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FOR IMMEDIATE RELEASE
December
9, 2002
State Board of Education Established
School Finance
Authority for Hazel Crest Schools
The State Board of Education acted today to establish
a School Finance Authority for financially troubled
Hazel Crest School District 152.5, setting in place
a mechanism for restoring financial stability and keeping
schools from closing prior to the end of the school
year.
The district had enough cash on hand to meet the Dec.
6 payroll, but is now basically insolvent and has been
unable to borrow money from private lenders. The School
Finance Authority should assist the district in efforts
to borrow money from private lenders and, if necessary,
enable the district to use an emergency loan from the
state to enable Hazel Crest schools to remain open until
the end of the school year.
Governor Ryan signed legislation Friday authorizing
the creation of a School finance Authority and establishing
an emergency loan of up to $4000 per student if funding
from private sources is insufficient to keep students
in school for the entire school year. The State Board
of Education had five days from Friday’s enactment
of the legislation to use the bill’s provisions
to establish the School Finance Authority. Within 15
days, State Superintendent of Education Robert E. Schiller
must appoint five members of the Authority, with two
residing in the Hazel Crest district.
“We have several districts with financial problems,
but Hazel Crest stands alone by being insolvent and
unable to borrow money,” Schiller said. “Fortunately,
the members of the legislature and the Governor recognized
the significance of the district’s problems and
passed this legislation to rescue the district and assure
the continuance of academic services for Hazel Crest
students.”
“Neither the State Board, legislators nor the
Governor preferred this course of action,” Schiller
said, “but, it is necessary to keep schools open
for the 1100-plus students of the district.”
The Financial Oversight Panel, previously put in place
by the State Board at the request of the Hazel Crest
School Board, will stay in place until members of the
School Finance Authority are appointed.
The Hazel Crest School Board voted at its last meeting
to dissolve the district at the end of this school year.
If the School Finance Authority concludes that is the
best option for the students of Hazel Crest, the Authority
will work with other area school districts to reach
agreement on assignment of students to another district
or districts.
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