Schools
Grosso: School Board Will Present Public With a Plan to Pay Down Debt
While assessed value is down and tax rates are up, the School District is grappling with the best way to deal with total debt of $293.9 million as of the end of fiscal year 2013.
The "debt crisis" is a national trending topic these days, but the "debt crisis" catch phrase might be nearly as pertinent to Geneva School District 304, which is still grappling with the best methods to pay down $293.9 million in debt.
School District 304 Board of Education President Mark Grosso announced last week that the board is going to meet the challenge head on by formulating a milti-year plan that it will present to the public.
"We are going to develop an action plan to get us through the next couple years —we do have our five-year projections that PMA (Financial Network Inc.) presented tonight," Grosso said at the Oct. 15 School Board meeting.
"We are going to revise any plan that we have had, and we are going to develop an action plan that will address our debt in the short-term and the long term. … We’re going consult with our professionals and our staff, and we’re going to develop an action plan that’s going to be published so everyone will know what we intend to do for the next couple years."
According to School District 304 website, the district owes $151 million in principal and $142.9 million in interest for a total debt of $293.9 million as of the end of fiscal year 2013.
A chart presented by PMA shows that one the problems facing the district is that the total equalized assessed value of School District property dropped 6.64 percent in 2011 and is continuing to drop. Because assessed value is down, the tax rate has gone up and property-taxpayers have seen their bills rise to make up the difference.
From 2007 to 2012, the School District's tax rate has climbed from about $4.66 per $100 assessed value to $6.10. (Scroll down to see the numbers.) For the owner of a $300,000 home, that translates to about a $1,340 increase for the School District portion of his or her property-tax bill.
As a tactic, the School District has in recent years levied more money than it has spent and used the difference to pay down the debt service — a process the School District calls "abatement."
TaxFACTS co-founder former mayoral candidate Bob McQuillan told the board last week that there's some confusion about the term abatement.
"Mark (Grosso) thinks abatement is giving the money back to the taxpayer, but that’s not what the board is doing," he said. "You’re charging me more and my neighbors more today. The bond was backloaded so that future residents share the burden, (but) right now, current residents are sharing most of the burden."
McQuillan also expressed concern about the economic projections offered by William Blair, a School District 304 consulting firm that made a presentation to the Finance Committee along with PMA.
William Blair's numbers were generally more optimistic than those by PMA. For example, PMA projects EAV will decrease by 2 percent next year while William Blair predicted a .95 percent increase, McQuillan said.
"While it does not sound like it’s a lot between percentages, it is a lot of money when you’re talking $1.2 billion, so I would suggest the board errs on the conservative side," McQuillan said.
Grosso said any member of the community who has questions about the debt should give him a call.
"I know our debt is a big concern, but you don’t have to wait for a public meeting," he said. "We want everybody to know the board is available to answer any questions. Call me. My phone number’s in the book. I’m glad to discuss anything with any members of the community."
D304 Tax Rate History
- 2012 — 6.1032
- 2011 — 5.7335
- 2010 — 5.3038
- 2009 — 4.8468
- 2008 — 4.6991
- 2007 — 4.6629
