U-46 to Establish Budget Advisory Task Force

SCHOOL DISTRICT U-46 FACING

$53.5 MILLION DEFICIT

Budget Advisory Task Force to be appointed

The economic downturn that began last year is continuing to cause problems for School District U-46 according to the district’s new Chief Financial and Operations Officer, Dr. Ron Ally. In a report to the U-46 Board of Education, Ally projected an operating fund deficit totaling $53.5 million including:

$19.7 in deficit balances from prior school years

$28.9 million from the 2008/2009 school year

$4.9 million projected shortfall for the current school year

“We face a growing revenue problem in U-46,” said Ally. “The economic slowdown hit our district much faster than we projected with local, state, and federal revenues coming in $20 million below where we projected for last school year,” he added. During the same period, salary and benefit costs continued to increase beyond what had been projected.

According to Ally, the current year’s deficit would have been higher, but is being reduced by using $6.4 million in federal American Reinvestment and Recovery Act funds allotted for the district. In addition, $4 million in proceeds from a recent sale of Tort Immunity and Judgment Bonds will be used to offset the current year’s deficit.

Superintendent José M. Torres shared with the Board of Education the goal of reducing current year expenditures by $4.9 million to ensure the district does not add to the deficit from past years. “We still have a large hole from prior years to fill, but we must begin by filling the hole that is closest to us,” Torres said.

Ally says the district’s early action in reducing expenditures last year was important in reducing the overall deficit. He also notes other reductions that have been taken already this school year, including:

Stopping the proposed purchase of new school buses;
Not allowing employees to combine part-time positions in order to obtain benefits;
Reducing the daily rate of pay for substitute teachers;
Reducing long-term substitute teacher costs; and,
Reviewing all third-party contracts.

The district is establishing a Budget Advisory Task Force made up of representatives from U-46 administration, including principals, the Elgin Teachers Association and other union groups, and advisory councils including the Citizens’ Advisory Council.

“The decisions on how to reduce cannot be made in isolation,” Ally says. “And, we cannot expect to reduce the full $53 million in one year. Instead, we will be looking to this task force to help us prioritize recommendations to balance our Fiscal Year 2011 budget while contributing $25 million towards reducing our deficit,” according to Ally.

Operating funds include the education, operations and maintenance, and transportation funds. The deficit amount for 2008/2009 is based on the modified accrual method of accounting.