The Citizen's Finance Advisory Committee was 10 years ago by the Board of Education to assist the Board with financial planning. During that time, the group has researched and reported on District spending and revenues.

The committee includes parents and community members with financial backgrounds, a teacher, a Board member and administrators. The full roster of committee members is available (CFAC ROSTER).

BAAC reported its findings to the Board of Education on January 12, 2012. The full report is available.

Key information coming out of the report to the Board of Education included:

Without any changes to the budget and assuming probable financial conditions, District 34 will overspend revenues by nearly $16 million in the operating funds by the end of the 2015-16 school year.

If CFAC’s probable financial assumptions are realized, titled the base scenario, the District would reduce its fund balance, or savings, by the end of the 2014-15 school year to the minimum level by Board policy. In the 2015-16 school year, the District would then need to make substantial budget cuts.

The District currently has a fund balance of approximately 50% of the annual budget. Maintaining at least the State recommended 25% helps avoid short-term borrowing to maintain operations between revenue payments. District 34 Board policy requires the maintaining at least a 30% fund balance.

For this year’s report, CFAC provided the Board with both the base scenario and the alternate scenario. The base scenario CFAC shared is their best estimate about the future financial picture while the alternate scenario represents the downside potential and takes more of a “worst case” look at both revenues and expenditures from a fiscal perspective.

One of the charges from the Board was for CFAC to determine the amount needed to balance the budget 2012-13. CFAC determined that amount at $2.6 million in reductions. CFAC shared that if $2.6 million in reductions were completed and took effect for the 2012-13 school year, the District would still deficit spend in future years but would maintain at least 30% fund balances through the 2016-17 school year.

Another charge from the Board was for CFAC to determine how to balance the budget by 2015-16 and maintain a 30% reserve level. CFAC shared that could be done by cutting the budget by a total of $4 million ($1 million in cuts each year for four years beginning in 2012-13). This approach would also result in deficit spending but would also maintain at least 30% fund balances through the 2016-17 school year.