Byron board directs $1.6 million in budget adjustments and approves up to $3.5 million short‑term borrowing

The Byron Public School District board on Dec. 2 directed district leadership to develop recommendations for at least $1.6 million in budget adjustments for the 2025–26 school year and unanimously authorized issuing up to $3.5 million in short‑term debt to shore up cash flow.

Staff told the board an audit shows about a $2.0 million shortfall largely tied to incorrectly recorded base salaries during negotiations and to rising salary, benefit and insurance costs. "I am proposing that, and I would like the board to do a vote after at the end of this, to give us direction and do a vote on reducing or adjusting — not all in reductions — it could be also some revenue increases, but at least $1,600,000 for next year," said the district administrator presenting the budget update.

Leadership said earlier steps trimmed roughly $1.5 million through staffing and budget adjustments, but the district ended FY24 with a fund balance under 1%, well below the board policy target of 8% of the annual budget. Staff cited a 29% increase in health premiums this year, the end of COVID‑era reimbursements (about $414,000 used previously), and inflationary increases in contracted services as major drivers.

To manage short‑term cash needs — including a large January debt‑service payment — the board also approved issuing aid‑anticipation certificates, a borrowing mechanism secured against future state aid or levy receipts. Presenters said the borrowing is intended to bridge timing gaps in cash flow and does not increase recurring revenue; estimated interest and issuance costs for the borrowing were cited at roughly $133,000. "We're asking to borrow against next year's aid — up to $3,500,000 of anticipated aid — that's why it's called aid anticipation certificates," a presenter said.

Board members asked for clarifications about how the $1.6 million target relates to the prior $1.5 million of adjustments and whether revised budget work could close the gap. Staff said the current revised budget for the remainder of this year is close to balanced, and the additional $1.6 million direction is intended to shape next year's budget and restore fund balance over time.

The board approved the motion directing the leadership team to recommend $1.6 million in adjustments by unanimous voice vote. It later voted unanimously on a resolution authorizing issuance and sale of up to $3.5 million in general obligation aid‑anticipation certificates, series 2025A, and authorized district officers to execute sale documents.

What happens next: staff expect to present a revised FY25 budget and the audit on Dec. 16; recommendations for the $1.6 million in adjustments will be developed by the leadership and brought back to the board for action in January or February, with final borrowing approval planned for early January if needed.