Questions about finances

I don’t know about you, but every time the topic of money (levies, tax abatement, fund transfers or anything else to do with finances) comes up in board meetings, I feel like a secret language is being used which I do not fully understand (is it Elvish? Klingon?). I mean, I can look up the terms and understand the words that are used, and by doing so, I can slowly chip away at the information that is presented. But by no means would I say that I have a clear picture. Having asked several questions and finding myself still perplexed, a friend suggested I just put the questions in a blog post and see if anyone else can provide some clarity. Or at least commiserate. *grin*

 

This first question I have asked many times over the past few years; can a Unit 4 5th grader present the finance information to the community? Whether it be in the context of a public hearing of a new budget or abatement, I want to know if a 5th grader can not only understand the information, but then also communicate it back out to the community in a language and style that is easy to digest. A few years ago I chatted with Matt Foster and developed a sample Sankey chart of the FY14 budget – for me, visualization helps a lot. This is just one step towards better understanding. I have also asked that jargon like “levy” and “abatement” not be used to explain “levy” and “abatement”.

 

On the topic of levies, I have queried board members about how the district settles on a tax levy amount (the “ask”). From what I gather, the district attempts to make an informed, educated guess about how much money is coming in via the tax rolls, and sets a levy amount that they know to be slightly over the amount they think they can take in an effort to “capture” any new taxes. The reason they submit a guess is that the Champaign County Clerk ultimately decides what the tax levy will be (based on the EVA, or “economic value added”), and due to an unfortunate timing of events, entities that levy taxes, by law, must submit their levy amounts even though the amount of money collected by taxes is not known until several months later. So in essence, levying entities in a “home-rule government” (Unit 4, MTD, Forest Preserve, etc – Parkland is not constrained by “tax caps” or PTEL, as a counter example) either declare some artificial maximum tax rate that will later be tuned down by the County Clerk, or if they set an amount that is less than the maximum, they “lose” the difference when taxes are actually collected. It’s all pretty stupid – I don’t know who wrote the laws that muck things up like that. But this brings me to my second question: why not just always levy for one billion percent? (Yes, 1,000,000,000%) Or choose some other completely arbitrary number that will always be “maximum”. Because in the end, no matter what number the district settles on, they always want it to be some (at the time) unknown “maximum”. It seems to me that this would at least make things a bit less confusing – you just basically skip all the nonsense and tell the County Clerk to assign the highest number possible. Until the laws change. (I settled on 1B% because it is absolutely ludicrous – it reflects the silly dance we do every year)

 

And finally my last question for today. What role do the various funds (ie, Fund 60, Fund 61) have, and when money is moved from one fund to another, exactly what is the intended purpose? I believe there is a document on the Unit 4 website that describes some of the funds, but at this time I cannot find it. More importantly, when there is a public hearing, currently all the documentation is presented in “State Form”, a format that is sent directly to the State for legal purposes. It is exceptionally hard to make sense of, and I have no idea why monies are moved from one fund to another.

 

I had the privilege of speaking with Gene Logas several times when he was the CFO at Unit 4; after one of those chats, Mr. Logas published several informative and helpful documents that are still listed on the “Finance department” section of the Unit 4 website, in particular, “Where Does All the Money Go?” and “Property Tax Lesson“. I applaud the district for going through the trouble of putting check registers, yearly budgets and many other pieces of information on their website. This is an excellent step towards transparency! The next step is helping taxpayers understand the information.

money and the state budget

There is a syndicated article in the NG today talking about how the state intends to chop ONE BILLION DOLLARS out from Education. Doing the math, right now the unbalanced budget has $13.2B set aside for Education, but we have to subtract out a massive $5B for pensions which brings it down to $8.2B for everything else in schools. Divided by 3862 public schools in the state of Illinois, that averages to roughly $2M per school or about $3993 per student. Unit 4 receives a little over $15M from the state (FY2014 state budget form) for the Educational Fund(*), which comes out to $1623 per student (9383 total students). Ironically, according to ISBE Superintendent Christopher Koch, the “statutory amount set for general state aid” per child is $6119. Which is obviously meaningless and a sad joke. There is a ton of talk about “pension reform” and I have not figured out how the proposed “balanced budget” of chopping $1B will affect pensions. If we assume the worst-case scenario where pensions are left alone, that brings the money for Education down to $7.2B, or $1.86M average per school ($3505 per student); for Unit 4, an oversimplified guess would put the cut at $2.1M (total down to $13.3M), or $1421.6 per student.

Unit 4 has a $103M budget(*), and Gene Logas and the rest of the Finance team has placed us in a really well-padded financial position. Except we are cutting into that buffer space with additional raises for both teachers and administrators over the next three years due to the contract negotiations last year.

* UPDATE NOTE: The total Unit 4 budget is $138,853,108 – I am focusing on the Educational portion of the budget from which teachers are paid (among other things).

It is quite unclear how Gov. Quinn’s promise to protect Early Childhood Learning will play into this picture. I am not smart enough to figure that out. *grin* If you are, or if you know of someone who is, please pitch in.

All this to say that I am quite confident Unit 4 will be fine for the next few years, but we have to be diligent and very careful with how we plan our future. My sincere hope is that all stakeholders can come to the table to exercise “community involved planning” to dream up ways we can maximize our dollars.

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Governance and civic responsibility, take 2

I recently talked to representatives of the Illinois Association of School Boards (IASB). As mentioned previously, I really like their mission statement and the ideals they lay out for board members of all school boards. After a wonderful and in-depth chat with Cathy Talbert (Associate Executive Director of Field and Policy Services), I came to learn that the IASB is going “all in” with John Carver’s “Policy Governance model“. This is reflected primarily in how the IASB has recently re-architected its own policies, and further trickles down to how the IASB will be training new board members. It is a model that utilizes servant-leadership and clearly states organizational purposes with the sole intent of having those purposes fulfilled. Again, the word “accountability” comes up – not with the intent of going on a witch hunt, but rather, for the good of us all, seeking out mutually beneficial solutions.

This is the kind of mindset I have when I ask various city managers/planners and the school district Business office about Tax Incremental Financing (TIF). TIF, and it’s brother “Enterprise Zones”, have a very strong focus on “economic development”. Which sounds all good and dandy. What really concerns me is that 1) the public is largely uneducated on these issues and 2) a significant lack of accountability on promises and goals. I believe city managers and planners have good intentions at heart. I think there is a systemic mentality about meeting the letter of the law but not really addressing the intent of the law (another example of normalized deviance).

Let’s take another example – the district’s Promises Made Promises Kept (PMPK) committee. I have harped on this before, and I will probably do so again. Back in June of 2010, I attended a PMPK meeting and personally asked Mr. Gene Logas if he could post online some of the awesome documents that they share at PMPK meetings. Again in March of 2012, I formally asked Mr. Logas, the Board and Dr. Wiegand the same thing, to post all informational documents on the committee website. In October of 2012, I again made the request that documents be posted online for Unit 4 committees.  In February of 2013 I made a post of documents I had personally received. Another post in March of 2013, with a little bit of delicious irony (Agenda Item V: How to Effectively Share with the Community the Work and Oversight of the Committee). At various times throughout 2012, 2013 and even this year, I asked individual committee members for relevant documents, and asked them to convey my wish that documents be posted online. On Feb 10th of this year (almost three weeks ago), I asked the Board (again) to have these documents posted on the PMPK committee page. I was told by the Board that these documents are indeed online. Imagine my surprise! So I asked where.

Silence.

Why am I so anal about this? Why am I “wasting” the time of various administrators and board members? Why am I making a big deal about this?

I hope to make it a point that I am not shaking my finger at individuals; entire Administrations have come and gone, and the Board has changed many times since 2010. The problem is that nobody else really cares (from my point of view), we have all come to expect that the PMPK committee (and other Unit 4 committees) have a standard way of operating, and that’s how it is done. Yes, I get it that the public is invited to attend any and all committee meetings (with the rare exception). I get it that information is freely shared at these meetings. Good job, keep it up! But sharing information at meetings does not equal engaging the community, nor engendering a sense of ownership. I realize posting informational documents isn’t a silver bullet either – it will not magically, instantly make all the stakeholders suddenly enjoy all the sunshine and transparency. This is just one step among many.

The exact same thing applies for the City of Champaign and TIF. The same thing applies in many areas of “governance” in our lives. We have lost the art of being informed and holding each other accountable.

The solution? Society itself must change. We have to think about others.

In Lisa Delpit’s insightful and enlightening “Other People’s Children”, she quotes a Native Alaskan teacher she had the honor of befriending; “In order to teach you, I must know you.” We must allow our walls to break down and get to know each other.

An incomplete historical snapshot of bond issues, tax levies and referenda

After attending and chewing on the Community Dialog about various school options (which all lead to big tax referendums), I got to dwelling on the the Elementary School options. Partially, as I said before, I was surprised to see them in the packet on Tuesday in the first place. So let me state right off the bat, I am fully aware and acknowledge that our school buildings, at all levels, need a bit of help. We have known this for over two decades. The sad part is that we have not come up with a good plan to deal with these issues, which has resulted in a snowballing problem, an escalating urgency that eventually borders on a crisis.

First some definitions and attempts to bridge the financial jargon.

  • Bonds (Sales Tax Bonds, Working Cash Bonds, etc): Basically, these are long-term loans, like mortgages.  The district gets a bunch of money from a bank to do stuff, and the district slowly pays back the loan (including interest) over 20 years (typically). To “issue” a bond is therefore to put oneself in debt to another.1
  • Tax Levies: This one is a bit harder for me to wrap my head around, but here goes. We pay property taxes, right? Various groups get a slice of the pie from those property taxes, and public education usually gets the biggest slice.2 The tax levy by the Board of Education therefore determines exactly how big that slice will be. 3 5 7 Gene Logas often bragged that Unit 4 has one of the lowest rates going.4 At the same time, Gene complained that “tax caps hurt”. 6
  • Referenda: The law states that when the school district wishes to acquire more money above and beyond what tax levies can bring in, the school district can ask the voters to approve more money via vote during an election in the form of a referendum. Obviously, this does not happen often because taxpayers typically do not want to pay more taxes. The Working Cash Bond is special because it slips under a certain ceiling that allows the district to raise property taxes without a voter approval.

(NOTE: Both Gene and Greg were amazing warehouses of information, but even more impressive was their willingness to sit down and explain things to folks like me)

Elementary School funding (and lack thereof)

While there is a rich plethora of statistics, financial data and worthy history, I am going to just rewind the clock to 1998 and focus on the elementary schools and related funding projects.

Gene Logas tells that Read the rest of this entry »

Jan 14th Reg Board Meeting: new school board members, new school attorney, lots of data

re: http://www.news-gazette.com/news/education/2013-01-14/champaign-school-board-chooses-blank-and-van-ness-new-members.html

It was an interesting board meeting tonight, although I fear “interesting” does not do the meeting justice. I don’t have the energy to write about it all now, so here are some highlights:

  • Another bevy of recognitions, including plaques and commendations for Greg Novak and Gene Logas, presented to Donna Novak and Nina Logas respectively.
  • Scott Leopold presented a veritable plethora of data and information about the targeted phone surveys (I hate using the word “quantitative”) and the latest update about the research efforts of Dejong. Overwhelming in fact.
  • Agenda line-item 10.a was removed from the agenda and then put back on the agenda at 9:50 pm after basically everyone had already left (and the tv cameras had stopped rolling I am sure); Tom Lockman will be the new school district attorney. Vote was 4-1 – oh how I wish I could write more about that.
  • As reported by Meg, a new (permanent) program for emotional disabilities/mental health was approved – board members asked some good questions
  • Oh, also as Meg reported (*grin*), two new board members; Arlene Blank and Phil van Ness. A few other candidates were also in attendance and stuck around to the bitter end.

UPDATE: Meg wrote another article about Lockman:

http://www.news-gazette.com/news/education/2013-01-14/champaign-school-board-hires-former-board-member-school-attorney.html

Thoughts this week about the school board

Walking in reverse direction down the path of my thoughts of the school board this past week:

Who are we?

I subscribe to a feed of the Wake County School District blog, and just this morning is a post about the new school board chairman of the Wake County school district (which, by the way, is frickin’ HUGE!). What is fascinating about his “acceptance speech” is that he casts an identity for the school board that unites it with the community; he readily acknowledges the rocky road they have been through (you think Champaign has an issue with Schools of Choice? Ha!) and the challenges going forward.

“We the Wake County Board of Education will provide the kind of exemplary leadership that is expected of us by this community, and I intend to lead us in that direction. I ask my colleagues around this table to join me in this commitment and this effort for we are Wake County.”

2013 Board Candidate John Williams, III

I am going to be reaching out to candidates as I find out who they are. Last night I had a great facebook dialog (be sure to click the tiny “See More”) with Mr. Williams. I am impressed by his convictions and desire to tackle some big issues. Better yet, not just desires but ideas on how to make them come to fruition. I asked him further about two points (getting the community to show up at meetings and pedagogy); he responded to the first by admitting there is a lack of community participation that is not solved by free food, the need to build relationships and the need for more open communication; to the second he agreed there is no “one size fits all” and very much wants to move away from lecture-laden approaches to engaging the students more thoroughly. What’s cool is that I see a number of excellent teachers already doing this. Hearkens me back to the Sir Ken Robinson video shown at the Futures Conference. Having said all this, don’t take my word for it – go read about John Williams yourself, or better yet, ask him some questions of your own.

As I find out who other board candidates are, I am going to make it a point to drop by and get to know them. Laurie, I have some questions for you next. *grin*

Transparency

I already shared how I attempted to address the board at Monday’s board meeting. Dr. Joe Davis was kind enough to follow-up with me (and CC: Dr. Judy Wiegand). He mentioned Gene Logas’ previous efforts to spell out “Where does all the money go?” I agree that this is a good first step in breaking down the complex tongue of finances, but it only goes so far (it is, after all, a first step). I responded with an example of Jess Bachman’s now famous “Death and Taxes” poster which gives an awesome overview of the Federal Budget. On top of this, I followed up with a member of the Promises Made Promises Kept (PMPK) committee; here is an excellent example where the district communicates a ton of information to a group of people that is open to the public, but the public has next to no clue what is going on because 1) very few community members attend the PMPK meetings, 2) the “transparent” reports take a REALLY long time to make it up on the website. In fact, the last one I can find is from December of 2011. So, first hurdle is to get this information in the public sphere, second hurdle is to get these reports so that we the common people can understand them. 🙂

Transparency is not about pointing fingers. It is about collaborating towards a common goal. As John Williams implied, accountability is a good thing, when done right. It helps all of us.

[PS – I hope that a letter-to-the-editor I submitted on this topic is printed soon]

More about 2013 Board Candidates

Meg Dickinson wrote an article on Tuesday in the aftermath of Tom Lockman stepping down from his position on the board. One particular quote of Mr. Lockman that I really like is:

I truly believe that public education is the most critical aspect of a community’s ability to succeed and develop…

Most. Critical. Those are big words, ones that should challenge our community. But back to Meg’s article about the candidates. She relates the Stig Lanneskog intends to run for the 2-year slot. She also says that seven people to date have checked out petitions from the Mellon Center. Note that the petitions actually come from the County Clerk’s office and that the Mellon Center merely provides the forms as a courtesy; since the forms are downloadable from the internet, there is no telling the maximum number of people that have expressed an interest. On top of that, just because someone picks up a packet does not mean they will get all the signatures and actually submit it by December 26th. What is most curious to me is, of the people that have picked up a packet, we only know about three (Ileana Saveley, Laurie Bonnett, John Williams and Stig Lanesskog). Personally, I really want to find out who the others are because I want to meet these people who are so interested in the school district that they want to serve on the board, which is not all fun and games. 🙂 Very worthy, no doubt, but a sacrifice none the less.

Digging at the root of the matter (part 1)

There are times when I find I have to take a step back. Especially this past week or two, with so much hubbub about the CFT negotiations, the Futures Conference, elections, the Immigration Forum and Bristol Place. And there is so much else just roiling beneath the surface – I am sure you can relate.

So as I step back, I see two very general categories, or catalysts, or … I don’t even know what to call them. But they get our goat. This is no great epiphany, but I had to start somewhere.

  1. Differences of opinion
  2. Money

It is not hard to find someone who believes in something different than you do. It is not hard to stumble across blogs, facebook pages, sound bites, tv ads or written commentary that expresses a strong opinion, and chances are that a large number of people feel differently. It is probably more accurate to say “think differently”, but the “feel” part of it is that knee-jerk reaction, that gut-level almost instantaneous “you’re wrong” thought that bubbles up unbidden. When we actually discipline ourselves to really think and not rely so much on “feel”, some great conversations and deliberation can happen. I was reminded of this just yesterday witnessing an exchange between a parent (Karen) and a Unit 4 administrator (Cheryl Camacho); what is awesome is that questions, thoughts, and genuine interest are traded back and forth – I find this to be an excellent learning experience. I invite you to join in (I will be right after this post *grin*).

From there I am going to Read the rest of this entry »