Few cuts, small surplus

Whether Lake Zurich Unit District 95 continues on the path of deficit spending will depend on how officials tackle future facilities needs.

"That is the number one issue facing us," Lake Zurich Unit District 95 Superintendent Brian Knutson said.

District officials said the proposed $77 million budget for the 2007-08 academic year, though in deficit when considering revenue versus expenditures in all funds, is projecting a modest surplus in the operating fund. Overall revenues are anticipated to be $76 million.

In August, the operating fund surplus was projected as roughly $400,000. Since then, district officials cut expenses, which could yield a higher surplus in the operating funds, Knutson said.

That is not as big a cushion as officials initially had hoped for.

The overall deficit is largely due to about $1.4 million in repairs and life-safety work that must be completed by June 2008. That does not include an unforeseen expense of $1.3 million to stabilize the sinking of the district's three-year-old middle school in Hawthorn Woods. Most of that expense is anticipated to be paid this fiscal year, while part of it was paid the previous school year.

The repairs were recently added onto the final budget document.

Many of those one-time repair expenses will be covered with roughly $4.4 million from a recent land sale.

"With the exception of these huge site and construction projects that we have, in all the operational areas we still have a surplus budget we are proposing," Knutson said.

Knutson said this year's surplus and overall budget turned out better than anticipated with minimal cutbacks, compared to last year's nearly $2 million in staffing and program reductions.

"Primarily because we stayed with exactly what the board gave us on the revenue side," he said. "It was also due to some minimal declining enrollment and the cuts we made last year."

The district intends to recoup everything it can of the money spent to fix the sinking of Middle School North from responsible parties to replenish its site and construction fund.

Balancing future budgets will be trickier as the district moves forward to address its long-term facilities needs, school board Vice President Roger Tieman said.

District 95 may have to shell out roughly $31.6 million for improvements over the next 10 years to maintain its facilities in fair condition.

Alternatively, officials may choose to close an elementary school, change boundaries or build a new school to replace an aging building that is now shuttered. They also face $37.8 million in major life safety repairs and structural improvements over the next five years.

"We do have to deal with the facilities problem and that is going to create some difficulties for us and we're going to do some deficit spending as a result of that," Tieman said.

The unexpected closing of May Whitney Elementary School due to flooding, asbestos and mold in mid-August also has thrown a wrench into the district's facilities planning.

The cost of moving May Whitney students and staff into the Annex building for this school year and beyond has not been figured into the 2007-08 budget. That will be added later in the year, Knutson said.

The school board is expected to approve the budget on Sept. 27.