Red ink could lurk again soon for Dist. U46

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Updated: October 19, 2011 4:10AM

ELGIN — The proposed 2011-12 budget presented to the Elgin School District U46 school board Monday foresees the district taking in $11 million more than it spends in the coming school year. But the district’s chief financial officers warned that if current trends continue, another bath of red ink could lie ahead.

Chief Operations Officer Jeff King and Director of Financial Operations Dale Burnidge said that, based on certain assumptions, total income can be expected to climb. But total spending probably will go up much more quickly. This year’s surplus already could be followed by a $3.5 million shortfall in 2012-13, and that could rise to a $12.2 million shortfall in fiscal year 2015-16.

The district’s cumulative total deficit could rise by $33 million over those five years, they said.

King said the projection assumes that the Consumer Price Index (a federal measure of inflation nationwide) stays at 1.5 percent a year, that each year adds $30 million worth of new construction to the real estate tax base, that total salaries go up by 2 percent a year and that the total cost of benefits such as health insurance goes up 10 percent a year.

Any increase in inflation actually would help the district’s finances by allowing it to collect more real estate taxes. The Illinois tax cap law limits each year’s levy increase to the rate of inflation or 5 percent, whichever is less.

The trends “could put us back into a difficult situation, so we really need to keep an eye on expenditures — especially in the salary area,” Burnidge said. U46 leaders are still negotiating new contracts for this year with the district’s six employee unions,

School board member Traci O’Neal-Ellis asked what can be done to minimize health insurance costs, which have gone up by one-third (from $31.4 million to $42.1 million) in just five years.

“We’re having conversations in all of our (labor) negotiations about that,” King said.

Superintendent Jose Torres said one possible route to adding income is that “U46 has not been aggressive in going after soft money” — gifts and sponsorships made by private foundations, companies and individuals for specific purposes.

In one example of such “soft money” income, the board Monday approved a contract with Provena Saint Joseph Hospital. The Elgin hospital will donate $50,000 over five years to the South Elgin High School Booster Foundation to make the hospital one of two “anchor sponsors” helping pay for the construction of the new stadium at South Elgin High. In return, signs advertising the hospital will be placed along the top of the stadium’s scoreboard and at two places along the perimeter fence.

Wisdom Adhesives and the Wisdom Foundation kicked off the stadium fundraising last winter with a $250,000 donation. So far, major sponsors who will have their names along the bottom of the scoreboard for a $25,000 donation include Sherman Health Systems, the Bear family McDonald’s restaurants, Coca-Cola Zero and Sebert Landscaping.

Anyone can inspect the proposed budget at www.u-46.org. A public hearing will be held at 7 p.m. Sept. 12 at the district headquarters, 355 E. Chicago St.

In other business Monday, looking to the start of classes on Aug. 24, human resources chief Debbie Zelinski said U46 started the summer with 120 vacant teaching positions. During the vacation, 27 more teachers quit and 15 asked for leaves of absence. But with a little over one week to go, Zelinski said, there are just 20 vacancies left, and four of those have offers pending to people who could fill them.

She said there are still 50 non-teaching jobs open, but the district hopes to fill all of those by the first day of school.