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Hey. Hey, hey, hey. Heat. Heat. every day. Nine. Okay, I will call the uh June 15, 2026 Board of Education Finance Committee meeting to order. I'm Sue Kerr. I'm the
co-chair of the finance committee and I am joined at the board table by Shanda Schwarz, Dr. Johnson, board president Melissa Owens, Miss Olsen, Kate Thomas, way down there, and board member Don Martin. And I'll have people in the audience
starting with Evelyn, just announce your names just for the record. >> [snorts] >> operations. >> Okay. So, I believe we'll start with the present presentation of the 2027 budget. Good evening. So tonight, Robin and I
will be presenting the framework for our 2627 tenative budget. To provide context for the budget, we will begin by reviewing a few key assumptions, priorities, and planning considerations that guided this development. Afterwards, Robin will detail the
specific allocations within the tenative draft. As a reminder, this budget represents an initial draft and will continue to evolve throughout the summer with ongoing collective bargaining discussions, summer staffing, enrollment adjustments, and updates to both revenue
and expenditure projections. We anticipate refinement before presenting the final budget for adoption. This slide here guides our principles used in developing our fiscal year 27 tenative budget. The board of education is committed to aligning resources with
priorities outlined in our U46 strategic plan and portrait of a graduate. Rooted in fiscal equity, our budget development process ensures that resources directly support the diverse needs of our students while balancing academic achievement, operational efficiencies,
and responsible stewardships of public funds. So given these fiscal realities, our focus and spending on high impact areas that directly accelerate student growth, enhance learning, and advance our core core goals for our district.
Before we begin reviewing the budget, I'd like to briefly highlight legal requirements that guide this process. In accordance to the Illinois School Code, school districts are required to develop a tenative budget, provide public notice, place the budget on display for at least 30 days, and conduct a public
hearing before adoption by the board of education. While the fiscal year begins on July 1st, school districts must adopt their annual budget no later than September 30th. This line provides an overview of the budget timelines and where currently we
are in the process. Throughout the summer, the financial services department will continue updating the tenative budget as additional information is received regarding state funding, grant allocations, and other budget assumptions. Tenative budget will be placed on public display no later
than August 14th, both on the U46 website and at the ESC. The finance committee meeting and public hearing is scheduled for September 14th with a final budget adoption anticipated on September 28th. And following adoption, the budget will be filed with
the county clerk as required by law. So with that overview and timeline in mind, I'll now turn it over to Robin to review our key components for fiscical year 27 tenative budget. >> Thank you, Dr. Kyle. Now that we have reviewed the purpose of the budget and
the key milestones that will guide our work over the next three months, let's turn our attention to the preparation and planning that has already taken place. The strategic plan serves as the foundation for our annual budgeting process. While the budget identifies the
financial resources available to the district, the strategic plan determines how these resources should be prioritized to support student success. As departments and schools develop their budgets, they are expected to align requests with these strategic
priorities. This ensures that resources are allocated intentionally and that every dollar spent contributes to ad advancing the goals outlined in the strategic plan. In this way, the budget becomes more than a financial document. It becomes a tool for turning our
strategic priorities into measurable outcomes for students. All FY27 school and department budget preparation efforts were guided by three key priorities. Fiscal equity, accountability, and student learning. By
applying a fiscal equity lens, we focus on providing the right resources in the right places at the right time while ensuring funding decisions are transparent, data informed, aligned with district priorities, and support our
commitment to all means all. So every student has the opportunity to succeed. Similar to our FY26 process, schools received budget allocations based on their enrollment counts for low-income students, gifted students, and students
with special needs. departments followed a hybrid zerobased budgeting approach approach which required department leaders to explain why each expenditure is necessary, how it supports district goals, and what level of funding is
needed regardless of whether the expense was funded in previous years. Now, let's turn our attention to the current financial guidance. Before we begin, it's important to emphasize that we are still in the early stages of the tentative budget process. The FY27
revenue and expenditure figures presented in the following slides are preliminary estimates based on the data currently available. These figures will continue to be analyzed and refined throughout the summer. The district's primary source of revenue
continues to be local property taxes. These revenues remain relatively stable year-over-year and are a foundational component of the district's operating budget. Other local revenues, including fees and interest earnings, is estimated at 432.9
million, reflecting a $15.6 million decrease in other local revenues, primarily driven by a projected re reduction in interest income. State funding, primarily through evidence-based funding formula, represents the second largest source of
revenue at 342.1 million. While U46 continues to receive increased EBF investments, this revenue stream remains subject to annual state budget decisions and broader economic conditions. The reduction in state
funding is largely driven by the state's reduction of the funding allocation for both transportation and special ed services. Federal revenues are categorical in nature and are restricted to specific purposes, including programs that support economically disadvantaged
students, English learners, and special ed services. These funded these funds supplement but do not replace our core instructional funding. Overall, the FY27 budget of $816.6 $6 million reflect a conservative and
realistic revenue projection approach that balances stability in local funding with the appropriate caution around state and federal uncertainty. If you look at the allocation chart on the left, our revenue profile remains heavily driven by local dollars. Local
revenue such as property tax, CPPRT, and other local um revenue contributes to 53% of our overall revenue. State funding at 42% and federal at 5%. Looking at our multi-year bar chart on the right, you can see a clear narrative
of stabilization. We saw robust growth peaking at 843 million in FY25, heavily impacted by the final year of ESSER federal funding. As these funds streams, these funding streams naturally sunseted, we stepped down slightly to
819 million last year or this current year and are tracking a minor reduction to 817 million for FY27. Moving from our revenue framework framework, let us now look at the resources and how they're being utilized. For the first time in our
district's history, the total expenditure budget crosses the $1 billion threshold, coming in at 1.0 billion. This represents an overall increase of 47.7 million or exactly 5%
compared to the FY26 budget. Personnel costs remain our primary investment. Combined salaries and benefits account for $585 million of our budget and an increase of 3.6%. 6%. Breaking that
down, while salary lines grew by a modest 2.5%, we are navigating a 7.2% jump in benefit costs, reflecting broader market realities in health care and obl uh employer obligations.
Capital outlay is up 14.7% to $213.9 million as we continue to fund major structural facility improvements in infrastructure commitments. 140 million or 65% of that amount is
earmarked for the plan deficit and the Unite U46 initiative. We also see a 46.6% 6% increase in non-capitalized equipment to support classroom and building needs. To offset these investments, the administration has
successfully trimmed variable costs. We have pulled back supplies and materials by 11.8%, saving over 7.9 million and reduced purchase services by 2.2 million. In short, this budget prioritizes our human
capital and long-term facility infrastructure while tightening our operational belts on everyday material commodities. If you look at the pie chart on the left, it provides a very clear visual of our district priorities. Salaries
[snorts] make up 45% of the allocation and benefits account for 13%, meaning 58% of every dollar spent goes directly into our personnel. The next largest slice of the pie is capital outlay at 21% with the remaining 21% covering the
other expenditure categories. On the right, the 5-year chart maps out our growth curve. We have scaled thoughtfully from 66 636 million in FY23 to our current proposed $1 billion
budget. This intentional trajectory represents our response or yeah response to evolving educational demands, structural investments, inflationary pressures, and the execution of our long-term strategic facilities plan.
This slide provides an all funds comparison of the three-year actual uh results, the FY26 budget and the FY27 tentative budget, summarizing the revenues and expenditures discussed throughout the presentation. Total
revenues are currently projected at approximately 8616.6 million with expenditures estimated at 1 billion resulting in a plan deficit of 194.2 million. Based on this projection, the district would end FY27 with a fund
balance of 586.5 million and a percentage of revenue of 72% in 8.62 months of revenue to fund balance ratio for the tentative budget process. comparisons are based on the FY26
adopted budget to the FY27 tentative budget as this provides the most meaningful and accurate view of planned financial activity. Since schools received allocations based on enrollment and departments used a zerobased budgeting approach, comparing budget to
budget demonstrates how demonstrates how these planning decisions affected resource requests for FY27. In addition, during the summer months, year-end transactions, including increased construction, payroll acrruels, and various financial
transactions are still being processed. When the final budget is presented to the board of education in September, actual FY2026 results will be incorporated for a budgettoactual comparison. This slide summarizes the tentative 27
budget by fund. I would like to highlight a few of these funds. The ED fund is resulting with a deficit of $34.9 million. District administration will continue to monitor revenue and expenditures throughout the year and make the necessary adjustments to ensure
the education of students remains the top priority for the transportation fund. The intentional deficit of 13.6 6 million is a result of the purchase of 86 new buses in accordance with the district's aged and obsolescence p plan.
The capital projects fund has a $15.9 million deficit exclusively due to the unite46 capital initiative. Finally, the working cash fund has a deficit of $19.6 $6 million exclusively due to the $18
million permanent abatement to the capital projects fund and $5 million abatement to the tort fund. As outlined in the five-year financial projection shared in February, the fund balance is expected to decline over the next few years as spending on the Unite U46
capital projects progresses. This chart illustrates the district's 5-year revenue and expenditure trends. From FY23 through FY25, revenues exceeded expenditures, supporting positive operating results.
Beginning in FY26, expenditures are budgeted to outpace revenues as the district continues investing in staffing, student programs, and capital improvements related to Unite U46. While revenues remain relatively stable, the projected increase in expenditures
underscores the importance of ongoing financial planning to ensure long-term fiscal sustainability. This chart shows the district's historical and projected year-end fund balances. Fund balances increased from 562 million in FY23 to a peak of 836
million in FY25, reflecting strong financial performance in preparation for the anticipated capital improvements. While balances are projected to decline in FY26 and 27 as expenditures exceed revenues, the district will continue to main
substantial reserves that support financial stability, cash flow needs, and long-term strategic investments. During June and July, district administration will continue to finalize our tentative budget, making any necessary adjustments. The public notice
and display, both online and in print, at the educational service center, will occur no later than August 14th. An executive update will be provided at the August 17th board meeting, where we will present any adjustments made. We will conduct the public hearing on September
14th with the final adoption going to the board of education on September 28th of 2026. Thank you for your time and attention. I will answer any questions you might have. >> Do board members have any questions?
>> Excuse [clears throat] me. I have a couple. Um, one is the on page 12. Um, our capital outlay obviously the last couple of years has been high because of all the construction. Is the 27 budget probably going to be the peak
or do we see the 28 budget also having a fairly substantial capital outlay >> for FY28? >> Yeah. >> So FY28 will be much lower. So our FY >> So we're sort of at reaching the high point. >> Yes. This is the the highest of them. Um, we have anticipated for FY28 will be
much less because the majority will be occurring this summer. >> Okay, that's that's what I thought. >> Um, another question I had is Cook County announced again they will be late. Yes. >> And I guess you know we can cover because we're three counties. Yes. But I guess it could impact our investment income. Have you do you have any
information on that or thoughts on that? >> We do not. We were we were made aware late last week that there is going to be a twomonth. So they are anticipating that the bills will now be due two months later, so October 1st. Um, as far as interest income, just as we
experienced this past fiscal year, um, we don't have any information that indicates, you know, that there's going to be any. >> Okay. Unfortunately, >> yeah. Yeah. And then my my final question is the the
education fund which is taking a better big hit this year. Do you have any thoughts on is it just additional staff as we're hiring more people or >> it is. So I did a review of that seeing that we are seeing a deficit in in fund 10 again. Last year we also saw a
deficit in fund 10. One of the things that we make sure that we want to do is um make sure that our fund balance ratios in each of our funds as well. So in the past years we have um revenue has gone into the ED fund and so we have
used some of those revenues to offset like the capital or some of those other uh expenditures in our other uh funds. Um so comparing year-over-year just in the ad fund we're experiencing.4
4% in revenue and only a.7 increase in expenditure. So, um, year-over-year, we're not seeing it's pretty stable year-over-year. We're just, um, we're still also going to see an anticipated like a 41% fund balance to revenue ratio
for Ed Fund. So, we're still in a comfortable spot for that. >> Okay. But you're keeping an eye on things. >> Yes. And we will continue to keep an eye on that. >> Okay. Thank you. Any other questions from anyone in the board? Okay, thank you very much.
>> And public comments. Do we have any public comments, Dr. Johnson? >> There are no public comments this evening. >> Okay. So, I will adjourn the finance committee meeting. Thank you all. [clears throat]