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School District Hopes to Weather Financial Storm With Savings, Investments

Board OKs tentative tax levy as revenues continue to decrease

Many households are feeling the pinch these days, struggling to find creative ways in which to pay mounting bills with dwindling paychecks. And it’s no different at , as the school district faces decreasing tax revenues for the third year in a row. 

A report from Assistant Superintendent for Administrative Services Gary Grizzafi detailing the history of the district’s EAV (equalized assessed valuation) each levy year since 1988 shows tax revenues down by 2.94 percent for 2009 and 3.61 percent for 2010. 

But based on estimates from the county assessor’s office, in 2011, the EAV is projected to be 6.31 percent less than last year’s figures. And according to Grizzafi, 76 percent of the district’s revenues this year will have to come from those dwindling local sources.

“Unfortunately, until something changes, the largest portion (of revenue) comes from property taxes,” Grizzafi said. 

In the district’s tentative levy request (the amount of property tax dollars a school district requests to operate the district for the subsequent fiscal year) approved Monday by the board of education, Valley View will seek a little more than $149 million in property taxes, a 4.77 percent increase over last year’s extension. 

And although Grizzafi said a 4.77 percent increase may sound like a fairly substantial amount to some, he characterized the levy as “very tight in what we are asking for.”

“It’s about as tight a levy as I’ve ever recommended,” Grizzafi said.

The final levy is scheduled for adoption Dec.12 and the district will have until April 1, 2012, to make adjustments.

Now there will be even less money coming in

Board president Steven Quigley expressed frustration with the latest pay cut of sorts for Valley View, courtesy of the state legislature’s recent passage of Senate Bill 2147.

If Gov. Pat Quinn signs the bill as promised, the legislation will allow the state to tap into a portion of local governments’ funds from the Personal Property Replacement Tax (PPRT) to pay 44 regional school superintendents across the state. The administrators have gone without paychecks since this summer.

Quigley was also frustrated with the legislation's timing, as it would allow the state to take money out of Valley View's coffers in the middle of its budget year. 

“It’s another poke in the eye,” Quigley said. “This will mean $85,000 to $100,000 less from the state for us, as we try to find nickels and dimes. That money would pay for a teacher-and-a-half or a program. I feel that if the state is going to require these positions, it should pay for them.”

School district seeks to increase revenue through savings, investments

As part of an ongoing restructuring effort begun by Valley View’s finance committee early this year, the board authorized Grizzafi to negotiate with existing bondholders for the refund of a portion of the district’s outstanding debt bonds and a re-issue of new bonds.

“It’s a wise financial decision, said school board vice president Rick Gougis. “We are going to buy bonds back and resell them. It’s very much like a refinance.”

The board also authorized a revision in Valley View’s investment policy to allow the district to invest in tax anticipation warrants (TAWs).

According to Grizzafi’s report, TAWs are “a short-term investment issued by entities that need cash for operations until real estate tax distributions are received by the issuing entity,” such as school districts and other units of government.

Once the government entity collects its real estate taxes, the warrants would be paid, Grizzafi explained.

Although Grizzafi described the investments as “kind of uncharted waters,” for the district, he said TAWs are relatively low risk, and, according to his report, would provide “a higher rate of return on short-term funds than the district is currently receiving.”

Under the terms of the district’s revised investment policy, the investments would be subject to board approval and attorney review.

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