And the spending continues....

by Robert McQuillan
September 4, 2014 

Well, the Geneva School Board just unanimously passed a $100.3 Million Dollar Budget!

Watch the August 25, 2014 school board meeting video http://www.geneva304.org/MeetingVideos.aspx and listen to the discussion of board members throughout the meeting.  The board complains about unfunded mandates but just started all-day kindergarten which is not mandated?  In doing so, they took the Five Year-Old Preschool program away from the Geneva Park District!

The Park District made $79,000 in profit on that program and even paid rent to the school district for use of their facilities.  So now, taxpayers will be burdened with additional costs of over $600,000 for all-day kindergarten and our Park District will lose $79,000 of profit.  

Remember, all-day kindergarten is NOT state mandated!  Our elected school board members continue to increase the budget every year. Perhaps that is what is considered a Tradition of Excellence?

Be sure to continue to watch school board meeting videos or attend a meeting or so.  Next April, two school board positions will be on the ballot and you will want to be aware of which school board members best represent your interests as a taxpayer.

Innovative Money-Saving Solution Regarding School Debt

by Sandra Ellis

At the October 28, 2013,  School Board meeting, a Geneva taxpayer, Dan Garrett, listened to the one-hour William Blair recommendations for addressing the mounting school board debt. Dan has over 30 years in municipal bond buying experience and asked the board members if he could present an additional option which could result in increased savings to taxpayers but was not included in the Blair options.

It is notable that the William Blair Company included a disclaimer in their presentation that they are not  "acting as a municipal or financial advisor", that their financial interests will differ from ours (they are bond underwriters), 

and that they cannot be responsible for the "accuracy and completeness" of the information in their presentation?

Subsequently, Mr. Garrett put together a simple, easy-to-follow presentation and offered to explain it to any school board member.  (Click the link to see the 10 minute presentation.)  He provided his electronic presentation to GenevaTaxFACTS, the Geneva Patch, and the Kane County Chronicle in advance of the November 11 board meeting so the community as well as board members would have an opportunity to ask questions. He personally presented it in advance to Dr. Kent Mutchler (Superintendent)  and Donna Oberg (Ass't Superintendent for Business Services) as well as to two school board members who took him up on his offer to explain in detail.

At the November 11 meeting, the school board voted 6 for and 1 against  to draft a resolution to increase the tax levy this year to 1%. This is projected to result in a little over a $300 increase (on a $315,000 home)  in just the school portion of your property tax bill arriving May of 2014. The final vote to increase the levy will be at a board meeting on December 9, 2013. (If any members of the community wish to address this, the comments should be made in the first comment session rather than AFTER the final vote.)

So far, it appears that the board feels spending even $30 million from reserves (money received from several years of overtaxing and now earning about .2%) to buy back our own school bonds and thus receive the interest as other bondholders (estimated at 2 to 3% conservatively) would be too risky?  Does everyone accept that answer from a board and administration that misstated enrollment figures for an $83 million referendum and refuses to explain the recent salary and options and interest-free car loan to Superintendent Mutchler? This plan appears solid and proposed by an expert who happens to live in Geneva and knows how bonds and schools work.  

Proposing a solution that could save the district over $15 million in the next five years to help alleviate our mounting debt and increasing taxes should be a fifth option.  If rejected, a reasonable explanation should follow.  If not, then why would ANY taxpayer who has expertise in specific areas be willing to step up and propose a money saving idea?

Presentation on Debt Options-Sept. 9, 2013

On September 9, 2013, William Blair & Company presented the Finance Committee of the Geneva School District options on repayment of district debt service. Debt service is defined as the principal and interest owed as a result of approved school district referendum. The complete presentation is listed below.

The vast majority of debt service is the result of the 2006 referendum requesting the building of two new elementary schools (Williamsburg & Fabyan) and renovations to a number of other schools. Due to the approval, the district was over the debt limit of 13.2% of Total Equalized Assessed Value and premium bonds were issued. The 2006 referendum was largely based on enrollment projections due to future growth within the Geneva School District boundaries.

In 2011, it was discovered that the projections of the district’s own expert were inflated. The referendum passed by 100 votes resulting in a total debt service for the district of more than $325 million. Currently, the debt service is $289 million with payoff scheduled for 2025.

Listed below are highlights of the Blair presentation:

• The projected budget numbers in the report do not include salary increases for certified staff.
• All figures assume that every year the maximum tax levy will be approved.
• It is assumed that assessed property values will increase starting in levy year 2014 and continue to increase at a rate of 4% year-to-year thereafter.
• Abatement is defined as any surplus in the Education Fund above $15 million that is paid on the debt service the following year.
• Abatement is currently in place so that yearly repayment is artificially held at $15 million per year. Scheduled increases above $15 million are paid with abatement dollars.
• In other terms, abatement is levying current taxpayers in order to create a surplus. Abatement actually increases property taxes in the short term.
• If abatement continues as is, in levy years 2015-19 the yearly repayment will increase to between $22-25 million per year. In levy years 2020–25 the yearly amount will drop to $19 million.
• If the District continues abatement for levy years 2011-13 and refunds the debt balance in 2025, yearly repayments will total $1 million. Levy years are two years behind calendar years.
• The District could also continue abatement through levy year 2018 and refunds in 2019 to hold repayments to $19 million per year. This would require having an Education Fund surplus of $34 million from levy year 2011 - 2018.
• The District could use $2.6 million in levy year 2014 to decrease long-term callable bonds. This would reduce the interest payments on callable bonds but result in large yearly repayments in the $19-22 million range.

It is clear that repayment of current debt service is the biggest challenge that the district faces over the next 15 years. No matter what option is chosen, the taxes will increase and the burden on all homeowners will continue to worsen.

NEW! Budget Presentations - 2013-2014

The 2013-2014 Adopted School Budget attachment is the budget which was recently approved. 

In late September 2013, the Geneva School Board approved the 2013-14 School Year Budget. The full budget and a summary are available below but highlights include:

• Expected revenue exceeds expenses by $1.0 million dollars ($92.6 vs. $91.6).
• The debt service repayment will increase $1.3 million over last year.
• Operations and Maintenance costs remain over $12 million per year. As few as three years ago, this cost was $9 million per year.
• Transportation expenses were higher this year because of the purchase of buses. The district is now on a two-year buyback program which means brand-new buses are purchased and used for two years. At the conclusion of the second year, the buses are sold back to the distributor using a combination of dollars from the sell-back and new funding from property taxes.
• The administration expects that revenue from the State of Illinois will decrease $500,000.
• Education fund expenses will increase $700,000, mainly due to the recent teachers contract.


AT A GLANCE - Current Summary of School District Finance History

A one page summary of the following for Geneva School District 304 Finances

  • Tax Rate History from 2004-2012
  • History of Total Budgeted Operating Revenues and Expenditures 2010-2014
  • Current Debt 2012-2013

Why Can't We FREEZE the Levy for 2012?

Sandra Ellis
November 27, 2012 

Over the last several weeks, the board and administration has given the impression that if they approve a 1.5% tax levy, they will need to make $901,500* in budgets cuts. The reality is that if they approve a 1.5% tax levy, they will receive $2,146,254 more than last year.

 If you are scratching your head saying that can’t be true, read on and review the district’s own numbers. For a quick synopsis, click on the image.

Using the district’s own numbers and projections, it is clear that the $901,500 has nothing to do with next year’s budget and it certainly isn’t a cut  (see the last page of the embedded document). Then, what is it?

Attachments:
Download this file (tax levy.pdf)tax levy.pdf

Read more: Why Can't We FREEZE the Levy for 2012?

Property tax cap first, pension shift second

Bob McQuillan Note:
August 14, 2012 

All summer we have heard the talk of pension reform in the state of Illinois.  The solution for one of the largest pensions: shift the burden to the local homeowners through their property taxes.  Arguments can be made for and against this change but the one key that can't be disputed is that local property taxes can not continue to increase.  If this change is made and the pensions are exempt from the tax cap, like debt service repayment, our property tax increases will be unbearable. The only solution is to place a freeze on property taxes and require referendums for any increase in any property tax.  If the local taxpayers are going to be paying teacher pensions, we must have a say in how they are structured.

Read more: Property tax cap first, pension shift second

The Numbers Behind The Geneva School District Tax Levy-2012

Bob McQuillan
November 21, 2012 

Based on what has been released to date, I believe that the board did an excellent job of representing the best interests of the taxpayers during the recent teacher agreement talks. I believe the board listened to comments from the community and balanced that with the financial situation of the District. That being said, we all need to realize that the community has many challenges to face over the next several years. The board members take an oath to be good financial stewards of the District and taxpayers’ assets. It is the community’s responsibility

Read more: The Numbers Behind The Geneva School District Tax Levy-2012

A Tale of Two Groups

James Cullen
August  11, 2012

It was the worst of times for most; it was a better time for a few. 
This is a tale of two groups: the citizens and the advantaged. 

"Illinois cannot continue down this path at the expense of our children."    ---Governor Pat Quinn

“An informed citizenry is the only true depository of the public will.”            
—Thomas Jefferson
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Before the public meeting of the Geneva School Board on Monday, August 13 at 7:00 pm to decide on the largest part of Geneva's property taxes, as described at the bottom of this post, here are some relevant facts, by the numbers:

Read more: A Tale of Two Groups

School district struggles with finances amidst criticism- 2011