001board members. We need to choose individuals who are committed to academics, not indoctrination, and to honoring parental rights with transparency of what is taught and what children are exposed to. So, there was a recent, very recent, uh, Supreme Court ruling, Muhammad versus Taylor, and the parents won the case six-3. So, that was a pretty good victory. And um the ruling imposes immediate requirements on public school districts nationwide. Schools must now provide advance advanced notice when potentially objectionable content will be used. Allow parents to have their children excused from instruction involving contested materials. apply strict scrutiny to policies that substantially interfere with or undermine religious beliefs parents want to instill. So, Muhammad, this is the uh Supreme Court decision establishes that parental rights claims involving religious exercise must be evaluated under strict scrutiny, which is the
002highest level of constitutional protection in the American law. Under this standard, a government must demonstrate that its policy advances interests of the highest order and is narrowly tailored tailored to achieve those interests. And uh just an ending, I would say that it's now up to the parents to exercise their rights vigorously and their responsibilities to their children also diligently. But you guys have the same responsibility to um not just to go along with the stat status quo but to stand boldly and wisely with the best interests of the children um under their parents uh authority. Thank you. Thank you very much PK. Uh good evening. Uh you know uh part of tonight's presentation is uh is by uh Dana on the district finances and uh it reminded me of a couple of questions that um
003I think might be good to address whether in today's meeting or a future meeting um for the public about the district finances. Um, one of those things is that uh if you look back at one of the board packets from uh from a June meeting, uh there was an inclusion of a schedule of the uh total expenditures uh in the district uh per student and then the uh total instructional expenditure per student and it was for 301 in comparison to about 10 or 12 other uh school districts, all CUSDs in the uh northern Illinois area. And uh we had uh the lowest instructional expenditure per student uh compared to all those districts uh just about $7,000 per student. Um a lot of the surrounding districts are significantly higher and even as a percentage of our
004our total uh revenue or total expenditure uh it was sub 50% and I think we were the only one that was spending less than half of the budget uh on instructional expense. Um and so that kind of stood out. Um so it'll be helpful to understand you know what's driving that. Um and then perspectively as we look ahead to the next academic year and the year after that um do we expect that to remain the same or change or are there things that actions we can take to bring our expenses more in line with with other districts? The assumption being that if we're not spending as much per student then we may not be providing comparable services educational services uh to to our population. So that's one uh one question. Um the other question this
005this goes back to uh kind of something we do um each year which is um the PTEL procedure and that allows us to uh submit um you know a budget that is uh higher than the 5% uh cap on increasing the uh uh the tax assessments and uh um it would be helpful I think just to have an explanation of like the motivation for that right u people are very concerned about the tax bills the size of the tax bills here versus in surrounding districts and with it you know continuously increasing more than 5% and going through administrative procedure to do that I think providing a little bit more explanation for the motivation for that um what strategically does it allow the district to do uh by doing that and is that actually translating into
006actual bills increasing greater than 5% or uh is there some other purpose uh behind it that would be helpful thank you thank you PK all All right. And with that, we will go on to Before we start rolling on with Dana and her financial presentation in September, the board is going to be asked to adapt adopt about a $90 million budget. And since we have four brand new board members, we thought we'd start at least early as early as we could to give you an overview of our of school finance. In July, on July 21st, we're going to have their auditors here. implied in some of the past questions have been raised by by people in this community is implied as some illegal activities going on. But we have orders that every year go over
007everything for any illegal activity and the inappropriate transfer of funds and and all those questions should be addressed openly in a public setting. And that's what we're going to we're going to do tonight just by giving an overview of school finance followed on the 21st with our auditors more discussion of why we do certain things and why certain things have been done in one way or the other in the past. So with that is a sort of a that's direction we're going in August you're going to get a preliminary budget. Again it's around $90 million. We're approaching a hund00 million budget here. And then in September by state law you have to adopt the the annual budget the FY26 budget 2526 budget. So that's required but before October one it has to be submitted to
008the state. So with that introduction N want to give us the 30,000 foot view of school finance. I can try. So and Jeff told me he's going to help you because he's been he's been listening to this for uh how many years? Too many years. Too many. Not as many. Nobody has that many years. Go ahead, Dana. So, when tasked to try to come up with a a presentation on how the budget works, um Jeff's already heard this presentation because it's the same one I gave at the CAT meeting in February to kind of give the community, bless you, um a 30,000 foot view of the budget and how it works. Um, so for the the three of you at the table in the community listening, um, this is just a very high level and
009as you're sitting here going through things, write notes and then at the end we can jot down notes and if I can answer them, great. If not, I'll have the answers for you at the next board meeting like Griff just said. So, um, so at Central 301, we have eight funds that we, um, that we use within our budget. So, each fund is like its own silo. every everyone listed on here, the education fund has certain expenditures and has a certain revenue that can go into that fund. So, there are kind of like their own little houses that um have purpose for what they have coming in and what they have going out. Some of the funds can be interchanged a little bit depend like the operations and maintenance fund and the capital projects. Those
010kind of go hand in hand. So it what might be a operation maintenance capital project um could be in fund 20 and it could be in fund 60 and it could be split between the two. So there are some that can be um kind of split others like IMRF only IMRF can go in there and only IMRF levy can come out of there. So that is strictly just for the IMF and social security. Can you explain what IMRF represents? Yes. I'm gonna every I'm gonna go through every one of these in detail. Okay. I just want to give Okay, so the education fund acronyms in education that's why so the education fund is fund 10. So with the state budget um there there's a code and there's a there used to be called an IPAM
011which is a Illinois accounting manual. I don't remember what the P stands for but um so that gives you a structure a guideline on how to code certain account numbers. So, anytime you see an account number that starts with a 10 in any school district in Illinois, it's going to be the education fund. So, fund 10 is education and you'll see every fund I list that at the top um for that education fund is where all the salary and benefits come except for the operation and maintenance which is your custodials and your um maintenance browns crew. The transportation salaries are in the transportation fund. Um and then the IMRF and social social security um the IMRF is the Illinois municipal retirement fund. So that is the retirement plan for um school employees. Um TRS which
012is the teachers retirement system those benefits come out of this fund but IMRF and social security come out of fund 50. So, this fund pays for all the instructional, everything, textbooks, anything for um the budget or the schools, building budgets, um any of the services that we have, any of the board, district office, any of the anything else that kind of goes within there. And then the departments, which um are listed below, I won't read them all to you, but it lists every single department that is included in the education fund. So, that's where your special ed, your early childhood, um your English language learners, your social workers. So all of those subgroups are included within this fund. Food service uh technology tuition for um special ed. Good to go. Okay, that was a lot.
013I didn't want to read them all, but um so education fund revenues come from all of these different buckets here. Our tax levy is our um our biggest revenue source for any school district. Um we get about 64 67 million in levy money for um for for revenues that come in. 67 million comes in to us in total. So it the levy is broken down by fund. So each fund has its own special dollar amount that it would go in there. Um, and then the other the the other big one is our evidence-based funding um, which is a state funded uh, amount that comes in and and that we get roughly 14 million. Um, and that also is split between the ED fund and the on andm fund depending on how the budget lands. Um,
014but here you can see the interest, our school lunches, our athletics, all the registration, all those fees come into this education fund. And then you got the grants, state and federal grants at the bottom. Our next fund is our operations and maintenance fund. This one is fund 20. This is where all of um Dan's crew um custodial maintenance grounds, all everything salary and benefits related to them come in to this account. all the services um our Nyore, our electricity, water, telephone, trash removal, all of those um services, our security monitoring, our garbage, all of those kinds of things that's related to the building comes out of this fund. Um and then any major capital projects if we have, we can use this fund. The money that comes into this fund is our tax levy and
015um our parking passes because they pay for the repair of the the asphalts and stuff. When we redo the parking lots, they pay for it. So, we put them the revenues back into that fund. Um corporate personal property replacement tax that um is it's an old it's I think from the 80s. We get a very small amount. we get about 200,000. Um that revenue gets split into the on andm fund and fund 50. So a portion of it needs to go into the IMRF fund which we have to cover a certain amount out of that fund and then all the rest would come into here. Um it's kind of like an interest. So that number fluctuates each year. And then evidence-based funding, which I said from the other one, can flow in here. And then
016we do apply for a school maintenance project grant every year. Um it's a $50,000 match. So every year we write it. um and we get approved and so we have to at least spend 50,000 to get the 50,000. Um but it's a easy way to chunk off some of the smaller projects. The debt services fund that is fund 30. This is where our bonds and interest payments come out of. Um any it's kind of like your mortgage. You have your your principal and your interest. Um we have a schedule out to I don't know 20 36 or something. Um so anything related to bonds and then we do have a debt certificate out there. So the debt certificate principal and interest would also come out of here. We have in the tax levy there's a
017line item for fund 30 which would pay for the bonds only. Um the interest income and impact fees. So when we have we get um impact fees from the city of Elgen those revenues come in and we put it to offset the debt certificate payment that we have. So debt certificates cannot be levied for. That has to come out of our own money. So when that decision was made back in 2016 to to purchase those debt certificates, um we did some bonds and we did a debt certificate. That debt certificates roughly about 500,000 a year that has to be paid out of money that's in this fund um from interest income or there's impact fees. So, as um the city of Elgen gives us those impact fees um that we report out every month that
018you guys see, the first 500,000 goes into this fund to cover that payment. So, that way we make sure we cover it. And then anything excess goes into the capital projects fund, which you'll see in like two more slides, I think. Transportation fund is the next fund. They're fund 40. Um, anything related to transportation, the department, the salaries, the benefits, the fuel, the bus leases, any, I mean, it's kind of an easy department. Um, anything related to them goes into the transportation fund. Um, revenue that comes in for that is the tax levy. Um, they get the interest and then, um, any field trips that we do. And then there are the state categoricals. The state categoricals are like what the state gives us back from our claim. So, every year we file a transportation
019claim and we file all of our expenditures and then they roughly give you about 80% or 70% back um the following year. So, we would get usually you would get quarterly payments. Um in the past they've been delayed. Maybe get three of the four that you're owed. Sometimes you would get two of the four, sometimes it would um they've been paying four four years. Um but they're still in a rear one payment. So, they pay one from the prior year, three from the current. Um, so I'm not sure how that's going to play out over the next year, but that's what though when you see state categoricals, that's it's like from the transportation claim. And it's based off of regular education and special education. So there's two different formulas of reimbursement for depending which type
020of transportation it is. Fund 50 is our Illino Municipal Retirement Social Security Fund. This is fund 50. um these are the benefits for the the non-certified people. So the IMRF and the FICA taxes that are taken out um come into this fund and then Medicare for all employees. So teachers get Medicare taken out. So the whole entire district's Medicare is in this fund. Revenue from this fund is comes from the tax levy um and then interest. And then here's you see that corporate personal property tax again. So the remainder I think we are putting about 60,000 into this fund. um 60 to 70,000 and then the rest goes into the fund 20 the on and m fund fund 60 is our capital projects fund this fund is for major capital projects there is no money
021that comes in for this fund there's no levy we do not levy for this um fund so the only way the money comes in here is from those impact fees that we get from the city of Elgen or township or whoever else that we might have impact fees Um those funds feed this account to to build up to be able to to do major capital projects. Um and then they do get interest. Every every account gets interest. Fund 70 is a working cash fund. Um this one doesn't have expenditures. Um it's more used for loans or transfers to other funds when needed. Um this one there is a very small levy that goes in there. I think it's about 100,000 a year that goes into this fund to kind of just grow it as like
022a um a fund that's there for being able to transfer to on&m. If a major project came up that we didn't couldn't afford, you could transfer money through a board resolution um and move money if we needed to. But a board has to pass a resolution. Correct. That's key. Absolutely. Yep. Yep. It's a two-month process. It's not something done by the administration. Absolutely. you know, legal would have to be involved and then yeah, we would have resolutions, right? Yep. And then our last fund is our tort fund. Um, this is fund 80. Um, this is where all of our insurance costs come in. So everything from our worker c, our work comp, our property and casualty, so like all of the boilers and all of the buildings and um our cyber liability, everything falls under
023that property and casualty. We have um unemployment insurance for our employees and then all of our legal bills from our lawyers go into this fund and then we do levy for this and their interest income comes in here. So sources of revenue this shows you a slide of our revenues coming in from local, state and federal. So here you can see um it's a list of all the different things that I was mentioning earlier. So you can see based on local um state and the revenue buckets. So federal, you can see there's all of our grants and then the state revenues. You see there's the evidence-based funding at the top and then um there's more grants, special ed grants at the bottom and then the transportation one that I was talking to earlier. And let
024me just So local makes up about 77% of our budget and state is 21% and federal is about two. So when they're talking federal cuts, it's only 2%. It's not as scary, but it is still a lot of money. So um the National School Lunch Program we get quite a few quite a few dollars from. And then um our idea grant we get over a million dollars from it. So it it's not that it's not significant, but it it is a smaller portion of our our revenues. This is just a graph of the prior slide. This shows you if if you're more a picture person, the local property taxes, you can see is 70% of our revenue. So a majority of it comes from our property taxes. And then you can see there's your um
025other local which is 7% your evidence-based funding is 16% and then your state and federal are five and two over there. Um so overall our expenditures for the operating funds so operating funds are um every fund except for the bond fund and the capital project fund. Um all of those funds. You can see that our 63% is salaries and benefits of a budget. So, um a lot of times it's between 60 and 70% of the budget is salary and benefits. That's just where majority of our expenditures are. Um and then all other ones are in the 30 is 37%. So, total expenditures by fund for last year's budget, 71% is in the ED fun. So, this just shows you another graphic picture of how much the ED fund um supports all of the or I
026mean how much the ed fund is compared to all the other funds. And then part of um what else I'd like to just share this is our bond payment schedule. Um so this is where our bonds are. So, if you look at the yellow row, that is our current fiscal year. Um, and if you go over to the maybe one the total column, it says $8.6 million. So, that's our bond payment for this school year. So, that's what we paid this fiscal year for bonds. Next year, we're paying a total of $9 million for bonds. And then the following year in 2027, we dropped to 1.6 million. So, the bonds that we've been borrowing over time, we paid off our 2006 bonds, we refinanced the 2013 bonds. Um, so that's what we're paying off. And
027then all that we have left is our 2017 bonds um that are up there. So, you'll see a a big drop if you look at keep going to the right, the bond and interest tax rate at the far far right column. That shows you we're at 87 cents for the bond and interest. So, in the levy, um you have your regular $5, um like5 or $6 for your tax percent and then there's a bond and interest one. So, it breaks it out at 87 and then you'll see that it goes to 90. So, there'll be a little slight little lip next year going up for that bond and levy levy amount and then it drops to 18 cents. So, there's a huge drop there. So there will be savings on people's tax bills um because
028we're down to the last bond on that schedule. That's usually when districts like to pass referendums. That would be the tax impact is neutral. Yes. And that was the intent. That's what we were shooting for, but we won't make it now. So um there will be some tax savings benefits there in people's eyes. And then this slide is um a little bit more detailed. This was what was also shared out um when we were um doing the 2024 referendum. Um this was trying to show you that if we were to go out in multiple stages. The reason that we were trying to get the referendum pass is to not exactly like Dr. Pow just said to not let that drop happen. Um because then you get used to that huge savings which is nice. as
029a taxpayer myself, I would love to see that savings, but then to come back in three years and say, "Now I need more money to build something." Um, and it's going to cost more at that time, it it's a little bit harder to swallow. So, trying to kind of keep that level as level as we could for the project that we were we were out proposing for. Um, this was just kind of showing you the scenarios of not doing it all at once either, like breaking up into three separate years to kind of stretch the borrowing out a little bit more just to keep it as level. And this slide was just kind of um attempting to do that for that reason. So, this was PMA's projections when we were doing that referendum. That's all
030that I had from a huge high level um view. So when I do when we work on the budget um the budget we have when I was talking about that accounting manual there's certain sections of the of the account. So the the account structure has its fund, it has its function, it has its object, it has its source, it has a different um sections of this account number and each section is related to this manual that's used as a guide as to you know the 1130 means it's a high school um high school account and if that wherever that number falls in any school district if you see that 1130 in that section for the function um it would mean high school related. So they don't have um every single scenario out there, but they
031have like elementary, middle school, high school. So you can keep going down in some of the count numbers. You can um get to the granular levels of how far you want to go by department, by whatever. Um so there is some sort of guidance and and in on the website, you'll see the um my spreadsheet of my working budget. Um it breaks it down by every department, every salary, benefit, services. it goes through every single section. Um, and then that ultimately gets loaded into what's called the ISBY um, 5036 form. So that is the state budget form and it's multiple tabs on a spreadsheet that it fills in and it kind of summarizes all of that, but that goes to um, by those functions. If the high school's 1120 or 1130 and the middle school's
0321120, every one of those different amounts feeds into the budget um and kind of summarizes and collapses some of the accounts so you don't have, you know, um you don't have 80 million of them, but that budget then gets uploaded to the state and um that's how you get your final budget. There's a test on this later. Are you better ready to see? Well, one one of the things that uh boards ask how can we control the budget? Well, 70% of the staffing. Uh every time we we come to you and we ask you to approve a personnel report, that's an expenditure. And many districts for example have said as a practice hiring new teachers more right out of college with few years experience because teachers make more money with years experience and degrees. So
033I think in the past pra past practice here has been to to work to try to keep the new teachers you've have a lot of new smiling faces in front of your kids. That's one one reason a lot of districts do that is to keep the cost down. In fact in the contract for teachers when they retire they get four 6% increases. It helps their annuity in in retirement for the rest of their lives. So that's a benefit that they've negotiated here. Well how do how do we pay for that benefit? Well, after hiring letting somebody go at hundred some thousand dollars a year, you hire a teacher at $50,000 a year as a replacement. That's how you come up with the savings. And that's a practice done in almost all the districts in the
034state of Illinois. But to me, 70% of of all your costs are staffing and hiring of teachers, hiring administrators. There there's your big cost. I know there's been a lot of discussion here. has been focused on purchasing land and a number of other construction things, but the focus in terms of long-term is is staffing and and you make decisions every single month regarding staffing and will tonight. And then we have situations like in special ed where it's almost impossible to find person staffing or teachers because there's a shortage of teachers in special education and English as a second language and there's a whole number of areas uh that we have a hard time. Matt could go on throughout for a long time on this. He struggles with it every single day. So questions again we're
035going to follow this up with our auditors on the 21st. questions you have for the auditors. As Dana said, if you have any follow-up questions of what you just presented, we need to hear them. While they're thinking, I'll I'll kind of ask a couple questions. And again, forgive me if some of these questions are very basic. um when you're talking about revenues coming in. So whether it's the tax levy or for um EBF is the percentages that go into those specific funds is that based funding the average person has no idea what you're sorry I'm still learning that. I just that's something new to me down the line. You're using that terminology. Go ahead. the percentages of that revenue that comes in, is it dictated by some sort of governance as to where that money
036goes, the percentage that goes into each of those accounts, or is that something that we decide as a district based on our expenditures? So, when we get that tax levy money, is there some sort of um I don't know what the right word is. Is there something that dictates what how much that goes into each fund or is that our decision as a district based on what we know our expenditures out of those funds are going to be? So the tax levy which you guys will learn in November when we do the tax levy November and December is when we do bring the tax levy bring a tenative and then we bring the final in. Um those you'll see that the request that we ask for is broken out by each of those funds. Okay?
037So it might say there's 28 million in the ed fund, 7 million in special ed. like it breaks down every single thing and so based on the formula and the calculations of all of the tax levy that it dictates and tells you this fund must be here. The only one that is um there's a revenue recapture for um it's a newer thing that basically the timing of receipts and and um people can dispute their taxes, stuff like that. That money comes back and you can kind of designate where you want it. Um, right now we're putting it back into the on andm fund, the capital or in fund 20, which is where maintenance is. We just put it in there. Okay. So, that was the only one that really you probably could put it in
038ED fund if you wanted to or onm and m operations and maintenance. Operations and maintenance. Sorry. Sorry. Every person thinks we we're talking another language. I know. And then for the EBF, is that the same? Um, EBF is based on another huge calculation that the state will hopefully give us um at the usually in the beginning of August. Um, and they'll say, um, there's different tiers. So, there's four different tiers for evidence-based funding. Um, right now we're in tier one, so they're we're considered one of the poor schools. So, we do get a bigger amount for evidence-based funding. So, in the past, um, just a little history, um, it used to be called general state aid, and there was a whole different formula was based on enrollments and another whole different calculation. Um and then
039that flipped over probably about four years ago. Um so four maybe six years ago, maybe it was right before COVID. Um so that was we weren't getting a lot of money in under that formula. Then when we flipped to evidence-based funding, we were considered we were in tier three. Um and we were getting about $100,000 $200,000 for the first three or four years of that new formula. But then we switched to tier one. So, um, evidence-based funding is that $350 million you hear that the state approved. 50 million usually goes to this property tax relief grant. Um, so there's 300 million that goes to the schools. So that 300 millions get split up by the tiers and I think 90% of that 300 million goes to tier one schools. Then the tier two schools get
040a percent tier one gets a percent of it plus then all of the tier two get the left. So by the time you get to tier three and four, there's no money left. Um so it it based on need, it's based on um adequacy targets um and need and your other revenues coming in. So there's multiple things that go in there. There are buckets that tell you um that there they recommend a certain amount goes towards special ed, um English language learners, very small amount for tech and title one. So, um, the amounts that are broken out in there, we spend way more money in those buckets than what's supposed to be earmarked for them. So, there's a little bit of guidance for those ones just to make sure that you never get below those.
041But, you know, you can use it in in really any fund that you need. Little history lesson. When public law 94142, which is the demand special education, passed in the 1970s in that federal government promises 40% of all costs were paid by the federal government. currently I think we're at like 10 to 12%. In terms of federal supporting of through IDA and that's quite a change from what the intent of the law was. So local taxpayers are paying more and more and they have for the last 20 or 30 years. So just a reality not a good one. But local that forces local taxpayers in their property tax to pay it and that's not going to get any better. I know Donnie Doner. Sorry. The reality right now Sorry, one more question and it's simply
042because I don't understand. Um, with the debt certificate that you were talking about where we take the impact fees from Elgen and it's 500,000 a year. Is there is there a limit on that that debt certificate? Does that expire at some point where we won't be putting money into that or is that just kind of Can you explain that a little bit more for me? The Yes. And I don't remember if it was in if it's on this schedule. If I can read this. I don't think it's on here because this is just bonds, not debt certificates. Um, so it that was I think in 2016. Um, I don't remember the exact term of it, but I do think there's probably three years left. Okay. So then it will be done and then that full
043amount could go anywhere. Okay. Unless we have new debt. Thank you. All right. Thank you so much. Really appreciate it. We only have a few minutes before we start our we have to go into close session. So, go ahead. You can Well, one one thing we could do is uh table our action items until after close session. Uh, and maybe we might want to take a break before we start our our interviews because I did bring food for the the board because we did force you to start at five o'clock and I figured you may want something. So, we have some salad, some pizza here for you. Okay. So, you could take a bite to eat and before we get into eight nine different interviews, right? Eight nine nine interviews that we have. So, yeah,
044out of respect for our our candidates that are going to be interviewing, I think um I'll ask for a I'm going to need a motion in a second, right? table a motion and a second to table our action reports till after we come out of close session second can I get a roll call for that please yes break and then we go into session take the motion going into close session yeah we'll make the motion Okay. Pardon me. So, I'll make the motion first and then go into close or do you want to take a break before? You want to take a break cuz Okay. eating is not part of close session activity. I know you thought it was, but it's not in the law. All right. The motion to go into close session, though.
045Well, it could go into motion, but I'm just joking about the meeting, right? So, yeah, we'll do that. We'll go ahead and Can I get a motion in a second to go to adjourn open session and move into close session and then move second? And roll call, please. Yes. So, we'll be moving into close session now. We got about five minutes for our first first person. So,