Tough talk on OPRF's spending

Opinion: Editorials

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The recommendations this week from the OPRF superintendent to the school board on initial steps in implementing the Imagine OPRF facilities master plan are encouraging to us. With a strong focus on updating dozens of classrooms, special ed spaces, student gathering spots and ADA and security updates, Supt. Joylynn Pruitt-Adams chose an equity forward path that we strongly support.

Those recommendations price out at $32 million, a not-insignificant sum. Using existing cash reserves to fund these projects seems to be the recommended route. Another solid recommendation.

The board's discussion of these recommendations began on Tuesday evening after press time, so it is not certain how these ideas were received. We will certainly be following up in our news pages and on this editorial page.

Coupled with the facilities recommendation at Tuesday's board meeting was a very strong, and to us persuasive, memo from Robert Grossi. He is an interim consultant to the district as it works toward hiring a new finance manager.

In just two pages, Grossi lays out some hard financial truths for District 200, which tell us that, if the board concurs, this district is beginning to grasp the limits of its ability to address challenges simply by spiking property taxes. 

Grossi notes the district is "in very good financial condition now." That will happen when you illicitly pile up $100 million in taxes not directly approved by voters. But he says, if new revenues are stuck at under 2 percent a year and spending by the district continues at a rate that mostly doubles the new income, the district is "extremely vulnerable to exploding deficits and rapidly deteriorating fund balance reserves."

Grossi closes by saying after the district diverts a portion of the cash reserve for facilities investments, that effort "must be paired with commitment by the district to align future expenditure growth to future revenue growth." Getting there, he says would require "reducing expenditure growth at a level at or below the future rate of revenue growth."

In other words, this school historically has a spending problem and voters won't sit idly by and pay endlessly for this proclivity.

These are good lessons. If overdue.

Reader Comments

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Kevin Peppard  

Posted: December 13th, 2018 2:10 PM

Josh: Using existing funds is NOT cheaper than borrowing when you consider OPPORTUNITY costs,an economic concept unknown to the District and its consultant. Those same funds in the hands of taxpayers can be invested at a higher long-term return than the District pays out in tax-exempt interest. There is no one there with an economic perspective.While that large balance sits there, it earns a puny fraction of a percent per year on its money, because it is constrained to invest in short-term securities.

Josh Vanderberg  

Posted: December 12th, 2018 2:57 PM

Sorry, I've been paying into this giant kitty over the last 6 years, and will be for the next decade or so. I don't want the money given back, I'd like to see the spendable portion of the reserves spent on the facilities my children will use. But I am very concerned that it be well spent. Long term spending the existing funds is cheaper than borrowing, and maximizes the benefit per tax dollar - this is why the financial expert is telling them to spend it.

Neal Buer from Oak Park  

Posted: December 11th, 2018 6:11 PM

Kevin, you are soooo correct. This was an argument used in the referendum, but we have to make sure D200 just floats a bond, and keeps the money.

Kevin Peppard  

Posted: December 11th, 2018 2:54 PM

Dan: Here is a better way to raise the $32 million. 1) Reduce taxes temporarily over the next two years by $32 million. 2) Sell $32 million in bonds, 3) Use the bond proceeds to fund the facilities. This leaves the fund balance down $32 million, just like the base case. But it gives $32 million int ax relief, and passes the burden of paying for facilities on to the next generation, who are the ones who will use them. At the moment they are getting a free $32 million. That's Intergenerational inequity. Yes, there will be interest costs, but then the taxpayers will have $32 million more to invest. The District is getting some bad advice on the financing

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