Plainfield School District Drops a Notch in ISBE Financial Profile

Plainfield School District 202 fell a notch on the Illinois State Board of Education’s annual Financial Profile this year.

The district dropped from "Early Warning" to the the "Financial Watch" category, which is the highest-risk category, according to the ISBE document.

Meanwhile, nearby Valley View School District remained in the "Financial Review" category, while Troy School District 30-C stayed in the "Financial Recognition" category.

"Financial Watch" districts are monitored closely by ISBE, which also offers technical assistance. "These districts will also be reviewed to determine whether they meet the criteria set forth in ... the School Code to be certified in financial difficulty and qualify for a Financial Oversight Panel," according to ISBE.

District 202 Assistant Superintendent for Business and Operations Angie Smith said the state uses five factors to determine a district's score: fund balance to revenue ratio, expenditure to revenue ratio, how many days' cash the district has on hand, percentage of short-term borrowing remaining and percentage of long-term debt margin remaining.

The score is based on a snapshot, or one day in a district's financial history. District 202's score is based on the district's financial situation on June 30, 2012.

"The thing to keep in mind is that these are literally done based on one day," Smith said. One June 30, the short-term borrowing included tax anticipation warrants that Smith said have since been paid down. 

"It's not that [the score] is misleading, it's just that it doesn't tell the whole story," Smith said, adding she doesn't anticipate the ranking will affect the district's bond rating. "You kind of have to look at in context."

At the time the score was calculated, the district was still waiting to be reimbursed by the state for expenses including transportation costs, she said.

"We were still owed a sizeable amount of money," she said. The state didn't pay up until August of 2012, she added.

"As long as the state continues to cut our funding and funding continues to be late, it's hard to paint a whole picture," Smith said. "It's a benchmark.

" ... The biggest thing that continues to weigh down our score is our long-term debt," Smith said. "As a large, fast growing district it was necessary to issue tax payer approved debt to build schools for our growing population. Every year that debt continues to decrease as it is paid down, but because we are so large, we also have a large total debt number that causes us to score a 1 in that area.  The Financial Profile does provide a barometer of sorts to compare districts, but since it is a fairly rough calculation, it doesn't depict a full picture or allow for unique circumstances like our fast growth to be shown in context."

District 202, which recently passed a budget with a $1.8 million deficit, has been on the Financial Watch list before. The district received that designation from ISBE in 2008. Its Financial Profile score improved in 2009 and remained at the "Early Warning" level in 2011.

The 2013 Financial Profile is based on districts’ Annual Financial Report from Fiscal Year 2012.

The designation categories in descending order are:

• Financial Recognition
• Financial Review
• Early Warning
• Financial Watch

Sixty-five percent of the school districts were in the "Financial Recognition" category. But the number is down form 670 last year to 562 this year. The state includes 865 districts.

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

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

Read:

• Election 2013: Plainfield School District 202 Board of Education
  
• Plainfield School District Files an Amended Budget with a $1.8 Million Deficit
  
• District 202 Approves Selling $17 million in Tax Warrants