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NewsThursday, October 25, 2007 4:24 PM CDT
Unit 5 favors asking voters about raising taxes
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NORMAL — Some Unit 5 school board members don’t want to require taxpayers to fix the school district’s cash flow problems without asking in a referendum — even if they legally can.

At its regular meeting Wednesday, Unit 5 school board members discussed but took no action on various options for correcting a cash flow problem. For the past four years the district has had to borrow money for a few months each spring to cover expenses until tax revenue or state aid arrives.

Board member Meta Mickens-Baker said asking the public for money without a referendum may be “permissible” but she wouldn’t support it.

Board member Mark Pritchett agreed, noting other public bodies have undertaken major spending plans in recent years without referendums.

Board members also seemed to prefer issuing $10 million worth of bonds to be repaid in five years instead of permanently raising tax rates to cover the annual shortfall in operating expenses.

Superintendent Gary Niehaus said decisions on referendums on the Feb. 5 ballot must be made at the board’s Nov. 28 meeting.

Another referendum question being planned involves a potential building project. The estimates have ranged from $100 million to $120 million, but the final figure may be less than $100 million, he said.

A more precise cost estimate and other information needed to make the referendum decisions is expected tonight. The board will meet with its architects and members of the public involved in planning workshops for the building project.

The cash-flow issue is tied to growth because adding buildings would increase annual operating expenses, according to the district’s Warrenville-based financial consultant PMA Financial Network Inc.

Last year, the school district borrowed $7.7 million in the spring to cover costs until tax revenues arrived. That short-term borrowing cost $25,000 in interest, Niehaus said.

He outlined several options the district could consider for the cash-flow crunch. They include raising the education fund tax rate, currently $2.62 per $100 equalized assessed valuation, by 10, 15 or 20 cents per $100 EAV.

Niehaus said another suggestion of raising the operations and maintenance fund tax rate by 5 or 10 cents per $100 EAV would not fix the cash-flow problem.

Raising tax rates would not help in the short term because tax money wouldn’t be received until the next year. If a bond is approved, money could come within about 60 days.

Board member Scott Lay favors the $10 million working cash bond sale, which would add about 13 cents per $100 EAV to the tax rate for five years.

He said he was less inclined toward a permanent rate increase to cover operating funds.

Board member John Puzauskas agreed. In the years 2012 and 2013 the district will have a better idea if growth will continue at the same rate. Having a chance to re-evaluate in five years would be financially responsible, he said.

The district can issue such bonds without a referendum — unless 10 percent of the registered voters sign a petition to force a referendum, Niehaus said.

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Reader comments on this story - 21 total

Note: All views and opinions expressed in reader comments are solely those of the individual submitting the comment, and not those of the Pantagraph or its staff.

to: to Normal Taxpayer wrote on Oct 26, 2007 10:44 AM:

" I think you might want to check a few facts. Primarily the fact that most of our most successful leaders at the community, state, country, and worldwide level are products of parochial education. Do you ever wonder why principals in Normal send their kids to parochial school? Shall we start by looking at the number of Supreme Court justices that are the product of parochial schools. I would hardly say students are pushed more in public schools. Yes, they are pushed more in public schools towards the latest fashions and adult behavior before they are prepared, but I would say that is it. "

pretty soon wrote on Oct 25, 2007 10:41 PM:

" you will be taxing even more empty houses that are for sale cause all the folk have abandoned these towns cause all the GOLD IS GONE! "

JMK wrote on Oct 25, 2007 8:26 PM:

" The favor asking... not sure they really care about the response. "

to Normal taxpayer wrote on Oct 25, 2007 7:13 PM:

" Glad your child is getting As in a Christian school. Christian schools do not challenge children. I know from personal experience. I have been in both. Unit 5 has a challenging curriculum and outstanding teachers. "

to stop wasting money wrote on Oct 25, 2007 7:10 PM:

" OK - obviously you would love it if teachers worked for free. Teachers have families to support just like everyone else does. Unions are not just about money, they are also about safe working conditions. Do you want to get back to the Industrial Revolution times when children worked, adults worked in unsafe and unhealthy conditions and worked long hours? "

here's mine wrote on Oct 25, 2007 5:15 PM:

" NO!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! "

Stop Wasting Money wrote on Oct 25, 2007 4:44 PM:

" Breaking the teacher's unions grip on this district would go a long way towards solving the continual budget problems. Say no to Unit Five's irresponsible and reckless spending patterns. "

BILLY BOB wrote on Oct 25, 2007 2:26 PM:

" Sorry Unit 5...Bloomington is raising my taxes already and I have had a tax increase every year for the last 5. I have no more money to give. We are middle class and already pay the lions share for schools and government. I will vote no to any increase in taxes. I also am voting against and campaigning against any aldermen that vote to raise my taxes. I already have to work through April into May to make enough money to pay my yearly taxes. Forcing citizens to sell out and move because they can't afford the taxes is wrong. But that is what is happening. "

Resident of Normal wrote on Oct 25, 2007 1:59 PM:

" Let us vote on an item by item basis on what should be done when. Unit 5 wise up and get your act together. Right now they sound like spoiled children that think that they can get their way if they scream and throw a temper tantrum. You can cry until you are blue in the face and horse but in the end you will not get something just because you want it. You have to prove that there is a reason and a sound reason at that to get more of my hard earned money. I do not have a problem with paying taxes when they money is being used wisely. I have a major problem YOU SQUANDERING MY EARNING. "

Normal Taxpayer wrote on Oct 25, 2007 12:04 PM:

" Well, I vote not to raise the taxes. As it is, my ADHD child WITH an IEP (from 3rd-8th grades) was practically failing school at Unit 5. This year he is in 9th grade and we are paying to send him to a Christian school. He is getting more individualized instruction and now has an A average. We don't need an increase in taxes on top of having to pay extra for private education because public education was failing him. We cannot afford having to send him back to a school where he will continuously be lost in the system; nor can we afford higher taxes. "

Doug from Florida wrote on Oct 25, 2007 11:51 AM:

" There are two issues here: The first is a building needs issue. The second is a short term cash flow issue. Issuing bonds to cover the short term cash flow problem is asinine. I get the feeling that the bond company lumped them together so they could make more profits at the expense of Unit 5 taxpayers. Unless I am missing something here the cost of repaying the bonds will be millions of dollars more expensive than continue to borrow as needed then paying it back when the state writes a check to Unit 5. "

Schools to be updated wrote on Oct 25, 2007 10:11 AM:

" Get some brains Unit 5! Tell us which schools are to be updated! I believe Sugar Creek was in the plan to have an addition added to it and 8 other schools will recieve updates. Tell us what the updates are. If parents/taxpayers knew that THEIR school was going to be updated, then you have a much better chance at getting yes votes from them. Unless, of course, you are just updating the new schools and the old schools get to stay old. Then I can understand why you are keeping that secret. If you told Oakdale parents they would be getting a new parking lot with a better drop off/pick up situation, you would be surprised how much support you would get from them. "

"Cash Flow - you're scaring me!" wrote on Oct 25, 2007 9:31 AM:

" "Cash Flow" mentions reductions. The last time they "reduced" they fired a bunch of janitors and then gave administrators a raise. One grade school principal now makes over $100,000 a year. Not bad money where they are always complaining how underpaid they all are. "

Yep wrote on Oct 25, 2007 9:08 AM:

" it's that evil teachers union working to make all the teachers in the district wealthy and overpaid. Get rid of the union - that will solve the funding problem. "

revenue vs. reductions wrote on Oct 25, 2007 9:06 AM:

" Probably because the issue is not that spending is more than revenue, but that the state does not get it's money to the district on schedule ... kind of like if your employer didn't pay you for a few months - how would you pay your bills? Would you reduce spending just because someone could not get their money to you in time? "

Give them a break wrote on Oct 25, 2007 8:54 AM:

" At least they are going for a binding referendum. That is better than heartland CC, colisium, performing arts or Downtown Normal. Those total to over $220,000,000 and they crammed it down our throats with no defined need provided. At least Unit 5 can say they are growing 300 to 450 kids a year, where do you want them to put them? To thechampion.org, the salaries start too low, end too high and put people into retirement at 55 or so. If they live to 85 or 90 they will be on retirement longer than they taught, that is a huge taxpayer problem we cannot afford. "

thechampion.org wrote on Oct 25, 2007 7:28 AM:

" How come we can never address the salary component of the expenses? Why is this off the table? We need to go see what our teachers make for working 8 months out of the year and ask ourselves some tough questions. I wish the news would address why salaries cannot freeze for a year and how much that would save the district. Is it all because of the teacher union contract? The union is pretty smart in negotiating contracts which avoids the salary issue whenever budget shortfalls are discussed. The union may very well be the problem here. "

Doug from Florida wrote on Oct 25, 2007 7:00 AM:

" I must be missing something here. Unit 5 can borrow 7.7 million and pay only $25,000 in interest according to the article. Why not do this for 5 years instead of issuing bonds that will cost alot more when repaid over 5 years. It doesn't mention in the article how much needs to be paid every year if bonds are used. I would think that BN residents would have learned from the arena financing to ask the true cost of issuing bonds. Better yet why not set money aside from current revenues and not borrow money or raise taxes. "

reader wrote on Oct 25, 2007 6:23 AM:

" Why a raise in taxes? Maybe the kids in Normal need more 'old cars' to beat up? for Homecoming? Difficult to understand? Need an expalination. "

a Normal resident wrote on Oct 25, 2007 6:21 AM:

" My "vote" - DO NOT RAISE TAXES!!!!! "

Cash Flow wrote on Oct 25, 2007 5:10 AM:

" Funny how all of the options discussed were revenue increases. None were cost reductions. "

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