CUSD 200

CUSD 200 – Laws? What Laws? – SCHOOL Districts using “Lease” to avoid the legal requirement for referendum to build new school.

Dupage Co. (ECWd) – 

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

On Wed, 3/14/2018, the School Board plans to approve the issuance of “lease certificates” in order to build a school  They are justifying this based on Section 10-22.12 of the School Code, which covers the school district’s lease powers. 

Major problem! 

10-22.12 only provides lease authority to lease “any building, rooms, grounds and appurtenances to be used by the district for the use of schools or for school administration purposes”

How they can look at that statute and read that it gives them the power to BUILD a new building is beyond me.  Statutory construction tells us they can not lease in order to build.  

We are raising the flag! 

According to the School Code 10-22.36, which is a specific statute and takes precedence, a referendum is required for permission from the voters “to build” a school.   

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.”

So why would this school board and their attorney’s be moving in a direction of “lease certificates” to build a new school? 

Because the voters have already told them no, twice!  When the voters speak, you would think the elected officials would listen but I digress, this is Illinois.  It appears the people behind this boondoggle are citing the Local Government Debt Reform Act, section 17(b) as their justification for lease certificates.

“17(b) The governing body of each governmental unit may purchase or lease either real or personal property, including investments, investment agreements, or investment services, through agreements that provide that the consideration for the purchase or lease may be paid through installments made at stated intervals for a period of no more than 20 years or another period of time authorized by law, whichever is greater; provided, however, that investments, investment agreements, or investment services purchased in connection with a bond issue may be paid through installments made at stated intervals for a period of time not in excess of the maximum term of such bond issue.”

So the question is actually pretty simple.  Is real or personal property being leased?

NO!  

What is happening is they are planning on issuing lease certificates in order to build a school that the voters told them no, not once, but twice in previous public referendums. This appears to be a clear, in your face, screw you taxpayers, we are going to do what we want, your voice be damned situation.

Since they know they can’t pass this by the voters, they have attempted an end-run of the mandated referendum in the school code by using one prong of a statute, while ignoring the first prong, which is a clear failure in statutory construction. In short, they eviscerate the law to support their position.

Their plan? Pay for the whole thing with the lease certificates and make the final payment with money that is donated or comes from a grant.

17(b) -“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.”

Major problem!

In order for no referendum to be the path, they must comply with both item (1) and item (2).  Item (1) is key!  No referendum is required if the if the purchase, construction, or building of any such building (1) occurs while the building is being leased by the school district

Message to voters!  

THERE IS NO BUILDING BEING LEASED BY THE SCHOOL DISTRICT! 

What is happening, in our opinion, a group of slick financial people has presented a pathway that the average citizen (board members) can’t follow and have convinced all involved that it is perfectly legal.

The legislative intent of the School Code is clear, as is the Local Government Debt Reform Act.  Neither permits the path we see this school district taking with your tax dollars.

More troubling, during a past meeting, the local DuPage Watchdog Jan Shaw raised the flag. When she asked what part of the school code gives them permission, Prudent Man Advisors (PMA), referenced 10-22.12 of the school code. When asked why 10-22.36 does not apply.  Bob from PMA responded, “I don’t know what that is.”

More troubling for this planned path against the taxpayer’s previous votes is what appears to be a total disregard for the law as well as the legislative intent.

2001 modification of 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 floor debate on 5/1/2001, 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.”

The law was never intended to circumvent the obligation of a referendum for the construction of a building!

We urge every citizen in this district and speak out against the path being taken to build this school.  And so there is no confusion, we don’t hate kids or their education.  We hate the evisceration of our laws in order to circumvent the taxpayer’s wishes.

No means No!

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2 replies »

  1. This project of building a new pre-school is moving forward.

    This method of financing without voter approval to be funded out of the Operations Budget is bizarre.

    Especially in this case as voters have twice rejected building a new pre-school, once in a pre-school only referendum in 2013 and the second time in 2017 as part of a district wide plan to refurbish most schools and build a new pre-school.

    The “lease certificate” financing to be paid out of the Operations Budget was done in Northfield (Cook County) and who knows where else.

  2. This is exactly true, you can make additions to existing buildings without a referendum but you cannot build a free standing, separate building without a referendum. This district should know this or are they pulling a shot????

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