Community Finance Advisory Committee
The Community Finance Advisory Committee, or CFAC, is an outcome of the district's Strategic Plan and a follow-up to the Finance Advisory Committee of 2013. The 2013 committee was charged with making several recommendations to the Board, including the target range for the size of the total fund balance, expectations for an operating referendum, guidelines for future tax levies, and communications strategies. After completing its work, the committee was dissolved.
The charge to the current committee is to revisit and revise the 2013 recommendations as needed. District members of the committee are Board member Craig Iseli, Superintendent Dr. Joylynn Pruitt-Adams, Chief Operations Officer Mike Carioscio, Chief Financial Officer Cyndi Sidor, Director of Buildings and Grounds Fred Preuss, and Accountant Alyssa Alfano. Community members are Silvia Brito-Todd, Kim Hoyt, Gregory Kolar, Steve Miller, and Sharada Sullivan.
April 17, 2019
CFO Cyndi Sidor provided an update on the budgeting process; the preliminary budget is almost complete. Improvements underway in the Business Office include developing an approval process for conferences, professional development, and field trips; automating the the free and reduced lunch application process; researching cost sharing for buses and their accompanying insurance liability; and going green by using electronic payments instead of paper checks.
Elizabeth Hennessy, managing director of Raymond James Public Finance, provided an overview of borrowing options for the district. Currently, D200 does not have any debt. With Imagine OPRF Facilities Project 1 on the horizon, knowing the district’s borrowing options and the potential impact of each type of bond is important. The district’s bond rating is Aa1 from Moody’s and AAA from Standard and Poor’s. The district has tried to increase its Moody’s rating, but due to the State of Illinois’ financial condition, that is unlikely.
Ms. Sidor discussed the district's basis of accounting, explaining that the main concern about switching to a cash basis is the risk of dropping our high bond rating with Standard & Poor’s. The district is requesting to remain on a modified accrual basis of accounting for the audited Comprehensive Annual Financial Report (CAFR) and the state Annual Financial Report (AFR) form. However, the district would like to budget on a cash basis since the internal records are kept on a cash basis. The district can provide a reconciliation at the end-of-year after the accruals are prepared to show any large variances in the budget, cash basis, and accruals prepared.
The committee recommendation is that the district internally report on a cash basis, which includes the annual budget, and externally continue to report on a modified accrual basis for ISBE’s Annual Financial Report and the audited CAFR.
March 20, 2019
CFO Cyndi Sidor provided an update on the district's budgeting process. For 2019-2020, budget managers were asked to reduce expenditures by 10% in order to achieve the Board's goal of having a balanced budget. The tentative budget will be presented to the Board in May.
Rob Grossi, president of Crystal Financial Consultants, provided an overview of the district's finances, including a historical view of revenues, expenditures, fund balance, and property value per pupil. Dr. Grossi discussed factors that will affect the future financial condition of the district, including Consumer Price Index, new taxable property, two tax increment financing (TIF) districts expiring in the near future, and the uncertainty about the state shifting pension costs to districts.
There was discussion regarding last fiscal year's ending fund balance of $106 million. The district has committed $32.6 million to Imagine OPRF Facilities Project 1. The district also is required by Board policy 4:20 to target an overall fund balance between 25% and 75% of operating cash flow. Dr. Grossi advised that with the state likely shifting pension costs to the district and the size of subsequent Imagine projects, the fund balance will be spent down more quickly than it might seem.
Feb. 26, 2019
This first meeting of the new CFAC started with an update of current Business Office projects. Steve Miller of Forecast 5 Analytics, Inc., and also a CFAC member gave a presentation entitled Reasons for Preparing a Financial Forecast. The post-presentation discussion focused on the importance of a five-year projection, key drivers in cost, and main sources of revenue.