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

When-&-Why has a board member voted “NO” over the past five years?

I searched my notes, this website and my memory, for votes that were not unanimous – for good chances for D200 to save money that were not taken.   I remembered one that was not already documented, so I found the video, watched it, took notes and will cover it in detail first.  The others will be listed with links for more info.

 

June 04, 2015 – special meeting to approve the 2015-2018 WWEA teachers’ contract.

each entry lists the starting time-mark, & who said what (the most informative comments are from Jim Gambaiani starting at 30:00)

2:00 Harold Lonks

WWEA contract. “How can we make comments on the agenda items when there is no information available to the public?  And why only 50 hours notice of the meeting?  Teachers have commented that the contract is generous.”

Quotes from the Daily Herald by board candidates from the previous election: “Trust, communication key issue in D200 board race…”

“Let’s look at what happened in the past couple of years in D200.  School board members eliminated B-sports at the middle schools because they could no longer afford to pay $150,000 and would not consider volunteers.  A parent was told in the last board meeting that there is no funding available to offer courses in foreign languages for elementary students.  Larger class sizes in elementary schools, installing cell towers on school property to raise revenue, and finally the board is considering higher fees [since then fees have gone up significantly]. And let’s not forget about the repairs and upgrades needed by our buildings… Are you going to be voting no to support the needs of our children and students, which is our number 1 priority?”

 

5:50 Jan Shaw

“How does paying more money to the same adults for doing the same job do anything for the children?”  Salary spikes should never have existed.  Now the end of career bonus –That should have never existed.  She mentioned two administrators, Sorrick and Belha, who ended their careers with 20% 0% 6% 6% salary increases.  It appears they put in for their end of career 20% then stuck around for three more years and then put in again for their 6% end-of-career spikes. We have a right to know exactly what is in that contract.  Board member should have been on that negotiating team.  There was absolutely no taxpayer representative on that negotiating team.  It should not be negotiated behind closed doors and the board given a yes/no vote.  A 25 year teacher is not worth two-and-a-half times a new teacher.

30:00 Jim Gambaiani –

“While I support many provisions of this contract, I cannot support those related to compensation, Specifically:

  • “Total salary increases approaching $6 million.
  • Total salary percentage increase that could reach 8.5%.
  • Total stipend percent increase of 6% and
  • a 50% increase in post employment payments.

In the 2016-2017 school year, this district will enjoy a $4 million windfall given the fact that 60 retiring teachers will be replaced with teachers at lower salaries. This situation presents the district with a unique opportunity to have access to funds that could be used for building maintenance and improvement, technology upgrade, or increase payments toward debt service obligations. These funds could also be used for unanticipated expenses that the district may incur due to pension shift legislation, reallocation of general state aid funds currently known as Senate ill number one, or lower per student dollar allocation. I believe it is important to acknowledge that the district has numerous current and future financial challenges that can no longer be ignored.  Unfortunately, these available funds are being used to support a teacher contract.  As a board it is incumbent upon us to make these difficult choices and use taxpayer money based on the identified needs and priorities of the district.  I believe that a $6 million earmark for the teacher contract should rather be used for the priorities and needs I just outlined.  Therefore, I will cast a NO vote. “

38:00 Jim Vroman

“…those surpluses will NEVER, will never achieve, will never pay for the needs for our facility… the facilities committee reported to us last May, a month ago, a few weeks ago, that the expected… financial needs to upgrade our facilities is $51-million.  And that is not going to come out of any surpluses, or operating expenditures. We must come up with some creative ways to deal with that…”

2015-2018 WWEA contract approved.

Passed 5-1, Jim Gambaiani voted No,  Jim Mathieson absent

 

Other chances to cut spending that were missed:

November 13, 2013

The board voted 5-2 to hire Unicom for $49,500 as consultants for conducting community engagement (Engage200 meetings). Jim Gambaiani and Jim Mathieson voted “no.”   https://dupagewatchdog.org/2015/02/wheaton-warrenville-cusd200-engage200/

 

May 29, 2014

The board voted 5-2 to forgive Dr. Harris the $40,000 fine for breaking his employment contract. Jim Gambaiani and Jim Mathieson voted “no.” https://dupagewatchdog.org/2014/07/district-200-superintendent-leaving-40000-gift/

 

Dec. 13, 2016

The board voted 6-1 to approve Dr. Schuler’s (superintendant) new contract. In his statement, Jim Gambaiani said “I believe a salary freeze should be part of the superintendent contract along with eliminating automatic annual salary increases. There are many elements within the contract that I do support, but these 2 items are show stoppers.” https://dupagewatchdog.org/2017/12/cusd-200-lavished-dr-schuler-with-more/

 

January 11, 2017

The board voted 6-1 to place $132.5 million referendum on the ballot. Jim Gambaiani (the sole “NO” vote gave his reasons for not supporting the referendum) “…Over the past 12 years, the average amount budgeted for building maintenance was less than half a million dollars.  Over the past 3 years, this district spent nearly $350,000 to study, survey, re-evaluation to gather data for the master facilities plan. In the end, we finally confirmed most of what was already identified” Tonight this board passed the Sherman Dergis policy thus providing an alternate funding source.  “…Personal property taxes have increased 42% and total district salaries and benefits increased nearly $27 million…https://dupagewatchdog.org/2017/02/cysd-200-132-5-million-referendum-placed-on-the-ballot/

 

August 17, 2017

The board voted 6-1 to approve the renewal of Administrator contracts. They renewed them with a 1-year salary freeze.  However, as Jim Gambaiani said in explaining his “no” vote, they still have $600,000 pension pick up, $850,000 benefits, and $25,000 per employee maximum retirement bonus. https://dupagewatchdog.org/2017/08/cusd-200-whos-in-charge/

 

May 9, 2018

The board voted 6-1 to approve a new 4-year teachers’ contract for the years 2018 to 2022.  Jim Gambaiani read his prepared statement: “…The financial impact of this contract will place the district in deeper financial stress.  The current 5-year budget forecast reflects a deficit of nearly $8 million.  Approval of this contract will add an additional $13 million pushing the total 5-year deficit to $21 million” https://dupagewatchdog.org/2018/05/cusd-200-teachers-contract-what-is-in-it/

 

June 14, 2018

The board voted 6-1 to approve the renewal of Administrator contracts.  Jim Gambaiani who voted “no” because he sees it as too much money with all the other recently approved and proposed spending.” https://dupagewatchdog.org/2018/06/cusd-200-public-relations-cost-admin-taises/

 

Feb 12, 2014

Not a vote. But Jim Mathieson explains why we will always be in debt and how debt can be used to get around the tax cap limitation. https://dupagewatchdog.org/2014/03/cusd-200-will-always-be-in-debt/