D122 Financial Forecast: 'State Failing to Make Their Obligations'

The five-year financial forecast is provided to District 122 administrators and board members twice a year, once in the winter and again in the summer, to provide context to the decisions they make.

With declining state aid and possible changes to transportation and pension funding ahead, the New Lenox school board got an updated financial forecast that administrators said is "bad, but not horrendous."

The five-year financial forecast is provided to administrators and board members twice a year, once in the winter and again in the summer, to provide context to the decisions they make. You can view the entire document, which is attached to this article as a PDF.

"When we met in January, things were looking good," business manager Harold Huang said. "We sounded rosy. Well, since January, I think it just went like this," he said, motioning his hand downward.

The reasons, explained by Howard Crouse of the PMA Financial Network, which gave the presentation, result from a number of factors:

  • The state is still behind two catagorical payments. Earlier this year, Huang said the district could possibly receive one or two additional payments, which are about $1.1 million each. Now, receiving even one might not happen.
  • General state aid will continue its decline, and the district will get less than originally thought because of the way the state has prorated it. 
  • There are ongoing discussions in Springfield that could put of a burden on local districts when it comes to pensions and transportation, which has already dropped significantly. 
  • Slight declines in the projected equalized assessed value in the district and an "overly optimistic" projection of foundation levels had the January forecast a bit brighter than Wednesday's.

The district actually , which helped cover a projected budget deficit for the current fiscal year. Looking ahead to next year, though, there are uncertainties as to what the state will decide. 

"Last year governor took money away from transportation," Crouse said. "There’s this risk that the governor will again play with the legislative dollars when it gets to his desk. There’s no indication he will except for past practice."

Crouse said the district has done a nice job keeping its expenditures down, most notably with its health care costs. After projecting an 8 percent increase to costs in January, the district's costs didn't even increase half of that, at 3.82 percent. 

Still, according to Crouse's presentation, "the district will need to use FY13 to review expenditures with an eye toward significant reductions." Huang and Supt. Mike Sass were confident the district could do that, saying the financial forecast has helped provide important insight in the past. 

"We saw a picture like this four years ago, so we’re now in the same situation where we’re saying, 'This is bad, but it’s not horrendous,'" Huang said. We can take care of this. It’s what we always do. It’s why we do this every six months."

The board has also looked at a capital improvements plan to upgrade its existing infrastructure, something Sass said is a priority for the district. With the most recent projections, though, he presented the board with various options that could help the district in the future. 

"When the state fails to make their obligations, our board has done what it's needed to," Sass said.

This year, he said the district will closely review the budget and some of the options, which include: 

  1. Receiving a fifth categorical payment from the state in each of the next two fiscal years.
  2. Selling land. The district owns land near Silver Cross Hospital, at Francis and Schoolhouse Roads and at Industry Drive. Sass said the land is definitely an asset to help the district in the future.
  3. Increasing class sizes by two students. The district is currently under its class size targets.

The other options that would "make the future look much brighter," Sass said, involve combinations of the three. 

Other topics discussed during the school board's strategic plan meeting included facility planning, program updates and board member initiatives. Look for stories in the coming days for more from the meeting. 

Marie June 14, 2012 at 01:14 PM
The school boards and politicians have failed to meet their obligation to the children. The pension liabilities are taking more and more funds from education. This and all other school districts in this state have contributed to the lack of funds available for education. While this district defended its actions with over-the-top contracts and salaries, every other district was, and many still are, doing the same thing, pushing their irresponsible actions onto the state.
cmcfeddron June 14, 2012 at 01:48 PM
Teacher's Unions in the collar counties got greedy with salary, health and pension benefits over the last 30 years. Now these same people want to make Chicago and downstate tax payers continue to foot that bill. For some, the solution is to destroy public education, starting in the City of Chicago. Then only those who can afford, uh, high school, can bus their kids to Charter schools. Teachers Unions granted salary increases and big pension benefits locally, so now this is our problem, not Governor Quinn and everyone else in the State of Illinois. We need to reign in current salaries and maybe even start to claw back on some of the overstated pension benefits, or make some of those who early retired at 55 yrs old, come back and work for a few more years.
Born Here June 14, 2012 at 02:35 PM
Totally agree, the unions have gotten out of control. They are untouchable, that is not what unions were suppose to be about. The were suppose to protect peoples jobs and give them good wages, not over the top, not to were it affects other people. You are hurting the pockets of the working class America, who is struggling enough. Wake up please! I thought you became a teacher because you WANTED to HELP children learn. Not because you wanted to be in a union and be greedy like the rest of the politicians.
Eugene June 14, 2012 at 03:54 PM
Agreed that this teacher and adminstrator pension balloon is the biggest debt to our public education system. But we also need to be more vigilant with operational decisions and costs. The Nelson Ridge Campus has a ridiculous amount of land for what should have been a 2 or 3-story complex and shared gymnasium and cafeteria. Spencer Road Campus has a new kindergarten that has now rendered Cherry Hill obsolete. Oakview and Bentley need upgrades due to old age. How did those 2 new campuses justify the bond expenses? 210 did the same building LW West when it wasn't necessary. Spend, spend, spend because it is not their money. Why would Harold Huang ($150,000+), Peggy Manville ($175,000+), Dr. Sass ($250,000+), ever care about a property tax increase for someone else? Some of them have even sent their own kids to Providence ($9000 annually). They also have full pensions coming that are above the average family salary in New Lenox, AFTER they stop working. Always easy to spend the neighbor's money on big projects today, that cost us tomorrow!
Marie June 14, 2012 at 04:18 PM
Agreed! The past and current school board members have not represented the taxpayers in a fair and responsible manner. They've made sure that the administration positions were set up with obscene compensation packages and bonuses for current and future administrators. Seems to me that the district has "passed the buck," and their pension costs, onto our kids' backs. Great role models.


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