With looming fiscal threats on the horizon, Evanston Township High School District 202 staff are bracing for the worst, according to the district’s top business official.
District 202 Chief Financial Officer William Stafford delivered a bout of bad news and a slew of warnings to district officials during a Board of Education meeting Monday night.
Board officials were informed that the district had not been selected to issue qualified school construction bonds, described as “interest free bonds” by Elizabeth Hennessy, managing director of William Blair and Company, an investment banking and asset management firm. She said nearly 200 districts applied to the Illinois State Board of Education for $495 million worth of such bonds, but only 29 districts received any allocation.
The good news, Hennessy said, is that the “market is strong so even though we don’t have interest free bonds, we have low interest rates.” The board voted unanimously at their Monday night meeting to issue $16 million in general obligation bonds. Stafford said $6 million of the revenue generated will be used to fund capital improvements, including major roof repairs and a school-wide signage project, while $10 million will be used to refinance 2008 bonds. He said, in interview following the meeting, that the latter action will save the district $500,000.
During a mid-year budget review, Stafford outlined potential hazards to district coffers including record low consumer price index increases for the past two years, which means “we’re not getting a lot of revenue in.”
Stafford said the district may also be forced to pay more money into the Illinois Teacher Retirement System if the state declines to pay their share of the cost, which could add between $2 million and $2.5 million in additional expenses per year.
Additionally, Senate Bill 1, if passed by the Illinois legislature, would alter the school funding formula, which could result in a loss of about $2 million in annual district revenue, he said.
“The other issue I’m really concerned about is not only does the state not have a budget but they’re starting to run out of money,” Stafford said. He said the district is currently operating with about a three to four month lag in payments from the state. Stafford also said as the financial crisis in Illinois worsens, that lag time could increase to six or even nine months.
“It’s not just us, it’s all districts,” Stafford said. “We’re in a very, very defensive position where we’re trying to project how much more we’re going to lose and how we’ll deal with it.”
More Top Picks Snapper 82 Volt Max Leaf Blower 1687879
Board member Jonathan Baum said the district and its board may be entering into a “new era” and he asked that staff help the elected officials better understand the their options down the line.
“We are going to face some very uncertain times in the future,” said Board President Pat Savage-Williams. “Every time I hear these reports it certainly sounds ominous but I want to hear what the administrators will recommend because I think this is really the time for us to lean on their expertise, their knowledge and creativity because we know what we want not to cut.” She added that what’s most important is sheltering students from the impact of potential cost cutting measures.
Stafford said district staff are in the process of formulating projections for the number of students per class and how many sections will be needed to fill out a schedule for every pupil.
Superintendent Eric Witherspoon said the process is critical to determining how to budget for next year,
“We have increasing enrollments,” he said. “Even though it’s inching up, it’s still inching up and not inching down.”
It’s imperative that the general public understand “the situation is pretty terrible,” said board member Anne Sills. She said the fiscal uncertainty the district faces requires officials to keep their shared values in mind when making hard decisions.
“This dysfunction in the state of Illinois is not favorable to public education,” Sills said.
Lee V. Gaines is a freelance reporter for Pioneer Press.