Illinois State Board of Education
|FOR IMMEDIATE RELEASE
October 21, 2002
Hazel Crest Financial Oversight Panel Members Appointed
School District Near Insolvency; State Superintendent to Visit Tonight
State Superintendent of Education Robert E. Schiller today named the three members to serve on the Financial Oversight Panel for the nearly insolvent Hazel Crest School District 152.5.
Schiller will be at the Hazel Crest School Board meeting at 7:00 P.M. this evening to outline his expectations for the FOP to work with the school board to analyze district finances and to develop recommendations regarding the long-term viability of the district.
“We know that numerous school districts are facing financial problems, but this district faces the very real possibility of depleting all financial resources in the next 60 days,” Schiller said. “We must work together to assure that Hazel Crest students get a full year of education and at the same time look for long-term solutions to the district’s financial problems.
“I am very pleased that three highly qualified individuals have agreed to serve on this Financial Oversight Panel and provide their expert guidance to help the school board provide required educational programs for the district’s students.”
Schiller appointed former school business officials Edward M. O’Malley of Orland Park, Lawrence E. Hupe of Palos Heights and businessman Rick Lites of Homewood to serve on the Financial Oversight Panel. The State Superintendent designated Hupe to serve as chairman.
O’Malley most recently served as director of fiscal services for Rich Township High School District 227 in Olympia Fields. He previously served in the business offices of three other school districts and a special education cooperative. He holds a Chief School Business Official Certificate and a General Administrative Certificate.
Hupe was the Worth Township School Treasurer for nearly 30 years, where he was responsible for investments and cash management for all Worth Township school districts and special education cooperatives. He was a founder, trustee and chairman of the Illinois School District Liquid Asset Fund. He is a former chair of the Illinois Financial Advisory Committee, the group that advises the State Superintendent on school district financial issues.
Lites is a senior vice president for Loop Capital Markets in Chicago. He is also a member of the Homewood-Flossmoor High School Board of Education and chairs that group’s Finance Committee.
The State Board of Education voted last week to approve the Hazel Crest school board’s petition to create the Financial Oversight Panel, which has broad responsibilities regarding the financial operation of the troubled school system.
Under State law, the panel can recommend an Emergency Financial Assistance grant from the state of $270,000 and an Emergency Financial Assistance Loan of $1.08 million. The loan would have to be approved by the General Assembly and Governor. Both measures would not be sufficient in themselves to assure the district could remain in operation through the end of the current school year.
In addition, the panel could recommend special legislation – such as creation of a School Finance Authority or even dissolution of the district -- to address the situation.
Schiller and the State Board acted swiftly to put the panel in place in order to have a plan for the legislature to consider during the veto session in late November and early December.
The district has two referenda on the ballot November 5, and will attempt to issue tax anticipation warrants in early November. Even if all those tactics are successful, the district will still come up short of the $5 million it needs to remain solvent through the end of the fiscal year next June 30, according to the district’s financial consultant, Robert Grossi.