And So It Begins...

Well everyone, it begins.  "What begins?," you might ask.  Minooka CCSD 201 has begun to issue working cash fund bonds (see here at page 4 of the July 17, 2017 meeting minutes under Item 5.01).  This is the end result of years of overspending.  It is an eventuality that I have warned about a number of times both in this blog (see here, here, and here) and as a member of the school board.

Essentially, the school board is funding day-to-day expenses with long-term debt (in this case five-year bonds).  Why?  Because the district has been overspending for years.  Rather than cut expenses to meet the revenue that the taxpayers have provided based on the approved tax rates, the school district has created and the school board has approved a cost structure that exceeds such revenue.

This is not something that is responsible for you or I to do in running our households, and it is not responsible for a government body to do either.  Many people decry the financial condition of the State of Illinois, the City of Chicago, and Chicago Public Schools, among many others.  If one looks back in the history of each of those entities, one would find the point at which they each began to fund day-to-day expenses with long-term debt.  That point represents the beginning of the financial crisis that each such entity finds itself in. 

No one should expect this to be an isolated event.  This represents merely the first of what will likely be many such bond issuances.

Next Minooka 201 School Board Meeting

The next meeting of the Minooka CCSD 201 school board is Monday, April 24, 2017 (regular meetings are now on Mondays instead of Wednesdays). The Committee of the Whole Meeting starts at 6:00 p.m. in the board room at the Minooka Primary Center located at 305 Church Street in Minooka. The Committee of the Whole Meeting will be followed by the regular Board Meeting at 7 p.m. Each of the meetings is open to the public, and everyone is encouraged to attend.  Information for the Committee of the Whole Meeting and the regular Board Meeting can be found here.

One item in particular of note on the agenda is the following:  "5.05 Working Cash Transfer of $4,000,000 to Education Fund."  If approved, this would transfer $4,000,000 from the Working Cash Fund to the Education Fund.  Now this seems innocuous enough.  One could view it as merely a transfer from one bucket of money to another.  And, in one sense, that is exactly what this represents.  In another sense, it represents much more than this.  It is a symptom of a school district that is overspending.  The Working Cash Fund is like an internal bank.  The money in the fund is used to even out the cash flow of the school district.  Without sufficient funds in the Working Cash Fund, a school district has to borrow such money from a bank and pay interest on that money.

It also sets up the school district for a possible "back door referendum" (for more information, see here) in order to replenish the Working Cash Fund money that was transferred to the Education Fund.  And here is where it gets dishonest in my opinion.  The Education Fund rate is currently at its maximum without a referendum to increase the rate.  The district has been and is currently spending more in the Education Fund than current revenues can sustain.  But a way around this is to transfer money from the Working Cash Fund to the Education Fund and then issue "working capital" bonds without a vote of the taxpayers.

There really are only three options in this situation.  The first option is to bring Education Fund spending in line with Education Fund revenues (i.e., stop deficit spending).  The second option is to ask the voters to raise the tax rate for the Education Fund (i.e., a rate increase referendum) to bring Education Fund revenue in line with Education fund spending.  The third option is to continue deficit spending in the Education Fund, transfer money from the Working Cash Fund to cover the deficit, and issue "working capital" bonds without a vote of the taxpayers.  In my opinion, only the first and second options are honest.  The third option, while legal, reeks of taking advantage of the taxpayers.

Next Minooka 201 School Board Meeting

The next meeting of the Minooka CCSD 201 school board is Monday, March 20, 2017 (regular meetings are now on Mondays instead of Wednesdays). The Committee of the Whole Meeting starts at 6:00 p.m. in the board room at the Minooka Primary Center located at 305 Church Street in Minooka. The Committee of the Whole Meeting will be followed by the regular Board Meeting at 7 p.m. Each of the meetings is open to the public, and everyone is encouraged to attend.  Information for the Committee of the Whole Meeting and the regular Board Meeting can be found here.

Next Minooka 201 School Board Meeting

The next meeting of the Minooka CCSD 201 school board is Monday, February 27, 2017 (regular meetings are now on Mondays instead of Wednesdays). The Committee of the Whole Meeting starts at 6:00 p.m. in the board room at the Minooka Primary Center located at 305 Church Street in Minooka. The Committee of the Whole Meeting will be followed by the regular Board Meeting at 7 p.m. Each of the meetings is open to the public, and everyone is encouraged to attend.  Information for the Committee of the Whole Meeting and the regular Board Meeting can be found here.

Next Minooka 201 School Board Meeting

The next meeting of the Minooka CCSD 201 school board is Monday, January 23, 2017 (regular meetings are now on Mondays instead of Wednesdays). The Committee of the Whole Meeting starts at 6:00 p.m. in the board room at the Minooka Primary Center located at 305 Church Street in Minooka. The Committee of the Whole Meeting will be followed by the regular Board Meeting at 7 p.m. Each of the meetings is open to the public, and everyone is encouraged to attend.  Information for the Committee of the Whole Meeting and the regular Board Meeting can be found here.