MONDAY, FEBRUARY 11, 2002
CHAMPAIGN, ILLINOIS

   CHAMPAIGN – A miscalculation in expenditures has left the Champaign school district with a $700,000 deficit in a year that a surplus was expected.
   With that news and new budget projections, Interim Director of Fiscal Services Guy Cahill said the district should be very cautious in what it spends now.
   He found the error while he was putting together budget projections. He said he noticed that the growth from last year to this was not as much as it should have been, so he started going through the line items.
   For unknown reasons the computer program did not add the $1.2 million Tort fund into the Education fund on the expenditure side as it did in the revenue side. Therefore, the budget looked balanced in total, but not all expenses were included.
   "We had every reason to believe what we were doing was right," Cahill said.
   The projected $200,000 surplus and some other unexpected revenues made up part of the shortfall, but most of it will have to be made up in next year's budget.
   Cahill said 80 percent of the budget is already committed in salaries, and there isn't enough left in this year's budget to make up the money.
   "There are a number of strategies to make it wash out," for this year, Cahill said. "We have enough in reserves to support it."
   Board member Nicole Storch said she's not sure where the money is going to come from, but that is her first question.
   "We're in negotiations with teachers and (the support staff), and it's very difficult to say where $700,000 is going to come from, and they're going to have to tell me," she said.
   At Monday's regular meeting the school board will be asked to accept an amendment to the budget with the change.
   "We're fortunate that Guy is a sharp business manager and noticed the error," board member David Sholem said. "My conclusion is that Unit 4 is getting its act together as to where they've been."
   After figuring out where the district is, Cahill started making projections for the next five years, and he predicts few increases in revenue while the district's expenses should continue to rise.
   His projections are based on the last 16 years of income and spending data. He paid particular attention to the last four years, while the district has been under tax caps, which limit the district's ability to increase the levy to the inflation rate or 5 percent.
   While new property tax growth has been strong for the last four years, Cahill said the city's growth is slowing and the benefit for the district will be "quite a bit less" next year.
   From the state perspective, the district appears wealthy and enrollment has stagnated, leaving it ineligible for further state help.
   "The state doesn't care that we're a tax capped district," Cahill said.
   "In the eyes of the formula we're a hold harmless district – we're not going to get any less but we're not going to get any more."
   On the spending side, the district must be careful, Cahill said. He hopes to maintain the salaries at 80 percent of the total budget and maintain spending at other areas at its current level. He said he doesn't see a need for cuts yet, but just a reallocation of expenses.
   "From a financial health perspective, the district sits well among its peers," Cahill said. "As the future unfolds we have reason to be cautious but the district is in control of its own destiny."
   

News-Gazette

-- Anonymous, February 11, 2002