Lisa Kowalski, the district finance staff member, presented a preliminary look at fiscal year 2025 actuals and the proposed fiscal year 2026 budget, saying the numbers are “preliminary” while auditors work on the fiscal reports. She told the Board of Education that final audited figures may change slightly but that the presented totals are “very, very close.”

The presentation summarized where FY25 budgeted figures diverged from actuals and how that will affect FY26 planning. Kowalski said the district budgeted to use $431,000 of education fund reserves but ended up using $175,000. She said capital projects commonly carry over into the next fiscal year because the district’s fiscal year ends June 30.

Kowalski described larger carryovers in the operations and maintenance (O&M) fund, noting she had expected to draw $1.6 million but the fund instead grew by about $3.0 million because planned work did not finish. She said bond funds issued for the high school project were budgeted at $6.2 million for spending in FY25 but actual spending was about $5.6 million, leaving roughly $580,000 to roll into FY26.

Kowalski outlined key components of the FY26 proposal: a $2.5 million transfer from working cash into capital projects, $2.0 million carryover in O&M, and a proposal to budget $7.0 million for a “wait room” addition (funded as $4.5 million from O&M and $2.5 million from the capital projects fund). She also flagged an anticipated 18% increase in health insurance costs (from about $2.8 million to $3.3 million) and said the district is planning not to exceed a 19% rise when projecting forward.

On revenue, Kowalski said property taxes will remain the district’s largest source (about 72.4% of budgeted revenue) and that evidence-based state funding (formerly called general state aid) accounts for roughly 5.2% of revenues. She described uncertainty in a state-reimbursed transportation claim and said if the state pays the 82% reimbursement currently estimated, that could add about $135,000 to transportation revenue.

Kowalski noted a projected negative balance in the tort fund for FY25 (about $234,000) caused primarily by scheduled payments to the Morton Police Department for school resource officer (SRO) services and a crosswalk payment to the village; she said next year’s tort fund should be “pretty much breakeven” once those one-time items are removed.

She told the board she had already posted a public notice that the budget will be on display and that a public hearing will be scheduled; she said the auditors from CliftonLarsonAllen are conducting an on-site audit this week. Kowalski emphasized that the budget must be filed by statuteally required deadlines and that she is using conservative estimates where final state numbers (CPPRT and transportation reimbursement) are not yet known.

Board members complimented Kowalski’s level of detail and asked no substantive changes during the presentation. The board will receive the formal hearing notice and an action item to adopt the FY26 budget at the scheduled September meeting.

Ending: The finance presentation tied FY25 carryovers and planned FY26 capital work to the district’s decision to preserve reserves while moving forward on multiple facility projects. The board will review the posted budget and hear public comment at the September hearing before taking formal action.