Annual Financial Report to District Stakeholders

Annual Financial Report to District Stakeholders

SUPERINTENDENT'S MESSAGE

Dear Butler 53 Community,

As we have reached the midpoint of the 2024-2025 academic year, I am writing to our school district community with an update on the financial health of the district. I am pleased to report that Butler School District 53 remains fiscally strong, stable, and healthy. Through a disciplined approach to revenue and expenditures, our school district is able to fund necessary capital projects, while maintaining strong balances and low debt levels. 

Part of the district's Strategic Plan is to provide greater communications related to the financial inner workings of the school district and the stability of our finances. I am hopeful that this communication will provide an opportunity to showcase what has been accomplished by our current Board of Education and administrative team to have a school district with a strong financial footing. The audited Annual Financial Report, discussed further in this communication, included a total reserves of $11,280,577 as of June 30,2024, which represents 79.6% of budgeted FY25 expenditures. The district maintains a reserve balance higher than district policy of 50%.

While the district has little control on the revenue received, as the large majority of revenue is dictated by property taxes and the percentage of revenue collected, the district can control expenses and be as proactive as possible for future scenarios. For example, over the past three years, the district has restructured and reduced the number of duplicative administrative positions in line with the strategic plan. This expenditure reduction allows funds to be reallocated to district capital needs and student achievement expenses. 

All of these financial decisions and investments facilitate the district's ability to continue to offer a world-class, personalized education for our students, retain approximately 90% of our talented and committed staff members each year, and align with the district's strategic plan.

If there is anything that you would like to learn more about, please feel free to reach out to me at superintendent@butler53.com. 

Stay safe, be well,

Dr. Paul O'Malley
Superintendent of Schools


2023-2024 Annual Financial Report (AFR) Results in Operating Surplus

Butler School District 53 maintains strong financial health, fiscal practices, and sound decision-making related to expenditures. As required by law, the District maintains seven individual governmental funds. In analyzing the Operating Funds, District 53 recognized revenues of $14,103,227 with expenses of $13,153,956, generating an operating surplus of $949,271. The payment of capital improvement bonds is $939,000, resulting in a net surplus of $9,346 which is added to reserves. Actual revenue received exceeded budgeted revenue by $186,000, as interest rates on our reserve funds remained higher than anticipated throughout the year.

While some expense lines exceeded the budget set in Spring 2023 for this fiscal year, such expenses were reviewed and authorized by Board of Education actions to enable the staffing and capital projects to meet our strategic plan. The Board of Education strategically invested in returning many special education services to district personnel to provide comprehensive services to district students within our own buildings. This decision brings greater flexibility and more cost certainty while also providing direct services to all our district students. Separately, employee benefits were higher than expected due largely to health insurance premium increases in the middle of the fiscal year. Nevertheless, the district managed an operating surplus at the end of 2023-2024.

Some key components of the district's financial report:

  • The District's combined fund balances on June 30, 2024, were $14,975,372, a decrease from the prior year’s fund balance of $21,937,696, resulting from the planned spend-down of bond proceeds for the Capital Improvement Vision Project.
  • The District's net assets decreased by $134,265. This represents a 0.7% decrease from June 30, 2023. The decrease is related to depreciation expenses that began upon completing the district’s Capital Improvement Vision Project.
  • The District’s largest source of revenue is property tax revenues, which were 80.5% of the District's total revenues, not including on-behalf payments. The District experienced a decrease in corporate personal property replacement taxes (CPPRT) and an increase in interest income, which comprised 5.2% and 5.7% of revenue, not including pension payments made “on-behalf” of the district by the State of Illinois, which are recorded in the financial statements per accounting rules.
  • Expenses for the year were $18,447,154 and totaled $14,873,996 when factoring out the aforementioned on-behalf payments, of which 95.9% were for instruction and student support services.

District 53 Receives Highest Assurance Level from Third-Party Audit

After completing the Butler School District 53 financial audit, Lauterbach & Amen LLP issued an unmodified audit opinion, the highest assurance level independent auditors can give over financial statements. Further, the district's management letter contained no material weaknesses or significant deficiencies in internal controls. The audited results support the assessment that the district maintains excellent financial practices and overall health.

Capital Asset Investment

The District’s three-year $20,000,000 investment in its Capital Improvement Vision project, implemented across both buildings during the preceding three years, represents a large portion of the district's net assets. The district adopted a Disciplined Debt Service Model to fully fund the debt issued on the Capital Improvement project with operating funds, without a taxpayer referendum and which did not require an increase in the district’s annual levy. 

All three phases have been completed, and the project was under the approved budget of $20,000,000.  These assets are used to provide services to students, and the facility upgrades include instructional learning environments, technology, safety and security, and life safety.

An open house for the community was held this fall to showcase the tremendous investment the district has made in its infrastructure for students today and in years to come. 

Property Tax Levy Remains Consistent from Previous Years

While Oak Brook residents enjoy a lower tax rate without a municipality tax, residents recognize a high-performing, award-winning school district. The district relies heavily on property taxes to fund expenses. Strategically, the district chooses not to levy a higher amount in the district's duty to the taxpayers and the conservative fiscal approach taken by the Board of Education.

The District will request a levy for the 2024 tax year, which will increase by 4.95% from the 2023 tax year. Illinois law caps the district at the lesser of the prior year’s consumer price index, which was 3.4% or 5.0%, excluding new properties. Based on this, we expect our extension to reflect an approximate 4.1% increase. This annual increase will assist the district in offsetting the rising costs associated with district expenses.

District Makes Key Decisions to Forecast Expenses Amid Tightening Economic Environment

As the district looks at future revenue assumptions and expense lines, the Board of Education has made strategic decisions to provide expense certainty in future years. The below staffing and benefit decisions protect the district in forecasting expenditures, retention, and student growth.

First, the collective bargaining agreement with the Oak Brook Education Association (through June 30, 2026) will provide cost certainty for a significant portion of expenditures for the next two fiscal years. This three-year agreement prioritizes the retention of long-time, committed, and talented district teachers. Further, it recognized the shortcomings of the previous agreement while remaining aligned with district financial health. With 66% of members holding a master's degree or higher, the contract has brought the average teacher salary to approximately $83,000, higher than the state average according to the Illinois School Report Card.

The Board of Education approved a contract with Kelly Services to provide paraprofessionals to our district, saving the district nearly $100,000 annually. Utilizing a third-party agency, the district can quickly find and if needed replace paraprofessionals minimizing disruption to the school's operations and student needs. Further, the district maintains flexibility in scaling up or down its workforce quickly in response to changing demands or unforeseen circumstances. 

Further, the district extended administrator contracts with multi-year financial terms. These contract extensions include Superintendent, building principals, and Director of Student Learning & Staff Innovation. The roles and responsibilities, along with the contract terms, for administrators align with the district's strategic plan and succession plan.

Finally, the Board of Education approved joining the Employee Benefit Cooperative (EBC), which provides a flexible plan design, risk-sharing opportunities, and access to wellness and incentive programs. Further, the EBC provides economies of scale and risk pooling that allows members greater long‐term financial stability than purchasing insurance products individually and an initial insurance rate premium for 18 months.

Ways to Learn More about District 53 Finances

  • Attend a Board of Education Finance Committee meeting
  • Attend a Board of Education Regular Meeting
  • Read the Annual Financial Report (AFR) posted on the district website
  • Review the monthly financial workbook uploaded to BoardDocs and posted, on the district website
  • Set up a meeting with the superintendent

District 53 Maintains Strong Academic Achievement

With the sound financial management of Butler School District 53, the district recognizes high academic performance by spending strategically on providing a pathway for all students to maximize their potential. For example, when data spanning 2018 to 2024 are combined, Butler School District 53 ranks in the top three for IAR ELA and Math student proficiency compared to similar school districts within our region. And, 96% of eighth-grade students at Butler Junior High School passed Algebra I.

Both Butler Junior High School and Brook Forest Elementary received Commendable School designations as the Illinois Report Card summative designation, highlighting 91% staff retention. Both schools were within 0.6 to 3.27 of the indices cut scores for Exemplary designation.

The data presented in the Annual Student Achievement and Performance Report convincingly substantiates the academic health of the district. We are proud of our students for outperforming all of the historically designated comparable schools considering ELA and math comprehensively and the district maintains strong indicators and trends of academic proficiency, school quality, and student success.

Key metrics reviewed that demonstrate academic achievement:

  • IAR ELA proficiency - meeting or exceeding expectations - is reported at 81%, compared to 41% throughout the state.
  • IAR Math proficiency - meeting or exceeding expectations - is reported at 75%, compared to 28% throughout the state.
  • ISA science proficiency is reported at 87%, compared to 53% statewide.
  • The comparison of ELA achievement results for District students with IEPs indicates levels near those of non-IEP students in the state (about 45%).
  • MAP Reading Attainment is reported at 81.9% at or above the national average for Fall SY25
  • MAP Math Attainment is reported at 85.6% at or above the national average for Fall SY25

Butler Junior High School Principal, Melissa Zaniewski, was recognized by the Illinois State Board of Education (ISBE) with an Award of Special Recognition through the Those Who Excel Awards program for her academic leadership within the Butler School District 53 community and for making a positive impact during her tenure as principal. The annual Those Who Excel & Teacher of the Year Awards celebrate incredible classroom teachers, administrators, teams, volunteers, and school support personnel who have impacted the students, families, and fellow educators in their school communities. 

Butler D53 Annual Financial Report