school finance issue / FALL 2010
Indispensable tool for School Business Management
EFAB
What is the latest? 16
PROPERTY REASSESSMENT
Effects in Illinois? 28
the right
moves?
INterfund transfers: Do you have a strategy? 22 www.iasbo.org
| 1
JOINT EDUCATIONAL SUPPORT
PROFESSIONALS CONFERENCE The rtt is an event designed specifically for downstate support professionals by some of the premiere professional development associations in the education field. Join keynote speaker Laurie Guest for the “Red Carpet s signed Treatment,” as well as, a variety of hot topic sessions designed c ceed. to give support professionals the edge they need to succeed.
SEPT. 21, 2010 Northfield Inn & Suites, Springfield
EDUCATIONAL SUPPORT PROFESSIONALS CONFERENCE The Educational Support Professionals Conference is an event designed specifically for support professionals by Illinois ASBO to improve best practices in the workplace. Join keynote speaker Laurie Guest for the “Red Carpet Treatment” designed to give support professionals a fresh approach to their careers. Sessions center on making the day-to-day professional experience a positive one, with a wide range of topics that are both practical and informative.
DECEMBER 3, 2010 NIU NAPERVILLE
2 |
update Magazine / Fall 2010
inside
Illinois Association of School Business Officials Update Magazine / Fall 2010 / v.18 / i.01
school finance issue
11 Rules to Guide a Successful Strategy
22
Knowing legal guidelines can help in making the the right moves to ensure Illinois districts maximize potential for financial success
During these challenging economic times, finding the correct balance of funding in the proper funds can be a daunting task. Lynda K. Given and Andrew L. Mace have utilized options under Illinois law to map out a specific strategy for guiding the school business manager to successful balanced budgets. Finding available funds to offset deficits enable school districts to avoid the issuance of tax anticipation warrants, working cash fund bonds or other short or long-term cash flow borrowings. Find out if these moves are a part of your current strategy. www.iasbo.org
| 3
perspective
articles
The latest from the Educational Funding Advisory Board
from-the-podium leadership during difficult times: Board President Garrick C. Grizaffi believes that now more than ever is the time for school leaders to maximize membership to step up and serve their district, community and illinois
In the face of uncertainty as to the amount of the 2010-2011 General State Aid foundation level, the Educational Funding Advisory Board continues its deliberations towards a December 2010 report to the Legislature.
16
7
Property Reassessment: Knowing the Effects in Illinois
from-the-office friday night lights: executive director michael A. Jacoby takes an interesting look on the potential impact of no child left behind if it was applied to the world of sports and activities in illinois school districts
A complete review of public school funding can be unrealistic.
28
9
11 4 |
update Magazine / Fall 2010
Discover how becoming aware of the key components of school and local funding, the property tax extension limitation law and property reassessment can provide school district stakeholders a foundation for understanding how educational funding is determined. Illinois ASBO listens to how membership can be more effective
from-the-field now more than ever: saac chair fenil J. patel finds an appropriate time to reflect on the 2010 Illinois ASBO Annual Conference and look forward to goals set forth by the saac to help improve Service Associate membership
Read how this appointed board continues to apply research and perspective to school funding.
Mission, professional development, networking, communication and marketing were points of interest conversation at the Illinois ASBO January 2010 leadership meeting.
Listen to the data
32
Learn how this objective feedback created the opportunity for Illinois ASBO to listen to members and further adapt how Illinois ASBO will meet member needs.
Resources
on paper These books and publications will expand the effectiveness of any school business official:
Growing Greener Schools How does green school leadership begin in your district? Who is the primary mover that begins the process? What motivates that leader to initiate the activities necessary? How long until others in the organization realize the benefit and add their efforts to the momentum? Who is your “Green Leader?”
18
Every school district is different; every organization takes a unique path based on the individuals and makeup of their team. Discover how local Illinois schools have developed programs that have improved savings within the district and helped improve environmental resources.
Essentials of Illinois School Finance Equalize Student Achievement: Prioritizing Money and Power State, Local and Federal Financing for Illinois Public Schools, 2000-2001 Illinois School Law Survey Taking the Mystery Out of Illinois School Finance, Third Edition Mechanics of a School District Budget Illinois State Board of Education
37
The final word Great Ideas from Great Illinois ASBO Members Richard S. Pagliaro Assistant Superintendent for Business & Personnel Joliet Township High School District 204 Illinois ASBO Foundation’s 2010 Monarch Award winner gives insight on the future of school finance, important aspects surrounding school finance and offers some ideas for affecting change.
42
on screen KEEPING UP-TO-DATE WITH CHANGING DATA AND TOOLS IS KEY TO SUCCESS: ABCs of the AFR School finance at a glance and more ...
40 www.iasbo.org
| 5
Find out more on becoming part of the 2011 cohort at:
iasbo.org/leadership
JOURNEY begins with a
EVERY
SINGLE STEP
INVESTMENT
The ILLINOIS ASBO LEADERSHIP INSTITUTE represents a unique opportunity for established school leaders and their districts to invest in professional growth through a year long program resulting in rewarding both the individual and the district in a variety of personal development areas.
FOCUS
This program requires a deep year-long committment to personal leadership interpretation, analysis and application. The LEADERSHIP INSTITUTE will focus on establishing goals, action plans and leadership behaviors. Likewise, developing a strong leadership support network through both face to face and online interaction will be key throughout the program’s term.
REWARD
6 |
update Magazine / Fall 2010
Participants will experience better results as school leaders, while developing higher motivation and confidence to lead effectively. Plan to gain higher focus and experience less stress as a highly trained professional while learning to give and receive feedback effectively, as well as, encouraging productive and effective relationships. Focus will also be given on the ability to develop others to their highest potential and maximize the benefits of their differences.
perspective / Board President
from-the-podium Leadership during difficult times: Now More Than Ever Now More Than Ever is Illinois ASBO’s theme for the 2010-11 year and it is easy to understand why. Almost every school district and community college throughout the state had a portion of revenues uncollected in the budgeted area of state reimbursements. As varied as districts across the state are, so too is their dependence on state funding to meet objectives and “balance the budget.” Many districts have been in budget-reduction or cost-cutting mode for a couple of years now. The focus first is to limit the cuts from impacting classroom instruction. As the cuts get deeper, this becomes harder to do without looking at staff reductions within each area of operation. These are typically the most difficult decisions to make. It is, Now More Than Ever, where experience and networking play a key role in helping school business officials spearhead these processes. As the new fiscal year is underway, participation in the variety of seminars, webinars and, of course, Annual Conference helps school business officials do our jobs. It is critical to belong to an organization that has professional development as a primary focus. No matter where you are in your career, think what it may have been like if these professional development opportunities had never existed or were not of the high standard you have come to expect. Now More Than Ever is the time to become engaged in keeping Illinois ASBO and the profession the best it can be. It is during these historical down times that school district leaders need to carry through the fiscal and operational integrity students
and communities expect and deserve. It certainly does not happen by accident — hard work, dedication and commitment are all necessary to achieve success. While the state’s financial woes look to continue into the near future, Now More Than Ever, students across the state need leadership to provide them with the best school experience possible. It is through no fault of their own that financial hardship is presenting challenges both within the school district and possibly within the households. Students should not be made to suffer for decisions they had no part in making.
Garrick C. Grizaffi Asst. Supt./Admin. Services Valley View CSD 365-U
Having recently attended the ASBO International Eagle Institute in Gettysburg, Pennsylvania, and relearning about the Civil War our country endured; it is through leadership, commitment and teamwork that our nation was shaped nearly 150 years ago. Much of what is going on in districts is similar to what happened then — community members dissatisfied with board and administrative actions. Now More Than Ever, we need to engage our communities and provide the leadership that instills trust and goodwill to provide the education we all want for the students of Illinois. One of the key phrases I took away from Eagle Institute was “adapt, innovate and overcome.” More profound words are hard to imagine during these trying times in our professional lives. While many districts have reduced or eliminated professional development budgets, I contend, Now More Than Ever, those types of activities are critical to the success in your area of responsibility. A key difference between a good leader See PODIUM page 15 www.iasbo.org
| 7
EnErgizing Education www.illec.org
an illinois not–for–profit corporation
8 |
sponsors
illinois energy consortium Join a program by contacting:
Ron steigeRwald, statewide MaRketing diRectoR 847 567 3051 / rsteigerwald@hotmail.com update Magazine / Fall 2010
perspective / Executive Director
from-the-office Friday Night Lights Fall means school has started and with school starting, that means high school football will be the centerpiece of Friday night activities throughout nearly every Illinois community. This summer grounds crews have been preparing practice and game fields and other operational personnel have been testing lighting systems, public address systems, preparing concession stands and securing emergency personnel. School administrators have been hiring coaches, lining-up ticket takers, scorekeepers, announcers, referees, and transportation schedules. Coaches have been preparing football teams, cheerleading squads and dance teams. Band directors have rehearsed half-time shows and numerous summer practices have already taken place. The behind the scenes preparation for these events is enormous and most Illinois ASBO members are involved in some way or another. But, far be it for Washington to allow these local events to continue without some intervention. The Department of Education just released the following rules and regulations for high school football programs. No Child Left Behind for High School Football Programs The Federal government has announced that all high school football teams must meet No Child Left Behind legislative standards beginning next season: 1. No team will be declared a winner, as that will leave 50 percent of participants behind. 2. All high schools will be divided into districts with eight teams per district. Every team must finish at least third place to be proficient. 3. All teams must score at least 21 points, but no defense can allow more than seven points. 4. No tournaments will be held as this would result in one champion. 5. All teams must make the state playoffs, and all will win the championship. If a team does not win the championship, they will be
Michael A. Jacoby executive director illinois asbo
on probation until they are the champions, and coaches will be held accountable. 6. All students will be expected to have the same football skills at the same time and in the same conditions. No exceptions for interest in football, desire in athletics, genetic abilities ... ALL STUDENTS WILL PLAY FOOTBALL AT A PROFICIENT LEVEL. 7. Talented players will be asked to work out on their own without instruction, because the coaches will be using all their instructional time with the athletes that are not interested in football, have limited athletic ability and whose parents do not like football. 8. Games will be played year round, but statistics will only be kept in 4th, 8th, and 11th grades. 9. This will create a New Age of sports where every school is expected to have the same level of talent and all teams will reach the same minimal goals. If no child gets ahead, then no child will be left behind. See OFFICE page 15 www.iasbo.org
| 9
10 |
update Magazine / Fall 2010
perspective / SAAC Chair
from-the-field Now More Than Ever As school districts focus efforts on beginning a new year of education and student growth, it is an appropriate time to reflect on the 2010 Illinois ASBO Annual Conference and look forward to the 2011 conference. The Service Associate Advisory Committee and Illinois ASBO have worked tirelessly to provide the most beneficial conference for both school district members and Service Associates. Prior to the 2010 Annual Conference, SAAC enhanced the overall experience for new and returning members. SAAC implemented the first ever seminar intended for Service Associates. The inaugural seminar and the pre-conference orientation were well attended and allowed members to network with veteran exhibitors and Illinois ASBO staff, as well as, get familiar with the conference facilities and events. Keep an eye out for information regarding these and additional seminars in 2011. The school market is a relationship driven arena. As a result, the more time Service Associates network and get to know clients; the more likely they are to increase business. For the 2010 conference, the exhibit hall was sold out and a waiting list was started. Despite the challenging business environment, more companies decided to invest the time and money to network and exhibit at the conference. As a result of the limited space, I urge anyone planning to exhibit to register early. The conference attempted to offer the exhibitors the maximum amount of face time with their clients. Even with limited space at Pheasant Run, Illinois ASBO offered a Wednesday evening hospitality reception in the Mega Center outside the exhibit time
frame. This created the opportunity for the two membership bases to continue their connections long after exhibiting time had ended. The Service Associate Annual Business Meeting was a great opportunity for Service Associates to learn about the activities of the committee for the last year. The meeting was an opportunity to meet the two newest SAAC members: 2010-2013 committee members are Dennis C. Bane, Principal at DLR Group and Kurt J. Hintz, Education Account Executive for Johnson Controls, Inc. I look forward to working with all the committee members to bring new ideas in order to enhance the Illinois ASBO experience for Service Associates.
Fenil J. Patel Vice President PMA Financial Network, inc.
New and talented members like Kurt and Dennis are the most important aspect in ensuring SAAC growth and development. SAAC would like to see an increase in Service Associate members applying for the SAAC this coming January. If you are interested in joining this unique group of professionals, please contact a SAAC member or the Illinois ASBO office at 815.753.9366. During the 2009 conference, I noticed quite a lot of attendees getting “tweets� on their phones. This year, I did not want to be left out and followed Illinois ASBO on Twitter. These tweets kept me up-to-date on the events of the conference, as well as, allowed me to network with other Service Associates and school district members throughout the year. Look for Illinois ASBO to continue to offer innovative platforms to let Service Associate and school district members network and keep the membership informed throughout the year. Go to www.iasbo.org to learn more about the See FIELD page 15 www.iasbo.org
| 11
coming fall seminars
the
For full seminar listings including location and PDC sponsorship, check the current Calendar of Events that was included with UPDATE or visit www.iasbo.org and register for professional development today.
Illinois Association of School Business Officials
Maga zine
Northern Illinois University, IA-103 108 Carroll Avenue DeKalb, IL 60115-2829 815.753.1276 / F: 815.753.9367 / www.iasbo.org
Editorial Staff
Johnathon T. Strube, Designer
815.753.7654, jstrube@niu.edu Sean P. O’Connor, Designer 815.753.9393, soconnor@niu.edu Angela Lehman, Communications Coordinator 815.753.9371, alehman@niu.edu
september Sep 10, 2010 – 9:00 AM Weathering the Current Investment Market:
Understanding the Factors Involved in Your District’s Returns Sep 13, 2010 – 9:00 AM Energize’ Operational Cost Savings Sep 17, 2010 – 9:00 AM Create Safer, More Comfortable, Energy Efficient Learning Environments Sep 21, 2010 – 9:00 AM Security and Emergency Preparedness Management
Oct 06, 2010 – 9:00 AM
Oct 06, 2010 – 9:00 AM
Oct 07, 2010 – 9:00 AM
Oct 15, 2010 – 9:00 AM Oct 18, 2010 – 9:00 AM Oct 19, 2010 – 8:30 AM
Nov 19, 2010 – 8:00 AM
Referendum in Recession Current State & Federal Legislative Issues & Related Topics Current State & Federal Legislative Issues & Related Topics Budgeting for Healthcare Trends and the Impact of Healthcare Reform Current State & Federal Legislative Issues & Related Topics Public Bidding from the Basics to the Advanced Key Components to Look For in a Tier I 403(b) TPA Budget and Financial Projections
Dec 14, 2010 – 8:30 AM
12 |
update Magazine / Fall 2010
Mark E. Staehlin, Treasurer Darrell J. Moon, Immediate Past President 2008-11 Board Directors
John A. Gibson, Stacey L. Mallek, Hillarie J. Siena 2009-12 Board Directors
Dennis Burnett, Nelson W. Gray, Raymond P. Negrete 2010-13 Board Directors
Susan L. Harkin, Beth L. Millard, Curtis J. Saindon
Advisory Committee Chairperson Dwain A. Lutzow, AIA, Service Associate Advisory Committee Vice Chair Terrie S. Simmons, ASBO International Liaison Gil Morrison, Regional Office of Education Liaison Debby I. Vespa, ISBE Board Liaison Dean M. Langdon, IASB Board Liaison
Headquarters Staff
Michael A. Jacoby, Executive Director Susan P. Bertrand, Assistant Executive Director
for Education & Professional Development Julie A. Warner, Administration Director HR Claudia A. Bank, Bookkeeper Judy A. Sharp, Mail Services Manager Angie Lehman, Communications Coordinator Rebecca A. Leneau, Meetings Coordinator Sandra L. Duda, Professional Development Secretary Holly Wallace, Member Relations Specialist Sean P. O’Connor, Graphic Designer II Johnathon T. Strube, Graphic Designer I Nicole Lee, Member Relations Associate
Support Staff What To Do? Nobody Wants a Capital Referendum School Security Best Practices Building Systems: HVAC, Electrical and Technology Seminar on School Finance Administrator’s Academy Credit – 1062 Risk Management Seminar Administrator’s Academy Credit – 442
december Dec 10, 2010 – 9:00 AM
Richard A. Lesniak, President-Elect
Fenil Patel, Service Associate
november Nov 05, 2010 – 9:00 AM Nov 15, 2010 – 9:00 AM Nov 16, 2010 – 8:30 AM Nov 19, 2010 – 7:30 AM
Garrick C. Grizaffi, President
Board Liaisons
october Oct 04, 2010 – 8:30 AM Oct 05, 2010 – 9:00 AM
Board Officers
Debt Management Best Practices; BAB’s & DSEB Changes Environmental Health and Safety
Emmert P. Dannenberg, Statewide Liquid
Asset Fund Marketing Director Ronald E. Everett, p-Card Marketing Director Calvin C. Jackson, Legislative Liaison / Professional Development Consultant Ronald C. Steigerwald, Statewide Illinois Energy Consortium Marketing Director
Privacy Policy
All materials contained within this publication are protected by United States copyright law and may not be reproduced, distributed, displayed or published without the prior written permission of the Illinois Association of School Business Officials. You may not alter or remove any trademark, copyright or other notice from copies of the content. References, authorship or information provided by parties other than that which is owned by the Illinois Association of School Business Officials are offered as a service to readers. The editorial staff of the Illinois Association of School Business Officials was not involved in their production and is not responsible for their content.
Contributors
Susan P. Bertrand Asst. Executive Dir., Illinois ASBO
James Fritts Northeastern Ilinois University
Lynda K. Given Partner, Chapman and Cutler LLP
Prior to joining Illinois ASBO, Sue worked for PMA Financial Network, Inc. as a Sr. Financial Advisor to school districts. While there, Sue was a member of Illinois ASBO, chaired the Public Policy PDC, participated in the NIU SBM Program and received the Lighthouse Award for DAA development.
James Fritts is a retired school business official who teaches graduate courses in school administration at Northeastern Illinois University. In addition to his experience, he calls on an array of sources with in state funding, property tax administration, and all aspects of school business management.
Lynda is a partner in the Public Finance Department. She has concentrated her practice in public finance. She serves as bond counsel to hundreds of units of local government throughout Illinois and is a frequent speaker on public finance topics.
Marion “Doc� Kotecki , LEED AP Acct. Exec., Energy Systems Group
Andrew L. Mace Principal, Miller, Cooper & Co., Ltd.
Dean T. Romano Business Manager, Maercker SD 60
Doc has 35 years in the building automation, temp. control and security and construction industry. He promotes performance contracting solutions for K-12 schools and higher education. He is a U.S. Green Building Council member and co-chair of the School Advocacy Committee.
Andy serves numerous villages, more than fifty school districts and vocational or special education cooperatives, plus other local governmental units and not-for-profit organizations. His focus is audit, internal control review and enhancement and operational consulting.
Dean currently serves as business manager at Maercker School District 60 in Clarendon Hills. He is an active member of Illinois ASBO participating on the Legal Issues PDC and acting as the SWASBO regional chair. Dean is enrolled at Aurora University completing his educational leadership Ed. D.
www.iasbo.org
| 13
Illinois ASBO partnership with IL CTO and ICE
Full OnE-day COnFEREnCE REgisTRaTiOn availaBlE augusT 1, 2010
TechCon is centered around the most dynamic element in education. This one-day intensive conference focuses on the effective use of technology in education. This event is a must for all levels of education professionals — from the most technology-savvy pros to those who need exposure to this ever-changing and dynamic field.
The COnFEREnCE CREaTEd to COnnECT sChOOl lEadERs with TEChnOlOgy issuEs OCTOBER 8, 2010 / nIu napervIlle Campus www.illinOisTEChCOn.COm / @TeChConferenCe 14 |
update Magazine / Fall 2010
Included in the event agenda is a current look at the financial issues that affect technology in schools. Keeping up-to-the-minute with these kinds of financial options is one of the most pressing issues school leaders face. Do not miss the chance to gain insights from peers, presenters and professionals. For developing event content: www.illinoistechcon.com For real-time updates, follow: @TechConference
perspective / Continued
PODIUM from page 7
OFFICE from page 9
FIELD from page 11
and a great one is the ability to lead during tough times. Every school business official has the ability to be a great leader, and being part of a dynamic organization like Illinois ASBO can make that happen. I challenge all members to remain as members during these times of budgetary cutbacks. Look for alternative ways to afford the opportunities to attend workshops, seminars and Annual Conference. Now More Than Ever, attendance at professional development opportunities is vital to continued success.
Obviously this is “tongue in cheek” and perhaps some of you have received a similar summary in your e-mail box. But on some level it brings home the reality that the federal government is becoming more and more involved in day-to-day school district activities. With ESEA due for reauthorization and continuing focus on Race to the Top funding, it is doubtful that federal influence will diminish and likely will increase. In fact, Secretary Duncan just recently called for a bipartisan commission to study equity issues and make recommendations for future federal intervention. Look for that to produce more policy questions and additional federal influence on state funding systems.
different social networking options available to members.
Now More Than Ever is the time to step forward and be great leaders. The children of Illinois deserve the best education possible and need help to experience it — Now More Than Ever. While it is cliché, I will say it anyway. I am both honored and humbled to be the President of, what I consider to be, one of the finest organizations in the world. I welcome the challenges of leading us through these difficult times, but I need help. A leader is only as effective as the support he or she receives from the group. Now More Than Ever is the time to step forward and be great leaders. The children of Illinois deserve the best education possible and need help to experience it — Now More Than Ever. For more information about the Board of Directors, contact Board President Garrick C. Grizaffi, Asst. Supt./Admin. Services, Valley View CSD 365-U at grizaffigc@vvsd.org or 815.886.2700.
While education has just put its arms around the ARRA funding regulations, there may be more to come. With State of Illinois funding issues looming and budget questions still unanswered for 2010-11, do not forget to keep an eye on emerging issues at the federal level. They are certainly controlling much of the policy agenda and yet federal resources for school districts still remain a very small part of the whole picture of school funding across the nation.
The 2011 Annual Conference will mark the final year at the Pheasant Run Resort in St. Charles. The following year the conference will be held in Peoria and after which time, we move to the Schaumburg Convention Center. Pheasant Run has served us well but as the conference grows, Illinois ASBO needed to find a facility that offered additional space with updated amenities. SAAC looks forward to new and exciting networking opportunities that will be possible with the new facility. As the business environment becomes more challenging, Illinois ASBO and SAAC offer innovative opportunities for businesses to persevere. The organization continues to be the association that Illinois schools look to for continuing education with Annual Conference as a vital component. Now More Than Ever, participation in Illinois ASBO and the Annual Conference are keys to success.
That said – enjoy a few Friday night games and appreciate the good work of your administrative and operational teams that have made the game a reality.
For more information about SAAC and Service Associate membership, contact SAAC Chair Fenil J. Patel, Vice President, PMA Financial Network, Inc. at fpatel@pmanetwork. com or 630.657.6400 x6437.
For more information about Illinois ASBO, contact Michael A. Jacoby, Executive Director, Illinois ASBO at mjacoby@niu.edu or 815.753.9366.
The opinions expressed by the author are solely his/her own and do not necessarily reflect those of PMA Financial Network, Inc. or its affiliates. www.iasbo.org
| 15
The latest from the
Education Funding Advisory Board By James Fritts Professor, Northeastern Illinois University
Editor’s Note: James Fritts, a member of the Illinois ASBO Principles of School Finance Professional Development Committee, teaches School Finance at Northeastern Illinois University. Information for this article was taken from the agenda materials, presentations and discussions at the EFAB meetings from December 2009-April 2010. Special thanks go to ISBE staff member Toni Waggoner, ED-RED Director Erica Lindley and Illinois ASBO Executive Director Michael Jacoby for providing the information on these meetings. In the face of uncertainty as to the amount of the 2010-2011 General State Aid foundation level, the Educational Funding Advisory Board continued its deliberations towards a December 2010 report to the Legislature. The General Assembly created EFAB in 2000, to make recommendations for the GSA foundation level and the supplementary GSA grant level for districts with high concentrations of poverty. The EFAB Board consists of five members appointed by the Governor for four years, with the advice and consent of the Senate. Sylvia Puente of Chicago, Executive Director of the Latino Policy Forum, serves as Chair. Other members include: Dean Clark of Glen Ellyn, an executive of Graphic Chemical and Ink Co.; Arthur Culver, Superintendent of Champaign Unit District 4; Ed Geppert, Jr. of Westmont, President of the Illinois Federation of Teachers and Ken Swanson of Springfield, President of the Illinois 16 |
update Magazine magazine / Fall 2010
Education Association. While the Board remains at five members, an advisory group was appointed at the April 28, 2010, meeting to provide stakeholder input into the study from several perspectives. Illinois ASBO Executive Director Michael Jacoby is slated to serve as a member of the advisory group. At its December 2009 meeting in Chicago, EFAB heard an informational presentation by Illinois State Board of Education staff member Toni Waggoner. She applied EFAB’s previous research methodology to calculate a current base funding level that would enable an efficient and successful school district to meet its educational goals. By examining the 2007-2008 spending levels of a sample of districts that spent below predicted levels and met success criteria, and updating the figures for 2009-2010 by applying the Employer Cost Index, she arrived at a hypothetical 20092010 foundation level of just under $8,000. The actual foundation level for 2010-2011 is $6,119, the same as 2009-2010. Increasing the GSA
article
budget to fund that level would cost an estimated $2.9 billion over the current $4.6 million budget, not counting any hold harmless increases. The remainder of the meeting was given over to answering Board members’ questions about other states’ formulas and defining questions to be addressed at future meetings. A scheduled February meeting for an update on the ISBE budget was cancelled. EFAB met in Springfield on April 28 at which Waggoner discussed the GSA foundation level elements of the poverty grant and other components of the GSA formula. Higher poverty counts have required that larger amounts of the total GSA appropriation be designated for that grant, doubling from $509,000 in 2000-2001 to $1.119 million in 2009-2010. Several representatives of stakeholder groups made presentations, as did faculty members working on the Illinois School Finance Adequacy Initiative at National-Louis University. At the Illinois ASBO Annual Conference, Waggoner discussed some of the GSA formula components that may come under EFAB examination. Questions on the poverty grant include whether it should be folded into the GSA formula or continued as a separate component, whether only the poverty grant should be prorated when GSA appropriations run short of claims and the sufficiency of the grant and whether it should be indexed to a measure of inflation. Others issues include whether the current Department of Human Services poverty counts are the proper measure of need.
The conversation on school funding extends beyond simple monetary decisions. Discussion of adequacy parameters might include application of a regional cost index to the basic adequacy figure, how to identify and account for the costs of educating low-income, ELL and Special Education pupils, and whether other factors, including pupil mobility, should be considered in arriving at an adequacy figure. General formula issues include whether the GSA formula calculation rates should be revised, the effects of these rates on PTELL districts, and whether PTELL districts should have access to the GSA hold harmless provisions. The first EFAB reported in October 2002, advocating a $1,105 increase to the foundation level, which was then $4,560, having been frozen at the 2001-2002 amount during another state budget crisis. A report in May 2005, recommended a $1,441 increase; the 2004-2005 level was $4,964. That increase would have brought it to $6,405, less than the $6,119 current, frozen level. The Governor did not reconvene EFAB until last year, ironically, in the midst of another and deeper crisis than eight years ago. Hopefully, a new
recommendation, backed by persuasive data on adequacy and cost efficiency, will be helpful in advancing the necessary revenue raising discussions to increase Illinois bottom three position among the states in the percentage of school revenues raised from state sources. (U.S. Census Bureau, June 28, 2010 based on FY 2008 expenditures.) Meeting dates, places and agendas are posted on the ISBE website. Illinois ASBO members are urged to attend these meetings to keep themselves and their school districts informed on the EFAB process and recommendations, and to submit their thoughts on issues to Executive Director, Mike Jacoby. www.iasbo.org
| 17
better
schoo 18 |
update Magazine / Fall 2010
article
Districts around the state are taking better planned approaches to planting the seeds of change to grow smarter, greener schools
olS
By Marion “Doc” Kotecki, LEED AP Account Executive, Energy Systems Group, Itasca, IL
The US Green Building Council defines green school as “a school building or facility that creates a healthy environment that is conducive to learning while saving energy, resources and money.” Dr. John C. Maxwell, a leading authority on developing leadership skills cites his number one quote: “A leader is one who knows the way, goes the way, and shows the way.” Combine the two for your school district. How does green school leadership begin in your district? Who is the primary mover that begins the process? What motivates that leader to initiate the activities necessary? How long until others in the organization realize the benefit and add their efforts to the momentum? Who is your “Green Leader?” Every school district is different; every organization takes a unique path based on the individuals and makeup of their team. www.iasbo.org
| 19
A
dlai E. Stevenson High School, located in Lincolnshire began it’s green initiative in 2007 when the Board of Education created a Green Committee. It was important to create a committee with members representing all stakeholders including: students, teachers, administrators, Board of Education members, community members and long-term district partners including: OWP/P Cannon Design, Gilbane Building Company, Johnson Controls and
Goals for Success During the 2008-09 school year, Adlai E. Stevenson HSD 125 engaged it stakeholders with the challenge of reducing the districts carbon footprint. These six goals emerged as final priorities: 1. Increase awareness and participation in green initiatives. 2. Reduce kilowatt burn by 5 percent per fiscal year. 3. Increase the amount of recycled waste by 50 percent over the next 12 months. 4. Reduce the amount of paper used and the number of copies made my 10 percent over the next year. 5. Reduce natural gas consumption by 5 percent over the next fiscal year. 6. Reduce the number of fossil fuel vehicles on campus by 10 percent over the next fiscal year.
20 |
update Magazine / Fall 2010
Sodexo Campus Services. Green Committee chairman Mark Michelini, Assistant Superintendent for Business at Stevenson, provides regular updates to the Board of Education. In the spring of 2008, with the assistance of Sodexo Campus Services, the district embarked upon its initial carbon footprint study. At that time it was determined that the district, through its daily operation produces 15,300 metric tons of carbon dioxide equivalents. The production and purchase of electric represented 38 percent of the total carbon burn, followed by transportation at 27 percent, solid waste management at 18 percent, the procurement of natural gas at 16 percent and other activities at one percent. The goal, of course, is to reduce the districts emission of CO2. There are two levels at which the Green Committee operates; building operations and organizational sustainability. The district has a long history of operational sustainability. Dating back to 2000, when the district earned it’s first Energy Star rating, to 2010 when the decision was made to pursue LEED EB certification, the district has always looked for building projects that would (a) reduce operating costs of the district; and (b) provide a sustainable future for our students. Academically, Stevenson High School has been a lighthouse organization for many years, the decision to pursue LEED certification was simply another avenue for the district to put metrics into place. Although the district has a long
history of operational efficiency, it wasn’t until the LEED’s process, specifically, the Energy Star rating program where the District began to measure the operating performance. The Energy Star program provided the district with metrics where the district could compare its rating of 79 to other schools who participate in the program. In addition, Stevenson, with the assistance of the Smart Energy Design Assistance Center from the University of Illinois performed an energy audit as part of the LEED-EB process. “We were happy to determine that our district spend of $1.32 per square foot was midrange for district of our size and age,” said Dr. Eric Twadell, but also pointed out that “there are still opportunities to do better, and be sure Stevenson will.” Retired science teacher, Mr. Bryan Cann led Hiawatha CUSD with a recycling grant application for the junior high school in 2005. In cooperation with Waste Management, each classroom received recycling bins. School Board President James Williams continued the efforts in leading the Board of Education. In 2008, Hiawatha entered into an agreement with Energy Systems Group to renovate the elementary school to include geothermal ground source heat pumps, lighting renovation, exterior window and door replacement, and a high efficiency boiler. Superintendent Christine Demory reports that ISTAT scores have increased significantly since the improvements were completed. In keeping with Board of Education and local community
article / Growing Better Schools
support, geothermal ground source heat pumps are included in an ongoing $4 million facilities addition/renovation project, while other finishes and options for the construction project are scheduled to be phased in as additional funding becomes available. Jim Coldwell, Director of Buildings and Grounds with Lincolnwood SD 74, secured a matching grant from the Illinois Department of Commerce and Economic Opportunity three years ago and saved the district over $50,000. Since that first grant, recycling bins were added throughout the district. Superintendent Mark Klaisner emphasized the need to educate and train everyone – from occupants to custodial staff – in how to use the recycling bins. Currently, the school district is focused on reducing paper use throughout the district. The end result is reduced cost, as well as, good stewardship. The newly-opened Willowbrook Middle School in South Beloit began their green initiatives with passage of a referendum in 2007. Prior to the referendum, three committees were formed: Construction, Communications and Instruction. Each had representation for five different constituents: parents, community, students, teachers and school board. They focused on three key areas: how to be expeditious, how to be financially responsive and how to promote stewardship. The combined efforts of School Board member Colleen Bell and Rockford architectural firm McClellan Blackmore
Districts with green thumbs Adlai E. Stevenson HSD 125
Lincolnwood SD 74
Lincolnshire, Illinois Eric Twadell, Superintendent 4,500 students www.hiawatha426.k12.il.us
Lincolnwood, Illinois Mark Klaisner, Superintendent 1,148 students www.sd74.org
Hiawatha CUSD 426
Prairie Hill CCSD 133
Kirkland, Illinois Christine Demory, Superintendent 616 students www.hiawatha426.k12.il.us
South Beloit, Illinois Ted Rehl, Superintendent 375 students www.prairiehill.org
has resulted in the Willowbrook Middle School achieving US Green Building Council Silver certification. Geothermal, day lighting, and use of recyclable materials are just a few of the building’s many features. Two grants of $100,000 each were awarded to the school district for geothermal and commissioning. Geothermal technology was an upfront cost of between $700,000 to $800,000, but will result in energy savings for the life of the building. The 80,000-squarefoot, fully air conditioned facility will spend far less for natural gas and electricity than a comparable local area school with conventional HVAC systems. Superintendent Ted Rehl views the new Willowbrook Middle School as just the beginning; green and sustainability topics are part of the curriculum, students will conduct tours of the facility and solar and wind projects will be explored.
community and each administration is unique. One needs to seek out the unsung crusader or leader to lead the charge. It will begin small, but gain momentum along the way. Each small step in the right direction is a positive, and needs to be promoted throughout the school and community it serves. Today’s decisions about school facilities and their mechanical and electrical systems will impact costs for the next 30 to 40 years. It is important to suggest a sound look at long-term benefits as opposed to short-sighted solutions.
Is there a perfect solution for your school? No way! Each school, each
Comments about any investment, any improvement need to be celebrated. Use every opportunity to promote progress, raise the bar and invite others to join. For more information, on greening your district, contact Doc Kotecki. Doc is an Account Executive for Energy Systems Group in Itasca. He can be reached at dkotecki@energysystemsgroup.com or 630.773.7203 x2107.
www.iasbo.org
| 21
22 |
update Magazine / Fall 2010
article
knowing the rules creates the opportunities to make the right moves A financial strategy is imperative in controlling the direction of school district funds. One move can capture funds before they vanish; one move can save entire programs from hardship; one move can block the loss of essential monies; and the right moves can strike the perfect balance to win financial success.
By Lynda K. Given & Andrew L. Mace
www.iasbo.org
| 23
One move can capture critical funds During these challenging economic times, many Illinois school districts are experiencing deficits in one or more of their operating funds. What they may fail to realize is that money in other funds may be available to offset those deficits. Many options are available under Illinois law that allow school districts to move money between funds, which could enable them to avoid the issuance of tax anticipation warrants, working cash fund bonds or other short or long-term cash flow borrowings.
1
INTERFUND LOANS Section 10-22.33 of the School Code of the State of Illinois, as amended (the “School Code”), authorizes school districts to make the following interfund loans:
2
• From the Educational to the O&M, Transportation and Life Safety Funds. • From the O&M to the Educational, Transportation and Life Safety Funds. • From the Transportation to the Educational, O&M and Life Safety Funds.
INTERFUND TRANSFERS Section 17 2A of the School Code authorizes school boards, by resolution, to transfer money among the Educational, O&M and Transportation Funds. Unlike an interfund loan that is temporary and must be repaid, an interfund transfer is permanent and is not repaid. Before adopting the transfer resolution, the school board must hold a public hearing called by the board or the board president. Notice of the hearing must include the date, time, place and subject matter of the hearing, be over the name of the board secretary and be:
As long as the loan is repaid to the proper fund within three years. If the repayment is not made within three years, the regional superintendent is authorized to withhold payment on claims under Article 18 of the School Code until repayment is made.
• Published at least once; at least seven and not more than thirty days before the hearing in a newspaper of general circulation in the district. • Posted at least 48 hours before the hearing at the principal office of the school board.
24 |
update Magazine / Fall 2010
article / Interfund Transfers
3
TRANSFERS OF INTEREST INCOME Section 9(c) of the Local Government Debt Reform Act of the State of Illinois, as amended (the “Debt Reform Act”), authorizes school boards to transfer interest earnings (including interest earnings on moneys set aside to pay most debt service) to the fund most in need of the interest. This section does not allow the transfer of the following: • Interest that has been earmarked or restricted by the school board for a designated purpose. • Interest earned on funds for the purpose of municipal retirement under the Illinois Pension Code. • Interest earned on funds for the purpose of tort immunity under the Local Governmental and Governmental Employees Tort Immunity Act.
4
ACCUMULATED LOSS IN COLLECTION MONEY FOR BONDS Section 16 of the Debt Reform Act directs county clerks, when extending taxes for general obligation bonds, to add to the levy for debt service on the bonds a sufficient amount, in view of all losses and delinquencies in tax collection, to produce tax receipts adequate for the prompt payment of the bonds. Districts often accumulate this loss in collection money in their Bond and Interest Fund over a period of years. Currently, there are no Illinois laws that permit this money to be transferred out of the Bond and Interest Fund as long as bonds are outstanding.
5
EXCESS SCHOOL BUILDING BOND PROCEEDS Section 10 22.14 of the School Code provides that when funds remain on hand from bonds (other than bonds issued for fire prevention, safety, energy conservation and school security purposes under Section 17 2.11 of the School Code) and the purposes for which the bonds were issued have been accomplished and paid for in full, a school board by resolution may transfer the excess funds to the district’s O&M Fund. Prior to making such a transfer, a district should consult with its bond counsel to assure that the transfer will not adversely affect the tax-exempt status of the interest on the bonds.
6
EXCESS LIFE SAFETY BOND PROCEEDS Section 10 22.14 of the School Code also provides that when funds remain on hand from an issue of life safety bonds and the purposes for which the bonds were issued have been accomplished and paid for in full, a school board by resolution may use those funds for the following purposes: • Other authorized life safety projects; or • Transfer to the Bond and Interest Fund for payment of those bonds. If the transfer is made to the Bond and Interest Fund, then within thirty days the board secretary must notify the county clerk of the amount of the transfer and direct the clerk to abate the taxes to be extended to pay the respective life safety bonds by the amount of the transfer.
Each piece has the power to be significant in making the moves to accomplish your strategic goals
www.iasbo.org
| 25
A thorough analysis of district funds can ensure a strategy is created to define the moves that ultimately end in success
26 |
update Magazine / Fall 2010
article / Interfund Transfers
7
EXCESS SPECIAL EDUCATION BUILDING FUNDS Section 17 2.2a of the School Code authorizes accumulated funds from the special education tax levy and the $1,000 State reimbursement per professional worker received under Section 14 13.02 of the School Code, if no longer required for special education building purposes, to be transferred to any other fund and used for any special education purposes. Such transfer may not be made until the regional superintendent certifies to the State Superintendent of Education that adequate housing provisions have been made for all children with disabilities residing in the district.
8
EXCESS LEASE LEVY FUNDS Section 17 2.2c of the School Code provides that a fund established for leasing educational facilities or computer technology may be abolished or abated by resolution of the school board and upon a determination by the board that the moneys in the fund are no longer needed for such purposes. Upon the adoption of the resolution, the balance in the fund must be transferred to another fund or funds as directed in the resolution.
9
WORKING CASH FUND Article 20 of the School Code authorizes school districts to create, maintain and administer a Working Cash Fund for the purpose of enabling the district to have in its treasury sufficient money for ordinary and necessary expenditures for corporate purposes. Moneys in the Fund may be transferred to a school district’s general funds in anticipation of property taxes and corporate personal property replacement taxes and must be repaid when those taxes have been collected. Moneys in the Working Cash Fund are required to be transferred to the Educational Fund and disbursed for the payment of salaries and other school expenses in order to avoid, whenever possible, the issuance of tax anticipation warrants or notes. In addition, Article 20 allows the Working Cash Fund to be abolished or abated in accordance with applicable law.
10
DEBT SERVICE FUND Section 23.100 of the Illinois Administrative Code (the “Administrative Code”) requires that payments for principal or interest on long-term debt be made out of the Debt Service Fund. Payments are made from this fund regardless of the fund that has pledged the revenues to cover the expenditures. To accomplish this, the district transfers money from the fund that has pledged the revenues to the Debt Service Fund. The Illinois State Board of Education (“ISBE”) has created account numbers in the 7000 and 8000 series of accounts to provide for these transfers. The Administrative Code does not require school board resolutions for these types of transfers.
11
CAPITAL PROJECTS FUND Section 23.100 of the Administrative Code similarly requires that payments for capital projects or acquisitions be made out of the Capital Projects Fund, except where acquisition of any equipment must be financed from the transportation fund pursuant to Section 17 8 of the School Code. Payments are made from this fund regardless of the fund that has pledged the revenues to cover the expenditures. To accomplish this, the district transfers money from the fund that has pledged the revenues to the Capital Projects Fund. ISBE has created account numbers in the 7000 and 8000 series of accounts to provide for these transfers. The Administrative Code does not require school board resolutions for these types of transfers.
CONCLUSION School Code, Debt Reform Act and Administrative Code provide numerous opportunities and requirements for fund transfers. A thorough analysis of a school district’s financial profile must include a review of each fund, its current and anticipated fund balances and the possibilities and need for transfers between funds. Only upon such analysis will a district be able to maximize its resources, potentially avoid the need to borrow to cover short-term operating deficits and adhere to prescribed accounting guidelines.
For more information contact Lynda K. Given, Partner, Chapman and Cutler LLP, Chicago at given@chapman.com or 312.845.3814 OR Andrew L. Mace, Principal, Miller, Cooper & Co., Ltd., Deerfield at amace@millercooper.com or 847.205.5000. Lynda is a Service Associate member since 1994 and member of the Cash Mgmt, Investments & Debt Mgmt Professional Development Committee. Andy is a Service Associate member since 1992 and a member of the Accounting, Auditing & Financial Reporting Professional Development Committee. www.iasbo.org
| 27
Understanding the effects of
property reassessment in illinois The relationship between property tax reassessments and tax rate, real estate taxes and local school district revenues in tax capped school districts By Dean T. Romano Business Manager, Maercker SD 60, Clarendon Hills
28 |
update Magazine / Fall 2010
article
T
he one thing that is clear about public school funding in Illinois is that it is actually unclear to the majority of our stakeholders. This fact can create misconceptions, frustration and mistrust within our communities. Funding for public schools today is not intuitive. Factors are abound that can play havoc on the actual dollars that are made available for educating our youth. Its complexity can often create confusion and individuals may be quick to make connections about how the process works based on what they perceive to be logical or what they have heard from a neighbor or read in a newspaper. When this happens, misconceptions can occur and spread through a community. These can then create expectations that cannot be met because of factors that have been overlooked. Missed expectations often lead to frustration but can grow into a mistrust of those perceived responsible for the source of their frustration. Often, this is a local board of education and a district’s administration. Avoiding this progression toward stakeholder dissatisfaction is the impetus for understanding public school funding in Illinois and the purpose of this article. Providing a complete review and analysis of public school funding in a single article is unrealistic. However becoming aware of the key components of school funding and discussion of local funding, the property tax extension limitation law (“Tax Cap”) and property reassessment can provide school district stakeholders an accurate foundation for understanding how educational funding is determined. Individual states are responsible for funding public K-12 education. This responsibility was left to the states through the U.S. Constitution. (U.S. Department of Education, 2010) As a result, educational funding systems vary from state to state. However, there are three differing levels of participation at the state level. The first is state operation which significantly limits the control of local school boards. The second is a state support model where locally raised funds are eliminated. In this model, the state generates revenues across the state and then distributes it based on a criteria set by that state. The final model is that of a foundation program. A foundation program maintains a local tax collection which is supplemented with state funds to ensure a minimum education funding level. (Brimley & Garfield, 2008) Illinois utilizes the foundation program and supplements local tax revenues with additional funding. (See Table 1) The suburban districts surrounding Chicago are often much more highly funded through local property taxes. In these districts, local tax dollars can account for between 70 and 85 percent of their total district funding. Local tax revenues are at the heart of funding local public schools.
Property taxes, also called “ad valorem” taxes which means “according to value”, are imposed by local government taxing districts. (Illinois Department of Revenue, 2002) In addition to school districts, these include municipalities, libraries, community colleges, forest preserves, fire districts, park districts and more. Although there are numerous taxing entities, the largest portion of an individual property’s tax typically goes to the local public schools. These taxes are administered by local officials who often include township assessors, local boards of review and county collectors. (Illinois Department of Revenue, 2002) While property can be divided into both real and personal property, only real property is taxed in Illinois. This includes land and permanent improvements such as buildings, additions and site improvements (e.g. – fences, landscaping etc.). The Illinois Department of Revenue breaks the property tax cycle into six steps that occur over a two year period. The first is the assessment phase. During this phase, all property is identified and appraised which sets the value of the property for use in the taxation process. Once properties are assessed, the assessments are reviewed for accuracy. This phase also allows for property owners to appeal what they feel to be unfair assessments through the local board of review. If an owner is not satisfied with the determination at this level, they can take their appeal to the State Property Tax Appeal Board or circuit court. (Illinois Department of Revenue, 2002) The next step in the process is for the Illinois Department of Revenue to equalize the assessments across the state by applying an equalization www.iasbo.org
| 29
Table 1 / Illinois State – State Financial Information – Revenue Percentages Year
Fiscal Year
Local Property Taxes %
Other Local Funding %
General State Aid %
Other State Funding %
Federal Funding %
2002
2000 - 01
54.4
7.5
17.9
12.7
7.4
2003
2001 - 02
55.4
6.1
18.7
12.5
7.3
2004
2002 - 03
56.6
5.4
17.9
12.1
8
2005
2003 - 04
57
5
18
11.9
8
2006
2004 - 05
58.2
5.1
18.5
10.1
8.1
2007
2005 - 06
58.8
6
18.2
9.3
7.7
2008
2006 - 07
57.6
7.3
18.1
9.7
7.3
2009
2007 - 08
58.7
6.3
18.6
9
7.4
factor to each county. Each taxing district then determines the revenue they need to operate and levy that amount. This process may require a school district to hold a Truth in Taxation hearing if the amount of the levy exceeds 105% of the prior year’s property tax extension. (Illinois General Assembly, 2009) The levy is then certified and provided to the county clerk. In the next stage, the county clerk uses the state equalization factor and assessed values of local real property to determine the tax rate needed to generate the extension or amount of revenue levied by a taxing district. During this process the clerk is also responsible for ensuring that the extension requested by each taxing district does not exceed their statutory limits. The new tax rate is then applied to all property within a tax district’s boundaries. The final step in the property tax cycle is for the county collector to prepare tax bills, collect the property taxes and then distribute them in accordance with each taxing district levy. (Illinois Department of Revenue, 2002) Historically, local school districts would determine the amount of their levy by identifying the amount of revenue that was needed to operate the district by using projections and some form of budgeting process. This dollar amount to be collected, which is called the property tax extension, would then be evenly distributed across the total assessed value of all taxable property within school district’s boundaries. When the tax extension is evenly applied to the property within the district, a school district’s tax rate is determined. This tax rate is then applied to the Equalized Assessed Valuation (EAV) of all the property within the district. For example, if you own property within a school district’s boundaries, this rate and extension (the actually taxes due) would appear on your property tax bill. The Equalized Assessed Value of a property consists of two components. The first component is the assessment of the property by a township or county assessor. This is determined by the assessor through the use of market value data. Additionally by law, “most real property is assessed at 33 1/3 percent of market value.” (Illinois 30 |
update Magazine / Fall 2010
Department of Revenue, 2002) The second component is the application of an equalization factor that is determined by the Illinois Department of Revenue. In the 1991 levy year, the collar counties around Chicago became subject to the Property Tax Extension Limitation Law (PTELL). (State of Illinois, 2010) The new law’s purpose was to slow the growth of revenue for school districts as it relates to property value increases that exceed the general rate of inflation. PTELL is often referred to as the “Tax Cap”. However, PTELL does not actually cap property taxes. What it does do is limit the inflationary increases on property taxes. (State of Illinois, 2010) These limitations were not automatic for all the counties across the state. This is due to the fact that the law requires that a county pass a referendum to enact the limitation before it is instituted. At current, the majority of all public school districts across the state fall under this voter approved limitation. PTELL uses a formula to establish a limiting rate on an annual basis. In short, a school district’s increase in property tax extension (total dollars to be received) are limited to 5 percent or the increase in the national Consumer Price Index (CPI) for the previous year’s levy whichever is less. In the chart below you will be able to see the history of the CPI since the inception of PTELL. (See Table 2) As Table 2 displays, there has only been one year in which CPI has reached 5 percent. This legislation has had a dramatic effect on public school funding over the years. Most recently, the 2008 CPI was 0.1 percent. This limited local property tax revenue to nearly a zero growth for the levy year in which that factor was used in the calculation formula for PTELL. The difficulty for school districts under the limitation law is that while their local property tax dollars are limited by an increase of 5 percent or less, expenses relating to such things as state mandates, insurance costs, supply costs, services and collectively bargained salary costs are not. In essence, the limitation erodes a district’s ability to maintain a constant level of services.
article / Understanding the Effects of Property Reassessment in Illinois
PTELL does provide a solution for this concern in that through another voter approved referendum, tax payers can increase property tax funding for schools. There are four referenda options for this. The first is by increasing the extension limitation. This would allow a district to increase the total dollars that they could levy in a year. The second is to increase the limiting rate. The next is the opportunity for a school district to pass a levy for a new tax rate. The final option is for the approval of an increase in the debt service
What is the “limiting rate”? The limiting rate is the tax rate that allows the district to impose the amount of taxes allowed under the extension limitation. The sum of all tax rates for funds subject to the PTELL cannot exceed the limiting rate. The formula used to compute the limiting rate is below. Limiting rate =
A x (1+1) CEAV – NP – AX – TIF + DIS
Where: A = aggregate extension base (prior year total taxes billed for funds subject to the PTELL)
I = inflationary increase (CPI or 5 percent, whichever is less; or other amount approved by referendum)
CEAV = current EAV of district used in setting preliminary rates
NP = new property AX = current EAV of any annexations TIF = recovered tax increment value
extension base. (State of Illinois, 2010). For a more detailed review of the limiting rate, please refer to the chart below. Although property tax increases have been limited by the PTELL, property owners have seen increases in their tax bills each year. A common misconception surrounding this scenario is that property taxes will decrease as property values decline. Under the PTELL calculation formula, this is not accurate. The law provides school districts with the ability to increase their extension over the previous based on the formula. The recent decline in property value creates a perfect storm in which home owners are expecting a reduction in their property taxes when in fact, it is very likely that they will increase. The table below provides an example of what has the potential to happen across the state for the 2010 tax levy. It is so important for school districts to protect their communities from the feelings frustration and mistrust associated with misconceptions in order to maintain healthy and supportive relationships. Now more than ever, our tax payers deserve for us to provide clear and understandable information regarding how the amount of tax dollars that they provide to our districts is determined. Building this base of understanding before misconceptions are accentuated when 2010 tax bills are received can significantly reduce the level of stakeholder dissatisfaction that can occur. For more information contact Dean T. Romano, Business Manager, Maercker SD 60, Clarendon Hills at dromano@ maercker.org or 630.323.3664. Dean has been an Active member since 2004 and a member of the Legal Issues Professional Development Committee.
(after the TIF expires)
DIS = current EAV of any disconnections
Table 2 / Illinois Dept. of Revenue – CPI’s Used for the PTELL Since 1996 – Updated 1/16/2010 Year
December CPI-U
% Change From Previous December
% Use for PTELL
Levy Year
Year Taxes Paid
1996
158.6
3.3
3.3
1997
1998
1997
161.3
1.7
1.7
1998
1999
1998
163.9
1.6
1.6
1999
2000
1999
168.3
2.7
2.7
2000
2001
2000
174
3.4
3.4
2001
2002
2001
176.7
1.6
1.6
2002
2003
2002
180.9
2.4
2.4
2003
2004
2003
184.3
1.9
1.9
2004
2005
2004
190.3
3.3
3.3
2005
2006
2005
196.8
3.4
3.4
2006
2007
2006
201.8
2.5
2.5
2007
2008
2007
210.036
4.08
4.1
2008
2009
2008
210.228
0.1
0.1
2009
2010
2009
215.949
2.7
2.7
2010
2011
www.iasbo.org
| 31
table 1: leadership meeting participation
Other Staff Regional Chairs PDC Chairs Board of Directors 32 |
update Magazine / Fall 2010
In January 2010, a focus group of association leaders used voting technology, flip charts and verbal comments to help identify gaps between member needs and wants and what Illinois ASBO provides.
article
By Susan Bertrand Assistant Executive Director, Illinois ASBO
listen data to the
Mission, professional development, networking, communication or marketing — Illinois ASBO wants to hear what it takes to make membership more effective
Back in January of this year, Illinois ASBO brought together current and past Directors, PDC Chairs and Coordinators, Regional Chairs, DAA Chairs and Vice Chairs, current and past SAAC Chairs and staff to gather objective feedback on the work the association does and on the tools used to support that work. This focus group of association leaders used voting technology, flip charts and verbal comments to help identify gaps between member needs and wants and what Illinois ASBO provides. Understanding that the focus group consisted of those members most heavily involved in the association did not deter the need for feedback; it just requires the reader to understand the bias. Creativity, professionalism and improved performance grow from objective feedback. The opportunity for Illinois ASBO to listen to members has huge implications for how Illinois ASBO will adapt and change to meet member needs. www.iasbo.org
| 33
Listening begged the question to review the Illinois ASBO mission statement, and we all know mission statement discussions can be tedious and boring. In a fun setting, the focus group participants were asked three questions about which of the following terms: networking, stakeholder, students, certification, professional development, members, services and legislative advocacy were important in a mission statement for Illinois ASBO. Focus group participants identified networking and professional development as clear winners over the other important services Illinois ASBO offers. Professional development appeared in the mission statement, but networking did not. The Board of Directors recognized that networking was an important add to the mission statement, and with only a few new words incorporated it into the statement. (See Table 2)
Table 2: illinois asbo mission Which of the following terms is most important in a mission statement for Illinois ASBO? 41% Networking 31% Stakeholders 23% Students 05% Certification
72% Prof. Development 20% Members 05% Services 03% Leg. Advocacy
Identified as important by the focus group and heard by the Board of Directors, the revised mission statement for Illinois ASBO now reads:
The mission of the Illinois Association of School Business Officials is to provide its members and stakeholders a comprehensive range of professional development activities and services through member networking and participation.
61% Networking 27% Services 08% Leg. Advocacy 04% Certification
Table 3: Networking Which statement best describes your preferred way of networking with other members? 51% Annual Conference 37% Regional Mtgs.
Members preferred way of networking with one another is during Annual Conference and at regional meetings. (See Table 3)
When focus group participants were asked what they go to Illinois ASBO for, over 73 percent responded professional development and networking. Just fewer than 3 percent said they go to Illinois ASBO for fun and 23 percent said for information and help. (See Table 4) Networking certainly is a key component of Illinois ASBO, who we are and what we do. Along with networking, information and communication were buzz words the focus group kept using throughout the day. Believe it or not, 72 percent of participants told us e-mail was the preferred way for Illinois ASBO to communicate with members; 17 percent said through publications and less than 10 percent said through the website. (See Table 5) 34 |
update Magazine / Fall 2010
06% Seminars 04% PDC Mtgs. of the Whole 02% Individual PDC Mtgs.
Table 4: illinois asbo is where i go ... 44% Prof. Development 30% Network 16% Information 07% Let Loose + Relax 03% Help
article / Listen to the Data
Table 5: preferred communication What is the best way Illinois ASBO can communicate with you? 72% E-mail 17% Print + Publications 09% Website 02% Social Media
Table 6: illinois ASBo brand Which statement best describes how you think of Illinois ASBO? 43% Lexus 35% SUV 11% Mini Van 08% Toyota Camry 03% Ford Taurus
52% Evolving 25% Cutting Edge 13% Traditional 07% Conservative 03% Behind the Times
In terms of personality which of the following terms best describes Illinois ASBO? 43% Very Busy 31% Business Man 20% Older, with Style 04% Stodgy 01% Old
62% Hardworking 23% Confident 11% Family Person 03% Fun-Loving 01% Happy
Participants recommended better use of the subject line and less text as key components to improving communication through e-mail. Social media as a communication outlet scored very low, less than 2 percent with the 2010 focus group, yet this avenue may be the wave of the future and offer an interesting comparison should we ask the same question in five years. We also heard about the need for virtual meetings and conference calls to eliminate travel and encourage statewide participation. Staff is hard at work researching a private social networking platform called Memberfuse to help committees and regionals communicate, collaborate and share virtually because member time has become such a rare commodity. One of Illinois ASBO’s biggest challenges is competing for member time and attention. We do this through seminars, Annual Conference, exhibits, publications, communications and marketing materials. Focus group participants took a look at many of the marketing materials we push out to members and told us they wanted clear communications, easily identifiable as coming from Illinois ASBO, easy to navigate and with larger font sizes. We engaged the services of an association marketing specialist, Kay Cruse of the Prescient Group, and embarked on a communications audit and branding discussion. Prescient Group tells associations that your brand is the promise you keep. When you think about the Illinois ASBO brand, both tangibles and intangibles probably come to mind. To help quantify the Illinois ASBO brand, we asked the focus group three questions about picking words or images that best describe Illinois ASBO. (See Table 6)
As humorous as the exercise was, the feedback gives us important clues as to the value and uniqueness of the Illinois ASBO brand — membership experience depicts our brand. The opportunity to solicit feedback from the focus group and really listen to what they are saying helps form Illinois ASBO’s strategic plan. Information from this day in January was brought to the Board of Directors retreat this past June and the board was able to digest, discuss and develop objectives based off the input from members. All members are invited to offer feedback and comments about this article to Sue Bertrand, Assistant Executive Director, Illinois ASBO at sbertrand@niu.edu.; Use Objective Association Feedback in the subject line. Tell us which image and word you think best describes Illinois ASBO. www.iasbo.org
| 35
Say "Yes" to Dual Benefits
ISDLAF+
When you renew with your affiliate ASBO, check the box for ASBO International Membership. With one payment, you can participate in both organizations—doubling the tools, resources, and colleagues you can call on to help you in your everyday responsibilities. Together, we can effectively manage resources to give every child the power of education.
help e h t , f f a t s r e w e f es and i t i l i b i s n o p iceless. s r e p r s g i n i p s i a h e s r r c e b n i m e e With th ASBO m (MN) h g u o r h t n i a g I t ls and expertise thaSBA, White Bear Lake Area Schoo xon Sr., R Peter Willco
36 |
www.asbointl.org update Magazine / Fall 2010
resources on paper: Static sources for education professionals
Essentials of Illinois School Finance, Fourth Edition By James B. Fritts Overview: This IASB publication was originally designed as a training manual and desk-top reference for school business managers and budget makers. While it continues to fill that role admirably, the book also provides an effective reference for anyone who needs to understand the essentials of Illinois school finance. What’s Inside: From the peculiarities of property taxes and state funding to the formulas for projecting enrollments and staffing budgets, this book covers just about everything - and does it in plain English. The book features a separate chapter on the role of school board policy (which is
addressed in the foreword by IASB Executive Director Michael Johnson). A comprehensive alphabetical index makes it easy to find substantive references to hundreds of topics. The Fourth Edition, of course, is completely updated with revised laws and state funding data for fiscal year 2009.
Where to Find It: Essentials of Illinois School Finance is available from IASB Publications.Price is $35 or $25 for IASB members plus $5 shipping. The book may be purchased at the association’s online bookstore, www.iasb.com.
Equalize Student Achievement: Prioritizing Money and Power By Ovid K. Wong and Daniel M. Casing Overview: Whether you have a casual interest in the politics of education funding or are an expert in school finance seeking a comprehensive and up-to-date analysis, this text is for you. Combining an entertaining history of our nation’s approaches to paying for public education with a detailed explanation of current funding structures, readers will get the knowledge and context needed to understand the technical aspects of education funding and the way funding for schools impacts everything from economic opportunity to racial and social justice.
What’s Inside: How money works to support school operations and answer rigorous accountability such as No Child Left Behind. This book paints a picture of school finance to illuminate issues with the current system and suggest ways to improve that system. Where to Find It: An ASBO International publication available through Roman & Littlefield Publishers at www.rowmaneducation.com. Price is $29.95 for soft cover or $70.00 for a hard cover.
www.iasbo.org
| 37
on paper: Static sources for education professionals
State, Local and Federal Financing for Illinois Public Schools, 2000-2001 By Illinois State Board of Education Overview: Serves to provide a basic understanding of Illinois school finance. As a discussion guide, it outlines for individual and group analyses, and supplementary reading in school finance courses. Information provides an abbreviated treatment of complex matters, further study is necessary for a comprehensive understanding of school finance and program funding. What’s Inside: Provides information on sources and fund amounts available for pre-kindergarten through post-secondary education in Illinois common schools. Contains summary of Fiscal Year 2001 appropriations to
Illinois State Board of Education and for educationally related purposes made to other state agencies. Provides sources and uses of state, local and federal revenues; Tax-rate limitations; interfund transfers; shortterm and long-term borrowing; and information on required recording of district revenues and expenditures. Where to Find It: To get a copy of the handbook and find other valuable resource information, visit Illinois State Board of Education Website at: www.isbe.net/sfms/pdf/slf01.pdf
Illinois School Law Survey By Brian A. Braun
38 |
update Magazine / Fall 2010
Overview: Provides a convenient resource written in plain English for answering the legal questions of educators and laymen. A CD-ROM version that accompanies the book provides rapid access to the laws governing Illinois public schools and represents an all-in-one legal resource.
public meetings, budgeting, property taxes and state aid. Answers are based on state and federal statutes and case law in force and reported as of January 1, 2010, and administrative rules and regulations current as of December 15, 2009.
What’s Inside: The book and CDROM present information in a questionand-answer format in 27 chapters on such topics as student discipline, the educational program, education of the handicapped, teacher employment, collective bargaining, school elections,
Where to Find It: This survey is available from Illinois Assoication of School Boards Publications for $40 or $30 for IASB members. It may be purchased online at: www.iasb.com/shop/details. cfm?Item_Num=ISLS10
resources
Taking the Mystery Out of Illinois School Finance, Third Edition By Thomas A. Kersten Overview: This book, published by the National Council of Professors of Education Administration, was developed over several years. Only by understanding the basics of Illinois school finance, can school administrators, board members and constituents make informed decisions. What’s Inside: Designed to explain key principles of Illinois school finance in a way that school administrators, school board members, teachers, parents, graduate students in educational administration programs, and other interested citizens can grasp without getting bogged down in excessive financial detail.
Where to Find It: Obtain a copy following these simple steps: 1. Visit: www.emich.edu/ ncpeaprofessors 2. Click “NCPEA Publication” in the left blue bar 3. Click “Books” in NCPEA Extras 4. Click On link below the picture: http://cnx.org/content/col10606/ latest/ 5. View the PDF of the book by clicking on (View Book (PDF) 6. Order a copy by checking “Order printed collection” in the upper right
Mechanics of a School District Budget Illinois State Board of Education Overview: Offers an introduction to school finances and helps to explain the budget process. The importance of clear, reliable and understandable budgetary information cannot be overstated. Once adopted, the annual school district budget is the plan to accomplish the financial goals of the school board. What’s Inside: Describes formatting and reporting requirements for Illinois school district annual budget. Explains budgetary components and accounting terms for individuals who want more
about how education dollars are estimated, received and spent. Covers Illinois Compiled Statutes (ILCS); Effective July 1, 2008, the (23) Illinois Administrative Code – Part 100; and School District Annual Financial Report (ISBE Form 50-35). Where to Find It: This handbook can be read, downloaded or printed from Illinois State Board of Education’s Website by visting: http://www.isbe.net/sfms/budget/ mechanics.pdf
www.iasbo.org
| 39
on screen: dynamic sources for education professionals
ABCs of the AFR Illinois State Board of Education Overview: Designed to introduce basic governmental accounting concepts to help readers of Illinois School District Annual Financial Report (AFR) better understand the annual audit process and the financial information generated. This guide will explain the AFR’s components and accounting terms for individuals who want to know more about how their school district dollars are received and spent. The intent is to describe the AFR fundamentals in such a way as to help bring order to what may incorrectly appear to be an overwhelming or unnecessary process.
What’s Inside: The issues discussed in this guide relate directly to: 1 – The Illinois Program Accounting Manual which is the basis for school district accounting and reporting within the legal requirements of The School Code of Illinois; and 2 – The School District Budget (ISBE Form 50-36) which is the annual budget that is adopted by all Illinois school districts. Where to Find It: Access this information and more when visiting the Illinois State Board of Education Website at: http:// www.isbe.net/sfms/ABCsofAFR/ ABCsofAFRdefault.htm
Illinois School Finance at a Glance Illinois State Board of Education Overview: ILEARN is your source for financial data on every school district in Illinois.
for all districts at once with the base of details. Other areas highlighted are:
What’s Inside: Aggregate totals of revenues and expenditures, as well as, operating expenses and per capita tuition amounts are delivered directly to you on the Internet. Cumulative tax rate figures, ranks, and averages are also available. Compare any district to another, to a county or even to the state. For further studies, use the base of details. The Annual Financial Report information, as shown for any specific district, can be utilized 40 |
update Magazine / Fall 2010
Internal & External Borrowing, Sources, School Facilities, Education Funding Advisory Baord, PTELL, Limitation of Administrative Costs Where to Find It: This information is available on the Illinois State Board of Education’s Website by visiting: www.isbe.net/sfms/pdf/ ataglance.pdf
resources
Alliance Legislative Reports Illinois Association of School Boards Overview: The Alliance speaks with a unified voice for school management and works on behalf of school board members and administrators from school districts of all sizes, geographic regions, types of school organizations, and from all degrees of wealth. Represents every school district in Illinois and therefore, every public education student. The Alliance lobbyists are always on call to answer legislative questions, give advice, provide legislative updates and work with local school officials. The Alliance Legislative Reports put up-to-the-minute information in the district administrative office each
week where it is readily distributed to members of the school board and the management team. What’s Inside: Compiled each week during sessions of the General Assembly and as needed during off-session times, Alliance Legislative Reports summarize major legislative activities and bills of interest to school leaders. Where to Find It: Current and archived issues can be found on the Illinois Association of School Boards’ Website: www.iasb.com/ govrel/alrmenu.cfm
Illinois Program Accounting Manual Illinois State Board of Education
Overview: Section 2-3.27 of the School Code charges the Illinois State Board of Education with the formulation and approval of forms, procedures, and regulations for accounting and budgeting of elementary and secondary local education agencies (LEA) in the State of Illinois. The Illinois Program Accounting Manual for Local Education Agencies has been designed in keeping with this requirement. What’s Inside: Provides the basis for complete accounting of all
district receipts and disbursements, systematic development of program budgeting, and the accumulations and dissemination of program-oriented costs. Due to ongoing changes in the program areas at both state and federal levels, there is a continuous need for changes in this manual.
Where to Find It: As changes accumulate, updated revisions can be found on the Illinois State Board of Education’s Website: www.isbe.net/sfms/html/ipam.htm
www.iasbo.org
| 41
the final word Great Ideas from Great Illinois ASBO Members Richard S. Pagliaro Assistant Superintendent for Business & Personnel Joliet Township High School District 204 As an Education Professional ... In an economy where financial resources are shrinking, the role of the school business official is increasingly important. It is essential that we have a clearly defined vision that ensures high quality educational programs and facilities — every program, facility or financial investment is made with sustainability in mind. If decisions are based upon a clearly defined vision that can be sustained, school business officials can ensure the resources necessary to provide quality education in a safe and healthy environment for generations to come. What does school finance look like in 5–10 years? In a society with an unstable economy and rapidly changing technology, it is difficult to predict the future of school finance. Advancements in technology continue to have tremendous affect on teaching methodologies and ways in which schools conduct business. School business officials must monitor the economy, while keeping current with technological trends. This ensures that we are operating with efficiency, while providing students with the technological tools they need to be successful in a 21st century learning environment. What is the most important aspect of School Finance? Districts continue to lose funding for regular programs while demands grow for unfunded mandates. It is our charge to forecast and respond to our school’s curricular needs. If a priority is identified, the entire organization needs to take on a “can-do” attitude. There are times when action needs to be taken even if the funding source needs to be identified at a later date. Simply put, we have to do what is best for our community and the students we serve. If you could change one thing about School Finance ... Funding! Currently, the state of Illinois is only willing to provide financial information for a six month time period that is subject to change at any moment. Although I do not claim to have the answer to state funding, I believe that someone needs to take the lead and put politics aside for our children’s future. Politicians have said they prioritize education, but I feel it is time for politicians to stop talking the talk and start walking the walk. 42 |
update Magazine / Fall 2010
fall 2010
Northern Illinois University & Illinois Association of School Business Officials
Fall 2010 — v ernon hills high school
School Business
Management Cohort This unique academic and practice based program is built upon the Professional Standards for School Business Management as established by the Association of School Business Officials International. Therefore, each class is unique to the field of school business management. Included in the program is a three semester internship overseen by practicing school business officials already serving in Illinois schools. This ensures that every student will exit the program with the breadth and depth of experience that is required to be successful in this growing educational leadership field.
Todd Latham NIU Academic Program Advisor 815.753.1465 - tklatham@niu.edu
Also, due to this unique partnership, students enrolled in these programs will automatically become members of Illinois ASBO and receive all of the benefits afforded practicing school business officials in Illinois. Be sure to visit www.iasbo.org to see what Illinois ASBO has to offer.
Sandi Duda Illinois ASBO Headquarters 815.753.9365 - sduda@niu.edu | 43 www.iasbo.org
Application information
EXHIBITOR REGISTRATION Monday, October 4
44 |
ATTENDEE REGISTRATION Wednesday, January 5
update Magazine / Fall 2010
stay connected at WWW.IASBO.ORG