SCHOOL FINANCE & BUDGETING ISSUE / WINTER 2018
OPERATIONS ISSUE / SUMMER 2014
INDISPENSABLE TOOL for SCHOOL BUSINESS MANAGEMENT
FORECAST, TRENDS & THE FUTURE
New Approaches for Budgeting and Managing District Finances
DISCOVER INNOVATIVE
TOOLS FOR YOUR DISTRICT Get the lastest cutting edge facilities information at the Facilities Professionals Conference! Hear from experts in the field about innovative solutions to help you bring your district processes to the next level. The conference, designed for maximum impact, will feature breakout sessions, networking time and a packed marketplace of service providers.
ATTENDEE AND EXHIBITOR
REGISTRATION IS OPEN! WWW.IASBO.ORG/FPC
Thursday, March 7, 2019 | Chicago Marriott Oak Brook
INSIDE
Illinois Association of School Business Officials UPDATE Magazine / Winter 2018 / v.26 / i.02
SCHOOL FINANCE & BUDGETING ISSUE
update
LEADERSHIP ISSUE / SPRING 2019
Evidence-Based Funding: A Tale of Three Districts
INDISPENSABLE TOOL for SCHOOL BUSINESS MANAGEMENT
LEADERSHIP SKILLS THAT
MATTER
THE NEXT ISSUE: LEADERSHIP
Leadership skills that matter.
As Illinois is currently in its second year of EBF implementation, learn how three districts of varying size, location and financial position are utilizing Evidence-Based Funding to move their districts forward. Cover Story by Jan J. Bush, Ric C. King and Gary R. Tipsord
BUILDING
TRUST
Visit ISSUU.com and search for Illinois ASBO.
BUILDING AND REINFORCING FINANCIAL TRUST WITH YOUR STAKEHOLDERS
Ensure your community members feel confident that the property tax dollars they send to their local school district are well spent and focused on the academic achievement of all students. By David H. Hill, Ed.D.
24
LOOKING FOR PAST ISSUES?
14
www.iasbo.org
| 3
PERSPECTIVE
FROM-THE-PODIUM Budget Forecasting in an Ever-Changing Climate. 07
FROM-THE-OFFICE EBF and ESSA: Elevating the Budget Narrative. 09
FROM-THE-FIELD Financial Forecasting for the Future of Facilities. 11
SCHOOL BUSINESS 101 How the Meritorious Budget Award Process has Impacted Community Transparency. 19
Site-Based Expenditure Reporting:
A Strategic Lever for Student Success
How school business officials and other district leaders can approach site-based expenditure reporting for the greatest positive effect on students. By Sara R. Shaw
20
STAY AHEAD OF
THE GAME: Managing this Year’s Budget While Planning for Next Year and Beyond
Does the financial management of your school district ever feel like you are playing multiple games at once? Get tips for managing this year’s budget while planning for next year and beyond. By David S. Torres
30
We Fixed the Formula‌ Now How Do We Fund it? Reaching the goal of fully funding the Evidence-Based Formula and creating educational success and equity for all students cannot happen without addressing the structural problems behind Illinois’ poor fiscal condition. By Ralph Martire and Daniel Hertz
36
How Far Does the Law Allow Schools to Go? See how the Constitution affects public/private partnerships, advertising and sponsorships for school districts. By Kenneth M. Florey, Jessica L. Knox, Howard A. Metz and Theodore L. Stec
42
The Final Word Nicole Stuckert
CFO, CSBO Sycamore CUSD 427 Nicole sees being a CSBO as a commitment to education. Understanding that you have a commitment to all stakeholders to provide the best educational opportunities, while ensuring financial stability, is essential to success in this role.
46
ON THEIR LIST Get energizing rules for life and work in this book review from Michael Schroeder of Channahon SD17.
45
www.iasbo.org
| 5
THE MAGA ZINE
Illinois Association of School Business Officials
CALENDAR OF
Northern Illinois University, IA-103 108 Carroll Avenue DeKalb, IL 60115-2829 P: (815) 753-1276 / F: (815) 516-0184 / www.iasbo.org
EVENTS
December 2018
S 25 2 9 16 23 30
M 26 3 10 17 24 31
T 27 4 11 18 25 1
W 28 5 12 19 26 2
Date
T 29 6 13 20 27 3
F S 30 1 7 8 14 15 21 22 28 29 4 5
Time
January 2019
February 2019
S 30 6 13 20 27 3
S 27 3 10 17 24 3
M T W T F S 31 1 2 3 4 5 7 8 9 10 11 12 14 15 16 17 18 19 21 22 23 24 25 26 28 29 30 31 1 2 4 5 6 7 8 9
M 28 4 11 18 25 4
T 29 5 12 19 26 5
UPDATE Editorial Advisory Board
March 2019
W 30 6 13 20 27 6
T F S 31 1 2 7 8 9 14 15 16 21 22 23 28 1 2 7 8 9
S 24 3 10 17 24 31
Event
M 25 4 11 18 25 1
T 26 5 12 19 26 2
W 27 6 13 20 27 3
T F S 28 1 2 7 8 9 14 15 16 21 22 23 28 29 30 4 5 6
Location
12/14/18
9:00am
Present Like a Pro: Speaker Training Workshop
12/24/18 to 1/2/19
Naperville
8:00am
Illinois ASBO Holiday Office Closure
1/16/19
8:00am
Facilities Operations Program: Essentials of Grounds Operations
1/16/19
8:30am
AAC#1786 - MBTI: Understanding Type in Leadership Development to Enhance Communication
1/16/19 1/17/19 1/22/19
9:00am
AAC #1896 - Assessing Financial Condition & Preparing for Collective Bargaining
East Peoria O'Fallon Naperville East Peoria O'Fallon Naperville
DeKalb Lisle Lombard
1/16/19 1/17/19 1/22/19
9:00am
ISDLAF+ School Finance Seminar
1/16/19
12:00pm
Lunch & Learn Webinar: Conflict Competence: Leading Effectively
1/18/19
9:00am
PDC Networking Meeting
1/25/19
9:00am
Leadership Day
1/30/19
9:00am
Delegate Advisory Assembly Meeting
Naperville
2/8/19
8:00am
AAC #1889 - Sustainability for PK-12 Schools: How to Create a Sustainability Program
Naperville
2/8/19
9:00am
Support Professionals Half-Day Seminar
Naperville
2/14-16/19
8:00am
2019 ASBO Executive Leadership Forum
San Diego, CA
2/26-27/19
10:00am Alliance Leadership Summit
2/27/19
8:00am
Facilities Operations Program: Essentials of Custodial Operations
3/5/19
9:00am
AAC #1500 - Using the LIFO Assessment to Grow Leadership & Communications Skills
3/7/19
8:00am
Facilities Professionals Conference
3/8/19
8:00am
AAC #1283 - 21st Annual Risk Management
3/15/19
8:30am
Bookkeepers Conference
Online Elk Grove Village TBD
Springfield Lisle TBD Oak Brook Peoria Northbrook
PDC MEMBERS Ryan Berry Legal Issues Yasmine Dada Principles of School Finance James T. Fitton Budgeting & Financial Planning Kathy M. Gavin, M.S. Ed., CSBO Special Education Sean Gordon, CPMM, CPS Maintenance & Operations Richard J. Hendricks, JD, CPA, CSBO Cash Management Stephen R. Johns, Ed.D. Planning & Construction Tim J. Keeley Purchasing John E. Lavelle Risk Management Stacey L. Mallek Accounting, Auditing & Financial Reporting Patrick McDermott, Ed.D., SFO, RSBA Public Policy Sherry L. Reynolds-Whitaker, Ed.D. Human Resource Management Michael J. Schroeder Transportation Laura L. Vince Food Service BOARD & EXTERNAL RELATIONS MEMBERS Cathy L. Johnson President Carrie L. Matlock, AIA, LEED ® AP, BD+C SAAC Chair AT-LARGE MEMBERS Jeff E. Feyerer Fairview South SD 72 STAFF MEMBERS Michael Jacoby Executive Director / CEO (815) 753-9366, mjacoby@iasbo.org Susan P. Bertrand Deputy Executive Director / COO (815) 753-9368, sbertrand@iasbo.org Craig Collins Statewide Professional Development Coordinator, (630) 442-9203, ccollins@iasbo.org Rebekah L. Weidner Senior Copywriter / Content Strategist, (815) 753-9270, rweidner@iasbo.org Tammy Curry Senior Graphic Designer (815) 753-9393, tcurry@iasbo.org John Curry Senior Graphic Designer / Videographer (815) 753-7654, jcurry@iasbo.org Laura M. Turnroth Communications Coordinator (815) 753-4313, lturnroth@iasbo.org
Illinois ASBO Board of Directors Cathy L. Johnson President Dean T. Romano, Ed.D. President-Elect Mark W. Altmayer Treasurer David H. Hill, Ed.D. Immediate Past President 2016–19 Board of Directors Jan J. Bush, Julie A. Jilek, Bradley L. Shortridge 2017–20 Board of Directors Mark R. Bertolozzi, Kevin L. Dale, Eric DePorter 2018–21 Board of Directors Seth Chapman, Ed.D., Angela M. Crotty, Ed.D., Adam P. Parisi
Illinois ASBO Board Liaisons
Carrie L. Matlock, AIA, LEED ® AP, BD+C Service Associate Advisory Committee Chair Terence M. Fielden, Service Associate Advisory Committee Vice Chair Deborah I. Vespa ISBE Board Liaison Perry Hill IASB Board Liaison David Wood Governmental Relations Specialist Calvin C. Jackson Legislative Liaison
Privacy Policy
All materials contained within this publication are protected by United States copyright law and may not be reproduced, distributed, displayed or published without the prior written permission of the Illinois Association of School Business Officials. You may not alter or remove any trademark, copyright or other notice from copies of the content. References, authorship or information provided by parties other than that which is owned by the Illinois Association of School Business Officials are offered as a service to readers. The editorial staff of the Illinois Association of School Business Officials was not involved in their production and is not responsible for their content.
Find More Winter 2018-19 event offerings at: www.iasbo.org/events/calendar
PERSPECTIVE / Board President
FROM–THE–PODIUM Budget Forecasting in an Ever-Changing Climate Our budgets, and all the pieces that comprise them, continue to evolve. I am often asked to explain how our budget is put together, and it is tempting to make a lighthearted comment about checking the direction of the wind blowing or noting that I am predicting the budget much like my favorite weatherman forecasts a snowstorm in January. I know that I can get close, but on occasion there are simply things that none of us could ever anticipate. The continued evolution of funding and the process by which we are encouraged and sometimes required to budget inevitably keep us all on our toes. Unfunded mandates, best-laid plans and ever-changing legislation will continue.
Cathy L. Johnson
ASSOC. SUPT./FINANCE & OPERATIONS TWP. HIGH SCH. DIST. 214
Our role is to understand where we have been, take the information we know to be true, consider the likelihood of other possibilities on the horizon and predict where we are headed — all while continuing to steer the course as steadily as possible. We use multiple tools and resources to do this. We keep in constant contact with our boards, our unions, our legislators and most importantly, each other. Much like our weather forecasters, we also rely on history and as we gain more experience… our gut. SIMPLY SAYING
We must predict and adjust for any number of results using the data we are presented, but use our gut as well. Last year, we had a storm coming and four of five local channels predicted snow, but my favorite forecaster said not just snow, but SNOW. He has been in the industry for more than 30 years and knows our area, the lake and what the winds will do. Doppler radar said one thing; his gut said another. He was right. During the forecast he spoke to both possibilities at length to allow the viewer to plan for either event. To that end, we must remain nimble, flexible and consider the implications of every outcome on our resources, from human and financial to political. We must predict and adjust for any number of results using the data we are presented, but use our gut as well.
Within this issue of the UPDATE there are multiple articles that outline different perspectives and tools to use when budgeting. Many of our members have taken time to share their processes and insights. They are for you to use, review and learn from. As we work together, we all grow. Said best by author Vista M. Kelly, “Snowflakes are one of nature’s most fragile things, but just look what they can do when they stick together.”
www.iasbo.org
| 7
ASSEMBLE YOUR DISTRICT LEADERSHIP TEAM
AND MARK YOUR CALENDARS! JOIN US IN SPRINGFIELD FEBRUARY 26-27, 2019 FOR THE ALLIANCE LEADERSHIP SUMMIT A jointly sponsored event designed for district leadership teams: the superintendent, school board members, business officials, and building principals.
F E B R U A R Y 2 6 - 2 7, 2 0 19
Hear from educational experts and political analysts Discuss educational leadership issues Engage in the legislative process
Ideally, district representatives would include the superintendent, one board member, one principal and one business official but any combination is welcome. District superintendents will be responsible for registering the team.
MORE INFORMATION AND REGISTRATION AT WWW.IASAEDU.ORG.
PERSPECTIVE / Executive Director
FROM–THE–OFFICE EBF and ESSA: Elevating the Budget Narrative Many have said “the budget is the educational program written in dollars.” How does that look in your district? All too often the reality is that the budget is just an extension of the previous year with some inflationary index plus or minus staffing changes. As we turn the page to the Evidence-Based Funding (EBF) formula and ESSA Site-Based Reporting, the school business official is suddenly “the tip of the spear” when it comes to student need-based budgeting. These two new laws set the stage for greater transparency and more thoughtful budget allocation methods.
Michael A. Jacoby, Ed.D., CAE, SFO EXECUTIVE DIRECTOR/CEO ILLINOIS ASBO
SIMPLY SAYING
Evidence-Based Funding and ESSA Site-Based Reporting set the stage for greater transparency and more thoughtful budget allocation methods. Evidence-Based Funding Several new sets of data are emerging and will be available to the public: 1) The Illinois Report Card will include an adequacy target for each district based on 34 elements that are either research-based, current practice across the State of Illinois or recommended spending levels. Additionally, your community will see the amount that your district currently has to support that target from local and state funds. The gap is what EBF is designed to fund over the next decade. 2) All districts will be reporting in a spending plan how they intend to use state EBF dollars and what they expect that plan will do related to local and state academic goals. Never before has the school business professional been asked to interpret and articulate spending around this construct. While the reporting is not accountability in the strictest sense, it definitely improves transparency around budgeting decisions.
ESSA Site-Based Reporting In addition to the EBF, all districts are preparing to report spending by school site versus the district level required previously. This has required advanced thinking around including local codes in the chart of accounts as well as determinations around the allocation of central costs such as central office, operations and maintenance, transportation, etc. This issue of UPDATE should get you thinking in these directions. My suggestion is that each of you embrace the new level of significance your role can have in the narrative around both EBF and ESSA Site-Based Reporting. Raise your profile and be the catalyst to make your budget have an impact on students in new ways! For additional information check out these resources: • Evidence-Based Funding: www.isbe.net/Pages/ EvidenceBasedFunding.aspx • ESSA Site-Based Reporting: www.isbe.net/Pages/sitebased-expenditure.aspx
www.iasbo.org
| 9
ONE DAY OF SERVICE. Lasting Community Impact. Network with a purpose and kick off the 2019 Annual Conference! The 2019 Illinois ASBO Legacy Project will serve The Boys and Girls Club of Elgin, whose mission is to help young people to reach their full potential as productive, caring, responsible citizens. Get to know fellow Illinois ASBO members as you help the Boys and Girls club continue to inspire the youth in their community.
SAVE THE DATE Wednesday, May 1, 2019
PERSPECTIVE / SAAC Chair
FROM–THE–FIELD Financial Forecasting for the Future of Facilities We all are familiar with personal budgets, but have you ever created a list of projected expenditures for your home? Probably not unless you bought a fixer upper, your family increased in size or you had a repair person tell you that your roof should be replaced. Even if you did not sit down ten years ago and make a list of improvements for the next decade, you probably spent a good amount of money maintaining and improving your home. The same applies to your school facilities. Carrie L. Matlock, AIA, LEED® AP, BD+C PRESIDENT DLA ARCHITECTS, LTD.
SIMPLY SAYING
Applying some new parameters to your facilities forecast and budget might be key in quantifying future capital outlay. Applying some new parameters to your facilities forecast and budget might be key in quantifying future capital outlay. This new approach would include considering factors beyond operations and maintenance: • Curriculum changes • Security upgrades • Life safety • Capacity issues • Gender neutral changes
• Outdoor play enhancements • Replacement buildings • Accessibility concerns • Program changes like full-day kindergarten
All school districts are unique and priorities vary by community, but each of these items have potential impacts on your facilities budget. All facilities goals can and should integrate into your long-range planning document. When each of these individual items are part of a larger all inclusive plan, your district might even tackle more than one at a time. We came across such an opportunity in a recent long-range plan at Lake Zurich High School. We found that students left campus to find alternative meeting places for required collaboration. Another need was to address maintenance, aesthetic and functional concerns in an antiquated auditorium/lecture space used for student detention. By addressing these seemingly disparate items at once, the district realized both time and cost savings.
These types of synergies are the result of long-range planning. Had we simply solved one problem at a time, the result for the high school would have looked much different. Compiling and prioritizing these items takes time, so do not expect results overnight. This will likely make a significant impact on your budget and need considerable strategic facilities and fiscal planning. It may take the better part of a year to execute, discuss and prioritize. Once you have a draft of your plan in place, prepare to discuss it at length, then determine how far out you should forecast your implementation plan. A best practice is to execute the work in ten-year increments and revisit it every five years to review priorities and cost estimates. Consider this plan a living document that can adapt to the ever-changing school environment. It is also a great tool for presenting your district’s accomplishments as well as a valuable leave behind upon retirement. Just think about how you would have appreciated a list of potential work your house needed when you moved in. When you change your budget from a tally of planned obsolescence to a broader forecast of expected change, managing district finances becomes a little more predictable and provides more insight into what the future holds. www.iasbo.org
| 11
CONTRIBUTORS
Jan J. Bush
Kenneth M. Florey
Daniel Kay Hertz
Business Manager Murphysboro CUSD 186
Partner Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd.
Research Director Center for Tax & Budget Accountability
Currently serving on the Illinois ASBO Board of Directors, Jan has worked at Murphysboro CUSD #186 since 2002 as business manager, treasurer and transportation director. She also served as the district maintenance director for several years. jbush@mhs.org
Concentrates his practice representing public and private clients, including municipalities, school districts, community colleges, private owners, contractors and design professionals regarding land use, municipal law, construction, tax, finance and litigation.
Has worked at the CTBA since 2016. His work focuses on issues related to pensions, housing and the City of Chicago, among other areas.
kflorey@robbins-schwartz.com
dhertz@ctbaonline.org
David H. Hill, Ed.D.
Ric C. King, CPA
Jessica L. Knox
Associate Superintendent Comm. Cons. Sch. Dist. 93
Asst. Supt./Business Services Schaumburg CCSD 54
Earned his CSBO endorsement from NIU, his Doctorate in Educational Leadership and Organizational Change and Master of Arts in Secondary Education from Roosevelt University. He is an Illinois ASBO Past President and has published numerous articles in educational journals. hilld@ccsd93.com
Has worked for Schaumburg CCSD 54 since 1995. Ric served as controller from 1995 until 2011 when he also became the Asst. Supt./ Business Operations and the facilities director. He has ten years of prior auditing experience.
Associate Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd.
fredricking@sd54.org
Practices in the firm’s commercial, construction, real estate, public finance and taxation practice groups representing clients such as townships, school districts, community colleges and private entities in real property taxation and assessment appeals. jknox@robbins-schwartz.com
Ralph Martire
Howard A. Metz
Sara R. Shaw
Executive Director Center for Tax & Budget Accountability
Partner Robbins, Schwartz, Nicholas, Lifton & Taylor, Ltd.
Sr. Mgr./Fiscal & Academic Solvency Illinois State Board of Education (ISBE)
Has served on the U.S. Department of Education Equity and Excellence Commission. Ralph has received the Champion of Freedom Award and the Ben C. Hubbard Leadership Award. He is also a distinguished lecturer on public policy for Roosevelt University. rmartire@ctbaonline.org
Counsels and represents school districts, community colleges, park districts and municipalities with respect to real estate, commercial transactions, construction law and land use and zoning matters. hmetz@robbins-schwartz.com
At ISBE, Sara builds bridges between programs and finance so that state K-12 policy and practice can support schools more holistically. Previously, she directed K-12 policy for the Illinois Secretary of Education. She began her career in education as a teacher in Milwaukee after graduating from Princeton University. sshaw@isbe.net
Gary R. Tipsord
David S. Torres
Superintendent Le Roy CUSD 2
Senior Product Manager Forecast5 Analytics, Inc.
With 28 years in a rural district, Gary chaired the group that formed after the initial phase of Vision 20/20. He also communicated and worked with superintendents to understand the implications of the Evidence-Based Model. Gary is now on the Funding Reform Legislation panel. tipsordg@leroyk12.org
Is responsible for the product management, development and outreach for 5Cast. A former Associate Supt./Business at Township HSD 211 in Palatine, David was involved in strategic financial planning projects and long-term capital improvement programs over 33 years at the district. dtorres@forecast5analytics.com www.iasbo.org
| 13
BUILDING
TRUST
BUILDING AND REINFORCING FINANCIAL TRUST WITH YOUR STAKEHOLDERS
ARTICLE
By David H. Hill, Ed.D.
ASSOCIATE SUPERINTENDENT COMM. CONS. SCH. DIST. 93
FOR THE MAJORITY OF SCHOOL DISTRICTS IN ILLINOIS
a large portion of revenues generated are from property taxes. As a result, it is critical that a school district builds and reinforces financial trust with its community, board of education and staff. Community members must feel confident that the property tax dollars they send to their local school district are well spent and focused on the academic achievement of all students. The board of education and staff must understand how the district spends its financial resources to provide the best educational experience for its students, professional development for its staff and a safe and secure environment for all who use the facilities. It is crucial to share communication and transparency strategies to help build and reinforce financial trust with your stakeholders.
BUDGET & FINANCIALS
The question that administrators must always ask themselves is, “How do we effectively communicate financial information to the public in a way that is clear and concise?” This can prove challenging at times because of the complexity of the Illinois public school accounting system and the state budget form. As we know, a school district budget is a unique document that can be difficult to understand. The following are three strategies that may work for your district.
1. HOLD A FINANCE TOWN HALL MEETING Town hall meetings can be an excellent strategy to educate your community about how the budget works and how financial priorities are determined. The town hall approach provides stakeholders an opportunity to interact with the finance officers of the school district and better understand how financial resources are spent. Although this takes time and energy, it can be a positive experience for the community as well as the school district. If a finance town hall meeting is an option for your district, you should consider a few things: • Live stream the meeting and save it to your website. This strategy will ensure that people who are unable to attend can either watch it live or watch it at a more convenient time. It might also be beneficial to provide an opportunity for people watching it through live stream to ask questions. • Advertise the town hall meeting using all of your regular communication platforms. • Create a presentation to focus your meeting, but ensure that you allow time at the conclusion for a question and answer period. • Keep your composure as you may have audience members concerned about spending or district priorities that may try to discredit your presentation.
COMMUNITY MEMBERS MUST FEEL CONFIDENT THAT THE PROPERTY TAX DOLLARS THEY SEND TO THEIR LOCAL SCHOOL DISTRICT ARE WELL SPENT AND FOCUSED ON THE ACADEMIC ACHIEVEMENT OF ALL STUDENTS.
www.iasbo.org
| 15
2. PROVIDE A FINANCIAL PUBLIC COMMENT PERIOD On each board meeting agenda, provide stakeholders with an opportunity to ask financial questions. Even if the board of education cannot answer the questions, it provides the community member with an opportunity to ask financial questions in front of the board of education. Additionally, it provides the school business official the opportunity to connect with the visitor after the meeting, build trust and provide answers to their questions. This communication strategy might not be an option in all communities but in some, it might be. If this is something that your district is considering, you should develop a marketing strategy to ensure that you inform your district’s community about this opportunity. 3. HOST A SCHOOL DISTRICT FINANCE BLOG This would give your school district an opportunity to generate awareness about finances and share all of the wonderful educational opportunities provided to students. Additionally, it could be a teaching tool for your community. There are both pros and cons to having a school district finance blog. It is very easy to start, it gives people a reason to visit the district website and it creates a sense of community and trust. There are also cons associated with starting a blog. Dedicated time must be given to the blog in order to keep it relevant, ensure it has a professional appearance, runs efficiently and effectively and messages must be carefully scrutinized to ensure that you do not over expose yourself or your district by opening up commentary to everyone. These are all important items to consider if your district is interested in starting a blog.
TRANSPARENCY
Transparency has many benefits for your school district: • Builds trust in your community • Increases community engagement • Gains a better understanding of your community’s needs • Empowers citizens • Educates your community members These are all positives; however, there are also some potential pitfalls to transparency. First, it could highlight the actual costs to educate students, emphasize the salaries and benefits afforded to staff, identify funds needed to educate high cost students and pinpoint other costs associated with the operation of the district. I believe that the benefits of being transparent far outweigh the pitfalls, but your district must determine the best ways to share financial information with your stakeholders so that they are able to see the benefits as well. What other documents might be appropriate to share to build trust with your community? The approved budget, the annual financial report, collective bargaining agreements and compensation report, among others, should already be on your district’s website, but another option might be to post a monthly financial analysis document. This document could provide an overview of the district’s financial position each month. It could contain graphs and narratives illustrating the district’s financial position.
THE BENEFITS OF BEING TRANSPARENT FAR OUTWEIGH THE PITFALLS, BUT YOUR DISTRICT MUST DETERMINE THE BEST WAYS TO SHARE INFORMATION WITH YOUR STAKEHOLDERS SO THAT THEY ARE ABLE TO SEE THE BENEFITS AS WELL.
16 |
UPDATE Magazine / Winter 2018
ARTICLE / Building Trust
It might be beneficial to organize your monthly report in the following manner: 1. INFORMATIONAL Contains information that you would like to ensure that your community understands. For example, how the district’s revenues are generated (federal, state, local), how the expenditures are expended (salaries, benefits, purchase services supplies, supplies and capital outlay) and the status of the district’s fund balance (past and present). 2. HISTORICAL Include the history of revenues and expenditures to provide your community with a long-term view of the financial history of your district. 3. CURRENT FINANCIAL CONDITION Insert current fund balances, bond rating, days of cash on hand, expense to fund balance ratio, etc. 4. POTENTIAL FINANCIAL ISSUES FACING THE DISTRICT Make note of inflation levels, property tax valuation appeals, the state’s financial crisis, possible property tax freeze and pension cost shift. Another strategy to improve financial transparency with your stakeholders is to post your monthly accounts payable register and procurement card expenditures (if your district utilizes procurement cards) to be approved by the board of education each month. Posting these expenditures on your website would provide your community with a detailed look at the district’s monthly financial obligations. Send out a reminder on a monthly basis to your community that detailed financial records are on the website. Posting your tentative tax levy presentation on your website is another way to communicate financial issues with your community. Property taxes are something that most of your community members can relate to, but you probably have heard the common complaint that property taxes are too high and the school district receives too
great a percentage of the taxes. Post your tentative tax levy presentation to provide some insight on how the district determines the necessary property tax rate in order to efficiently and effectively operate your school district. One bit of advice on this strategy is to provide some explanation about the tax levy because it is a foreign subject for most community members. Without further explanation, you could cause additional confusion that could increase the number of calls to your office.
COMMUNICATE
WITH YOUR COMMUNITY
It is extremely important that your school district builds and reinforces trust with your community. Stakeholders who have children that attend your schools care greatly about the educational experiences that are afforded to their students. However, if your community is anything like Community Consolidated School District 93, the majority of your stakeholders do not have children attending your schools. Therefore, teaching and learning are not their primary concern. Rather, they are concerned with their property tax obligation and want to know how those tax dollars are spent. They want to feel confident that your district is spending their tax dollars in a way that will benefit them. They either want to ensure that their pre-school aged children will receive an exceptional education experience or that they will receive top dollar if they decide to sell their home. Hopefully, the communication and transparency strategies shared in this article will provide additional opportunities for your school district to build and reinforce financial trust with your community.
www.iasbo.org
| 17
A PROVEN PATH TO BETTER LEADERSHIP PRACTICES
TAKE THE FIRST STEP TO BETTER COMMUNICATION Using the Life Orientations (LIFO®) Framework, explore your own preferences and how to bridge your communication with others who have difference strengths and communication styles.
GET A PANORAMIC VIEW OF YOUR LEADERSHIP Using the Leadership Practices Inventory (LPI®), get a 360-degree view of how you are performing in five key leadership areas through a self-assessment and the feedback of your colleagues.
START YOUR JOURNEY AS PART OF THE 2019 COHORT! Apply today at: www.iasbo.org/institute
PERSPECTIVE / On the Profession
SCHOOL BUSINESS 101 How has your community transparency changed as a result of the Meritorious Budget Award (MBA) process? think that transparency has improved by going through the MBA process. Any of the “ Isections of the MBA can be shared with the community. This makes it much easier for
the community to understand the budget. The community had a hard time trying to understand the ISBE Budget Workbook. We post the whole MBA on our website so everyone in the community can view it and ask any questions they might have. We have also been able to have some articles posted online and in the papers on the MBA.” MICHAEL L. ANDRESHAK, Dir./Business Services, Kirby SD 140
through the MBA process each year has not only increased transparency and “ Going communication with our board of education, but we also feel that receiving the award
increases our overall level of trust with the entire community. The process pushes the district to drill down on not only financial components, but district initiatives and goals, along with what resources are required to give the community the educational product they desire. The MBA also creates an excellent platform from which to examine historical data and future projections.” TIMOTHY A. GRONSKI, Chief School Business Official, Geneseo CUSD 228 desire for transparency was behind Fremont’s effort to attain the MBA. With 90 “ The percent plus of the district financial resources generated locally, the board wanted to
demonstrate transparency in their progressive stewardship of community resources. The MBA does a great job of telling the district’s story, and highlights the many positive steps the district takes to run efficiently and operate within its means. It also aggregates diverse managerial data sets into one document, serves as an ideal reference primer for new staff and board members and is the perfect tool to guide analysts during bond rating calls.” MICHAEL G. TANNER, Assoc. Supt./Finance & Operations, Fremont SD 79
MORE ON THE MERITORIOUS BUDGET AWARD Applying for ASBO International’s Meritorious Budget Award promotes your district’s skills in developing an effective budget presentation, compliance with clear budget presentation guidelines and commitment to the community through a reader-friendly budget document. Congratulations to the 16 Illinois districts who were recognized for their 2017-18 Annual Budgets through the MBA program! Michael Andreshak and Staff at Kirby SD 140
www.iasbo.org
| 19
By Sara R. Shaw
ARTICLE
SENIOR MANAGER /FISCAL & ACADEMIC SOLVENCY ILLINOIS STATE BOARD OF EDUCATION
Site-Based Expenditure Reporting:
A Strategic Lever for Student Success
I AM A SCHOOL FINANCE CONVERT. I managed to work in education for half a decade without touching finance. I spent my days in the classroom and later in districts focused on the connections between people and the systems that support them: teachers and students, principals and staff, district leaders and school leaders. Then Evidence-Based Funding (EBF) and the Every Student Succeeds Act (ESSA) came along. One year since the signing of both of these laws, I still believe that relationships are at the heart of education. What has changed is seeing business officials and the resources that they manage as integral parts of those relationships. Both EBF and ESSA appreciate resource allocation not as a strictly bureaucratic or technical process but rather as a critical and strategic lever for student success. They both implicitly ask: Where are you putting money to make an impact on students? It is inspiring to watch district leaders grapple with strategic resource allocation in new ways through EBF and ESSA and it is our privilege at the Illinois State Board of Education (ISBE) to support their work. This article focuses specifically on the ESSA side of the work, highlighting how business officials or district leaders who take on the role of business officials within their districts can approach site-based expenditure reporting for the
Both EBF and ESSA appreciate resource allocation not as a strictly bureaucratic or technical process but rather as a critical and strategic lever for student success.
greatest positive effect on students. As you read, consider what mindsets, principles and practices are also applicable to your work with EBF and overall resource allocation. A FAMILIAR TERM IN THE BUSINESS OFFICE By now, “ESSA” has become a familiar term around the state. The Every Student Succeeds Act replaced No Child Left Behind in late 2015 as the major federal law governing K-12 education. Yet educators are still learning about specific provisions of the long and comprehensive law. One such provision, known variously as the “financial transparency provision,” “site-based expenditure reporting” and “school spending reporting” occupies barely a paragraph in the 449-page law but represents a significant shift in district financial reporting practices. The actual text of the provision requires that State Education Agencies must report on their Report Card, beginning with FY 2019 data: The per-pupil expenditures of Federal, State and local funds, including actual personnel expenditures and actual non-personnel expenditures of Federal, State and local funds, disaggregated by source of funds, for each local educational agency and each school in the State for the preceding fiscal year.1 Put simply, Local Education Agencies have reported their finances at the district level for years, but FY 2019 will be the first year in which districts will report their expenditures by school site. As part of that reporting, the expenditures will be broken out by source of funds (on the one hand, federal funds; on the other hand, state and local funds combined). All district expenditures, including district centralized costs, must be shown at the school level, except for certain specified exclusions. Only actual expenditures must be reported; the law does not refer to site-based budgeting or school-level accounting.
www.iasbo.org
| 21
MORE THAN A MEANINGLESS MANDATE It would be easy to write off the provision as yet another unfunded and meaningless mandate from Washington. Yet when an advisory group of Illinois superintendents, school business officials and other statewide representatives gathered to shape the Illinois implementation of site-based expenditure reporting, the group grounded itself — and, consequently, state policy — in what value this data set could have for districts and their communities. Namely, advisory group members posited that: ᴑᴑ Site-level expenditure reporting provides an excellent opportunity for LEAs to maximize care for the whole child, in a whole and healthy school, nested within a whole and healthy community. ᴑᴑ With site-level expenditure reporting, how resources are allocated will be more readily accessible and revealing to schools and stakeholders. ᴑᴑ This reporting should ultimately lead to greater equity and improved outcomes for children, it empowers LEAs and communities to assess and improve equity in funding between individual schools and it enables a better understanding of the relationship between student outcomes and financial resources. ᴑᴑ It will also enable LEAs, schools and the state to identify evidence-based best practices and opportunities to foster innovation between peers. ISBE owes the members of this advisory group a great debt of gratitude for their time, commitment and thoughtfulness in developing this value proposition and corresponding guiding principles, which have influenced everything from implementation guidance to trainings to data collection and visualization. Ultimately, they ask every district in the state, "What can this data set mean to you and your community? " A NEW WAY TO ENGAGE As business officials, you may think of compiling the data set for reporting as your primary responsibility in sitebased expenditure reporting. It is true that reporting
responsibility likely falls squarely on your shoulders, and it would be possible to fulfill that responsibility without engaging much with the value of the data, (e.g. go through a series of technical maneuvers to calculate per-pupil expenditures by site and then simply walk away). Arguably, even that exercise can have value, given the decisions that you will face in the course of putting together the data set — decisions like how to define site-level vs. centralized expenditures, how to allocate centralized expenditures down to the site level and how to handle outplacements. These decisions involve engaging with the data in new ways that can be revealing unto themselves, especially if filtered through a “value lens” that prioritizes reflecting actual service delivery and making data meaningful and actionable. Still, the sheer technical effort involved in data calculation and collection can often overshadow its value. (ISBE acknowledges that this data compilation effort can be burdensome and has committed to providing guidance and supports for all districts. For a list of resources released thus far, visit www.isbe.net/site-based.) The greatest impact of a business official, however, may not be in the technical compilation of site-based expenditure reporting but rather in driving the questions, conversations, connections and ultimately decisions that arise from pairing financial data with student need and academic outcome data. Imagine what it could mean for students to bring these questions to a district cabinet meeting even before you have site-based expenditure data available: ᴑᴑ What are we curious to see in these site-based expenditure data? ᴑᴑ What do we think the data will show? ᴑᴑ How do we make spending decisions as a district? How do we know the impact of those decisions? ᴑᴑ What does “fiscal equity” mean to us and our district community? ᴑᴑ What does “educational return on investment” mean to us and our district community?
Footnotes: 1. Elementary and Secondary Education Act of 1965, as amended through Pub. L. No. 114-95 (2015). 2. If, after reviewing the existing materials, you have outstanding questions or ideas, individual support is available at ISBE. Sara R. Shaw, senior manager, Fiscal and Academic Solvency, is the primary point person for site-based expenditure reporting and can be reached at sshaw@isbe.net or 217-782-0249.
ARTICLE / Site-Based Reporting
Or consider these questions, once you have the site-based expenditure data in hand alongside student need data, academic outcome data and any other data points of interest: ᴑᴑ What story do these data sets show us? ᴑᴑ Do we see connections between site allocations, student need and student performance? ᴑᴑ Where are there discrepancies in site allocations? Were they intentional? Are they affecting student performance? ᴑᴑ Where do we see the impact of investment of dollars at the school level? ᴑᴑ Are our site-based expenditure allocations leading our district in the direction we believe is best for student outcomes and most equitable based on student need? ᴑᴑ What are we going to do as a result of seeing these data? FROM REVEAL TO REVELATION Upon reviewing the site-based data, it will be natural for districts to find allocation results that were unexpected or to struggle to immediately explain them. By leaning into and leading those conversations, school finance leaders can turn the revealing of these data points into true revelations that inspire district action on behalf of students. Moreover, this action can become an important new point in a district’s story: “When we saw X, we did Y, because of who we are and what we believe.” Neither ISBE nor anyone else should expect districts to already know what their data will show. Instead, you will get to show what you chose to do as a result of thoughtful review and analysis. RESOURCE ALLOCATION FOR STUDENT SUCCESS I became a school finance convert because I saw powerful examples of how districts could use resource allocation as a lever for student success. The buzz around both ESSA and EBF has turned resource allocation into a hot-button topic across the state. In your role as financial leaders for your districts, how will you harness that focus and help your district move beyond analyzing data solely for cost-savings measures and checkbook balancing (as important as those activities may be)? How will you take advantage of sitebased expenditure reporting for your district’s story and your students’ success? What will we have to learn from you?
Your Partner in the Process ISBE will be alongside districts in this process, positioning the new data as a new opportunity for inquiry and dialogue. Some resources already available at www.isbe.net/site-based speak specifically to this opportunity: • A webinar that walks you through how to get an early sense of your site-based data and what you can do with it. Access the recording at www.iasbo.tools/sitebasedwebinar • Presentation and facilitation slides are available for adaptation for your district’s cabinet team as you begin asking the value-laden questions above. Find them at www.iasbo. tools/sitebasedslides • Perhaps most comprehensively, a timeline is available on ISBE’s sitebased expenditure reporting page that marks every major milestone and suggested action between now and December 2019. Find it at www.iasbo.tools/districttimeline • More resources will be posted in the coming months.2
www.iasbo.org
| 23
Evidence-Based Funding: A Tale of Three Districts
When the Evidence-Based Funding for Student Success Act was signed into law, it was a game changer for how schools are funded in Illinois. The model creates a unique funding target for each district based on research-based elements, focusing new funding toward districts who are the farthest from adequacy. Now that Illinois is in its second year of EBF implementation, learn how three districts of varying size, location and financial position are utilizing EvidenceBased Funding to move their districts forward. 24 |
UPDATE Magazine / Winter 2018
ARTICLE
By Jan J. Bush
BUSINESS MANAGER MURPHYSBORO CUSD 186
Ric C. King
ASST. SUPT./BUSINESS SERVICES SCHAUMBURG CCSD 54
Gary R. Tipsord SUPERINTENDENT LE ROY CUSD 2
SCHAUMBURG CCSD 54 Focusing New Funds on Supporting Instruction Ric King
Asst. Supt./Business Services DISTRICT SIZE: 15,000 PK-8 students (22% English learners, 10% with disabilities and 20% low income) EAV/PUPIL: $300,000 FINANCIAL PROFILE: Financial Recognition (debt free since 2011 with a fund balance of approximately eight months expenditures) EBF TIER: 2 (dropped down from Tier 3 with the percent adequacy target at 85.6%)
INITIAL REACTION TO THE MODEL
When the funding models were being discussed in Congress, we were a district projected to lose the most money and it would have been destructive to our school district. We pride ourselves being fiscally responsible, spending close to the state average per student, with zero debt managing our limited resources within our means. We provide outstanding support in the classroom to our staff to allow them to succeed as is reflected in our exceptional results. We were therefore relieved when the EBF model was agreed upon as the new state funding model, because it ensured we were not going to lose money but in fact gain some additional funding.
HOW WE ARE USING THE TIER FUNDING
The new funding has allowed us to continue to focus on supporting instruction within the classroom by bringing 21st century learning equipment into our 28 school buildings. We always strive to excel in this district and our target is always to reach our three goals of success of the whole child, being in the top ten percent and closing the achievement gap for all students.
HOW WE BROUGHT IT UP TO THE BOARD
The EBF model was introduced to our community through our legislative committee. This committee has representatives from our board, union leadership, community members and administration. For budgeting purposes, the community is well aware that our property taxes pay for 80 percent of our obligations and we accept any new state funding as an opportunity to continue to innovate in the classroom. Additional tier money will allow us to bring more 21st century changes to our schools and will also help us provide more opportunities to support the whole-child development of all our students.
ADVICE TO OTHER DISTRICTS
“
Additional tier money will allow us to bring more 21st century changes to our schools and will also help us provide more opportunities to support the whole-child development of all our students. Ric King Asst. Supt./Business Services
Our advice for any other school district is to live within your means and be fiscally responsible with additional funding. We had a strategic planning committee convene last year that developed our three goals and our District 54 Promise, ensuring whole-child student success. This strategic planning committee consisted of board members, community members, parents, union leadership, teachers and administrators. The business manager was not included in this committee and yet one core mission in the promise was fiscal responsibility. One comment from the committee was they were glad this district does not just go out and spend money on the bright new shiny objects, but instead takes time to research best practice and implements in the best interests of the students when the time is right. www.iasbo.org
| 25
LE ROY CUSD 2 EBF as a Tool for Conversation and Decisions Gary R. Tipsord, Superintendent LOCATION: On I-74 between Bloomington and Champaign DISTRICT SIZE: 850 PK-12 students EAV/PUPIL: $133,148 FINANCIAL PROFILE: Review (3.35)
INITIAL REACTION TO THE MODEL
I was fortunate to be a part of the conversations about funding reform from the beginning of the Vision 20/20 initiative. The moment we determined the Evidence-Based Model could be a viable solution, we saw a lot of potential. For the first time, there could be a model that was specifically designed to identify the resources necessary to deliver a high-quality education for the students specific to a given district and account for the uniqueness of specific geographic regions. However, there were three major concerns: • Would stakeholders and policy makers invest enough time to understand the model or simply resist out of the fear of change? • Could we ensure that resources would go to the areas of the greatest need first? • Would the General Assembly fund the model?
EBF TIER: 2
HOW WE ARE USING THE TIER FUNDING
The data from the model supports a necessary effort to further enrich our professional development plans and invest in the continued improvement of professional practice. We will leverage ESSA and local measures of accountability to build a bridge between the EBF resources and these plans. Specific to staffing, we are fortunately aligned pretty well, but what was revealed through the model was a gap in services for our regular education students who demonstrate gaps in achievement. We will, over the next four years, dedicate all new money funded through the Tier distribution to employ two interventionist positions. While we have quantified some specific plans, I do not want to leave this unsaid: the very first question we had to answer was, “Is our Adequacy Target appropriate to meet the demands of our public?” Until that question was answered, we could not look to the future.
26 |
UPDATE Magazine / Winter 2018
ARTICLE / A Tale of Three Districts
HOW WE BROUGHT IT UP TO THE BOARD
In meeting the demand of governance locally, it was critical for our board to understand the purpose of the model and the implications to our district. The original video was very helpful in getting our board to a basic and purposeful understanding. At the time, that was as much as our board needed; but once the model became a reality and was the future of funding in Illinois, it became necessary to use the model to set a “decade of direction” for our school district. We have leveraged the model to make strategic decisions related to staffing, to build a bridge to student achievement and the associated accountability and to build a narrative around property taxes and our local responsibility in balance with the State’s obligation. Our board has embraced the comprehensive capacity of the model to tell our own story and to develop a plan for the future.
“
We have leveraged the model to make strategic decisions related to staffing, to build a bridge to student achievement and the associated accountability and to build a narrative around property taxes and our local responsibility in balance with the State’s obligation. Gary R. Tipsord Superintendent
ADVICE TO SIMILAR DISTRICTS
”
If I can offer any encouragement, I would suggest taking the time to recognize how powerful this model can be. Your ability to create narrative around educational initiatives and resource management is limitless. This is just math; it is not ideological, it is just data. We have a powerful tool with which to both make decisions and have conversations. In some cases, you can find answers in the model, but in every case, you can find information around which to have critical conversations. Regardless of where your district lies in the relative access to resources, the model will allow you to create a strategic narrative for your own “decade of direction.” Please take this leadership opportunity to win the day for the students and the communities we are so privileged to serve.
www.iasbo.org
| 27
MURPHYSBORO CUSD 186 Increasing Core Teaching Staff to Reach Adequacy Jan J. Bush, Business Manager DISTRICT SIZE: 2,005 students EAV/PUPIL: $79,438 FINANCIAL PROFILE: Review EBF TIER: 1 (61% Adequacy in FY 2019)
INITIAL REACTION TO THE MODEL
When the model was first introduced, I was skeptical that Illinois would ever be able to make the changes needed to adequately fund public schools. Prior to the implementation of the EBM, Murphysboro CUSD 186 lost $4.2 million dollars during the five years from FY 2012 through FY 2016 due to proration of GSA. Murphysboro is dependent on state funding to make ends meet and five years of GSA proration with a flat foundation level significantly impacted our budget. I was also very hopeful that the EBM would address many of our funding issues and start to level the playing field for all Illinois schools. However, one of my biggest concerns was that the new funding would come with strings attached and districts would have to jump through many hoops to receive the funding.
HOW WE ARE USING THE FUNDING
Because Murphysboro 186 is a Tier 1 school that has so many different target areas where the new funding is needed, it has been difficult to know where to begin. The district focused initially on increasing the number of core teachers. The EBM showed that our district would need to hire 30 core teachers K-12 in order to reach adequacy in that particular area.
The district hired five additional teachers for grades 4-8 for the FY 2019 school year in order to decrease class size and increase common planning time for teachers. Additional core teachers are needed in grades K-2, but the district currently lacks the physical building space for additional classrooms. In lieu of hiring additional K-2 teachers, several additional instructional aides were hired for the FY 2019 school year to work with students and support teachers in the primary grades. The district also hired a Dean of Students for grades K-5, since that is another area where the district was below the adequacy target based on the EBM.
The district anticipates that with smaller class sizes, additional classroom aides, increased common planning time for teachers and added teacher support through a Dean of Students, our students will receive more focused instruction and additional learning opportunities. One result of the new funding that I do not think anyone truly anticipated was the staff turnover and movement between districts by teachers as districts began to hire additional staff. The domino effect has been very interesting. Murphysboro hired a total of seven new certified positions and had four teachers retire, but the district ended up with a total of 24 new certified hires due to resignations of certified staff taking positions in other districts.
ARTICLE / A Tale of Three Districts
HOW WE BROUGHT IT UP TO THE BOARD
The district administration began talking to the board of education about the EBM in very general terms when the EBM was first introduced in Springfield. After the EBM legislation was passed in Springfield, administration began a conversation with the board about the estimated “new money” that the district would be receiving as a Tier 1 school under the EBM and discussed the EBM and adequacy in a little more detail. The administration began talking with the board of education about the EBM many months prior to receiving any new money under the EBM so that the board and community could be part of the conversation about the areas where we fall below the adequacy target.
“
In March 2018, the district administration presented information to the board of education regarding the EBM, including the information, data and variables involved in order to define “adequacy” for Illinois school districts. The administration explained that as a Tier 1 district, we were far below adequacy at 58 percent of the adequacy target. The administration reviewed some of the specific areas in the EBM where the district was below the adequacy target, with an emphasis on the district’s need for additional core teachers. In subsequent months, the administration requested board approval to hire additional core teachers.
District 186 focused initially on increasing the number of core teachers. The EBM showed that our district would need to hire 30 core K-12 teachers in order to reach adequacy in that particular area. Jan J. Bush Business Manager
ADVICE TO SIMILAR DISTRICTS
My advice would be to make sure that your board and community have a good understanding of the EBM and the “new funding” that your district is receiving and is part of the conversation and decision-making process about how those new resources should be allocated. I would also recommend being cautiously optimistic regarding spending the “new money” until we see a pattern of the EBM and Illinois schools being funded as the model was designed.
LOOKING TO THE FUTURE
”
The district felt that it was in our best interest to increase the number of core teachers with the first round of new funding. As additional funds become available under the EBM, the administration will discuss the future needs of the district. The district will continue to analyze the 34 elements of the EBM and as “new funding” gets pumped into the EBM, we will cautiously move forward with spending money on additional staff and new programs until we feel more certain about the sustainability.
www.iasbo.org
| 29
STAY AHEAD OF
THE GAME: Managing this Year’s Budget While Planning for Next Year and Beyond
30 |
UPDATE Magazine / Winter 2018
By David S. Torres
ARTICLE
SENIOR PRODUCT MANAGER FORECAST5 ANALYTICS, INC.
The Team’s Challenge School business officials and their teams who manage district budgets are both coaches and general managers. They are always hard at work juggling day-to-day administration of the current year’s fiscal budget to make sure “nowcasts” are up-todate and there are funds available to address current needs. At the same time, the team is tasked with preparing the forecast for the next fiscal year’s budget. It is a continuous cycle of analysis (monthly), development (budget) and planning (multi-year forecast). Just like any coach or general manager of a pro football team, you cannot afford to lose! Access to key insights about how the team is performing now is critical for future decisions on the field. Data drives good decision-making, but only if it is available and utilized for effective game management.
The Playbook • You need to keep score of how you are doing now, while simultaneously making predictions about your performance next year and beyond.
• You know your financial data best! Focus on the “impact player” line items that are the key drivers on both sides of the line (revenue/ expenses).
• Use scouting reports for what changes to make to ensure you are set for next year. Access key performance indicators and economic factors.
You have many fans (stakeholders) interested in your every move. A few missteps could put you in the hot seat. That is why it is so important to have the right game plan to link management of the current fiscal year with strategic budget planning for next fiscal year and beyond.
The Importance of Operational Forecasting Operational forecasting is a game changer. The process provides both a “nowcast” and a forecast that takes advantage of historical and current budget data to: • Increase financial insight into budget performance, both past and present.
• Improve administrative decision making and board level governance.
• Improve variance analysis based on historical trends.
• Improve accuracy of forward-looking assumptions.
The process requires being able to model and analyze “what if?” scenarios to identify the cause of changes, the impact of the change and what action to take.
www.iasbo.org
| 31
GAME 1: MANAGING THE CURRENT FISCAL YEAR’S BUDGET The unexpected is the one thing financial managers can count on every year. By assessing historical budget data, the process of operational forecasting takes advantage of what happened in previous years to identify trends that are likely to affect the current fiscal year’s budget. Armed with that information and a clear accounting of current income and expenditures, a school district’s finance team is better equipped to quickly and proactively, adapt as needed to make wellinformed decisions.
KEY BUDGETING TACTICS: 1. Monthly Budgets Operational forecasting enables a school district to create budgets for each month based on historical trends that incorporate actuals as a percentage of the total to produce a monthly average. It requires analyzing historical trends to uncover correlations between financial and operating data. For example, do revenues and expenditures tend to vary with the level of economic activity (CPI), or are they independent of business cycles? Five years of historic data is ideal to the recognition of anomalous events and patterns with exponential smoothing of trend percentages. 2. Actuals vs. Budgets Monthly financial reporting shows the district’s progress in implementing the budget by evaluating the current month’s performance (MTD), the year-to-date budget (YTD) with comparisons of what was budgeted versus what actually occurred. It is also important to compare prior years’ actuals to budget and incorporate what you learned from trend analysis to make adjustments as needed to the remainder of the fiscal year. 3. Comparative Analysis Monthly financial reporting is also an opportunity to implement a best practice of comparing current data against target goals for both MTD and YTD, as well as multi-year evaluations.
4. Variance Analysis It is critical to understand why there are variances in the actuals versus the budgeted amounts to more accurately measure financial performance and proactively identify potential budget variance in the future. This information allows a school district to reallocate current year’s funds to better address the unexpected or fund priority initiatives. By maintaining control over expenses, the team can create year-end estimates and anticipate projected year-end variances from the budget. The monthly accounting close process should identify all significant variances to the plan using present threshold quantified as dollars or percentages. It is also useful to understand the variances’ cause, impact and effective action (what happened and why?). 5. Projected Year-End Position By understanding the variances between planned and actual revenue/expenditures, there is an opportunity to adjust or re-forecast targets, objectives or strategies for the current fiscal year. 6. Timely Updates of the Forecast By assessing the monthly budgets, actuals vs. budget, comparative analysis and variance analysis, school districts can more accurately adjust or re-forecast targets on a monthly basis to reset objectives or strategies for the current fiscal year.
MONTHLY RE-FORECASTING (Scenario - "What If" Analysis)
6 Months Jul-17
Aug-17 Q1
Sep-17
Oct-17
Nov-17 Q2
Dec-17
Actuals / Budget (Trend)
BASELINE SCENARIO 1
Jan-18
Feb-18 Q3
9 Months Mar-18
Apr-18
Projected (Trend)
May-18 Q4
Jun-18
Assumption % or $ Change SCENARIO 2
% or $ Change
Year End Position Projected/Budget/Variance + (-) Favorable Variance or Unfavorable Variance + (-)
Cause - What? / How? Quantify the control Impact - Program-wide; dependent accounts Action - Adjusting goals, objectives or strategies; status quo; reduce; or spend
ARTICLE / Financial Forecasting
GAME 2: PLANNING AND UPDATING YOUR MULTI-YEAR PROJECTION What is the team’s outlook in the future? How many times during the year are you reviewing and updating your playbook for the future? What about all the unknown factors? Is it worth the effort of developing a multi-year financial projection plan when you have little or no control of revenue streams, especially if you are in a situation in which you have local or legislative requirements to operate within a balanced budget? Will there be any value generated in this type of analysis for local districts that are subject to volatile annual appropriations or uneven revenue collections? These are all relevant questions and point to the priority and need for maintaining a multi-year financial projection with regular review for updating as the season unfolds. Long-term success and sustainability does not happen without a solid plan.
LONG-TERM PLAYBOOK The multi-year forecast is one of the most critical working documents that the business office produces. When done well, the forecast becomes both a strategic and operational plan that can guide internal and external stakeholders on key opportunities and issues facing the district. Maintaining a multi-year forecast may be an elective task; however, some states require school districts to submit a financial forecast as a scheduled compliance report. In those states with mandated reporting, the required projection periods are generally three to five years beyond
the current budget year. Even when optional, many school districts and other government entities commonly use a five-year period for their projections. A forecast done for less than five years may not capture the full impact of financial compounding on decisions and strategies that are being considered. On the other hand, an analysis that goes out farther than five years can potentially bring in too many unknowns. Let us break down the multiyear forecast into four decision and analysis bands: Historical, Budgetary, Early Warning and Directional.
BREAKING DOWN THE MULTI-YEAR SPECIAL FORECAST... 2014
2015
2016
2017
2018
Historical Performance (Prior Years)
2019
2020
2021
Budgetary Level Accuracy (Current Year, Years 1 & 2)
••Measurement of performance ••Executable budget template informs future assumptions ••Rev./Exp. variables known
2022
2023
Early Warning (Year 3) ••Inflection point for change decisions
2024
Directional (Years 4 & 5) ••Evaluate overall financial trend — “how the math will play out”
Decision/Analysis Bands Historical: Five years of historical data serves as a solid repository of actuals for highlighting performance trends and assisting with guiding future assumptions on key revenue and expenditure line items. Budgetary: In many cases, the current year and years one and two of a well-executed financial forecast will be more accurate in terms of projected ending cash balances.
Early Warning: As assumption results compound into the third year of the projection, any unfavorable condition or identified structural deficit may signal an early warning and an opportunity to execute a course correction plan. In almost every case, it is less painful to make small corrections years in advance than it is to try to fix a problem caused over several years in a single year.
Directional: Inherent in the assumptions process, the fourth and fifth years may not be as accurate in terms of projected balances. However, there is tremendous value in the direction in which years four and five point. A projection of declining balances is symptomatic of structural deficits. Evaluate the overall financial trajectory and “let the math play out.”
Local governments that are consistently executing multi-year forecasts are putting themselves in the best position to make informed decisions and to be able to maintain service levels to their stakeholders and communities. What is your multi-year forecast telling you? www.iasbo.org
| 33
WHAT ABOUT THE ISSUE OF UNPREDICTABLE REVENUES? Having the opportunity to work with local school districts around the country, our team has observed many different revenue models and spoke with business officials about the challenges of building multi-year projections in the face of uncertain cash flows. Here are three different considerations when deciding which model is best for your team: Best and Educated Estimates — In this model, you accept the fact that revenues may be uncertain, but you use the best data available to make educated projections for each revenue stream. Additionally, you use the Budget, 1-2, 3, 4-5 approach to qualify the accuracy level of the projection through the five-year period.
Financial Gap Analysis — In this approach, the multiyear forecast is used as a position statement on where the organization wants to go without regard to revenue volatility. This approach recognizes the direction the organization would pursue without the constraint of uncertain revenues. When determining assumptions on the expense side, the funding needed to support the visionary level of programming and services, will produce a basic financial gap analysis and calculated funding level required to provide the services. This approach will also provide an opportunity to evaluate existing and future programmatic initiatives. As you look forward and begin to consider the potential infrastructure/staffing requirements of the scenario, you may gain strategic insights regarding the current state of your district.
Decision Band Approach — Here, you accept the volatility, but you establish intelligent ranges for your key revenue assumptions and present the forecast not as a single outcome line, but rather as potential outcomes that may occur within the calculated bands. This approach will allow the school district to discuss and plan around rational “what-if” scenarios.
Strategic Forecasting For Advocacy 2019
2020
2021
Budgetary Level Accuracy (Current Year, Years 1 & 2)
2022
Early Warning (Year 3)
2023
2024
Directional (Years 4 & 5)
Best Educated Estimates for Key Revenue Streams Decision Band Approach — Establish Ranges for "What If" Scenarios Organizational Vision Statement/Position — "Where We Want To Go" Financial Gap Analysis — “We need $_ to support the visionary level of programming and services, communication tool for stakeholders and potential infrastructure/staffing requirements.”
34 |
UPDATE Magazine / Winter 2018
ARTICLE / Financial Forecasting
GAME 3: PLANNING NEXT FISCAL YEAR’S BUDGET The good news is that all the goals for managing the current year’s fiscal budget (Game 1), will strategically link directly to more timely and accurate updating of the multi-year forecast (Game 2) and serve as a chronological set-up for the planning and development of next year’s budget. Essentially, year one of your multi-year forecast setup a preliminary perspective for next fiscal year’s budget development process. Budgetary Level Accuracy (Current Year, Years One and Two)
The Strategic Link...
2019
2020
2021
2022
2023
2024
Updates to Multi-Year Projections/FY19 Budget Development Q1
Q2
Q3
Q4
Current FY 2019 Budget Jul-18
Aug-18
Sep-18
Oct-18
Nov-18
Dec-18
Jan-19
Feb-19
Mar-19
Apr-19
May-19
Jun-19
Monthly Budgets Actuals vs. Budget Comparative Analysis Variance Analysis Projected Year-End Position School district budgets are complicated with so many moving parts and unplanned changes to expected revenues and expenses being a normal part of managing the yearly budget. With visibility at an aggregate level of monthly performance and trends, finance teams can make better forward-looking decisions and anticipate future needs.
PLAY TO WIN
The best financial game plan involves bridging monthly performance analysis, with the multi-year forecast and the budget development process. This bridge is essential for advancing overall programmatic initiatives and aligning resources and priorities for increased financial vision during the budget development process. Budgetary position and parameters on key line items can be established and delineated for greater understanding and perspective. Boards are best positioned to support budgetary parameters when viewed from an overall programmatic and sustainable perspective. The players will change and the competition will present challenges, so prepare and account for adjustments of strategies, methods and approaches. When it comes to financial management, one game plan does not always fit all. GAME ON!
www.iasbo.org
| 35
We Fixed the
Formula‌
Now How Do
We Fund it?
36 |
UPDATE Magazine / Winter 2018
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
Reaching the goal of fully funding the Evidence-Based Formula and creating educational success and equity for all students cannot happen without addressing the structural problems behind Illinois’ poor fiscal condition.
ARTICLE
By Author Ralph Martire
EXECUTIVE DIRECTOR TITLE SD/COMPANY CENTER FOR TAX & BUDGET ACCOUNTABILITY
Author Hertz Daniel
RESEARCH DIRECTOR TITLE SD/COMPANY CENTER FOR TAX & BUDGET ACCOUNTABILITY
www.iasbo.org
| 37
A Historic Turn of Events
When August 31, 2017 dawned, Illinois had one of the worst school funding formulas in the country. By nightfall, that changed 180 degrees and Illinois had the best school funding formula in the country — one designed to ensure that public education not only had an adequate level of resources to meet the needs of all students, but that those educational resources would be distributed equitably.
Contrast that to Illinois’ prior K-12 education funding formula, which was not based on any evidence of what leads to student success, but also was not based on any actual costs of educational needs of different students. On the one hand, it led to a system that provided an inadequate level of funding to schools statewide. On the other, it resulted in a highly inequitable distribution of those inadequate amounts of funding.
The reason for this historic turn of events? Governor Bruce Rauner signed the Evidence-Based Funding for Student Success Act (Public Act 100-0465) into law. Known as the Evidence-Based Formula (EBF), it created a system that ties school funding to the cost of implementing best practices that research indicates have a statistically meaningful correlation with enhancing student academic achievement. This ensures that, when the EBF is fully funded, public education will have adequate resources to meet the needs of all students
The result? In fiscal year 2017, the Foundation Level was just $6,119 per student — an amount that had not increased for seven year and which research suggested was woefully inadequate to educate Illinois’ children, particularly in districts with large low-income and English language learner populations. Additional funding, in the form of a “Low-Income Grant” and “categorical” grants for specific programs like transportation and special education, did little to solve this problem.
The good news is that Illinois has taken a quantum leap forward in its approach to funding public education. The bad news is the EBF cannot be the agent for educational success and equity it has the potential to be, unless it is fully funded. statewide. The EBF identifies a unique funding target for each school district based on the costs of implementing these best practices and that district’s unique demographic makeup. Then, it directs all additional funding above prior levels to those districts with the greatest gap between funding target and actual funding. The bottom line: The EBF aligns resources with evidence-based needs.
38 |
UPDATE Magazine / Winter 2018
The good news is that Illinois has taken a quantum leap forward in its approach to funding public education. The bad news is, the EBF cannot be the agent for educational success and equity it has the potential to be unless it is fully funded. That is quite a challenge, given that the Illinois State Board of Education (ISBE) shows current funding levels for K-12 statewide are some $7.4 billion less than what the evidence indicates is needed.
ARTICLE / Solving the Structural Deficit
The Real Problems Behind the Structural Deficit
Of course, that gap will not be closed overnight. Especially when Illinois’ poor fiscal condition is taken into account. Indeed, current projections are that Illinois’ General Fund will have an accumulated deficit of $9.9 billion by the end of FY 2019. This means 38 percent of state spending on current services this year will be deficit spending. That is troubling, since $9 out of every $10 Illinois spends on General Fund services go to the core areas of education, healthcare, human services and public safety. All of which means if the education community wants to realize the promise of an adequate and equitably funded public school system in Illinois, it has to become fully engaged in the fight to get the state’s fiscal house in order. This, in turn, means getting decision makers to take the actions needed to eliminate Illinois’ serious and long-standing structural deficit.
A structural deficit exists when, over time, revenue growth is insufficient to maintain the same level of services, adjusting solely for changes in inflation and population. And despite frequent claims to the contrary, Illinois’ structural deficit is not about overspending on current services. Indeed, accounting for inflation and population growth, Illinois’ General Fund service spending has fallen by some 24 percent in real terms since FY 2000, including a 29 percent real cut in human services and a stunning 52 percent cut to higher education. If it is not spending, what is the real problem? The data clearly show Illinois’ structural deficit is driven by two things: first, a revenue system that is not designed to keep up with the modern economy and second, an unsustainable, back-loaded pension debt repayment plan. This plan was created under Governor Jim Edgar back in 1994 and is known as the “Pension Ramp.” And while reforming Illinois’ tax policy is crucial, the biggest fiscal problem Illinois faces today is created by this Pension Ramp.
BILLIONS OF DOLLARS
THE CURRENT PENSION RAMP V. REAMORTIZATION WITH BONDS
REAMORTIZATION PAYMENTS
BONDS
CURRENT LAW CONTRIBUTIONS
The Pension Ramp: Digging a Hole By Design
When passed, the Ramp was sold as a responsible way to pay back the unfunded liability owed to Illinois’ five state public pension systems, which then stood at around $17 billion. However, rather than being a responsible repayment plan, the Pension Ramp by design dug the hole much deeper. It in fact legislatively continued the practice of intentionally underfunding the state’s pension systems through 2010–growing the principal of the unfunded liability by over $46 billion. Making matters much worse, the Pension Ramp also created a back-loaded repayment plan which requires rapidly escalating annual payments to reach a 90 percent funded ratio by 2045. Today, the state faces the largest unfunded pension liability in the country, with annual contributions that will take up more than 27 percent of General Fund revenues by 2045. It is crucial to understand that this growth and Illinois’ pension crisis in general, is entirely a result of pension debt, rather than pension benefits. Indeed, the Commission on Government Forecasting and Accountability used actuarial data to show that less than two percent of the growth in the unfunded liability
Illinois’ structural deficit is driven by two things: A revenue system that is not designed to keep up with changes in a modern economy and an unsustainable, back-loaded pension debt repayment plan. since 1995 was a result of growing salaries and benefits. Meanwhile, over 41 percent was the direct result of underfunding, with lower-than-expected investment returns (largely from the 2008 Great Recession) and flawed actuarial assumptions comprising the lion’s share of the rest.
BILLIONS OF DOLLARS
SCHEDULED PENSION RAMP PAYMENTS: NORMAL COST AND DEBT PAYMENTS
NORMAL COST
DEBT PAYMENTS
ARTICLE / Solving the Structural Deficit
In fact, the cost of newly earned pension benefits will be just $1.9 billion in FY 2019, compared to the $5.6 billion payment on pension debt required in that year under the Pension Ramp. Looking ahead, the cost of newly earned pension benefits is expected to fall, even as the cost of repaying the debt Illinois owes to its pension systems rises dramatically. It is that growth that pushes the state’s annual pension contribution to a scheduled $20.2 billion by FY 2045.
“Simple” Solutions: Reamortization and Bond Issuance
Fortunately, solving the Pension Ramp quandary is actually somewhat simple in concept: replace the highly back-loaded repayment plan of the Ramp with a level-dollar reamortization of Illinois’ pension debt. This means, rather than a back-loaded ramp that substantially increases the state’s required pension payments annually, Illinois would make the same nominal dollar debt payment to its pension systems each year. To work, this level dollar payment has to be sufficient to increase the funded ratio annually and bring the systems to health, while covering all cash-flow obligations to pay pension benefits to current and future retirees. That means the level dollar amortization schedule requires somewhat higher payments in the first several years than under the Pension Ramp. But the magic of compounding interest means those somewhat higher payments allow for dramatically lower payments in outlying years. Better yet, the fact that payments remain the same in nominal dollars over time means that in real dollars, accounting for inflation, the state’s payments would gradually shrink over time,
demanding a smaller and smaller share of General Fund spending and freeing up significant revenue to invest in other priorities, such as the EBF. Of course, Illinois’ current fiscal system cannot accommodate increasing up-front payments to the pension systems (by our calculations, some $2.4 billion in the first year of the plan) without a tax increase, as every additional General Fund dollar that pays for pension debt is a dollar not available to pay for core service programs including education. For that reason, we propose that the additional payments required above the current Pension Ramp (some $11.2 billion over the next eight years) be financed with pension obligation bonds. Bonding out these payments does not generate new debt — it simply replaces existing pension debt with bond debt. And that creates two major benefits. One, it allows Illinois to make its payments to the pension funds without reducing spending on current services. Second, it refinances highinterest pension debt with lower-interest bond debt, saving taxpayers money in the short and long-term. Even accounting for the debt service payments on the pension obligation bonds, we estimate that this reamortization plan saves the state some $67 billion through 2045 when compared to the Pension Ramp — while getting the systems over 70 percent funded, a major improvement over the current 39 percent funded ratio. It also means budgetary room to invest more in core services that Illinois residents depend on, and which drive the modern economy — like fully funding every public school district in the state through the EBF.
Bottom line: the Pension Ramp is fiscally unsustainable and makes it impossible to fund K-12 education adequately under the EBF. www.iasbo.org
| 41
How Far Does the Law Allow Schools to Go? How the Constitution Affects Public and Private Partnerships, Advertising and Sponsorships
Due to decreased funding and increased operating costs, school districts across the country seek new ways to raise additional funds through public and private partnerships including advertising and other private revenue streams. When looking for ways to generate extra income, school business officials must be mindful of the nuances and complexities of the law when opening school facilities to the public. There are many common questions and problems that school business officials face when bringing in advertising and other private revenue streams. Gain practical solutions for two different ways to generate income: renting out existing facilities to the public and advertising on school property.
ARTICLE
By Kenneth M. Florey
PARTNER ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD.
Jessica L. Knox
ASSOCIATE ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD.
Howard A. Metz
PARTNER ROBBINS, SCHWARTZ, NICHOLAS, LIFTON & TAYLOR, LTD.
Ted Stec
SUPERINTENDENT LOMBARD ELEM. SD 44
How can schools generate extra income from private entities? A wide variety of sources exist that school districts can utilize to generate extra income to offset cuts in funding, from selling naming rights to classrooms and stadiums to selling advertising space on report cards. Some school districts have even implemented programs to allow private entities to place advertisements on the sides of school buses, lockers or sports jerseys. School districts can also rent out classrooms, field houses or other facilities to the public when not in use by the school district. Under what conditions are schools allowed to rent out buildings to the public and have private entities advertise on their property? School districts can rent out buildings (e.g. the field house) to the public and have a private entity advertise on school property (e.g. the scoreboard), but school districts must understand the Illinois Constitution’s prohibition on the use of public property for purely private purposes. The Illinois Constitution states that “[p]ublic funds, property or credit shall be used only for public purposes.”1 School districts and other units of local government can allow private entities to use public property so long as a public purpose exists. Furthermore, school districts must be mindful and careful to navigate First Amendment free speech issues in regulating the types of advertising permitted.
Who determines whether a particular activity has a public or private purpose? Courts will generally defer to a school district’s determination that a particular activity serves a public purpose and therefore does not violate the Illinois Constitution’s prohibition on the use of public property for private purposes. Courts give school districts broad discretion and unless it is clear that a particular activity exclusively serves a private purpose, courts will accept the judgment of the school district. Critically, receiving sufficient funds for the public space will generally serve the public purpose requirement. When is property serving public versus private purposes? When a public school allows a private entity to advertise on school property (e.g. scoreboard or jerseys) or use school property (e.g. renting out classrooms or the field house) and is obtaining funds for use or advertisement on the school property, a public purpose exists. The district can then use the funds that it receives from the advertiser or user to support the students and educational programs. On the other hand, it would be a violation for the district to allow a for-profit private entity to use the property without obtaining any form of compensation or benefit from the private parties’ use of the property.
What are some examples of uses of school property for a public purpose versus a purely private purpose? This is a judgement call. For example, if a school district allowed a private company to build and operate an ice rink on school property and the private entity kept all the profits generated from the ice rink without paying rent, this would create a problem in that there would be no public benefit or purpose involved. In the often-cited case, O’Fallon Development Company, Inc., v. City of O’Fallon, the court rejected a city’s public purpose argument by stating that no public purpose existed when the city used a public water tower to advertise a private shopping center. It is significant to note, however, that in the O’Fallon case the city did not receive any compensation for the advertising. However, in Friends of the Parks v. Chicago Park District, the Illinois Supreme Court determined that a financial benefit to a private party standing alone does not diminish the fact that the Soldier Field stadium would serve a public purpose and the public would use it for a wide variety of public purposes.
Footnote 1. Ill. Const. 1970, art. VIII, §1(a). www.iasbo.org
| 43
School districts should develop, adopt and consistently enforce a board policy addressing private uses of school facilities and advertising on school property.
Can a school district limit who advertises or what advertisements say on school property? Yes, a school district may limit who advertises on school property or the message, but the school district cannot discriminate based on content or a specific viewpoint. School districts must carefully navigate First Amendment free speech issues in regulating the types of advertising that the district will and will not allow. Since school districts are considered non-public forums, the government may limit expressive activity if the limitation is reasonable and not based on the speaker’s viewpoint. Similarly, the government may control access to the forum based on subject matter and speaker identity so long as the distinctions drawn are reasonable in light of the purpose served by the forum and are neutral in viewpoint.
What are examples of how advertisements can be limited? School districts may exclude certain advertising subjects that would be disruptive to the educational purpose of the school such as alcohol or tobacco. However, if the school district did decide to allow a certain advertiser such as a tobacco company, then the school district would have to allow all tobacco companies to advertise at the school. Similarly, if the school district decides to allow certain advertising subjects, such as certain religious groups, then the school district would have to allow all advertisements from other such groups without regard for its content. School districts may not refuse to post an advertisement based on a particular viewpoint expressed, but may refuse to advertise a particular subject matter as a whole. Additionally, it is not discriminatory if school districts limit by certain constraints such as space, again, as long as they are not refusing the advertisement based on a party’s viewpoint.
What are some ways a school district can avoid unwanted content or facilities renters and not violate the First Amendment? One way a school district can help avoid unwanted content is to set minimum advertising fees or higher insurance requirements. If advertising fees or insurance requirements are too low, there could be a higher probability that the school district will get unwanted advertising or renters. When advertising fees are higher, there is a greater likelihood that those who pay to advertise at that price point are serious advertisers whose purpose is to promote their business or product instead of personal reasons. For example, if a school district is selling pavers at a low price, it is more likely that they may get some unwanted messages, but if the price is higher, such as $500, it is less likely that someone will pay that amount of money to display a personal message.
Create a Plan School districts should develop, adopt and consistently enforce a board policy addressing private uses of school facilities and advertising on school property. Furthermore, school districts should develop administrative procedures for scrutinizing potential advertisements that clearly delineate the responsibilities of all parties and set minimum advertising and user fees or insurance requirements. Finally, school districts should never reject an advertisement because of the specific viewpoint it advocates as that is infringing upon First Amendment rights. Having specific procedures and being aware of these issues will help determine appropriate action when confronting potential advertisers or renters on school property to protect school districts and ensure fairness.
RESOURCES Energizing Rules for Life and Work for himself, his family and his team. With the assistance of several other passengers, Joy teaches George to overcome his fears and those negative influences that limit his effectiveness.
Do you feel positive and energized by your life, family or by leading your team toward achieving peak performance? Is the team you lead in lock-step with your enthusiasm and also performing at their absolute best? If you are uncertain about these questions, take a ride on Jon Gordon’s The Energy Bus. This Wall Street Journal best-seller employs an anecdote format to take George, a negative minded mid-level manager struggling through the everyday challenges of life, family and work, to live in a positive mindset. A quick and easy read, The Energy Bus offers simple energizing rules for increased effectiveness in leadership in both your personal life and work. Lessons from a Breakdown The book begins with George's car breaking down before work. Without his car, George is faced with the prospect of riding the bus to work. He meets Joy, the driver of the bus, who shares with George a series of ten rules to elevate George’s positive energy
The routine of life often finds us lacking the positive thoughts and energy necessary to lead ourselves and others to peak performance. Sometimes we feel like we have a crisis on our hands. The perspective offered by The Energy Bus is, “Every crisis offers an opportunity to grow stronger and wiser; to reach deep within and discover a better you that will create a better outcome. So while this is your crisis, what matters most is what you do with it.” The Power of Positivity As servant leaders in our schools, our staff needs us to be predictable and consistent from one day to the next. Few things are more disruptive to an organization than erratic, unpredictable leadership. Brian Tracy once said, “You’re not what you think you are, but what you THINK, you are.” Let The Energy Bus take you on a ride to eliminate the negative influences that consume your energy and enthusiasm, using positive thinking to propel you, your family and your team to great harmony and success. At Channahon School District 17, our entire staff read this book over the summer. We returned the following school year energized and ready to implement the ten rules to drive with purpose, have fun and enjoy the ride!
On Their List Book reviews from your peers on relevant career topics
Michael J. Schroeder Chief School Business Official Channahon SD 17 A member of the Transportation PDC and former Chair of the Will County (Three Rivers) Regional Organization, Mike helps lead a small school district in the areas of transportation, food service, capital improvements and facilities. He believes servant leadership is essential for CSBOs to assist staff in removing obstacles to effective operations.
As leaders, we must recognize that our positive thinking, attitude and enthusiasm resonate throughout our team. www.iasbo.org
| 45
THE FINAL WORD SPEAKING UP ON SCHOOL FINANCE & BUDGETING NICOLE STUCKERT CFO, CSBO Sycamore CUSD 427
Being a CSBO is a commitment to education.
Understanding that you have a commitment to all stakeholders to provide the best educational opportunities, while ensuring financial stability, is essential to success in this role. The budgeting process should focus on efficiently utilizing resources while aligning to the district’s strategic design.
The budget should be a roadmap.
It should guide your district in decision making through its vision and mission, but it should not hinder what the ultimate priority is: educating your students. Our district has made tough decisions over the last four years, reducing our expenditures by over $6,000,000, but our students have more opportunities today than ever before. Creativity amongst your board, administrators and staff is necessary to be financially sound, while empowering your students to be successful now and in the future.
The role has to constantly be flexible.
New legislation and unfunded mandates are always impossible to budget for. The challenges of not receiving categorical payments in a timely manner seems like something that will continue until the state fixes its revenue woes. Knowing that you can be thrown a curveball at any moment and being adequately prepared to handle those difficult situations will define your success.
Transparency is key.
When establishing a budget, involvement of all building administrators and program managers is a must. Align building and district goals through the resource allocation process and present to the board so they have a comprehensive picture. Communicate, communicate, communicate. Educate all stakeholders so they understand your district’s story — not just the numbers. Community partnerships are essential and should be utilized to foster support.
2019 ILLINOIS ASBO
B O O K K E E PE R S
CONFERENCE
SAVE THE DATE Friday, March 15, 2019 Hilton Chicago/Northbrook The Bookkeepers Conference is for the support professional at any skill level and will provide networking and learning opportunities to enhance your career. This year, take your knowledge to the next level with a brand new advanced learning track featuring both payroll and non-payroll sessions, in addition to the intermediate track! Attend or send your office staff to benefit from this empowering day of learning.
REGISTRATION OPENS JANUARY 25 AT: WWW.IASBO.ORG/BOOKKEEPERS
Powerful Learning
to Inspire Powerful Impact The 2019 Annual Conference learning will go beyond the usual breakout session format to include goldmine sessions, a thought-provoking keynote speaker, mentoring and new microlearning in the School Business Solutions Marketplace! After two days of nonstop inspiration, you’ll leave with new insights to empower the work you do every day.
May 2 - 3, 2019
Schaumburg, IL
REGISTER TODAY TO EXPERIENCE THE POWER! www.iasboconference.org