And So It Begins...

Well everyone, it begins.  "What begins?," you might ask.  Minooka CCSD 201 has begun to issue working cash fund bonds (see here at page 4 of the July 17, 2017 meeting minutes under Item 5.01).  This is the end result of years of overspending.  It is an eventuality that I have warned about a number of times both in this blog (see here, here, and here) and as a member of the school board.

Essentially, the school board is funding day-to-day expenses with long-term debt (in this case five-year bonds).  Why?  Because the district has been overspending for years.  Rather than cut expenses to meet the revenue that the taxpayers have provided based on the approved tax rates, the school district has created and the school board has approved a cost structure that exceeds such revenue.

This is not something that is responsible for you or I to do in running our households, and it is not responsible for a government body to do either.  Many people decry the financial condition of the State of Illinois, the City of Chicago, and Chicago Public Schools, among many others.  If one looks back in the history of each of those entities, one would find the point at which they each began to fund day-to-day expenses with long-term debt.  That point represents the beginning of the financial crisis that each such entity finds itself in. 

No one should expect this to be an isolated event.  This represents merely the first of what will likely be many such bond issuances.

Board Docs: A New Information Portal for Minooka CCSD 201

Frequent readers of my blog will know that I am a strong supporter of transparency and sharing the maximum possible information regarding the inner workings of public entities.  In that vein, I am happy to share some news.  Minooka CCSD 201 has a new information portal:  Board Docs.  This site allows the District to easily share information such as meeting agendas, board packets, and the like with the stakeholders of Minooka CCSD 201 and other interested parties.  The link to the public information site is here.  If you are interested, "bookmark" the site for future reference.

The Purpose of This Blog

Over the four years that this blog has existed, the feedback that I have received regarding it has been overwhelmingly positive.  Many people have called, texted or stopped me on the street to tell me that they read my blog regularly and it helps to keep them informed about Minooka CCSD 201.  There are a few people, however, who believe that my blog is inappropriate and that I should take it down.

To those that suggest that I take it down, you should not expect that to happen any time soon.  This blog will remain as long as I am a member of the Minooka CCSD 201 school board and probably long after.  You see, I believe there is a fundamental disagreement between myself and those that think this blog is inappropriate.

Let's start with the fact that Minooka CCSD 201 is a public school district.  And as a public school district, it is financed with public money (your tax dollars).  It is my belief that when you finance an institution with public money, that institution should be subject to public scrutiny and public oversight.  That, my friends, is the reason that there is a school board elected by the voters of the district to oversee the district, an Open Meetings Act to ensure that the public is aware of and can attend the proceedings of the school board, a Freedom of Information Act to ensure that the public has access to public documents held by the school district, and a Public Records Act to ensure that public records created by the school district are preserved and cannot be destroyed. 

As an elected official, I believe that it is my obligation to ensure transparency and provide the public with as much information as possible (while still abiding by the privacy laws that exist).  I believe that public servants spending public money should invite and encourage scrutiny and not be afraid of it.  We are, after all, doing the public's business on behalf of the public.  If we are doing that to the best of our abilities, then we have nothing to fear from transparency and public scrutiny.  And, if we fear transparency and public scrutiny, then that is the first sign that perhaps we are doing something that we should not be doing.

Unfortunately, public institutions do not always provide adequate transparency or desire public scrutiny.  To the extent that this blog provides more transparency, invites public scrutiny, and increases public awareness of the inner workings of Minooka CCSD 201, then I consider it a success.

Government Transparency and the Illinois Open Meetings Act

A recent law passed in Illinois requires that all school board members complete training on the Illinois Open Meetings Act.

The problem with the Illinois Open Meetings Act is that it is woefully outdated.  Given the current state of technology (internet, free PDF readers, camcorders, YouTube, etc.), if the politicians in the State of Illinois were serious about government transparency, each entity of state and local government would be required to do the following (at a minimum):

1.  Post information (including board packets or the like - minus the information that is subject to privacy protection or the subject of executive session) online at least two days prior to public meetings.  This would be in addition to the agenda that is required to be posted pursuant to the Open Meetings Act.
2.  Post video recordings of meetings to their websites or to a service like YouTube.  This would be in addition to the minutes that are required to be posted pursuant to the Open Meetings Act.
3.  Post all financial information to their website and update such information at least monthly.

Given the technology available today, there is no reason that each and every citizen shouldn't have this information available to them at their fingertips.  A person should not have to submit a Freedom of Information Act (FOIA) request for anything but the most esoteric information.  If we really want openness in government, we need to bring our Open Meetings Act into the 21st century.

Lists of Bills and Treasurer's Reports

For those who are interested, here is a link to the most recent Minooka CCSD 201 lists of bills and treasurer's reports by month.

Risk Management Plans: Legitimate Policy or End Run Around Tax Caps

At the last meeting of the Minooka CCSD 201 school board, the superintendent presented a new Risk Management Plan for the district (see here).  So what is a risk management plan?  Is it a legitimate policy tool to reduce the risk associated with running our schools or is it an attempt at an end around the tax caps placed on certain funds in the school district's budget (or is it a combination of the two)?  And why is this coming up now?

To answer these questions, you have to know a little bit about school finance and how an Illinois school district raises revenue.  You also have to understand that our school district raises the overwhelming majority of its funds (80 to 90%) through local property taxes.  Now, if you own property in the district, you get a property tax bill every year which includes an entry that shows the tax rate for Minooka CCSD 201.  For example, that tax rate for last year (if you lived in Grundy County) was 2.95428 (this is the number you get when you add the rate for "Minooka Grade 201", which was 2.87206 with the rate for "Social Security" listed just below "Minooka Grade 201", which was 0.08222).  Well, this one number really consists of a combination of tax rates for each of the various categories of spending that the district has.  You can think of these as buckets.  The buckets are labeled: education; operations, building and maintenance; transportation; working cash; municipal retirement; social security; tort immunity; special education; fire prevention and safety; lease purchase; and bond and interest.  Now some of these buckets (or categories) have rate limits that are set by law and can only be increased by the voters of the district pursuant to a referendum.  Others do not have limits that are set by law.  The categories and their limits for Minooka CCSD 201 are as follows (the rates are per $100 of equalized assessed value):

Education: 1.62
Operations, building and maintenance: 0.25
Transportation: 0.12
Working cash: 0.05
Municipal retirement: none
Social security: none
Tort immunity: none
Special education: 0.02
Fire prevention and safety: 0.05
Lease purchase: 0.05
Bond and interest: none

You will notice that the funds that do not have tax caps are municipal retirement, social security, tort immunity and bond and interest.  The amounts levied for municipal retirement and social security are merely a function of the school district's payroll and so there is not much here to play with.  The amounts levied for bond and interest are a function of the school district's current indebtedness.  The county clerks are required to levy enough in the bond and interest category to pay the current principal and interest payments on the school district's debt.  Since the amount of this debt is limited by statute and the debt typically can only be issued pursuant to a referendum of the voters (but see my post on the Back Door Referendum), the amount levied for this fund is subject to certain controls.  You may notice if you look at one of the levies approved by the school board, that the school board does not set a levy amount for this fund.

That leaves the tort immunity fund.  Now, the purpose of the tort immunity fund is two-fold.  The first is reactive and the second is proactive.  The reactive part is to allow the school district to raise money to pay tort claims for which it becomes subject pursuant to a judgment as a result of a lawsuit.  The proactive part is to allow the school district to raise money to pay for insurance to cover such tort claims and to pay for risk management activities to decrease the chances of such tort claims in the future.

There is, however, a potential for abusing the tort immunity fund as a way to raise revenue that is more properly categorized under one of the other funds and therefore create an end run around the statutory tax caps.  This has been documented by commentators (here and here), as well as being remarked upon by the Illinois legislature itself ("Notwithstanding the extraordinary nature of the [tort immunity tax] . . . it has become apparent that some units of local government are using the tax revenue to fund expenses more properly paid from general operating funds."  745 Illinois Compiled Statutes 10/9-107).

At the end of the day, as long as a school district is raising revenue in the tort immunity fund in accordance with the letter and spirit of the law, the school district should not have any problem.  However, if the school district is using the tort immunity fund to pay for items that really should be paid for with another fund, then the school district has a problem.  A taxpayer has the right to sue the school district for return of the improperly levied funds.  Now, you might think that the likelihood of recovery on a lawsuit of this nature is slim.  But there have been some high-profile cases in which taxpayers have won and forced the school district in question to return the improperly levied funds.  (See here and here).  Notably, the Illinois State Board of Education has even cautioned school districts about their use of tort immunity levies in the wake of the Freeport and Quincy cases (see here).

So, why is this topic coming up now here at Minooka CCSD 201?  Well, probably because the school district is levying taxes at the maximum rate in each of the funds that has a rate limit.  In addition, the district is currently operating at a deficit with more deficits as far as the eye can see.  Faced with that situation, what is a district likely to do? 

Government Transparency: Part III (Video Recorded Meetings?)

Another issue that arises when thinking about government transparency is the question of video recording meetings. Given our current state of technology, it would be relatively easy to video record the Minooka CCSD 201 school board meetings and post the videos to a website where people could view them on their computers. With our busy schedules and so many other things competing for our time, it is difficult for many people to attend school board meetings. Video recording would allow interested persons to watch school board meetings with ease and convenience. There is, however, some time, effort and expense that must be incurred to video record meetings and then post them to a website. So, I would like some feedback from those of you who read this blog. Would this be something that you are interested in? Do you think that it would be worth the time, effort and expense? You can either submit a comment to this blog or email me at dpmartin1775(at)yahoo.com (replace the "(at)" with the "@" symbol).

As you are considering this issue, consider that many other local government bodies in Illinois, including school districts, make videos of their meetings available to the public. Click here, here, here and here for examples of some local government bodies that make video recordings of their meetings available.

The Back Door Referendum: Part II

My first post on the "back door referendum" has provoked quite a few comments (I have declined to publish the comments to protect anonymity). Some concern has been raised that Minooka CCSD 201 may be considering a "back door referendum" in the near future. At this time, there is no cause for concern. My initial post on this subject was merely for informational purposes. To my knowledge, the Minooka CCSD 201 school board has not had any discussions about an imminent or proposed "back door referendum." If this issue arises in the future, I will publish a post on this blog. It will then be up to the voters to decide if they want to force the school board to put the question to the voters of the district in a subsequent election. According to Illinois law, petitions can not be circulated until a school board has voted on and approved a "back door referendum" and thereby started the 30 day time clock. Interested persons can, however, begin getting together and planning to gather signatures. With decent prior planning and the help of the internet and email, it would be relatively easy to gather the signatures of 10 percent of the registered voters of the district. The people who gathered signatures in the recent Palatine SD 15 case were able to gather hundreds more signatures than they needed.

I have also received a number of questions regarding bonds and school finance in general. In the near future, I will attempt to explain certain aspects of school finance. At the most recent school board convention (a couple of weeks ago), I attended a number of seminars, one of which was on the topic of school finance and issuance of school bonds. I will share what I learned.

The Back Door Referendum

Typically when school districts such as Minooka CCSD 201 want to raise additional property tax revenues or sell additional bonds, they must put a rate increase referendum or a bond referendum on the ballot and ask the voters to approve the referendum by a majority vote. Illinois law, however, provides the school board with another option, which has come to be known as the "back door referendum." Essentially, the way it works is that the school board is allowed to vote to issue "working capital" bonds. Once the school board approves the working capital bonds, any resident of the district who wishes to protest the issuance of the bonds has 30 days to gather the signatures of 10 percent of the registered voters in the district. If they are able to do this within the 30 day time limit, then the school board must put the issuance of the bonds to the decision of the voters in a referendum at the next election. If no person protests the issuance of the bonds and gathers the appropriate number of signatures, then the school district is allowed to issue the bonds. This turns the usual bond issuance process on its head. Under the normal process, bonds are only allowed to be issued upon a majority vote in a referendum. Here, bonds are allowed to be issued unless the protest of 10 percent of the registered voters forces a referendum. Hence, the term "back door referendum." The bond issuance sneaks in through the back door unless 10 percent of the registered voters close the back door.

Because voters typically do not keep a watchful eye on their elected representatives and because the time frame to gather the required signatures is fairly short, "back door referendums" are usually successful. Since this process has been available to school boards, there are very few instances in which voters have forced a referendum. The difficult economy and the internet may change that, however. In the past year, some concerned citizens in Palatine School District 15 were able to force a referendum on the issuance of $27 million in "working capital" bonds. In the recent election on November 2, the voters in that district voted "NO" on the referendum by a vote of 67 percent to 33 percent. You can read about it here, here, here and here.

Minooka 201 Salaries, Benefits and Contracts

The Minooka CCSD 201 salary, benefit and contract information (including collective bargaining agreements) is available on the District website. Click here and here to be taken to this information.

Minooka 201 Salary Information

As an Illinois public school district, Minooka CCSD 201, reports its salary information to the Illinois State Board of Education on an annual basis. The Family Taxpayer Foundation is an organization that provides this information in a easy to search format. Click here to be taken to the page where you can search for salary information. Just enter "Minooka" in the box marked "District" and click the "search" button. Then choose "Minooka CCSD 201" and the salary information will appear. Click here to be taken to the Family Taxpayer Foundation home page. It may also be interesting to search other nearby districts for comparison.

Representative Democracy

A local school board, such as the Minooka CCSD 201 school board, is an exercise in representative democracy. The Minooka CCSD 201 school board is better able to make informed decisions when residents of the school district voice their concerns and opinions. I realize that most people lead hectic lives, so if you don't have the time to attend school board meetings and voice your concerns and opinions in person, please feel free to send me an email at the following email address: dpmartin1775(at)yahoo.com (you have to replace the "(at)" with the "@" symbol-I spelled it out in an attempt to foil spammers).

Now, it is impossible for any representative body, including the Minooka CCSD 201 school board, to satisfy all of their constituents at the same time. Each person has their own opinions and concerns which may conflict with the opinions and concerns of others. But, I believe government works best when it is transparent (shares all possible information) and held accountable (voters continue to stay involved and vocal, not merely during election season).

Government Transparency: Part II

In researching how other local governments (including many here in Illinois) are striving to become more transparent, I came across the following website of the Illinois Policy Institute. One of their major projects is called the Local Transparency Project. As part of the project, they conduct "transparency audits" of local governments. You can read all about it by clicking on the link above. One page of their website provides a list of items that they believe should be provided on a local government's website, their rationale and examples of Illinois local governments and others (including links to those government websites) that provide such information. Sunshine Review is another resource for government transparency.

Government Transparency

In a democratic Republic, government is the servant of the people, not their master. As such, government entities must operate in such a way to enable the people to hold their public servants accountable. Transparency is the key to enabling people to hold their public servants accountable.

In the words of a couple of important Illinois statutes:

"It is the public policy of this State that public bodies exist to aid in the conduct of the people’s business and that the people have a right to be informed as to the conduct of their business."
- Illinois Open Meetings Act, 5 ILCS 120/1.

"Pursuant to the fundamental philosophy of the American constitutional form of government, it is declared to be the public policy of the State of Illinois that all persons are entitled to full and complete information regarding the affairs of government and the official acts and policies of those who represent them as public officials and public employees consistent with the terms of this Act. Such access is necessary to enable the people to fulfill their duties of discussing public issues fully and freely, making informed political judgments and monitoring government to ensure that it is being conducted in the public interest."
- Illinois Freedom of Information Act, 5 ILCS 140/1.

As one of your elected public servants, I would like to see Minooka CCSD 201 run in the most transparent manner possible (consistent with applicable privacy laws).

To further transparency in Minooka CCSD 201, I am recommending the following steps be taken:

1. Posting of board packets (prior to school board meetings) to the District website. Any information for executive sessions should be removed and distributed to school board members separately.
2. Posting of District financial information (including the long form budgets, audits, Treasurer's reports, and monthly lists of bills) to the District website.
3. Posting of contact information (phone number and email address) of current school board members to the District website.
4. Posting of salary & benefit information to the District website.
5. Posting of all contracts (including vendor contracts and collective bargaining agreements) to the District website.
6. Posting of Freedom of Information Act (FOIA) officer contact information (as well instructions regarding how to submit FOIA requests) to the District website.

I believe these steps are fairly easy given the current state of District technology. I also believe these steps will go a long way to ensuring that Minooka CCSD 201 is run in a manner that is transparent to the public. If anyone has any additional ideas regarding transparency, please feel free to post a comment.