U-46 board reviews proposed school year expenses

Elgin Area School District U-46 officials propose spending roughly $507 million this school year, including $7 million in reserve funds for capital expenses.

The district borrowed $40 million last school year through debt restructuring to fund building maintenance and capital projects.

"We did borrow it for that reason so that we could keep our buildings in decent shape rather than putting Band-Aids and stitches," school board President Donna Smith said during Monday night's board meeting when administrators presented budget highlights.

Roughly $13 million of the borrowed funds is earmarked for building improvements in this year's budget. Other major expenditures include leasing 87 new buses and purchasing new computer equipment.

Taxes automatically will be levied by the county to cover the cost of debt service on the loan, said Jeff King, district chief operations officer.

The proposed 2015-16 budget includes nearly $7.6 million in additional revenue over what was budgeted last school year. Expenditures also are expected to rise by nearly $20 million.

Officials discussed the uncertainty of state funding and how that could affect the budget.

Property taxes make up 64 percent of the district's budget, while state funds account for 29 percent and federal grants make up 7 percent of total revenues.

Officials are anticipating a reduction of nearly $10 million in general state aid payments for the 2015-16 school year; the state is expected to fund 92 percent of what the district is owed under its funding formula.

Last school year, the state withheld 13 percent, or more than $14 million, in general state aid from U-46.

The district should receive four quarterly state categorical payments - covering expenses such as transportation and special education - but this year's budget includes only three payments to allow for a cushion if the state is late with payments.

"We're pleased that the state education budget calls for more funding, but we know that more financial decisions loom over our state, including pension reform and the final general state budget," U-46 Chief Executive Officer Tony Sanders said. "We are proceeding cautiously as we make expenditure decisions that support our strategic plan and ensure all U-46 students graduate prepared to succeed in college and the workforce."

A public hearing on the proposed budget is set for 7 p.m. Sept. 14 at the district's headquarters, 355 E. Chicago St., Elgin. The school board will vote on the final budget Sept. 28.