CUSD200 plans to build new Jefferson against taxpayers’ will

After asking via Referendum twice,

And being told “NO” twice,

Wheaton-Warrenville, CUSD200 is looking to build a new Jefferson pre-school WITHOUT a referendum.

On Wed, 3/14/2018 the board plans to approve the issuance of “lease certificates.” The “lease certificates look, walk & act like bonds (not more than $14 million, not less than $10 million).  They are justifying this based on Section 10-22.12 of the School Code, which allows a school district to lease a building.

They are totally ignoring and avoiding Section 10-22.36 of the School Code which requires a successful referendum for any new construction unless paid for by donations, grant, or sale of other property. Their plan is to pay for the whole thing with the lease, and make the final $1.⁰⁰ with money that is donated or comes from a grant.

This is obviously not in keeping with the intent of the law, and based on the verbatim discussion of the Illinois House when Section 10-22.36 of the School Code was last changed, is not in keeping with the intent of the law makers.  I have brought this to the attention of the board and the administration via email, and via public comments at the January 17, 2018 board meeting.  I also spoke at the March 7, 2018 finance committee meeting.

The community has said “NO” to the referendum twice, came out en mass to say “NO!” to adding an entire pre-school wing to Monroe Middle School (and gutting Graf Park).  It is time to tell them that they must do this via referendum.  And if they want the referendum to pass, they must cut the bloat from salaries and benefits so that the district can afford to do it out of current funds – starting with the Superintendent setting an example by agreeing to remove the recently added perks to his contract.

If I am the only one saying “NO!” they will proceed in authorizing the Initial Rental Payment of $1,500,000.

Please, if you live in the district, and believe the LAW should be followed, contact the D200 school board at board@cusd200.org or better yet, show up at the board meeting at make your public comments.

 On 3/7/2018 I attended the CUSD 200 Finance meeting.Bob Lewis of PMA presented the lease agreement – sounds just like a Bond or financing agreement, except

• they call it a lease
• the district does not take the title for the new building until they pay $1.⁰⁰ (with grant or donated money) after all “lease payments are made”
• The district cannot raise taxes to pay this one.

When asked what part of the school code gives them permission, PMA referenced 10-22.12.  I asked why 10-22.36 does not apply.  Bob  responded “I don’t know what that is.”

 

During public comment I asked our superintendent, Dr. Schuler if he has something in writing from a lawyer as to why the district does not need a referendum.  He assured everyone that he spoke with the district lawyer and this is legal – nothing in writing.

In the pursuing discussion, it was implied that bond council looked at the legality.  But, bond council simply looked at the legality of issuing lease certificates.  The district’s general council should look at the requirement for referendum.

Did anyone actually look at the legality of leasing a yet to be constructed school, on school property, using “lease certificates” for funding without taxpayer approval as required by 10-22.36?

 

(105 ILCS 5/10-22.36) 

Sec. 10-22.36. Buildings for school purposes. To build or purchase a building for school classroom or instructional purposes upon the approval of a majority of the voters upon the proposition at a referendum held for such purpose or in accordance with Section 17-2.11, 19-3.5, or 19-3.10. The board may initiate such referendum by resolution. The board shall certify the resolution and proposition to the proper election authority for submission in accordance with the general election law.

The questions of building one or more new buildings for school purposes or office facilities, and issuing bonds for the purpose of borrowing money to purchase one or more buildings or sites for such buildings or office sites, to build one or more new buildings for school purposes or office facilities or to make additions and improvements to existing school buildings, may be combined into one or more propositions on the ballot.

Before erecting, or purchasing or remodeling such a building the board shall submit the plans and specifications respecting heating, ventilating, lighting, seating, water supply, toilets and safety against fire to the regional superintendent of schools having supervision and control over the district, for approval in accordance with Section 2-3.12.

Notwithstanding any of the foregoing, no referendum shall be required if the purchase, construction, or building of any such building (1) occurs while the building is being leased by the school district or (2) is paid with (A) funds derived from the sale or disposition of other buildings, land, or structures of the school district or (B) funds received (i) as a grant under the School Construction Law or (ii) as gifts or donations, provided that no funds to purchase, construct, or build such building, other than lease payments, are derived from the district’s bonded indebtedness or the tax levy of the district.

Notwithstanding any of the foregoing, no referendum shall be required if the purchase, construction, or building of any such building is paid with funds received from the County School Facility Occupation Tax Law under Section 5-1006.7 of the Counties Code or from the proceeds of bonds or other debt obligations secured by revenues obtained from that Law.

 

You can find these portions of school code by  starting at ilga.gov/

• Click on “Illinois Compiled Statutes”
• Click on “CHAPTER 105   SCHOOLS”
• Click on “105 ILCS 5/ School Code.”
• Press <ctrl-f> and Search for “10-22.36”

 

2001 modification to the law

The original law (105 ILCS 5/10-22.36) prior to 2001 stated that no referendum was required if the district used funds from the sale of other buildings or funds received as gifts or grants, provided that no funds were derived from the district’s bonded indebtedness or tax levy.  That was clear.  However, in 2001 the language was changed to add subsection (1) “while the building is being leased by the school district” as well as the clause “other than lease payments”.

The change was made by

• Public Act 92-0127
• Bill number: SB1035 of the 92 general assembly
• Passed in the General Assembly May 01, 2001.
• Approved July 20, 2001

In the transcripts for the House on 5/1/2001,

ilga.gov/house/transcripts/htrans92/t050101.pdf

on pages 49-52 Rep. Black asked

“…I want to make sure, Representative, that we’re not circumventing the right of the voters to say, ‘I don’t think that you ought to buy that building.’”

And Rep Crotty (bill sponsor) replied

“That is not in the Bill….When we’re talking about leasing, many school districts lease a building maybe for a dollar an hour just to be sure that that is not something that needs to be done with referendum.  So, we’re not changing that part.  And if there are added dollars needed for a school district, they most definitely have to still go through referendum.”

Those who passed it understood that it does NOT allow lease to own in order to avoid the referendum!

 

(105 ILCS 5/10-22.12)
Sec. 10-22.12. Lease of property for school purposes. To lease, for a period not exceeding 99 years, any building, rooms, grounds and appurtenances to be used by the district for the use of schools or for school administration purposes; and to pay for the use of such leased property in accordance with the terms of the lease. The board shall not make or renew any lease for a term longer than 10 years, nor alter the terms of any lease whose unexpired term may exceed 10 years without the vote of 2/3 of the full membership of the board.

 

See previous articles:

•  Feb. 2018  dupagewatchdog.org/2018/02/cusd-200-cant-afford-a-new-jefferson-pre-school/ 
• Feb 2018 dupagewatchdog.org/2018/02/school-districts-use-lease-to-own-as-a-huge-illegal-loophole-to-avoid-referendum/ 
• Jan. 2018 dupagewatchdog.org/2018/01/cusd-200-board-meeting-this-wed-new-pre-k-without-referendum/
• Dec. 2017 dupagewatchdog.org/2017/12/cusd-200-lavished-dr-schuler-with-more/
• Nov 2017 dupagewatchdog.org/2017/11/cusd-200-new-pre-k-building-despite-taxpayers-saying-no/
• Sept. 2017 addition to Monroe dupagewatchdog.org/2017/09/cusd-200-new-early-learning-center-without-taxpayer-approval/
• Aug. 2017 addition to Monroe dupagewatchdog.org/2017/08/cusd-200-whos-in-charge/