District 65 reports FY25 unaudited surplus trends, details FY26 tentative budget and SDRP3 timetable

District 65 presented unaudited fiscal-year-2025 results and a tentative FY26 budget at the Committee of the Whole on Aug. 4, saying district leaders had reduced spending substantially in FY25 but that longer-term deficit challenges remain. Key takeaways from the financial presentation - FY25 performance: Administration reported the district came in roughly 6.3% under budget on expenditures in FY25. Major contributors included a $2.5 million reduction in special-education purchased services and about $2.2 million lower transportation costs compared with the FY25 budget. - Salaries and benefits: Aggregate salaries and benefits were under the FY25 budget by about $882,000 after hiring freezes and position reductions. Special actions during the year included leave of certain positions unfilled and schedule compressions, which administration said reduced reliance on temporary agencies. - Purchased services and supplies: The district reported targeted monitoring and reductions in purchased services and supplies; purchased services were approximately $8.3 million under the projected FY25 budget. - Fund balance and trend: The district’s fund balance moved back above the policy minimum; administrators reported about 104 days of reserves in FY25 (excluding capital projects), a recovery from earlier deficits but still short of the 180-day profile some rating guidance favors. The structural deficit has been narrowed from the mid-teens of millions in earlier years to roughly $710,000 in one reported snapshot. Tentative FY26 budget highlights - Revenue assumptions: The tentative budget assumes increases in real-estate tax receipts (a $4.7 million increase tied to the December 2024 levy), flat evidence-based funding (tier 4 district—limited new state money), and modest federal and state grant projections pending federal allocations. - Expenditure pressures: The district modeled salary increases tied to collective bargaining and built contingencies for utilities (electricity modeled conservatively at a 38% increase and natural gas at 17% for budgeting), out-of-district tuition adjustments (a ~3% increase), and contractual purchase-service increases (assumed 3% for budgeting). Buildings maintenance projects pushed from FY25 to FY26 were also reflected. - Projected deficit: The tentative FY26 budget projects an operating deficit trajectory that would widen in coming years absent further reductions; administration and the board described an additional $8 million to $10 million in reductions potentially needed for FY27 under some scenarios. Park School and other items - Park School: The Park School joint program (Districts 65 and 202) was presented with revenues and expenditures balanced for the program; District 65’s share was presented at 60% of costs with District 202 covering 40%. What the board and administration said - Board members and staff praised administration and central staff for the FY25 spending reductions and urged continued work on long-term cost structure, including transportation and special-education delivery models. - Administration warned that some near-term savings in FY25 were timing- or one-time in nature and cautioned the board that continued structural changes are necessary to reach a sustainable FY27 budget. Next steps - Audit and final FY25 results will be presented after the fiscal audit is complete. - The SDRP3 (deficit reduction and reconfiguration) process will present initial consolidation scenarios to the board on Sept. 29, with updated scenarios on Oct. 20 and a possible board vote in late October or Nov. 17 to allow public hearings in December if needed. Ending Administrators said improved FY25 performance buys time to pursue larger structural changes, but they cautioned that demographic trends, inflation and contract-driven cost pressures require difficult choices going forward.