This past week, the Oak Park and River Forest High School board voted to approve a funding plan for Imagine OPRF Project 2, which will replace physical education (PE) facilities built in 1928 with PE learning spaces that meet the needs of this century’s learners.
Over the past several months, the district’s Community Finance Committee (CFC) vetted five different scenarios for funding the $102 million cost of the project, moving three on to the board for consideration. Two of the options would have required the community to vote in 2024 on whether to issue referendum bonds; approval would have added a debt-service levy to property tax bills on top of the regular annual levy. The other option — the one approved by the board — involves debt certificates, which do not result in an additional tax levy or a referendum; they would instead be repaid from the district’s annual operating budget.
Sorting through the funding complexities has boiled down to a few questions:
Does the district have the ability to self-finance Project 2 with debt certificates, and if so, why?
To answer this question, it’s important to understand that Illinois tax-cap law limits school districts’ annual operating levy increases to 5% or the Consumer Price Index (CPI), whichever is less.
From 2005 thru 2017, the district spending was increasing at 3.7% while CPI increased by 2.1%. This meant that despite an overly large fund balance, financial projections showed the district was headed for deficit spending.
As part of getting the district’s financial house in order, we’ve made systemic, data-driven changes in how the district manages its finances. These include:
● Removing overly conservative assumptions that presumed worse-case scenarios.
● Becoming disciplined with staffing recommendations, using the state’s Evidence-Based Funding model to help ensure than any new recommendations don’t drive up the district’s overall expenditures.
● Changing how the district manages its employment contracts, benchmarking total compensation against per districts.
From 2018 through the present and continuing to 2028, expenses are projected to increase at 2.8%, within expected CPI growth. As a result of this expense control, rather than seeing a looming operating deficit, we anticipate a continuing surplus, which can be used to fund the debt that’s needed to execute the next phase of our Imagine long-term facilities plan without putting an additional burden on you, the taxpayer.
We recognize that there are risks with many assumptions in our forward projections, especially beyond five years but do not feel we should use the same conservatism that was used in the past.
What are the long-term differences between the three options presented by CFC?
For the past 10 years, successive boards have focused on responding to community concerns about the district’s overly large fund balance, which had reached roughly $130 million by 2013. In order to bring it down to a reasonable level (which CFC recommends as a range of 25-50%), boards since 2013 have voted to levy a total of $67 million less than permitted by tax-cap law.
How then would the different options affect our fund balance?
A 20-year projection shows that, without significant changes to expense growth, a referendum option would once again lead to unnecessary growth in the district’s fund balance. Alternatively, the no-referendum, debt-certificate scenario shows the fund balance growing to 60% of operating expenses, within the range recommended by CFC. So only the self-funded route meets the guidelines of fund balance and expense growth outlined in our fund balance policy. I have spent the past 10 years working to move our district to meet these guidelines.
Some community members, most of whom are ardently opposed to the pool project in general, state that a referendum is the only correct option for Project 2 while also criticizing the referendum from 2002 that first led to the huge fund balance. If it was unconscionable then, why is it the right path now?
There has been considerable misinformation in the community about this project, which is unfortunate as how to fund this project is an issue of legitimate public interest. I am proud that our board has moved forward with a plan that meets the needs of our students, while equally respecting those of our taxpayers. I am thrilled that we can now fund the next step of our community-led plan, Imagine OPRF Project 2, without asking for a tax increase.
Over the next several years, future boards will need to revisit our facilities needs as we look to fund the rest of the Imagine OPRF plan. It’s almost certain that as we do so, we will need to turn to the community for assistance. But waiting to ask for that support until we need it is the most fiscally responsible course of action. Building up a fund balance now would only result in us repeating previous mistakes.
Tom Cofsky is president of the District 200 Board of Education.
