Scott Coffey Critiques District 155 School District Budget

Cary Grade School District 26 Board President Scott Coffey took a look at the Crystal Lake High School District 155 budget and offers the following observations under this article:

Former CL High School School Board Candidate Calls Out Board Members Who Beat Him

One of the district’s key problems is inflated teacher salaries which is self-inflicted.

In fact, the levy presentation indicated that one of the two main reasons for the max levy request was the contractual increases built into the teacher’s contract.

This is further exacerbated by the relentless decline in enrollment.

The impact of de-leveraging is crushing when the Board fails to adjust appropriately.

I don’t fault the Board for hiring an independent consulting firm to analyze facilities options.

Neither the administration or the board members have the capability to adequately perform that analysis.

What I do fault the Board on is the complete failure to move forward upon the recommendations generated from the study.

It is completely clear that one of the buildings needs to be closed due to declining enrollment and the significant future capital expenditures that will be required in a building like CL Central HS.

As to the study’s recommendation to outsource food service at the remaining two schools, the Board completely screwed that up as well.

They voted to outsource the service but failed to eliminate the 16+ district food service positions at those two schools.

So the savings will be ZERO.

I spent some time on the phone with their CFO on this topic and I give him credit for trying to defend the indefensible.

Which brings us to the second reason identified for the max levy request, which was the need to fund a significant stream of capital expenditures over the next 6 years totalling $48.8 million.

This is on top of the $45+ million in CapEx the district spent over just the past 4 years.

That’s $94.2 million over a 10 year stretch.

In fact D-155 issued $19 million in debt in ’14 and ’15 to provide the cash necessary for some of those projects.

These bonds won’t be paid off (or come off the tax levy) until 2033.

I seriously question the wisdom of issuing 20-year debt with interest rates maxing out at 5% when the district is sitting on more than $100 million in Cash yielding less than 1%.

This voracious pace of capital spending is a serious management problem.

D-155 spent $11.1 million last year and is prepared to spend at least $11.3 million this year.

I asked the CFO when the last time the Board approved a Request For Qualifications for architectural services.

He did not know.

This is something Boards should do periodically, and, I think, a part of the problem.

The district’s architects have been a significant beneficiary of the district’s robust capital spending the last several years.

They have been receiving approximately $1 million/year in fees over the last 4 years per the district’s Annual Statement of Affairs reports.

Thus, it should come as no surprise that the key document, the Facilities Condition Analysis report (FCA), produced by the architects, would suggest spending another $48.8 million over the next 6 years.

This FCA report provides the foundation for the justification of the levy request presentation.

Two problems exist for using it in this manner, other than the obvious conflict of interest in the firm that produced it, is that:

1) The administration adopted the numbers without evaluating, adjusting or editing any of the proposed projects which is standard practice. They incorporated them into the levy presentation as published. And,

2) The FCA report has not yet even been presented to the Board for review. So, the Board voted to increase our taxes the maximum allowed under the law predicated on projections from a report that they have not yet seen or approved.

Lastly, regarding any discussion on fund balance levels, it looks like D-155 finished FY17 with a fund balance of $55.1 million, subject to any audit adjustments.

It should be noted that D-155 employs a levy revenue recognition accounting principle of deferring 100% of their levy revenue.

In other words, the annual levy of roughly $73 million, of which half is received in June of 2017 and the remaining half is received in September of 2017, is entirely deferred into the 17-18 school year even though half of it was received in the 16-17 school year.

Many districts utilize a 50/50 recognition principle based upon constructive receipt of that first levy payment.

The effect of a 100% deferral principle is to understate year-end fund balance, in this case about $36.5 million.

The deferrals explain most of the variance between the district’s usual Cash balance of $100+ million at year-end and its Fund balance of $55-$60 million.


Scott Coffey Critiques District 155 School District Budget — 28 Comments

  1. My guestion is why is Dist 26 reopening Oaknoll school before the last bonds are paid off so our taxation rate can be reduced?

    Shouldn’t that happen then if you feel the need to expand you come to the voters and ask permission?

  2. Nob, along with the re-opening of Oak Knoll, the district will be defeasing approxiamtely $4.2 million of future debt service (i.e. a reduction in property taxes).

    The savings to the taxpayer will be approximately $760K against next year’s levy alone.

    Here is a link to the district’s press release:

    The relevant language to the tax cuts:

    “This funding plan will allow the District to lower its tax rate by abating portions of the future debt service levy extension, resulting in savings to taxpayers of an estimated $4.2 million over the next seven years.”

    Over the last 5 years, the Board’s actions through bond refinancing, refinancing equity contributions, two bond sinking funds, abatements, and now debt defeasement, have reduced the burdern to the D-26 taxpayers by roughly $9.2 million.

  3. Here is the levy presentation:

    Community High School District 155


    2017 Tax Levy Discussion

    Budget, Planning, Finance & Audit Committee

    September 5, 2017

    – page 18 of the pdf

    Why Does D155 need its allowable extension?

    …in addition to maintaining our facilities…

    – D155 currently has contracts in place that escalate through the next Fiscal Year, 2018-2019

    – Prior fiscal projections indicate that we need to take advantage of our future allowable CPI increases to remain fiscally solvent


    “D155 currently has contracts in place” includes collective bargaining agreements with public sector unions, including the teacher union.


    Given that, consider that the CHSD 155 teacher union endorsed 3 of the 4 winning CHSD 155 school candidates for the April 4, 2017 school board election, and allowed the other one to attend its Meet the Candidates Night on March 20, 2017 (the losing candidates were not invited to that event).


    In a March 24, 2017 article titled, “Stakes High in Crystal Lake-based District 155 School Board Race,” Brett Rowland of the Northwest Herald reported the CHSD 155 teacher union President, Devin Hester, elected by teacher union members, said the following:

    “Our slate is for academic excellence and fiscal responsibility,’ Hester said.

    ‘Taxes are high.

    We don’t advocate raising taxes.'”


    That article was less than two weeks before the April 4, 2017 school board election at which the following three candidates endorsed by the teacher union were elected to the CHSD 155 school board:

    Board Member #1 – Ron Ludwig

    STEM Teacher at South Elementary in Crystal Lake Elementary District 47 since 2015.

    In 2015 earned $78,605 and in 2016 earned $79,866.

    2016 was his 27th year of service.

    From 1996 – 2014 was Principal at Hannah Beardsley Elementary School in Crystal Lake CCSD 47, with ending salary of $122,284.

    Ron Ludwig’s wife Rita is a teacher at Indian Prairie Elementary in Crystal Lake CCSD 47, earning $55,935 in 2016 her 13th year teaching.


    Ron Ludwig’s son Ryan Ludwig is a teacher at Cary Grove High School in Crystal Lake HSD 155, earning $80,485 in 2016 IN HIS 7th year teaching.

    If Ryan Ludwig never receives another raise in the next 28 years of service and retires with 35 years of service his starting pension will be $60,364 ($80,485 x .75).

    Ron Ludwig’s daughter in law Jessica DaMore Ludwig is a teacher at Lundahl Middle School in Crystal Lake Elementary District 47.

    Mrs. Ludwig earned $34,796 in her 7th year teaching which is very low so she probably works less than full-time.

    Early in her career she worked in Lake Villa Elementary District 41.

    Ron Ludwig’s daughter Alexandria Mayers is a teacher at Bernotas Middle School in Crystal Lake Elementary District 47.

    Mrs. Mayers earned $56,733 in 2016.

    Ron Ludwig’s son-in-law Michael Mayers is a teacher at Cary Grove High School in CHSD 155.

    He earned $63,279 in 2016.


    Board Member #2 – Jason Blake

    SVP & CFO at Associated Equipment Distributors (AED), an international trade association representing companies in the distribution, rental and support of equipment used in construction, mining, forestry, power generation, agriculture and industrial applications.

    Married to Sharon Blake, a CHSD 155 English teacher who earned $112,631 in 2016, her 22nd year teaching.

    If she does not receive another raise in the next 13 years of service and then retires with 35 years of service, her starting pension will be 112,631 x .75 = $84,473, which will increase 3% annually (3% COLA).

    Mrs. Blake benefited from a TRS rule whereas she received full year pension credit for the years she worked as a part time teacher.


    Board Member #3 – Nicole Pavoris

    Nicole Pavoris is a Social Studies teacher at Larkin High School in Elgin School District U46 (Unit 46 aka SD U-46).

    She earned $72,835 in 2016 in her 14th year teaching.

    If she never receives another raise in her next 21 years of service and retires with 35 years of service, her starting pension will be $72,835 x .75 = $54,626, increasing 3% annually in retirement (3% COLA).


    The 4th candidate invited by the teacher union to its “Meet the Candidates Forum” was the only non teacher union endorsed candidate to be invited by the teacher union to its forum.

    – David Secrest was an incumbent seeking re-election in the April 4, 2017 election.

    He is reported to be married to a CHSD 155 employee.

    Patti Secrest?

    – Patricia M Secrest (Patti Secrest) earned $112,499 in 2016 at CHSD 155.

    She is currently in administration and was previously a nurse.

    Her starting pension if she achieves 35 years of service and if she never receives another raise will be $112,499 x .75 = $84,374 and will increase 3% annually in retirement due to the COLA.


    Angela Jean Secrest married Bryan Welder.

    Angela Welder earned $100,664 in 2016 at CHSD 155 in her 18th year teaching.

    She’s an English teacher at Crystal Lake Central High School.

    If she does not receive another raise for the next 17 years and achieves 35 years of service, starting pension will be $100,664 x .75 = $75,498 and will increase 3% annually in retirement (3% COLA).

    Both are in the TRS pension


    The other present members of the CHSD 155 school board are:

    – Adam Guss

    Mr. Guss was recommended by the CHSD 155 teacher union for the April 7, 2015 school board election.

    Mr. Guss is a Technical Supervisor at Comcast.

    His wife Wendy is an Art Teacher at Cary Grove High School, earning $104,870 in 2016 (per Open the Books Widget) in her 19th year teaching.

    If she does not receive another raise for the next 16 years of service (she obviously will receive another raise in the next 16 years of service), and retires with 35 years of service, her starting pension will be $104,870 x .75 = $78,653, which will increase 3% annually in retirement due to the 3% COLA.

    Those are TRS Tier 1 pension benefits.


    – Amy Blazier

    Ms. Blazier was endorsed by the CHSD 155 teacher union in the April 7, 2015 school board election.

    She is a preschool teacher at Friendship House Early Childcare Center, a private not-for-profit facility in Crystal Lake.

    She is married to John Blazier (son of Robert Blazier), a Business Development Ambassador at Exemplar Financial Network.

    Bob Blazier is a former Crystal Lake Elementary District 47 Superintendent.

    The Better Goverment Association pension database lists Bob Blazier’s TRS pension as $114,673 in 2016 with 37 years of service with a pension start date of June 29, 1985.


    – Rosemary Kurtz – Ms. Kurtz was not endorsed by the CHSD 155 teacher union in the April 7, 2015 school board election.

    She was first elected to the CHSD 155 school board on April 7, 2015.

    She is a former teacher and State Representative.

    The Better Government Association’s pension database lists her TRS (teacher) pension at $44,431 in 2017 with 23 years of service and a benefit start date of August 11, 1990.

    The BGA pension database also lists her GARS (legislator) pension as $11,665 in 2017 with 4 years of service and a retirement date of Jaunary 1, 2005.

    Those pensions also increase 3% annually due to the 3% COLA.

    Her daughter is McHenry County Board Member Donna Kurtz.

  4. Here is a recap from above of the relatives of current CHSD 155 Board members employed by the district resulting in conflicts of interest.

    Taxpayers can lobby the board to create board policy to prevent future board members from holding office if they have a son, daughter, stepson, stepdaughter, spouse, son-in-law, or daughter-in-law employed by the district.

    For the time being, a policy can be created to prevent such board members from voting on certain issues or policies pertaining to these employees (collective bargaining agreements, administrator contracts, etc.).

    However there is a long list of items that board members vote on which effect such employees (budgets, etc.), so an outright ban on such elected officials is in the best interest of taxpayers.


    Current CHSD 155 Board Member Ron Ludwig has a son in law (Michael Mayers) that is a Math Teacher at Cary Grove High School in CHSD 155.


    Current CHSD 155 Board Member Ron Ludwig has a son (Ryan Ludwig) that is an English and Math Teacher at Cary Grove High School in CHSD 155.


    Current CHSD 155 Board Member & School Board PRESIDENT Adam Guss has a wife (Wend Guss) that is an Art Teacher at Cary Grove High School in CHSD 155.


    Current CHSD 155 Board Member David Secrest has a wife (Patti Secrest) that is listed by the district as a Nurse at Prairie Ridge High School and in Administration in CHSD 155.


    Is Angela Secrest Welder related to David Secrest and if so how (daughter?).

    She is employed as an English Teacher at Crystal Lake Central High School in CHSD 155.


    Current CHSD 155 Board Member Jason Blake has a wife (Sharon Blake) that is an English Teacher at Cary Grove High School (and Crystal Lake Central High School?) in CHSD 155.


    That is 4 of 7 current CHSD 155 board members with conflicts involving 6 of their relatives employed at CHSD 155.

  5. Thank you Scott.

    Thank you Mark.

    Great “follow the money” information.

    I’d love to chat with you both sometime.

  6. corrected Summary:

    Son in laws: 1

    Sons: 1

    Wives: 3

    Daughters: 1 possible.

  7. It could be a reality TV show.

    Wives of CHSD 155 Board Members.

    Or, Relatives of CHSD 155 Board Members.

  8. Here are the relatives of CHSD 155 Board members employed in CHSD 155 schools, categorized by High School:

    High School – Full Time Equivalents (FTE) – Teacher / Nurse

    Cary Grove HS – 3.83 (Mike Mayers, Ryan Ludwig, Wendy Guss, & Sharon Blake)

    Crystal Lake Central HS – 0.17, possibly 1.17 (Sharon Blake, & possibly Angela Secrest Welder)

    Crystal Lake South HS – 0

    Prairie Ridge HS – 1 (Patti Secrest)

    Total – 5 (possibly 6)


    Could a board member be tempted to vote for a budget that is helpful directly or indirectly for a loved one?

  9. 4 of the 7 CHSD 155 Board Members (Ron Ludwig, Board President Adam Guss, David Secrest, and Jason Blake) have relatives (wife, son, son in law, and possibly a daughter) employed by CHSD 155 as teachers and one nurse.

  10. What?

    How is any of this legal to have family members serving on the board?

    There is too much conflict of interest.

    I believe in other districts there are rules that do not allow for this.

    So what do we do?

    How should we organize so the residents understand that the current sitting board is not interested in listening to the consultants that hired and they have major conflicts of interest?

    We need to get the word out to residents to open up their eyes and understand that we should not continue taking pride in paying for insane IL taxes.

  11. A good first step would be a board policy creating a disclosure form that candidates and board members complete listing relatives employed by either the government body or a vendor / consultant to the government body.

    On second thought a board policy preventing relatives employed by the district (or a vendor / consultant to the district) has the drawback that a reform candidate could have such a relationship.

    There are pros and cons to any solution.

    Also, in smaller districts, especially in rural areas, it is more difficult to find candidates who do not have a relative employed by the government body or a vendor / consultant to the government body.

    In a lot of communities, the local school district is the largest, or one of the largest, employers in the community.


    What happened in the CHSD 155 April 4, 2017 school board election is all of these relationships were not reported by the press (some were).

    Three of the four winning candidates in that election (Ronald Ludwig, Jason Blake, & incumbent David Secrest) have relatives employed by CHSD 155.

    Then add additional pieces of information.

    The teacher union endorsed Ronald Ludwig and Jason Blake, and invited David Secrest to their candidate forum (the losing candidates were not invited).

    Next, the teacher union President was reported by the Northwest Herald to have said:

    “‘Our slate is for academic excellence and fiscal responsibility,’ Hester said.

    ‘Taxes are high.

    We don’t advocate raising taxes.'”


    Now six months after the election the board, some or all of the newly elected and re-elected board members, all endorsed by the teacher union, are proposing to raise taxes.

    And the teacher union President, elected by teacher union members, is not speaking out against raising taxes.

    The teacher union President never provided the public with an example of how the board could balance the budget without raising taxes.

    Someone could go back and look at what the newly elected and re-elected board members said about raising taxes during the election cycle.


    In some school districts, the board releases the teacher union president from some or all school district work responsibilities.

    If such a relationship is in place, it is typically stipulated in the collective bargaining agreement.


    Here is the wording in the current CHSD teacher collective bargaining agreement pertaining to the CHSD 155 teacher union president release time.

    That agreement was approved by the board Tuesday January 19, 2016 and took effect July 1, 2016.

    Article VII Rights


    “The president of the District 155 Education Association shall be released for five (5) periods per week from a non-classroom assignment to work on liaison between the different schools and to carry on other school business.

    In addition, the president may be released for up to ten (10) additional periods per week (including teaching assignments) at the discretion of the Association.

    The Association will pay the cost for staffing a replacement teacher for these additional periods.

    Further, should the replacement teacher require health insurance benefits, the Association will pay for the cost benefit package based upon the appropriate fraction of additional release time afforded the president.

    The Association will notify the District by March 1 each year as to how much release time the president intends to use during the following school year.”

  12. In Woodstock nearly 40 % of homes are rentals.
    This skews voting population motivation.

    At 5 years of >4% property tax rates we can assume that there is no political solution available.

    I suggest we pursue banking lending regulation reform.

    Taxpayers should not be on the hook to backstop risktaking by foreclosure vulture investors in busted-out communities like Woodstock Illinois.

    Federal mortgage guarantees should be limited by amounts of debt-to-statutory-tax-cap-ratios in school districts, and limited by property tax rates which literally represent public spending relative to the means of the taxable community.

  13. This information should be gathered, vetted for accuracy, and then put together so we can socialize it on Facebook, NWH, etc.

    Residents need to be informed about these kinds of situations as the majority of our property taxes are tied directly to the school district, and the Board may not be able to make the correct decisions when there are major conflicts of interest.

    Mark – you seem to have the best handle.

    Can you backup all your statements and possibly produce something that could be used to begin circulation?

    I would like to help drive attendance to the next school board meeting from my neighbors who have extremely high property taxes, whom have expressed interest in learning more about WHY.

  14. Gary, you are correct, Mark has the best handle, regarding the schools.

    The Teacher’s Union, the School Board, nor the Administrator’s represent the Taxpayer or the children.

  15. In McHenry County, two of the most successful reform boards have been Cary Elementary School District 26 including Scott Coffey and McHenry County College including Chris Jenner, who was previously on the board of Cary District 26.

    Cary District 26 feeds into Crystal Lake High School District 155, and thus Mr. Coffey’s interest in CHSD 155.

    Mr. Coffey is an excellent resource for financial reform in CHSD 155.

    In terms of the relatives of board members being employed by the school district, there are various approaches to confirming the information, such as Google searches, asking people in the community who know these people, etc.

    During April 4, 2017 school board election cycle, the losing board candidates had a campaign piece about some of the relationships between school board candidates and their relatives employed by the school district.

    That marketing piece is found in the following blog post.


    McHenry County Blog

    Literature from Crystal Lake High School District 155 Tax Cutting Team Led by Donna Kurtz

    March 20, 2017


    The next CHSD 155 Regular Board Meeting is at the Board Room in the District 155 Center for Education, One South Virginia Road, Crystal Lake.


    A major problem with CHSD 155 Board Meetings is the board does not produce a “board packet” that is posted on the district website prior to board meetings.

    A Board Packet is a pdf that contains all the documents to be discussed and voted on at the board meeting.

    The pdf should be searchable using the find feature in Adobe, and should allow copy from the pdf and paste to another document.

    Paul Serwatka implemented such board packets at the Village of Lakewood, which is a much smaller unit of government than CHSD 155.

    McHenry County (the county unit of government) also posts board packets prior to its board meetings.


    CHSD 155 this year began videorecording its board meetings and posting them on YouTube.

    Those meetings are livestreamed on Youtube (one can watch the live meeting on YouTube).


    So one can watch the videos to see and hear the board members who have relatives in the school district.

  16. Mark you do a great job, now question? Every time our Fallen Angel, says “Thank A Teacher”, I would love to thank him personally with a Sissy Slap across the room, do you think he would set up a meeting with me?

  17. A significant portion of a proposed school district budget is the result of the collective bargaining agreement agreements (cba), and the most significant cba is the teacher cba.

    Taxpayers are at a distinct disadvantage during collective bargaining negotiations.

    School boards could, but do not, allow taxpayers to review or vote on the contract, prior to the board voting on the agreement.

    Since the taxpayers are unorganized, even if the taxpayers did get to vote, the majority of those voting would probably be teachers.

    However, at the very least, taxpayers should be allowed to review the agreement for a week or so, and should be allowed to make public comments at a board meeting prior to the board voting on the matter.

    That would be a significant change to current practice.

    If such a policy were to pass, the taxpayers should be provided the cba change document to review.


    Boards can, but very few do, post the current cba change document on its website, in addition to the current cba.

    A cba change document contains, for instance, underline text for additions and stricken (strike through) text for deletions.

    The board has (or should have) the change document, but simply does not post it.

    The union has the cba change document.

    The administration has the cba change document.

    The taxpayers can acquire the cba change document by submitting a FOIA request.

    Legislators could pass a law requiring the cba change document be posted on the district website.

    Alternatively, local boards can pass a policy requiring the cba change document be posted on the district website.

  18. Here is another aspect of taxes as it relates to school districts.

    There is a myriad of state and Federal laws passed by the Illinois General Assembly and US Congress over the decades that result in state, local, and Federal taxes.

    – pension laws (TRS, IMRF)

    – Illinois Educational Labor Relations Act (IELRA), the resulting Illinois Labor Relations Board (IELRB), mediation, arbitration, interest arbitration, and collective bargaining laws.

    – many more.

    The most powerful influence in that legislation is the teacher unions.

    If one were to compare laws that apply to Federal employees v local school district employees, one sees that local school district employees have a significant advantage over Federal employees.

    That is primarily due to the power of the teacher unions in Illinois over the state political process over a period of many decades.

    Coupled with the influence of local teacher unions over many school board elections, the result is extraordinary pay and benefit hikes.

    There is no easy way to reign that in or scale it back.

    There are many parts to the equation, including policy, political, and legal.

    The unions have an entire infrastructure to deal with that.

    Their opposition, the taxpayers, are a piecemeal, ragtag outfit.

    The taxpayers have been sitting ducks for a very long time.

    The ability to make data and documents difficult to understand, difficult to locate, and difficult to obtain is part of the scheme.

    The ability to extend bond, pension, and retiree healthcare payments over decades is part of the scheme.

    The legally corrupt pension sentence added to the state constitution on December 15, 1970 is part of the problem, in that it enabled UNLIMITED pension and retiree healthcare hikes for UNLIMITED amounts to pensions and retiree healthcare that was already underfunded, with inadequate disclosure to taxpayers as to the meaning and intent of the hikes.

    The patronage system of state politics, in place in some local politics, is part of the problem, in that people’s government careers and contracts are tied to abiding by the wishes of the political party.

    While both political bodies were part of the scheme, at the present time the most dominant influence by far is Michael Madigan, first elected as State Representative in 1970, taking office in January 1971.

    Michael Madigan’s first elected office was as a delegate to the 1970 state Constitutional Convention.

    That experience provided him with a good foundation to understand the state constitution.

    A current thought is to pass legislation allow local units of government to go bankrupt.

    Even if that were done, how high could taxes go before bankruptcy occurred?

    Property taxes in many Cook County southwest suburbs of Chicago are already higher than the highest property taxes in McHenry County.

    Property taxes in many Special Service Areas are already higher than the highest property taxes of those not in an SSA.

    These high property taxes are a diversion of money to special interests and result in less money for property taxpayers to fund retirement and college savings, and result in lower property appreciation.

    Even if one moves, and stays in the USA, they are still under the giant USA debt, which per taxpayer, is larger than the state and local debt.

    If enough people do something and get organized, these are not insurmountable problems.

    But they are time consuming and difficult problems.

    In the meantime, the party continues.

    Enjoy it while it lasts.

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