Schaumburg consolidated School District #54, located in Chicago's northwest suburb, is one of only 18 districts nationwide to receive the highest credit rating by Moody's—the gold star in global credit scores. The elementary district, with 15,000 diverse, middle-income students dispensed across 27 schools, earned this rating for its low debt burden, rapid balance payback, and ample reserves, including a working cash balance of $63 million. Its stellar financial standing is the result of collaboration between administrators, board members, the community, and Mohsin Dada, the assistant superintendent for business services.
"We are always looking to see what our highest priorities are and avoid any waste in the system," says Dada.
"Avoiding any waste" has been Dada's mantra over the last 15 years as he's saved the district millions by renegotiating health care costs and finding cheaper solutions to acquire bonds, then redirecting money back into the classroom.
Creative Financial Solutions
In 2008, when SCSD was in need of a $17.37 million bond to fund its 10 Year Capital Improvement Plan, Dada wanted to try something new. For previous bonds, the district had relied upon a negotiated bond process, which uses an underwriter to seek out the best bids in the bond market. Dada went to the school board and proposed a different method: a competitive sale. In this process, the district would have more control by setting a date to remove the bond from the market and more transparency to view the bids."
By putting everything in public, you're showing the community your achievement," says Dada.
In the end, 10 firms participated in the bidding process, 35 bids were proposed, and Schaumburg's bond was bought at the lowest interest rate—0.736 percent. The bond is funding the district's enhancement project, which has mapped out facilities that need improvement over the next 10 years, including HVAC replacements, playgrounds, doors, carpets, windows, and floors.
Millions more had been saved in health care costs just a few years earlier. In 2005, Dada changed the role of the insurance broker to a consultant position. "I wanted to work with someone who was not working on commission," says Dada.
Their insurance rate was reduced from $380,000 to a fixed fee of $30,000. Becoming a health care connoisseur, Dada immersed himself in the topic and explained to the teachers union and the board that using generic medications, adjusting deductibles, and being selfinsured would save the district money and put more money back into salaries.
"When Mohsin brings forth a recommendation, people listen," says Ed Rafferty, superintendent of SCSD . Rafferty says Dada's health care recommendations have saved the district nearly $9.5 million per year. Dada's financial management strategies earned him a Professional Eagle Award by the Association of School Business Officials in 2005.
Schaumburg has kept a balanced budget without increasing the city's tax rate or taking away from student achievement.
"When Mohsin started here we were $160 million in debt," says Rafferty. "Now we are debt free and student achievement has never been higher."
Four years ago there were no schools with 90 percent of the students meeting or exceeding state standards. Now there are 16. One of the most significant resources retained has been teaching staff, says Rafferty. Although the district continues to tighten up every year, the average class size remains approximately 23 students.
"Financial officers have to bring value to their position," says Dada. "We're not just bookkeepers. We are there to redirect our resources in the classroom."
Marion Herbert is associate editor.