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Elk Grove Township Elementary District 59 could run $100 million deficit over next five years

Elk Grove Township Elementary District 59 is projected to run a $100 million deficit over the next five years, prompting the district to ask taxpayers to fund millions in bonds as a temporary fix to help pay for construction projects and stabilize the budget.

The district, which has schools in Elk Grove Village, Arlington Heights, Des Plaines and Mount Prospect, has nearly $120 million in reserves. That's among the highest in the suburbs and enough to cover an entire year of expenses.

Despite the healthy savings, however, the district could soon have financial problems largely caused by adding dozens and dozens of employees over the past few years, but also due to expenses for new programs, increased transportation costs, losses in federal funding and higher-than-expected construction bids across the district.

According to recent budget projections, reserves could drop to $22 million by 2022 - well below a state board recommendation that at least 25 percent of annual operating costs be held in reserve. But even before that, the district may need to start cutting costs because a self-imposed school board policy requires at least 60 percent of annual operating expenses be kept in reserve.

"There's a very realistic possibility we're going to hit a brick wall in three to five years," school board member Tim Burns said.

The district is trying to delay the impact by issuing bonds to help pay for construction projects originally intended to be paid with reserve funds. A couple of weeks ago, school board members approved starting the process for securing $15 million in bonds, which would increase taxes for the owner of a $250,000 home by about $15 per year.

The district wants to issue bonds to help pay for a new $17 million administration building and kitchen commissary in Elk Grove Village.

Costs for the project were originally 25 percent lower, and the district had planned to use reserve funds and the $5 million sale of its current administration building in Arlington Heights to cover the costs. The bonds could also help pay for renovations at several schools.

The potential bond issue is facing pushback and isn't a done deal. The school board still needs to vote on final approval, scheduled for Sept. 11.

Plus, a movement has started to collect at least 3,347 petition signatures - 10 percent of the registered voters in the district - to force a referendum on the bond issue. The deadline to submit signatures is Aug. 11.

Even if the bond issue is approved, projections show the reserve fund will dip below the 60 percent benchmark in two years, kick-starting budget cuts if the board sticks to its policy.

"Our most significant resource is staffing," Superintendent Art Fessler said. "When looking at any strategies to balance our budget, we're going to take into consideration our staffing numbers.

"That includes everyone, administration and teachers."

The possibility of job cuts comes as the district has been adding employees. In an effort to improve early education and intervention programs, the district has added 50 to 60 employees over the past several years, and 19 more are coming to the district this year, officials said.

The district has expanded programs. For example, the district recently implemented all-day kindergarten at all schools. This summer, the district added tuition-free preschool classes for students who don't qualify for state or federal grant funding but whose families may not be able to afford preschool.

The focus has been on early education because a majority of district students enter kindergarten one to three years behind developmentally, Fessler said. Additionally, more than half the students come from low-income families, and one-third are considered English language learners.

Fessler declined to specify where the budget would be cut if things play out as projected. He said the district will balance the budget by studying which programs are working and cited changes to state and federal education funding as reasons for the uncertainty.

"Right now there's so many things up in the air, it's hard for us to pinpoint next year what we're going to do," he said.

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