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Davenport district presents FY26 proposed budget; forecasts another $80 million borrowing and about $14 million annual debt service
Summary
District staff presented the proposed FY26 budget showing the district borrowed roughly $79.8 million already for Phase 1 and expects to borrow an additional ~ $80 million in FY26; staff forecast an annual debt-service cost of roughly $14 million and said legislative changes and ESSER timing drive year-to-year swings in revenue and expenditures.
District staff presented a three-year comparison of revenues and expenditures for FY24–FY26 and outlined how federal ESSER funds, state actions and planned borrowing for capital projects will shape next year’s budget.
Kevin (staff member) said the district has already borrowed about $79.8 million for phase 1 projects and plans to borrow a second roughly $80 million in FY26. That second borrowing is reflected in a projected annual debt-service expense of about $14 million, which combines payments for the current borrowing and the anticipated first-year payment on the second borrowing.
The presentation also described large year-to-year swings driven by ESSER grant spending in FY24 and by a reduction in Title I allocations tied to census counts. Kevin noted the state later added $5 to the per-pupil allotment, which he estimated would lower the district’s levy by roughly four cents and increase state aid by about $200,000.
Key fiscal points:
- Borrowing and debt service: The district reported borrowing $79,800,000 in the current program and anticipates borrowing an additional ~ $80,000,000 in FY26. The combined effect produces an estimated annual debt-service burden of roughly $14,000,000 while the second borrowing is front-loaded.
- ESSER and federal changes: FY24 totals were inflated by ESSER carryover; as ESSER spending falls, general-fund revenue and expenditure patterns normalize. Title I allocations fell by about $1 million in the district after the state changed its calculation methodology tied to census data.
- AEA flow-through: The state’s proposed change to AEA funding means some services could be paid directly to the Area Education Agency. District staff said districts may retain 10% of the funds this year; the district estimates roughly $1.1 million of general-fund dollars will return to the district and that a portion will flow to private schools where required. The district said it will track how best to use retained funds (special-education coaching, building-level supports) before making larger structural changes.
- Fund balance and capital projects: The capital projects fund reflects the planned borrowings and large construction outlays (West renovation, Sudlow and Smart construction, North bids anticipated). Staff said the capital projects fund is expected to decline as project spending proceeds and that the district will monitor whether budget amendments are needed in May.
Superintendent Schneckle and board members asked clarifying questions about debt-service mechanics, the timing of borrowing to secure favorable interest rates, and how AEA flow-through might affect services. Kevin repeatedly emphasized estimates and noted some numbers — including the published “not to exceed” levy notice — will be adjusted as final state numbers and borrowing terms are set.
Discussion vs. decision: The budget presentation was an informational discussion item; the district will present the proposed budget for a formal vote at the next regular meeting. No budget vote occurred at this session.
