Lemont School Districts Improve in State Financial Rankings

A statewide financial analysis by the Illinois State Board of Education resulted in improved ratings for both Lemont school districts for fiscal year 2012.

Lemont High School District 210 was placed in Financial Recognition, the highest financial designation in the ISBE Financial Profile. The district had previously earned Financial Review status, which ranks just below Recognition, for fiscal years 2007 through 2011.

Lemont-Bromberek Combined School District 113A also made strides in the eyes of the state board. ISBE officials placed the district under Financial Review, a step above last year's Early Warning rating and a vast improvement from 2009 and 2010, when it was placed on the state's Financial Watch list. 

The annual Financial Profile provides a snapshot in time that helps ISBE gauge school districts’ financial condition based on five indicators of financial performance: fund-balance-to-revenue ratio, expenditures-to-revenue ratio, days cash on hand, percent of short-term borrowing available, and percent of long-term debt remaining.

The 2013 Financial Profile is based on districts’ Annual Financial Report from fiscal year 2012.

The designation categories in descending order are:

• Financial Recognition: The highest category of financial strength. A district must receive a score of 3.54 – 4.00. Districts in this category require little or no review or involvement by ISBE unless requested by the district.
  
  
• Financial Review: Districts with a score of 3.08 - 3.53 receive this designation. Districts in this category receive a limited review by ISBE, but they will be monitored for potential downward trends. Staff will be assessing the next year’s school budget for negative trends as well.
  
  
• Early Warning: Districts with a score of 2.62 - 3.07 are placed in this category. ISBE monitors these districts closely and offers proactive technical assistance (e.g., financial projections and cash flow analysis, etc.). These districts are also reviewed to determine whether they meet the criteria set forth in Article 1A-8 of the School Code to be certified in financial difficulty and possibly qualify for a Financial Oversight Panel.
  
  
• Financial Watch: If a district receives a score of 1.00 - 2.61, it is placed in this highest risk category. As with the Financial Early Warning districts, ISBE monitors these districts very closely and offers them technical assistance including, but not limited to, financial projections, cash flow analysis, budgeting, personnel inventories and enrollment projections. These districts are also reviewed to determine whether they meet criteria set forth in Article 1A-8 of the School Code to be certified in financial difficulty and qualify for a Financial Oversight Panel.

Sixty-five percent of the school districts were in the "Financial Recognition" category. But the number is down from 670 last year to 562 of the state’s 865 districts, according to ISBE officials.

The number of districts listed in Financial Watch, the lowest designation, increased from 17 last year to 45 this year.

Improved Expenditure-to-Revenue Ratio in District 210

ISBE officials gave District 210 an overall financial score of 3.80, the same score it achieved for fiscal year 2007 when it was last placed in Financial Recognition. The score has been 3.45 for the past four years.

"District 210 is pleased to regain its 'financial recognition' status with the Illinois State Board of Education," District 210 Superintendent Mary Ticknor said in an email. "Our improved status is a testament to sound financial decisions made by the Board of Education and former superintendent Dr. Sandy Doebert, as well as continued efforts by administrators, faculty and staff to be good financial stewards for taxpayers."

District 210 Community Relations Director Tony Hamilton said the driving force behind the improved rating was the score provided for the district's expenditure-to-revenue ratio. For the first time in five years, District 210 ended the fiscal year with a ratio under 1.0 (0.991, compared to 1.044 the year before).

"Though the district adopted a budget with an anticipated deficit of approximately $1.1 million, it ended the 2011-12 school year 'in the black' through a balanced effort of limiting expenditures and increasing revenue," Hamilton said.

The 2013 Financial Profile also indicated that District 210's percentage of long-term debt remaining dropped by approximately 15 percent from 2011 to 2012. That indicator will continue to improve due to recent debt restructuring and timely payments on building bonds approved through community referenda in 1996 and 2006, Hamilton said.

Steady Improvement in District 113A

For District 113A, the past 10 years of ISBE Financial Profiles has been something of a rollercoaster.

District 113A last achieved Financial Recognition for fiscal years 2003 and 2004, when its overall scores were 3.80 and 3.55, respectively. The district earned a 3.45 three years in a row, thus dropping to Financial Review.

In 2009, when the state reviewed fiscal year 2008, the district was placed under Early Warning after its score dropped to 2.75. The score continued to plummit in 2009 (2.30) and hit its lowest point in 2010 (1.85), which was enough to place the district on the state's Financial Watch list.

Over the past few years, however, District 113A has managed to improve its financial standing through severe budget cuts and adherance to a state-approved financial plan.

As a result, the district's profile score jumped to 2.65 in 2011, earning the Early Warning designation. This year, the score further improved to 3.10.

"District 113A is very pleased with the progress we are making to improve our financial standing," Superintendent Susan Birkenmaier said in an email Tuesday. "Everyone in the District 113A schools and community has contributed to this success. We expect to continue this positive forward movement this year and beyond."

District 113A will continue to operate under an ISBE-approved financial plan as it works to re-build the fund balances it depleted in 2009. The administration is currently working on an update to the current plan, as well as a strategic plan to outline the district's goals and priorities for the next five years.

According to ISBE documents, "a long-term strategic planning process has been undertaken to establish a blue print that will be used to further build (District 113A's) financial future and continued success."

The 2013 Financial Profile for all districts in Illinois can be found at: http://www.isbe.net/sfms/P/profile.htm

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