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Monday, February 10, 2020

Financial Forecast

Fiscal Years 2020-2025

Policy 4:10

Forecasting Process

• Integrated with annual budget, audit and monthly financial reporting

• 5 year timeline

• High level overview of all district operations and funds

• Emphasis on available resources and fund balances

2

Monthly Budget

Analysis (Current)

Multi-Year Forecasting

Budget Planning

(Next Year)

Overview

• Operating Fund Overview

• Fund Balance Levels

• Property Taxes

• Evidence-Based and Other State Funding

• Expenditures

• Non-Operating and Capital Forecast

• Future Activities 3

4

Operating Funds Forecast

Budget

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025

Revenue

Local 293,219,831 304,900,369 313,769,382 322,355,067 331,074,963 339,932,297

State 53,220,972 55,231,972 56,301,922 57,377,271 58,458,127 59,544,600

Federal 11,448,317 11,448,317 11,448,317 11,448,317 11,448,317 11,448,317

Total Revenue 357,889,120 371,580,658 381,519,621 391,180,655 400,981,407 410,925,214 92,958,409

Expenditures

Salaries & benefits 270,375,479 280,871,627 290,715,937 298,513,106 306,569,714 314,896,334

Other 85,760,402 88,894,946 89,088,469 90,482,679 92,958,409 95,518,971

Total Expenditures 356,135,881 369,766,573 379,804,406 388,995,785 399,528,123 410,415,305

Excess/Deficit 1,753,239 1,814,085 1,715,215 2,184,870 1,453,284 509,909

Other Financing Sources (Uses) - - - - - - -

Other Reductions -

Net excess (deficit) after reductions 1,753,239 1,814,085 1,715,215 2,184,870 1,453,284 509,909

Beginning Fund Balance 115,732,251 117,485,490 119,299,575 121,014,790 123,199,660 124,652,944

Ending Fund Balance 117,485,490 119,299,575 121,014,790 123,199,660 124,652,944 125,162,853

Fund Balance as % of Revenues 32.83% 32.11% 31.72% 31.49% 31.09% 30.46%

REVENUE / EXPENDITURE PROJECTIONS

Forecast

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Revenues by Source

Property Taxes 77%

Other Local Revenues 5%

Evidence-Based Funding 11%

Other State Revenue 4%

Federal Revenue 3%

Monthly Fund Balance Summary

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0

50

100

150

200

250

Mill

ion

s

Revenues

Expenses

Fund Balance

Fund balance high point

Fund balance low point

Property tax installment

Property tax installment

Reported Fund Balance

Monthly Fund Balances –with Property Tax Deferral

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-50

0

50

100

150

200

250

Mill

ion

s

Revenues

Expenses

Fund Balance

Same fund balance high point

low point and reported fund balance is a deficit at end of each fiscal year

Previous year June taxes moved into July

low point and reported fund balance is a deficit at end of each fiscal year

Property Tax Assumptions – New Property

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New Property

New Revenue

Historical Average – 2014-2018 Levies

$60.6 $3.0

2019 Levy 99.2 5.0

Forecast – 2020-2024 Levies

55.5 2.8

(amounts in millions)

Every $10 million in new property generates approximately $500,000 of new, annual revenue for the District

Property Tax Assumptions – Consumer Price Index

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CPI New Revenue

Historical Average –2014 – 2018 Levies

1.45% $4.3

2019 Levy 1.90% 5.7

2020 Levy 2.30% 6.9

Forecast – 2021 –2024 Levies

2.00% 6.0

(revenue amounts in millions)

Every .1% increase in the Consumer Price Index (CPI), results in approximately $300,000 of new, annual revenue for the district

Forecasted Property Tax Levies

0

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

350,000,000

400,000,000

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Operating Debt Service

10

historical projected

Property Tax Assumptions – Existing EAV Change

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EAV Change CPI

Historical Average -2014-2018 Levies

3.01% 1.45%

2019 Levy 3.72% 1.90%

2020 Levy* 3.50% 2.30%

Forecast – 2021 –2024 Levies

3.50% 2.00%

(*CPI is actual, EAV Change is a forecast)

If EAV Change exceeds the CPI, taxpayers will receive a reduction in the district’s operating tax rate. If the CPI exceeds EAV Change, operating tax rates could increase.

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Forecasted Tax Rates

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Debt Service 0.6192 0.5916 0.5431 0.5113 0.4967 0.4705 0.4538 0.4352 0.4093 0.3696 0.3404

Operating 5.4584 5.2589 5.0573 4.9854 4.9622 4.875 4.8184 4.7486 4.6798 4.612 4.5451

0.0000

1.0000

2.0000

3.0000

4.0000

5.0000

6.0000

7.0000

Operating Debt Service

historical projected

State Funding Sources

• Anticipate $800,000 of annual EBF funding increases based on District’s Tier and adequacy percentage

• Projecting small increases in mandatory categorical grants (MCATs)

• Unpredictability in non-EBF state funding due to proration and timing of payments

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Evidence-Based Funding (EBF) – Five Largest Districts

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% of Total State

Enrollment

2018Adequacy

Level

2020 Adequacy

Level2020 Tier

Chicago Public Schools

18.6% 63% 65.6% 1

Elgin 46 2.0% 55% 58.7% 1

Indian Prairie204

1.4% 80% 80.0% 2

Rockford 205 1.4% 61% 60.6% 1

Plainfield 202 1.3% 64% 65.6% 1

Total/Average 24.7% 64.6% 66.1%

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Expenditures By Object

Salaries 62%

Employee Benefits 14%

Purchased Services 14%

Supplies & Materials 4%

Capital Outlay 1%Other 3%

Non-Capitalized Equipment 2%

• Salaries aligned to collective bargaining agreements

• Minimum wage impact of $500,000 by 2025

• Health benefits increased by 6-8% annually

• Special Education Out-of-District tuition increased by 9%

• All consumables increased by Consumer Price Index

• Transportation Purchased Services increased 9.5% in alignment with contract

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Expenditure Assumptions

Annual Capital Expenditures By Fund

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2020 Budget 2021 2022 2023 2024 2025

An

nu

al E

xpen

dit

ure

s (M

illio

ns)

Operating (fund 20) Non Operating (Fund 60)

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Capital Projects Fund 60 Projected Fund Balances

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000Fund Balance

Revenues

Expenditures

Land sale and transfer from operations

Gradual decrease of fund balance as less funding is available in operating budget

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Bond and Interest Fund Payment Schedule

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

160,000,000

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

2020 2021 2022 2023 2024 2025 2026 2027

Principal Interest Remaining Bond Principal

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Non-Operating Forecast

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Budget

FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025

Revenue

Local 28,394,538 28,244,829 28,313,585 28,056,084 27,010,336 25,722,299

State - - - - - -

Federal - - - - - -

Total Revenue 28,394,538 28,244,829 28,313,585 28,056,084 27,010,336 25,722,299

Expenditures

Salaries & Benefits - - - - - -

Other 29,681,284 29,680,622 31,688,594 33,002,000 32,425,275 30,792,225

Total Expenditures 29,681,284 29,680,622 31,688,594 33,002,000 32,425,275 30,792,225

Excess/(Deficit) (1,286,746) (1,435,793) (3,375,009) (4,945,916) (5,414,939) (5,069,926)

Other financing sources 3,490,912 - - - - -

Change in Fund Balance 2,204,166 (1,435,793) (3,375,009) (4,945,916) (5,414,939) (5,069,926)

Beginning Fund Balance 30,941,460 33,145,626 31,709,833 28,334,824 23,388,908 17,973,969

Ending Fund Balance 33,145,626 31,709,833 28,334,824 23,388,908 17,973,969 12,904,043

Fund Balance as % of Revenues 116.7% 112.3% 100.1% 83.4% 66.5% 50.2%

REVENUE / EXPENDITURE PROJECTIONS

Forecast

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Future Activities

• Continue to monitor assumptions

• Monitor State of Illinois funding and potential legislation

• Determine EBF elements to implement

• Continued Board of Education updates

• Forecast transition to Tentative Budget early spring