Hillsboro R-3 Closes Fiscal Year in Strong Position as Board Approves Budget Amendment

District reports strong reserves as projected tax rate falls to its lowest level since 1993

By The Jefferson Review

HILLSBORO — The Hillsboro R-3 Board of Education closed out its June 25 meeting with a financial report that leaned positive for the district, showing strong reserves, solid revenue collections, continued debt reduction, and progress on major facility work heading into the next school year.

The board approved Budget Amendment #6 for the 2025-2026 school year, a year-end amendment district officials described as part of the normal process of balancing accounts as revenues and expenditures are finalized. The amendment came alongside the district’s monthly financial report through May 31, which showed Hillsboro R-3 in a stable financial position as it prepares to close the books on FY26 and begin FY27.

According to the district’s financial summary, Hillsboro R-3 reported total reserves of $23,763,261.02. That included $17,241,602.77 in operating funds, $1,747,763.46 in the debt service fund, $4,773,894.79 in the capital projects fund, and $563,733.65 in the activity fund.

Through May 31, the district had collected $49,337,217.07 in actual year-to-date revenue, or 92.6 percent of its FY26 budgeted revenue. Actual year-to-date expenditures stood at $48,934,436.81, or 81.26 percent of the budgeted amount. The district reported an actual surplus of $402,780.25 at that point in the year, compared with a projected budget position of about $6.9 million in deficit spending.

District officials noted that the surplus number should be understood in context. Part of the current financial picture is tied to timing around the high school HVAC replacement project, including funds received this year that will be spent in the next fiscal year. In other words, some of the money is already committed, but the expenses have not fully hit the books yet.

That was also reflected in Budget Amendment #6. The amendment increased revenues by $328,028 overall, including $228,390 in additional food service-related revenue, $82,183 in activity fund revenue, $26,261 in Title I revenue, and $19,364 in Medicaid revenue. At the same time, the amendment showed an overall decrease of $3,448,785 in expenditures, largely because $3,939,425 in planned high school HVAC expenditures were moved into the FY27 budget.

The financial report also showed some increased costs in staffing-related areas, including $544,551 in classified salaries for additional substitute, overtime, and special education wages, along with $119,595 in classified benefits. Dr. Jon Isaacson framed those costs as part of meeting staffing and student support needs while continuing to manage the budget carefully.

The high school HVAC project was also discussed earlier in the meeting. A representative from Schneider Electric reported that several rooftop units were already running, including units serving the commons area and other parts of the high school. The district also heard that 74 water-source heat pumps had been installed quickly after delivery, and that the project remains largely on track for the start of school, although some equipment delays will carry portions of the work into the fall.

Looking ahead, the district also approved its preliminary FY27 budget. Dr. Isaacson emphasized that the budget is conservative and will likely be refined throughout the year as final revenue, state funding, and tax rate numbers become clearer.

One major positive highlighted during the budget discussion was the district’s tax rate outlook. Dr. Isaacson said the district anticipates a tax rate of roughly $3.44, with the final rate to be set at the September tax rate hearing. He noted that the projected rate would be lower than the district’s 1993 level — the year of the historic flood — and said the rate has fallen by about $1.30 from its 2014 high.

Dr. Isaacson said the drop has come largely because of the district’s focus on paying down general obligation debt. He also noted that last year’s rate was about $3.67, meaning the district expects the local community to see another decrease this coming year.

The district also pointed to major progress in reducing debt. Dr. Isaacson said general obligation debt that stood at roughly $27.7 million in 2019 is expected to be paid off during the upcoming budget year. That debt reduction is one of the reasons the district has been able to lower its tax rate over time.

At the same time, district leaders were careful not to present the budget picture as problem-free. Dr. Isaacson noted that state funding pressures could create challenges, including a possible reduction of $700,000 to $850,000 for the district. He also said future facility and safety needs may require broader community conversations, especially around secure entrances and long-term building improvements.

Still, the overall message from the meeting was that Hillsboro R-3 is entering the next fiscal year from a position of strength. The district pointed to healthy reserves, disciplined spending, a lower tax rate, and continued investment in major infrastructure projects.

Dr. Isaacson also highlighted several academic and operational indicators tied to the district’s budget planning. Attendance averaged 93.4 percent for the year, which was above the district’s strategic plan goal. The district also noted a 95 percent graduation rate, above the state average, while spending less per student than the statewide average.

Outside of the budget discussion, the board was recognized for receiving a 2026 governance award, the third consecutive year Hillsboro R-3 has earned the recognition. The district also celebrated a major milestone with the American Heart Association, which recognized Hillsboro schools for raising more than $500,000 over the years through Kids Heart Challenge efforts. Three Hillsboro schools participated this year, raising more than $18,000.

The district also previewed its new “Hawk Talk” podcast, which is intended to share updates, stories, and conversations from across the school district. A community information session on future project planning is scheduled for Tuesday, July 21, at 6:30 p.m., with architects expected to attend and gather community input on facility priorities.

The board also approved several routine business items, including an academic team extra-duty position at the high school, a lease agreement for three John Deere Gator utility vehicles, timing contracts for cross country events, a three-year agreement with BSN for athletic supplies and uniforms, the annual Sodexo food service renewal, the district’s annual audit engagement letter, and year-end fiscal transfers and adjustments.

The takeaway from the June meeting was a positive one: Hillsboro R-3 is managing through a complicated school finance environment with strong reserves, lower debt, and a cautious but forward-looking budget plan.