The District 58 Board of Education held a Financial Workshop and Special Meeting on Monday, Jan. 27 at O’Neill Middle School. View the agenda. View the meeting video.
Financial Workshop
Superintendent Dr. Kevin Russell led a presentation on District 58’s finances. Over the last several years, District 58 has taken significant steps to improve the District’s financial position, planning process, and sustainability.
The first step in the process was to ensure that the budget was balanced. The District continues to present a balanced budget year after year. The second step was to adopt a fund balance policy to ensure a sustainable future. The fund balance policy has been in place for several years and ensures the District has enough cash on hand during the low-cash point. The third step that was put into place this year is a capital reserve policy. This policy assures that money is annually allocated for District 58’s school and building long-term maintenance. Next year, the District will transfer $750,000 from its operating funds to the capital fund, and the District will require these funds to be used for capital projects. Following these three steps will greatly help District 58 continue to be on a sustainable financial path moving forward.
While District 58 has been on a sustainable path, the financial outlook is no longer as rosy as it once was. District 58 is far from alone regarding its economic outlook, and many school districts will need to make adjustments moving forward. The bottom line for District 58 is that if adjustments are not made, expenditures will outpace revenue, and the District will not be on a sustainable path moving forward.
Why are costs exceeding revenue? While there are several reasons, the main factors are as follows:
- Inflation - The Property Tax Extension Limitation Law, or PTELL, limits District 58 from annually increasing its property tax revenues by the consumer price index or 5% (whichever is less). Meanwhile, many of District 58’s expenses are increasing at a much higher rate.
- Federal COVID funding - All school districts received support from the federal government to navigate the pandemic. To address learning loss, District 58 used federal funds to hire additional staff and purchase support materials. This is the last year that school districts have access to COVID funds. Therefore, adjustments must be made, and the District needs to return to normal operating procedures.
- A sharp increase in transportation costs - All school districts have experienced a sharp increase in transportation costs due to significant increases in labor rates, caused by driver shortages, including District 58. The District has also experienced a sharp increase in homeless transportation costs. In 2022, the Interim Housing Center, a large homeless shelter, opened within District 58’s boundaries. The District is required to provide transportation to and from this center to all students attending its schools and must split the transportation cost to those wishing to remain in their home district. Over the last four years, District 58 transportation has increased on average 25% a year from $3.4 million in fiscal year 2021 to $6.75 million for fiscal year 2024.
- Less financial support and declining revenue from the Illinois State Board of Education - While District 58 receives the majority of its funding from local property taxes, it also relies upon state and federal funding. The State of Illinois is facing an approximate $3.2 billion deficit next year. This means the District will likely face steep cuts on its budgeted state funding, including for transportation and special education. Additionally, last year the District’s revenue from the state’s Corporate Personal Property Replacement Tax (CPPRT) was significantly reduced in August and expects that will continue next year.
While all local school districts are facing financial constraints, District 58 has some unique challenges, including maintaining its expensive neighborhood school model, having one of the county’s lowest property tax rates, and being home to the Interim Housing Center (IHC), mentioned above. While District 58 will always serve homeless students (as required by law) and takes pride in meeting the needs of all students, the IHC has a significant impact on the budget. Finally, Dr. Russell noted that funds from District 58’s successful 2022 referendum are only allowed to be used for specific construction items, in line with the ballot question.
The District’s central administration team started the fiscal year 2025-26 budget process early. In order to meet the District’s financial goals, they determined that $2,186,600 in cuts must be made.
The District 58 team has been working diligently and collaboratively to meet its financial goals while minimizing the impact on students and staff. District 58 intends to preserve its core programming, including general education, special education, English language learning, all State mandates and extracurricular activities.
In addition, the District identified programming improvements/shifts that were already in the works and would naturally result in approximately $676,000 in cost-savings. These cost-saving improvements/shifts include:
- Gifted programming: District 58’s elementary gifted program used to take place at a centralized school one day per week. The District is shifting its gifted programming to take place during pull-out sessions at all elementary schools. This has resulted in decreased gifted transportation and programming costs.
- Certified salary schedule lane change adjustment: The District shifted how it budgets annual certified salary schedule lane changes.
- Occupational therapist shifts: The District shifted its occupational therapists from contract positions to staff positions, saving money.
- Expected lower outplacement costs: The District expects a decrease in special education outplacement needs. The current eighth grade class has a higher-than-typical number of outplaced students who will be leaving District 58 at the end of the school year.
In addition to the above, District 58 is proposing the following reductions:
- Software reductions: The team audited its software and recommended the elimination of underused/redundant services, as well as identifying more cost-effective solutions for other products.
- Administration reduction: The reduction of the part-time assistant principal position at Highland and Kingsley was recommended. Elementary schools of similar size already made this adjustment successfully in past years.
- Preschool schedule shift: The District pays a premium in preschool transportation costs, due to its route times. Adjusting preschool start and end times will result in lower transportation costs.
- Class size adjustments: With federal pandemic funds, District 58 was able to make class sizes smaller. District 58 will return to its pre-COVID recommended class size targets:
- Grade K-2: 80% of classes will have 24 or fewer students
- Grades 3-8: 80% of classes will have 26 or fewer students
With this shift, the District expects to reduce up to six elementary teaching positions and 5.5 middle school teaching positions.
- Nursing substitute reduction: The District employs a 0.6 floater registered nurse to ensure coverage in buildings; while this was a bigger need during COVID times, there are fewer absences in this area now. All schools will continue to have a full-time registered nurse on staff.
- Special programs certified staff reduction: The reduction of two special program certified positions was recommended. After COVID, District 58 increased its certified staffing in special education to respond to a lack of available instructional assistants. There is no longer a significant instructional assistant staffing shortage.
Dr. Russell shared that District 58 will continue to be transparent and direct with staff, families and the community regarding its financial position, and recognizes that reductions are always difficult. No final decisions have been made, and the team will continue to monitor enrollment trends, revenues and expenditures. Dr. Russell noted that without reductions, District 58 will not be on a sustainable financial path.
School board members acknowledged the gravity of the situation and thanked the administration for their hard work. Member Emily Hanus pointed out how education has changed since the pandemic and expressed concern with the potential impact of the reductions. She asked if the administration could share any other reduction ideas. Other Board members expressed concern that the reductions might not be enough, considering the recent financial trends -- homeless transportation has been increasing exponentially, state revenues continue to be cut deeper and deeper; if these trends continue, the recommended reductions will not be sufficient. Member Tracy Weiner asked how the District would determine how large class sizes could become, as well as how the District would determine which classrooms would be affected. She noted that a classroom of 28 students might work well with one group of students, but with another group it could be much more challenging, especially considering some of the increased student behavior issues that District 58 has been facing since the pandemic.
The District will take the Board’s input into consideration and provide them the additional information requested over the coming weeks and months. As planned, no action will be taken at this time. The District will continue to keep all stakeholders informed as information becomes available.
Board Vacancy Discussion
Board President Darren Hughes shared that Board Vice President Gregory Harris has resigned from the Board due to personal reasons. President Hughes thanked Mr. Harris for his eight years of service.
“It really has been an incredible honor over the past eight years working with Greg. I really enjoyed working with him,” said President Hughes. “I want to take an opportunity to thank him for his time and service on the Board. He came on at the same time as me. We were in a budget deficit, we went through COVID, we went through a lot. He’s had a great tenure and I really do wish him the best of luck.”
“During the past six years that I’ve been on the Board with him, he was a model Board member, doing all his homework,” added Member Tracy Weiner. “I just can’t say enough good things about his steadfastness and his earnestness and to work with all of us; it’s a loss.”
The Board discussed the need to appoint a Board member to fill Mr. Harris’s place until his term ends in April 2025. The appointed member would not be eligible to run in the April 2025 election unless he or she already filed paperwork to be a candidate with the County Clerk in November 2024 and is already on the ballot, or meets the requirements to be a write-in candidate. A Board application will be shared with the community.
Upcoming Events
- Friday, Feb. 7 at 7 a.m.: Financial Advisory Committee Meeting at the Downers Grove Civic Center
- Monday, Feb. 10 at 7 p.m.: Regular Board Meeting at the Downers Grove Civic Center
District 58 Board of Education members are: Darren Hughes, president; Kirat Doshi, Melissa Ellis, Emily Hanus, Steven Olczyk and Tracy Weiner, with Dr. Kevin Russell, superintendent; and Melissa Jerves, board secretary.