Maximizing School Board Efficiency: A Guide for Business Managers

1. The Business Official -the other leader you can’t live without Susan Harkin, CFO, Carpentersville CUSD 300 Luann Mathis, Business Manager, Prospect Heights ESD 23 Brian Mee, Terrie Simmons, Asst. Supt. Of Business and Finance , Sunset Ridge SD 29

2. Agenda • School Board Roles and Responsibilities • Building & Sustaining Relationship • Board Members Should Have a Basic Understanding of Business Office Functions: • School Finance • Business Operations • Question and Answer Session with Real Life Board Members!

3. Origins and Basic Function of School Boards Grew out of town meetings dating back to the original Thirteen Colonies. Basic Function of the School Board remains the same: represent all constituents within their district providing local control over education. ALL CONSTITUENTS: Administrators, teachers, support staff, students, parents, non-parent tax payers, local businesses, special interest groups etc. etc.

4. IASB Mission Statement “The mission of the Illinois Association of School Boards is Excellence in local school governance and support of public education”

5. Foundational Principles of Effective Governance The School Board is considered a corporate entity required by law to govern the school district according to State Statute. The School Board represents all their constituents within their school district boundaries.

6. School Board Duties & Responsibilities IASB Defined Duties: Employs a Superintendent Clarifies the District Purpose Connects with the Community Delegates Authority Monitors Performance Takes Responsibility for Itself

7. Employs Superintendent Single most important job of the School Board. Only individual School Board actually employs and evaluates. Directs and holds Superintendent accountable for implementation of School Board Policy and overall School District performance. School Board is legally required to approve all employment contracts, however, School Board delegates authority to Superintendent to select, employ and evaluate all other employees within the standards established by School Board policy.

8. Clarifies the District Purpose Per IASB, “as its primary task, the School Board continually defines, re-defines and articulates district ends to answer the recurring question – who gets what benefits for how much?” As Steven Covey states: “Begin with the End in Mind”. Knowing where you want to be as a School District will help you to establish your mission, values and goals providing clear direction to all involved. Clearly established goals allows the School Board to easily monitor the District performance holding the organization accountable.

9. Board Connects with the Community Per IASB “the purpose of the conversation is to enable the Board to hear and understand the community’s educational aspirations and desires, to serve effectively as an advocate for district improvement and to inform the community of the district’s performance”. How does your Board communicate? Comment time at meetings, web site, email, twitter, face book, day/evening coffees, staff coffees, newsletters = transparency, transparency

10. Board Delegates Authority Difficult for some Board Members! Board is ultimately responsible for everything, however the Board delegates authority to the Superintendent who delegates to many individuals within the District including the Business Manager. Successful Boards are able to delegate and empower their Superintendent and staff.

11. Board Monitors Performance Per IASB “A School Board that pursues its ends through the delegation of authority has a moral obligation to itself and the community to determine whether that authority is being used as intended”. Board needs to have a basic understanding of data used within District, both student and financial based data.

12. Board Takes Responsibility for Itself The role the School Board fulfills as trustee for their constituents cannot be filled by any other person or group – the Board is ultimately responsible for the operations, success and compliance with State Laws.

13. Mandatory Board Training Open Meeting Act – Effective 1/1/2012 Board Members elected post 6/13/2011: Minimum 4 hours of professional development inclusive of: education and labor law, financial oversight and accountability and fiduciary responsibilities. PERA – Effective 6/13/2011

14. That’s All Great, But Where Does the Business Manager Fit in? – How do I Build and Sustain My Relationship with My Board Members??

15. District’s Are Different! The First Step is to understand how your District operates in terms of: Board Structure Communication with Board Board Policy Development Trust Between Board & Administrators Documents for the Board Board Involvement in Training & IASB

16. Don’t Forget CARDINAL RULE: UNDERSTAND clearly your superintendent’s expectations of your relationship with Board Members!! History of Relationship between Business Manager and Board Members New to the District - talk to your predecessor about their relationship with Board. Take all discussions with a grain of salt – what worked for them, might not be your style – what can be changed, what needs to remain the same! Have a basic understanding of your Board Members professional and personal backgrounds. Hot Buttons? Platforms? Agendas?

17. Board Structure This is not a cookie cutter approach! All Boards are unique with their own personality! How Does your Board Operate: Committee of the Whole? Board Committees with only Board members Board Committees plus community members Board Committees plus other administrators Board Committees plus community members & other administrators, Etc., Etc., Etc.,!!!!!! Don’t forget – What authority do these committees have?

18. How Do You Communicate? Here is where having a clear understanding of your superintendent’s expectations will come in handy! Again, possibilities are endless: Individual Board member can email you questions: You respond only to that Board member, You forward question and your response to superintendent who will respond to Board member(s), You respond only to that Board member and superintendent, You respond to entire Board and superintendent. If not already established, early in your tenure, talk with your superintendent and possibly entire Board on their preferences for communication.

19. A Few Last Words on Communication Methods Please Note in Ink!!! Established methods are subject to change!!! New Superintendent – new methods New Board President – potential new methods. And your mantra: Transparency, Transparency, Transparency!!

20. School Board Policy Development Well developed School Board Policy has been found to make your life easier in some respects….. Does your Board just implement/approve policy pushed out by IASB? Does your Board and superintendent allow you to further develop policies unique to your district that are associated with finance and operations of the District?

21. What Exactly Do You Do All Day? Or, Why Does Our District Need You? In meeting with new Board Members it is critical that they have a basic understanding of your role and responsibilities in the District!

22. Top Ten Business Manager Responsibilities Tax Levy Annual Budget Audit/Legally Required Claims (GSA, Grants, NSLP, Etc.) Payroll & Accounts Payable Buildings & Grounds/Construction Risk Management Transportation Food Service Enrollment Projections/Staffing Contract Negotiations

23. Board Members Should Have Essentials of Illinois School Finance by Jim Fritts Annual Budget Book: - ISBE Generated Budget & Budget Certifications - District Financial System Generated Budget - Budget Presentation/Talking Points - Long Range Planning Overview – How did we arrive at this budget - Fund Summary – One Sheet Broken Down by Fund - Tax Levy - GSA Entitlement

24. Board Members Should Have • Audit & AFR • Current Five Year Financial Projections • Most Recent Life Safety Report • Copy of all Collective Bargaining Agreements • In addition – review the Business Office sections of your school district website.

25. Finance Toolbox

26. Tools for the Business Manager to use with School Board Members in Understanding School Finance

27. Simplify the High Level Concepts • Budget • Tax Levy • Investing • Borrowing

28. FUND ACCOUNTING OPERATING FUNDS OTHER FUNDS • 10 - Education • 20 - Operations & Maintenance • 40 - Transportation • 50 - IMRF/Social Security • 70 - Working Cash • 30 - Debt Service • 60 - Capital Projects • 80 - Tort Immunity • 90 - Health/Life Safety

29. A Good Resource

30. How is school income determined? • Property Values • Tax Rates • State Appropriations & Federal Aid • Pupil Enrollment

31. Revenue (Federal) • Block Grants - usually based on student population and need. Focus resources on handicapped children, economically disadvantaged students and other targeted special purposes. • National School Lunch Program

32. Revenue (State) • General State Aid - Unrestricted. The greater the property value results in less General State Aid to the district per student. Based on average daily attendance. • Categorical Aid - Restricted. Underwrites state required programs such as lunch program, transportation and special education. • Grants - Restricted. Block and Matching

33. GSA & the Foundation Level (State) • The State Legislature increases General State Aid (GSA) each year by increasing the foundation level. • $6,119 in FY13 - $5,631? • General assembly boasts that each school district will receive $X more per student • GSA formula reduces foundation level by local “wealth”. Divide it!

34. Revenue (Local) • Property Values • Determines how much revenue the district is capable of raising from property taxes. • Property value is set by the marketplace, the ability to access it is affected by the tax cap. • Tax Rate • Maximum tax rates are established by the State of Illinois • Can be raised above the maximum only with approval of voters. • Tax cap keeps the tax rate lower than the approved level.

35. Revenue (Local - Other) • School Fees • Lunch Fees • Rental Income

36. Who decides how the district spends the money? • Determined by Board of Education based on recommendations from administrators through program decisions and negotiated contracts. • More and more budget decisions however are forced on boards by mandates beyond the board’s control (federal and state).

37. LaGrange School District 102 BUDGET PRESENTATION FISCAL YEAR 2012

38. All Funds Summary CHANGES FROM TENTATIVE TO FINAL BUDGET • Final Stimulus Payment Received $187,945 • Added Retirement Penalty Budget $142,000 • Salary & Benefits Increase $178,611 • Reduced Supply Budget $20,000 • Construction Loan $2,000,000 • Net Effect: $1,887,334

39. Operating Funds Summary PRELIMINARY RESULTS FOR FY11: • Operating Fund Balance $1.5m Favorable Variance • Deliberate Cost Savings Measures • Conservative Estimates • Teacher Contribution $660,000 over next two years • State of Illinois Owed $1.1 Million from FY11 • Promised by December • Will Receive Four Payments in FY12

42. Purchased Services

43. Purchased Services

44. Purchased Services

45. Purchased Services

46. Purchased Services

47. NON OPERATING FUNDS

48. 2011 Property Tax Levy Presented By: Lauri Calabrese

49. 2011 Tax Levy Timeline & Truth in Taxation Act • Tax levy must be estimated twenty days prior to the adoption • If the proposed levy increase is more than 105% • Public notice must be given via local media • Public hearing must be held • Tax Levy filed with Cook County by the last Tuesday in December

50. 2011 Tax Levy • Equalized Assessed Valuation (EAV) should be approximately 1/3 of a parcels Fair Market Value • Property tax burden is shifting from commercial/industrial to residential property values in recent years