Lemont School District 113A Bond Referendum - Facts For Voters

The District 113A Bond Referendum:

The District 113A Bond Referendum Facts Voters Should Know For The April 5, 2011 Election Lemont, Illinois

Referendum Overview:

Referendum Overview District 113A Is Asking Voters To Approve A $20mm Bond Issue On April 5 Lots of Confusion: Is It Necessary? What Will Happen If It Is Defeated? Americans for Prosperity Presents A Review of the Facts For Voters To Consider Objective is an Informed Decision on Election Day

Long Term Revenue and Expense Trends:

Long Term Revenue and Expense Trends Annual Revenues And Expenses FY: Sources: 2002-2005 Illinois State Board of Education, 2006-2010 District Audited Financial Statements Year Revenues Expenses Surplus/ Deficit 2002 $16.4 $18.1 $1.6 2003 22.2 26.0 3.8 2004 19.0 23.3 4.3 2005 19.0 20.6 1.6 2006 21.3 22.3 1.0 2007 23.1 23.9 0.9 2008 23.5 26.6 3.1 2009 25.8 28.8 3.0 2010 28.9 31.5 2.6 Total $199.2 $221.1 $21.8 Long Term Revenue and Expense Trends

Chronic Overspending Has Reduced Financial Strength:

Chronic Overspending Has Reduced Financial Strength

And Compromised 113A’s Short Term Ability To Pay Bills :

And Compromised 113A’s Short Term Ability To Pay Bills

… while 113a’s Current Liabilities Have Soared ($$ in Millions):

… while 113a’s Current Liabilities Have Soared ($$ in Millions)

The District Proposes Significant New Debt To Remedy The Problem::

The District Proposes Significant New Debt To Remedy The Problem :

The District’s Reasons::

The District’s Reasons: Create financial stability… Decrease class sizes …. Restore educational programs and, Provide the public with financial policies for accountability

Taxpayers Have Already Done Their Part To Provide Financial Stability :

Taxpayers Have Already Done Their Part To Provide Financial Stability

But, 113A Spends More Than It Takes In:

But, 113A Spends More Than It Takes In

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First, Are 113A’s Numbers Credible? Sources ISBE, Audited Financials & Citizens For School District 113A Website The District’s Comparison With Downers Grove SD58 Actual Audited Costs Comparison with Downers Grove SD58

Use Of The Proceeds:

Use Of The Proceeds 60% of the Bond Proceeds Are Used To Fund Current Operating Expenses

Would The Proposal Increase Financial Stability?:

Would The Proposal Increase Financial Stability? In the Short-Term, Yes Fund Balances Would Increase The Current Ratio Would Temporarily Increase Dependence on Potentially Volatile Tax Anticipation Warrants (TAW) would end And Interest Rates Are Low

But Not In The Long Term…:

But Not In The Long Term… There Are No Tangible Permanent Benefits From Borrowing Not Only That, the District Already Owes A Lot of Money: Debt Service Costs Already Significant. They Have Nearly Doubled Since 2001 – Despite Falling Interest Rates Debt Service Makes for a Materially Higher Claim on Budgets Than Other Districts At 12% of Operating Budget Now, and $1,200 Per Pupil per year, Finance Charges are Already Crowding Out More Productive Expenditures See the Following Charts

113A’s Interest Costs Are Already Dangerously High: 113a vs. State of Illinois Average:

113A’s Interest Costs Are Already Dangerously High: 113a vs. State of Illinois Average Sources: Illinois Interactive Report Card database, Northern Illinois University; and Illinois State Board of Education

Has The District “Turned The Corner”?:

Has The District “Turned The Corner”? They Project a FY 2011 Budget A $2 Million Surplus ---1 st in a Decade Voters Should Expect Well-Paid District Management To Meet Their FY Projected Budget If So, The Stated Purpose of the Referendum Doesn’t Make Much Sense The District Shouldn’t Spend What It Doesn’t Have

What Are The Possible Outcomes?:

What Are The Possible Outcomes? If The Board’s Projections Are Achieved—Not Much Should Change, Even Without New Borrowing Extra Teachers Probably Won’t Be Hired—But Enrollment is Projected To Decline If District Management Can’t Hit Their Own Projections, It’s Time To Change Management, Not Borrow Money…. “One’s Greatest Fears Are Seldom Realized”

Conclusions:

Conclusions District Revenues are Have Grown Faster Than Enrollment And Adjustment For Inflation Yet, The District Spent About 10% More Than Revenues Over The Past Decade The “Cure” is Better Expense Management, Not “Covering Up ” With More Borrowed Money The District’s Financial Condition and Projections Argue Against The Proposed Doubling of Debt Indicated Action: Roll Over TAWs and Pay Them Off With Projected Surpluses Over Time

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