CARPENTERSVILLE – Nearly $3.5 million from a Sears Centre incentives deal and other savings from a new teachers contract will fill District 300's budget hole by 2016, the district's chief financial officer said.
During a district board meeting June 24, members amended the district's 2012-13 school year budget to reflect a $800,000 deficit, something that administrators have known and prepared for since a three-year, $13 million teacher contract was ratified in December.
The contract with the district's teacher union, LEAD 300, ended a one-day strike earlier that month. But it left the district to rely on reserves to make up for the deficit spending created by the contract and other annual non-union salary raises in effect until the contract expires in the 2014-15 school year.
But those annual deficits shouldn't linger past 2015 because of anticipated savings from a variety of sources, said Susan Harkin, District 300's chief financial officer.
"We are confident that we will get back to a balanced budget by 2016," Harkin said.
Nearly half of the $13 million contract with LEAD will go toward hiring more than 60 additional teachers to reduce district class sizes, a major sticking point in last year's contract negotiations.
The other half of the contract covers annual salary increases to existing teachers. Those increases gave teachers a 1 percent raise, plus a "step" increase for classroom experience this past school year. It will give them a step-only raise next year, and a 1 percent raise plus a step increase in 2015.
Step increases for a teacher average about 2 percent, the district estimates.
Administrators and non-union members, such as administrative staff, are set to receive annual salary increases that mirror the raises included in the LEAD deal. The raises and the costs to reduce class sizes are the primary reasons for the deficits, Harkin said.
But the contract also phases out a teacher retirement incentive by 2015 that will save the district between $1 million to $2 million once it expires. The smaller class sizes also will allow the district to pay less to teachers who receive overload pay for managing large classrooms, Harkin said.
The district will receive roughly $300,000 in annual savings on overload pay beginning next year, when smaller class sizes take effect, she said.
District officials also are assured that the district will receive $3.5 million by 2015 from a economic development agreement involving the Sears Centre Arena in the district's territory of Hoffman Estates.
Those combined savings should alleviate the district's deficit spending by the time board members and union leaders meet again to negotiate a new teachers contract.
"We are using some of our reserves right now to address the immediate needs of the district," Harkin said. "With the economic development agreement coming and some other savings we will see from this contract, we will see a balanced budget in the future."