It’s not easy meeting expenses when revenue is limited, but Homewood-Flossmoor High School District 233, serving 2,800 students, has managed to present balanced budgets the past 12 years.
Ken Parchem, H-F business manager, is proud of that accomplishment and the positive impact it has had on the district’s reputation within financial markets.
Illinois’ schools are funded primarily through property taxes, but the amount of money a school district can collect has been limited since 1995 when the Illinois Legislature set tax caps. The tax caps stipulate districts can collect no more than five percent or the Consumer Price Index (CPI) — whichever is less.
In the early 2000s when property values were increasing each year, H-F district homeowners saw their property taxes increase on average by just 1.5 percent, keeping in line with CPI. That H-F, with a current budget of $52.6 million, has managed to live within its means for so long has impressed Standard & Poor’s credit rating service. Today the rating agency gives the H-F district a triple AAA bond rating.
H-F is one of just 69 high school districts in the country receiving this highest possible rating. That’s quite an accomplishment when compared with more than 13,500 school districts in the country. Parchem said he has worked with the administration and school board to constantly improve its financial operations. The result was a steady move up the Standard & Poor’s ratings ladder from A to AA to AAA.
The rating tells lenders H-F is a sound risk for investment and repayment of debt. Parchem said that AAA rating was essential when H-F went into the market in 2012-2013 to borrow $29.3 million for the new fieldhouse and renovation work on its North Building.
The project cost the district $ $27.3 million, with additional expenses for furnishings, architectural and design work, engineering and other related costs. The district used reserves on hand and borrowed funds at 2.2 percent.
The district’s debt repayment will remain at or below levels that have been in place the past 25 years, Parchem added. This year H-F is negotiating with its teachers union on a new contract. The district has 210 certified staff members, 30 instructional assistants and roughly three dozen support staff.
“We make a strong effort to work together with our union,” he said. “We utilize an interest-based bargaining approach. We’re very transparent with each other so they know what we know. It’s in the best interest of the school going forward. It’s been very successful for us.”
In addition, the district stipulates in its contracts with its three major suppliers – custodial, food and transportation—that H-F will only pay an additional 1.5 percent each year, in keeping with the tax cap-limited revenues.
Contact Marilyn Thomas at [email protected]