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Special Report of the 2003 Joint Annual Conference

Below is a list, by title, of 10 panel reports that make up the Special Report of the 2003 Joint Annual Conference. Among the reporters who drafted these session summaries were conference "interns," education administration students from several Illinois universities. Each was assigned to cover a panel selected for its lasting value to school leaders.

The aim is to make some of the most vital information presented at the conference available to a wider audience of school board members and administrators. After all, with more than a hundred panel sessions scheduled at the conference each year, no individual can hope to attend all of them.

In navigating this document, you may click on any of the panel titles to read the contents of the report on that particular session or you can simply scroll down to read all of the reports.

The panels described here were presented as part of the Joint Annual Conference of the Illinois Association of School Boards, Illinois Association of School Administrators and Illinois Association of School Business Officials. The annual conference is the state's largest annual meeting of public school leaders. It features speakers, panel presentations, exhibits and informal discussions about a wide array of school leadership topics. The 2003 conference, held November 21-23 at the Hyatt Regency Chicago, attracted nearly 6,000 school leaders.

Panel Reports

District Consolidation-Can We Improve Educational Opportunities for Students?

Design Trends Among Illinois' Newest Schools

Some Steps to Head Off Financial Disaster

District Financial Health; the School Board's Responsibility

Getting the Most from your School Foundation

Connecting School Board Policies and Improvement in Student Achievement: Sounds like a Full-time Job

Solving the School Funding Problem

A Seamless Transition: Building a new Administrative Team

Controlling Special Education Costs

Which Watch List Do I Watch?

District Consolidation—Can We Improve Educational Opportunities for Students?

Moderator/Panelist: Robert Hall, Professor of Educational Administration, Western Illinois University, Macomb.

Panelists: Donna McCaw, Associate Professor of Educational Administration, Western Illinois University; Steve Rodeffer, Former Committee of Ten Co-Chair, La Harpe

Reporter: Damian D. Jones, Sr., Principal, New Holland-Middletown ESD 88, Middletown

Illinois School districts are under financial pressure from increasing costs and stagnant revenues. Districts consolidate to pool and extend their resources. A failed consolidation of Colchester, La Harpe, Northwestern, and Roseville was discussed.

Issues pushing consolidation in Illinois are:

  • Declining enrollment
  • Declining EAV
  • Declining state aid
  • Availability of highly qualified teachers (NCLB)
  • Educational opportunities for students
    • Are the students ready for 21st century employment?
    • More course offerings in bigger schools

Flashpoints to consider regarding consolidation are both economic and cultural. Loss of jobs of teachers, administrators, and support staff are likely. Traditions are also greatly affected with the loss of old rivalries, mascots, pictures of graduates hanging in the hallway, and loss of identity for communities.

Other items to consider are school location and size. Where will the schools be placed and in what configuration is a major decision. What is too big? How big should each school be? Should a new school be built? What is the suggested class size? These are a few of the questions and problems that school boards must consider regarding consolidation.

The Committee of 10 for the failed consolidation was discussed at length. Lessons learned from the Committee of 10 were:

  • Do not consider a consolidation without the enthusiastic support of the boards of educations and all district administration.
    • One unhappy board member or administrator can effectively kill a consolidation through bad public relations.
  • Development of subcommittees broadens the base of people involved.
  • Develop the purpose early, identify responsibilities, and define the Committee of 10 and subcommittees.
  • Involve the students and teachers (especially elementary teachers)
  • Learn to agree to disagree
  • Determine the most important issues and discuss them early in the process.
  • Decide that the Committee of 10 speaks with one voice.
  • Establish rules to operate under and a common vision.
  • Get information out quickly, honestly, and through all media.

The Committee of 10 also developed eight subcommittees to develop and foster committee input and ownership in the process. The Committee made worst-case assumptions so that it could plan for the future of the consolidated district.

The Committee appeared to excel with communicating to the public and looking at multiple options but still failed in the consolidation. Why? Steve Rodeffer thought it failed in two communities because board and administration support was not overwhelming. In the two of the four districts that it passed by a large vote total, the boards and administrations publicly supported the consolidation.

Timing of a consolidation is key. Is your community really ready for a consolidation? Have they suffered enough emotionally as a result of the cuts of key programs and/or personnel? Just because a consolidation makes sense educationally and fiscally, it may fail due to reasons stated above.

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Design Trends Among Illinois' Newest Schools

Moderator: Wil Helmick, Senior Associate, Phillips Swager Associates, Peoria

Panelists: A. Donald Hendricks, Superintendent, Reed-Custer CU District 255U, and Richard L. Johnson, Architect, Richard L. Johnson Associates, Rockford

More than half of the $26.8 billion spent on school construction in 2001 went for renovations and additions, but a need still exists for new buildings and those buildings need good design to meet the changing functions of schools.

Helmick presented trends he sees in school construction. Technology will dominate delivery of school services, just as it is shaping home and work environments. Districts will use energy efficiency wherever possible. Architects, engineers and contractors will work together in terms of delivery and management of services. And, to get more impact for the dollar, there will be more partnerships with community groups and park districts for school construction projects. Helmick also said that as buildings are designed, more thought will be given to professional development needs for staff and security needs for both staff and students.

Hendricks said schools, by law, are required to take the lowest responsible bid, but some districts are choosing to hire a construction manager, a designation that would not have to be bid. In this scenario, a board would hear presentations from prospective project managers and then select one to oversee the project. The contract is between the district and the construction manager, who represents the district to each of the subcontractors. This system requires more involvement from the district standpoint. Some architects are not comfortable with this system, because it creates another level of management they must work with.

Johnson showed slides of current projects with some new twists. Some of the more innovative were: Champaign recently renovated a bakery building for use as an early learning center. Washington Intermediate School in Pekin underwent a "from the heart" restoration, which returned the older building to its original architecture inside but with all the modern amenities. Belvidere Middle School used pre-cast concrete, which saves some foundation work and allows work to proceed even in bad weather. Hononegah High School saved half the cost of regular construction by using an air-vacuum bubble for a new gymnasium (so they built twice as big). The facility, which includes a 200-meter indoor track, also serves as a large community use space.

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Some Steps to Head Off Financial Disaster

Moderator: Robert Bergland, Senior Vice President, Hutchinson, Shockey, Erley & Co., Chicago

Panelists: Stephanie Ramsay, Certified Public Accountant, Gorenz & Associates, Peoria; Timothy Stratton, Attorney, Chapman & Cutler, Chicago; Lowell Taylor, Superintendent, Forrestville Valley CUSD 221, Forreston

Reporter: Damian D. Jones, Sr., Principal, New Holland-Middletown ESD 88, Middletown

Illinois school districts are under financial pressure from increasing costs and stagnant revenues. Reasons why costs may be increasing include, but are not limited to: a trend of double digit increases for health insurance, salary and contract increases, technology updates, underfunding of growing special need programs, increased maintenance and energy costs for older buildings, security upgrades, and implementation of the No Child Left Behind Act.

In addition to the increase in costs, there is also considerable constraint on revenue growth. Many districts are hindered by PTELL (tax caps), state funding cuts, PTAB (especially Cook County), property tax reassessments, failure to pass tax-rate referenda, and Tax Increment Finance districts. Another future constraint could be the loss of "Hold Harmless" funding.

The key to operating in the future of school finance is to learn the options available to prepare for these financial difficulties. By planning ahead, most financial difficulties can be anticipated if one realizes that they are generally either cash flow related or the result of an ongoing structural deficit. Cash flow relates to the amount of money on hand to take care of educational business and a structural deficit is the second operating deficit in a row. Each of these can cause considerable financial difficulty for a school district.

It is important for district superintendents and boards of education to know the early warning signs and be aware of planning tools for handling these difficulties.

The early warning signs are:

  • Deficit budgeting in the operating funds
  • Deficit spending in the operating funds
  • Declining fund balances
  • Repeated need for Inter-fund loans
  • Need for short-term borrowing to pay for current operating expenses

The planning tools are:

  • Have a realistic operating budget and live within it
  • Insist on monthly cash flow projections for the current and subsequent financial years
  • Create, or keep up to date, a five-year capital expenditure plan
  • Analyze any potential future savings from retirements

Successful school districts are balancing their budgets (sometimes painfully). They maximize tax levies/local revenue and utilize working cash funds. They are work diligently to pass funding referenda.

A case study was presented by Taylor for Forrestville Valley CUSD 221. The key for superintendent and board relations is communication. The superintendent needs to establish clear objectives, clear processes, and to develop consistent outcome statements. Ample financial and planning data should be presented to the board of education monthly and/or quarterly.

"Even with good forecasting and planning, the time may come when a choice has to be made between increasing revenue or jeopardizing existing programs," said Stratton. Several options exist for short-term borrowing for operating purposes:

  • Tax anticipation warrants
    • Issued in anticipation of taxes levied, but not yet collected
  • State aid anticipation certificates
    • Issue in anticipation of general state aid payments
  • Personal property replacement tax notes
    • Issued in anticipation of PPRT receipts
  • Revenue anticipation notes
    • Issued in anticipation of revenue for a reliable source (fed or state)
  • Teachers' orders
    • Issued for the payment of teachers

Two types of long-term borrowing are working cash fund bonds and funding bonds. But the last word on increasing revenue is "referendum."

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District Financial Health; the School Board's Responsibility

Moderator: Jay Tovian, Director of Business Affairs, SD 45, DuPage County, Villa Park

Panelists: James Fritts, Visiting Assistant Professor, Loyola University, Highland Park; Michael Locigno, Business Manager, Berkeley District 87; Craig Schilling, Assistant Superintendent for Business Affairs, Northfield Township HSD 335, Glenview

Reporter: Trish Jackson, Principal, Farmingdale Elementary School, Pleasant Plains CUSD 8

In order to keep a school district in good financial condition it requires cooperation and communication among all of its stakeholders: the school board, administration, faculty, staff, parents and the community. It is imperative that the school board be knowledgeable and informed regarding a district's finances.

Fritts addressed the benefits of good financial policies. First and foremost, the board needs to focus its attention on principles and oversight, not on day-to-day management. Misunderstandings on unimportant fiscal matters, between the board and administration, must be avoided. Both groups should work on developing a framework for detailed administrative procedures. Fritts also recommended identifying areas that have been troublesome in board discussions or where staff needs direction. Suggested policy topic areas include:

  • Responsibilities of school board and superintendent
  • Accounting, reporting, and auditing
  • Budget development and administration
  • Bidding and purchasing
  • Long-term planning
  • Standards for business, building and other support services
  • Internal control

In addition, "rainy day funds" are needed for unexpected events such as postponed state aid payments, escalating special education expenses, pre-negotiated contract demands, and local economy distress. How much is needed in such a fund? Ten to fifteen percent is a minimum but 30 to 35 percent is a more comfortable level. Finally, fund balance policy and rationale must be communicated to all stakeholders and its policy reviewed regularly.

Schilling explained the purpose of financial planning and budgeting. He encouraged districts to look at district finances, "as a grandparent would, not as a parent." In other words, long term v. short term. Two alternative approaches to building a budget were presented. The traditional model includes:

  • Financial projections/levy process
  • Budget calendar
  • Guidelines
  • District focus
  • First draft of budget
  • Revisions to budget
  • Adoption of budget

The systems approach is identified by:

  • Allocation driven
  • Plan driven
  • Revenue projections/guidelines
  • Site based
  • Incorporates program/curricular components
  • Compilation of budget
  • First draft/budget summary
  • Revisions and adoption

A systems approach allows all stakeholders to discuss, review and make informed decisions in a timely manner with the goal being to have thoroughly discussed all of the major components of the budget before the first draft is crafted.

The board of education must set the tone at the top by conducting ethical business, maintaining a commitment to strong internal controls, periodically review internal controls, assign authority and responsibility, recognize the importance of written procedures and consistent, fair, and professional treatment of all employees.

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Getting the Most from your School Foundation

Moderator: Ronald P. Bernardi, President, Bernardi Securities, Inc., Chicago

Panelists: Mary Ann Bobosky, President, Advocates Building Communities, Inc., Naperville; Vaughn Henry, President, Henry & Associates, Springfield; Lawrence C. Mortier, Vice President for Advancement and Public Services, Western Illinois University, Macomb

Reporter: James Russell, Director of Publications, IASB

A state study of Local Education Foundations (LEFs) in 1995 examined fund raising activities and methods. The report, which counted as many as 300 LEFs operating in Illinois, concluded that they were reasonably effective in attracting private contributions as alternative funding sources. Creating additional revenue, to compensate for inadequate funding, or to enhance programs or educational opportunities for students

Typically holding assets of less than $50,000, these organizations are organized to fund programs, such as tech enhancement, fine arts, scholarly work, creative teaching, leadership development, matching gifts, etc., or to fund projects. Common examples include arts in residence, bicultural awareness, field trips, and community partnerships, even publishing the school newspaper.

The report suggested that the school superintendent must be behind the LEF, or it won't go. That means playing an active role in the funding decisions but holding non-voting membership. The balance of board members must be large enough to assure diversity, yet small enough to be effective.

Major factors influencing LEF success were identified: leadership, clearly defined mission, active and involved board, acceptance by the community, working relationship with school board, effective marketing strategy and materials, operating committees, and donor recognition programs.

While most school foundations expect their board members to be the primary fundraisers, the study suggested that at some point, they should consider hiring a staff, even a retired person, who gives the organization a distinct identity.

That identity with the community is essential. In fact, partnerships with existing organizations and private sector foundations can enhance the scope of the LEF. Examples of cooperative ventures were given for Naperville, including Lucent Technologies, Illinois Pork Producers, Exchange Club, city of Naperville, funeral homes, chamber of commerce, and community colleges.

But goals should be tied to curriculum, because businesses will not donate to the school district. First you build a trust, and then prove it, "we're for real." That also means supporting the same organizations that support the LEF.

Senior citizens and alumni are excellent candidates for support. Many have a special bond with the community and a passion for schools that can be tapped. Start by going out and telling the district's story, and by listening to what the community has to say.

To reach major donors, LEFs have to approach estate accountants and lawyers who are employed to protect assets. These advisors don't need to hear about tax benefits, but should be able to convince their clients why they should be willing to improve the organization, or why it's important to the community.

Sources were cited to show: 31 percent of all planned gift donors have never made a cash contribution to the charity that will benefit from their gift; 21 percent of donors have no affiliation with the charity that will benefit from their planned gift; 68 percent of bequest donors have not notified the charity of their gift.

LEF's purpose: to help such donors and be useful in their estate planning. Ask for stuff that will trigger an income tax, e.g. corn or beans in the bin.

The makeup of the LEF board is also considered critical to its success. The potential good will of the foundation can be squandered if the board fails to follow the "three G's" of foundation work: Give, Get, or Get the heck out. Board members who are trying to build a resume or personal prestige should not be appointed.

Once the framework and mission of the foundation are established, it is essential to remain visible and active, i.e., network with supporters, and make sure the community is aware of you.

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Connecting School Board Policies and Improvement in Student Achievement: Sounds like a Full-time Job

Moderator: William Rathmann, Member, Germantown SD 60

Panelists: Marla Langenhorst, President, Germantown SD 60; Robin Becker, SIP Coordinator, Germantown SD 60; Marlene Fields, Board Member, Germantown SD 60; John Raymer, Superintendent, Germantown SD 60; Linda Barth, Bookkeeper, Germantown SD 60

Reporter: Trish Jackson, Principal, Farmingdale Elementary, Pleasant Plains CUSD 8

Germantown School District 60 has developed and implemented a plan for bringing together policy monitoring and school improvement. They have created a yearlong calendar that helps to keep them on track with both items with legal deadlines (adoption of budget and tax levy, RIF notifications) and items that the board deems important (policy review, receiving reports, School Improvement Plans, goal setting).

Each quarter of the calendar year has designated topics that the Board discusses, reviews, or adopts. This prevents the board from becoming over-involved in day-to-day management of the district and ensures that they will have time for important issues that boards should be involved in.

Monitoring school board policies can be a tedious task. The Germantown board offered these suggestions for fellow boards to make the task less daunting:

  • Begin with an up-to-date policy manual (IASB can help with this)
  • Separate the manual into sections by broad topic area
  • Establish a yearly agenda calendar
  • Develop compliance indicators and write them down
  • Monitor your policies
  • Update your policies
  • Use your policies

The Germantown board and administration are committed to making board policies tied to school improvement. They see the power of school improvement as being highly focused (limited to 1-3 topics per year), data driven, involving stakeholders, including a forum for ideas and possibilities, communicating to all stakeholders, and providing assessment data to the board.

Germantown's School Improvement Approach includes establishing their school improvement team in August. Members are chosen on a strong desire to serve both the school and the community. The team includes two students members from each grade sixth through eighth; four parents interested in the process; six rotating faculty members; and two members of the board of education.

The school improvement team conducts internal reviews. They meet three nights in April, tour the building, analyze test scores, discuss new curriculum concepts, analyze data from school report card, review student handbook and choose two or three goals for the coming school year.

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Solving the School Funding Problem

Moderator: Cynthia S. Woods, Assistant Director for Advocacy, Illinois Association of School Boards, Lombard

Panelists: Brian Hock, Student, CUSD 300, Carpentersville; Ralph M. Martire, Executive Director Center for Tax and Budget Accountability, Chicago; Jessica Bartlett (student) reading the testimony for scheduled panelist Emily Meade, Student, Canton Union District 66

Reporter: Maria Dunstan, Principal, Edison School, Macomb CUSD 185

Bartlett read Meade's testimony. Meade wrote that schools, due to financial difficulties, are forced to shift focus and make decisions about what to cut while still trying to educate students. She said that many businesses and services are affected by the loss of revenue to schools. Property values decline and schools decline, because the condition of the school and community go hand in hand. Financial difficulties affect higher education as well.

Because classes are full or are not offered, many students attending college need to stay nine or ten semesters instead of eight to graduate. Despite the negative financial picture, there are some positives to emerge. Schools are more involved and aware of possible solutions, and a Students First organization composed of all students has formed.

Jacobs comes from a fast-growing district, and the school can't hold all of the students moving into the district. A referendum to alleviate the overcrowding failed. As a result, his A.P. history class went from 25 students to 46 students, and his English class went from 26 to 46.

Jacobs said that students had better grades when classes were smaller, because teachers had more time to work with students. There isn't enough space in the cafeteria to eat, so students eat in the hallways. The librarian was cut, so no one can check out books, and all library books must be kept at school. The copier doesn't work and hasn't for three years.

He claimed that the Illinois Constitution says Illinois should fund the majority of the money for schools and doesn't. He asked for the "edge" to put back into education.

Martire stated that the only way to ensure all children receive a quality public education is to shift the primary obligation of funding education from local taxing bodies to the state. Revenue must be enhanced and a portion of that money must go to abate a portion of the property taxes that fund schools. The additional money needed to fund education is approximately $4 billion annually.

Illinois does not have a spending problem, it has a revenue problem, Martire said, as he laid out five principals of good financing. He said the state system should be fair, responsive, stable, efficient, and transparent.

To be fair, the state of Illinois needs to increase the personal income tax rate. We have a regressive tax system that relies on revenue from those who earn the least. We need to be progressive and tax those who earn more. He suggested that the income tax rate should go from its current rate of 3 percent to 4.5 percent.

To be responsive, Illinois needs to implement a refundable tax credit for low-income wage earners. Low-income wage earners pay taxes through sales, property, etc. Sales tax is stable and may need to be expanded to services and food.

Our current reliance on property taxes to fund schools is not efficient, because the quality of a child's education depends on where they live. Martire said we need to structure 25 percent property tax relief as an abatement, with each school district receiving at least 20 percent property tax relief, but some poorer districts may receive more.

Lastly, the system needs to be transparent (accountable). Indicate on the property tax bills the amount of relief given to the taxpayers. The bottom line is that the state of Illinois needs to increase the state income tax, expand the tax base, and decrease our reliance on property taxes to fund schools, he said.

Martire's plan is complimentary to the EFAB proposal, but it doesn't call for as much property tax relief as does EFAB.

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A Seamless Transition: Building a new Administrative Team

Panel Members: Joyce Carmine, Superintendent, Park Forest-Chicago Heights District 163, Park Forest; Virginia Ford, President, Park Forest-Chicago Heights District 163 Board of Education, Park Forest; Maryann Matyasec, Instructional Services Director, Park Forest-Chicago Heights District 163, Park Forest; Margaret McDannel, Vice President of the School Board, Park Forest-Chicago Heights District 163, Park Forest; Debbie Hart and Bonnie Barilow, teachers, Park Forest-Chicago Heights District 163, Park Forest

Reporter: Cindy S. Carlson, Principal, North Greene Junior High School, Roodhouse Center

At the close of the 2001-2002 school year, this school district lost nine of its 13 administrators. These included the superintendent, business manager, special education director, instructional services/grant director, and several building level administrators. Most followed the former superintendent to her new school district. Some left for better pay and some left for career advancement.

The school board acted very calmly, quickly and responsibly by hiring an interim superintendent and business manager. They did this to provide stability for the district and to provide the district time to conduct a national search for a new superintendent and a business manager with multiple credentials.

In order to fill the remaining administrative vacancies, the district promoted some administrators from within the district and hired others from within. Veteran administrators provided support for these new administrators and worked to develop a spirit of collegiality. This team came together by having open communication, a non-threatening approach to mentoring and extensive professional development.

In order to have a smooth start to the 2002-2003 school year, the board charged the interim superintendent and the interim business manager with the task of putting a new administrative team in place by the time school started in August of 2002. These efforts were supported by the school board through strong cohesive support, a comprehensive policy manual, board and administrative collaboration, a close working relationship with the teachers' union, and the provision of adequate time to accomplish the tasks.

In hiring a new superintendent, the board hired a search team and developed a superintendent profile. Each board member made a list of the top ten things they were looking for in a superintendent, and narrowed the field to six candidates. The board then interviewed and narrowed the field to three. These candidates were interviewed by administrators, teachers and community members. These groups listed the strengths and weaknesses as they saw them and the board then reviewed the feedback. The new superintendent was hired to begin work in May and worked side by side with the interim for a week.

Communication was stressed. The new superintendent met with each administrator personally. She visited every building and every classroom during the month of May. She asked for as much information and past practice as she could get. The district administrators work hard together and have fun together. A four-day retreat for the district administrators was held and a shared vision was developed. There is an administrator on each board committee and district goals are communicated through bi-weekly meetings and quarterly articulation meetings.

In order for the school year to start smoothly, the new administrators attend new teacher orientation, attend fall institute days, attend all staff development sessions provided for building staff and participate in monthly study groups. A stronger administrative staff is the result.

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Controlling Special Education Costs

Moderator: Lois Hince, President, Glenbard THSD 87 Board of Education, Glen Ellyn

Presenter: Steve Fry, Director of Special Education, Glenbard THSD 87, Glen Ellyn

Reporter: Maria Dunstan, Principal, Edison School, Macomb CUSD 185, Macomb

Fry discussed several ways that might help to control the cost of special education while recognizing that some costs are uncontrollable. With the passage of Public Law 94142 in 1978, the identification and services provided to children requiring special education has increased.

By law we have to provide special education to students from the ages of 3 to 21. In Illinois, 14.5 percent of the population has been identified as special education. Some things that schools can do to control costs include:

  • Providing students with an appropriate education, not a "Cadillac" education
  • Using research based reading instruction such as the Orton method the Wilson Reading System, etc. Many children are labeled learning disabled because the child has not been taught in an appropriate manner
  • Monitoring student progress frequently
  • Increasing non-special education options such as peer mentoring, counseling, and teaching of study skills
  • Using interventions in the regular ed. classrooms for at-risk students
  • Providing the least restrictive environment
  • Minimizing the use of off-campus placements
  • Increasing curricular flexibility
  • Moving older students (19 to 21 year olds) to community site-based settings.
  • Hiring flexible teachers
  • Providing related services that don't involve special education placement.
  • Complying with federal and state regulations
  • Looking for prevention interventions
  • Providing high quality early childhood programs. A longitudinal study has shown that by placing children from low-income families in strong early childhood programs, their employment rate doubles
  • Programming for the non-disabled (late bus service, outdoor ed., etc.) needs to be planned carefully, because you may have to do it for the disabled
  • Looking at ways to meet the needs of the 13 percent of the students who have I.Q.s between 71 and 85 and don't qualify for special education. Many schools end up placing these students in special education classes, because they don't know what else to do

Fry believes that the three main areas we need to concentrate on in order to better meet the needs of children and control the rising cost of special education include:

  • Using research based reading instruction
  • Providing quality early childhood programs
  • Working with the forgotten kids, i.e., the 13 percent who have I.Q.s between 71 and 85 and don't qualify for services

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Which Watch List Do I Watch?

Moderators/Presenters: Jay Cunneen, Superintendent, J.S. Morton High School District 201, Cicero; Margaret A. Kelly, President, J.S. Morton High School District 201 Board of Education, Cicero; Les Luka, Assistant Superintendent for Curriculum and Instruction, J.S. Morton High School District 201, Cicero; Ben Noakowski, Financial Officer, J.S. Morton High School District 201, Cicero

Reporter: Cindy S. Carlson, Principal, North Greene Junior High School, North Greene USD 3, Roodhouse Center.

J.S. Morton High School District 201 has been, at one time, on the state's Financial Watch List for the state and is now concerned about being placed on the Academic Watch List. This school district faces the dilemma of having to decide where to put its concentrated effort in order to best meet the needs of the district and its students.

In order to avoid placement on the Financial Watch List, a district must meet a specified fund balance-to-revenue ratio. The expenditure-to-revenue ratio represents how much the school district is spending for every dollar they are bringing in. The funds included in determining this ratio are Education, Operations and Maintenance and Transportation. A district is also rated by how many days' cash they have on hand and the debt remaining.

According to ISBE, a district is placed on the Financial Watch List when one or more of the following occurs:

1. The district's ratio is negative;

2. It has issued teachers orders or funding bonds to retire teachers' orders in three of the last five years;

3. It has issued second-year tax anticipation warrants or notes;

4. Expenditures for the aggregate totals of the educational, operations and maintenance, transportation and working cash funds have exceeded revenues and reserves in those funds for two consecutive years; or

5. It has not submitted the Illinois School District Annual Financial Report to the Illinois State Board of Education in time to be included in the FAAS ratio calculation.

The other watch list of major concern to school districts in Illinois is the Academic Watch List. Illinois calculates Annual Yearly Progress by looking at three factors: the percent of reading and math scores that meet or exceed standards, the percentage of students in specific demographic groups participating in the test, and the average daily attendance rate. Schools that do not meet the target criteria for two years in a row are placed on the watch list.

According to ISBE, Illinois school accountability laws require schools to be included on an Academic Watch List after placement on the Academic Early Warning List if they have not made Adequate Yearly Progress for two consecutive years.

By law, schools are placed on the Academic Early Warning List when less than 50% of their test scores meet or exceed state standards for two consecutive years. Schools are expected to make Adequate Yearly Progress (AYP), defined as the incremental amount it takes to have 50% of students meet state standards in five years. Schools that make AYP and still remain under 50 per cent stay on the list; those that exceed 50% earn removal from the list. Two consecutive years on the AEWL without making AYP leads to placement on the Watch List.

The stakeholders in the school district want neither watch list status. If a district is placed on the financial watch list the sanctions may go as far as the financial operation of the school district being taken over by the state. The academic watch list carries stiff remedies that also negatively impact the academic and financial status of the school district.

Luka and Noakowski debated specific issues to illustrate the implications of being on either financial or academic watch lists. The issues discussed included the areas of what a district should do with increased revenue, whether or not class size should be reduced, the purchase and utilization of new technology, teacher recruitment and after-school tutoring programs.

The general consensus was that resources should be allocated to address both issues. If a school district could not meet its financial obligations, improvement in instruction could not be facilitated.

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