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February 14, 2003

State Superintendent Appoints Members of Financial
Oversight Panel For Cairo School District 1

Second FOP for a financially troubled school district in 50 days

State Superintendent of Education Robert E. Schiller today announced the appointment of three veteran educators to the Financial Oversight Panel for Cairo School District 1 in Alexander County. The State Board of Education acted February 6 to approve the Cairo School Board's petition requesting a Financial Oversight Panel and emergency financial assistance.

Jack D. Hill, President Emeritus of Shawnee Community College in Ullin, was designated by Schiller to serve as chairman of the Cairo FOP. Schiller also appointed David W. Hindman, retired superintendent of Herrin School District 4, and Samuel W. Harbin, former superintendent of Meridian School District in Mounds, to serve on the FOP.

“I am pleased that these three veteran educators have agreed to devote their time and expertise to the task of restoring the financial foundation of the Cairo school district,” Schiller said. “While this district's financial problems reflect those of many other districts in the state, it seems clear that funding to complete the school year will not be available without state assistance.”

Hill is currently the Chief Executive Officer of the East St. Louis Community College Center and also serves as Executive Director of the Southern Illinois Collegiate Common Market in Herrin. He was president of Shawnee Community College from 1991 to 1996 and has been designated President Emeritus since that time.

Hindman was Superintendent of Herrin schools from 1992 to 2000, after serving a four-year term as the elected Regional Superintendent of Schools for Williamson County. Harbin served seven years, from 1986 – 1993, as superintendent of the Meridian School District and earlier in his career was a teacher and principal in the Cypress Grade School.

The Cairo FOP will work with the Cairo School Board to develop a financial plan for completing the school year and for the long-term stability of the district. The financial plan, as well as every financial transaction of the district, will have to be approved by the FOP. The FOP will be in place for no less than three years and possibly up to ten years.

State Board staff members have been working with the district to analyze its current funding status. With that information, Cairo Superintendent Robert Isom concluded the district “was in the midst of a major financial crisis.” As of December 31, 2002, the district was utilizing restricted funds in excess of $60,000 to meet ongoing operational expenditures. In January 2003, the district issued Tax Anticipation Warrants totaling $414,000 which is the maximum allowable by law. Current financial projections indicate that the district will likely exhaust all available resources in its three operating funds within the next sixty days. By that time, the district will need to secure a line of credit for an additional $400,000 to $500,000 to meet current year operating expenses.

Under the law, the panel may recommend an Emergency Financial Assistance Grant from the state of $230,000 and an Emergency Financial Assistance Loan of $900,000. The State Board could provide the grant from funds remaining in the Emergency Financial Assistance Fund if the FOP concludes it is needed. If the panel recommends the emergency loan, it would require additional appropriations from the General Assembly and Governor.

Cairo is the sixth district to operate with an FOP. Mt. Morris, the first district to have an FOP, has since annexed to another district. East St. Louis School District 189 in St. Clair County has operated with an FOP since 1994. Round Lake School District 116 in Lake County and Hazel Crest School District 152 ½ in Cook County each operated with an FOP but have since been placed under the oversight of School Finance Authorities. The State Board created a Financial Oversight Panel in December 2002 for Livingston School District 4 in Madison County and continues to monitor other districts that are inching towards similar financial conditions.

Illinois State Board of Education
100 North First Street
Springfield, IL 62777