Presentation on theme: "DEBT SERVICE EXTENSION BASE REFERENDUM Hartsburg-Emden District #21."— Presentation transcript:
DEBT SERVICE EXTENSION BASE REFERENDUM Hartsburg-Emden District #21
WHAT IS MEANT BY DEBT SERVICE EXTENSION BASE? It is the amount the board can levy for principal and interest in a single year to pay off non-referendum limited tax bonds. For instance, if the board of education would sell $250,000 worth of bonds and finance them to be repaid over a period of three years, the total levy for each of the years would need to equal the annual payment.
WHAT IS THE CURRENT DSEB? The current DSEB is $0
HOW IS THIS FIGURE DETERMINED? This figure was based on the amount of outstanding bonds (debt) owed by the school district at the time “tax caps” came into effect in Logan County (1996).
WHAT DOES HAVING A DSEB OF $0 MEAN? The board of education cannot issue bonds (borrow money) with prior voter approval except health/life safety bonds.
HOW IS REQUIRING PRIOR VOTER APPROVAL (BEFORE ISSUING BONDS) A PROBLEM FOR THE BOARD OF EDUCATION AND/OR THE SCHOOL DISTRICT? Elections are held only at specified times every other year and may not always coincide with when the board would need additional revenues to operate.
WHAT IS THE HISTORY OF THE BOARD OF EDUCATION WHEN IT COMES TO ISSUING BONDS? The last bond issuance was in 1997 (approved by voters in November 1996) in the amount of $500,000 for the addition to the high school. The bonds were paid in full in 2007.
WHAT IS THE PROCESS FOR ISSUING BONDS? The board of education must adopt a proper resolution, the notice of intention to issue bonds must be published in the newspaper within 10 days after the adoption of the resolution, and then there is a 30 day petition period. The petition period provides one last opportunity for the bond issuance to be subject to a vote by voters of the district. If during this petition period at least 10% of the legal registered voters sign a petition then the question must be voted upon at the next scheduled election. If there is no petition presented during the 30 days, then the board may issue bonds without referendum.
WILL APPROVAL OF THIS BALLOT QUESTION MEAN MY TAXES WILL INCREASE? No, the only way taxes would increase as a result of approving this question is if the board decided to sell bonds. As a matter of fact, the tax rate levied by the school district has actually DECREASED each of the last three years in in in in 2012
DOES THE BOARD PLAN TO SELL BONDS IF THE DSEB IS APPROVED? There is no immediate need and/or plan by the board to sell bonds.
IF THERE IS NO IMMEDIATE NEED AND/OR PLAN TO SELL BONDS, WHY IS THE BOARD SEEKING APPROVAL OF THE DSEB? Since 2008 when the recession hit throughout the United States, the district has relied on reserve funds to help operate the school system. The district has operated a deficit budget in 6 out of the last 7 years. The district has filed a balanced budget for this year (fiscal year 2014). As of result, the Education Fund (75% of our total budget) has seen the fund balance decrease from approximately $500,000 in 2008 to approximately $65,000 as we started fiscal year The only real reserves now are in the Working Cash Fund (approximately $550,000) which a person may equate to your personal savings account. Monies can be borrowed from the Working Cash Fund but must be paid back. The problem with this is there is no revenue source to repay this interfund loan. The board is seeking to create another revenue source option and to establish a more sound fiscal position with the approval of the DSEB.
WHAT HAS HAPPENED WITH REVENUES (INCOME) SINCE 2008? Revenues have increased only 1.05% over the past six years. This has occurred because the level of state funding has decreased by almost 50% over that time period. Fortunately, local revenues (property taxes) have increased at about the same rate due primarily to increased farmland values. The district has few options to increase revenues significantly.
AREN’T THE FINANCIAL ISSUES FACING THE DISTRICT REALLY DUE TO OVERSPENDING? For fiscal year 2014 the total expenditures in our Education Fund will be 4.25% less than they were in This comes at a time when the district faces a mountain of unfunded state mandates, increased special education costs, technology demands, and annual inflation.
WHY IS THE BOARD SEEKING TO INCREASE THE DSEB TO $500,000? It is the position of the board that this figure represents a figure that would more than cover any short or long term needs of the district. The $500,000 represents a maximum figure and is not likely to ever be reached.
IN REALITY, AREN’T THE VOTERS OF DISTRICT # 21 BEING ASKED TO PUT THEIR TRUST IN THE BOARD OF EDUCATION TO AUTHORIZE THEM TO ISSUE BONDS (BORROW MONEY) IN THE FUTURE IF AND WHEN THEY FEEL IT IS NECESSARY? Yes, voters will need to decide if the board of education has earned your trust.
CAN YOU GIVE ME A SPECIFIC EXAMPLE OF HOW MUCH TAXES WOULD INCREASE IF THE BOARD WOULD DECIDE TO ISSUE BONDS AT SOME POINT IN THE FUTURE? Based on the current Equalized Assessed Evaluation (EAV) a tax increase of.25 (25 cents) would garner the district approximately an additional $89,500 in revenue. So, if the board sold bonds in the amount of $250,000 and were to repay them over a three year period a house worth $150,000 would see a tax increase of $ for each of the three years until the bonds were paid off. After the three years the levy for bonds would be removed from an individual’s tax bill. If the board was to extend the repayment period then the annual levy would be less.
WHAT WILL THE DSEB QUESTION LOOK LIKE ON THE BALLOT? The question will read as follows: Shall the debt service extension base under the Property Tax Extension Law for Hartsburg-Emden Community Unit School District Number 21, Logan and Tazewell Counties, Illinois, for payment of principal and interest on limited bonds be increased from $0 to $500,000 for the 2014 levy year and all subsequent years, such debt service extension base to be increased each year by the lesser of 5% or the percentage increase in the Consumer Price Index during the 12 month calendar year preceding the levy year?
WHO CAN I CONTACT TO GET MORE DETAILED INFORMATION ABOUT THE DEBT SERVICE EXTENSION BASE BALLOT QUESTION? Don Beard, Superintendent Hartsburg-Emden #