Nov
24
O’Connell threat holds up bond sale
A second threat of litigation from D58 board member Scott O’Connell has led the district’s bond counsel to again postpone the sale of $10 million in life safety bonds, the proceeds of which were slated for roof repairs and other projects.
Bond counsel Chapman and Cutler made the call Nov. 19, four days before the bonds were to be sold, in response to a letter O’Connell sent to the Regional Office of Education and the Illinois State Board of Education. The letter questioned the estimates provided by the district’s architectural firm, according to a statement released today by D58.
Both offices had approved the life safety amendments and cost estimates earlier this year.
“O’Connell requested an investigation into all of the architect’s cost estimates because two roof replacements and a playground replacement that took place this summer, which the bond issuance was to have paid for, came in under budget,” the district said.
“The district temporarily borrowed approximately $2 million from its cash reserves, essentially an emergency fund, to pay for that work with the intention of reimbursing the money with proceeds from the bond sale,” the statement said.
O’Connell believes the district lacks the authority to issue the bonds, which he says are fire prevention bonds designed to bring school districts into compliance with fire codes.
“I don’t think we have the authority to issue these bonds,” he told the DGreport, adding that other districts have done so, but “it doesn’t mean it’s okay.”
“Others have challenged it before the bonds are issued and they have stopped them because the authority doesn’t exist,” he said. “If you challenge it after the fact, the bonds are already issued.”
O’Connell first threatened legal action to prevent the bond sale last June, although he later declined to put his objections in writing as requested by Board President Elizabeth Davis and Chapman and Cutler.
“If he’d respond, the bond counsel could look at his specific objections and we could address them and move forward,” Davis said.
When O’Connell’s written objections weren’t forthcoming, the district’s legal counsel directed Davis to abstain from voting and withhold her signature from the board’s resolution approving the bonds — a move that would allow the matter to go before a DuPage County judge for resolution.
The judge ruled in October that the district had done everything legally required in regards to the bond sale and directed Davis to sign the resolution, which cleared the way for bond counsel to issue a letter of opinion and permit the sale to proceed.
The D58 board earlier this month voted to reimburse Davis for legal expenses of $2,178 incurred in the matter. In all the district had spent less than $40,000 on the matter as of the November 9 board meeting.
At yesterday’s workshop meeting, the board directed its attorney to issue a response to O’Connell’s letter to the ISBE and to research the possibility of bringing in a new bond counsel. The board also asked Controller Jim Popernik to discuss a timetable for repaying the loan from its cash reserves, according to the district.
Meanwhile, the clock is running on the projects already approved, including new roofs at Belle Aire, El Sierra and Kingsley schools. The district has five years to complete the projects.
The judges in DuPage also sided with Wheaton School District 200 in regards to Mr. Mark Sterns repeated request to get a copy of the the Superintendents contract. Mr. Stern took his case all the way to the Illinois Supreme Court where the decision was overturned unanimously and Wheaton School District 200 had to turn over the Superintendents contract over to Mr. Stern.
O’Connell strikes again. How much money is this guy going to cost us? This will be one vote he never gets. Enjoy your time making things difficult Scott (that seems all you want to do). Your time will be done in Spring 2011. You can count on that. In addition your reputation around town has suffered greatly.
The real problem I see is not Scott O’Connell, its that the board will not exercise fiscal restraint. I dare anyone to find me a year where the school board didn’t take in more money in their tax levy. The levy has increased at least 3% each year since 2003. When will the school board live with in their means? You cant just keep taking more tax dollars and offering the same product. These life safety bonds have to be paid back. Anyone know how that will get done? Stay tuned to the tax levy going forward.
Aren’t we all tired of Board members calling other board members names when things don’t go their way. You would think some of these board members would have witnessed enough sand lot name calling during their careers to know that it just isn’t endearing.
Frankly, when bond counsel (and we are assuming D58 picked really good bond counsel) backs out of giving an opinion to the legality of a bond issuance…We know that it isn’t Scott Oconnel who scared them off. There are big time legal fees involved if this thing goes forward. To run away from those fees, legal counsel has to be really concerned over the validity of the issuance…
Scott may have already seen something legal counsel needed to be aware of. Using the “life safety” back door for issuing bonds is not always the best way to get those bonds issued. It can be perceived by many to be out side the guidance given to issuing those bonds when fixing just roofs and not fire escapes, sprinkler sytems, new exits…that which it was intended to do.
While I agree that the board should exercise fiscal restraint. We need to make sure we ask, what cuts at what cost. If they don’t levy, where do we cut. Do we do as Scott suggests and eliminate the working cash fund? I personally disagree. It’s been my experience in business, that when most businesses fail it’s caused by the lack of working cash. Having a working cash fund will be what keeps our district afloat over the next couple of years. I personally support levying for the working cash fund until it reached at least 1/4 of the annual budget. Then we can talk about removing the levy.
As far as the life-safety bond issue goes, I think that it shouldn’t have gotten to this far. I think previous boards going back many years should have foreseen these needs and set money aside in the budget for future maintenance expenditures. They tried to to ask for a .25 levy, which I think was absurd. I believe a nickel levy for building and property maintenance would have been reasonable and probably would have passed. Unfortunately, they did not and now we are stuck with their lack of foresight and have a real issue on hand. I think that is critical for the current board gets the bond issue problem solved. Roofs need to be repaired and along with other list of items that need to be taken care of. Sure we could drain the working cash fund until its gone to pay for some of the roofs. I believe this would be a mistake.
On the note of Scott’s actions (or lack of), if he’s going to keep threaten litigation, do it and stop making idol threats. Not only is he holding up the bond issue, he’s setting a horrible precedent on how an individual can hold publicly elected officials from doing their sworn duty which ends up costing taxpayers money. If there are members of community who support Scott’s view on the bond issue, I wish they would step forward. The closest I’ve seen to backing him is Chad W. above and my response to him is the district can afford to pay the bonds off over the next ten years but needs the money in next three.
I don’t support the way Scott goes about his business on the board, but people in the audience and on the board need to move on past the O’Connell circus and try to save us some money! You cant just raise the levy every year because that is what has always been done. Innovation people! Find ways to do more with less.
The reason school boards levy the maximum allowed is to protect their ability to do so in future years, given that each levy is based on that of the year before. I understand and accept this practice, but I have never understood why school boards apparently never abate taxes if they don’t “need” all the proceeds.
As for the roof fund, I completely agree with Todd Krause that the best remedy would have been a more modest referendum in 2007. While the use of fire prevention bonds for roofs is open to debate, I for one find the current impasse a sorry state of affairs.
Maybe the board should start weighing a referendum just in case.
Well said Todd. Chad I do agree. I am all about saving my money. I feel Scott is costing me more than he’s saving me. That is the exact opposite of what he said he was gonna do.
Funds raised though a referendum would be less costly than issuing Life Safety bonds. If cuts can’t or won’t be be made to free up some money for roof repairs, let’s have Todd’s modest referendum. Let the voters decide how wet our kids should be instead of continuing to blame this board for past mistakes.
Good point, Pete. I’m editing my comment accordingly.