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Readers Argue Both Sides of District 113 Referendum

Patch readers and bloggers are discussing their opinions at length about the April vote to determine whether or not taxpayers will spend $89 million on Highland Park and Deerfield High Schools.

The District 113 School Board voted unanimously last month to put an $89 million referendum on the April ballot to pay for five years' worth of projects for Highland Park and Deerfield High Schools.

Though the vote is months away, already Patch readers and bloggers are discussing their opinions at length.

In a blog post entitled Michelle Holleman puts the referendum in a historical context, comparing this vote to a similar one decided in Highland Park a century ago.

"The investments made in 1914 were good ones, maintained for 100 years," she writes. "But the time has come to ask, can we do better for our kids? And the answer is a resounding yes."

Not everyone is so sure, however. Some feel that the school board should have been making these renovations on an annual basis.

"The real issue is the failure of the school board to put aside money for maintaining the two school on an annual basis," writes Daniel. "A responsible property owner does that. Now were hit with an enormous capital call. Still, there does not seem to be any plans for future to do just that, plan for the future."

Reader Ken Robertson disagreed with that perspective.

"Let's stop pretending that this project is due to 'lack of maintenance.' It's like making the argument that your 50-year old car should still run like new because you changed the oil!"

The plan is projected to cost $114 million. Of that total, $25 million will come from the district's reserve funds and the remaining $89 million will come from District 113 residents. If the referendum passes, District 113 residents who own homes valued at $300,000 will pay $173 in taxes to the district in levy year 2013, a $47 increase from levy year 2012. If the referendum fails, those same homeowners would only pay $15 in taxes to District 113 in 2014 because the District paid off a significant amount of its debt this year. The 10-year average price residents have paid to District 113 in taxes is $198 annually, according to District 113's financial advisor, Tammie Schallmo, with PMA Securities.

One user felt it was the district's responsibility to save for these pricier renovations rather than ask the taxpayers for help.

"I don't expect [District 113] to come to me and ask for a referendum to build up reserves for future projects," writes Walter White. "I expect them to build up these reserves as a matter of course! Manage your budget! Make do with the money you have!"

Other readers spoke more highly of the way the District has managed its schools.

"If not for the effective and sensible stewardship, the problems faced, and needs to be addressed would be far greater," writes Brad. "Our pools are vastly inadaquate and some of the mechanicals are 70+ years old. Its time to be invest in our community."

One commenter was Walter (Tripp) Hainsfurther, who made made one of the presentations to the school board at the meeting where they approved to place the referendum on the ballot. He tried to assuage readers' concerns that the district would keep coming back for more money from taxpayers even if this project were voted for.

"I can't guarantee that the District won't come back with additional referenda. That, in large part, depends on the community's needs and desires," Hainsfurther writes. "However, it is our goal (and my belief) that the improvements will last the length of time we have set as a goal, as long as they are maintained properly (which I believe they will be) and infrastructure replaced at the end of its life cycle."

What do you think? Do you support or oppose the referendum? Leave a comment below or blog about it here.

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Gene Saltzberg February 12, 2013 at 03:18 PM
By maintaining our schools, we "insure" the future of our community. Good schools attract families with children, the community renews itself, and our property values are maintained or increase!! We all lose if we don't support the needs of our schools.(Disclaimer:I have no children in the school system!!) gene saltzberg
Carl Lambrecht February 12, 2013 at 03:43 PM
At present it cost an average of about $12,000 for a student to go to school in Illinois. Yet District 113 it cost about $30,000. The administrative cost is too high. According to a finance meeting report the school had a reserve of $49.6 million dollars last year. This reserve is over 50 percent. By cutting administrative costs and using this reserve the school can do all what is necessary without a referendum.
Bryce Robertson February 12, 2013 at 04:29 PM
As a member of the Finance Committee, I think it is important for me to note this here in response to Walter's comment about building reserves. Thanks to the fiscal prudence of Dist 113, we've maintained the highest possible bond rating that an organization can receive. This, in turn, lowers our cost of borrowing when it comes to bond issues such as the proposed referendum. However, building up reserves like Walter suggests is an unsustainable practice. First of all, it is not an accepted practice in any other school district. For reasons mentioned elsewhere, D113 can't go through a bond issue as easily as, say, Stevenson can (short version: a change in the law long ago left a loophole that some districts can squeeze through). The general rule of thumb in any organization is that if reserves are being built up as a large percentage of the budget, there will be calls for that money to be returned to the "investors", or in this case, the taxpayers. Google "Apple Greenlight lawsuit" if you want a good example of this - Apple Computer built up large cash reserves, and put simplistically, everyone wants their money back. Furthermore, our reserves are already built up to a much higher percentage than needed. This contributes to keep our bond rating up as high as it is. (1/2)
Bryce Robertson February 12, 2013 at 04:31 PM
Our committee decided that removing money from reserves would not be fiscally prudent, could serve to put the district in an undesirable financial position, and jeopardize our AAA bond rating. If you respect the process and thousands of man-hours put into coming up with this new plan, then respect the decision that reserves are not going to be tapped for capital improvements such as proposed in this Master Plan. (2/2)
Walter White February 13, 2013 at 01:05 PM
You're missing the point altogether. I'm not talking about operating reserves. Those need to be at a certain level to maintain bond rating. I'm talking about capital reserves. Now if you're telling me that building capital reserves to plan for equipment replacement is unsustainable then you need to go do some more homework. Both public and private entities do it every day. Furthermore, by not building capital reserves, you are saying that a referendum will be needed every time a capital expenditure is required. Is that what you really want to say? Are you telling the community that you will be coming back for future referendums when the next A/C unit needs to be replaced?
Stuart Roger Wilk February 13, 2013 at 04:45 PM
Just tell the truth. The true costs of the referendum are not $89 million but $114 million. You are not adding the $25 million that is to be taken from the reserve and the $89 million in tax obligations. This is the exact reason the public does not trust our elected officials. Just tell us the truth and we will decide if the project is worth doing. Roger Wilk HP 60035 A resident for 50 years.
Richard H Heineman Jr February 13, 2013 at 07:10 PM
The cost of this 5 year project is expected to be $114 million. There is an $89 million referendum and an average of $5 million per year for a total of $25 million from the normal capital budget. This average of $5 million per year would be spent no matter what. This is communicated as far as I can tell everywhere. I do not understand why anyone is confused about this. All materials produced by the district note that the project cost is $114 million. Mr. Wilk, if you would like additional information on the project and the funding I would be happy to get together.
Ken Robertson February 13, 2013 at 07:11 PM
Roger - who is hiding the truth, here? To quote from the article: "The plan is projected to cost $114 million". The district has made multiple public presentations on this, and their website states plainly and clearly, everywhere, the cost of the project and all of the details, including the names of all the community volunteers (i.e. not "elected officials") that spent 18 months putting this together. The $89 million is the portion of the cost that must, by law, be voted on by referendum. If you do nothing to educate yourself on the facts, then you cannot blame "elected officials" for what you do not know.
Richard H Heineman Jr February 13, 2013 at 07:22 PM
Let's not confuse the issue by using the term reserves. Out of the on going operating budget the district assumes that there will over the next 5 years $5 million per year available for capital expenditures. For example this is were the money came from to fix the roofs over the past decade. It is also where the money to fix the HVAC in the Deerfield HS auditorium is coming from. This money is from the normal levy.
Bryce Robertson February 13, 2013 at 08:02 PM
Walter: mea culpa. I wasn't calling you out specifically - I've discussed the issue about reserves with you, as have others, on other threads, and I believe we're all in agreement. However, as evidenced all over Patch, there are many readers who will skim and take things as fact, out of context. Your comment was tossed into this article out of context - we clarified the term "reserves" on the other thread. To clarify once again: I never said that building operating reserves is a bad thing. What I did say is that to pour massive amounts of money into reserves (capital or otherwise) in order to be able to pay for $114MM worth of work is bad fiscal practice, and there would be an uproar in the community if the district did that (imagine: "how dare they keep raising taxes to the levy when they have all this cash they can use to pay teachers' salaries?!"). We have a very healthy reserves balance, and as I said, those of us on the finance committee made the recommendation to leave those alone, so they're available to address future needs (operating for obvious reasons, and capital for, say, a storm that damages a roof). The reserves continue to be built at a manageable level to allow for payment of smaller capital expenditures, such as a new A/C unit, when that comes to pass down the road. So, I would say we're in agreement here: reserves are important, and are factored into the master plan to address future needs.
Walter White February 13, 2013 at 08:06 PM
Call it what you want but I would never advocate doing anything to endanger a good bond rating. However good financial management dictates that you MUST plan for eventual capital replacement. To suggest otherwise and intimate that any future capital expenditures can only be paid for via referendum is just wrong. You're saying we have funds to cover us for the next 5 years. What about beyond that?
Bryce Robertson February 13, 2013 at 09:33 PM
Walter: those funds (the $5MM/yr for 5 years) are budget line items in the operating budget. We're not depleting any funds that weren't already allocated for capital expenditures. Part of the long-term plan assembled by the District sets out a roadmap for saving for these future expenses, as well as continuing to allocate funds in the yearly operating budget for such expenses. Does that answer your question?
Walter White February 14, 2013 at 07:09 PM
How much is being allocated, for how long, and for what capital expenses?
Bryce Robertson February 14, 2013 at 09:48 PM
I'll have to dig to find the exact number, but the background is this: each year, the district sets aside x amount for capital expenses. A capital expense is defined the same as it is anywhere else - some sort of purchase or installation that will be depreciated over time. This could be machinery, a new roof, or stadium seating. I'm just using these as examples, not saying that any of these will come up in the near future. I know the district has life expectancies for many things and that they push those as far as they can... For example, the heating at HPHS. Ere are allocations for surprise expenses, though - similar to how you would expect your furnace to last ten years, but it blows in five... You've got to be prepared. There's no way to set an exact amount over the entire long-range plan, again, similar to how you don't know how much you will be spending on food in ten years. Things change. As far as current/recent numbers, I will try to get those and put them here.
Walter White February 14, 2013 at 09:55 PM
Great. Looking forward to it. Please provide the reference of your numbers also. I will disagree about not knowing what things will cost in 10 years. Inflation rates can be predicted with a high level of confidence. And even if something unusual happens, plans can be reviewed every year and updated. There's really no excuse for not planning effectively except for poor management.
Bryce Robertson February 14, 2013 at 10:00 PM
Will do. To clarify: I'm not talking about the actual *cost* of things, I'm talking about the change in what we'll need. In 10 years, I'm assuming your food consumption will differ from what it is now. To the same point, the school does not know many of its *needs* 10 years down the road. I completely agree that planning is in order, and I'm glad we both see that the long-range plan that is currently set can change to adapt to future needs. That was really my big point.
Ken Robertson February 14, 2013 at 10:58 PM
Hey, Walter - no offense, but since I would rather see my tuition payments going toward Bryce's education than yours, I think you would be interested in reading the wealth of information that the district provides on their budgeting and planning here: http://dist113.org/depts/businessoffice/Pages/default.aspx. I would recommend the FY2013 Mid Year Report as a start. Please take a look at page 4, where you will see a list of FY12-13 capital projects. Page 19 reflects the $30mm spent on capital projects over 2006-2011.
Walter White February 14, 2013 at 11:10 PM
Hey Ken, no offense, but let the kid answer the question. He's a big boy now, or at least he sounds like one. You wouldn't be covering for him, would you?
Ken Robertson February 14, 2013 at 11:23 PM
I'm not "covering" for anyone - you can see Bryce's history of freely responding all over Patch. You will get your response, but since you seem intent on getting all of these answers, why not go straight to the source? I recommend everyone take a look at what the district provides in detail...
Bryce Robertson February 15, 2013 at 12:22 AM
Yes, Walter - actually, I was giving half a response for your benefit. I've been flying all day, and had about half an hour between landing and my accounting test to respond. I hadn't unpacked, and didn't have time to dig through the midyear report to find what you wanted, so I told you I had it coming. Evidently, my dad beat me to it. Nothing wrong with that... you got your info, with reference provided. Seems to be what you asked for!
Walter White February 15, 2013 at 12:59 AM
This is getting tiring and that report isn't giving me what I asked for so I'm going to sign off for now. I don't see anything about budgeting for capital expenditures for the next 10-20 years. The only thing I see is a statement that "We are very pleased with how our financial picture has developed over the last 5 years." You mean other than the fact that you're asking for $89M? Hopefully others will continue to ask the same questions that I have and maybe even get some answers but I'm done.
Enrique H. March 02, 2013 at 05:18 PM
Ken, the plan is being advertised as "only costing" 89 millions dollars. That is the big, extra-large font, black, bold, underlined number that we all see. Then there's that "other stuff" that describes it is going to cost 120 million. It is a bit misleading, and purposefully so. Really, it is costing us $120 million, 25 million which has already been collected by the district from taxpayers. It is not being "sold" that way, because it does not sound as attractive. From the get-go, it has been described as an 89 million dollar plan, with additional expenses funded through cash reserves. (Hm, and where do cash reserves come from?!) A subtle change in language can have a big impact on voter approval. You know that and we know that. The Plan is a still a bloated figure of $120,400,000 that is largely devoted to new pools and gyms. Mr Bryce stated "However, building up reserves like Walter suggests is an unsustainable practice." Okay, then don't. Build up reserves until the district can fund a major project with say, half the reserve amount, and make sure the project is worthwhile (improving HVAC in both schools) and execute that plan. In another 10 years, use half of the built-up reserves and improve the 2 pools. And so on. Here is what "The Master Plan" is telling the taxpayers: Taxpayers, although you give us a lot of money, in the top percentile of the entire state, we still don't have enough, so give us more. It is comical!
Ken Robertson March 02, 2013 at 07:10 PM
Enrique - facts are facts. The referendum is for $89 million in bonds, which is why it is most prominent. But you can't find a single piece of literature that doesn't provide the total cost ($120.4 - 6.4 - 25 = 89) clearly. As to the pools/gyms argument...do you realize how much more your taxes will have to go up to "save up" for what the pool/gym replacement would cost in 10 years? Let alone the fact that you will continue to pay increasing maintenance costs on outdated and end-of-life equipment for another 10 years. Your argument is fiscally irresponsible to the community. The reserves are kept at 50% of budget (a municipal best practice, 6 months of spending) for cash flow, unexpected expenses, to keep borrowing costs down due to high bond ratings, etc. so they should not be used for major planned capital improvements. Fortunately, we have had major EAV additions in the last few years that have enabled these reserves to be built back up without significantly increasing what a typical taxpayer pays for operations (outside of bond/interest). And the new B/I cost with the referendum will still be LOWER than what you have been paying! I don't understand the argument that because the pools/gyms are 33% of the project, we should postpone replacing them until we "save up" and have a project where they are 100% of that (much higher) project cost! D113 has had both pools for over 50 years. To spend $20 million to last another 50 years doesn't seem like a bad idea.
Ken Robertson March 02, 2013 at 07:12 PM
And, FYI, D113 operating expense per pupil (OEPP) as calculated by the state, is lower than Lake Forest, New Trier, Glenbrook, and Evanston....
Enrique H. March 02, 2013 at 07:59 PM
"$89 million in bonds, which is why it is most prominent"--Disagree. It is most prominent because it is a lower number than $120,400,000. I read online print, look at posters in the community, and read actual print. 89 million dollars is featured most prominently because it is a smaller number. I never said that 25M reserves and 6.4M contractor adjustments weren't mentioned. "do you realize how much more your taxes will have to go up to "save up" for what the pool/gym replacement would cost in 10 years?" And *this* is a fiscally sound argument? The same "logic" can be used for any individual/organization to get *deeply* in debt b/c the cost of most "stuff" goes up with time. The argument boils down to: "Buy this now because it will cost more later." But most things cost more later, so buy most things? Not a sound argument to me. "And, FYI, D113 operating expense per pupil (OEPP) as calculated by the state, is lower than Lake Forest, New Trier, Glenbrook, and Evanston." Yes, true, and also true: a Big Mac has less calories than a Whopper. They're both loaded with fat, cheese, and grease, and all the districts you mentioned are well off compared to the state. Oh the poor destitution of Dist 113. C'mon man. This bloated Master Plan needs to be broken down into small chunks and funded by the money the district already has or will receive with future, non-increased, taxes.
Ken Robertson March 02, 2013 at 08:16 PM
Unfortunately, if your primary argument is that you don't trust your neighbors that are elected to the school board, who hired your neighbors in the administration, who have worked with over 100 of your neighbors over 18 months to put together this plan without considering what you are suggesting...well, then I'm sure I can't do anything to convince you.
MM March 02, 2013 at 09:32 PM
Enrique, if the District was a bloated spending machine, it wouldn’t be AAA rated and wouldn’t be paying off essentially all of its debt next year. DHS and HPHS exist the way they are because of large bond offerings paid off over time. Nearly every other school district in Lake County has bond offerings as well – and many of them are much nicer than DHS and HPHS. This tax hike is less than 1% of your tax bill to add facilities that will last another 50 years – get over it.
Enrique H. March 03, 2013 at 03:10 AM
"This tax hike is less than 1% of your tax bill to add facilities that will last another 50 years – get over it." Well, that's the funny thing. I don't have to get over it. And I'm not going to fall into the ridiculous trap of "well if some other school districts do it, then we should too--have to stay competitive, you know" which is always in any administration's toolbox of justification for any sets of improvements/salary negotiations/policy changes. Also, having a AAA rating has no bearing on whether the district is spending its money wisely! I am tired of the AAA fact being brought up--it was also brought up when we were sitting around listening to the "Aw, shucks the referendum failed" speech by the superintendent a few years ago. Mr. Robertson sums it up nicely, and I do appreciate the civility despite our differing stances : "well, then I'm sure I can't do anything to convince you." I don't trust my neighbors elected to the school board, nor the administration. Why should I? I have worked along side them in the past. I know their foibles, attitudes, and agendas. Hard work does not constitute a plan that will be accepted at-large by the community, and I will be the first in line to try to vote this new referendum down.
Twenty Year Resident March 22, 2013 at 08:33 PM
Administrative cost have risen above practicality. Infrastructure has deteriorated as a result of. Problem is greater than the referendum. Unfortunately, children tend to be leveraged from mismanaged adults.

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