DeKALB – DeKalb School District 428 Board members approved a budget with a $7 million deficit this week, but will soon be making what they said will be the last big payment – $10 million – in their years-long strategy to restructure $108 million in bond debt from a decade ago.
But that’s $10 million taxpayers won’t have to pay after the district had to figure out a way to repay the millions in bonds taken out in 2008 through 2010 after expected growth didn’t materialize. The $100.1 million budget will continue to operate at a deficit – with $108 million expected in expenditures – but Carpenter said the deficit still falls within district policy.
Cynthia Carpenter, District 428 director of business and finance, said the district is in good standing with $4 million in excess of their normal operating needs, and will use that plus $6 million additional operating funds to pay down 2010 bonds in the spring, leaving the fiscal 2020 budget with a $7 million deficit.
“This is the last big chunk of bonds that are callable, so there’s not more to do, which is good,” Carpenter said Thursday, adding the remainder of the bonds will likely be paid off on schedule because the principal has been lowered.
“We’ve been doing this basically since 2016,” Carpenter said. “We’re finally to the point where we’re refinancing the last big chunk of bonds. It’s been a process.”
In April, the board also agreed to set aside $3 million to pay down the principal from 2009 bonds using money from the city’s tax increment finance district known as TIF 2 when it expired Dec. 31. At the end of 2016, about $9.3 million of bond debt was restructured in order to level out future debt payments. By retiring the bonds, the district projected to save more than $1 million in interest for taxpayers over the life of the loan.
Another factor yet to consider is the recently approved DeKalb Classroom Teachers’ Association union contract, which was also approved Tuesday. Because of the contract’s tardiness, the budget will need to be amended in January or February Carpenter said, although union members will receive retroactive pay since the contract was supposed to be approved by Aug. 15.
“The effect of the DCTA contract is not included in this budget,” Carpenter said, addressing the District 428 board Tuesday. “We’ll have to shore up the budget once the dust settles.”
Carpenter said she anticipates between $870,000 and $900,000 will be need to be accounted for in the operating budget, which will see its 500 members in the district receive a cumulative raise of 15% over the next four years.
Unlike in past years, Carpenter said the district has already received an additional $1.3 million owed from fiscal 2019 in state categorical payments, meaning funding set aside for the district programs like for students with special needs. Carpenter said the state often is late in making those funds available, which can also impact the planned budget since it needs to be amended mid-fiscal year then.
As of Sept. 11, Illinois Comptroller Susana Mendoza had a total backlog of $6.9 billion in delayed payments, Carpenter said, and the district is still owed $30,000 more.
Source: The Daily Chronicle