Better Government Association
223 W. Jackson Blvd., Suite 900
Chicago, IL 60606

Oct. 30, 2012

Lyons Township School Treasurer’s Office
930 Barnsdale Road
LaGrange Park, IL 60526

Dear Lyons Township school trustees,

As you may know, the Better Government Association is a Chicago-based nonprofit that identifies problems in government throughout Illinois, and tries to fix those problems when possible.

We “expose” through journalism, and “propose” through recommendations drafted by our policy arm.

We have taken an interest in the goings on at the Lyons Township School Treasurer’s Office/Trustees of Schools and conducted research for several months, spurred by local residents and school districts concerned about your operations.

Accompanying this letter, we include a number of reform recommendations that we urge you to seriously consider.

We recognize that some changes are already in the works and appreciate the stated commitment to transparency and sound business practices.

But we believe more systemic change is necessary to demonstrate that politics and poor management have no place in your agency – and that taxpayers, and their money, are paramount.

We are willing to discuss these recommendations with you, as well as any other proposals you are weighing, as needed.

We appreciate your consideration. As a courtesy, we also want to let you know that we will be publicizing our recommendations in the near future.

Sincerely,

The Better Government Association

 

Lyons Township Trustees of Schools and Treasurer Reform Suggestions

Summary

The Trustees have exhibited poor oversight of employees and agency functions, helping to create circumstances that allowed the now-former Treasurer to:

  • Cash in – improperly, according to the office – hundreds of supposedly unused sick, vacation and personal days to the tune of more than $500,000, and manipulate the system that was supposed to track off-days.
  • Put taxpayer money in investments that appear to violate the agency’s own rules as well as state law.
  • Hire friends as consultants, and pay fees that may be above industry standards.
  • Accept and possibly solicit campaign donations from agency consultants.
  • Operate without a budget, and otherwise keep shoddy records.

Solutions

While some positive steps have been taken to clean up the agency in the wake of the troubling disclosures about the now-former Treasurer, Trustees should consider the following reform proposals:

  • The two Trustees who were on the board when the now-former Treasurer was engaging in questionable conduct should resign, and they should be replaced by people with financial experience.
  • Trustees should consider replacing any and all legal and financial consultants who were on the agency’s payroll during the time the now-former Treasurer was there.
  • Trustees should conduct an analysis of legal and financial fees and commissions in recent years to determine whether they were appropriate.
  • The agency should, in conjunction with its member school districts, conduct an independent study to determine the financial wisdom – and process – of eliminating the agency and transferring functions to the member school districts. (The Better Government Association’s analysis of the law is below.)
  • Trustees and member school districts should establish a panel consisting of representatives from each school system to regularly meet and review finances, as well as anything else members deem important, with an advisory role.
  • Trustees should not only establish an annual budget, but make it, along with data on assets and investments, available on the agency web site for public viewing.
  • Trustees should establish an outreach effort to better inform community residents about public meetings, and the functions of the office.
  • Trustees should establish new controls that, among other things, ensure investments adhere to internal regulations as well as state law.
  • Trustees should establish stringent ethics regulations that restrict political donations from agency employees and consultants to campaign funds affiliated with Trustees or agency employees.
  • Trustees and the Treasurer should regularly attend school board meetings of member school districts and publicly brief their officials on the state of finances. (Likewise, a representative from each member district should strive to attend every public Trustee meeting.)

Replacement Process – Based on 105 ILCS 5/5-14:

In the case of a Township Trustees of Schools vacancy, the remaining trustees fill the position. If they fail to act within 30 days, the regional superintendent makes the appointment. This process applies unless the vacancy occurs within less than 28 months remaining in the term or less than 88 days before the next election for the office. In that case, the vacancy isn’t filled until the next election.

Abolishment History and Process – Based on 105 ILCS 5/5-1:

While the Township Trustees of Schools are one of the oldest forms of local government, the General Assembly has been taking steps to reduce their number over the past 50 years. In 1962, any Township Trustees of Schools that were located in a County with a population of less than 200,000 were abolished. This rule essentially abolished all Trustees and the corresponding treasurer except in Cook County.

Since in 1989, any elementary or high school district with a student population between 2,500 and 6,500 and that is coterminous with another district of opposite type can, by proper resolution, withdraw from the township trustees and elect or appoint their own board of its own school treasurer.

Township trustees and township treasurers can be abolished through a joint decision by all effected districts. This decision then goes to voters via a referendum. If the referendum passes with a majority vote in each effected district, the Township Trustees of Schools and position of township treasurer is abolished.

Conclusion

The Trustees exhibited poor management, and the agency needs to dramatically alter operations, and soon, to ensure the integrity of tax dollars and the education of thousands of children.

As the office and affiliated school districts implement reforms, including possible dissolution of the treasurer’s position, the Better Government Association is willing and able to meet and discuss proposals should Trustees and school districts want to flesh out the above recommendations or other ideas.

The main BGA contact is Policy Coordinator Emily Miller, who can be reached at emiller@bettergov.org or (312) 821-9034.