For an institution funded by taxpayers, the financial reserve is an essential aspect of planning and budgeting. An adequate reserve protects against late tax collections from the county, allows for unplanned but necessary expenditures, and maintains good credit ratings.
Set at the right level, totaling perhaps four months of the institution's usual expenses, it is a budget number the taxpaying public might never consider.
But with its reserve growing so fast and so high over the past decade — now approaching $120 million — the pile of cash accumulated by Oak Park and River Forest High School has become, for many taxpayers, the key identifier of our high school. OPRF-related conversations, especially in the midst of a brutal recession, often started, and sometimes ended, with the outsized bundle in the bank. Civic conversation about academics and technology and the arts program came after the frustration and the distrust caused by the school collecting so many dollars it had no need to stockpile.
And the lame responses the school offered to inquiries about why it had so many millions squirreled away just added to the sense of disconnection: Our dubious "phase-in" after the last referendum is legal, they said. We're just avoiding the need for another referendum for as long as possible. We are solely the stewards of OPRF and it is our moral and fiduciary responsibility to gather every dollar available.
Now, though, we have a new day. Voters largely remade the school board over the past two elections. There is a superintendent in tune with the need for broad community support and involvement in the school. And, notably, the architect of the tax grab, the former chief financial officer, has decamped for a school on the North Shore.
With credit to many and specifically to John Phelan, president of the school board, OPRF's board is about to act on recommendations from an ad hoc finance committee it appointed to study the reserve and the coming capital needs of the school and advise the board on appropriate next steps. Led over the past several months by Jeff Weissglass, vice president of the school board, the committee has focused on this issue with the clear charge that the school's leaders had come to understand that the super-sized reserve was unnecessary and a wedge between the school and the public.
The key takeaways for us are three:
1) The reserve is unconscionably large and has to be actively reduced over the next few years by reducing current taxes.
2) Upcoming capital expenses — and they could total $30 to $50 million — are properly paid for by taking on debt that the school and current and future taxpayers will pay for over the life of those upgrades.
3) Prepare eventually for a tax referendum. Going to the public, making the case for your strong efforts, and asking permission to increase taxes is the way the system is intended to work. A referendum every 10 years or so is not a failure; it is a sign of respect to those footing the bill.
The District 200 school board will sort out its options very quickly now with the final tax levy due to be set. We are confident the school board will do the right thing. We thank them and we thank the Finance Advisory Committee for its good work.
Answer Book 2016
To view the full print edition of the Wednesday Journal 2016 Answer Book, please click here.
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