State knocks down District 67 financial rating
Updated: February 25, 2013 11:06AM
The Illinois State Board of Education has lowered the financial rating of Golf Elementary School District 67, because of what district officials say has been stagnant or declining revenue.
But Marty McConahay, acting business manager, said the demotion is not a major concern at this point.
The state knocked the district down from “financial recognition,” the highest rating, to “financial review.”
“Right now we can pull that back up,” McConahay told the District 67 School Board at its Jan. 17 meeting. “It will take hard work.”
Each year the state board rates districts in Illinois based on several financial factors, including the fund balance to revenue ratio and expenditure to revenue ratio, or whether the district has a balanced budget.
Overall ratings range from the highest, financial recognition, where district 67 has been in the past, through financial review, financial early warning and finally financial watch. At that lowest ranking, McConahay said the state takes over decision-making for the district.
“I would be sweating blood if we went to the next level (down),” McConahay told the board. “Falling to financial early warning would be a much more serious concern.”
McConahay said District 67 has dropped just below the level required for the highest rating, primarily as the result of a lack of revenue.
Voters turned down referendum measures twice last year that would have increased property tax revenue for the district by about $1.14 million a year. Another vote is on the February primary election ballot.
McConahay said that although the district has reduced spending in the last several years by more than $1 million through staff and program cuts, revenue has not kept pace with costs. Property values in the district have been declining, he said, and money from the state also has dropped. Property values in the district have declined an average of 7 to 9 percent a year, he noted.
“We’ve had some struggles with diminishing revenues,” he said.
McConahay said another factor in the drop in financial rating is that the district has been using fund balances to help offset a lack of new revenue. As a result, the fund balance to revenue ratio has declined.
“It’s not mismanagement. It’s how healthy our fund balances are,” McConahay said. “We’re not as healthy as we need to be.”
The state board uses a weighted score that takes several financial factors into account. The highest rating requires a minimum score of 3.54 percent. District 67’s new score is 3.45.
McConahay said the district did score well on its rating for short-term debt because it has not done any recent borrowing.
Long-term debt, however, reflected a recent bond sale to finance construction of a new gym at Hynes Elementary School and building improvements at both schools.
The new designation, McConahay said, will mean the state will review the district’s finances again later this year to determine if it has changed.