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Local

Morris School District 54 aims to pay down debt

Morris School District 54 aims to pay down debt

The Morris Elementary School District 54 board of education voted to approve the fiscal year 2019 (FY19) amended budget during the regular board meeting on June 17.

Board members Bonnie Cap, Sarah Bogard, Jerald White and Amanda Hiller were present for the approval process. No comments were made at a public hearing held prior to the regular meeting regarding the budget, which was on display for 30 days before this week's approval.

District business manager Jill Mills said fund balances will be up $726,983 in the next fiscal year.

“That’s all in the plan we have orchestrated," Mills said. "Kathy Perry helped us to increase our fund balances so we could prepare for these big bond payments we have coming up in the next few years. Everything is falling nicely into place.”

The FY19 amended budget estimate profit and loss report shows funds saw an increase due to higher revenue over expenditures. Fund increases included: education $65,610; building $106,961; debt $41,155; transportation $6,892; Illinois Municipal Retirement Fund/Social Security $114,967; capital $88,780; working cash $20,412; Tort $149,781 and life safety $132,425 with a total of a $726,983 increase.

Dudek said when he started in 2016, the number one concern was the looming out of control balloon payments and a lack of a plan to structure the district's debt. As a result, the tax rate kept rising. Dudek and the district worked with Saratoga School District 60C Superintendent Kathy Perry to create a budget plan.

“We worked really hard at stabilizing the rate, not extending any debt and paying off our bills,” Dudek said. “We agreed at $3.60 as a tax rate, we were going to stay at that. That was the last tax rate when I came, so we said that was the tax cap, we were not going to go above it.”

Dudek said the district has worked hard to build a surplus and pay off debt using tax increment financing (TIF) funds. The balloon payments for the Morris Grade School building start next year to the tune of $800,000 per year for six years.

“They borrowed for the building and then in 2008, things changed, the economy changed, obviously Collins Station closed so they restructured the debt, I don’t know what I would have done, but they put balloon toward the end to kind of push the debt down the road, well now we are at that point-we are not pushing it anymore, we are paying it off,” Dudek said.

Mills said the renting of the former Shabbona Middle School building has helped the district financially within the building fund, which historically struggled. Dudek said the district saves around $400,000 annually between rent and not needing to spend money on the building needs.

State evidence based funding also helps the budget, as the Morris Grade School revenue from the state increased this year by $329,459.

“We are a Tier 1 district, so we are the most needy, so we get the highest percentage of new money. So every time [the state] puts more money in the evidence based model, we get more, and we are also one of the last groups to lose it,” Dudek said. “That’s why are trying to take all of those pieces and pay off our debt.”

In the debt totals by year report, Dudek said working cash bonds all go toward employee salaries and benefits and the other bonds the district holds are building bonds that have to be paid down. Dudek hopes to have all of the building debt paid off in FY29, but the majority paid off in seven years.

The district sells working cash bonds each year. New this year was the use of private placement to save the district money. The district avoided having to go to Moody’s to get a bond rating- pay those fees and attorney fees and less to bonding agents by going through the private placement option.

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