News

State ready to exit financial control of Dist. 116

Posted November 28, 2009 10:00 pm

Bob Susnjara

Once on the brink of extinction, Round Lake Area Unit District 116 is expected to regain the ability to handle its own financial affairs for the first time since 2002.

A special school finance authority launched by the Illinois State Board of Education recommended it end oversight of District 116, with a formal vote likely in January.

District 116 has become stable enough for the five-member authority to recommend shifting financial decisions from the state back to local leaders, officials said. The state has been in control of the district's money since 2002.

If all goes according to plan, District 116 will get to have its own superintendent starting in the next school year. School board members elected by the community would reclaim all financial decision-making powers.

District 116 Chief Executive Officer Ben Martindale said residents and students should benefit with a return to local control of the school system.

"It's been a long time since this school district has had a reputation for success or confidence," Martindale said.

Six other Illinois schools were operating under a state financial oversight panel soon after District 116 joined the list. Officials said they believe District 116 would be the first to improve its finances enough to regain local control without a merger.

The district's downward financial spiral began in the 1990s. Short-term debt was the main problem that threatened to force District 116's closure and send its students elsewhere in Lake County to be educated.

School board members asked for the Illinois State Board of Education's help in 2000. That led to creation of the school finance authority by special legislation in 2002.

At one point in the financial mess, the district's short-term debt reached $14 million. One of the finance authority's tasks has been to erase the debt.

Employing financial basics - such as not spending beyond revenue and refraining from borrowing against future tax income - led to the turnaround, Martindale said. District 116 got into trouble by having administrators who "didn't say no enough," he added.

Under the state-created authority, the elected school board was removed from making any financial decisions for District 116. The school finance authority has been in charge of the district's chief executive officer, chief education officer and chief financial officer.

George Lingel, a retired school business manager from Rockford who's been on the authority since its 2002 inception, said a recent audit indicates District 116 has its finances in order. The district has eliminated the once-staggering short-term debt and now has an education fund that's $25.7 million in the black.

Some debt was added when voters approved a tax increase that provided about $15 million for demolition, renovation and an addition to formerly shuttered John T. Magee Middle School in Round Lake, and $2 million for other projects. Lingel said the middle school, reopened in 2008, is an example of how far District 116 has come.

Lingel said the state panel would informally keep an eye on finances in 2010-11, but plans to be completely out of the picture before the 2011-12 school year.

"I think it's very important the local school board takes over complete authority of the school district," Lingel said.

Clashes between the restricted District 116 board and the state finance authority occasionally surfaced in public. For example, some board members questioned why former CEO Dennis Stonewall never told them he approved the village of Round Lake's plan to hold a festival on Magee Middle School's grounds in 2006.

Still, District 116 board President W. Guy Finley said the state panel has served well because it corrected the financial woes. He said he and his elected board colleagues know they can't allow money problems to develop again.

"I think we're almost better (financially) than our peers are," Finley said.

The departure of the state financial oversight panel would not only return power to the elected officials, but also to taxpayers, Finley said. He noted the state authority has had the ability to raise taxes as it sees fit - without voter approval - to fund operations and levy a separate tax to pay off the district's debt.

While optimism about the future is justified, Martindale said, there is plenty to be anxious about at District 116. He said the district's reliance on state money instead of local property tax is at the top of his list of potential problems.

"The state is in such a financial calamity, I'm concerned about the district," said Martindale, who no longer would be involved at District 116 as chief executive officer if the state authority ends its oversight as expected.

Martindale said District 116 was considered successful in the 1980s. To fully return, he said, the first superintendent hired by the school board since 2002 should have strong leadership credentials.

"It's a major hire for this district," Martindale said. "It's a real big thing."

Magee Middle School Principal Eric Gallagher greets students the first morning of classes after the building reopened after renovations in 2008. Paul Valade | Staff Photographer

Quick district facts What: Round Lake Area Unit District 116 Enrollment: About 6,900 Number of schools: Nine Towns served: Portions of Round Lake, Round Lake Beach, Round Lake Heights, Round Lake Park and Hainesville Sources: 2009 Illinois school report card, Daily Herald reporting

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