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Kaneland budget battle over possible fund transfers

SUGAR GROVE – The Kaneland School District 302 Board tentatively approved a $66.5 million budget for the 2014-15 school year this week – but not without criticism from a board member.

The budget includes a $3 million deficit in its education fund, which officials hope will be reduced with reserves by the time the budget gets final approval in September.

One of the options the district could use to reduce the deficit in the education fund is a $1.9 million fund transfer from its transportation fund surplus – which prompted board member Tony Valente’s objection.

Valente said the move is not technically illegal, but it is not correct for the school board to do it.

“The government allows a one-time transfer once a year from one fund’s surplus to another area where you may need it,” Valente said. “They have no intention to use it in the transportation fund. They took no action last night, but their intention is to transfer it.”

Valente said it is wrong for the district to over-tax or over-levy intentionally in one fund. He said the intent of the law is to allow a transfer when money is left over.

“It [state law] does not tell you to lie about what you need, which is what we’re doing when we’re transferring millions of dollars over,” Valente said. “The people I represent, I don’t think they would think that’s OK.”

Superintendent Jeff Schuler said the tentative spending plan is a deficit budget – its overall deficit at $870,000.

“It is not a balanced budget overall,” Schuler said. “We did present to the board a deficit budget this year. When you look at the four operating funds together, when you look at the total expenses and revenues, it is not balanced … but we anticipate that gap likely closing a little bit between the tentative and final budget.”

Schuler said the education fund is at its tax cap limit. He said transferring surplus from the transportation fund is an option that was discussed this week but not acted upon.

“The board is not anticipating any kind of budget transfer,” Schuler said. “The board could do it but is not planning on it. It was part of the conversation, not part of the formal recommendation.”

He said the board could decide to make the transfer in September when the final budget is approved or make a transfer any time during the school year, if it becomes necessary. 

“Mr. Valente is entitled to his opinion about that practice,” Schuler said. “It is certainly a permissible practice. When we present it to the community, we are very upfront.”

Schuler said what Valente suggests to do is cut $3 million from the education fund. 

“That is not the direction the board [majority] would like to go,” Schuler said. “It would have a devastating impact on the quality of our education.”

Valente said he did not support cutting $3 million at once.

“My solution was, over time, to project where they will be,” Valente said. “What good administrators do is they project the EAV [equalized assessed valuation] and then make slight adjustments as you go through, so it is a lot less impacting at one time. You can save the money, if you can watch the spending.”

Valente said it was clear to him the board intended to transfer funds from the transportation fund to the education fund but did not do it this week. He said the board majority will do it once public attention wanes.

“One of the reasons I’m so adamant is that home values are stagnant, and our test scores are mediocre,” Valente said. “At one point, my house was worth $400,000, and now it’s worth $250,000. That’s the difference. If we were a top-notch district with top-notch scores, I would not be yelling as loud.”

Valente was principal at Kaneland High School, but left in 2009 to be a principal in another district.

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