Board looks at finances before deciding on a bond issue
Monday evening, the USD 234 Board of Education held a special meeting with the primary focus being a budget workshop designed to give board members an overview of where the district is currently positioned financially.
Diane Gross, USD 234 superintendent, said feedback on the recent facilities assessment was also a topic of discussion, which she classified as only a preliminary report. The topic of a potential bond issue was also broached during the workshop.
"We talked a little further about what might be entailed with a bond issue," Gross told the Tribune Tuesday from her office. "Again, we're not saying there is going to be a bond issue. If we pursued that (bond issue), these are things we would have to consider, so it's really just initiating some discussion about whether or not it's even feasible for us to pursue that."
Gross said background information relating to the district's finances should help the board to make more informed decisions pertaining to the upcoming teacher negotiations.
"And so the purpose of the meeting was really just to share information and help our board be better informed, to get them thinking about where we're going to be down the road as we pursue these (teacher) negotiations, and set us (USD 234) up in a good situation for the future," Gross said.
Susan Brown, USD 234 business manager, was on hand for the meeting, and gave board members a five-year recap of school district expenditures and cash balances. Brown said she also encouraged board members to develop "some possible financial policies for the district so that when we're doing our budget each year, we can basically say, 'this is where we need to be at the end of the year.'"
"It (budget workshop) also helps us plan for the future," Brown said. "And out of that needs assessment, we determined that there are some very immediate needs that need to be addressed. And I'm not sure we can do that with the reserves that we have on hand to address some of those. So that's why we're having conversations about a potential bond issue. And these are mechanical issues within our schools, because the age of the facilities have caught up with us, and so that's really why we're having these discussions."
The reserves Brown refers to are the cash balances the district has in its capital outlay fund as well as its contingency reserve fund. According to Brown, those are not funds that are funded annually, "it's just money that's been set aside over the years. So once it's gone we don't really have any other funds available for big projects," she said.
Gross compared the current state of school district facilities and the need for upgrades to that of being a homeowner.
"There are regular parts of your home that need to be analyzed, or you need to do some upgrades, or just maintenance to keep them in good operating condition," Gross said. "That's what some of these reserves are generally used for. And over the past several years some of those reserves have just been eaten up. And our facilities are old and it's just natural that we're going to have added expense in the areas of maintenance. And we're just trying to do our job in making sure that we're physically responsible with the funds that we have available."
Brown said there are some benefits to immediately pursuing a bond issue.
And I think that's the real advantage here, if we try to do these projects locally where we're just doing them a little bit at a time over five, 10 years, the local taxpayers are having to take on all of that burden, Brown said. "Rather than maybe pursuing a bond issue, of what size we don't know, that's still yet to be determined -- but we would actually get state aid to pay for almost half (48 percent) of that in a bond and interest payment."
Brown also said because of school district bonds that will be expiring over the next two years, that this is a good time to start having discussions about a bond issue. However, Gross said at the current time the potential bond issue is only in the discussion phase.
"I just want to clearly communicate that nobody is saying we're doing a bond issue, it's simply discussion, putting ideas out there for us to consider and really keeping the focus on what we need to do to provide quality education for our students," Gross said.