The Oswego School District 308 Board of Education was given a glimpse into the future as administrators presented updated five-year financial projections for the district during its meeting Monday, Oct. 7.
Five year projections, as described by Superintendent Dr. John Sparlin, were presented to "provide information and gain direction from the board in regards to accomplishing our financial goals."
When the district first began the process of balancing the budget in 2016, administrators presented a "do-nothing scenario," where the district changed no financial practices. In that scenario, the district would have been out of reserves by fall of this year and at the end of the 2020 fiscal year the district would have had a projected $15 million deficit.
"At our last board meeting, we presented a balanced budget with a $15 million reserve, and we all know how much work went into making that happen," Sparlin said.
The Board of Education approved the balanced budget at its Sept. 23 meeting.
Since 2016, the Board of Education has approved more than $14 million in budget cuts and fee increases, affecting all levels of the district, from students to administrators.
"In 2016 we had two goals: one was to create a balanced budget and the other was to increase our financial goals, which we have accomplished," Sparlin said. "Is that the goal that we want to maintain and carry forward?"
The district was presented with two options for how to proceed. One would maintain current practices which would include steps like continuing to issue Tax Anticipation Warrants (TAWs) and making further budget cuts and fee increases.
The first option projects a slight increase in the surplus over the next five years, creating a $3.4 million surplus and projected year-end balance of $31.4 million in 2025.
The second option would bring back the operating fund referendum, a $.30 cent property tax rate increase beginning in the 2021 tax collection year. Those revenues would allow the district to gradually reduce the amount of TAWs is would issue and roll back several previous budget cuts and fee increases.
Passing the referendum, according to the presentation, would also increase the district's surplus, but at a greater rate, leaving a $5.6 million surplus and projected year-end balance of $37.9 million in 2025.
Sparlin emphasized the importance of the state of Illinois' Evidence Based Funding (EBF) formula, which plays a large part in the district's finances.
"Without the additional funds of the EBF, as compared to General State Aid in the past, we wouldn't be where we are today," he said, chalking the district's current circumstances up to a combination of monies received from the state, cuts made to date and revenue generated.
The two options were presented as information items, and were not voted on during Monday's meeting.
The Board of Education will next meet at 7:30 p.m., Monday, Oct. 21, in the Community Room of Oswego East High School.