Palestine School District Informational Meeting

2-13-13

Since we last metThe district has been in contact with our

state representatives.The district has been in contact with the

Illinois State Board of Education.The district has been in contact with other

school districts in our similar situation.

What have we learned?Representatives have worked hard to study

our situation.$35,000 came in last week from our Early

Childhood Block Grant (Pre-K)We did not expect these payments for

months.Getting answers from the state is difficult.

State Concerns for the DistrictPension Reform-Is still a hot topic. We

believe that pension reform will happen. The original bill will not have the cost shift to

the district, but a bill later on will include the cost shift to districts.

What will happen to rural schools?No answer has been received at this timeAt this point, it is survival of the fittest!

Illinois State Board of EducationMark Mullen, financial consultant for I.S.B.E.

has been in the district twice to look at the financial picture of the district.

He believes that the Illinois State Board of Education annual budget recommendation for education will not make it pass the governor. The I.S.B.E. has asked for full funding for General State Aid. The state funded us at 89.17% this year.

His prediction for next year is 80% funding for G.S.A. This will cost the district around $100,000.

Future OutlookI cannot guarantee that all these moves will

work for long term stability, but it is a start.When the state continues to cut funding, we

find ourselves further behind. The district must balance a budget from here on out.

State is looking to cut General State Aid payments to 80% or lower.

That will cost the district between $70,000 to $100,000.

School Districts Many school districts our size are looking at

cuts. Oblong, Red Hill, and Neoga are all looking at cuts.

Noble is looking to annex into the Olney School District.

Everyone is looking for ways to reduce spending and are looking at Reductions-In-Force.

Where are we?Timeline

Out of money in March or April.Looking to Tax Anticipation Warrant money to

get us through August. ($800,000)Will probably need to explore the use of

Working Cash Bonds to operate in the 2013-2014 school year.

Tax Anticipation WarrantsTax anticipation warrants are issued in

expectation of the collection of taxes and may be issued to the extent of 85% of the total amount of taxes levied.

The warrants must be repaid, upon the receipt of tax moneys by the district and bear interest at a statutory rate.

What is a bond?A bond is written certificate or evidence

signed by the president and clerk of the school board to pay a specific sum of money.

A bond represents a general obligation of the district.

Taxes in an amount necessary to pay principal and interest due each year are extended by the county clerk without regard to the tax rate.

How do bonds work?Generally:

The board will pass a resolution at a school board meeting to solicit for bonds.

The board will have a bond hearing.There is a thirty day petition period for the

bonds.This means any person in the district may

circulate a petition to place the bonds up for referendum.

BondsThe petition of bonds must be signed by

registered voters. If the petition is signed by 10% of the registered voters then it goes on the ballot.

The question to allow the bonds then will be voted on in the March 2014 election, if a special election cannot be held sooner.

A simple majority vote passes the bonds.

What does this mean for the district?When the tax anticipation money runs out we

are basically out of funds, until we can tax anticipate again.

The only option is going to the bank to take out a line of credit. The banks will not loan money to a school district who cannot guarantee re-payment.

When the school shows a zero balance and cannot make payroll, the state will be called.

Financial Oversight PanelThe Illinois State Board of

Education would take over the finances of the district and make decisions on behalf of the district.

They would choose a three member oversight panel made up of people outside of the school district.

We do not want a Financial Oversight Panel in Palestine

Cairo Financial Oversight Panel East St. Louis Financial

Oversight PanelHazel Crest School Finance

Authority North Chicago Financial

Oversight PanelNorth Chicago Independent

AuthorityProviso Financial Oversight

PanelRound Lake School Finance

AuthorityVenice Financial Oversight

Panel

How do we keep away from this?We have to make cuts. These cuts are

unpleasant and we will let go of dedicated people who work in the Palestine School District.

We then must have the ability to bond money to use when we cannot tax anticipate money.

We must balance a budget.

Reduction- In-ForceA Reduction- In -Force (R.I.F) is a decision of a

school board to decrease the number of teachers employed or to discontinue some particular type of service.

The Board will have a hearing on the Reductions –in-Force in early March.

The Board will then review the information that is presented at the hearing. The board can choose to act on the Reduction- In-Force at the March Board Meeting.

Teachers then can be recalled back by the board if there services are needed.

Projected ReductionsElementary TeacherSpecial Education

TeacherSocial Science TeacherMathematics TeacherPhysical Education

TeacherEnglish TeacherBand TeacherMusic Teacher

Looking not replace:Business TeacherArt

Extra-Curricular CutsJunior High Sports

BaseballSoftballScholastic BowlTrack

High School SportsGolfScholastic BowlTrack

Recommend to stay if funded by outside groupsSchool cannot fund

these sports.Junior High

Basketball Girls $6,297

Basketball Boys $5,294

5th & 6th Grade Basketball $2,625

High SchoolFootball

$9,169

Basketball $9,871

OverallI know that the recommendations only bring

more questions than answers.The board is looking for input as we go

forward.If you have questions, please come down to

the microphones on the floor.State your name and the question that you

have.If you do not want to come down, please call

or e-mail me at 586-2713 or jsornberger@roe12.net