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Local News

Lincoln-Way put on watch list for 3rd year

District officials working toward budget surplus

NEW LENOX – Lincoln-Way High School District 210 will be able to rise from the lowest state financial rating by building back budget surpluses only borrowing less in short-term debt, its superintendent said. 

For a third year in a row, District 210 was given watch status last week by the Illinois State Board of Education. When District 210 was first given the rating in 2015, rumors abounded that a school would close, and when they came true, it set off a tumultuous period for the district. 

Over the years, the district spent far more than it took in, incurring multimillion-dollar deficits in its budget and depleting its fund balances, which led to the board deciding in 2015 to close Lincoln-Way North High School as a cost-cutting measure. 

Superintendent Scott Tingley said the district will begin to improve its finances by running surpluses annually to work its way from watch status to higher state ratings. District officials expect to make a surplus of about $2 million this year. 

“It’s going to take a couple of years to get to that place,” he said. 

District 210 is one of 19 districts statewide on the watch list. Chicago Public Schools has been on the watch list for the last three years, and Millburn District 24 in Lake County has been on it since 2007. 

Tingley said the rating will have “little effect” on the district. When the district first received its rating in 2015, district officials put together a deficit reduction plan to avoid being put on a state financial oversight panel.

He said the district continues to meet quarterly with ISBE representatives to track the district’s progress. ISBE representatives review the district’s cash flows, net projections, fund balances, savings and other items. 

“As they track our progress, they’ve been satisfied with the direction we’re heading,” Tingley said.

Jackie Matthews, ISBE spokeswoman, stated in an email that the state agency has worked with District 210 to create financial projections, run records for potential budget reductions and make a financial plan for creditors.

“ISBE staff spent a considerable amount of time with the district last fall and winter and have been constantly available by phone,” she stated.

Last year, the district was one of six on the state’s watch list – along with CPS – that were investigated to determine whether they met the criteria for financial difficulty, which District 210 did not. If it had, the district might have received more state intervention.

According to a May 11 ISBE memo, district officials outlined their plan to address budget deficits, which included closing North to reduce operating expenses in staffing, maintenance, transportation and other costs. 

ISBE officials noted in the memo that the district would need to issue tax anticipation warrants – or short-term borrowing – for cash flow, which the district has done this fiscal year. Last month, the board approved issuing up to $3 million in tax anticipation warrants. 

“We are living off of money that we anticipate getting in the future,” Tingley said. 

In March, district officials said operating expenses have experienced a decline equating to a reduction of $5.2 million year over year. They estimated having $814,000 in operations and maintenance savings as of March, of which $469,000 was the result of running three schools instead of four. 

One challenge the district faces is delays in mandated categorical payments, a problem other districts across the state are also experiencing. The state payments that are earmarked for special education personnel, transportation and other costs have been delayed. 

Tingley said by the close of this fiscal year, the district will be owed about $1.7 million in delayed payments. He said the district has made sure to budget conservatively.

“I think we’re still in a position to run a surplus even with a shortage from the state,” he said.

Another challenge is the district’s “junk” bond rating, affected by the last several years of the district’s audits and its annual financial reports filed with the state. Tingley said building surpluses will improve its credit rating.

“We have to run surpluses for the next several years to increase our cash position and then that will in turn improve our credit rating,” he said.

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