We are not in the same which is the reason if you remember the prior 20 years before the last three years we had to borrow money just to make the year make the year what we've been trying to do we've done all kinds of things to be able to reduce the level of expenses but there's really no nothing we can do to do to increase revenue really there are things that will be helpful. For example, we have fees that are owed to the district close to $5 million that's not being paid seems to grow every year. If we add that, that will make a difference. We're talking about a projected deficit of $8 million for next year. If you have that $5 million now, the deficit goes down 3 million. So, the amount of reduction we have to do be significantly lower than having that money and not having that money.
sold to the district. >> If I may, just out of curiosity because I know this was a touch point in previous meetings. Is the district still looking to do collections because I know that was a talking point from the district leadership. >> We would we would like the opportunity that affords us to be able to collect money owed to the district without having to resort to the option of layout. We can. So to answer your question directly, the authority or the directive for us to do collection will have to be agreeable to the board. >> Fair and I just know from a business side that cost money. So how are we able to afford a collection agency to come in and collect this money from these families? >> That's the money. >> That's a very good question. My experience tells me even having the option to collect, sending folks to collection without really going to collection will motivate some of the folks who owe us money to pay because we all know most of the folks who most of us we're hardworking.
We want to pay the bills that we owe. We know that if we get an outstanding bills to collection, it dings our credit. It impacts us significantly in the rate that we get if we need to buy a car, we need to borrow money even for insurance. So having that option in our tool belt without deploying it will serve as a way to motivate some of the folks you owe us money to actually pay us. >> So playing devil's advocate and again this is just my corporate brain, right? >> Um given the economic tides that are coming and this is not even just for 26 and 27, many families are just making it. So when we talk about credit, I mean it's fair, right? >> I mean if you think about it in theory, middle class is not even middle class at this point. So >> yes, we would like to have that objective.
Yeah, we want to pay our bills, but ultimately some of us can't. So I think we really have to face the question is is this a reliable source and is it worth us adding additional expenses to our bottom line? >> That's a very good uh point that you made. But the issue is that the way education is funded in Illinois, we get so much money from the state, we only get so much money from property taxes, but the cost of everything else keeps going up. The cost of utility goes up every day. The salary that we paid our staff because most of our staff have the option to work here or to work somewhere else where they can get paid the amount of money that they think they can. So, we have to find a way to bridge the gap, if you will. And one of the ways that we do that is to levy fees to make sure that our our students get the best educational experience possible.
But what we'll continue to do is continue to cut and there's a limit to how much cut that we can endure without having negative impact on student experience in the classroom. >> Thank you, Mr. Um our fees act collection actually has been going up strategically since last year. So >> no, it's actually been going the opposite >> this. But if you look at the difference between last year and this year we see an increase when I looked at it last time. Am I mistaken? Am I mistaken on that? Okay. >> Yes. >> All right. Let's keep going though. >> We no no district wants to levy fees on but at the same time there's significant expenses involved in educating students. And the the the main thing is with the education of students is very labor intensive. 84% of the expenses is tied to people. We need teachers, we need TAs, we need deans, we need bus drivers, we need all these people who required to be paid to be able to fund education.
However, we don't have enough revenue from state from property taxes to be able to bridge the difference. We have to figure out a way to bridge the difference. >> Last comment, I promise. um from a corporate stance I know we do like uh different forecasting right um like you're 12 plus four or what have you so given in a and I do understand that there's a difference between corporate and obviously the educational landscape but I if I'm not mistaken at one point if I gather or if I recall correctly 75% of our budget goes to compensation which is benefits and so forth on so >> it's actually 84% >> well when I first started mind. >> It's always been it's always been. If you look at every school district in the state of Illinois, it's very similar. It ranges from 80% to about 85%. You will that that's that's the uh >> well, in my latest notes, because I typically try to take notes, it was 75% at one point in time.
>> No, it wouldn't that would not be possible. >> So, not possible meaning that 75% of the lot a lotment was not for >> now it's possible that 75% might be salaries only I'm talking about salaries and related benefit you can't have salary without benefits >> well that's fair um I'll have to go back and look through my notes but I could have sworn that there was a more of a 70 range compared to now the increase of the 84% >> there hasn't been so there hasn't been that significant of an increase uh now we've given raises because it's a shift So for example, our TAs for example, well a good number of of our staff members, what we're doing is we were paying so low, no one wanted to work for us as a TA. But what we're doing in order to fulfill the requirement of the ID, we were then paying a significant higher amount to a third party company to then bring the same TA and pay them.
and we were paying them $25 to $30 an hour while we're paying our own employees 12 to $15 an hour. So on on the face of it might look like we're paying a lower salary amount in percentages but what we're doing we're shuffling the cards. So we're paying less in salary but we're paying more in purchase services payment that we're making to third party companies. And the disadvantage of that is you were having people who had no no bond to the district. They'll work here today. They'll call in without thinking about it. They have no relationship that are employees who have been here long term. Some of them 18 20 years. The same level of commitment that they have. You wouldn't get it with a third party TA. They were doing the same thing. >> All right. I'm sorry. I'm just going to rebuttal. And I say this just hearing teachers comments.
So there are some teachers that are at tenure where they will no longer receive an additional increase. So how does this play a part of our numbers at this point? So meaning like they capped out. >> So whether they're tenure or not doesn't have any impact on their salary. I think what you may be talking about is staff. >> So if they if they maxed out on the staff, >> okay, >> because teachers get paid a base salary staff depending on the education as well as the years of services. So if they still if they maxed out on the step, they will still get the base increase on their salary. >> Thank you for the clarification. Appreciate it. >> So this is another way of looking at at uh the numbers that we were just looking at earlier. So, uh, wanted to point out that without doing something to address the, uh, the financial challenges, not just plagues us, but all the other districts in the state of Illinois.
If you've been following the news, you've been seeing that the uh, the reductions that have been suggested here is the same reduction that is taking place up and down in the state. Look at our neighboring district, it's the same situation. So it has nothing to do with how we manage money. We've actually done a really really good job in the last few years of making sure that we get the best the best value for everything that we we buy. For example, the approval that the board just made for the um for the energy efficiency program where we actually we're spending 87,000 we're going to get a benefit of a million dollars and that goes on and on over the years. So we're doing our best to be able to address what we have control on which is the expenses that are that are controllable. So uh essentially so the cash flow crisis will hit us in 29 and actually will hit us before then.
it would just get to be a crisis point in 29 and uh so at that time the structural deficit will exceed $20 million and we absolutely absolutely don't want to get anywhere close. It'll be catastrophic. So this is the next step that uh we respectedly believe that the board and the committee should consider. We should consider doing uh taking actions that will lead to better collection on our fees and continue to engage in cost containment uh strategies which we we continue to do. There's actually an approval that's coming on later on tonight as it relates to energy savings uh with the um with the um the the um >> natural gas >> reverse uh no reverse auction that we engaged in. That's an example of uh cost containment and we have to look at alternative revenue uh streams. I know we've talked earlier before a couple of years ago and thinking about advertising, maybe selling them in rights uh on our buses and other assets in the district to be able to make money uh from uh from entities that are willing to put their names on things to then use those revenues to be able to supplement the funds that we need without having to do layout.
And then uh long-term we need to continue to make sure that we have a plan in place to stabilize our finances so we don't do uh ups and downs and then look at all the revenue options just like the one I mentioned earlier. >> That's the end of it.
Any questions uh discussion items? >> Can you go back one slide? Yes, sir. because I think one of the items that we brought just initially for review in general was the early childhood presentation back in January and one of the things that we've undertaken since then as in that presentation we've we we saw was just the the the importance of the whole program but also as a result of that just had an opportunity to work with the early childhood program to start to look at how we are thinking about both the legal and um state required requirements around transportation. And what we've learned is the importance of that legally and district perspective, we really have to ensure and I think given the the pressure of what we're seeing, we are going to have to start to move towards prioritizing the needs of our our most needy students in that program.
Now, all of our children in early childhood are important, but for a start, we're going to have to for next year really examine the the need to think about early childhood and really legally transporting just our our students who have an IEP or who require those educational requirements. Um, with that, however, we are working with the director, the executive director of the program to identify what that looks like in terms of the supports for students who may need continued support. Um, we've identified, so in in the month of April in our presentation, we will bring a broader overview of what those changes will look like and bring for the board's review final decision. But I just want to say that was one of the things that we've identified. It essentially it costs about $4 million and that is a significant um uh it's very important but it also does have a significant impact on the rest of our program and both are extremely important and so I want to just name that that neither is more important but in a position where we have to make difficult decisions we may have to fix that.
Yeah. That's when I start to think about that's 50 teachers, right? >> Yes. That's equivalent to the salary of 50 teachers. Yes. >> So I mean these are the types of things that we have to think about. Um yeah. >> I can we tread lightly when we say teachers because I think there's also another pathway of admin too, right? Um, right now it would appear that our teachers are being the most impacted, but I and again I don't know all the logistics behind the decisions that are being made in regards to who is going to um be a part of the riff, but I would like to acknowledge that it should also be in consideration of our admin too along with our teachers. Yeah, I think that we're looking at a >> as far as like like percentage decrease, you're going to probably see a bigger percentage decrease in admin versus versus almost any other FTE in the district.
Um, I say 50 teachers because the equivalent of $4 million is equivalent to 50 teachers. We could say it's equivalent to 45 teachers and four admin if you wanted to do that. But that's kind of the um those are the trade-offs, you know, versus with the EC potentially on the transportation when we're transporting students at a significant cost per student. And then kind of I look at it from an RF, you know, an ROI perspective. um what do you get more value out of 50 teachers or transporting 300 kids, you know? >> Well, I I want to just name that we we took this on from a very scientific approach and we will be bringing some of the findings for the board to make sure the board has fully informed and then regardless we are beginning to identify alternative resources for families who may need transport.
I just want to name that there are other um considerations up here that you've heard tonight. Um even while we are looking at um you know this evening you have on there we are bringing 11 there are 11 educators versus the 5560 that we have now this is hard this is a very difficult decision >> don't take it lightly but we do feel that we have wasted no we have spent every single ounce of our energy to make sure that we are thinking about this holistically and so Um, we know that this is something we'll continue to do and we would invite any questions to come our way. Be happy to engage it. I'll be following up with more information about all the various costs of containment strategies we are doing like we did last year. And >> I'll just say to Dr. Katti's point, the idea for reduction to balance the budget has been something that was not taken by one person.
It was a team effort where it was a collaborative effort where we include uh we include folks in the district to come up with ideas. It's not going to be one track where we're talking about reduction just in teaching staff. It's going to be it's it's going to be well thought out. It's going to be carefully evaluated. It's going to be done in such a way that u it will be fair because to Dr. ical guys, but this is not something we take. It's just something that we just doing clearly carelessly and just we know that in order for us to be able to do any of the things that we need to do as a school district, we need to put our financial resources in order. And that's that's the most important thing because the the funds is well what funds everything that we do in the district and sometimes is we have to make difficult decision but if we don't make those decisions now it gets compounded later and it might be a small level of pain now but if we decide that we don't want to have the courage to be able to do it now all it's going to do is going to be a bigger painoint.
point down the road. It's not going to benefit our students educational experience. >> Other questions from board members? >> I have a quick question. Um, >> if we make these $8 million in cuts and we stay in tier 2 and the cost of everything else doesn't increase more than the CPI, will we have to continue to make cuts or will we be stabilized? I know there's some there. >> I'll be I'll be honest with you and just to be very frank, inflation is not going anywhere anytime soon. If you if you look at the the numbers that are out there is showing that that's the thing with inflation. Once it takes hold, it's hard for it to go away, >> right? But so >> with inflation though, we would be then able to increase the levy by that amount, >> assuming it doesn't go over five.
So even if it if it goes I I don't anticipate that we'll get to five. >> But the issue is that there's certain fundamental things that we spend money on that tends to be higher highly priced higher priced on inflation. For example, the price of fuel. >> Okay. But just for my just for me >> just hypothetically if things don't increase more than CPI >> that's never happened before >> $8 million cut that we have to make is due to the tier one versus tier two and the additional cost would be because of in random things going up. I look at things from a very very frank point of view. I don't like >> I know >> I don't like happy talk and and I don't I don't talk about finances just to be mean. I'm just being realistic about what the headwinds are, the challenges are and we just have to have the courage to be able to face it.