School District Helps Tax Hikers

Tax House + DollarsHinsdale School District 181 gave , according to the Chicago Tribune

“The school district released directory information requested by Citizens for a New HMS, a group formed to get voter support for a $65 million bond sale referendum to fund a new Hinsdale Middle School.

“The information includes the names of each student in the district along with school attended, grade level, and a name, mailing and email addresses, home and cellphone number for a parent. Exceptions are for those who opted out of information being shared.”

State Rep. Ron Sandack has taken up the taxpayers’ side of the issue.


School District Helps Tax Hikers — 10 Comments

  1. It’s not a $65 Million Referendum.

    With interest it’s probably at least $80 million and probably a lot more.

    It should be illegal to advertise a referendum for principal only since taxpayers pay principal and interest.

  2. Also school districts always finance 100% the cost of building a new school.

    They are never able to save $1 to put towards building a new school.

    Lenders are not willing to provide 100% financing to a taxpayer for building a new residential home.

    But lenders are willing to finance 100% financing to a school district for building a new school, because friendly taxpayers seemingly have endless money for bonds, pensions, and retiree healthcare.

  3. Submitting a FOIA to a school district to obtain the cell phone numbers of parents for the purposes of assisting in the passage of a referendum is absurd.

    Apparently the over zealous referendum supporter submitting the FOIA has no clue that even if it permissible to obtain the cell phone number of parents from a public school district via current FOIA law it should not be done because that will make some people angry and annoy even more.


    So let’s shed some light on this elementary school district which primarily falls in southeastern DuPage County, with a bit being in mid southwestern Cook County).

    Hinsdale School District 181 overview.

    Also known as:
    Hinsdale Community Consolidate School District 181
    Hinsdale CCSD 181

    Type of school district: Elementary (preschool – 8th grade)

    Number of schools: 9
    – Clarendon Hills Middle School
    – Elm School, Burr Ridge
    – Hinsdale Middle School (target of the referendum)
    – Lane School, Hinsdale
    – Madison School, Hinsdale
    – Monroe School, Hinsdale
    – Oak School, Hinsdale
    – Prospect School, Clarendon Hills
    – Walker School, Clarendon Hills

    County: Primarily in Dupage, some in Cook

    Enrollment: Approximately 3,900

    High School feeder district: Hinsdale Township High School District 186 aka Hinsdale Twp HSD 186, primarily or entirely to Hinsdale Central High School.

    Federal NCES ID (for educational statistics): 1719290.

    CUSIP (for bond research on the EMMA MSRB website): 262579.

    Recent Bond Issues (Amount of Original Issue):

    (This is a lot of bond activity. Most school districts of this size do not issue bonds this frequently. Note that refunding school bonds may include new money but in general is akin to refinancing a mortgage, so one can’t simply add up all the refunding bonds and conclude that’s new money because it’s not, nor can one assume there is no new money; have to look at the details).

    Series 2014A – $09,090,000 (General Obligation Refunding School Bonds)
    Series 2014B – $09,385,000 (General Obligation Refunding School Bonds)
    Series 2014C – $10,580,000 (General Obligation Refunding School Bonds)
    Series 2013 — $09,645,000 (General Obligation Refunding School Bonds)
    Series 2012 — $09,395,000 (General Obligation Refunding School Bonds)
    Series 2011 — $13,095,000 (General Obligation Refunding School Bonds)
    Series 2010 — $04,980,000 (General Obligation Refunding School Bonds)
    Series 2010 — $00,730,000 (General Obligation Refunding Debt Certificates)
    Series 2009 — $05,760,000 (Debt Certificates)
    Series 2007 — $10,000,000 (General Obligation School Refunding Bonds)
    Series 2006 — $10,000,000 (General Obligation School Refunding Bonds)
    Series 2005 — $10,000,000 (General Obligation School Refunding Bonds)
    Series 2004 — $41,005,000 (General Obligation School Bonds)
    Series 2003 — $09,000,000 (General Obligation School Bonds)
    Series 2002 — $15,000,000 (General Obligation School Bonds)
    Series 2001 — $08,240,000 (General Obligation Refunding School Bonds)
    Series 2001 — $01,500,000 (General Obligation Debt Certificates)
    Series 2000 — $06,300,000 (General Obligation School Bonds)
    Series 2000 — $02,000,000 (General Obligation Lease Certificates – Limited Tax)
    Series 1998 — $08,400,000 (General Obligation School Bonds)
    Series 1997 — $05,000,000 (General Obligation School Bonds)
    Series 1995 — $08,000,000 (General Obligation School Bonds)

    The amount of principal debt outstanding as of some point in 2015 per the continuing disclosure on the MSRB website was $67,310,000.

    There was no mention of the debt service outstanding (principal + interest) in that continuing disclosure which covered the period through 2014 (no mention if that was calendar year or fiscal year 2014).

    The debt service numbers (principal + interest) are typically not prominently advertised by school districts but should be.

    2014 Market Value – $6,509,812,968
    2014 EAV – $2,169,937,656
    2014 Tax Rate (Per $100 EAV) – $2.8455
    2014 Extension – $63,111,502

    Teacher Labor Union: Hinsdale-Clarendon Hills Teachers’ Association (Hinsdale CHTA), IEA-NEA
    IEA = Illinois Education Association
    NEA = National Education Association
    Hinsdale CHTA is part of IEA Region 57 whose regional office is in Lombard, IL.
    EIN of Hinsdale CHTA: 36-3864086

    Staff Labor Union: Hinsdale Educational Support Staff (HESS), IEA-NEA
    EIN of HESS: 20-0227756

    Illinois Department of Revenue District ID: 20-0227756.
    Illinois Department of Revenue Personal Property Replacement Tax (PPRT) ID: 0227041810

    Illinois Comptroller ID: 022/263/51


    Illinois State Board of Education (ISBE) School District Profile

    Hinsdale is an upscale community but does not achieve the highest ranking on the profile.

    The 4 levels from highest to lowest are:
    – Recognition
    – Review
    – Warning
    – Watch

    There are 860 public school districts in Illinois with a school district profile in 2015.

    Here are the number of districts in Recognition:

    2015 – 533
    2014 – 560
    2013 – 562
    2012 – 670
    2011 – 604
    2010 – 578
    2009 – 626
    2008 – 612
    2007 – 513
    2006 – 488
    2005 – 449
    2004 – 356

    Metrics in the School District Profile:
    – Fund Balance to Revenue Ratio
    – Expenditure to Revenue Ratio
    – Days Cash on Hand
    – Short Term Debt
    – Long Term Debt

    Hinsdale Elementary School District 181
    Year – Designation – Score
    2014 – Review – 3.45
    2013 – Recognition – 3.70
    2012 – Recognition – 3.80
    2011 – Review – 3.45
    2010 – Recognition – 3.80
    2009 – Review – 3.45


    Unfunded Pension Liabilities attributed to Hinsdale Elementary School District 181.

    – IMRF (pensions for non teachers and administrators)
    – Teachers Retiremetn System of Illinois (pensions for teachers and administrators)

    Not easy to find.


    It is no coincidence the debt service (principal + interest), unfunded TRS pension liability, unfunded IMRF liability, and unfunded TRIP (Teachers Retirement Insurance Program of Illinois) retiree healthcare liabilities attributed to Hinsdale Elementary School District (or any other school district) are hard to find.

  4. The Debt Service (principal + interest) payment schedules are in the District 181 CAFR.

    Beginning on page 34 of the CAFR (page 53 of the pdf).

    As of June 30, 2015, debt service (principal + interest) owed by Hinsdale District 181 taxpayers is:

    General Obligation Bonds: $71,905,651.

    Debt Certificates: $6,498,155.

    Total: $78,403,806.

    There is $5,666,349 of fund equity available in the Debt Service Fund to service outstanding
    bonds payable.


    There are also defeased bonds (the district purchased US Government securities to use as a source of funds to pay the bonds as they come due thus this is not a taxpayer IOU) of $59,305,000.


    As of June 30, 2015 the District was obligated to pay $208,184 in early retirement benefits associated with the TRS Health Insurance Plan (TRIP) aka THIS.


    TRS (teacher and administrator pension fund) information follows.


    1. Employer contributions for the year ending June 30, 2015 (FY 2015), separated into:
    A) The State of Illinois Contribution on behalf of the employer: $11,100,333.
    B) The District Contribution of .58% (little less than 1/2 of 1%) of creditable earnings / pensionable income: $195,113.


    TRS Unfunded liability attributed to the district:

    District portion of unfunded liability attributed to the District (district owes the pension fund): $3,344,968.

    State portion of unfunded liability attributed to the District (state owes the pension fund on behalf of the school district): $203,980,433.

    Total TRS Unfunded Liability attributed to District 181 (District + State): $207,325,401.


    IMRF Unfunded Liability is $3,585,588.


    Retire Healthcare for teachers and administrators:

    State Contribution to TRIP/THIS (on behalf of the district): $343,130.

    District Contribution to TRIP/THIS: $255,666.


    Next the District apparently operates a post employment healthcare plan separate from TRIP/THIS.

    Retirees make no contributions to the plan.

    Apparently District contributed $292,297 to this fund.

    It’s not clear why both THIS/TRIP & the OPEB benefit are utilized and why both are necessary.


    Lots of good information in that CAFR.

    Not all school districts publish a CAFR.

  5. Let’s add the all the taxpayer IOU’s in Hinsdale Elementary District 181.

    General Obligation Bonds: $71,905,651.
    Debt Certificates: $6,498,155.
    District portion of TRS pension unfunded liability (taxpayer IOU): $3,344,968.
    State portion of TRS pension unfunded liability (taxpayer IOU): $203,980,433.
    IMRF pension unfunded liability (taxpayer IOU): $3,585,588.
    Total Taxpayer IOU for District 181 monopoly education: $289,314,795.

    That’s $289 Million Dollars taxpayers owe bondholders and pension retirement funds for Hinsdale Elementary District 181 only.

    Add the $65 Million Principal, plus the interest on the $65 Million, to the $289 Million, if the referendum passes.

    Kick the can, hide and seek, catch me if you can.

  6. Let’s rank from highest to lowest.

    TRS pension (State portion): $203,980,433.
    General Obligation Bonds: $71,905,651.
    Debt Certificates: $6,498,155.
    IMRF pension: $3,585,588.
    TRS pension (District portion): 3,344,968.
    Total: $289,314,795 taxpayer IOU.


    Let’s rank by category:

    Pensions: $210,910,989.
    Bonds / Debt Certificates: $78,403,806.
    Total: $289,314,795 taxpayer IOU.

  7. Now here is how the school district would justify the referendum.

    The $204 Million is a state responsibility.

    That’s true, but remember, the state makes its contribution “on behalf” of the school district.

    The state could shift some or all of that $204M, or could more likely cease “picking up” all or some of the annual contribution “on behalf” of the school district, most likely with a “phased in” or “ramp” approach with escalating percentages over a period of years.

    Remember from above, that State of Illinois annual contribution on behalf of the school district for FY 2015 was $11,100,333, which over 10 years is well over $100 Million Dollars.

    Only time will tell how this shakes out.

  8. Board Members

    Here are the current Hinsdale Elementary District 181 Board Members and when their term expires:

    – Mridu Garg – President – 2017
    – Richard Giltner – Vice President – 2019
    – Jill Vorobiev – Secretary – 2017
    – Jennifer Burns – 2019
    – Gary Clarin – 2017
    – Leslie Gray – 2019
    – Marty Turek – 2019

    The Consolidated General Elections are April 4, 2017 and April 7, 2019.


    Retiree Healthcare

    Here is more information about retiree healthcare in the district.

    There seem to be two plans.

    1. TRIP/THIS which is administered by the State of Illinois, Department of Central Management Services. This program is not pre-funded by the State, rather, it’s pay-as-you go.
    The TRIP/THIS unfunded liability was $19.5 Billion as of June 30, 2013.
    The Illinois Supreme Court ruled in Kanerva v Weems that retiree healthcare benefits are protected in the pension sentence added to the Illinois State Constitution on December 15, 1970.
    There is no mention in the District 181 CAFR of the FY 2015 cost for TRIP/THIS benefits provided to District 181 retirees.

    2. District administered plan(s?) which do not seem to have a name, referred to in the CAFR as, “Postemployment Healthcare Plan” and “district postretirement benefit plans” that are funded on a pay as you go basis and has an “obligation” of $2,279,484 as of June 30, 2015.


    TRIP = Teachers Retirement Insurance Program
    THIS = Teacher Health Insurance Security Fund


    Transparency and understanding of retiree healthcare is murkier area than pensions.

    There are a lot of state costs attributed to school districts that are not reported in the cost to educate a child.

  9. It just occurred to me why we are now getting more transparency about the unfunded pension liability in the school district financial reports.

    It’s not that school districts have decided to become more transparent to taxpayers.

    Rather, GASB 65 is taking effect.

    Too bad GASB didn’t take effect 45 years ago.

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