DANVILLE — District 118 officials are weighing obtaining bonds and raising taxes as their expenses mount up —including an operating deficit of $1.8 million dollars, which might rise closer to $3 million.
“Our deficit was like $1.8 million, and that’s before the audit,” said Todd Pence, the Interim Business Director. “Honestly, it usually goes up, so we’re probably looking at two and a half to $3 million when it’s all said and done.”
Pence presented cash-flow monthly charts showing that while some months the district is in the green due to property tax payments, the other months are in the red.
“There’s only a few months where we actually have a positive cash flow… the two months [when] the tax money comes in,” Pence said. “The rest of them are all negative cash flow months.”
And with a projected deeper pocket deficit, Pence says decisions will need to be made.
Currently, the district has a $7.7 million deficit district-wide for 2026-27. But Pence says there was a recent discovery of $1.5 million in salaries that reduced the Education deficit down a bit.
“It’s a good swing for us,” he said. “That would take that 3.7 in the (education) fund down to 2.2, which isn’t great, but it’s also not as bad as it could be.”
Pence says the budget is a conservative one.
“My philosophy is always: you want to overestimate your expenses [and] underestimate your revenue,” he said. “You don’t want to come in and tell your board, ‘Hey, we’re only running a million‑dollar deficit,’ and it’s 10 million.”
And even with the changes to the budget — Pence says the final deficit could be as high as $4-5 million versus the projected possible $2-3 million.
So, what is Pence proposing the district board do to solve the financial woes?
For one, Pence says they cannot ‘cut their way’ to a balanced budget. To do so, it was said by one school board member that there would need to be almost 50 positions eliminated.
“Let’s just say we had to cut spending to make a balanced budget… What we would cut? In my opinion, a financially responsible thing to do,” one member said, suggesting layoffs.
“Can’t do it,” Pence replied. “A lot of the others aren’t necessarily staff… and a big chunk of that $7.7 is out of working cash.”
So to fix the finances, Pence says the district could maintain the current rate of the EAV (Equalized Assessed Valuation) to pocket the property tax monies already flowing in. He said the district rate dropped from $4.84 to $4.15. If the district maintained the higher rate, they would bring in millions more.
“This year it cost us $3.5 million, and last year it cost us $1.7 million,” he said. “So that three and a half million, we’d still have money in working cash, so that would have cut our deficit in half right there.”
And that is not the only area Pence says the district is losing funds. He said they are losing around $1.3 million a year to Tax Increment Financing districts, to the tune of close to $4.8 million.
Pence said another area the district could work on is issuing working cash bonds. He says $5 million would refill the district’s cash reserves.
“We could put 5 million back into working cash, put it back into [our] savings, our rainy‑day fund,” he said. “The impact is minimal.”
And while a tax levy increase of over 5% would trigger a public truth-in-taxation hearing, the district is losing out on that money, and they need the funds.
“If we do it… it’s not going to look pretty in what goes in the paper because it’s going to be a big increase,” he said. “Like it or not, I don’t know that we have much choice but to get something fair to the district too.”
The district is also facing a large jump in health insurance costs unless something changes.
Under the current gold plan for DEA members, an individual employee pays $175.50 per month. The DEA fund contributes about $122.36, and the district pays roughly $848.50 per month, which includes a 22% premium discount the board agreed to fund when it put $1 million into the DEA insurance account.
Pence warned that if the district’s January 1 renewal comes in at a 15% increase — lower than last year’s 28% — and the DEA subsidy runs out by July, the employee share on the gold plan could soar.
“You’re looking at individual insurance going from $175 to $450 by July is the projection,” he said, “Needless to say, we’re looking at all options.”
Dr. Darlene Halloran, the board president, closed the meeting acknowledging the board’s challenges.
“This has been an evening of not great news when we have our challenges,” she said. “But… the board is up to the challenge, and we’re willing to take this on and make a difference with our administrators.”