Should state lawmakers decide to make local schools pay a share of their employee pensions, Lake Zurich Unit District 95 should be able to weather the cost without severe impacts to taxpayers, candidates for the school board agree.
Six candidates are running for four seats in the K-12 district. How pension crisis might affect the district and what may have to be done were among the questions asked during an interview with the Daily Herald editorial board.
The candidates include incumbents Kathy Brown, the board president and a teacher in Palatine District 15; and, board members Scott McConnell, technology director for Allstate and Lisa Warren, executive director of a not-for-profit group. Both were appointed to in 2012.
Political newcomers Eileen Maloney, a vice president at Zurich North America, Russell J. Cerqua, business manager for Cook Memorial Public Library District, and, John Shaw, building manager for Metra complete the field.
The following information is from the interview, as well as answers to a Daily Herald questionnaire.
Warren, who lists maintaining fiscal responsibility as her top issue, said District 95 has an advantage in possible pension liability because as a unit district, salary ranges are lower.
“It gives us some confidence we can probably weather this,” she said. “It’s just something we’ll have to adjust for in our budgeting going forward.”
However, she said she didn’t foresee any “magical source” of income besides property taxes.
“We look OK. We can survive this. I don’t know if other districts could,” she said.
Brown said the district has recovered from borrowing money to meet payroll when she joined the board eight years ago and is on solid financial footing. “Living within our means” is her top campaign issue.
“While there would be an impact, it wouldn’t be anywhere near catastrophic,” she said of the possible shift in pension costs.
It would affect all aspects of district operations but wouldn’t require immediate cuts or major changes because of the financial stability the district now has, she added.
McConnell noted district reserves are up, and the teacher contract approved last year provides fair compensation while controlling the growth of expenses.
He said he doesn’t think local districts should be “cleaning up a mess” created by the state. Teachers have earned the benefits, he said, but he understands the reasoning if costs were shifted. That scenario wouldn’t result in any short-term impacts but long-term implications were possible, he added.
“When we get a better idea of what folks in Springfield will do, we’ll adjust,” McConnell said.
Maloney said she theoretically doesn’t disagree with the notion of school districts sharing pension costs but added pension reform measures could “significantly” impact all districts in Illinois.
“Our district is no different. Once there is more certainty around these state issues we will have a better idea of where District 95 stands,” she said.
“The problem is that’s not the system in place now and it’s not easily absorbed by the majority” of districts, she said. “We are in a respectable position to absorb it.”
Shaw said the timing of pension sharing would make a difference. He said he is “intrigued” with the possibility of a 401(k)-type plan for new hires.
“The district financially in the short term will be fine. The long term will be an issue,” he said.
The district needs to continually evaluate all payroll/benefits programs to ensure it operates in line with current and projected revenues, he added.
Cerqua said the district has done well with finances and hopes it is in a position to weather a pension cost shift.
“It’s not unreasonable to think the school district should bare some of the costs or all of the costs (but) hopefully the state will be responsible about it,” he said. Depending on the financial impact, “we may have to go back to the teachers and say, `We need to rework this,’” he said.
Cerqua said he thinks the most challenging budget issue facing District 95 will be funding for technology and suggests finding alternative or existing resources to buy equipment and train staff.
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