NO MEANS NO – Hinsdale High School District 86 – Referendum 3.0

You have no doubt heard the extreme and inflamed rhetoric coming from the D86 Board and their referendum supporters since November 2018 General Election.  So for the sake of truth and honesty, let’s recap what our tax and spend D86 Board has accomplished in the last two years.  On April 4, 2017 the D86 voters clearly and convincingly voted NO on the Board’s proposed $79,000,000.00 bond referendum.  And they did not listen.  So on November 6, 2018, D86 voters repeated themselves in a second rejection by voting NO on the Board’s proposed $166,000,000.00 bond referendum.  And still they did not listen.  So now your D86 School Board continues in its pattern of defiance of the voters’ will and is proposing yet another unacceptable bond referendum for the April 2, 2019 Municipal Elections; this time for $130,000,000.00.

                Unhappily, the taxpayers are being asked again to vote on a referendum that only serves to bailout the mismanagement and give-away contracts of this special interest agenda driven Board and its Administration.   So what is new and appealing about this bloated referendum effort?   In this instance the Board has adopted a new and clever tactic that it failed, or forgot,  to use in the previous two referendum failures; i.e. voter FEAR and INTIMIDATION.  Here is how it works, unless Referendum 3.0 is passed the Board will cut football, swimming, water polo and a variety of other popular student activities to generate the funds it needs.   By threatening these cuts the Board intends to apply maximum emotional and fiscal pressure on students and parents to force the referendum to pass.  However, what the Board has not considered in this scenario is addressing any of its unsustainable contracts and practices that are bankrupting the District.   Further, this Board continues to promote and sustain a divisive situation within the District by intentionally ignoring the fundamental resource and curriculum inequities between Hinsdale Central and Hinsdale South.  One would think that the Board would attempt to address and remediate these inequities in order to garner broad voter support.  Instead, it has chosen FEAR and INTIMIDATION, as well as maintaining the Status Quo, to force Referendum 3.0.  It is also their last chance to force a referendum before the Board turns over in April. 

                You will be hearing more hysterical and histrionic rhetoric from the D86 Board and their Yes supporters over the next 90 days.  Instead of sound fiscal and financial practices you will be hearing raw pandering emotion.  Therefore, as you hear these things, ask yourself and the Board (boe@hinsdale86.org) the following questions. 

1.       Why will the Board not utilize empty space at the South campus and correct the disparity in curriculums between the two campuses?  Would this not lessen the divisiveness between communities, as well as, minimize costs involved with a rebuild at the Central campus?

2.       Why will the Board not allow parents a choice in paying for sports before cancelling the sports and activities as they do in the overwhelming majority of suburban Chicago high school districts?

3.       Will the Board vote to reinstate the sports if its referendum passes?

4.       Why is the Board not supporting a $45 Million referendum as the D86 survey referenced in order to gain wide community support?

5.       Regarding the call for safety improvements – where is the verification by the state, federal or local authorities that such specific projects are really required? 

a.       If these improvements are required what is the time table in which they must be implemented, and could these projects proceed under existing bonding authority and District savings, thereby not requiring a referendum?   By using existing bonding authority and District savings the Board would not have to cut popular sports and activities. 

6.       Should not the Board’s goal be to minimize the divisive situation in the District by proposing a referendum that overwhelming passes?  

Thank you for your time and please stay engaged.  Also please feel free to share this email with  your family, friends and neighbors.  For further information on these topics please see the following websites.  

  1. https://www.citizensforch.com/
  2. http://fillsouthfirst.com/index.html

Noel Manley

High Property Taxes due to District 200 Bond Debt

Take a look at property tax bills over the years.  If you live in Wheaton-Warrenville CUSD 200 you’ll notice the largest and fastest growing portion is for the school District

eav tax rate history D200

EAV ( Equalized Assessed Value) is the product of the assessed value of the property (both land and improvements) and the State Equalization Factor. The EAV value in the above chart is the total for all taxable property in District 200.

 

Tax Levy is the amount of money the school district is requesting for a tax year.  The school board sets a levy to be what they had in the previous year’s base levy plus inflation, plus value for new construction or TIF areas becoming taxable, plus the amount needed to make scheduled bond (principle + interest) payments, round up to ensure taxing to max allowed by law.  The school board set a Levy once per year.

 

The Extension is the total amount of property taxes the county bills to property taxpayers.  It is the lesser of the requested levy and the maximum tax allowed by law.  The base portion is limited to last year’s + inflation + growth.  The portion for bonds is whatever has been contracted for debt services.

 

The tax rate is set by dividing the Extension by the total EAV.

 

The statistics in the chart come from the following documents:

Illinois Department of Revenue (IDOR), Property Tax Statistics by Year.

 

DuPage County Clerk, Property Tax Rate and Extension Reports.

Property value down – Taxes UP / Tax Rate down – Taxes UP

Your property tax is your property’s EAV times the tax rate.  Even when EAV fell (2010 to 2014), because the total EAV fell as well, and the tax extension went up, odds are your taxes went up.  Recently, EAV went up, the tax Extension went up, and the tax rate fell.  For most, taxes went up.  In fact you might notice that taxes always go up.  The only way it will ever go down is if the district stops issuing new bonds and pays off existing bonds.

 

Note: from District 200’s third flyer, they expect you to care about “Tax Rate” rather than your “Tax Bill.”

flyer3 p4 w comment

For project cost, see: https://dupagewatchdog.org/2018/10/how-much-will-a-new-jefferson-really-cost/

From “M Wheaton” FaceBook page,  the attitude of those promoting the referendum:

posted 10/31/2018

you should move 10 31 mywheatonFBPosted 8/21/2018

mindy Jefferson yes attitude

 

5-Year Forecast Shows $21M or $26M deficit

The January 2018 forecast-5 shows a $21M deficit an updated one received in October 2018 shows $26M.

On October 19 I received a response to a FOIA about district financials:

On October 9, 2018, you requested the following documents:

Please provide ALL documents that show any changes to the 5-year budget that was approved August 15, 2018 or any other documents that show how you plan to balance the budget.   

Your request is granted.  Please see attached document. (below)

forecast5 10.19.1

I had sent an update to the request later on Oct 9:
be sure to include the latest forecast-5 summary
see attached screenshot from 1/31/2018 presentation.
and included  a forecast-5 chart from page 15 of the January 2018 PMA presentation
Notice:
  • on page 13, it includes funds for Jefferson
  • On page 15 the sum for years 2019 to 2023 of “Surplus / Deficit Incl Other Fin Sources” is -$20,736,934 or a $21M deficit of the next 5 years based on the January 2018 report.  Since then, a new teacher contract and administrator contracts that are more generous than originally assumed, have been signed.
  • on page 16,  the low point for fund balances is negative in FY-2020.
I copied the data from the Oct 2018 forecast-5 chart into excel and highlighted cells that changed since the January 2018 version.  Also added a column “Sum of Row” which is a total for years 2019 to 2023.  The most important one is “Surplus / Deficit Incl Other Fin Sources” which shows a total 5-year deficit of  $26,011,650 in the October 2018 forecast.
oct2018 forcast5 highlighted
 Note: the districts fiscal year (FY) runs July 1 to June 30.  Property taxes are due in June and September.  As a result the low point for cash on hand is end of May.  District 200 has been running around $15M cash on hand at the end of May.  That will NOT cover a $26M deficit.

So yes, while “Jefferson is in the budget,” D200 does not have the funds in reserve to cover their planned deficit.

How Much Will a New Jefferson Really Cost?

Current (10/21/2018) Cost Estimate:

Jeff cost4

(Our original prediction, prior to the last FOIA response was 23.6M)

 

Backup Documentation:

Cost estimates from the 8/15/2018 board agenda

As attached to the 8/15/2018 board agenda Action Item after the closed session.  On page 3  we found what the district anticipated had they gone ahead without the referendum.

New ELC_Program Summary 20180809

Jeff cost bkup

The districts’ FAQ for the referendum is advertising “$15 million in the latest construction bids.”

new Jefferson size cost

Architectural & Engineering (sum 3 lines)
994,949 + 66,920 + 368,164 = 1,430,033
957,719 + 17,248 + 368,175 = 1,343,142

Debt Service Cost

in the 8/15/2018 board packet, (item 2 in Action Items after the closed session) lease_certificate_resolution  pdf page 5.

The Certificates shall become due and payable serially or be subject to mandatory redemption (subject to option of prior redemption as hereinafter described) on the dates of each of the years (not later than 2038), in the amounts (not exceeding $1,200,000 per year) and bearing interest at the rates per annum (not exceeding 5.00%) as set forth in the Certificate Notification. 

The $1,200,000 is for principle + Interest.  Verbally they were talking $1M/year.

Borrowing $14M and paying back $1M/year for 20 years is a total payment of $20M or $6M in interest.

If it is $1.2M/year for 20 years that is $24M or $10M in interest.

Based on what bonds have been selling for, 4% interest and $1M/year is more likely.

 

Debt Service – Update (10/19/2018) 

On October 11 at 10:42 AM, I submitted the following FOIA:
Please provide the total cost estimate for the new Jefferson building if approved.  This should include, but not limited to:
  • design costs (how much has been already paid + estimate for remaining work)
  • construction costs
  • debt services or “lease interest”
  • “owner’s cost”  to include removal of old Jefferson, landscaping, furnishing the new building and storm water retention.

On October 19 at 9:04 AM, I received a response

Your request is granted.  Please see information below:

  • design costs (how much has been already paid + estimate for remaining work)  $813,138.26 paid to date

  • construction costs  see attached document (document can also be found on district website)

  • debt services or “lease interest” estimate of debt service schedule attached

  • “owner’s cost”  to include removal of old Jefferson, landscaping, furnishing the new building and storm water retention. see attached document (document can also be found on district website)

One of the attachments is the one I had found in the 8/15/2018 board packet.  The other is a Debt Service Schedule, dated  September 12, 2018 (after placing the referendum on the ballot).  It shows borrowing $13,675,000, a coupon rate of 4%, total interest of $6,231,936.11 and “Total P+I” of $19,906,936.11

20yr Lease Certs CM Est Debt Service Schedule.shaw.10.19.2018.2

The difference between $14M and the $13,675,000 being borrowed is $325,000 which is most likely the cost of issuing the lease certificates.  Our original guess for interest was $6M.  We updated it to $6.5M based on this document ($6,231,936.11 + $325,000).

Updated 10/23/2018

Since i have not confirmed the $325,000 as being a cost… I decided to not include it.  Note: the cost is a close estimate based on district data.  Actual cost will be determined when/if certificates are actually sold.

Originally posted 10/18/2018, updated 10/19/2018 & 10/23/2018

Faster than Inflation

Someone posted a link to ballotpedia’s entry for Wheaton-Warrenville CUDS 200 on social media.  I took a look. There is some nice historical data there.

If you have lived in CUSD 200 for two decades or longer, and “feel” like school taxes have gone up faster than inflation, you have good reason. 

From:  https://ballotpedia.org/Community_Unit_School_District_200,_Illinois

ballotpedia 93 to 2003 total rev

ballotpedia 93 to 2003 exp

ballotpedia 93 to 2003 bonds

Using a US inflation calculator https://www.usinflationcalculator.com/ to determine what we should expect if revenue, expenses and debt went up with inflation, we find it all went up significantly faster:

Note:  Debt & Gov. Payments is “payments to state and local governments and interest on school system debt”

actualVinflation3

The number of students in the district does not account for this large budget growth.

From the CUSD 200 Demographic Trends and Enrollment Projections, June 2017 report by John D. Kasarda, Ph.D., in 1993 the total enrollment in D200 was 12,383.  Enrollment peaked in 2003 at 14,314.  In 2013 it was at 13,243 and in 2017 had dropped to 12,642.

enrollment1980_2000

enrollment 2000_2017

 

Jefferson – Plan B – Facilities Master Plan

On January 31, 2018 the District presented to the board their “District Wide Facilities Category and Condition Ranking.”

2018_1_31 capital improve plan

For Jefferson to maintain the building with no addition or remodeling, it will cost $5,319,800 for paving, roofing, mechanical, electrical, plumbing, fire protection, doors / hardware, windows, and other.

While, there is no doubt that building new will result in a newer, bigger, nicer facility.  Is it a “NEED” or a “WANT”?

To build a new building, the construction cost alone is estimated at $15 million.  Total costs will include:

  • design costs (most already spent)
  • $15M construction costs.
  • “debt services” or “lease interest”
  • “owner’s cost” – removal of old Jefferson, landscaping, furnishing the new building and storm water retention.

My guess is total cost will be at least $21 million.  (FOIA pending)

The total costs for “needs” at each of the CUSD 200 facilities according to the “District Wide Facilities Category and Condition Ranking.” (linked above):

Jefferson Early Learning Center $5,319,800
Bower Elementary School $6,217,600
Emerson Elementary School $1,338,700
Hawthorn Elementary School $1,742,900
Johnson Elementary School $3,037,500
Lincoln Elementary School $3,097,900
Longfellow Elementary School $1,911,500
Lowell Elementary School $5,626,700
Madison Elementary School $2,726,600
Pleasant Hill Elementary School $2,859,300
Sandburg Elementary School $1,242,400
Washington Elementary School $5,366,800
Whittier Elementary School $2,087,300
Wiesbrook Elementary School $1,260,300
Edison Middle School $12,611,500
Franklin Middle School $10,830,800
Hubble Middle School $0
Monroe Middle School $10,376,300
Wheaton North High school $6,836,800
Wheaton-Warrenville South High School $6,817,300
GRAND TOTAL $92,308,000

 

CUSD 200 in the News – Jefferson Pre-K 2018

Community Unit School District (CUSD) 200 has been in the news, and they are now planning to try a third referendum to build a new Jefferson Pre-school.

 

8/15/2018 – Regular Board Meeting held

8/20/2018 – Special Board Meeting held

9/13/2018 – Law Suit Voluntarily Dismissed Without Prejudice

 

Originally posted September 4, 2018. Updated September 18, 2018 and October 6, 2018