Susan Handelsman Provides a Summary of Woodstock District 200 Finances

From Woodstock resident Susan Handelsman:

HISTORICAL OVERVIEW

10 years ago d200 borrowed over $100 million to build three new schools.

3,300 of new enrollment capacity was created.

In the ensuing years there has been no growth in enrollment, but we have been paying for full costs of operation and maintenance on all d200 buildings even though many are operating far below enrollment capacity.

Enrollment is projected to decrease over the next five years.

D200 has spent and borrowed and hired more each year for the past decade, all while our home values fell drastically.

With flat district enrollment, the district FTE (full time equivalent) employment rose from 743 to 932.

Total Annual expenditures rose from $55 million to $97 million.

District cost per pupil rose from $9,500 per year to $14,700.

The property tax burden rose from $53 million to $59 million. More money taken form homeowners, yet D200 was getting more and more money from Illinois tax coffers.

General State Aid, that is money from Illinois, has risen from annual $7 million to $14 million.

The district debt has long exceeded the percentage limit which was set by law to protect taxpayers from irresponsible borrowing by school districts.

When accrued unpaid interest owed is factored in, we owe over $140 million dollars, more than we owed ten years ago.

All the additional money taken from taxpayers was spent on…what?

Not to pay down crushing debt load, not to fund increased enrollment because there was no increased enrollment.

Additionally D200 has unfunded pension obligation for employees of over $210 million dollars.

SUGGESTED CONSOLIDATION

The plan to consolidate high schools, and merge Dean, Clay, and Northwoods students into other schools, as well as closing District Administration buildings, is projected to save at least $3 million dollars per year going forward.

It will preserve expansion capacity for 1,700 new students.

$3 million of cash savings represents $395 per $100,000 of home value annual savings from property taxes.

With the average home value in Woodstock of $155,000 that would save $612 per year for an average Woodstock household.

Because property tax rates are fully capitalized into home values, the budget reduction also represents a savings of $612 worth of an average home value each year which would continue to be lost in the alternative.

Additionally, there will be a savings of $6 million of building improvements which are to occur in the near future on the three older buildings: Clay, Dean, and Northwoods.

$6 million will mean a savings of $1,224 per home worth $155000, with an additional $1,224 savings of property devaluation.

WOODSTOCK COMPARISONS

Today we have a 4.6% property tax rate and our home values remain severely depressed while the rest of the nation has enjoyed a full recovery to pre-recession values.

America has an average property tax rate of 1.4% of total home fair market value.

As our extraordinary 4.6% property tax rate is capitalized into our home values, we lose over 3% every year off the value of what is for most of us our biggest investment for retirement.

In addition to the erosion of our home values, due to D200 overspending we lose thousands of dollars a year from household budgets, which most Americans are allowed to keep to save for their own retirement or save for a child’s college fund, or spend to stimulate their local economy.

All over America and Illinois, communities provide all the public services, such as education, required by law.

All over America, communities provide these same services and hold property taxes nearer to the American average of 1.4% than to the extraordinary Woodstock rate of 4.6%.

I ask that proponents of continued overspending by this district present some proof of some benefit of this overspending.

We spend more than $1.33 for every dollar spent by Huntley Unit School District per student per year.

What are we getting that is worth one third more than Huntley students are getting?

There is a high human cost to Woodstock’s 4.6% property tax rate.

If opponents to cutting D200 costs will not cite quantifiable objections with specific rationales, but insist on arguing emotional generalities, I beg them to at least answer one specific question:

Is there a maximum dollar amount you are willing to demand from all of us before you feel any twinge of conscience, any moral compulsion to show compassion for the economic devastation you are causing so many of your less fortunate neighbors?

My point is, if you cannot articulate a maximum amount that you are willing to take from others to fulfill your personal vaguely defined desires, we must see our community not as a community but as a collection of adversaries fighting one another for survival.


Comments

Susan Handelsman Provides a Summary of Woodstock District 200 Finances — 20 Comments

  1. Community wide consolidation would save six million.

    Closing the district office would save three.

    Then you are back to 2006 level spending.

    Problem solved.

  2. Re: “Problem solved.”

    With voter comments such as this, I not at all surprised that our government units are out of control.

    Tax bite roll back only addresses a small portion of the ‘problem’.

  3. Ya – I’m a really myopic for not posting a dissertation on rolling back taxes in an article about just schools.

    Don’t worry Mark will be here in a jiffy to post something completely unrelated, much to your satisfaction.

  4. With standards like that, you must also enjoy reading Dictionaries and the PhoneBook.

  5. Dear Springfield:

    Schools take over SEVENTY-THREE PERCENT of our property tax dollars.

    “Consolidation” needs to start with the SCHOOL DISTRICTS.

    That is, if you really care about the taxpayers and not your political career…

  6. I hear Susan Handelsman and another VotersInAction.com roundtable member are running for the school district D200.

    That’s GREAT NEWS for the overtaxed, under-informed, residents of Woodstock!

    4.6% real estate taxes?

    That’s CRAZY!

    Dear God, If we feed these two tax fighting Gremlins after midnight will they multiply?

    Praying!

    We need more like them!

  7. That’s the big yellow thing you find wrapped in plastic on your driveway that you pitch into the recycling bin.

  8. The spending for public education has been out of control for decades in Illinois, driven by the irresponsible hiking of pension benefits, salaries, current benefits, and retiree benefits, when pensions were already underfunded.

    Woodstock District 200 is in worse shape than most.

    The numbers are even worse than portrayed above.

    Expenditures (total cost of services) of $97 million were in fiscal year 2014 (year ending June 30, 2014).

    In FY 2015, total cost of services were $103 million.

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

    Obligation – Amount – Source in FY 2015 CAFR (comprehensive annual financial report)

    Bond Debt Service (principal & interest) – $210,041,392 – p38 (pdf p66); p = page

    Technology Loan Debt Service – $475,394 – p38 (pdf p66)

    Capital Lease Debt Service – $410,058 – p38 (pdf p67)

    District portion of TRS unfunded pension liability – $5,413,718 – p42 (pdf p70)

    State portion of TRS unfunded pension liability – $211,213,921 – p42 (pdf p70)

    IMRF unfunded pension liability – $6,073,459 – p42 (pdf p70)

    Unfunded retiree healthcare liability (OPEB) – $4,240,350 – p53 (pdf p81)

    Total taxpayer obligations to Woodstock District 200: $437,868,292

    ++++++++++

    The State portion of TRS unfunded pension liability is on behalf of the school district.

    Currently, state taxpayers are responsible for that obligation.

    More state money to the pension unfunded liability, means less state money available to school districts for current operations.

    ++++++++

    The 2016 CAFR is now on the District website, so the above numbers can be updated.

    http://www.woodstockschools.org/school-board

  9. Here are the Woodstock CUSD200 obligations as of June 30, 2016 (FY 2016).

    Obligation – Amount – Source

    Bond Debt Service – $200,475,451 – p38 (pdf p 66)

    Technology Loan Debt Service – $214,809 – p37 (pdf p65)

    Capital Lease Debt Service – $2,141 – p38 (pdf p66)

    District portion of TRS unfunded pension liability – $7,123,710 – p41 (pdf p69)

    State portion of TRS unfunded pension liability – $231,720,926 – p41 (pdf p70)

    IMRF unfunded pension liability – $10,577,591 – p47 (pdf p75)

    Unfunded retiree healthcare liability (OPEB) – $4,213,190 – p50 (pdf p78)

    Total Taxpayer IOUs to Woodstock District 200: $454,327,818

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

    Change in Taxpayer obligations to Woodstock District 200:

    FY 2016, $454,327,818

    less

    FY 2015, $437,868,292

    equals

    $16,459,526 increase in taxpayer obligations to Woodstock CUSD 200 from FY 2015 to FY 2016.

  10. Woodstock District 200 Total Expenses

    FY 2014 – $96,670,000

    FY 2015 – $103,460,000 – 7% increase

    FY 2016 – $109,260,000 – 5.6% increase

    source: Woodstock District 200 FY 2016 CAFR

  11. So let’s look more closely at this.
    Bond Debt Service 2015 $210,041,392
    Bond Debt Service 2016 $200,275,451
    Decreased by $9,765,941

    Tech Loan Debt Service 2015 $475,394
    Tech Loan Debt Service 2016 $214,809
    Decreased by $260,585

    Capital Load Debt Service 2015 $410,058
    Capital Load Debt Service 2015 $2,141
    Decreased by $407,917

    Unfunded pension liabilities are the mess that the state legislature has created. It is funds directly related to the current and past employees of the district so the things that this board has direct control over reflected a DECREASE of $10,434,443 from 2015 to 2016.

    Looks like they do have a debt management plan in place.

  12. Woodstock District 200 Debt Service Schedule

    (debt management plan to repay bonds)

    Year Ending June 30 – Principal – Interest – Total

    2017 – $5,695,000 – $4,162,219 – $9,857,219

    2018 – $5,840,000 – $4,025,419 – $9,865,419

    2019 – $6,110,000 – $3,746,294 – $9,856,294

    2020 – $6,645,000 – $3,453,469 – $10,098,469

    2021 – $7,205,000 – $3,150,799 – $10,355,799

    2022 – $1,270,000 – $2,833,863 – $4,103,863

    2023 – $18,686,390 – $9,073,523 – $27,759,913 WOW!

    2024 – $12,611,900 – $15,584,213 – $28,196,113 That’s not an illusion.

    2025 – $5,307,950 – $16,402,763 – $21,710,713 Brutal

    2026 – $5,180,700 – $17,297,213 – $22,477,913 Ugly

    2027 – $8,435,000 – $1,934,237 – $10,369,237

    2028 – $3,970,000 – $1,542,387 – $5,512,387

    2029 – $4,175,000 – $1,322,015 – $5,497,015

    2030 – $4,405,000 – $1,092,110 – $5,497,110

    2031 – $4,645,000 – $858,300 – $5,503,300

    2032 – $5,450,000 – $660,087 – $6,110,087

    2033 – $5,520,000 – $371,650 – $5,891,650

    2034 – $1,520,000 – $76,000 – $1,596,000

    Total – $112,671,940 – $87,586,561 – $200,258,501

    ++++++++++

    The school board approved that plan.

    Bond debt service falls outside the tax cap, meaning, property taxes to repay bonds can be in addition to the tax cap which is the lesser of CPI or 5%.

    Note the high interest amount compared to principal.

    +++++++++++

    source: Woodstock District 200 FY 2016 CAFR

    – page 37 (pdf page 65)

    There is another debt service schedule on page 38 (pdf page 66) which is similar but not exact.

    ++++++

    “As of June 30, 2016 the statutory debt limit for the District was $99,780,897 providing a legal debt margin of ($7,130,728) after taking into account amounts available in the Debt Service Fund.”

    – page 38 (pdf page 66) of FY 2016 CAFR for Woodstock CUSD 200.

    Meaning, debt exceeds the legal debt limit.

  13. The statutory debt limit is 13.8% of total assessed value.

    Total assessed value for FY 2016 was $723,049,978.

    $723,049,978 x .138 = $99,780,897 statutory debt limit.

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

    The calculation of Total Net Debt Applicable to the Limit:

    Bond Principal – $112,671,940

    plus

    Technology loans – $211,130

    plus

    Capital leases – $2,048

    less

    Amount set aside for repayment of general obligation debt ($5,973,493)

    equals

    Total Net Debt Applicable to Limit: $106,911,625

    +++++++++

    $106,911,625 debt applicable to limit – $99,780,897 limit = $7,130,728 over the limit

    +++++++++

    Note bond interest is not applicable to the limit.

    Only bond principal is applied to the statutory limit.

  14. “Note bond interest is not applicable to the limit.

    Only bond principal is applied to the statutory limit.”

    Last year I had contacted all our state reps on this issue (which encourages borrowing by using financial instruments most harmful to taxpayers, as a way to circumvent borrowing limits).

    They all said the right things in agreement, and promptly did absolutely nothing about it.

  15. Looking at the issue of the school district statutory debt limit including principal but not interest.

    From the FY 2016 Woodstock District 200 CAFR:

    Principal – $112,671,940 (56% of total)

    Interest – $87,586,561 (44% of total)

    Total – $200,258,501

    Thus the school district statutory debt limit ignores $87,586,561 of the total bond debt.

    The school district statutory debt limit ignores 44% of the total bond debt.

    ++++++

    If the credit card company, mortgage company, car loan company, etc. ignored the interest we owed, then we could borrow more.

  16. As Mark states with source-cited evidence, we are being obligated by elected officials to guarantee debts far in excess of Illinois statutory limits.

    What can we do about this?

    Contact the people who did this to us.

    Work to hold the people who did this to us accountable.

    Make sure the people who did this to us STOP doing this to us, and do everything to protect us from the fallout of having done this to us.

  17. Before voting in the Woodstock School Board election look at this post:

    Mark on 12/17/2016 at 10:49pm

    Given current projected growth in the district Woodstock District 200 will have to pay fees to refund or otherwise refinance the bonds that are due in 2023, 2024, 2025, & 2026 to avoid spikes in property tax bills.

    Has the incumbent board clearly articulated this to taxpayers?

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