District 95 Financial Dashboard

Located northwest of Chicago, Lake Zurich Community Unit School District 95 encompasses an area of 19.4 square miles serving the communities of Lake Zurich, Deer Park, Hawthorn Woods, Kildeer, unincorporated Lake County, and North Barrington.

 

District 95 is a community unit school district that serves students ages Pre-K—22.

 

The District annually completes a five-year long-range plan to anticipate and address the revenue and expenses of the District. The District’s assessed property values for 2020 have increased for the sixth year in a row. During the current fiscal year, the District had a full bond rating review where Standard and Poor’s reaffirmed the District’s AAA bond rating.

 

The communities served by the District strongly support the District; this was illustrated by passing a building referendum for $77,600,000 with 69% of the electorate approving the referendum. $37,600,000 of these bonds were issued in June 2020. The District has a stable workforce and has a labor agreement with the District’s certified staff through the 2025-2026 school year. The fiscal year 2023 budget is balanced on an operational basis.

 

The District will continue spending referendum dollars from the Capital Projects Fund where revenue was received in prior fiscal years. The District has strong fund balances which will support interest earnings during the current school year that will support this year’s budget. The District has adjusted assumptions to financial projections in a post-COVID world to develop realistic financial plans.

 

 

The Board is required to adopt the fiscal year budget by September 30th each year. The Board is required to have a budget hearing before the Board adopts the budget. This year the public hearing and approval of the budget took place on September 22, 2022.

 

The official budget requires that “On Behalf Payments” from the State be included although these are not recorded on the District’s financials. The “On Behalf Payments” expense is estimated and budgeted on the revenue and expense sides for a net impact of zero dollars. The budget represents a set of reasonable assumptions and plans for what could happen. Many of the direct budgetary impacts of the pandemic have been addressed and these budget line items have returned to normal pre-pandemic levels. Revenue sources such as athletic admissions, facility usage and interest earnings have been updated to reflect current trends and expectations. On the expenditure side, the District as maintained, post-pandemic expenses related to the additional custodial cost for extra cleaning. Additionally, expenses related to purchased services and supplies have been updated to reflected anticipated increases due to inflationary pressures.

 

The District has completed issuing all the general obligation and debt service bonds related to the referendum-related work. A transfer of $3M from the Operations and Maintenance Fund to the Capital Projects Fund has been budgeted. Overall, the budget is a deficit budget due to the construction-related expenses. Without the referendum promise expenses and transfers, the budget for across the operating funds would be a positive budget of $599,202.

 

 

The Board of Education is annually required to adopt an estimation of the taxes to be levied not less than 20 days before the adoption of its final levy. The tax levy resolutions shall be filed with the county clerk by the last Tuesday in December.

 

District 95 is subject to the Property Tax Extension Limitation Law (PTELL) or “tax cap” which limits the amount of taxes a district can extend regardless of the district’s need. The growth in the tax extension is limited to a 5% increase or the Consumer Price Index (C.P.I.) whichever is less, plus new construction. The C.P.I. for the 2022 levy is capped at 5.0% with the C.P.I. reaching the highest point since the inception of PTELL at 7.0%. The taxes extended for District 95 are based on the Equalized Assessed Valuation (EAV) of the district and the Consumer Price Index (CPI) and PTELL.

 

Another key component in determining the total EAV and the taxes that can be extended is new property values within the District. New construction is important to a district since this property comes to the district at its full value, not calculated in the limiting rate. This year the county assessor indicates that the District will have $10,198,327 in new construction for the 2021 calendar year. Preliminary information will be used as part of the 2022 levy preparation and will be adjusted in the spring when final calculations are issued.

 

Combining anticipated new property value with the decrease in value for existing EAV the estimated 2021 EAV for the district is $1,724,524,079. The CPI, estimated change in existing EAV, and the value of new property are used to the tax extension for the District’s annual levy.

 

Annually, the actual levy figure that the Board will be asked to adopt will be more than the levy extension estimated to be received by the District. This annual safeguard in the levy process is designed to protect the District to ensure that all of eligible funding is captured. The safeguard is an important component of the levy process as the figures used to establish the levy are based on estimates. Second (and more importantly), the levy is adopted by individual funds and not in the aggregate, the higher number in the individual funds allows the district to make adjustments to allocations when the final levy is received in April based on changes in revenue received and budget decisions for Fiscal Year (FY) 2023. While the requested levy is more than the District anticipates receiving, the taxpayer is protected by the tax cap and the District cannot exceed the total available extension based on the CPI (capped at 5%) plus new construction.