Deficit spending ahead in Geneva District 304

A financial consultant told the Geneva school board Monday it can expect to see deficit spending in its operational funds as soon as fiscal year 2009-10.

And by 2014, it will be close to not meeting its goal of keeping a 30 percent cash reserve on hand for those funds, said Steve Miller, a representative of PMA Financial.

The first to go: The Illinois Municipal Retirement Fund, where the bill is expected to increase 10 percent annually for the next five years. Member agencies are being hit with large contribution increases to make up for losses the fund suffered in last fall's stock market crash.

Operations and maintenance will spend more than it takes in fiscal year 2010, if the district proceeds with plans to build a bus parking garage at Brundige Road and Keslinger Road. (Board member Mark Grosso requested, later in the meeting, that the district halt the garage project. The matter will be voted on at the board's next meeting, Sept. 14.)

The education fund - the district's largest operating fund, because it pays salaries for administrators, teachers, assistants and aides - will start running a deficit in fiscal year 2011, Miller said.

The calculations assume that the district goes from having the equivalent of 418.6 full-time employees now to 423 by 2014.

The projection also assumes that the allowable increase in the district's tax levy will increase for the 2010 levy (payable in spring 2011) to 2.5 percent, based on the rate of inflation in the Consumer Price Index at the end of this year. For levy year 2009 (payable 2010) the CPI was 0.1 percent, the lowest it has been since the state enacted the property tax cap law nearly 20 years ago.

So far this calendar year, it is at 2.4 percent.

Bodies are allowed to increase levies by 5 percent or the rate of inflation, whichever is less.

It also assumes 2 percent growth in the equalized assessed value of property in the district for the 2009 levy, 0 percent the next year and 11 percent the year after that.

The board also reviewed updates in its proposed 2009-10 budget, which it is scheduled to adopt Sept. 14. The fiscal year began July 1, but the state gives districts until Sept. 30 to set their budgets.

Donna Oberg, assistant superintendent for business services, said the state has cut aid to the district at least $187,000, including removing textbook loan money completely and reducing reimbursement for special education workers, a reading improvement program and school safety work.

She warned more could be coming. "These reductions from the state, these are what we know of so far," Oberg said.

Geneva gets about 10 percent of its operating money from state aid.

The state is also $1.2 million in arrears to the district on reimbursement for other expenses, including a transportation subsidy, Oberg said.