D200 committee asks: What's the purpose of a fund balance?

Operating expenses, state mandates among reasons cited by finance group

Share on Facebook
Share on Twitter

By Terry Dean

Staff reporter

After weeks of educating itself on the finances of Oak Park and River Forest High School, an ad hoc finance committee appointed by the District 200 school board turned Monday toward formulating actual recommendations on how the school might use its large cash reserve – currently pegged at $118 million.

With ideas ranging from paying down debt to continuing to abate a portion of tax revenues back to taxpayers, from paying for new student swimming pools to taking on the cost of pensions if the state legislature shifts those costs, the committee began preliminary assessments of its options.

A topic readily agreed to was the need to improve the district's communications to taxpayers about its financial decisions going forward.

The ad hoc District 200 Finance Advisory Committee is scheduled to forward its final recommendations to the school board in time for that body's December board meeting. The timing aligns with the need for the school board to set its property tax levy for next year.

On Monday the committee agreed that a school fund balance can be maintained for cash flow purposes, as well as to absorb potential impacts on a school budget, such as fluctuating enrollment and potential state mandates.

A potential state mandate likely to come down the road is shifting costs of staff pensions from the state to local districts, the committee noted at its Oct. 21 public meeting.

Committee members discussed whether to recommend a specific range for a proper fund balance but didn't get into what that could be Monday.

The committee discussed scenarios that could lower the current fund balance over time.

The reserves could be used to pay off debt and bonds the school has accumulated. It could go toward capital expenditures, though $5 million is already budgeted annually for such projects.

OPRF accumulated its large reserves through a 2002 referendum—the school hasn't sought a referendum since—and a 2005 "phase-in" of property tax money that wasn't attained from the '02 rate hike approval from voters.

Abating some of those property tax dollars, as the school board did in February to the tune of $2.4 million, is another option for the school board to consider as part of a plan to right-size the fund balance.

Aside from finances, improving communication from the school to community is a likely policy recommendation the D200 FAC will make. The committee Monday discussed the need to better communicate the school's finances to the public.

Maintaining an ad hoc finance committee, or even a "citizen's finance advisory committee," beyond December is an option for the school board, committee members said.

The school has some short-term and long-term financial responsibilities related to the fund balance, the committee noted.

A recommendation the board could include addressing the pools, which school officials maintain needs replacing sooner than later.

The pools, committee members noted, is a short term goal the reserves can fund now.

CONTACT: tdean@wjinc.com

Reader Comments

21 Comments - Add Your Comment

Note: This page requires you to login with Facebook to comment.

Comment Policy

Matthew from Oak Park  

Posted: October 25th, 2013 2:30 PM

Return the money to the taxpayers. Which is the bigger problem: Taxes are too high in Oak Park, or we lack a swimming pool? D200 should follow the Village's example with the Garfield TIF. Just because you have money in the bank doesn't mean you should spend it.


Posted: October 24th, 2013 9:57 PM

@Tired hit the nail on the head. They pension system today is nothing more than a taxpayer-funded Ponzi scheme that is too interwoven in retirees' lives that it simply cannot be shut down. But it can be saved. Increase employee contributions, raise the retirement age to match SS and keep raising it as life expectancy increases, cap the max benefits that can be received (like SS), lower the final avg salary calc or salary % taken, TAX IT like everyone else's retirement fund. Balance it!

Brian Slowiak from Oak Park  

Posted: October 24th, 2013 4:33 PM

@ Done: Agree w/all except SS is a federal issue not state issue. The Oak Park Police Pension Fund, funded by payments taken from officers paychecks bi weekly are well funded and invested, even w/o the payments not made by the local government. If,if, local government had paid their full portion, which they did not, funds from the pension could have been loaned back to the Village.

Done from Oak Park  

Posted: October 24th, 2013 3:40 PM

Jeff - it is also due to the state taking a "so-called pension holiday lawmakers created in 2005 to allow themselves to avoid investing about $2.3 billion over two years." Not a ton of money but that money was never allowed to compound to what could be a nice chink of change in the coffers. I beleive the city of Chicago also did this.

Jeff Schroeder from Oak Park  

Posted: October 24th, 2013 3:34 PM

There is no easy fix to the situation. The bottom line is that contributions (both employee and employer - government unit) were not enough over the past forty years to support the current payout formulas. This is due to inflation in the 1970's, low rates today, longer life expectancy, etc. Politicians will not fix this with one idea alone.

Tired of Taxes from Oak Park   

Posted: October 24th, 2013 3:29 PM

Done, if they switched mid-stream to a 401k style system, then how could they continue to fund the current Ponzi scheme. They NEED the contributions of current members to pay for the benefits of retired workers. The retired workers get approximately 8 to 10 times the benefits in retirement that they themselves paid in years ago (when salaries were lower).

Done from Oak Park  

Posted: October 24th, 2013 1:31 PM

Brian - I have no problem with the state following whatever agreements were signed into law for those that have currently earned a pension from the state. Covering that expense by the state will be painful for many years, but not doing anything for future employees will make it even more painful if nothing at all is done.

Brian Slowiak from Oak Park  

Posted: October 24th, 2013 12:46 PM

@Done: Only if the retired police,fire fighters and public school teachers are given full and equal Social Security benefits. Presently, as a retired police officer I will get a 19% to 26% of my Social security benefit, even though I have 40 quarters with my part time jobs and pay into SS fully now after I retired..The denial is called, I think, a POG, or cut our SS input top no more than 26%.

Done from Oak Park  

Posted: October 24th, 2013 11:50 AM

Solution - any state employee hired after a set date in the future (Jan. 1, 2014, June 1, 2014: whatever) gets put into a 401K program and the state matches up to 3% of what the employee puts in. I know that won't make the unions happy since this might be an agreement that can't be "doctored" to favor anyone but it makes the most sense for the stability of this state.

Jeff Schroeder from Oak Park  

Posted: October 24th, 2013 11:11 AM

Of course, if the State ultimately pushes back the unpaid pension obligation to the local decision makers (ie. school boards) then we will be glad we have that big reserve.

Jeff Schroeder from Oak Park  

Posted: October 24th, 2013 11:07 AM

Ideally, a school would want to carry a general fund balance of three months of operations (approximately $20,000) which allows for the seasonal nature of tax collections. Beyond that, you would look at long term building issues. I am sure there are excess funds beyond that which could form the basis for at least a freeze on taxes for the next few years.


Posted: October 24th, 2013 10:26 AM

@Done - I see no reason to take these funds and put them towards a highly unbalanced and unsustainable pension system. Any extra monies put there now before substantial pension reform is money down the drain. The day of reckoning will come soon enough.


Posted: October 24th, 2013 10:19 AM

State funding is a moot point. Pensioners, on average, withdraw much more than they contribute (via their own contributions + state portion investment gains) over the course of their lifetimes. The typical pensioner burns through their share in about 12 years. TRS ranks seventh highest of the 101 major pension plans tracked. IL pensions are not taxed by the state. State assumes 8.5% annual return on assets, which is tied for the highest assumption among statewide pension systems nationally.

Speedway from Oak Park, Illinois  

Posted: October 23rd, 2013 10:53 PM

I agree with Done and HisDad. I also agree that the state did not adequately fund these pensions but I also don't think that the promises made to the unions in contracts were reasonable to agree to. In the future I hope that all individuals will have to put up a fair share toward their own pensions without the city, village or state having to make up the majority share of these pension outlays. The amount of monies we are talking about is ridiculous and should not be put on the taxpayers.

Done from Oak Park  

Posted: October 23rd, 2013 1:51 PM

Dadness - great idea, well said and I would be behind this 100%. The state needs to take responsibility for the years they took the "pension holiday" to not fund their share while the union held up their end of the deal. OP would never declare bankruptcy - what lousy publicity that would be for a seemingly "well-off" suburb to declare bankruptcy.


Posted: October 23rd, 2013 1:29 PM

Spend every penny. IF the state passes the retirement obligation to local municipalities, the municipalities should bankrupt themselves (which the state can't) and settle the pension obligation for pennies on the dollar. Otherwise, give us back our tax dollars and stop stealing from the citizens of Oak Park.

Done from Oak Park  

Posted: October 23rd, 2013 10:53 AM

I can't wait to see the amount refunded. I'm sure it'll make a big difference in our bill.

Speedway from Oak Park, Illinois  

Posted: October 23rd, 2013 10:28 AM

To Done - District 200 has refunded the last tax levy however it will not show up on our taxes until next year. Look for it then. Remember we were not taken by the District for a few measly $100, but for thousands on each property. I will not forget come voting time.

Done from Oak Park  

Posted: October 23rd, 2013 9:18 AM

Speedway - agree with you 100%. Same feeling with D97 also. The idea of doing capital improvements at OPRF and having to float a bond in order to pay for it is another slap in the face to the taxpayers who have already filled the coffers. And we will also now have to pay interest on the bonds while there is $100M+ in the till? Absolutely not! First - fund the pension liability to 100% funded. Second - consider improvements with what you have - just like I do.

Done from Oak Park  

Posted: October 23rd, 2013 9:14 AM

"Abating some of those property tax dollars, as the school board did in February to the tune of $2.4 million" - can somebody please inform us as to how this was done?

Speedway from Oak Park, Illinois  

Posted: October 23rd, 2013 2:37 AM

I will say it again. This HS got a lot more than it was seeking from the last referendum. They insulted us taxpayers by adding to our tax load by it's yearly levy though not in need. I still feel that the excess tax money should be returned to the taxpayers who were gouged in this process and not find ways to spend it now on something that may or may not happen in the future. Let the taxpayers of the future fund what may come. I will vote no on any future referendums until the money is retu

Facebook Connect

Answer Book 2017

To view the full print edition of the Wednesday Journal 2017 Answer Book, please click here.

Quick Links

Sign-up to get the latest news updates for Oak Park and River Forest.

MultimediaContact us
Submit Letter To The Editor
Place a Classified Ad