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Operations & Business Services Newsletter October 23, 2019
Operations & Business Services Newsletter October 23, 2019
Dr. Frank Evans
Tuesday, October 22, 2019

Construction Update

The new unit heaters and unit ventilators for heat and air conditioning were installed at Stella May Swartz School. The valves to them will now be programmed for use with our Automated Logic Control system. The ALC allows set temperatures to be set in the units and the units can be monitored by computer remotely.

The plumber has completed the plumbing connections for the Albright Middle School LMC Workroom so that the sink, counter, and counter-top can be installed. Engineering needed to confirm how to address two air conditioning condensate pipes under the sink. The condensate pipes come from the IT Server Room and the District Office Conference room.

The vertical insulated panels for Salt Creek Primary School began installation this week after school. Once that job is done the remaining gutters and downspouts can be installed and the new roof project will be complete.

We are still waiting for bookshelf counter tops to be installed in two offices in the district office and installation of some lock cores and conference room blinds and the district office remodel will be complete. When you are over to Albright Middle School for any reason please stop by the district office, we would love to show you the finished summer project.

New lock cores have been ordered for Albright Middle School. After the cores are installed all teachers will be issued new classroom master keys that allow them to open any classroom in the school. Over the years a number of master keys were made as new locks were installed resulting in multiple master keys needed.

Now only one new master key will be needed. Administrators will have that new master key, a district and general office master key, and an outside master key to carry around. The new lock cores were requested by Gerrie Aulisa and as approved by Dr. Chung.

District maintenance staff are renovating the two staff bathrooms at Stella May Swartz School at the request of Sarah Smith and as approved by Dr. Chung. The bathrooms will receive new fixtures, lights, flooring, and paint.

Summer 2020 Work Finalized

FGM Architects will design/bid/and supervise construction this summer to complete window replacement at Stella May Swartz School, Albright Middle School, and the District Maintenance Garage.

In addition, all of the remaining health life safety work at all three schools and the district maintenance garage will be done this summer. That work includes replacement of some doors, door frames, door closers, electrical work at all three schools and replacement of rooftop condensing units at Albright Middle School that have reached end-of-life. You will recall in the roofing work done during Summer 2018 construction all of the rooftop units were gathered together into an area of the roof to reduce walking on the roof to service the equipment, including replacement of the equipment. The soft and hard costs will be paid from the remaining repair bond proceeds until they are fully spent, and then through the Operations & Maintenance Fund as needed.

In addition, the Operations & Maintenance Fund this summer will provide funds for the demolition of the existing playground at Stella May Swartz School and construction of a new playground. The FTC is committed to adding additional playground equipment as a result of their 2020 fund raising efforts. We may also have a contribution from the City of Oakbrook Terrace who provided funding when the original playground was installed over 24 years ago.

While district taxpayers still have a few years left to pay the principal and interest for the $8 million repair bonds, the repair work itself was expedited and will be complete at the end of the Summer 2020 construction work. We deeply appreciate the support of the community to do much needed repairs of our schools. If we had not received the bond proceeds it would have taken at least 16 years to do the same work within the limited funds collected each year in the Operations & Maintenance Fund due to the Property Tax Limitation Law.

FY 2019 District Audit Presented & Accepted By Our Board Of Education

Dave Meyer, Partner and Katie Napier, Lead Auditor presented the audit to the Board of Education last Wednesday. Katie and her team of auditors came to the district last July and spent a week pulling samples that included vendor payments, payroll, bond payments, etc. They also checked with vendors, attorney, and banks to verify our records.

The annual audit is comprehensive but is not a forensic audit, meaning that they do not review every document and general ledger transaction, only a sample is taken. On the basis of the sample the auditors reported no findings, which in auditor talk is a clean audit. We are managed and reported on a cash basis which ties into our monthly cash reporting to the Board of Education. Most units of government operate on the modified accrual reporting system so the auditors always note that we are not in compliance with government reporting standards and note that we are in full compliance with the Illinois State Board of Education reporting standards .

We also will receive recognition status for our financial reporting which is the highest possible in the State of Illinois.

The Education Fund, our largest, had receipts of $12,171,052 and disbursements of $11,146,019 resulting in an excess of receipts over disbursements of $1,025,035. The Operations & Maintenance Fund had receipts of $1,428,480 and disbursements of $1,463,317 resulting in a deficiency of receipts over disbursements of ($34,837). The third operating fund is Transportation and it had receipts of $715,467 and disbursements of $668,508 resulting in an excess of receipts over disbursements of $46,959.

Our Capital Projects Fund spent $4,204,279 for Summer 2018 Construction paid in FY 2019 leaving a fund balance of $3,262,476 that is being used in FY 2020 for Summer 2019 construction. The Capital Project Fund pays for repair construction. We plan to totally spend the repair bond proceeds when Summer 2020 construction is completed.

Fund balances as of June 30, 2019 in all funds was $13,711,072. The Education Fund had a balance of $5,011,613, Operations & Maintenance Fund had a balance of $1,800,622. The Debt Service Fund had a fund balance of $2,621,800. Transportation Fund had a balance of $422,598. Illinois Municipal Retirement and Social Security Fund had a fund balance of $324,347. Capital Projects Fund has a fund balance of $3,262,476. Finally, our Working Cash Fund had a fund balance of $267,616. I cautioned everyone that the June 30, 2019 fund balances reflected the first payment of real estate taxes for the 2019-2020 school year and were not liquid to be used for other purposes.

When pressed by a Board member the two auditors acknowledged that the district had another good year.

Illinois Districts Could Struggle To Meet Minimum Teacher Salaries

The minimum teacher wage bill signed by Illinois Gov. J.B. Pritzker in August, which will increase the minimum annual salary to $40,000 over the next five years, has not proven universally popular. The average teacher salary in Illinois is over $65,000, 11th among the 50 states, although public records show teachers making less than half of that average, some under $30,000. Even as union leaders and Democratic officials framed the new law as a crucial way to telegraph the value of educators, at a relatively small cost to taxpayers, opponents argued that the fiscal impact will be larger, and more detrimental, than just raising salaries for the lowest paid. Some districts’ current starting salaries are so low that they’ll have to raise them by 20%-25% to reach even the starting $32,000 figure, said Ben Schwarm, deputy executive director of the Illinois Association of School Boards. The group opposed the bill, calling it an unfunded mandate that interferes with local decisions. Two-thirds of school funding in Illinois comes from local, not state, revenue, he added, meaning that districts may have to cut programs or staff in order to raise the salaries.


Illinois State School Board Vote On Legislative Agenda

The Illinois State Board of Education’s legislative agenda is scheduled to vote on the upcoming fall veto session and regular spring 2020 legislative session this week. The superintendent is also expected to suggest that a representative from a local mental health agency should attend board meetings, rather than a representative of the Illinois Department of Human Services, in cases where suspension or expulsion occurs with mental illness as a cause. Changes to enrollment reporting for private special education facilities, alongside moving the special education child count from December to October, are among other items up for discussion.

Some Illinois Lawmakers Want To Pass Pension Consolidation Measure 

Some Illinois lawmakers want the upcoming veto session this fall to focus on a task force recommendation to consolidate 649 downstate local police and firefighter pension funds into two funds. Two lawmakers said the plan was a small reform to address the state’s high property taxes and underfunded pensions. Gov. J.B. Pritzker unveiled a plan proposed by the Pension Consolidation Feasibility Task Force last week to combine 649 suburban and downstate police and fire pension funds into two separate funds, one for police and another for firefighters. The plan does not include the city of Chicago or the state’s five pension funds for university employees, state employees, lawmakers, judges and teachers.

Before Pritzker announced the plan, the Illinois Department of Insurance released its biennial report on public pensions. It showed in 2018 the average funding ratio for the state’s suburban and downstate police pension funds was 55.1 percent. Downstate firefighter pension funds were 54.4 percent funded. The total unfunded liabilities for those funds was a combined $12.3 billion.

State Sen. Robert Martwick, D-Chicago, said some local public pension funds were 80 percent funded while others are woefully underfunded. Consolidating them won’t be an immediate fix. “An 11 percent funded local pension fund after this consolidation is still only 11 percent funded,” he said. However, Marwick said consolidation would give smaller funds the ability to access investment opportunities with greater returns.

State Rep. Mark Batinick, R-Plainfield, said he likes the overall proposal because it would lower costs and increase investment returns, even if it doesn’t deal with the state's $135 billion in unfunded liabilities. “But if you’re in the burbs or downstate this is a big issue with your property taxes,” Batnick said. “And some of this snowballs.” There aren’t many vetoes to consider when lawmakers return later this month and Batnick said he hoped to see the consolidation plan pass before the end of the session. “It would actually be nice to focus on something that is important, that directly affects property taxes so I’m kind of hopeful that all the air is taken out [of the room] with this,” Batinick said.

Many communities across the state report local police and firefighter pension funds are taking up more and more of their operating budgets and share of property taxes. Martwick said he expects thorough hearings of the governor’s pension consolidation proposal. “All of this was done behind closed doors and so I’m looking forward to some public hearings where I can hear the people in support of it say why they support it and I want to hear what those who are opposed to it say why they are opposed to it,” Martwick said.

A state firefighter association has come out in support of the proposal. A state police association has raised concerns. Batinick warned against muddying up the idea, something he said could be a greater risk if lawmakers wait until the Spring to take the issue on. “Springfield can screw up a one-car funeral,” Batinick said. “People could throw anything at it ... people with other agendas that may want to attach something else to any bill that’s passed.” Lawmakers return to Springfield for three days beginning Oct. 28 and three days beginning Nov. 12. It’s still unclear who the governor will pick to take the lead on the pension consolidation plan.

Exelon Utilities CEO Abruptly Retires

The CEO of Exelon Utilities abruptly retired amid questions about the company's lobbying activity and connection to Martin Sandoval, a Democratic Illinois state senator at the center of a vast federal corruption investigation. The company made the announcement about CEO Anne Pramaggiore's retirement Tuesday.

“We thank Anne for her valuable service to Exelon and ComEd and the important contributions she made to enhance our utility operations throughout her tenure,” Exelon CEO Christopher M. Crane said. “Over the past several years, including under her leadership, Exelon’s utilities have continued to achieve high levels of reliability and record levels of customer satisfaction, while implementing industry-leading strategies for the future of our utility business." The public utility announced last week it had received two federal grand jury subpoenas related to the investigation into Sandoval.

According to a warrant unredacted by the Illinois State Senate last Friday, federal investigators were searching for anything tied to “ComEd, Exelon, any employee, officer or representative of any of those businesses, Exelon Official A, Exelon Official B, Exelon Official C, Exelon Official D, and/or any issue supported by any of those businesses or individuals, including, but not limited to, rate increases.”

Sandoval’s daughter, Angie, works for ComEd as a senior account executive. In 2016, the Illinois General Assembly agreed to electricity rate hikes to bail out two ComEd nuclear power plants in the state. It's unclear of the FBI investigation is related to the bailout. The corporation named Calvin G. Butler Jr., CEO of Baltimore Gas and Electric Company, as Interim CEO, effective immediately. 

“We remain steadfast in our commitment to providing our millions of customers with clean, affordable and reliable energy and outstanding service,” Crain continued. “We are confident this will be a smooth transition for all Exelon stakeholders, including our customers, employees, communities and shareholders.”

The unredacted warrant released last week also lays out a broad investigation into Sandoval's dealings with a video gambling company, a red-light camera company, an asphalt contractor, and state and municipal officials.

According to the unredacted warrant, agents were searching for "items related to any official action taken in exchange for a benefit," also known as a kickback.

In May, federal agents also raided the homes of former ComEd lobbyist Mike McClain, House Speaker Michael Madigan's former political operative Kevin Quinn, and former Chicago Alderman Michael Zalewski. Each has close relationships with and political ties to the powerful House speaker.

Part of that raid focused on payments McClain and other lobbyists for ComEd made to Quinn after Madigan was forced to fire him following allegations of sexual harassment. The Chicago Tribune has also reported that the FBI sought communications about attempts to get ComEd to give lobbying work to Zalewski.

Several Illinois Cities Among Nation's Slowest-Growing, New Analysis Shows        

Several Illinois cities ranked among the slowest-growing cities in the nation, according to a new analysis from the personal finance website WalletHub. WalletHub ranked the fastest and slowest growing cities in America. Researchers looked at 515 cities across the nation. Nineteen cities in Illinois made the list. Most finished in the bottom quarter of the rankings.

WalletHub analyst Jill Gonzalez said researchers looked at 17 metrics of growth and decline over the past seven years. The metrics included population growth, college-educated population growth, unemployment rate and regional gross domestic product per capita. Cities in the Southern and Western areas of the country generally ranked among the fastest-growing. The fastest-growing city in America was Lehigh Acres, Florida. The slowest growing city on the list was Shreveport, Louisiana, which ranked 515th.

Cities in Central Illinois tended to rank poorly on many of the metrics researchers used, Gonzalez said. "It really comes down to jobs and the economy, overall," she said. "Right now, the job growth is just not there in a lot of these cities. Median household income is very stagnant or negative." Many of the larger central Illinois cities were ranked as the slowest growing cities. Champaign ranked 475 out of 515. Bloomington finished 480th, Peoria 497th, Springfield 510th and Decatur finished 511th.

Elsewhere, Rockford was ranked 498th and Davenport, Iowa, ranked 512th. St. Louis finished better than many Illinois cites, with an overall ranking of 401st. One of the key factors for growth was venture capital investment, a metric that St. Louis ranked near 150th, Gonzalez said.

When compared to other cities across the country with growing populations, Gonzalez said the employment picture looked much different. Places with growing populations also had the most jobs to offer. There was more entrepreneurial activity and new businesses in the cities with growth, Gonzalez said.

No Newsletter Next Couple Of Weeks

I am joining my wife on another Quilting Cruise out of Long Beach, CA and ending up in Fort Lauderdale, FL. We will go along the coast of Mexico down to the Panama Canal up to Costa Rica and Columbia, Grand Cayman, and end up to Fort Lauderdale. The ship is repositioning from Alaska trips to Caribbean trips for the winter. My wife will work on three different quilts with classes taught by the designer of the quilt while I am relaxing on board the ship. This will be the longest cruise we have ever taken, 16 days.

The next Operations & Business Services newsletter will be November 20, 2019.

Quote Of The Week

“The school is the last expenditure upon which America should be willing to economize.”

                                                                                                                            ~ Franklin D. Roosevelt