August 21, 2002
State Board authorizes School Finance Authority for Round Lake School District 116
State Superintendent Names Members
The petition of the Round Lake School District 116 Financial Oversight Panel to create a School Finance Authority for the district was granted today by the State Board of Education.
The Oversight Panel voted unanimously in June to petition the State Board to authorize the School Finance Authority. The school district has been plagued with severe financial problems for several years and the State Board authorized the School Finance Authority after determining that the petition is in the best interests of the educational and financial interests of the district.
District 116 was placed on the states Financial Watch List and as a result of their deteriorated finances, the State Board certified the district as In Financial Difficulty on April 16, 1992. Required financial plans were developed but failed to stop the flow of red ink. The District faced a short-term debt of $10.5 million and long-term debt of $37 million in April of 2000 when the district asked the State Board to create a Financial Oversight Panel to improve its financial condition and to make the district eligible for a state emergency loan and grant.
The Panel secured the emergency financial assistance of a $1.4 million grant from the State and instituted several cost-cutting measures that produced the first balanced budget for the district in over ten years. Still, the district faced huge long-term debts that could not be met within the existing structure. The Panel considered several options for assuring long-term viability for the district and held several public hearings to gather input on the financial and organizational options for the district. The Panel concluded that a School Finance Authority, similar to one created by the legislature in 1980 to stabilize the Chicago Public School Districts finances, held the most promise for strengthening the education opportunities for students and stabilizing district finances.
The Illinois General Assembly passed legislation last spring authorizing the creation of a School Finance Authority with the approval of the State Board of Education. Governor George Ryan signed the legislation into law in June.
"After reviewing the reasoned arguments in the petition, we have concluded that the Panel's recommendation is the best way to stabilize district finances and to improve educational opportunities for the students it serves," said State Board General Counsel Respicio Vazquez who was serving as State Superintendent when the petition was submitted.
The School Finance Authority will have the power to appoint the top management of the district, including a Chief Executive Officer, a Chief Educational Officer to replace the position of Superintendent when the current Superintendents contract expires, and a Chief Fiscal Officer replacing the position of School Business Official. In addition the SFA is empowered to negotiate collective bargaining agreements, to issue debt within specified limits and to establish tax rates necessary to pay off the debt. The Authority would be removed from some of the limitations of tax caps.
Superintendent Schiller Appoints Members
Under the legislation, the State Superintendent is required to appoint five members of the School Finance Authority, two of whom must be residents of the district. State Superintendent of Education Robert E. Schiller announced those appointments following Board action authorizing the SFA.
"I am pleased to announce that we have secured the assistance of five highly qualified individuals to accept this challenging assignment," said State Superintendent of Education Robert E. Schiller in announcing the appointments.
Appointed to serve on the Round Lake Area Schools District 116 School Finance Authority:
Illinois State Board of Education