Lincoln Elementary School District 27
board faced that dilemma Wednesday evening at a special meeting to
discuss ways to close the nearly $3 million funding gap between the
money needed to build a quality junior high school and the funds at
hand.
The board asked Kevin Heid of First
Midstate Inc. to put together figures on several bond alternatives,
but on close inspection the board found disadvantages to each plan.
Two of the plans Heid presented, debt
certificates and alternate revenue bonds, do not raise taxes for
district residents; the disadvantage is that they must be paid off
from district revenues.
According to Superintendent Robert
Kidd, the district is in good financial shape now and could afford
the yearly payout, which would average from $300,000 to $350,000
depending on the type and amount of the bonds. However, noting the
dire financial condition of the state of Illinois, which could
affect the state aid school districts get, and the faltering
economy, Kidd said he had reservations about pledging to use the
district's operating funds to pay off a 20-year bond issue.
He said he favored a third type of
bond, a funding bond that would raise the district's tax levy by 25
cents per $100 of assessed valuation, because it would provide a
guaranteed revenue stream to pay off the bonds, and the district's
operations would not be threatened.
However, board president Bruce
Carmitchel said he believed the duty of the board was to act in the
best fiscal interest of the taxpayers. After weighing the pros and
cons, he proposed the board give first consideration to the
alternative revenue bonds.
"If we have the ability to do this [pay
for the bonds out of operating funds] is it fair to ask taxpayers
for an increase?" he asked.
After lengthy debate, board members
voted unanimously to give first consideration to the alternative
revenue bonds rather than the funding bonds that would raise the tax
rate.
Board member Stephen Rohrer hesitated
longest before voting yes. He said he was concerned about the risk
the district was taking using operating funds, noting that the
future of the economy was a "big gamble" and the district would be
renegotiating teacher contracts in a few years.
Heid said there could be "other options
down the road if this isn't working," such as issuing Working Cash
Fund or funding bonds to pay off some of the debt.
The alternative funding bonds do carry
a provision under which the district could levy additional taxes, if
the revenue dedicated to paying them off should be inadequate.
Heid said these bonds have been issued
since 1988 and he knew of only one district that had gone to the tax
levy.
Kidd said the possibility of raising
taxes to repay the bond was remote. "The world as we know it would
pretty much have to come to an end," he said.
Although the board voted to pursue the
alternative revenue bond option, the decision could still be
changed, as the extra money will not be needed until late in the
year. Heid will attend an April 8 board meeting to continue helping
the board make a final decision.
According to a printout provided by
First Midstate, the alternative revenue bonds could be issued for
either $2,935,000, which is the district's debt limit, or
$3,300,000, a figure over the debt limit.
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this article] |
The $3.3 million is the extra money the
district would need to build a 54,000-square-foot junior high with a
three-story classroom wing, a gymnasium and a stage and provide new
furnishings, fixtures and equipment. However, Kidd said the junior
high has many new desks and other furniture that could be moved to
the new building.
Carmitchel said he favored staying with
the debt limit of $2.935 million, but the board postponed the
decision on the actual amount.
Paid over a 20-year period, the $2.935
million would require setting aside $314,000 dollars a year for
repayment; the $3.3 million bond would require $352,500.
Heid cautioned the board that the bond
would be a "first lien" and would have to be repaid no matter what
the district's operating costs were. He suggested pledging the
repayment funds from the district's building fund and if necessary
from state aid.
Both the alternative revenue bonds and
the funding bonds that Superintendent Kidd favored allow the
residents of the district to request a referendum. A public notice
must be printed, and district residents can then petition to put the
bond issue to a vote. Heid said 10 percent of district residents
would have to sign the petition for a "back door referendum" to be
held.
If residents do petition for a
referendum, the district would have to drop the alternative revenue
bonds, Kidd said, because the next election is not until the spring
of 2004 and the district will need the money before that time.
If the district finds it cannot issue
the alternative revenue bonds, it can fall back on debt
certificates.
One advantage of the debt certificates,
which are also paid out of operating funds, is that they are not
subject to the "back door referendum," Heid said. However, they are
more expensive, having a higher interest rate, and can be issued
only up to the debt limit of $2.935 million.
"We do a lot more alternative revenue
bonds than debt certificates," Heid said. "My advice is to try to
issue alternative revenue bonds first. Why should the community pay
extra interest if they don't have to?"
He said this is a good time to issue
bonds of any kind because interest rates are at "rock bottom" lows.
The low interest rates would be locked in for the entire 20 years of
the bond issue.
The board is facing this dilemma
because actual costs for building the new Central School and
estimated costs for the junior high are higher than anticipated.
Originally costs were estimated at a total of $12.4 million for both
buildings. A state grant gave the district $8.3 million, and the
district passed a bond issue of $4.1 to make up the difference and
be eligible for the grant.
Board members were unpleasantly
surprised when bids well over estimates began to come in, and the
board had to work hard to cut costs on Central School.
"I can't say it's the fault of the bad
economy. We just didn't guess right on the price," Carmitchel said.
The board had opposition to demolishing
the old schools, particularly Central School, from a group called
Save Our Schools, but the referendum for the bond issue passed by a
comfortable margin.
Board
members said they are aware they may have opposition to any plan to
raise money to complete a quality junior high building, but they
intend to give the public complete information on whatever
alternative they choose to raise the extra funds.
[Joan Crabb]
|
While acknowledging
that the state faces unprecedented challenges, including its largest
budget deficit ever and an ethical crisis in state government,
Blagojevich maintained that a unified, bipartisan approach to
problem-solving is needed.
"As we deal with the
fiscal crisis, we cannot lose sight of our goal of making Illinois a
better place," Blagojevich said. "I refuse to accept the notion that
in tough times government must abandon the commitment to give people
the tools to build a better life. Times of uncertainty and struggle
are when people need us the most."
The proposals he
outlined during his speech to a joint legislative session mark the
expansion of an aggressive agenda he has carried out during the
first eight weeks of his administration, which have focused heavily
on the need to quickly bring reform to state government.
While continuing to
cite the importance of such efforts to change "business as usual" in
Springfield, the governor emphasized proposals to address people's
concerns in four core areas -- jobs, education, public safety and
prescription drugs for seniors.
Within those four
areas, the initiatives highlighted by Blagojevich included the
following:
1. JOB CREATION AND ECONOMIC
DEVELOPMENT:
Illinois Opportunity Fund
Blagojevich announced
legislation to create the Illinois Opportunity Fund to attract
private investment to the state. The $200 million fund in private
investments embodies Blagojevich's innovative plan to bring
much-needed venture capital to the state. If passed by the
legislature, Blagojevich said, the fund could be functional within
one year.
The governor said
that the fund "will help jump-start industries and focus on new
technologies that have the potential to not only put people back to
work, but to create the sort of jobs that will attract young people
to our state."
Nanotechnology, the
manipulation of matter at the atomic level, is an area in which
Illinois currently is a national leader and one of the many areas of
opportunity Blagojevich said he would target for expansion.
"There will be no
more missed business opportunities," he said, citing the fact that
although the Web browser was developed at the University of Illinois
in the early 1990s, other parts of the nation benefited more from
the economic activity associated with the Internet.
The venture capital
program notably would be used to enhance the state's agriculture
economy, to help farmers' commodities be used for ethanol and other
value-added products.
Entrepreneurship centers
As part of the
venture capital plan, the governor announced the creation of six new
Centers for Entrepreneurship. The first of the centers could be
operational in two months, he said, and 20 centers could be in place
within two years.
"There are countless
entrepreneurs across the state with good ideas who just need a
chance to show what they can do," he said, explaining the purpose of
the centers.
The centers will
supply training, tools and resources to provide 400 $5,000 business
planning and development assistance grants to entrepreneurs.
These centers will be
located in Rock Valley College in Rockford, the University of
Illinois at Urbana-Champaign, the University of Illinois at Chicago,
Western Illinois University in Macomb and at Southern Illinois
University campuses in Carbondale and Edwardsville.
Minimum wage
To help workers on
the brink of poverty obtain economic independence, the governor
announced his support of legislation to increase the minimum wage
from the federal standard of $5.15 per hour to $6.50 per hour to
protect the value of the dollars earned by hardworking families.
In addition,
Blagojevich said: "It's time for women, who make up more than half
the state's work force, to receive equal pay for equal work, instead
of just 69 cents for every dollar a man makes."
Clean coal technology
The governor said
that 20,000 new jobs could be created in Illinois through the use of
clean coal technology to revitalize a coal mining industry that has
suffered for the last quarter-century.
He pointed out that
financial incentives totaling $800 million are available to
encourage power companies to invest in advanced coal technology that
can burn Illinois coal and meet or even exceed clean air standards.
Using this technology, power companies in Illinois can burn Illinois
coal more cleanly than they burn coal from Western states and create
thousands of coal mining, construction and ancillary jobs in
downstate Illinois. The state also will aggressively market the
technology to power companies across the nation.
2. EDUCATION:
Universal preschool
To provide every
Illinois child a chance at success in school, Blagojevich announced
his plan to lay the foundation for universal preschool.
"Every educational
expert agrees that the earlier a child begins to learn, the better
his or her chances are of succeeding," he said.
His plan would begin
by reaching every at-risk 3- and 4-year-old child in Illinois within
three years. There are an estimated 25,000 at-risk 3- and 4-year-old
children in Illinois.
Illinois Future Teacher Corps
Pointing out that
educational initiatives are dependent on students having quality
teachers, Blagojevich announced the creation of the Illinois Future
Teacher Corps, a new scholarship program that would provide
scholarships to students who agree to teach in Illinois public
schools. These scholarships will address the expected need for
44,000 teachers by 2006 and help attract teachers for hard-to-fill
posts.
Under the program,
$5,000 annual scholarships would be available to juniors and seniors
in college who agree to teach for five years in Illinois public
schools in either shortage subject areas, such as reading, science
or early childhood, or in geographical regions of the state
experiencing teacher shortages. Scholarships of $10,000 per year
would be available to those students who teach in both subject and
regional shortage areas.
Parental involvement
Speaking as a father
himself, Blagojevich cited the important role that parents play in
their children's education and the challenges that they face.
"Our message to
parents is unequivocal -- we support you," he said.
Blagojevich announced
several initiatives to enhance parental involvement in education.
First, he said he would have legislation introduced to expand the
amount of unpaid leave time parents can take from work to attend
school activities, such as meetings with teachers or counselors,
from the current eight hours per year to three days per year. To
demonstrate that he is leading by example, he pledged to sign an
administrative order that would enable state employees to
immediately use the expanded leave time.
Blagojevich also
announced that he would sign a proclamation calling on all Illinois
schools to adopt the National PTA standards for parental
involvement, focusing on more frequent communication between
teachers and parents. To further facilitate that goal, he announced
the creation of a new Web-based system to enable parents to access
information via the Internet regarding their children's classroom
activities, homework and attendance. He added that the
administration would explore cost-effective mechanisms, such as
setting up voice mail for public school teachers to make it easier
for parents to communicate with their child's teachers.
3. PRESCRIPTION DRUGS:
Consolidation of state purchasing
Blagojevich announced
that the state will take a major step toward addressing the concerns
of seniors who are finding the cost of lifesaving medicines simply
too expensive.
"The phrase 'sticker
shock' does not begin to describe what so many people feel when they
go to the pharmacy," he said.
He announced that he
will sign an executive order this week to create a special advocate
who will be assigned the task of negotiating a better deal on the
nearly $2 billion in prescription drugs currently purchased by the
state. He criticized the state's meager 1.7 percent rebate on drug
purchases -- the worst in the nation -- and noted some states
receive a rebate 10 times more generous.
Under his plan, all
nine state entities that purchase prescription drugs would
coordinate purchasing activities in order to leverage the state's
purchasing power.
[to top of second column in
this article] |
Senior discount cards
To further reduce the
financial burden shouldered by seniors, Blagojevich urged lawmakers
to work with him to legislate the creation of a discount card for
seniors. The program would enable seniors to pool their purchasing
power, and the state would negotiate discounts that seniors could
access for all over-the-counter drug purchases.
Circuit Breaker
In the hopes of
covering drugs for all conditions, rather than a select few, the
governor said that he will fight for federal funding to fully expand
the Circuit Breaker program. Last year, the federal government
provided funding to expand coverage for most Circuit Breaker
participants, but 50,000 seniors were not included. Blagojevich
pledged to work with the state's congressional delegation for the
expansion.
Expansion of FamilyCare and KidCare
In addition to his
efforts to enhance seniors' access to prescription drugs,
Blagojevich announced plans to expand the state's FamilyCare
program, to provide health insurance to up to 300,000 working
parents within three years, and to provide coverage to more than
20,000 children by expanding KidCare. He explained that the state
has lost as much as $150 million in federal funds because of a
failure to fully invest in these programs.
4. PUBLIC SAFETY:
Operation Spotlight
Blagojevich pointed
out that this year more than 35,000 offenders, a record number, will
be released from Illinois prisons, and half of those would likely be
re-incarcerated within three years.
His new initiative,
Operation Spotlight, would double the number of parole agents over
four years from the current 370 to 740 and tighten supervision
standards so that parole agents are required to have more regular
contact with parolees once they are released. The plan would empower
parole officers to make swifter arrests and impose graduated
sanctions, such as electronic monitoring, to discourage criminal
activity.
Reopening Sheridan Correctional Center
as a model institution to deter drug crime
Citing the fact that
the majority of criminals in Illinois prisons are incarcerated for
drug-related offenses, Blagojevich called for the gradual reopening
of Sheridan Correctional Center for use as a national model drug
offender rehabilitation facility.
Illinois leads the
nation in drug abuse, drug addiction, drug overdoses and deaths, and
25 percent to 50 percent of Illinois' prison inmates were arrested
for a drug- or drug-related crime. Under the plan, Sheridan would
become the nation's first prison that monitors and treats drug
offenders both in prison and when they are re-entering the
community.
"Illinois leads the
nation in drug-related crimes," the governor said. "We should lead
the nation in drug crime prevention."
Project X
Declaring that it is
time to stop a dangerous trend in drug use, the growing prevalence
of so-called club drugs, such as Ecstasy, "before it becomes an
epidemic," the governor announced a new effort, Project X, that
would enhance current federal, state and local law enforcement
efforts.
Blagojevich's plan
would triple the investment in the Club Drugs Task Force and allow
the Illinois State Police to detail more agents to specifically work
on targeting Ecstasy and methamphetamines. The plan would focus
efforts on college campuses, which are key targets for dealers. This
initiative will involve undercover operations and increased
resources targeted to college campuses to crack down on drug abuse
and drug dealers.
Citing the fact that
use of Ecstasy among teens has increased 71 percent since 1999,
Blagojevich's plan also calls for a statewide awareness campaign to
inform both parents and their children about the dangers of these
illegal drugs.
Statewide Terrorism Intelligence
Center
The governor
announced the creation of a national model Statewide Terrorism
Intelligence Center, to be based in Springfield, which would provide
24-hour, seven-day-per-week access for terrorism-related
intelligence queries for all law enforcement agencies. The center
would serve as a focal point for both state and federal database
inquiries and would establish a centralized repository for incoming
data, which will be analyzed, assessed and shared with law
enforcement agencies.
- - -
The governor
recognized that he presented an ambitious agenda to legislators in
his speech, and his proposals carry a price tag of $88 million.
"This agenda and
these proposals are not only worthy, they are achievable and they
are affordable," he said. "With a nearly $5 billion deficit, I don't
propose them lightly. But these are not only investments we can
afford to make, these are investments we can't afford not to make."
Blagojevich again
repeated his promise to balance the budget without an increase in
the income or sales tax. "We cannot burden the taxpayers with the
full weight of fixing the mess created by those who led them
astray," he said. "But we also cannot punish the taxpayers by using
this crisis as an excuse for inaction."
In addition to the
policy initiatives in the four key policy areas, Blagojevich also
spoke of the need to continue to "first restore the ethical and
fiscal integrity of our state."
Since taking office
in January, Blagojevich has taken steps to closely examine state
expenditures -- even those that are the result of long-established
spending practices -- and bring much-needed reforms to state
government to restore people's faith in their leaders.
In late February, he
called on departments and agencies to cut, on average, 10 percent in
administrative costs, a move that could save $30 million this year
and $125 million in fiscal year 2004, and he placed an additional
$1.7 billion worth of this year's operations costs, grants and
capital projects in reserve.
He also unveiled an
innovative plan to refinance the state's pension obligation and
apply approximately $1.9 billion to the deficit.
Blagojevich has
called for major reforms of the state's current lineup of boards and
commissions, eliminating 11 boards through executive order and
announcing legislation to cut all pay at another 11 boards,
eliminating stipends and per diems, cutting 120 seats and
consolidating another four boards into two.
Earlier in his
administration, he froze payments for legislative member initiative
projects, imposed a hiring freeze on all agencies, called for
measures to reduce administrative costs at state universities,
prohibited agencies from acquiring new cars, and canceled costly
lobbying contracts with Washington, D.C.-based firms.
The governor
appointed a special investigator for employment to review whether
high-paying positions held by term appointees and others are
essential to state government.
Last week, the
governor announced reforms intended to prevent repeats of a
situation where employees of the previous administration cashed in
on unused vacation time for one-time payouts of as much as $90,000.
Blagojevich issued an administrative order that limits about 3,000
state employees to carry over no more than five vacation days per
year.
Blagojevich said
that, in addition to steps that he has already taken to mandate
ethics training for state employees and develop new whistle-blower
protections, he will work with Attorney General Lisa Madigan to
enhance these efforts by creating a new Board of Ethics to help
restore integrity to state government. The board will take swift and
fair disciplinary action in cases of unacceptable behavior by state
employees.
"We must begin by
giving the people of this state a reason to start believing in
Springfield again. Business as usual will not do," he said.
Blagojevich added that he would return to
the same chamber next month to present a full and comprehensive plan
to balance the state's budget.
[Illinois
Government News Network
press release] |