District consultant warns slower revenue growth will shrink surpluses; board urged to monitor CPI and capital plans

Rob Grossi, the district—s long-time financial consultant, told the Oak Park Elementary School District 97 Board of Education on May 13 that the district faces a narrowing gap between projected revenue growth and expenditure growth that will reduce annual surpluses over the next decade.

Grossi said the district—s revenue growth averaged 4.8% from 2017 through recent years while expenditures rose 3.3% over the same period. "Revenue growth has outpaced expenditure growth by 1.5%," he said, but under his current assumptions revenues are likely to slow and expenditures will increase, producing a negative gap of about 1.3 percentage points going forward.

The consultant emphasized three revenue risks: slower property-tax growth driven by lower inflation; declines in corporate personal property replacement taxes after an Illinois Department of Revenue correction; and uncertainty in state and federal aid, including the end of ESSER COVID relief. He said evidence-based state funding for the district is small on a per-student basis and that the district receives roughly $4 million annually in federal funds, primarily special education reimbursement.

Why it matters: Grossi said that because roughly three-quarters of the district—s non-capital budget is salaries and benefits, the district is sensitive to even modest revenue shortfalls. "If CPI begins to fall to around 2% or sub-2%, that's gonna be something that will likely force you to make" budget adjustments, he said. He projected the district would maintain fund balances inside its policy range through the projection period under the baseline scenario, but cautioned that lower inflation or deeper state cuts could produce deficits by FY 2030.

Board members pushed on next steps. Several trustees asked whether the district should use non-referendum bonds (DCEO/non-referendum debt) for capital rather than deploy fund balance; Grossi said that shifting a portion of planned capital to borrowing could preserve reserves and that the district has capacity to issue non-referendum debt because it currently has none outstanding. He also said rebidding a transportation contract is projected to save about $692,000 annually starting in FY 2026.

Grossi offered procedural recommendations the board asked staff to act on: monitor CPI and state/federal signals closely; update multi-year projections regularly and after major funding developments; and consider non-referendum borrowing as a lever if revenue prospects weaken. He described the forecasts as a "living document" and said the administration should be prepared to "quickly pivot on the projections" when new information arrives.

The presentation drew questions on specifics: trustees asked about the composition of federal aid, how out-of-district tuition projections were counted, and the district—s historical fund-balance practices. Grossi supplied figures from his slides: the district has invested roughly $101 million in capital in the last eight years, used about $64.4 million in bond proceeds, and increased fund balances from about $27.2 million to $44.6 million in that period.

The board did not take formal action at the meeting; trustees directed staff to continue refining projections and to return with details if staff recommend borrowing or other structural changes.