State Board of Education Established School Finance
Authority for Hazel Crest Schools

FOR IMMEDIATE RELEASE
December 9, 2002

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.