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Schools debate how much cash to have on hand

Woodridge School District 68 had enough cash at the end of the 2010 fiscal year to cover the cost of operating the school system for another school year – and then some – a Tribune analysis of area schools has found.

Following passage of a property tax increase approved by voters in 2003, the district amassed cash reserves that topped $40.5 million for the 2009-10 school year – 103 percent of what the district took in for operations that same year.

District 68 Assistant Superintendent for Business Kevin Wegner said the district intended to save up for a rainy day since the 2003 tax levy was approved by voters. He said the restrictive nature of property tax caps made the size of the reserve necessary.

“We knew when we passed the tax increase back in 2003 that we would accumulate a balance,” Wegner said. “We plan to use (the money) up over time. With the tax caps that are in place that’s the only way you can do it, otherwise you can’t get what you need.”

Compare that with Downers Grove-based High School District 99, which showed only 3 percent of its annual budget in available cash.

Controller Mark Staehlin, who said he served on the committee that developed state reserve fund guidelines, said a combination of fiscal conservatism on the school board and more precise accounting methods are two major reasons behind District 99’s low reserve fund balance of 3 percent. Unlike others, Staehlin said District 99 does not include early tax receipts in its report to the state.

Staehlin said the district’s reserve funds are definitely low, but added that the size of the district and the reliability of property tax collections makes the level acceptable.

“Obviously we’re holding taxpayer money and the question is: How much is a prudent level to have?” Staehlin said.

The contrast begs the question: how much is too much?

While the Illinois State Board of Education says district fund balances are like checking or savings account balances to the average citizen – providing an important window into each district’s financial health— there are sharp differences of opinion over just how much taxpayer money should be kept.

The state board of education gives a high financial rating to districts that have fund balances equal to at least 25 percent of operating revenues. But the Tribune found that 80 percent of districts had more than that at the end of 2009-10 – often considerably more.

Overall, 380 districts had fund balances equating to at least 50 percent of revenues, and 70 districts had fund balances representing 100 percent or more of revenues.

That irks taxpayer advocates who don’t think school districts should be sitting on a great deal of taxpayer cash and instead should lower tax rates or give money back to taxpayers. But school officials say it’s prudent to have significant fund balances at a time when the state is in fiscal crisis, and behind on payments to districts.

Of the five districts that feed into District 99, the Woodridge school system kept the highest percentage of cash compared to the annual operating costs.

In comparison, Darien School District 61, Maercker School District 60, Center Cass School District 66, and Downers Grove District 58 all keep more than the state recommended amount on hand. But those balances do not come anywhere near District 68′s stockpile, instead ranging between  about 41 percent  and 61 percent of annual operating costs.

Jim Popernik, Controller for Downers Grove District 58, said the recession gave good reason for districts to keep more than the state recommended 25 percent on hand. District 58 keeps about 49 percent of its annual money collections.

“I don’t think you can accuse somebody who had 40 percent of gouging (taxpayers) … simply because of the difficult economic times we’re going through,” Popernik said.  “It allows a district to operate more normally than making more radical cuts to programs and services. It gives a district an option.”

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