The state board identifies which districts are in or are moving toward financial difficulty by giving them a score every year. If they’re on the low end of the scoring range, they’re considered high risk and are put on the watch list.
They could even qualify for a financial oversight panel because of the scores if State Superintendent Tony Smith asked the state board to establish one or if the local school board asked for emergency financial assistance, according to the school code.
East St. Louis District 189, for example, has had a state-appointed oversight panel since 2012. The panel was created to help the district after years of deficit spending, according to the state board.
For the last three years, District 189’s scores have consistently put it in the highest of the four financial health categories. School officials at District 189 couldn’t be reached for comment.
Scores are based on financial indicators from the previous fiscal year like how much school districts spent for every dollar they received.
Districts’ savings are also a factor in their scores. Another indicator the state board uses is an estimate of how many days the districts could likely pay their operating costs if they didn’t receive more money than they already had.
School officials say scores can be affected by things like delays in receiving money from property taxes and from the state, for example.
“In many cases, they’re impacted by variables that school districts don’t have any way of controlling,” said Brian Mentzer, assistant superintendent for Belleville District 201.
When you’re receiving less or late payments from the state, you’re going to see a shrinking fund balance, and you’re going to spend more than you’re taking in.
Ryan Boike, Belleville District 118 assistant superintendent
The Belleville high school district is among those to improve its score enough to no longer be on the watch list. It’s now in the second-highest financial health category for the first time since 2014.
According to the state board, District 201 will get limited review at the state level this year, but it will continue to be monitored for “downward trends” through the same process next year.
Mentzer said the scores are based on “snapshots” of the end of each fiscal year, which benefited District 201 this time but has also hurt its score in the past.
“The negative about this is it is taking a picture, truly, of your financial health at one given point in time,” he said.
When District 201 was put on the watch list last year, Mentzer said school officials sought advice from sources like an independent auditor.
“We’re trying our best to manage the things that we can manage,” he said, including making changes to save money, such as restructuring the district’s health care plan.
“We’re always looking,” Mentzer said. “We’ve been looking and continue to look for ways to be more efficient.”
District 201 recently decided to start running its own school bus service for Belleville East, Belleville West and the elementary schools in its boundaries next school year. Mentzer said that was another effort to cut costs. Officials estimate that the district will save between $400,000 and $500,000 each year compared to the cost of its contract with bus company First Student, Inc.
The other school district in St. Clair County to be taken off of the watch this year was Brooklyn District 188. It moved from the lowest financial health category to the second-lowest, which means the state board will continue monitoring District 188 closely. School officials at District 188 couldn’t be reached for comment.
0 St. Clair County school districts on the state’s financial watch list in 2017
2 St. Clair County school districts on the state’s financial watch list in 2016
Belleville District 118 is also in the second-lowest category, where it’s been for the last three years. Assistant Superintendent Ryan Boike said District 118’s score has been affected by its reliance on state funding.
“When you’re receiving less or late payments from the state, you’re going to see a shrinking fund balance, and you’re going to spend more than you’re taking in,” he said.
Last fiscal year, school districts received their final quarterly payments from Illinois for things like transportation and special education services six months late, according to the state board. Those payments are reimbursements for money districts have already spent.
School districts haven’t received any money from the state for those services yet in the current fiscal year.
Another challenge for District 118 has been the declining property values in Belleville, which Boike said resulted in less taxpayer money for schools. He said the district recently saw the first increase in five years, which will be reflected in the money it starts collecting this summer.
Boike thinks the 2.37 percent increase in home values and recent efforts to work with District 201 for bus services could help improve District 118’s score next year.
District 118 is also anticipating a number of retirements in the next few years, which gives school leaders a chance to cut personnel costs, according to Boike. One way to do that is through attrition, or not replacing some of the retirees’ positions, he said. There’s also a savings in hiring entry-level employees whose salaries would be lower than the staff members who were at the end of their careers, Boike added.
In Central 104’s case, it fell from the highest financial health category. Superintendent John Bute said that’s due to the district’s use of reserves in the past year to offset reduced state funding without cutting programs.
“We are not surprised that Central 104 is not on the financial recognition list,” which is the top category for districts, Bute said.
The negative about this is it is taking a picture, truly, of your financial health at one given point in time.
Brian Mentzer, Belleville District 201 assistant superintendent
To avoid cutting programs in Belleville District 118, Assistant Superintendent Ryan Boike said the school board also decided to deficit spend.
“It’s good when you can maintain programs for kids,” Boike said. “Nobody wants the second best education for their kids.”
State Superintendent Tony Smith stated in a news release that Illinois school districts’ financial health has improved overall this year but acknowledged that some schools are struggling to cover day-to-day costs. He called for a change in the school funding model.
“Forcing school districts to rely primarily on taxing local property wealth to fund education inherently means the students who need the most will receive the least,” Smith stated. “We expect dedication, innovation and improvement from our administrators, educators and students; we owe them the resources necessary to meet those expectations.”
In Whiteside District 115, it received a score that put it in the second-highest category this year. Superintendent Peggy Burke said she doesn’t expect to see the district move to the top category because it doesn’t have a large savings or a way to generate more cash.
She acknowledged that there are reasons for school districts to have savings, especially when there is a decrease in funding from state, but District 115 largely spends what it asks taxpayers for rather than storing the money, Burke said.
“What we levy in taxes and what we get we should be spending,” she said. “The idea isn’t to levy for taxes and then hoard them.”
Burke is proud of the district’s financial health, especially because she said it continued to offer activities and programs to supplement the curriculum while having the county’s lowest tax rate among elementary school districts in 2015, according to numbers provided by District 115.
The district started collecting money from its 2015 tax rate in 2016, which is when the state board analyzed finances to determine this year’s scores.
State board data actually shows District 115 was on the watch list last year with a score of zero. But Burke said that was because of a delay in getting the district’s reports to the state. District 115 was later given a score that put it in the same category as this year, according to Burke.
More school districts in the metro-east
In Madison County, several districts are on the watch list this year, including Edwardsville District 7, Triad District 2, Alton District 11 and Bethalto District 8.
Collinsville Unit 10, Granite City District 9, Venice District 3 and Roxana District 1 are each in the highest financial health category. Two of Monroe County’s school districts are also in the top category this year: Columbia District 4 and Valmeyer District 3.
Waterloo District 5’s score put it in the second-highest category.
Reporter Curt Libbra contributed to this report.
Five indicators that the state board uses to give districts a score include the following.
- Fund balance to revenue ratio, which reflects the overall financial health of the district.
- Expenditure to revenue ratio, which shows how much a district spends for each dollar it receives.
- Days cash on hand, which is an estimate of the number of days a district could pay its operating costs if no additional revenues were received.
- Percent of short-term borrowing ability remaining. Districts sometimes incur short-term debt if there is a delay in receiving property tax money, for example.
- Percent of long-term debt margin remaining. A district often incurs long-term debt for major expenditures like construction.
Financial health categories
Four financial health categories that school districts’ scores can fall into include the following.
- Recognition, which is the highest category of financial health.
- Review, in which districts get limited review from the state board but will continue to be monitored for potential downward trends annually.
- Early warning, in which districts are monitored closely by the state board.
- Watch, which is the lowest category of financial health and the highest risk category.