Financial Error Alters Long-Term Projection of Passed Referendum

HIGHLAND PARK, IL - The long-term projection in the case of a successful North Shore District 112 referendum included a “significant error,” Mohsin Dada, Chief Financial Officer for the District, revealed at a recent school board meeting.

The error means that by the mid 2030s, the District’s budget would actually be in the red, instead of what was originally thought to be a surplus.

The original projection, made through the consultants systems analysis process in November, “inadvertently froze the salaries in education from 2022 to 2028,” Dada said. “Since this was a 20-year projection beyond that, the lower base had magnified the error.”

“We told you operating surpluses would be there through 2039 and a projected balance will exceed 25 percent through 2039 should the referendum pass,” he added. “That is incorrect.”

CARE, the most vocal anti-referendum group, said in a group statement the error shows the original plan “grossly overstated the middle school plan’s savings.”

“Now, according to the District, this plan will not secure our finances for a generation, but will solve our financial issues for only 5 years after the project completion date,” the statement read. “112 has sold this plan to the voters with claims that it fixes our financial problems, saying on its web site, for instance, in the publication Reconfiguration: Frequently Asked Questions (updated Nov. 13, 2015): “Projected savings are estimated to be between $4 million and $4.8 million annually. Compounded over a 30-year period (the life of the bond issue), this translates to a total of more than $190 million.”

Moving 112 Forward, the most vocal pro-referendum group, downplayed the error as insignificant in a statement of their own.

“The error described by Mohsin Dada had no effect whatsoever on the first five years of the financial projection,” the statement read. “The result of the error after ten years is that, assuming nothing else changes, the District would have an operating deficit in 2027 of approximately $600,000, on a total operating budget of approximately $120 million. In the big picture, the issue is trivial.”

The $600,000 deficit is something the District “routinely” manages on a year-to-year basis, M112 Forward claims.

“We would all be very fortunate if a $600,000 projected deficit ten years from now turns out to be our biggest financial challenge.”

Dada said the error was detected when “we intended to release our annual CPI, an annual number used for tax calculations.”

“We understand the magnitude of this error,” he said, noting that the district’s projected surplus following a successful referendum will run through 2026, not 2033.