Considering Consolidation of High School District 155 with Feeder Grade Schools

The following was written by Cary Grade School Board President Scott Coffey:

Thoughts on School Consolidation

Here's the entrance to the Cary Grade School District's Administration Center.

Here’s the entrance to the Cary Grade School District’s Administration Center.

A new, consolidated district is NOT required to migrate to the highest wage rates of the legacy contracts of the combined districts.

However, that has been the experience of consolidating districts in this state.

Why?

It’s just easier to cave in.

Because the alternative requires a substantial amount of effort on behalf of the new Board members and Administration of the new consolidated district to battle the newly formed union to agree to a successor agreement that more closely matches the lower cost agreement rather than the most expensive labor agreement.

And, that, apparently is just too hard to do.

Somehow, people have come to believe that the new district has to live with the more expensive contract, that is not true.

Consolidating the 4 elementary’s that feed D-155 (3, 26, 46, 47) would be quite challenging.

Obviously, all 4 communities have to vote to approve.

And to get approval, there has to be an incentive for each community to want to consolidate.

We’ll start with taxes.

The Operating Tax Rates [dollars per $100 of assessed valuation] for the 4 districts are:

Cary 26 = 3.88827
CL 47 = 4.3488
PG 46 = 4.87884
FRG 3 = 5.717264

At a minimum, the entire proposal would have to drive down to at least Cary’s rate, otherwise Cary residents will vote NO to what would effectively be a tax increase.

So what happens if all the districts migrate to Cary’s rate?

Taxpayers save the following based on current EAV:

  • Cary = $0
  • CL 47 = $7.4 million
  • PG 46 = $2.1 million
  • FRG 3 = $1.7 million

Total = $11.2 million

This is great for most taxpayers, but for Cary residents its tax-neutral.

What’s the incentive for their YES vote?

One might have to design the referendum with a new Tax Rate that is even below Cary’s current rate.

But, back to the above scenario, of course this means also that the new consolidated district will operate with $11.2 million less in annual operating revenue.

At a minimum, the question is, are there enough cost savings opportunities in the new district to cover the lost revenue?

Note: Existing debt service stays with the community that originally issued the debt so that is not a part of the puzzle.

Could a new Board successfully navigate all the challenges (and there are dozens of other issues I haven’t mentioned) and put a successor district in a financially affordable and sustainable position for the future?

= = = = =
See also


Comments

Considering Consolidation of High School District 155 with Feeder Grade Schools — 28 Comments

  1. So, bottom line:

    Consolidation should not be considered until the State Legislature passes right to work legislation?

    Until that time, just concentrate on individual school districts?

    Reason: “It’s just easier to cave in.”

  2. Your comment:

    “Per ISBE, our average teacher salary has fallen from $80,226 in 2011 to $57,006 in 2015 (or almost a 30% reduction).”

    should be qualified by how many teachers retired and what was the burden they placed on the public pension system?

    In the private sector, early retirement packages are frequently offered to ‘trim’ payroll costs.

    In the private sector, retirement is mostly in the form of an annuity which will never increase.

    Teachers, when they retire, do not receive an annuity, they receive a defined benefit pension which includes in most cases a guaranteed annual increase.

    https://www.illinoispolicy.org/reports/pensions-101-understanding-illinois-massive-government-worker-pension-crisis/

    So, yes your district lowered its payroll costs by increasing the cost to the taxpayers via a different tax ‘bucket’.

    You could start by listing the pensions of retired Cary School District teachers and admin employees.

  3. Readers may also be interested in this little nugget:

    https://trs.illinois.gov/press/reform.htm

    Included in the link is:

    “Active and inactive TRS members eligible for a refund will have three options this year:

    Apply for a cash refund that will be mailed to them.

    Apply for a withdrawal with the intention of “rolling over” the taxable portion of the refund into a qualified non-TRS retirement plan, such as a 401(k), 403(b) or an IRA.

    Do nothing and leave the ERO contributions with TRS. Members can apply for a refund at a later date, but no interest will accrue if the ERO contributions are left with TRS.”

    How about refunding this money to the taxpayers?

    Every penny paid to a teacher (to cover salary and all benefits) is a taxpayer penny.

  4. While on the topic of pensions:

    https://www.lexisnexis.com/communities/state-net/b/capitol-journal/archive/2016/08/19/public-pension-return-rates-lagging-in-states.aspx?utm_campaign=State+Net+Capitol+Journal+Newsletter&utm_medium=email&utm_source=newsletter&utm_term=State+Net&utm_content=Volume+XXIV+No.+27+-+August+22+2016

    “Investment returns for large public pension plans in the fiscal year that ended June 30, 2015 were significantly lower than the plans’ assumed rates of return, according to money management news source Pensions & Investments.

    “The one-year return rates for 17 large public pension funds – including California’s CalSTRS and CalPERS – ranged from 2.0 percent to 5.4 percent, while the assumed rates for those 17 funds ranged from 7.0 percent to 8.0 percent.”

    Not sure what the Illinois “assumed rate” is but its performance is shown to be in the 3.0 – 3.9 below the assumed rate.

  5. Back in 1974-75 a dissident group of Cary residents placed a referendum on the ballot attempting to “spin” Cary District 26, FRG District 3 and the Cary/FRG portion of district 155 into a Unit district.

    The results of the referendum were overwhelmingly against the proposal primarily because of the significant costs that a Unit district incurs with little or no reduction in “administrative” costs.

    The failure of the referendum resulted in the passage of referenda to build South High School and expand Cary-Grove High School.

    While history is not always the best teacher, in this case, with no change in the inequitable distribution of State aid there would be no advantage to unitizing.

  6. People often argue from analogy,

    “businesses achieve economies of scale as they grow; so should government.”

    The problem with this statement is, of course, that the incentives of business and government are diametrically opposed.

    Businesses have an incentive to save money.

    Governments have an incentive to spend as much as possible.

    Think about it from your own experience:

    have YOU found that big governments are less bureaucratic or more bureaucratic than smaller governments?

    And this is true of school districts.

    If you consolidate four school districts, you lose three superintendents.

    You gain six assistant superintendents, assistant principals, assistant curriculum coordinators, etc.

    Now, if my contention is true, then it should show up in the data.

    And it does.

    I’ve examined the data on expenditures for all the school districts in Illinois.

    I’ve performed this analysis for several years’ data.

    I always leave out Chicago because it is such an outlier, although if I include it, it simply reinforces the conclusions.

    And here are the conclusions:

    There is no statistically significant correlation between expenditures per pupil and outcomes as measured by graduation rates and test scores.

    Some schools spend $9,000 per pupil.

    Some spend up to $28,000.

    Here in McHenry County, the range is around $9,000 to $18,000.

    Zero correlation.

    None.

    There is no statistically significant correlation between teacher wages and outcomes.

    There is no statistically significant correlation between teacher experience and outcomes.

    There was only ONE statistically significant relationship:

    bigger districts spend more per pupil than smaller districts.

    And in addition to the wage issue, which will almost always be resolved in favor of the higher wage scale, the bureaucratic factor is overwhelmingly against consolidation.

  7. Good info Steve !

    To Questioning, District 26 did have
    Quite afew teachers retiring, therefore
    Able to lower the median pay range.

  8. Questioning,

    You indicated that we increased “the cost to the taxpayers via a different tax ‘bucket’.”

    That’s not true.

    Those employees had already earned those retirement benefits based on their years of service under TRS rules promulgated by the State.

    Therefore, the State had ALREADY incurred the liability to pay those earned benefits.

    The district’s (or their employees) actions did not create a burden for the State.

    It already existed.

    In fact, the 2011 union contract which, among other reductions, reduced the salaries of the non-retiring employees by 3% in the first year and held salaries flat for the subsequent two years, actually will probably save TRS millions in future pension payments as the salary growth curve has been flattened over the last 5 years.

    Additionally, the retiree replacement process utilizing the BA-0 new-hire policy, has allowed us to bring in TRS Tier 2 employees that have substantially different retirement benefits/requirements, thus saving TRS millions more in the future.

  9. While on the subject of pensions, are you aware that Illinois has 656 different public pensions?

    The next largest number in neighboring states is Michigan with 136.

    Wisconsin has 3..

    Consolidation?

    Coffey: Your statement:

    “Therefore, the State had ALREADY incurred the liability to pay those earned benefits. “

    is exactly the problem.

    THE STATE HAD ALREADY INCURRED THE LIABILITY.

    NOT THE SCHOOL, THE STATE.

    The State is a different tax bucket.

    Now, if the state had been fully funding pensions, I would agree with you but that is not the case.

    “Between fiscal years 2008 and 2012, the funded ratio of Illinois’ state-administered pension plans decreased from 54.3 percent to 40.4 percent. The state paid 76 percent of its annual required contribution, and for fiscal year 2012, the pension system’s unfunded accrued liability totaled $94.5 billion. This amounted to $7,421 in unfunded liabilities per capita.”

    To repeat, in 2012 we had an unfunded liability of $7,421 for every man woman and child.

    https://ballotpedia.org/Public_pensions_in_Illinois

    “Higher pension costs can have the following consequences:

    higher taxes
    less intergovernmental aid for services
    lower credit ratings
    higher interest rates on state borrowing”

    Then there is the following:

    “The Teachers’ Retirement System, or TRS, manages pensions for teachers across Illinois (excluding Chicago).With more than 130,000 active members and nearly 95,000 retirees, TRS is the largest pension system in the state. Unfortunately, TRS also has the highest unfunded liability of the state’s pension systems. In 2012, TRS was only 40.6 percent funded and officially had more than $53.51 billion in unfunded liabilities. TRS members contribute 9.4 percent of their salary to the pension system.”

    https://www.illinoispolicy.org/reports/illinois-taxpayers-bear-the-brunt-of-rising-pension-costs/

    Your statement:

    “The district’s (or their employees) actions did not create a burden for the State.”

    is not true.

    By not contributing THEIR FAIR SHARE, the employees (unions) are complicit in the state public pension problem.

    Even if we change the Constitution for future employees, the taxpayers of Illinois are on the hook for the current pension under-funding.

    Politicians like Jack Franks and Mike Madigan are responsible.

  10. How many of the Teachers who retired in the past three years from Cary D26 fell under the tier 1 category?

    How many under tier 2?

  11. More on “the other tax bucket”.

    “In fiscal year 2015, taxpayers were forced to pay $3,523,256,530 into the government pension fund”

    http://www.taxpayersunitedofamerica.org/latest/teachers-retirement-system-millionaires-its-not-for-the-children

    Total number of TRS pension beneficiaries is approximately 114,434

    8,507 collect pensions in excess of $100,000

    56,717 collect pensions in excess of $50,000

    The average annual TRS pension is $52,752

    The average amount that employees paid into their own pension fund is $74,470, or 4.1% of their estimated lifetime pension payout

    The average estimated lifetime payout is $1.5 million*

    The average age at retirement is 58

    The average years of employment are 27

    In fiscal year 2015, taxpayers were forced to pay $3,523,256,530 into the government pension fund

    In fiscal year 2015, teachers’ paid $935,451,049 into their own government pension fund

    The net return on investment for TRS was only 4%, or $1,770,549,533

    As of the end of fiscal year 2015, TRS had a 42% funded ratio with a $62 billion unfunded liability

  12. Nobody is retiring under Tier II yet.

    Tier II is for employees who began their career January 1, 2011 or after.

  13. As of July 1, 2016, Teachers and administrators in TRS only contribute 9% to to TRS, not 9.4%.

    The .4% was for Early Retirement Option (ERO) which was discontinued as of July 1, 2016, because it was not renewed by state legislators.

    +++++++

    Many teachers and administrators did not contribute the full 9.4% and don’t contribute the full 9%.

    That’s because in the majority of school districts in Illinois, the Board “picks up” some or all of the employee’s 9.4%, in a scheme called salary schedule add on or salary schedule reduction.

    The salary schedule add on results in hiked gross pay.

  14. In some school districts, the board picks up some or all of the administrators 9.4%, but not some or all of the teacher’s 9.4%.

    The reverse is seldom if ever true.

  15. Illinois has 20 public sector pension systems.

    Downstate Police and Downstate Fire mushroom into hundreds of individual funds, because the investments are not pooled.

    IMRF, although the investments are pooled, the contributions and funding vary by taxing district / municipality.

    ++++++

    Here are the 20 pension systems in Illinois.

    Firs is the common name.

    Then is the full name.

    Then is the Article in the Illinois Pension Code

    Last is the Illinois Compiled Statute.

    +++++

    – Cook County Forest Preserve District Fund
    – Forest Preserve District Employees’ Annuity And Benefit Fund
    – Article 10
    – 40 ILCS 5/10-107

    – Chicago Laborers aka LABF
    – Laborers’ And Retirement Board Employees’ Annuity And Benefit Fund–Cities Over 500,000 Inhabitants
    – Article 11
    – 40 ILCS 5/11-169

    – Chicago Parks
    – Park Employees’ And Retirement Board Employees’ Annuity And Benefit Fund–Cities Over 500,000
    – Article 12
    – 40 ILCS 5/12-149

    – MWRDRF
    – Metropolitan Water Reclamation District Retirement Fund
    – Article 13
    – 40 ILCS 5/13-503

    – SERS
    – State Employees Retirement System of Illinois
    – Section 14
    – 40 ILCS 5/14-131

    – SURS
    – State Universities Retirement System
    – Article 15
    – 40 ILCS 5/15-155

    – TRS
    – Teachers’ Retirement System Of The State Of Illinois (TRS)
    – Article 16
    – 40 ILCS 5/16-158

    – CTPF (Chicago Teachers Pension Fund)
    – Public School Teachers’ Pension And Retirement Fund–Cities Of Over 500,000 Inhabitants
    – Article 17
    – 40 ILCS 5/17-127

    – JRS
    – Judges Retirement System Of Illinois
    – Article 18
    – 40 ILCS 5/18-131

    – GARS
    – General Assembly Retirement System
    – Article 2
    – 40 ILCS 5/2-124

    – CTA (Chicago Transit Authority)
    – Miscellaneous Collateral Provisions, Division 1 – Additional Pension Funds – Transit Authorities
    – Article 22
    – 40 ILCS 5/22 div. 1

    – RTA / Metra Train / PACE Bus (Regional Transportation Authority)
    – Miscellaneous Collateral Provisions, Division 1 – Additional Pension Funds – Transit Authorities
    – Article 22
    – 40 ILCS 5/22-103

    – Downstate Police
    – Police Pension Fund – Municipalities 500,000 And Under
    – Article 3
    – 40 ILCS 5/3-125

    – Downstate Fire
    – Firefighters’ Pension Fund – Municipalities 500,000 And Under
    – Article 4
    – 40 ILCS 5/4-118

    – Chicago Police
    – Policemen’s Annuity And Benefit Fund–Cities Over 500,000
    – Article 5
    – 40 ILCS 5/5-168

    – Chicago Fire
    – Firemen’s Annuity And Benefit Fund–Cities Over 500,000
    – Article 6
    – 40 ILCS 5/6-165

    – IMRF
    – Illinois Municipal Retirement Fund (IMRF)
    – Article 7
    – 40 ILCS 5/7-171-172

    – MEABF (Chicago Municipal)
    – Municipal Employees’, Officers’, And Officials’ Annuity And Benefit Fund–Cities Over 500,000 Inhabitants
    – Article 8
    – 40 ILCS 5/8-173

    – Cook County Fund
    – County Employees’ and Officers’ Annuity and Benefit Fund – Counties Over 3,000,000 Inhabitants
    – Article 9
    – 40 ILCS 5/9-169

    – Chicago Housing Authority Retirement Fund

  16. A defined benefit pension is basically an annuity.

    Want to know how much one would need to contribute to obtain a guaranteed lifetime payout when retiring at a certain age?

    Look up an annuity calculator online.

    Or call someone who can sell you annuity.

  17. The assumed rate / discount rate has been lowered for most if not all the pension funds listed above.

    Lowering the assumed rate of return on investments, hikes the annual contribution, due to the actuarial calculation.

    TRS for example was lowered from 8.5% to 8% then 7.5%.

    But many years ago it was increased over time to 8.5%.

  18. In terms of school district reorganization.

    There are a ton of issues.

    Basically right now the game is rigged against the taxpayer.

    In the spring of 2016 the Illinois Policy Institute came out with a new way of looking at the problem, or at least a way that’s been minimized to date in reorganization feasibility studies.

    While theoretically viable, it would be very difficult to implement statewide due to politics.

    +++++

    Illinois Policy Institute

    Too Many Districts: Illinois School District Consolidation Provides Path to Increased Efficiency, Lower Taxpayer Burdens

    by Ted Dabrowski, Vice President of Policy,
    and
    John Klingner, Policy Analyst

    Spring 2016

    http://www.illinoispolicy.org/reports/illinois-school-district-consolidation-provides-path-to-efficiency-lower-tax-burdens

    ++++++

    Their recommended approach in general includes consolidating districts but not schools.

    And consolidating administrators but leaving the teacher collective bargaining agreements untouched.

  19. State law has been in place for many years allowing four incentives to school districts for consolidating.

    The Illinois Policy Institute touches on this in their study.

    The incentives are problematic in many ways.

    Basically there are four incentives:

    – Salary Schedule Equalization Incentive

    – General State Aid (GSA) Incentive

    – Deficit Inventive

    – $4,000 per cetified employee to school district

    ++++

    The Illinois State Board of Education has a section on its website describing the incentives and other information about school district reorganizations.

    Illinois State Board of Education (ISBE) > School Business Services > School District Reorganization

    http://www.isbe.net/sfms/html/reorg_school.htm

    +++++

    For those really interested, the Illinois Association of School Boards has information and a book on its website about school district reorganizations.

    The book was written by 3 people whom perform reorganization feasibility studies as a side business so their approach goes along the lines of presenting the status quo alternatives that are currently permissible by law.

    Exploring School District Reorganization in Illinois: Navigating Your Options
    by William H Phillips, Scott L Day, Leonard R Bogle
    http://www.iasb.com

  20. Hopefully Cary Elementary District 26 will post collective bargaining agreement change documents, which indicate the exact changes in the agreement, for instance, underline text for additions, and stricken text for deletions.

  21. Mark: U.S. Census shows under state and local pension systems for Illinois a number of 660, does this mean there are 660 systems or are there only 20 as you listed?

    U.S. Census posts this: “A pension system is a pension plan in which investments, contributions, and benefits are administered as a separate entity independent of the parent government general fund. Assets are accumulated and benefits paid under a particular set of actuarial assumptions, including employee age, compensation, and service credits. They include single employer systems, in which one government is the sole sponsor of the pension plan, as well as multiple employer systems, where two or more governments maintain membership on behalf of their employees.”

    https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

  22. The Census number of 660 systems takes into account that Downstate Police and Downstate Fire are 641 pension systems, not 2.

    There are 641 Downstate Police and Downstate Fire pension systems, one for each police department / fire department / fire protection district that participates in such a plan.

    That number grows as new police departments, fire departments, and fire protection districts are added to the plan.

    +++++

    The rules governing the pension systems are found in Articles in the Illinois Pension Code.

    Downstate Police is Article 3.

    Downstate Fire is Article 4.

    ++++++

    So in the never ending attempt to simplify Illinois pensions, let’s take all that into account.

    ++++++

    But first, there is another nuance.

    The Chicago Housing Authority Retirement Fund, whose exact name is CHA Employees’ Retirement Plan and Trust, is considered a private governmental plan not subject to Illinois pension statutes (but is subject to Internal Revenue Code 401(b)).

    Meaning there is no Article in the Illinois Pension Code for the CHA Pension Fund.

    ++++++

    So there are 19 Pension Fund Articles, plus the CHA Pension Fund (CHA is a private governmental plan not in the Illinois Pension Code).

    These Articles contain the rules for the pension systems.

    ++++++

    Now, to distinguish between the rules and the actual contributions and investments.

    We have 19 Pension Articles in the Illinois Pension Code, plus the CHA Pension Fund (which is a private governmental plan).

    That is 20 sets of rules that govern govern the 661 pension systems (the Census probably didn’t consider the CHA Pension Fund a pension system since it’s a private governmental plan).

    +++++

    The difference between 20 and 661 is due to Downstate Police and Downstate Fire, which are 641 pension systems, one for each police department, fire department, and fire protection district that participates in such a plan.

    ++++++

    There have been discussions of pooling the contributions / investments of all Downstate Police pension systems into one fund.

    And likewise for Downstate Fire.

    That would make Downstate Police and Downstate Fire more like IMRF from the perspective of how to invest and manage contributions.

    IMRF (Illinois Municipal Retirement Fund) pools contributions / investments of all its participants (cities, villages, towns, park districts, counties, townships, etc.) into one giant fund.

    Instead of one fund for EACH city, village, town, park district, county, township, etc.

    +++++++

    Pensions are the biggest reason why Democrat County Board Chair Jack Franks’ call for all taxing districts in McHenry County to cut their property tax extension by 10% is a joke.

    There are many severely underfunded Downstate Police and Downstate Fire pension funds in McHenry County.

    There is no plan that can fully fund those pensions by cutting property taxes.

    So Jack Franks’ call for those taxing districts to cut their property taxes 10% is not sustainable.

    It’s an election gimmick.

  23. Omitted a word.

    ….Democrat County Board Chair candidate Jack Franks’….

  24. Illinois Department of Insurance

    Public Pension Division

    2015 Biennial Report (2013 – 2014)

    The report is issued every two years.

    The most current report was issued in 2015.

    The report issued in 2015, covers the years 2013 – 2014.

    The date of the figures listed below are as of April 30, 2014, unless otherwise noted.

    An unfunded liability is the amount that should be in the pension fund as of that date, but is not.

    Thus, because this is a defined benefit pension system, it’s a taxpayer IOU to the pension fund.

    Taxpayers are responsible for 100% of the unfunded liability.

    The employee / retiree is responsible for zero percent of the unfunded liability.

    +++++

    Algonquin Lake in the Hills Fire Protection District Pension Fund

    – 75% funded

    – $5,375,018 unfunded liability

    +++++

    Algonquin Police Pension Fund

    – 64% funded

    – $11,062,231 unfunded liability

    +++++

    Cary Police Pension Fund

    – 52% funded

    – $8,008,961 unfunded liability

    +++++

    Cary Fire Protection District Firefighters Pension Fund

    – 80% funded

    – $820,590 unfunded liability

    +++++

    Crystal Lake Firefighters Pension Fund

    – 68% funded

    – $11,917,321 unfunded liability

    +++++

    Crystal Lake Police Pension Fund

    – 58% funded

    – $22,873,951 unfunded liability

    +++++

    Fox Lake Fire Protection District Pension Fund

    – 72% funded

    – $214,327 unfunded liability

    ++++

    Fox Lake Police Pension Fund

    – 73% funded

    – $4,628,041 unfunded liability

    +++++

    Fox River Grove Fire Protection District

    The Fox River Grove Fire Protection District dissolved during the biennial period covered by the report.

    The Fox River Grove Fire Protection District now participates in the IMRF pension fund.

    +++++++

    Harvard Fire Protection District

    – Dissolved during the biennial period.

    – The Harvard Fire Protection District has converted to the IMRF pension fund.

    +++++++

    Harvard Police Pension Fund

    – 65% funded

    – $4,618,227 unfunded liability

    +++++++

    Huntley Fire Protection District Firefighters Pension Fund

    – 90% funded

    – $2,055,063 unfunded liability

    +++++++

    Huntley Police Pension Fund

    – 48% funded

    – $6,364,608 unfunded liability

    +++++++

    Island Lake Police Pension Fund

    – 49% funded

    – $3,467,933 unfunded liability

    +++++

    Johnsburg Police Pension Fund

    – 42% funded

    – $2,871,493 unfunded liability

    +++++

    Lake in the Hills Police Pension Fund

    – 79% funded

    – $6,073,470 unfunded liability

    +++++

    Lakemoor Police Pension Fund

    – 32% funded

    – $146,846 unfunded liability

    +++++

    Marengo Police Pension Fund

    – 44% funded

    – $6,026,775 unfunded liability

    +++++

    McHenry Police Pension Fund

    – 52% funded

    – $18,242,250 unfunded liability

    +++++

    McHenry Township Firefighters Pension Fund

    – 1,745% funded

    – $3,532,437 surplus

    (It’s a newer fund, so there is not 10 years of historical data. Would need to gather all the facts before assuming or concluding anything about those figures.)

    +++++

    Spring Grove Police Pension

    – 42% funded

    – $3,265,514 underfunded

    +++++

    Woodstock Fire / Rescue District

    – 52% funded

    – $4,918,656 underfunded

    ++++++

    Woodstock Police Pension Fund

    – 66% funded

    – $9,621,710 underfunded

    ++++++

    Grand total (note that some portions of some funds are the responsibility of taxpayers in Lake County):

    $129,040,548.

    ++++++

    $123,665,530 is the unfunded liability (taxpayer IOU) of the above 21 Downstate Police and Downstate Fire pension funds, most of which is attributable to McHenry County residents, as of April 30, 2014.

    ++++++

    So how are the above taxing districts going to cut their property tax revenue 10% yet come up with a plan to fully fund pensions.

    ++++++

    Not included in the above are IMRF pensions, which are generally better funded, although often not fully funded.

    ++++++

    We can also look at all the collective bargaining agreements in place in McHenry County.

    An employer cannot unilaterally make changes to a collective bargaining agreement.

    The changes must be agreed upon with the union.

    Every once in awhile a union will agree to make cuts to an existing collective bargaining agreement with no consideration in return…that rarely happens.

    +++++

    Jack Franks calling on taxing districts to cut 10% from the amount of property taxes they receive from property taxpayers is an election gimmick.

    The only portion of the property tax bill which Jack Franks would have any significant influence on is the County portion, which is for most municipal taxpayers less than 10%.

    A 10% reduction on 10% of the property tax bill is 1% of the overall property tax bill.

    Cut10 is Cut1.

    http://www.cut10.org

    http://www.cutmchenrytaxes.org

    McHenry County Property Taxes

    Where is the plan?

    Jack Franks is taking a page from the Nancy Pelosi handbook of passing legislation, and transferring it to elections.

    You have to pass it to see what’s in it (Obamacare).

    You have to elect me to see what’s in it (Jack Franks Plan to cut County taxes 10%, and plea for all taxing districts in McHenry County to follow suit and cut their taxes by 10%).

    ++++++

  25. Getting back to Cary School District 26.

    +++++

    Cary CCSD 26 aka Cary Community Consolidated School District 26 aka Cary Elementary School District 26.

    Teacher union is Cary Education Association (CEA), IEA-NEA.

    Enrollment is about 2,740 in 4 schools, all of which are in Cary: Briargate Elementary, Deer Path Elementary, Three Oaks Elementary, and Cary Junior High School (Cary Jr High School).

    ++++++

    Recent collective bargaining agreements:

    2002 – 2004

    2004 – 2006

    2006 – 2008

    2008 – 2011

    2011 – 2014

    2014 – 2017 (the 42 page agreement will expire August 2017).

    ++++++

    Regarding cost savings plans that were implemented.

    Here is one such plan.

    In a comment above Mr. Coffey states, “Additionally, the retiree replacement process utilizing the BA-0 new-hire policy, has allowed us to bring in TRS Tier 2 employees that have substantially different retirement benefits/requirements, thus saving TRS millions more in the future.”

    The BA-0 new hire policy is not in the collective bargaining agreement?

    In which case it would be a policy outside the collective bargaining agreement.

    The 2011 – 2014 & 2014 – 2017 collective bargaining agreements state the following about new hires:

    Article X

    Credit for experience on salary schedule

    10.1 Maximum Credit

    Credit to a maximum of twelve (12) years experience may be granted to new hires based on full-time accredited public school teaching experience.

    ++++

    A second plan was to reduce the salary schedule 3% in year 1 of the 2011 – 2014 agreement.

    And hold salaries flat years 2 & 3.

    There is only 1 salary grid in that agreement, covering all three years.

    So the question is, what is meant by holding salaries flat.

    Typically, the entire grid is increased from one year to the next, presumably as a hedge against inflation.

    But even if the grid remains the same from year to year, which it was in this case, then one has to define flat.

    Does flat mean the teachers can advance vertical steps (years worked) and horizontal lanes (earning so many college credit hours with a minimum grade).

    Or does flat mean the teachers cannot advance steps and lanes, that literally their salary remains exactly the same?

    +++++

    A collective bargaining change document would allow taxpayers to quickly identify the salary grid and other changes from one agreement to the next.

    The change document might for example contain underline text for additions, and stricken text for deletions.

    +++++

    So those were the two cost savings identified by Mr. Coffey.

    Maybe other school districts can implement such strategies.

  26. Mark,
    Let me answer the second question first.

    The 2011-2014 contract called for a 3% reduction in Year 1 and then a freeze for Year 2 and Year 3.

    If a teacher was making $50,000 in 2010, their salary dropped 3% to $48,500 for 11/12 and remained frozen at $48,500 for 12/13 and 13/14.

    The BA-0 new-hire strategy is not part of the agreement.

    As you indicated, the current agreement states:

    “Credit to a maximum of twelve (12) years experience MAY be granted to new hires based on full-time accredited public school teaching experience.”

    The district was upfront with applicants during the hiring process that we were not granting years of experience in our offer for a BA-level position.

    Apparently, it is standard practice for districts to not take into consideration the financial impact of the salary level of new teachers being brought on board.

    It took me almost a year to successfully argue to the Board that in order to hire all of the new heads required over several years to return our eliminated programs, all of the new hires had to come into the district at the BA-0 level.

    Given the substantial number of new hires we’ve had from 2013-15, this strategy has allowed us to accomplish that goal.

  27. It is a standard practice for districts to not take into consideration the financial impact of the salary level of new teachers being brought on board.

    Plenty of school districts have cut programs yet new hires were brought on above BA-0.

    I’m sure if contacted the Illinois Policy Institute would be happy to write a story about this scenario at Cary District 26.

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