Gov. George Ryan signed legislation Thursday to create a finance authority to run Round Lake School District 116.
“This law will help the Round Lake School District remain solvent, preventing the state from taking on its debt and the surrounding school districts from having to absorb additional students if it were to dissolve,” Ryan said in a prepared statement.
A special financial oversight panel for District 116, which serves more than 6,000 students in northwestern Lake County, was created two years ago to help the district deal with chronic budget problems.
The district, which has been on the state’s financial watch list for a decade, has $14 million in short-term debt and $40 million in long-term debt.
The oversight panel proposed creation of the finance authority in January to prevent the district from having to shut down and send its students to neighboring schools.
The only other time a special finance authority was created by the Illinois legislature was in 1980, when one was formed to help the troubled Chicago Public Schools.
Sen. William Peterson (R-Long Grove), whose district includes the Round Lake schools, said he was grateful that the governor signed the bill.
“The only way to help that school district and reorganize it was to form a finance authority,” said Peterson, chairman of the Senate Revenue Committee. “No one wanted their community schools broken up.”
The state’s superintendent of schools will appoint five members to the new finance authority. The legislation calls for the appointment of two members who live in the district and three who don’t.
The group will have the authority to sell bonds and raise property taxes above the current tax cap, which limits increases to no more than 5 percent a year.
The finance authority also will have the power to appoint the district’s top management team and negotiate collective bargaining agreements.
