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Arlington Heights SD 25 projects modest operating surplus but dipping reserves amid capital spending
Summary
Finance staff presented a five‑year forecast showing operating surpluses before capital spending, projected capital needs of about $21.5 million over five years, and fund balances projected to dip below the board's 60% target late in the forecast period under current assumptions.
Stacy, the district’s finance lead, told the board on Feb. 17 that property taxes account for roughly 80% of the district’s revenue and that the five‑year forecast uses a 10‑year CPI average of 2.8% as a baseline for levy projections. She said new growth continues around 0.7% and that evidence‑based funding to the district is about $5.3 million annually under current formulas.
The forecast shows a balanced operating budget before capital investments but highlights capital spending as the primary driver of projected reserve declines. Stacy said 2026 summer projects total about $4.3 million and that the five‑year capital plan totals about $21.5 million. She noted the forecast includes an anticipated transfer of $1–2 million annually from the operations and maintenance fund to capital projects and budgeting for roughly $1.3 million in technology infrastructure over five years, partially offset by projected category‑2 e‑rate funding of about $410,000 over four years.
Stacy described other revenue assumptions: annual transportation reimbursement around $1.3 million, Medicaid reimbursement currently around $285,000 per year, CPPRT receipts near $1.4 million and rental income from district facilities at roughly $1.1 million. She cautioned that several streams are sensitive to state and federal budgets and that late property‑tax receipts reduced potential investment earnings in the current year.
On expenditures, the forecast ties compensation growth to CPI assumptions and anticipates ongoing staffing turnover and pension and benefits costs. The forecast includes contingency funding and assumes modest annual inflationary increases for purchase services, supplies and insurance. Stacy said fund balances are projected to decline and could fall below the board’s 60% target at the end of FY 2026–27 if current assumptions hold, but she also said the district has reserve breathing room to respond and does not need immediate drastic action.
Board members asked for a concise “current state” summary when the forecast returns in materials — what is used now, implementation dates, and a high‑level cost need justification — which staff agreed to provide when appropriate.
The presentation is informational; no vote was taken at the Feb. 17 meeting.
