Budget Reductions

Naperville 203 projected a $12.4 million structural deficit. This means that our daily operating expenses are growing faster than our revenue. We have taken proactive steps now to "right-size" our budget to ensure the district remains financially healthy for future generations. The proposed budget has reduced the structural deficit to under $4 million.

We have prioritized reductions with the least impact to students first:

1. Reduce Discretionary Spending: Reducing costs for software, out-of-state travel, conferences, and external consultants.
2. Maximize Revenue & Resources: Ensuring program fees accurately reflect the cost of materials and services to protect the general budget.
3. Streamline Staffing: Adjusting staffing levels to match our current enrollment through attrition (retirement and resignations). This includes streamlining roles at the District Office and across administration.

Our Budget Buckets

How did we get here?

• Enrollment Shift: Over the last decade, student enrollment has declined by 875 students.
• Staffing Growth: During that same 10-year period, certified staff increased by over 185 positions.
• The Funding Cliff: One-time federal pandemic relief (ESSER) funds, and higher-than-usual investment income, which supported higher staffing levels during student recovery, have expired.
• Inflation vs. Salary Growth: While local revenue is tied to CPI, our primary expenditures, salaries and benefits, have grown at a rate that exceeds CPI. Because school districts are labor-intensive, even a modest increase in total revenue often fails to cover the compounding costs of contractual obligations and healthcare.
• Revenue Limits: As a Tier 4 district, state funding increases are minimal (averaging $15,000 annually), and local property tax revenue is limited by the Consumer Price Index (CPI).

• November 17: Board of Education presented Five-Year Financial Forecast
• February 2: Board of Education presented updated Five-Year Financial Forecast 
• March 2: Board of Education reviews certified staffing proposals.
• March 16: Board of Education reviews certified staffing proposals.
• May 4: Board of Education reviews tentative Budget posted for public inspection.
• May 8: Tentative Budget posted for public review.
• June 15: Public Hearing and Board action.

• November 17: Board of Education presented Five-Year Financial Forecast
• May 4: Tentative Budget Presentation
• June 15: Public Hearing and Board action

Capital Projects: Strengthening Our Infrastructure

The Capital Projects Fund (Fund 60) represents a strategic investment in the long-term health and safety of Naperville 203 facilities. It is important to distinguish these one-time capital investments from the District’s ongoing operational expenses. While the operational budget covers day-to-day costs like salaries and utilities, Fund 60 is utilized specifically for essential, non-recurring infrastructure updates.

The authorization for these projects is a direct result of Board Policy 4:20, which provides a fiscal roadmap for managing the District’s reserves. Each project listed below was presented in a public meeting for community transparency and formally approved by the Board of Education to ensure our schools remain safe, equitable, and efficient:

• Junior High Modernization: Approved via a series of Board actions between December 2023 and March 2025.

• Naperville North Addition & Renovation: Approved May 6, 2024.

• Kennedy Junior High Modernization: Approved June 16, 2025.

• Transportation Facility: Authorized August 4, 2025, with specific sustainability design approval on November 3, 2025.

By following Board Policy 4:20, the District is directed to manage fund balances within a 10–20% range. When the balance exceeds this threshold, the policy prioritizes utilizing those "savings" for non-recurring expenses. This strategic approach allows the District to:

• Avoid Debt: Fund major construction projects without taking on new bonds or incurring interest payments.

• Ensure Efficiency: Proactively address facility needs to avoid the significantly higher costs associated with emergency repairs.

• Promote Sustainability: Integrate energy-efficient technologies that lower future utility costs.

Because these projects are funded through a one-time transfer of existing savings, they do not impact the $3.9 million structural operating deficit. Completing these active projects ensures that we fulfill our commitment to providing modern, safe, and sustainable learning environments for all Naperville 203 students