PBL school district placed on ‘review’ list

PAXTON — The Paxton-Buckley-Loda school board learned last Wednesday that the school district’s annual audit showed “clean” opinions, but due to the amount of debt the district has taken on in the past fiscal year, it has been removed from the Illinois State Board of Education’s financial recognition list and placed on its review list.

Certified public accountant Russell Leigh delivered the news to the board, saying that the downgrading of PBL’s financial status by the IASB was mostly a result of the bonds the district issued last year to pay for the construction of a 63,000-square-foot addition to Clara Peterson Elementary School, plus renovations to be made to that school and PBL High School.

One other contributing factor, Leigh said, was that the district’s educational fund finished the fiscal year on June 30 with cash on hand that did not meet the minimum “state standard” of being able to cover six months of operating expenses.

“Other than that, we still had a very clean audit,” Leigh said. “There were clean opinions — unqualified opinions — which is what you’re looking for. There were a couple of minor issues, but nothing major that causes us any concern. Overall, the books are in good shape, as they have been for the last several years, so that’s good.”

Leigh, of Hoopeston-based Russell Leigh & Associates, said the educational fund — the district’s main operating fund — ran a deficit of $491,000, with total revenue of $11.7 million compared with expenses of $12.19 million. That caused the educational fund’s cash on hand to drop to $5.5 million, which, in part, led to the district being placed on the IASB’s review list.

Leigh noted that it is not uncommon for a school district in Illinois to run a deficit in its educational fund, especially given the uncertainty of state funding in the past year.

“It’s nothing to be concerned about,” Leigh told the board. “I don’t think there’s anything abnormal about it that would cause me any concerns.”

Within the educational fund, Leigh noted that the district is supposed to be receiving about $5.3 million from the state toward the Teacher Retirement System (TRS) benefits for its employees. However, the state did not fund about $1.5 million of that amount, Leigh said.

Leigh cautioned the board that in the future, depending on what the state Legislature ultimately decides, local school districts may be stuck with the burden of paying more toward the pension liability, either through local property taxes or using their own funds already on hand.

“Maintaining your fund balances is going to be key to being able to withstand that pension liability if it ever does get kicked back to you,” Leigh warned the board.

Leigh also highlighted a couple of other district funds, including the operations and maintenance fund, which took in more revenue ($844,000) than expenses ($776,000) in the last fiscal year to help boost that fund’s cash on hand, by $68,000, to $644,627.

“That’s good,” Leigh said. “I would say that’s a positive.”

The transportation fund, meanwhile, ran a deficit of $99,000, with revenue totaling $588,000 and expenses totaling $687,000. That dropped the fund balance to $206,000. Part of the problem in that fund, Leigh said, is that reimbursements from the state to local school districts for providing transportation services to their students are either being reduced or not being made at all.

“That’s a fund that’s going to, obviously, continue to be looked at, and who knows what happens with it in the future,” Leigh said. “Because again, we’ve either got payments being prorated or being dropped. It’s going to be interesting to see what the state does with transportation over the next couple of years, because we keep losing payments and (the state) keeps lowering reimbursements.”

Leigh said that PBL, like other districts, may need to “get creative” to try to generate more revenue for their transportation funds, perhaps by finding creative ways to claim other expenses for reimbursement.

“I think we’re going to have to get a little more creative on that kind of stuff,” Leigh said.

Meanwhile, Leigh said the construction fund, which is being used to pay for the upcoming construction projects, will likely see “a lot of activity” this fiscal year. Leigh told the board to be prepared to see increased expenses in that fund in next year’s audit.

The board voted unanimously to approve the audit.

Construction project update
Also last week, the board heard an update on the status of the upcoming construction project from Chuck Reifsteck of Champaign-based Gorski-Reifsteck Architecture and David Norris of Chicago-based Gilbane, the district’s construction management firm.

Reifsteck said his team of architects was “deep” into the “construction documents” phase of the project — which, he said, is the third phase of architectural services for the project.

“That’s really where we get the detailed drawings and specifications out that will eventually go out to bid to contractors,” Reifsteck said. “We’ve been working on that over the past month.”

Reifsteck said that being incorporated into the drawings were some changes brought about by a “value engineering” exercise conducted about five weeks ago with the district’s design team.

Members of the district’s design team were scheduled to go to Chicago this week, when they will be presented with various classroom furniture options to consider, Reifsteck said. Toward the end of October, options for exterior building materials will be presented to the design team, Reifsteck added.

Reifsteck said his firm has an “internal goal” of being 50 percent complete with the “construction documents” phase of the project by Oct. 27 and being 100 percent complete with that phase by Dec. 11.

Norris said that the Oct. 27 deadline is like “our kickoff for really looking at the details of constructability.”

“We’re going to really start looking at constructability, phasing, construction schedules ... and really looking at how we design the construction project to minimize impacts,” Norris said.

Norris said that according to a “preliminary” schedule, there is a January target date for putting the project to bid.

Preliminary levy presented
Also last week, the board discussed the district’s preliminary property tax levy, which will be reflected on tax bills next summer.

Superintendent Cliff McClure said the numbers reflected in the levy are only preliminary, noting that a more accurate version of the levy will be presented next month after “tighter numbers” regarding the district’s equalized assessed valuation (EAV) can be obtained from each county’s supervisor of assessments.

A final version of the levy will be up for approval in December, McClure said.

At this point, McClure said he is not planning to increase the tax rate. But he said the revenue the district will receive is likely to rise from year-ago levels regardless —  but only because the district’s EAV is expected to rise.

In the preliminary levy, the estimated EAV is $162 million, up from $160 million last year. The total tax rate is 6.24 percent — about the same as last year’s rate — while the total aggregate rate is 4.9 percent. The district would receive $10.1 million in property taxes — $123,255 more than last year’s levy generated.

Other business
Also during last week’s board meeting:

➜ The board unanimously approved new and revised school board policies, including one that requires signs to be posted on schools’ front doors whenever metal detectors are used to search students and their bags. The signs will warn students that they are subject to search using metal detection.

➜ The board approved assigning the high school’s athletic director, Brock Niebuhr, a district-issued credit card with a $1,000 spending limit.

➜ As required by the Illinois State Board of Education and Grant Accountability and Transparency Act and as recommended by the district’s auditor, the board approved a “capitalization threshold resolution.” A capitalization threshold is a dollar figure above which the cost of an item will be depreciated over time. The district set its capitalization threshold at $1,000.

➜ The board unanimously approved PBL’s participation in the Midland CEO Program, which will also include participation by the nearby Fisher and Gibson City-Melvin-Sibley school districts.

➜ The board appointed its vice president, Dave Dowling, as its voting delegate for the delegate assembly at the upcoming Triple I Conference. During the delegate assembly, board members from IASB-member school districts will vote on the IASB’s legislative platforms, which will be used to draft legislation in Springfield. McClure asked board members to be prepared to provide their opinions on how they would like Dowling to vote as a delegate during the board’s November meeting.

➜ McClure presented a sample of a risk-management plan and asked the board to consider approving such a document at an upcoming meeting. A risk-management plan would involve administrators doing “time studies” several times a year and the district creating a committee to help identify risks.

➜ The board approved 2018 IERMP health insurance rates. Although rates rose by 7.95 percent, McClure said the health of PBL’s employees caused them to be placed in a higher “tier,” meaning the actual costs to the district will go down, rather than up.

➜ The board affirmed the resignations of Alex Goudy as a high school class sponsor, effective at the end of the 2017-18 fiscal year, and Clara Brown as a junior high/high school cook, effective Oct. 6.

➜ The board approved the Family Medical Leave Act requests of Debra Kennedy, Wendy Niebuhr and Atalece Bird.

➜ The board approved the reassignment of Brian Swanson from PBL Eastlawn School custodian to PBL maintenance groundskeeper.

➜ The board approved the hiring of Cheri Cambridge as a Clara Peterson Elementary School paraprofessional, Sandra Bryant as junior high/high school cook, Susan Schlickman as junior high/high school cook, Skyler Emberson as a PBL Eastlawn School custodian, Amanda Lackey as junior high cheerleading sponsor and Courtney Koonce as junior high/high school three-hour cook

➜ The board approved a $202 grant from the Illinois Retired Teachers Association for teacher Lindsey Alred.

➜ The board approved Quinton Hatfill as a volunteer high school boys’ basketball coach and Deb Domeier as a high school speech team coach.

➜ The board approved the disposal of technology items deemed no longer useful to the district.

➜ The board approved the disposal of weight-room equipment that was deemed no longer useful.

➜ The board approved the disposal of agriculture items deemed no longer useful to the district.

➜ The board reviewed fall activity reports from each school.

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