Financial Update

April 6, 2020

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Cash Flow Projections

Five-year projections based on the results of the March 17,

2020 referendum ballot question.

2

Revenue Assumptions

• 2.3% CPI for taxes collected calendar year 2021

• 2.0% CPI for taxes collected calendar years 2022-2025

• $15M annual new property growth

• Increases in Evidence Based Funding (EBF) – the increase gradually decreases as we get closer to our adequacy target

• Four mandated categorical (MCAT) payments received each year

3

Expense Assumptions

• Approved BOE budget reductions

• $500,000 annually for curriculum cycle

• Negotiated increases per collective bargaining agreements

• $1M contingency funds

Does not include:

• Technology refresh needs presented at March 16, 2020 Board meeting

• Deferred building maintenance/capital projects

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BUDGET REVENUE / EXPENDITURE PROJECTIONS

FY 2020 FY 2021 % ∆ FY 2022 % ∆ FY 2023 % ∆ FY 2024 % ∆ FY 2025 % ∆

REVENUE

Local $116,199,529 $118,478,308 1.96% $122,027,369 3.00% $124,969,836 2.41% $128,046,702 2.46% $131,260,656 2.51%

State $87,195,159 $91,495,159 4.93% $95,095,159 3.93% $98,295,159 3.37% $101,095,159 2.85% $103,595,159 2.47%

Federal $8,691,966 $8,691,966 0.00% $8,691,966 0.00% $8,691,966 0.00% $8,691,966 0.00% $8,691,966 0.00%

Other $0 $0 $0 $0 $0 $0

TOTAL REVENUE $212,086,654 $218,665,433 3.10% $225,814,494 3.27% $231,956,961 2.72% $237,833,827 2.53% $243,547,781 2.40%

EXPENDITURES

Salary and Benefit Costs $170,552,651 $176,086,337 3.24% $181,752,110 3.22% $186,494,289 2.61% $191,363,486 2.61% $196,363,848 2.61%

Other $40,186,463 $40,807,751 1.55% $41,443,029 1.56% $42,092,678 1.57% $42,757,095 1.58% $43,436,686 1.59%

TOTAL EXPENDITURES $210,739,114 $216,894,088 2.92% $223,195,139 2.91% $228,586,967 2.42% $234,120,581 2.42% $239,800,534 2.43%

SURPLUS / DEFICIT $1,347,540 $1,771,345 $2,619,355 $3,369,994 $3,713,246 $3,747,247

OTHER FINANCING SOURCES / USES

Other Financing Sources $0 $0 $0 $0 $0 $0

Other Financing Uses $0 $0 $0 $0 $0 $0

TOTAL OTHER FIN. SOURCES / USES $0 $0 $0 $0 $0 $0

SURPLUS / DEFICIT INCL. OTHER FIN. SOURCES $1,347,540 $1,771,345 $2,619,355 $3,369,994 $3,713,246 $3,747,247

BEGINNING FUND BALANCE $16,321,987 $17,669,527 $19,440,872 $22,060,227 $25,430,221 $29,143,467

AUDIT ADUSTMENTS TO FUND BALANCE $0 $0 $0 $0 $0 $0

PROJECTED YEAR END BALANCE $17,669,527 $19,440,872 $22,060,227 $25,430,221 $29,143,467 $32,890,714

FUND BALANCE AS % OF EXPENDITURES 8.38% 8.96% 9.88% 11.12% 12.45% 13.72%

FUND BALANCE AS # OF MONTHS OF EXPEND. 1.01 1.08 1.19 1.33 1.49 1.65

Educational│O & M│Transportation│IMRF / SS│Working Cash│Tort

CUSD 308 │ Base Scenario 9/11/19

Updated March 2020 - CPI

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Pandemic FY20 Impact - Expense

Contracted Vendors

• Emergency Amendment to Rule 223 –Districts must continue to pay private placement facilities

• Transportation Vendors – Requesting to be paid at 75-80% of normal invoices

• Food Service – Aramark is working with a small crew to provide lunch and breakfast to our students.

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Pandemic FY20 Impact – SavingsEducation Fund

• Classroom/office supplies/copy paper: $12,000

• Staff mileage: $10,500

• Athletic workers/events: $25,300

• Professional development: $17,700

• Substitutes: $200,000

• Contracted Services: $81,700

• Food Service: $340,000

• Miscellaneous earnings: $50,000 7

Operations Fund

• Resource officers/patrol: $14,400

• Utilities: $120,000

• Facility rental/staff coverage overtime: $10,000

• Supplies: $6,400

• Repairs/maintenance: $15,200

Pandemic FY20 Impact – Savings

Transportation Fund

• Fuel: $49,000

• Contracted Services: $690,000

• Inspection & Repairs: $8,100

• Supplies & Parts: $6,500

• Wages for Athletic/Field Trips: $10,000

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IMRF Fund

• Board portion from savings of only paying classified employees for contracted earnings: $5,000

Estimated Total Savings: $1,671,800

Education Fund

• Delayed/reduced property taxes

• Reduced 4th quarter grant expenditure reimbursement

• Reduced National School Lunch Program reimbursement

• Student fees: sports, pre-school tuition, registration

Transportation Fund

• Delayed/reduced property taxes

• Reduced transportation claim (FY21)

Operations Fund

• Delayed/reduced property taxes

• Facility rental fees

IMRF Fund

• Delayed/reduced property taxes

Pandemic Potential Impact - Revenue

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FY20 – Fourth Quarter Cash Flow

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Projected Reserves 2-Apr-20

First Midwest Bank 4,668,175$

PushCoin Credit Card 367,061$

PMA 16,834,125$

Balance - Actual 21,913,284$

Estimated Outstanding AP/PR checks (600,000)$

Balance - Estimated 21,313,284$

April - 1st EBF Installment 3,397,817$

Title I 253,051$

Misc. Revenue 262,732$

Estimate: April 15, 2020 PR (7,100,000)$

April - 2nd EBF Installment 3,397,817$

Estimate: April 27, 2020 AP (3,300,000)$

Estimate: April 30, 2020 PR (7,100,000)$

Estimated April Ending Balance 11,124,702$

May - 1st EBF Installment 3,397,817$

Estimate: May 15, 2020 PR (7,100,000)$

May - 2nd EBF Installment 3,397,817$

Estimate: May AP (1,903,200)$

Estimate: May 30, 2020 PR (7,100,000)$

Estimated May Ending Balance 1,817,137$ Estimated September Ending Cash Balance

CARES Allocation 982,687$

June - 1st EBF Payment 3,397,817$

Estimate: June 15, 2020 PR (7,100,000)$

(902,359)$

Estimate: Tax Receipts 38,632,500$ Kendall County received 6/20/19

Estimate: June 30, 2020 PR (7,100,000)$

June - 2nd EBF Payment 3,397,817$

Estimate: June AP (2,200,000)$

Estimated June Ending Cash Balance 31,827,958$

Pandemic Impact – Future Fiscal Years

Potential financial impact of COVID-19

• Declining EAV and slow/stalled growth of new property

• Increased tax appeals – especially in hotel, restaurant, and retail properties. Many will never recover and close their doors

• Decrease in state revenue may cause EBF to be frozen at current levels – or potentially pro-rated

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CARES Act ~ Education Funding

• $13.5 billion allocated to K-12 and higher education for emergency relief grants

- $982,687 based on our Title I allocation

- Illinois will have an additional allocation to use at the Governor’s discretion for: technology, sanitizing, mental health, summer learning, etc.

• An additional $3.5 billion to be distributed across the country for Governors to distribute based on local need

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Updated Revenue Assumptions

• No increase in EBF in fiscal year 2021

• $10M new property growth

• 1.8% CPI in levy years 2021 and 2022 (previous 10-year average)

• Does not include any money we may receive from Governor’s emergency funds

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BUDGET REVENUE / EXPENDITURE PROJECTIONS

FY 2020 FY 2021 % ∆ FY 2022 % ∆ FY 2023 % ∆ FY 2024 % ∆ FY 2025 % ∆

REVENUE

Local $116,199,529 $118,478,308 1.96% $121,797,426 2.80% $124,235,966 2.00% $126,830,048 2.09% $129,711,742 2.27%

State $87,195,159 $87,195,159 0.00% $90,795,159 4.13% $93,995,159 3.52% $96,795,159 2.98% $99,295,159 2.58%

Federal $8,691,966 $8,691,966 0.00% $8,691,966 0.00% $8,691,966 0.00% $8,691,966 0.00% $8,691,966 0.00%

Other $0 $0 $0 $0 $0 $0

TOTAL REVENUE $212,086,654 $214,365,433 1.07% $221,284,551 3.23% $226,923,091 2.55% $232,317,173 2.38% $237,698,867 2.32%

EXPENDITURES

Salary and Benefit Costs $170,552,651 $176,086,337 3.24% $181,752,110 3.22% $186,494,289 2.61% $191,363,486 2.61% $196,363,848 2.61%

Other $40,186,463 $39,137,751 -2.61% $41,443,029 5.89% $42,092,678 1.57% $42,757,095 1.58% $43,436,686 1.59%

TOTAL EXPENDITURES $210,739,114 $215,224,088 2.13% $223,195,139 3.70% $228,586,967 2.42% $234,120,581 2.42% $239,800,534 2.43%

SURPLUS / DEFICIT $1,347,540 ($858,655) ($1,910,588) ($1,663,876) ($1,803,408) ($2,101,667)

OTHER FINANCING SOURCES / USES

Other Financing Sources $0 $0 $0 $0 $0 $0

Other Financing Uses $0 $0 $0 $0 $0 $0

TOTAL OTHER FIN. SOURCES / USES $0 $0 $0 $0 $0 $0

SURPLUS / DEFICIT INCL. OTHER FIN. SOURCES $1,347,540 ($858,655) ($1,910,588) ($1,663,876) ($1,803,408) ($2,101,667)

BEGINNING FUND BALANCE $16,321,987 $17,669,527 $16,810,872 $14,900,284 $13,236,408 $11,433,000

AUDIT ADUSTMENTS TO FUND BALANCE $0 $0 $0 $0 $0 $0

PROJECTED YEAR END BALANCE $17,669,527 $16,810,872 $14,900,284 $13,236,408 $11,433,000 $9,331,333

FUND BALANCE AS % OF EXPENDITURES 8.38% 7.81% 6.68% 5.79% 4.88% 3.89%

FUND BALANCE AS # OF MONTHS OF EXPEND. 1.01 0.94 0.80 0.69 0.59 0.47

Educational│O & M│Transportation│IMRF / SS│Working Cash│Tort

CUSD 308 │ COVID-19

Projection Summary - Updated April 2, 2020

Tax-Anticipation Warrants

• $25M issued in February to fund the District’s cash flow until the receipt of the first property tax installment – due July 31st

• Many Counties are waiving penalties for late payments

• Any delay in the receipt or decrease in the amount of the first installment could put the District in an immediate, emergency cash crisis

• Securing Board authority to issue additional TAWs would position the District to react to any changes in tax collections or additional financial news coming from local, state, or federal sources 15

FY21 – First Quarter Cash Flow

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Projected Reserves

June Ending Cash Balance 31,827,598$

Estimate: July 15, 2020 PR (6,900,000)$

Estimate: July 27, 2020 AP (3,300,000)$

Estimate: July 30, 2020 PR (6,900,000)$

Repay current TAWs (25,000,000)$ Due July 31, 2020

Estimate: Tax Receipts 1,200,000$

Estimated July Ending Balance (9,072,402)$

August - 1st EBF Installment 3,397,817$

Estimate: August 15, 2020 PR (6,900,000)$

August - 2nd EBF Installment 3,397,817$

Estimate: August AP (3,300,000)$

Estimate: August 30, 2020 PR (6,900,000)$

Estimated August Ending Balance (19,376,767)$

September - 1st EBF Payment 3,397,817$

Estimate: September 15, 2020 PR (7,300,000)$

Estimate: September 30, 2020 PR (7,100,000)$

September - 2nd EBF Payment 3,397,817$

Estimate: September AP (3,500,000)$

Estimate: Tax Receipts 36,750,000$

Estimated September Ending Cash Balance 6,268,867$

Bond Refinancing/Restructuring• Bob Lewis from PMA had worked out 4 scenarios to present to the Finance

& Facility Committee

• Initially, in response to the national shut down, municipal interest rates spiked as investors tried to remain liquid during these uncertain times

• Since the passage of the CARES Act, the market has stabilized somewhat and rates have dropped

• The next major call date is February 1, 2021; we can close on a tax-exempt refunding around November 1, 2020

• Therefore, given the recent market volatility and the earliest closing date, PMA is recommending the District wait until May to revisit bond refinancing/refunding

• Bonds that would be considered for restructuring are the 2011 and 2011A Series

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Wrap up

• Prior to the COVID-19 pandemic the District was on a path to increased fund balances

• While there are many unknowns as a result of the pandemic, we can expect there to be a financial impact to the District

• May has historically been the low-point for the District’s cash reserves

• It is recommended that the District prepare for this new, rapidly changing financial landscape

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