CAT Tracks for January 15, 2003

CAT Tracks for January 15, 2003

FINANCIAL OVERSIGHT PANEL?

On January 14, 2003, representatives of ISBE, CSD #1, and CAT met at the Regional Office of Education in Ullin to review the financial status of Cairo School District Number One. It was not pretty...

ISBE evidently requested the meeting when the "financial indicators" of the District for the past five years (through the end of 2001) computed out to 2.45 (on a 4.0 scale) - a score that would place CSD #1 on the "Financial Warning" list. Again...that is the "Financial Warning" list...not just the "Financial Watch" list! A calculated update to include the past year indicated that the situation had worsened.

Most of the meeting was devoted to an emphasis by ISBE on the seriousness of the financial situation in Cairo and an inquiry as to what District officials were planning to do to address the crisis.

ISBE made the following observations:

Discouraged the District's plan to issue State Aid Anticipation Warrants in March. (This would be spending next year's revenue to pay this year's bills.) ISBE indicated that such a move might not be approved by the State...way too early in the year and NOT a solution. Cairo officials indicated that they knew this...but that they had no other option.

Discouraged the District's intent to place the bond referendum for a new elementary building on the ballot...that "matching funds" were gone for this year and that there were an excess of schools making "demands" for the money. Cairo officials indicated a need to reduce operating costs by replacing three deteriorating attendance centers with one modern facility.

Discouraged the District's past practice of making illegal fund transfers...paying Education Fund bills out of other funds, such as Operations and Maintenance. (This is made possible because ALL funds are deposited in one banking account, with "separation" occuring on the books.)

Encouraged the District to run a balanced budget...to make budget cuts to bring the budget in line with existing revenues. It was noted that 85% of the budget consists of salaries and benefits. Cairo officials indicated that staff had already been "cut to the bone"...that further cuts would destroy the educational program. It was also noted that cutting staff was a "double edged sword"...that cutting staff who are paid out of grants would result in a loss of the grants, which would not alleviate the problem.

STRONGLY encouraged the District to voluntarily request a Financial Oversight Panel - SOON! With the Panel comes a grant of $250 per student - approximately $250,000. Also, the District could borrow (on very favorable terms) up to $1,000 per student - approximately $1 million.

If you would like more details on the financial crisis, an ISBE representative has been invited to attend the January 16th meeting of the Cairo Board of Education to explain the details and options to the full Board. He has accepted.

FOOTNOTE: A BIG footnote...The ISBE representative in charge stated that the District had taken a BIG hit when it made the decision NOT to make up the days missed by the strike - a BAD decision - a decision that cost the District $400,000 - and that part of the District's financial problem was that it was now paying back that loss through reduced revenue for this year. Hmmm...Seems that we've heard that somewhere before!