by Lynn Meredith
With the Kaneland School District facing several revenue challenges for the 2010 fiscal year, the School Board is reviewing a long-range financial plan to help the district make informed budget decisions.
“We have some decisions to make to prepare for the 2009-2010 budget. Our next task is going to be talking about how we can balance our revenues and expenditures,” school business official Julie-Ann Fuchs told the School Board on Monday.
PMA financial advisor Michael Frances laid out the plan charts and graphs depicting the district’s financial past and projecting its future. The stagnant housing market, limited state funds and a low Consumer Price Index (CPI) have all contributed to a drop in revenue, he said.
Frances said Kaneland receives the bulk of its money from property taxes. The CPI fell radically earlier this fall, effectively stopping the flow of revenue, he added.
“The CPI in 2008 (last year) was 4.1 percent. The CPI for 2009 is 0.1 percent,” Frances said. “We’re hitting two extremes: Previous to this, the CPI was 3.4 percent on the high end and 1.67 percent on the low end. This number is basically saying you are getting no new revenue next year.”
The increase in Equalized Assessed Valuation (EAV) also dropped. From 2004 to 2007, when housing was booming, Kaneland had from $41 million to $65 million worth of additional assessed valuation added to its EAV.
“We have received a solid projection for 2008 from the county of what that number is going to be. It’s fallen more than halfâ€”to $22.4 million,” Frances said. “With the stoppage of new construction, the number is realistically going to fall further.”
The emergency cost-cutting measures implemented so far have been to slash $740,000 from the current budget. Those cuts will remain as the administration finds ways to cut an additional $1 million for next year.
The district plans to operate only one middle school, instead of the planned north and south schools. It also will not hire additional staff.
Officials will bring a list of recommendations to the board at the Monday, Feb. 9, meeting. The list will ensure that the district does not go into deficit.
“As you well know, we don’t have much control over the revenues, but certainly we have control over our expenditures. That’s where we’re going to focus our efforts, so that we are proactive and don’t get ourselves behind the eight-ball and get to where we have to cut 10 percent, and now we’re looking at a lot of pain for our organization,” Fuchs said.