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KCRT Mission Statement

Who Is The KCRT?

Initial KCRT Board Members

Mr. Albert Tippens, Chairman
Mr. Kenneth J. Davis, Executive Director
Mr. Kevin Killion

Committee Chairs

Education: Mr. Kevin Killion
Finance: Mr. Kenneth J. Davis

Introduction

Because for each $10,000 of real estate taxes now being paid, 38.4% of the $10,000 or $3,840 goes to Kenilworth School District 38. Therefore, if one divides the $820 increase by the $3,840, the tax increase being proposed is really 21.4%. One also needs to add to this 21.4% the CPI escalator of an estimated 3.2% equalling a total tax incease of 24.6%. The CPI escalator is then compounded on top of this 24.6% for each subsequent year thereafter. This of course is payable every year FOREVER by every Kenilworth home owner!

Question: What is the difference between the District 38 School Board Members explaining the tax increase as $820 per $10,000 of taxes paid per above and their other explanation given of a 45 cent and 5 cent increase [50 cent in total] per $100 of equalized assessed value for the Referenda?

Answer: The former explanation results in the 24.6%/$820 increase in taxes actually payable and the latter results in a 29.3%/$1,000 increase in actual real estate taxes payable to Kenilworth School District 38 per each $10,000 of real estate taxes now being paid! The two explanations don't reconcile which goes against the policy of transparency and clarity. We are being told the tax levy authorization increases being requested will only result in the 24.6% [or is it 29.3%?] increase in actual taxes payable but we really don't know if the $820 [or $1,000] example is the maximum allowed by the new levy tax rate or not. The actual tax payable could therefore be even more than the 29.3% increase given the complex calculations and time delays in figuring real estate taxes in Cook County. We do know that both numbers are Big and Permanent.

A -Operating Fund Referendum Financial Information

Answer: Actual revenues will increase by $1,800,000 per year if the Operating Fund Referendum passes.

Question: Where will this huge increased amount [$1,800,000] of money be spent?

Answer: According to the School District 38 designated expert [outside consultant], "basically on teachers' salaries". When asked for the 5 year forward detailed financial projections on a line item basis supporting this huge request, it was revealed that detailed line item projections have not been done but rather factors [percentages] were applied to broad expense categories to come up with the ball park number of the $1,800,000 tax increase. This casual approach does not support the business case that needs to be made so that Voters can understand what they are voting for and thereby agree to such a gigantic real estate levy and subsequent actual taxes payable increase.

Question: What is the size of the Deficit?

Answer: For the year end 6/30/2007, the Deficit is projected to be $787,000 if no actions are taken by the District 38 Board Members.

Question: Why does District 38 have a deficit?

Answer: In part because the Board created the deficit by approving a 7% per year salary increase for teachers when the CPI was up only 2.5% on average. The Superintendent's base pay went up approximately 9.3% [not including the $15,000 housing allowance, $4,500 a year car allowance and $19,111 pension payment] for a total package of $218,925 for fiscal 2007. The District 38 Board approved these excessive increases without knowing where it would get the additional funding. Hence, yes there is a deficit but an intentional deficit.

Questions: Are there other reasons for the Deficit?

Answer: Yes. Another reason why District 38 is running a deficit is because District 38 has had a Superintendent, Interim Principal and Principal [$149,000 salary] for most of Fiscal Year 6/30/07 creating a bigger than needed expense, probably approaching some $350,000 in excess. When asked what it would take to combine the functions of Superintendent and Principal [total cost now approximately $713,901], thereby saving some $350,000, the answer was that this is within the School Board's power to do this and that they can do it with a simple vote! The question is why has this not been done to help correct the deficit long term. The consensus rationale as to why we need both functions seems to be that the Superintendent's Office needs a "buffer" between it and the Parents which is the Principal's Office!

Question: What would the 6/30/2007 deficit be if the District Board 38 took action?

Answer: A $350,000 savings would cut the Deficit to $437,000 [$787,000 minus $350,000 equals $437,000]

Question: Why are the projected deficits so large and why do they expand so quickly?

Answer: If Voters allow the District 38 Board Members to allow the Administration of District 38 to spend on everything on their Wish/Dream List, then a deficit will be created which needs to be funded. A circular argument if ever there was one. Put another way, if the Voters give District 38 carte blanche on what they ideally want to spend, then yes there will be a deficit and a much bigger one! The voters need to send a message that there are limits which have now been reached by Voting No on the referenda on April 17, 2007!

The Administration and District 38 School Board must be persuaded by your NO vote that residents' unconditional acceptance of unsubstantiated demands for tax increases must not be permitted.

Question: Even if one concedes the deficit is $437,000 and not the $1,800,000 requested, where does the additional $1,363,000 get spent?

Answer: Even if one takes the total Salaries and Benefits costs of the Educational Program of $4,220,232, the additional $1,363,000 is a 32.3% increase the first year not including the 7% already granted for the coming fiscal year 2007/2008 contract. The business case is not made and the numbers just don't make sense! One program apparently being discussed is to give free laptop computers to every student at Sears? Other ways to spend more money might be higher staff salaries, a full time greeter, more staff, and additional perks. The District 38 School Board has not answered these questions with any specific financial facts but as we all know, if you give Government free money, they will figure out a way to spend it.

Question: Aren't District 38 Reserves dwindling to very low levels?

Answer: The financial facts from the District 38 Financial Report dated 6/30/2006 are that:

Total Revenues Received:	$9,564,217
Total Expenditures Disbursed	$8,655,565
Excess Reserves	$908,652
Reserve Balances Beginning Yr. [6/30/2005]	$5,789,114
Reserve Balances End of Year [6/30/2006]	$6,697,766
Reserve INCREASE	$ 908,652

Question: Why do we need such high Reserves in the first place [77.4% of total annual expenditures]? The reason given is that the District can't predict when it will get its real estate tax receipt revenues.

Answer: This answer doesn't make any sense since there is great predictability! Why? Cook County electronically transfers tax receipts to Kenilworth's bank accounts within 30 days of the due dates/payment dates. VIrtually all real estate taxes are paid on time with a very low number [estimated at less than 1%] being paid late. There is no reason to keep the extremely high reserves that the District 38 Board Members is requesting other than to have monies available for additional, non voter approved spending projects! Some reserves are needed, but to ask for an actual 29.3% real estate taxes payable increase so that $6,697,766 or more sits in money market accounts earning 2.84% or less makes no sense at all. What are the specific planned uses of these excess reserves that we are not being told about??

Question: Is there a Crisis?

Answer:. There is no crisis. The Newsletters put out by Sears School contain predictions of dire consequences of not approving both Referenda. However, if one uses the $437,000 projected real deficit number for 6/30/2007 versus excessive reserves of $6,697,766, District 38 actually needs to work these reserves down to a more realistic level for 2 or 3 years and then come back with a spending request for a more modest amount after an expense reduction review has been done on a line by line basis.

CONCLUSION

If this Operating Referendum passes, homeowners will be selling their homes because the annual operating costs are no longer related to anyone's income except the very wealthiest in Kenilworth. Unnecessary tax increases can torpedo existing property values by putting more unsold homes on the market thereby driving DOWN the value of all homes in Kenilworth. The real estate market is already suffering enough.

B-Capital Referendum Financial Information

Answer: The $8,250,000 request actually covers 10 separate projects which will be done over the next 4 to 5 years. Remember, this $8,250,000 is separate from and in addition to the $1,800,000 that District 38 Operating Fund Referendum request above in A. Also, none of the $1,800,000 Operating Fund increase will go towards these 10 separate projects. Since these projects will be done over a 45 year period, there really is no urgency in getting all of these projects done now. Apparently the $8,250,000 million will sit somewhere during this 4-5 year period during which time the District 38 Board and Superintendent's office really decides when and how to spend it.

Question: What projects will money be spent on?

Answer: According to the District 38 designated expert, NO engineering opinions have been obtained yet to justify the work on any of the projects nor have any bid proposals on the costs of each project been obtained. In essence, the 10 projects are a "Wish List/Dream List" put together by the District 38 Board and Superintendent's Office. This is an unacceptable approach to spending voters' monies and the reason that this Referendum should be defeated at this time.

The District 38 Board and Superintendent need to prioritize the 10 projects, obtain engineering/expert opinions as to the work that is needed and when versus the "Wish List" and then get bid proposals on that shorter list. At that time, a new Referendum for a shorter list of projects could be put to Voters with actual supporting documentation, time lines ans numbers to see if it makes sense. The voters deserve better and more TRANSPARENCY which is why this Capital Referendum should be voted down at this time and then brought back at a later date with a lower and more specific and supportable requests.

Question: What would it take annually to amortize principal and interest on the $8,250,000 from the proposed bond sale?

Answer: Spread over 30 years at municipal bond interest rates, it would take approximately $671 per $10,000 of real estate taxes now paid to amortize the bonds and not the $82 mentioned in various Sears School Newsletters. This would INCREASE the $820 of the proposed new taxes payable per $10,000 of current taxes now payable by another $589 or $1,409 in total which is a 40.1% increase [$1,409 divided by $3,820 plus 3.2% CPI] in real estate taxes payable by each homeowner. Once again, the numbers don't make sense.

Question: Is the Management of District 38 equipped to handle all of this money and all of these 10 projects?

Answer: The structure of District 38 Management does not currently give total confidence that the $8,250,000 will be spent efficiently. We have a Superintendent with one year left on a contract, an Interim Principal, a Principal on leave and a part time [2 days a week] consultant who signs the checks serving as a functional "CFO" and "Treasurer" [this CFO position should be made a full time one, especially with the amounts of money being handled and all of the projects; also, a resident who lives in the District should be appointed Treasurer by the Board]. Changes to the District 38 Board itself are also near.

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