While the Woodland School District Board of Education called a community meeting Monday to explain the projected shortfalls in revenues facing the district, the board spent an equal amount of time trying to field questions about faculty being overpaid.

Superintendent Doug Foster began the meeting with a gloomy picture of the anticipated loss in funding to the district.

Foster identified three areas where revenues are expected to drop: Corporate personal property replacement tax (which is tied to the economy), general state aid payments and categorical reimbursement payments for items such as special education, transportation and pre-kindergarten.

The CPPRT is expected to drop by 18 percent both this year and again next year. General state aid is predicted to be slashed and categorical payments from the state are already behind, with no new payments on the horizon.

In all, Foster said that last year's budget showed a $110,360 deficit due to losses in these areas. This year, that deficit is expected to be $570,806. And next year, the deficit is projected at $548,562.

"We have some reserves. We have good financial stability right now," he said. "But when I look at these losses, I'm not sure we can maintain it."

But when the board opened the floor to questions, the audience pounced not on the steps the district is taking to deal with the financial crunch, but on how the board intends to recover money overpaid to teachers between the 2004-2005 school year and the 2007-2008 school year by a former employee.

Some of the overpayment was made on paychecks and some to the Teachers' Retirement System contributions. The total that was overpaid over four years is $217,361. The overpayments occurred due to errors, believed to be unintentional, in calculating payments. Those errors were not made across the board, but to various teachers over that time period.

The employee responsible for the errors also is facing a charge in Livingston County for falsifying checks that totaled about $129,500. So far, $50,000 has been recovered. The incident took place around the same time as the overpayments. The case is still pending.

Audience members demanded to know how that much money could disappear without being noticed. The board said that the district's auditor has been dismissed. An annual audit is required but did not turn up the overpayments.

"Where are the checks and balances?" one resident demanded. "Who is going to be held responsible?"

Foster said that since the incident, a number of procedures have been put in place to provide those checks and balances.

"We are a small school district,"he said. "We don't have the number of checks and balances you would wish to have with an accounting system. We have taken a number of steps ... to make sure this never happens again."

Board Vice President Todd Russow said the district is seeking to recover the overpaid funds during the collective bargaining process as the board negotiates a new contract with the Woodland teachers' union. The board said it could not elaborate since those negotiations are still pending.

But resident Heather Leskanich said the recovery of funds should be separate from the collective negotiation process since not all teachers were overpaid. Each individual who was overpaid should meet with the district to discuss the amount owed and how to repay it.

Board member Tom Kaminke said the board would be glad to do that — as long as the union agreed.

"We would love to sit down one on one and show them line by line," he said.

Some audience members said the issues of the overpayment and the financial shortfall are separate and they wanted to spend the meeting talking about the revenue loss.

Foster said a committee is being formed to come up with a plan to deal with the funding loss by examining programs, staffing and budget spending to look for ways to trim expenses. The committee is expected to meet soon and will make a recommendation to the board. The board will then make a final determination as to how to move forward.

Some residents asked the board to look at other alternatives before slashing spending too deeply.

Tom Clark asked the board to consider a referendum to increase revenue. Foster said due to the tax caps, the education fund rate is maxed out at $4 per $100 of assessed value, however a referendum could be passed to suspend the tax caps for up to three years but once that time period passes, the district would return to its original state.

Clark said the referendum would give the community a chance to keep programming in place and let the state and the economy recover.

"Give us the option, if there is going to be major cuts,"he said. "If the referendum fails, you have your directive."

Kevin Cassady, however, said the board should be looking to spend down its $1.4 million in fund balances before asking the community to accept any kind of revenue increase, as a show that the district has exhausted all possibilities.

But board member Krista Turner feared that would make the district vulnerable to the state forcing a consolidation or dissolving the district and sending students to various districts. Cassady countered that regardless of the fund balances, that possibility always exists.

Foster noted that Woodland's issue with declining revenue is not just a local problem.

"It's not just happening here at Woodland,"he said. "These are the kind of decisions being made by boards of education all across Illinois."