McHenry Grade School Seeks Replacement for John O’Neill

The resignation of John O’Neill from the McHenry Grade School Board opens up an opportunity for someone else to step up and serve.

The District 15 School Board has issued the following directions for doing so:

McHENRY –  The deadline for residents to apply for the vacant school board position has been extended to October 6, 2015.

Board member John O’Neill resigned his position on September 8, 2015. Any resident of the school district who is 18 or older is eligible to fill the vacancy. The appointee will serve until the remainder of the term which ends in April, 2017.

The district plans to hold a special meeting on October 7, 2015 to interview candidates and make a selection as soon as possible.  Those interested should send a cover letter and résumé in care of Cindee Nootbaar, at McHenry Elementary District 15, 1011 N. Green St., McHenry, IL, 60050. Or, interested candidates can send the information by e-mail to cnootbaar@d15.org.

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This is a particularly important time of the year for school boards.

It is when they decide whether to take every dime allowed under the Property Tax Cap or show some mercy to real estate taxpayers.


Comments

McHenry Grade School Seeks Replacement for John O’Neill — 2 Comments

  1. McHenry Elementary School District 15
    aka McHenry CCSD 15
    aka McHenry Community Consolidated School District 15

    Current Board Members
    Kimberly Qualls – President
    Patrick Miller – Vice President
    Mike ​Hettermann
    Betty Davis
    Amanda Geyer
    Erik Sivertsen​

    Student enrollment approximately 4,600 (varies each year) in 8 schools.

    EAV in 2014: $873,569,186

    Approximate Revenues in 2014 based on all revenues in all funds from annual financial report on ISBE website (aka Revenues 9-14 tab): $62,033,573
    (school districts present revenues in all sorts of different ways)
    (revenues include local, state, and federal sources)

    Number of employees: Around 375 teachers and administrators in 2012, plus all the support personnel, transportation employees, substitute teachers, etc.

    Debt

    List of schools
    – Chauncey H Duker Elementary
    – Edgebrook Elementary
    – Hilltop Elementary
    – Landmark Elementary
    – McHenry Middle Schook
    – Parkland Middle School
    – Riverwood Elementary
    – Valley View Elementary

    Illinois State Board of Education (ISBE) identification
    Region County District Type (RCDT) #: 44-063-0150-04.
    http://www.isbe.state.il.us

    ISBE Data Analysis
    http://www.isbe.state.il.us/research/default.htm

    ISBE Annual Financial Reports of school districts
    ISBE school district budgets
    http://www.isbe.net/sfms/afr/afr.htm
    http://www.isbe.net/sfms/html/financial_archive.htm
    ftp://ftpfinance.isbe.net/AFR/2014/School%20Districts

    Illinois Comptroller identification
    Name: McHenry CCSD 15
    Number: 063/606/51
    http://warehouse.illinoiscomptroller.com

    Illinois Department of Revenue (IDOR) identification # 0567040150
    The school districts receive personal property replacement tax (PPRT) revenue from the state of Illinois for example.

    NCES (National Center for Education Statistics) identification # 1725290
    Federal government educational statistics.
    https://nces.ed.gov

    Bond identification
    CUSIP (Committee on Uniform Securities Identification Procedures) # 580781
    http://emma.msrb.org
    Principal + Interest Bond Debt =

    Most recent OS (Official Statement) for bonds, which shows debt repayment schedule.
    http://emma.msrb.org/EA402875-EA315362-EA711075.pdf

    Teacher Union: McHenry Classroom Teachers’ Association (MCTA), IEA-NEA.
    MCTA EIN 91-1890000 (tax exempt)
    Local affiliate: MCTA
    State affiliate: IEA
    National: NEA
    Regional: IEA Region 23 at 2230 Point Boulevard, Suite 400, Elgin.
    http://d15.org/District/1427-bargaining.html

    Support staff union: McHenry Educational Support Personnel (MESP), IEA-NEA.
    MESP EIN: 36-3836034.
    http://d15.org/District/1427-bargaining.html

    Transportation union: McHenry School Transportation Association (MSTA), IEA-NEA.
    MSTA EIN: 36-3440456
    http://d15.org/District/1427-bargaining.html

    Illinois Interactive Report Card
    http://iirc.niu.edu/Classic/Default.aspx

    In most communities the public school district(s) are amongst the largest, and often the largest, employer.

    They are often typically large bureaucracies with money flowing all over the place and often complex politics at the local, state, federal, and teacher union levels.

    The teacher unions in Illinois are especially powerful thanks in large part to the power granted them by state legislators and governors over the years in exchange for political campaign contributions, votes, and election assistance.

    The unions job #1 is to obtain maximum taxpayer money for their members in the form of pay, benefits, and working conditions (new and remodeled schools, etc.), and they are typically very in effective in doing so.

    They are employee unions, not kids unions, not parent unions, not taxpayer unions.

  2. Pensions are another area school board members and taxpayers should understand if they want to keep taxes at a reasonable level.

    In fact, pensions are the most critical and complicated area to understand regarding school district finances, which seems ironic as the unfunded TRS liability is currently a state responsibility.

    But taxpayer money flows every which way in Illinois and is not infinite.

    If the state doesn’t have the money to fund TRS, you can bet the public sector unions and others covered by TRS will fight for other sources of revenue for their hiked pensions.

    The state could shift funding from local school districts (General State Aid for example which is primarily funded by state income taxes) to the TRS pension fund.

    The state could shift funding from local school districts outside Chicago, to the Chicago Teachers Pension Fund (CTPF) (CTPF is a separate pension fund from TRS and currently receives little if any direct state funding).

    So here is a little history of school district pensions outside Chicago.

    Most employees in a school district contribute to one of two different pension funds.

    1. TRS, which is Teachers Retirement System of the State of Illinois.
    Teachers and most administrators contribute to TRS (administrators whom do not have a Type 75 certificate do not contribute to TRS).

    2. IMRF, which is the Illinois Municipal Retirement Fund.
    Most employees other than teachers and administrators contribute to IMRF.

    These two pension funds are vastly different.

    The rules for both were created by State Representatives, Senators, and Governors.

    For instance, employees in TRS do not contribute to Social Security, and thus do not receive Social Security for the period in which they contributed to TRS.

    As a one sentence side note, if employees who contribute to TRS work for another employer (before, during, or after their “TRS employment”), they may or may not be entitled to receive Social Security based on rather complicated Federal rules known as Government Pension Offset (GPO) and Windfall Elimination Provision (WEP).

    Employees in IMRF do contribute to Social Security, and thus do Social Security upon retirement.

    Why the difference?

    When the Federal Government created Social Security it did not cover government employees.

    But the laws have changed over time.

    An explanation from IMRF follows.

    ++++++++++++++

    9.20 Social Security Coverage

    Unlike people working in the private sector, state and local government employees are not always covered by Social Security.

    Since July 1, 1991, state and local government employees are automatically covered by Social Security if the employee is not a member of a retirement plan provided by the government employer.

    To acquire coverage for employees who are retirement plan members, three steps are necessary:

    1. The state must enter into a Federal-State Agreement with the Secretary of Health and Human Services under Section 218 of the Federal Social Security Act to enable employers to provide Social Security coverage for public employees designated from time to time by the state.

    On September 15, 1953, the State of Illinois entered into a Federal-State Agreement as authorized by the Social Security Enabling Act (Article 21 of the Illinois Pension Code, 40 ILCS 5/21-101 et seq.).

    2. An individual public employer or a retirement system must enter into an agreement with the state to adopt Social Security coverage.

    For individual employers, this is called an ”absolute coverage group” agreement.

    For retirement systems, this is called a ”retirement system coverage group” agreement.

    In both cases the agreement, to the extent authorized by the Social Security Act, must designate which officials’ and employees’ positions are covered and which are excluded from coverage.

    IMRF entered into a retirement systems coverage group agreement with the State of Illinois (Social Security Unit of the State Employees Retirement System) effective December 31, 1957, retroactive to January 1, 1956.

    The State-Federal Agreement must be modified to include each coverage group under the State-Federal Agreement.

    3. The IMRF Retirement System Coverage Group was included by Modification No. 59, effective December 31, 1957, retroactive to January 1, 1956.

    This provided Social Security coverage for employees of all employers in IMRF on December 31, 1957.
    Employers entering IMRF after that date have been included by subsequent modifications.

    Some of these had entered into an Absolute Coverage Group Agreement prior to entering IMRF.

    If there were any differences between the exceptions to coverage in that agreement and the IMRF agreement, the IMRF agreement prevails.

    http://www.imrf.org/AAmanual/Online_AA_Manual/9.20.htm

    ++++++++++++++++++++++++

    So, IMRF entered into a retirement systems coverage group agreement with the State of Illinois.

    TRS did not enter into a retirement systems coverage group agreement with the State of Illinois.

    Thus, employees contributing to IMRF also contribute so Social Security.

    Employees contributing to TRS do not contribute to Social Security.

    +++++++++++++++++++++++++++++++++++++

    TRS has a massive unfunded liability.

    IMRF has a much smaller unfunded liability.

    In terms of a public sector defined benefit pension fund, an unfunded liability is a taxpayer IOU.

    In other words, the unfunded liability is money that should be in the pension fund right based on actuarial assumptions to fully pay future pensions without hiking taxes over and above the typical annual hike.

    In other words, the government has not properly funded the pension fund.

    Since the government receives money from taxpayers, that means the taxpayers have not properly funded the pension fund.

    Which means something must be done, such as clawing back hiked benefits, hiking taxes, etc.

    ++++++++++++++++++++++++

    The hiked benefits are key to understanding the TRS scheme.

    Even though pensions were already underfunded, state legislators and governors hike pension benefits.

    That happened at the state level.

    On the local level, school boards hiked salaries, and hiked salaries results in hiked pensions, which is a problem because once again pensions were already underfunded.

    At the state and local level, teacher union lobbyists and employees advocated for hiked pension benefits and hiked salaries, knowing full well their pensions were already underfunded.

    Doing so was placing future tax hikes or service cuts on taxpayers.

    The hiked pension benefits and salaries while pensions were underfunded was done in large part because one sentence was added to the Illinois State constitution, via approval by elected delegates to the 1970 constitutional convention and subsequent approval by voters at a special election held on December 15, 1970.

    The pension sentence and many other changes to the state constitution were approved by the delegates and subsequently by voters at the special election.

    Since there were so many changes to the state constitution, the pension sentence was not properly scrutinized and debated, and that has proved disastrous for state and many local government finances.

    The result of the sentence is taxpayer are forced to fund hiked pensions resulting from hiked benefits and salaries.

    Here is the sentence.

    “Membership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired.”

    +++++++++++++++++++++++++

    An enforceable contractual relationship funded by taxpayers.

    There were not sufficient safeguards put in place to protect predatory politicians and public sector workers and lobbyists working in conjunction to hike pension benefits and salaries, both of which hiked pensions, even if current salaries and benefits and funding resulted in underfunded pensions.

    +++++++++++++++++++++++++

    So, local school boards have a responsibility to work together aggressively to solve the pension problem, but they don’t and won’t.

    The Illinois Association of School Boards (IASB) and local school boards have not educated taxpayers about what has transpired and how it affects taxpayers.

    In fact many if not most school board members oversimplify the issue by stating they don’t control pension rules.

    That’s true, but the school districts they oversee are greatly affected by pension rules, because there is a finite amount of taxpayer funding available to government.

    And school boards do control salaries which is a major part of the pension problem.

    +++++++++++++++++++++++++++++++++

    IMRF has less generous benefits than TRS but still has very good benefit levels.

    IMRF rules and operations have allowed it become much better funded than TRS.

    IMRF funding varies by employer, unlike TRS, meaning each employer has it’s own “fund” and thus funding level, but all the funds are pooled and invested at the IMRF level, not at the local employer level.

    +++++++++++++++++++++++++++++++

    Bottom line, local school boards are affected by the state pension crisis and they have not done enough to educate voters about the pension problems.

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