A year and a half after it faced possible extinction, Hazel Crest School District 152 1/2 won a reprieve Thursday when the Illinois State Board of Education voted unanimously to let the financially troubled district remain open.
“This is a major achievement for a district that, by all accounts, was on the verge of closing its doors before the end of the 2002-2003 school year,” said State Supt. of Education Robert Schiller. “This is a tribute to the district’s determination to seek and accept [state board] assistance …”
Despite the endorsement, the district is not out of the woods.
Rob Grossi, who oversees the district’s finances as part of an agreement with the state board, said the district will have a balanced budget through next school year, but said the situation could turn dire after that.
“The district is still in critical financial situation,” Grossi said. “It does not have significant fund balances. If revenue growth is stagnant, we may have to go to the state board in the future and recommend a merger with another district.”
It has been a long, arduous 18 months for the 1,100-pupil district. It was on the verge of insolvency in 2002 after it accrued debt of more than $1.4 million and was unable to find a financial institution that would lend it money.
In October 2002, district officials pleaded with the state board to take control of their finances. The board agreed and eventually appointed a three-member panel to oversee financial operations.
In early 2003, the General Assembly provided about $1.5 million in grants and $4 million in loans to help keep the district afloat. Voters injected new money into the coffers when they approved a property-tax hike.
But Hazel Crest 152 1/2 was still swimming in red ink, and the financial panel began exploring the possibility of merging with a neighboring district. It became apparent very quickly, however, that the five surrounding school districts were not that much better off financially.
The finance authority rejected a merger. “It does not make much sense to merge with a district that already is in financial trouble itself,” said Grossi, who serves as the unpaid head of the financial panel.
Nearly three-quarters of the 891 school districts in Illinois are in deficit spending.
In the end, the finance authority slashed 100 teaching positions and closed two of the four elementary schools. The superintendent resigned, and the business manager was placed on leave.
School officials breathed a sigh of relief Thursday.
“We are all happy and a bit relieved,” said Robert Kelly, who became the district’s new business manager in August. “We are going to make it, and we are going to be fine. This year looks good and next year looks good as well, and I feel confident we will stay the course in the future.”
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