GEL ELECTION PROFILE: Glen Ellyn School District 41 Board - Questions and Responses 21 - 26

Question 21: What purposes do you think cash reserves should be used for?

Terra Costa Howard: In my opinion, cash reserves should be used to balance the budget. For example, if our budget needs exceed our income, we may need to draw from our cash reserves to finance our initiatives. My belief is that is similar to a savings account that may need to be drawn on from time to time. The current economy and the potential that our future revenues will be less than our needs may force us to use our cash reserves.

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Drew Ellis: I feel that any cash reserves should be used for projection shortfalls, as to reduce or eliminate the amount of dollars requested in the levy. The District, to its credit, has been actively building reserves to help weather an economic storm. It is equally financially prudent for the Board to be good stewards of the resident’s tax dollar as these reserves are acting as the Districts financial back stop.

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Jack Kahler: Cash reserves should be used to buffer the general operating fund from temporary cash flow dips, accumulate funds in anticipation of future obligations, and pay for unexpected expenses that aren’t covered by other funds or by insurance.

The use of reserves should be budgeted, and reserve funds in excess of the cap should be rebated unless some emergency exists.

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Dan Smith: Cash reserves should be used for situations/events that result in unexpected expenses occurring. If a budget shortfall is expected, then appropriate actions should be taken once the board is made aware. If instead, cash reserves are used, then when the unexpected occurs without the reserve available, it could have a negative impact on the financial health of the district.

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Question 22: CPI for 2008 was 0.1% and it is expected that CPI will be again be quite low for 2009. This will greatly influence the budget for school years 2010-2011 and beyond. What strategies/changes should the Board/District employ to deal with expenditures outpacing revenues.

Terra Costa Howard: The district long range plan will need to be reevaluated. We may need to prioritize new iniatives as well as continuing different programs. The board is beginning a two year budget cycle to begin to address these concerns. On April 6, the board will have a committee of the whole to discuss the budget so we can plan accordingly. The key is long term planning that allow us to project and prioritize our needs.

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Drew Ellis: With declining revenues ahead the district must implement contingency plans relating to expense control. This requires hard choices for the Board, administration and the community. Respectfully, one idea, relating to cost control, would be to partner with other neighboring districts to consolidate purchases and capital improvement projects with the hopes of getting better pricing from vendors. However, the majority of the district budget is allocated to personnel expense and related costs and the district needs to look at staffing to see if they have areas of excess and trim those numbers as necessary to help with the budget. It is necessary to always be mindful of the district mission and goal of excellence in education and ongoing collaborative relationships in discussing staffing issues.

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Jack Kahler: Maybe we should ask why expenses are growing faster than the CPI.

The first priority for aligning expenses with revenues is to make operational efficiency a Board priority. Everyone pays lip service to fiscal responsibility, yet we’ve seen a rapid increase in administrative staff and expenditures. These in turn feed into D41’s long-term health care and pension obligations. We can’t allow the school district to follow in General Motor’s path.

The Board sets the agenda for the Superintendent to execute. If we expect Dr. Riebock to drive efficiency into the administration, then the Board must include suitable targets in her annual performance plan. In approving budgets, the Board must draw a strict distinction between non-discretionary classroom spending and discretionary, non-essential headcount and expenses. The Board must prevent budget cuts from impacting educational programs. That’s the Board’s job.

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Question 23: Recent Illinois law allows counties to create a sales tax revenue stream that is earmarked only for school construction/capital projects and is proportioned amongst county school districts based solely upon student enrollment numbers (i.e. it is not means-tested). Would you, as Board member, support or oppose D41 calling on the County Board to approve creation of such a tax?

Terra Costa Howard: I support D41 calling on the DuPage County Board to approve the creation of the sales tax. The question comes to the county board after a county wide vote to approve the tax. I strongly believe that the vote of the community should be supported. Dr. John Perdue, superintendent of Community Consolidated District 89 is the leader of this proposal.

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Drew Ellis: In this current economy we need to be careful imposing any additional retail sales taxes. While DuPage County still has lower tax rates than some neighboring counties, we have to be sensitive to family’s already limited budgets and retailers declining sales. Strategically, it does not make sense to change a competitive strength into a competitive weakness.

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Jack Kahler: Since we already pay into a progressive tax system I strongly favor fairly allocating county, state and federal education funds based on proportional student enrollment.

Whether or not I’d support a sales tax depends on what that sales tax would look like and what the funds would be used for. I’d want to clearly define “earmarking” rules so these funds wouldn’t find their way into district operating expenses (as occurred when the federal government “borrowed” from the Social Security trust fund.) I recently heard a “penny tax” discussed that sounded like a reasonable idea. But the problem is, most new taxes sound like a good ideas in the beginning, until they expand and become overly burdensome. Cook County probably thought their sales tax was a good idea, once.

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Dan Smith: I first learned of this when I attended a legislative breakfast held at Hadley on 10/4/08. The last thing the taxpayers need is a new tax, especially in our current economic climate. Instead, we should look at having more of existing tax revenue make its way to the schools. I believe the state of Illinois needs to send more of the money it already collects to the school districts.
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Question 24: Do you have an opinion on the creation of a TIF District(s) that could be proposed within the D41 boundaries?

Terra Costa Howard: TIF districts currently exist within D41 boundaries. TIF districts can have a positive impact for the district long term but must be structured as such.
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Drew Ellis: The District, historically, has a great potential to be open and cooperate with other local entities. TIF’s are sometimes looked down upon, but they provide an excellent way for one entity to improve while paving the groundwork for all to benefit by in the future when the valuation of the property is greatly improved. To learn more about TIF’s and how they relate to schools visit: http://www.illinois-tif.com/FAQ8.asp

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Jack Kahler: This would first depend on the completion of our master facilities plan, which will define the District’s development initiatives for the foreseeable future. If we determine that a significant development is required, then we should consider TIF as a financing alternative.

In my understanding, TIF’s were originally intended to fund development in areas of lagging development, where municipal development would lead to higher property values and associated taxes would then be used to finance the development. D41 doesn’t strike me as particularly blighted, so I have some questions about our eligibility for TIF designation. I also wonder how much property value appreciation we can eno

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Question 25: School Districts are allowed to sell bonds to fund additions to buildings without going to referendum. Would you be in favor of doing so, or do you think capital improvements of that size should be approved by the community in a referendum?

Terra Costa Howard: No, the community needs to support a referendum.

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Drew Ellis: I think that this should be brought to the community if needed. Again it is in the District 41 Mission Statement to “Partner with the community” and I believe that this type of bridge building can go far to establish trust with the community. Further, I believe that with the requisite trust level, the community will openly support education and the Districts needs.

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Jack Kahler: No, I do not favor floating bonds to avoid referendum votes. No matter how they are funded, I believe all major capital projects in District 41 should have explicit community support. It’s not the Board’s role to work independently of the community it serves.

Perhaps larger school districts in developing areas can issue bonds with confidence that a growing tax base will fund future obligations. However, we in D41 must depend on a relatively small, residential tax base that probably won’t grow much in the coming years. Our Board must be very careful to avoid making financial commitments that overly burden the taxpayers, and any substantial program should be aligned with the priorities of the people who must pay for it.

On a side note, I smile when people imply that bonds will help us avoid tax increases. Maybe Google is still free, but most things like building additions aren’t. Bonds are just IOU’s that must be paid back sooner or later by the district, a.k.a. you and me, in the form of taxes. Bonds are good for spreading out big expenses over many years, but repayment still comes out of our tax dollars along with the added interest burden. As a general rule, any District expenditure that’s not funded by user fees is funded by tax dollars.

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A couple of specific questions for incumbents:

Over the past four years, how consistently has your performance and voting record on the Board reflected your 2005 campaign platform as a candidate?

Terra Costa Howard: I believe my voting record and performance have been consistent with my platform. I am confident that each and every decision I have made over the past four years was in the best educational interest of District 41 children.

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Have you supported the District’s policy and methodology of phasing-in the 2001 referendum, which has met with a great deal of public criticism, and which has more than doubled property tax collections over the past 8 years? If so, what are your reasons for doing so?

Terra Costa Howard: The current board, excluding one member, has not participated in any decisions regarding the phase-in approach to the 2001 referendum. The phase in process was completed prior to being seated on the board.

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