District 57 finance advisory committee presents conservative five‑year budget projections; fund balance may decline in out years

District 57 staff and the Citizen Finance Advisory Committee presented the board with the district’s midyear budget and conservative five‑year financial projections, emphasizing assumptions that could push fund balances below policy bands in later years if revenue and growth do not meet expectations.

Jason Kaes, presenting the budget update, said most district revenue is local and property‑tax based and that the district is “right around 50%” of its fund balance target in the current fiscal year. Fred Schaffer, a CFAAC member who helped prepare the projections, walked the board through the committee’s assumptions and sensitivity scenarios.

Why it matters: the board has a formal fund‑balance policy that targets a 40% reserve with a 30%‑50% band. CFAAC’s base projection assumed conservative revenue inputs — a 3% CPI assumption for the current year then 2.5% in out years, $2,000,000 in annual new growth (CFAAC described that as conservative compared with a 13‑year historical average of about $5,000,000), and $2,000,000 per year set aside for capital/repairs. Under the base scenario the district stays above policy bands this year but projections show the fund balance drifting toward the lower band in later years if assumptions hold.

Fred Schaffer told the board that the committee intentionally modeled alternate scenarios to show sensitivity, including a lower CPI and a higher new‑growth assumption. “We plan on $2,000,000 annually in new growth… that 2,000,000 number is fairly conservative,” Schaffer said. He and Jason Kaes emphasized that projections are a “moment in time” and that internal and external factors can change outcomes.

Board questions focused on what costs are included and how the district would respond if projections deteriorate. CFAAC said expenditure reductions are levers the district can use, though they preferred to model revenue uncertainty because revenue is less under district control. Board members also asked about the $2,000,000 capital outlay figure; staff clarified that over the next three years $1.5 million of that was earmarked for construction while $500,000 was to support Lions Park and Fairview during referendum work, and that operating savings from a new Lincoln building could reduce some future operating costs.

The presentation included these clarifying figures (as discussed in the meeting): the district’s operating budget is about $35,000,000 for the year; ESSER federal funds were received and increased revenue relative to budget in the current year; fund‑balance policy target is 40% with a 30% lower band and 50% upper band; a modeled conservative new‑growth assumption of $2,000,000 per year versus a historical average near $5,000,000; and a placeholder of $2,000,000 annually for capital needs. CFAAC recommended continued annual re‑review of projections and said there are staffing and capital levers the district can use to respond to future shortfalls.

The board received the report; no formal vote was taken. Members thanked CFAAC for its work and asked staff to continue monitoring assumptions and returning updated projections annually.