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FOR IMMEDIATE RELEASE
June 30, 2003
Hazel Crest district finances see turnaround
Hazel Crest schools are poised to open for fall classes
and end the 2004 school year with no budgetary deficit.
The financial news marks a turnaround for a district that
was on the verge of bankruptcy, according to Illinois
State Board of Education (ISBE) officials.
“The fact that Hazel Crest was not only able to
finish this year, but also will now open next year, are
major accomplishments for Hazel Crest,” said State
Superintendent of Education Robert E. Schiller. “Just
months ago, few of those involved in this challenge thought
the district would be able to operate past the close of
school this year. Instead, through the hard work and cooperation
of the School Finance Authority (SFA) and others, the
district will now be able to operate throughout the 2003-04
school year.”
The south suburban Cook County school district faced
bankruptcy this past year with debts in the millions of
dollars. Now the FY04 financial plan for Hazel Crest School
District 152.5 indicates the district may, in fact, close
the 2004 school year with available funds of $338,000.
The Hazel Crest School Finance Authority (SFA), appointed
by Schiller in December, 2002, and the local school board
crafted an FY04 budget totaling $10.8 million with a $338,000
cushion to cover unexpected revenue and expenditure changes.
The budget was accepted by the Illinois State Board of
Education at its June 17 meeting.
That action followed a several-month process of cost-cutting
that immediately curbed spending and required cuts, including
the closing of two buildings and reduction in staff. The
steps were carried out without overcrowding classrooms
or losing the ability to provide a good education for
the children.
Hazel Crest’s financial situation reached a crisis
stage last fall when the district, unable to pay bills
or meet payroll, petitioned ISBE for a voluntary Financial
Oversight Panel (FOP). The FOP then determined that the
district met the criteria for an emergency assistance
loan. However, after the FOP determined that the loan
would not be enough to finish the year, it petitioned
ISBE to go to the General Assembly for legislation to
establish a School Finance Authority (SFA).
According to a State Superintendent’s report to
the ISBE Board last November, Hazel Crest had accumulated
more than $1.4 million in debts going back to May 2002.
Additionally, financial lenders considered the 1100-student
district to be too great a risk for loans.
The establishment of the FOP resulted in ISBE’s
authorization of a $238,000 emergency grant. The district
also received $1.5 million through a Member Initiative
grant from the General Assembly. In addition, the oversight
panel was able to borrow $1.7 million for the district
through issuing Tax Anticipation Warrants. The General
Assembly appropriated $4.5 million as a loan.
“Hazel Crest’s situation is still very serious,”
said Schiller. “But it is a credit to the level of
cooperation among ISBE, the school board, local leaders
and lawmakers that much has been accomplished in the best
interests of the district’s children. Had it been
otherwise, we would be reading about an entirely different
situation in Hazel Crest this week.”
ISBE will continue to work with the SFA to manage the
district’s finances and to prepare a recommendation
for the district’s future.
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