This is an instance when I’m happy to have to update one of the essays I’ve posted about Hinsdale High School District 86 (see https://jamescrandell.wordpress.com/2015/02/19/quarter-century-clubbed/ for the original article). For those of you new to this blog, I worked at Hinsdale South, one of the two high schools in District 86, for twenty-five years.
Two months ago, via an e-mail sent to employees from the administration, an honorary dinner for teachers who had worked in the district for a quarter century held annually for the past thirty-one years was cancelled. At the time, the business manager was forecasting a $1.7 million deficit at the end of the fiscal year on June 30, and so cuts like the Quarter-Century Club dinner were said to be necessary. Despite its small cost ($10,000) in a district with a pretty large budget (over $80,000,000), the crisis of deficit spending meant the dinner had to die. Then, last week, we (ex? zombie?) members received an invitation to the thirty-second Quarter-Century dinner. I’m told that the explanation for the Quarter Century’s reinstatement was that the balances in various funds were turning out better than anticipated, so there was no need for its elimination. Therefore, on May 19, I will be going to Ashton Place with many of my colleagues, both current and retired, to welcome four new members to the resuscitated Quarter Century Club.
Now, I could postulate political theories on why this wonderful recognition of longevity and hard work was cancelled in the first place, pointing fingers at certain board majorities that never got along with teachers all that well, and especially didn’t like the union to which virtually every teacher in the district belongs (or did belong, in the case of retired teachers). And I’m certain a regular commentator on this blog (as well as all articles about District 86) will be happy to attack the union in the comments section below. However, the voters spoke quite clearly on April 7 and selected board members who will soon make a new, different majority. So I won’t claim that the original cancelation might have been for reasons other than projected deficits. You could make that argument, but the more important story here is that what had been a $1.7 million deficit just over two months ago has turned into a surplus. And the long-term lesson that should be learned from this flip-flop on the Quarter Century Club is the folly of basing too many decisions on financial projections made in school districts.
I have written about this before, so I will just summarize here (for the more detailed analysis, go to http://patch.com/illinois/darien-il/bp–inside-public-education-school-finance ). When making a budget for the next fiscal year and projections for years even further into the future, school district business managers have a vested interest in under-estimating revenues and over-estimating expenses. The reason makes perfects sense, and I would do exactly the same thing in their situation. Think about these two scenarios: One, the business manager predicts that the district will have a surplus at the end of the fiscal year, but is wrong and a deficit results. Or two, the business manager predicts the district will have a deficit at the end of the fiscal year, but is wrong and a surplus results. In both cases the business manager’s forecasts were incorrect; however, in the first example, he would take a lot of heat and might even be fired, while the second would probably earn him a raise. It’s simply smarter to be extremely conservative when making budgets so that any surprises at the end of the year turn out to be pleasant ones.
District 86 has been doing this for at least the past twenty-eight years (I started working in Hinsdale South’s English Department in 1987 and retired in 2012). Some of you might recall in the recent campaign for school board that one side touted the surpluses of the past two years contrasted with the $7,000,000 deficit of the two years prior to that. If you look at the documents that support this claim (see pages 79-80 of the District’s 2014 Comprehensive Annual Financial Report), you will see that the only reasons for those two years of deficit spending are unusual expenditures—two years (2010 & 2011) of spending over $3,000,000 in the category of “Payments to other Districts excluding special ed”—and one year (2012) when the district depreciated its physical assets (buildings, mostly) to the tune of $5,616,356. The almost $5,000,000 “deficit” which was reported that year, then, was simply the district having an appraisal done which indicated that its physical structures had aged while property values had increased; thus, meaning it would take $5.6 million more to replace them in 2012 than it would have at the last appraisal. It’s not as if the district had to spend $5,000,000 more than it took in; it was simply updating replacement costs, something which did not occur in any other of the ten years which appear on this report. So during the ten years from 2005-2014, there were only two years in which deficits occurred, one of which was due to a once-every-decade reappraisal and the other which resulted from unusually high payments to other districts. I have no explanation on why in those years the district spent some $7.4 million to other districts, while no other year had more than $425,000 expenses in this category (in three years, there were no costs at all), but they were clearly anomalies.
Unfortunately, nobody seems to pay enough attention to how the district operates fiscally to call out this Chicken Little, “The sky is falling!” approach to finances. As I said, it’s totally logical to be conservative with the public’s money. But that conservation in District 86 has led to expensive construction projects for which most school boards have to seek voter approval to fund. Because District 86 has routinely been able to accrue millions of dollars in its reserves, it has also routinely been able to spend down those reserves by building (or buying as in the case of several homes and a day-care center that was converted to a special needs school) new facilities. As someone who worked in those facilities, I do believe that most of the construction was valid and worthwhile. But I obviously had a significant self-interest in working someplace with clean, modern classrooms, where I could get supplies (from paper to computers) to do my job well. Should some of these projects have followed the more traditional approach of being voted on by the public? Well, with the funds already available—some of the building was also funded by the board’s use of bonds—the question never came up in any way but an advisory one. You know, a committee with a foregone conclusion as its charter is formed. It’s sort of like those questions Steven Colbert used to pose, “Am I the greatest political satirist on TV or just one of the greatest?” Instead, the question in District 86 was more like, “Should we build this addition now or a week from now?”
Regardless of any committees formed, District 86 has been able to spend millions and millions on construction improvements without asking its constituents if that money needed to be spent. And there’s no real reason to challenge this process since surplus after surplus shows up at the beginning of each fiscal year. Those who see the teachers’ union’s salary requests as “unsustainable” and who yearn for inflation-based tax levy increases to be halted should really look into this amassing of surpluses to be used for construction. Think about it: District 86 has run several referenda in the last year on such “important” questions like teachers’ end-of-career bonuses and parental input on teacher evaluations, but it hasn’t sought approval for any of the multi-million dollar projects it has done over the years: the additions of field houses at both schools, an entire wing erected at Hinsdale Central, the numerous science labs added at Hinsdale South, or some six fields of artificial turf. (And don’t forget the millions spent at each campus to put in air-conditioning.) I’m not suggesting that these were not beneficial or useful; but when a thirty-one-year tradition that costs $10,000 gets dumped at the threat of a deficit, it certainly seems odd that nobody has raised an eyebrow over these past budgetary practices. Based on my research, District 86 hasn’t put a referendum for additional funds before the public since 1962 when the money to build Hinsdale South High School was approved.
But at least the Quarter Century Club lives for this year. Once again, however, the recently deposed school board majority has turned a positive into a negative as there was never any compelling reason to euthanize it in the first place. It seems like an even worse choice when you consider that this life-threatening deficit reported and acted upon just two short months ago has now evaporated into the normal end-of-year surplus that District 86 has historically had. Since a new board will take office in a week, we can hope it will be able to focus on the things that make District 86 one of the top high school districts in the state rather than obsessing over faux deficits. The public, however, would do well to inform itself of the enviable financial position this district has so that predictions of devastating deficits that never materialize don’t create needless stress and over-reactions. I’m happy that the district recognized the folly of disbanding the Quarter Century Club, and perhaps everyone can be more prudent to avoid making hasty decisions the next time projections scream of financial boogeymen lurking around the corner.