Almost Halfway Through the School Year

Hard to believe, but the fall semester is almost over. This fall has been a busy one for the Glen Ellyn School District 41 board, as we go about our business. We are now at the time of year where we see how our actual finances performed to our previous budgets and get ready to finalize the Tax Levy to be implemented the following year. Additionally, we have been having discussions on what the appropriate fund balance (cash on hand for a rainy day) should be for our district.

At our Nov. 14th, 2011 board meeting, I learned during a PMA presentation (the district auditing firm) the district had ended the fiscal 2010/2011 year with a $3 million dollar surplus. This was approximately $2 million dollars more than had been expected when compared to the budget. This gave the district a fund balance as a % of revenues of approximately 37%. This was useful information to me, especially since earlier in the evening we had been discussing at the finance meeting a proposed policy change that would put a fund balance target number in writing.

The policy committee had proposed a target of 33%, which it appears we are currently exceeding. In my opinion, the 33% level is too high. The ISBE gives out the highest financial rating to districts that have a 25% level, which we are already exceeding. Why is the % important?

Here is the way I look at it.

89% of the revenue the district receives is from Property Taxes. Unlike our state government, property taxes have a historical record of being paid and on time. Typically, the pay rate for property taxes is 99%. That source of revenue is pretty rock solid. So as a district, we are virtually certain to receive that money. The other 11% of our revenue comes from local, state and federal government sources. The state has been slow on paying their bills and has recently began to cut back on some programs (transportation). If we assume all that money went away, the district would have reserves to make up that revenue for a couple of years. In my mind, that should be enough time to come up with contingency plans for this shortfall. That is why I am comfortable with a number in the 20%-25% range.

At our Nov. 28th, 2011 meeting, the board has set aside some time for a discussion the tax levy which will be finalized next month. According to the district, the levy recommendation for 2011 is a 3.69% increase over the previous year’s extension. The district actually expects an increase of 2.59% under the Property Tax Limitation Act.

As always, I look forward to hearing from residents of D41. Feel free to contact me and please say hello if you attend one of our board meetings. Our next meeting is Monday, November 28th, 2011 at the Central Services Office, just south of the corner of Main St. and St. Charles in Glen Ellyn. Our board meeting packet information is available here:

11/28/2011 Packet info