QuickStory 2: School Funding Is One Fine Mess

"Enrollmentgate" took the thunder, but there was lot was going on at Tuesday's School Board meeting—concerns about class size, school funding, the condition of the high school auditorium, Coultrap demolition and more.

There was more action at Tuesday night's Geneva School Board meeting than you might find in a Laurel and Hardy two-reeler—much of it related to the fine mess we've gotten ourselves into with state funding, a real estate collapse and a 2007 referendum that has left the district deeply in debt and

Among the topics Tuesday night:

  • Two parents talked about the crisis they see coming at Mill Creek Elementary School, where they said kindergarten and first-grade class sizes were reaching 27 or 28 students.
  • School officials received "unprecedented" response regarding efforts to replace seats and repair the Geneva High School aditorium—and the board voted to take action Monday night.
  • The School District received news that state pension costs likely will be transferred to the district. The bill would phase in the pension reform plan, starting in 2013-14.
  • A presentation was made to , particularly in the area of special education, due in part to state mandates.
  • It was revealed that the School District is required to pay for transportation of homeless students who have moved as far away as Hoffman Estates.
  • Transportation and Operations & Maintenance budgets show expenditures going up in 2012-13, according to a preliminary budget report by Assistant Superintendent Donna Oberg.
  • The School Board is grappling with how to sell the aging and mostly-vacant Coultrap building as well as 27 acres of property it owns on Brundige Road.

Each of these topics is worthy of its own headline—and many will get a headline or two in the coming days—but because of a Tuesday-afternoon press release on the 2007 enrollment issue, each story took the back-burner.

The School Board moved up the meeting's first public comments session to the second agenda item, so the 5:17 p.m. e-mailed press release came up in the form of a question from the public rather than as an announcement by the board.

The stems from the recent release of a report by John Kasarda that showed enrollment projection numbers the consultant gave the district in 2006. Those numbers are lower than those presented to the public prior to a 2007 referendum that won permission to build two new schools.

"I’m here in regard to the May 26 Kane County Chronicle editorial regarding the referendum vote in 2006," resident Mark Ferguson said. "My concern is that there is no discussion as to how the numbers are inflated. I think that really does need to be addressed. I and my wife voted for the referendum. I worked for many years in making capital investment decisions for a large corporation, so I know the value of a dollar. As a taxpayer, I don’t want to vote for something under false conditions.

"There are a lot of silent people out there," he said. "They heard this, and it bothers them."

School Board President Mark Grosso responded that "the district did release additional information today. There is a release put online this afternoon. It’s available online right now.

"This board does not have any investigative powers other than looking at our own numbers and our own research," he said.

It basically says the enrollment projection numbers came from a variety of sources, including the Kasarda report, and that additional information sources indicated the Kasarda report's projections were low. The press release concludes that "nothing deceptive or unlawful was done in the process of the referendum campaign."

Another resident and a member of the Geneva Taxpayers for Accounable Controlled Spending (TaxFACTS) citizens group, Barry Bourdage, called the statement "a nonresponse."

Bourdage said the $80 million referendum only allowed the district to collect $52 million—and the additional $38 million debt is in the form of a note that is paid back at a 9 percent rate.

"It’s not ethical. It’s not moral. It is legal," he said. "I sure hope you take a look at what’s going on."

At the same meeting, the , took a look at preliminary budgets for Trasportation and Operations & Maintenance that called for spending increases and heard more hard news about unfunded state mandates.

"I look at this budget. I don’t see any cuts," Bourdage said. "How many people have seen a reduction in salary or no salary at all? I look at the salary list, and there are a lot of teachers making low or average salaries that are doing a great job. Why are we having a $140,000-a-year driver’s ed teacher?"

Garin Bergman told the board that Tuesday night was "my first board meeting." Bergman said he was moved to attend because of a recent property tax increase. His family is paying $16,000 a year in property taxes, with $10,000 going to the School District, he said.

The first installment of the Kane County property tax bill is due June 4.

"My friends and family cannot believe it," Begman said during a later comment period. "As I listen to this presentation and I don’t see any cuts, how can we do that? The people in the audience have tightened our belts. We don’t spend more, we spend less. I don’t see how we can continue as a school district to spend and spend and spend."



Martina Natoma May 30, 2012 at 04:31 PM
This same Geneva 304 school board, that routinely hands out $150,000 in last minute pay raises each year for retiring teachers to BOOST their pension payments - will now see it's chickens come home to roost, (as will the rest of Geneva), since it looks like the State of Illinois is going to redirect it's pension obligations back and put them on your tax bill. Illinois, run by crooked unions, and local school districts such as Geneva 304 run by teacher union cronies, is no place do business, or expect much of a future. Let's not forget, it IS 'for the kids' that the local unionized school district employees line their own pockets with unsustainable public pension obligations.
Bob McQuillan May 30, 2012 at 10:15 PM
As usual and excellent recap of a very interesting meeting. It was great to see several new speakers address the board of education and the administration. This is one topic that needs clarification and that is the 2007 bond issue. The school district debt limit is 13.8% of the total EAV of all properties in the district (residental & commerical). Right now that EAV is $1,328,294,553. So the district's maximum allowable debt is $183,304,648. That is prinicpal only. We are currently around $150,000,000 in principal and another $160,000,000 in interest. In 2007, the district could not borrow the entire $79,990,000 that was approved by referendum. It would have put them over the debt limit. So what they did was a little trick called issuing premium bonds. It gets confusing but in order to get the $79.99M they had to get rid of some current debt. That is done by refinancing the current debt at a premium, in this case a non callable 9% rate. They "refinanced" @38 million of current debt and purchased T-bills so that as that debt comes due, they use the T-bills to pay off the debt. Since they have the $38M in investments the orginial $38M is not considered debt any more, it is a premium bond and preium bonds don't count against your debt limit. So instead of the $79.99M, they received over $112M ($79.99M + $38M). Please see the next post.
Bob McQuillan May 30, 2012 at 10:34 PM
It is all explained in the 2007 bond issue here: http://www.genevataxfacts.org/attachments/article/9/2007%20Bond%20Issue.pdf page 2 shows the 9% rate and page 11 shows the $112,089,067.70 that was received. It is also interesting to note that the bond issue contains an official statement about all the district's financial information. The high enrollment projections are contained in that official statement on page 15. Now ask yourself, if you would have known the district was going to exceed it's debt limit and receive over $112M instead of the $79.99M listed in the actual referendum question, would you still have voted yes to the referendum? The referendum passed by 100 votes and we are now staring at @$305,000,000 dollars that must be repaid by 2027 and some of that is non callable 9%. Meaning the bond can not be paid off early, we are responsible for the entire 9%. Do you now understand why it was so important for the board and the administration to get that referendum passed? If it didn't pass, they couldn't borrow enough money and their phase I & II building plan was doomed. You do remember that the 2007 $79.99M referendum was supposed to be followed by a second $85M referendum in 2009 for the high school expansion, another elementary school and a performing arts center don't you? Confused yet? It is all there, you just need to know where to look! You now know the rest of the story. Scary isn't it! See you Monday night at 6:45pm for the community town hall.
G.Ryan May 31, 2012 at 01:47 AM
This sounds so surreptitious to me. Now that we know the truth this School District and the Board of Spenders(Education) need to be overhauled. Us taxpayers can no longer support this establishment fiscally and with this breach of trust they need to resign. We need a Board that advocates for us taxpayers as this is their purpose. How can this be legal? Better yet how can this not be illegal? Why can't they obtain all documents and complete a through investigation? Aren't they required to document all proceedings in the adoption of a referendum? Aren't they required to disclose all financial transactions to maintain transparency to us taxpayers? But the saddest is they just don't care about us taxpayers because if they did they would remedy a solution which includes cutting and trimming their budgets along with ceasing their spending appetities. All we heard last night is spend, spend, spend, want, want, want and need, need need. Now who are the children here?
James May 31, 2012 at 04:00 PM
Who inflated the number from 888 to 1618?
Bob McQuillan May 31, 2012 at 05:18 PM
No one knows but Who is on 1st and What's His Name is on 2nd.
James May 31, 2012 at 05:30 PM
Follow the money and find out.
Nate June 01, 2012 at 12:20 AM
Bob, Do you have a copy of the referendum documentation submitted to the county? Interested to know who signed off on this paperwork, If they didn't know where the numbers came from they shouldn't have signed it. To me it sounds like there needs to be some serious changes to the referendum process so a government body just can't make up numbers.
Bob McQuillan June 01, 2012 at 03:50 AM
There are several things that the school's response appears to be in conflict with. 1. https://www.geneva304.org/FAQ/OperationalServicesFAQ.asp Where is the District in terms of enrollment? (posted 12/9/11) The Geneva School District currently has more than 5,900 students. In 2006, the Board commissioned and received a demographic report projecting student population growth for the future. This study was done by Dr. John Kasarda of the University of Florida. His analysis provided three levels of projections: ‘A’ for a slow growth model; ‘B’ for a stable model; and ‘C’ for a rapid growth model. At the time of this study, the Geneva demographics placed our projections in the ‘C’ model which was used for future planning, including the 2007 referendum. Since 2009, the District has been on target for the ‘B’ model. This assisted the Board in determining that plans for an additional elementary building, as well as the expansion of Geneva High School, were not needed at this time. This study is currently being updated and will be presented at a Board of Education meeting when completed. 2. Dr. Mutchler and former board president are on videotape (March 17, 2012) stating that they always used series B and they did not use aggressive projections http://www.genevataxfacts.org/School-Board-Meetings/03-17-2012.html Use the shortcut pull down to go to section 4.3 - Kasarda report recalculations, trending toward series B. In 2007, they said series B was used
Martina Navritolova June 01, 2012 at 04:03 AM
Bob, you are a sad, sick man, and I pity you.
Bob McQuillan June 01, 2012 at 06:04 AM
Martina Thanks for sharing your opinion. You were a pretty good tennis player but not a very good dancer. Didn't realize an international star such as yourself read the GenevaPatch.
James June 01, 2012 at 01:14 PM
Bob your the man. You display things in a way anyone can understand. I have spent hours reading Genevataxfacts.org. Great work. Keep it up.


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