Coles Co. (ECWd) –
As the State of Illinois crumbles from failures of our public officials to know and do their job, one only need to look at their local government to see much of the same problems. For years we have been asking public officials a simple question. Where in the law does it give you the power to do what you did? Commonly known as Dillon’s Rule.
Who knew Coles County was $1,105,000.00 in Bond Debt? According to its Comptroller filing, the county sold Revenue Refunding Bonds, Series 2008, among other Bonds, to “finance construction of an office building for the Regional Office of Education”. The original issue of those bond was $600,000.00 of which they currently owe $270,000.00, however that number does not reflect the interest.Â
Is county government allowed to sell bonds to build an office building for the Regional Office of Education? Where in the law does it give them the power to do what they did?
How the game is played.
The School code has outlined County Board obligations as it relates to the Regional Superintendent.
(105 ILCS 5/4-2) (from Ch. 122, par. 4-2)
    Sec. 4-2. Office and supplies. Provide for the county superintendent of schools a suitable office with necessary furniture and office supplies.
Although the counties code does not specifically permit the County to bond for an office building for the Regional Superintendent, the Building Commission Act does, which is how the county built this office building.
Is there anyone in their right mind that spends $600,000.00 plus interest to build an office building so you can provide a suitable office for the Regional Superintendent?
Under Dillon’s rule, the Building Commission has 1)powers granted in expressed words; 2) Those necessarily or fairly implied in or incident to the powers expressly granted, and 3.) Those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable.
Working backward, most would agree that building an office building is not essential in order to provide office space. Some may contend that building an office building is necessarily or fairly implied to the power granted of providing office space. I think that is a stretch.  That leaves us with the first rule, powers granted in expressed words.
Although the Building Commission has the power to sell bonds and build buildings, the Public Building Commission Act has limitations set by resolution when they were created and can not be expanded without the approval of the voters.  The PBCA states, The County Board of any county that has created a public building commission for a limited and specific purpose may expand that purpose by resolution.
Two questions:
- What did the Resolution creating this commission outline as the limited and specific purpose?
- Why are the taxpayers of Coles County burdened with this expense when the Regional Superintendent represents six others counties from that office? (Clark, Cumberland, Douglas, Edgar, Moultrie, & Shelby Counties)
An FOIA request has been issued for a copy of the original Resolution that “shall specify the limited purpose for which such Public Building Commission is to be created.” Any bets there was any reference to the construction of an office building so the county would be able to provide a suitable office for the Regional Superintendent?
As this relates to the other counties obligations, we understand there is a lease agreement with those counties and the Building Commission. That too has been FOIA’d and we will update accordingly.
We also note there have been numerous school superintendents that are convinced the duties of Regional Superintendent could easily be performed by the applicable School Superintendents, which would save a small fortune to the taxpayers.
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6 Comments
Mike
Posted at 16:11h, 23 MayThe Official Statement (OS) on the EMMA MSRB website stated the purpose of the 2008 bonds were to entirely refund a 2006 Public Building Revenue Bond issue.
Refunding bonds is akin to refinancing a mortgage.
Can’t locate the 2006 bond issue on the EMMA MSRB website.
The County should be able to provide a copy of the 2006 OS and the current debt service schedules.
When there’s time can the “Comptroller filing” be posted?
The URL to the Indebtedness section of the Coles County section in the Comptroller Warehouse does not include the “Comptroller filing” information noted in the article.
The Coles Public Building Commission is not one of the several Public Building Commissions listed as a discrete unit of government in the Comptroller Warehouse.
Maybe some Public Building Commissions are a subsidiary / component unit of the County, and some are not.
Some school districts use ROE services more heavily than others.
There are currently 35 ROE’s.
That does not include the 3 intermediate service centers (ISC) in suburban Cook County, or the City of Chicago.
As is so often the case in Illinois government, Cook County and Chicago has their own way of doing things.
Suburban Cook County and the City of Chicago have no entities called ROE’s.
The most recent round of ROE consolidation was effective July 1, 2015.
ROE 11 (Clark, Coles, Cumberland, Douglas, Edgar, Moultrie, & Shelby counties) was left untouched in that consolidation, which reduced the number of ROEs from 45 to 35.
The 1995 ROE consolidation reduced the number of ROEs from 57 to 45.
The 1977 ROE consolidation reduced the number of ROEs from 78 to 57.
Charles Burns
Posted at 21:31h, 23 MayAdditional details on the bonded debt see Note 1 sub C) on page 74 of the pdf.
https://emma.msrb.org/ER983748-ER769988-ER1171381.pdf
Charles Burns
Posted at 14:59h, 22 MayWhat is a refunding bond and are these refunding bonds?
Government Finance Officers Association website:
Refunding Municipal Bonds
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Type: Best Practice
Background:
Bond refundings are most commonly used by state and local governments to achieve savings on interest costs. Refunding bonds can also be issued to remove or revise burdensome bond covenants or to restructure debt service payments, although these are less frequent.
Refunding bonds are characterized as either current refundings or advance refundings. A current refunding is one in which the outstanding (refunded) bonds are redeemed within 90 days from the date the refunding bonds are issued. In an advance refunding, the refunded bonds remain outstanding for a period of more than 90 days from the date the refunding bonds are issued. Under federal tax law, governments may engage in a tax-exempt advance refunding only once over the life of the bonds. Issuers of taxable or tax credit bonds may be subject to different restrictions or tax law. However, the methodology and policies for determining when a refunding might be appropriate may be applied to all types of bonds.
Governments should familiarize themselves with the terminology and market for bond refundings, using the resources section of this best practice, including supplementary material Refunding Bonds Terminology.
http://gfoa.org/refunding-municipal-bonds
Address Purpose of Refunding. Debt policies should also address when an issuer will consider a refunding whose primary purpose is not debt service savings. Issuers will sometimes pursue refundings to eliminate restrictive bond/legal covenants, restructure the stream of debt service payments, or achieve other policy objectives. In such cases GFOA recommends that the policy objectives and benefits, along with any economic loss of the refunding, should be clearly understood and articulated to all stakeholders, as well as how such a decision fits into a long-term financial plan.
http://gfoa.org/refunding-municipal-bonds
https://emma.msrb.org/MS269362-MS265416-MD512135.pdf
Charles Burns
Posted at 14:54h, 22 Mayoopsd!
Charles Burns
Posted at 14:53h, 22 MayHey leakers-
https://emma.msrb.org/IssueView/IssueDetails.aspx?id=MS31977
https://emma.msrb.org/MS269362-MS265416-MD512135.pdf
Add’l- What is a refunding bond, and what was the purpose of this bond issue? A refunding bond generally borrows money to pay off higher interest bonds already issued typically apparently, but in Coles County???:
Address Purpose of Refunding. Debt policies should also address when an issuer will consider a refunding whose primary purpose is not debt service savings. Issuers will sometimes pursue refundings to eliminate restrictive bond/legal covenants, restructure the stream of debt service payments, or achieve other policy objectives. In such cases GFOA recommends that the policy objectives and benefits, along with any economic loss of the refunding, should be clearly understood and articulated to all stakeholders, as well as how such a decision fits into a long-term financial plan. Source- Government Finance Officers Association website; link to document which is the source of the above excerpt –
http://gfoa.org/refunding-municipal-bonds
M. Black
Posted at 13:43h, 22 MayCurious, do taxpayers in Coles County know what is happening in their county?
The way I see it, ROE’s are not needed and a burden to taxpayers. Just more
government supported by more taxpayer
hard earned money.