Battle Lines Forming in Lyons School Dispute

An ugly political fight is brewing in Lyons Township, pitting the troubled government agency that manages tax dollars for 13 west suburban school systems against the biggest public school district in the consortium.

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Robert Healy

An ugly political fight is brewing in Lyons Township, pitting the troubled government agency that manages tax dollars for 13 west suburban school systems against the biggest public school district in the consortium.

Either way taxpayers stand to win – or lose – depending on outcomes and outlooks.

Before we get too deep here, a quick primer.

Since last year, the Better Government Association has been investigating the Lyons Township School Treasurer’s office, an obscure but important government agency based in LaGrange Park. "Obscure" because most members of the public probably have no idea it exists. "Important" because it controls more than $200 million in tax money for the 13 districts referenced above.

For a refresher on previous BGA coverage, click on these links:

In short, those links show that the school treasurer’s office was run by an administrator – Robert Healy – with no discernible financial training, but deep political ties. He was investing taxpayer money in questionable places, with financial firms charging questionable fees. And the three-member board of trustees elected to oversee treasurer Healy, who held the appointed post for more than 20 years, was asleep at the switch, allowing him to basically do as he wished.

If you don't see the video above, click here and watch it on CBS2.

To that end, Healy is accused of improperly cashing out unused sick, vacation and personal days to the tune of more than $500,000. He has denied doing anything untoward, but prosecutors appear to be investigating him vigorously. The BGA has learned current and former school treasurer’s office employees and board members have been interviewed by the Cook County state’s attorney’s office, computers and records have been turned over to authorities, and at least two subpoenas have gone out.

Healy, who resigned last year from his post, didn’t return phone calls.

The school treasurer’s office has been trying to clean house since his departure, getting its books in order and determining how much damage Healy may have inflicted.

Amid this process, agency officials said they discovered Lyons Township High School District 204 hadn’t paid all requisite fees to the school treasurer’s office – and may be in arrears by more than $2 million.

The school treasurer’s office not only invests tax money for participating school districts, it also handles payroll, billing and bookkeeping functions. However, District 204 has in-house staff to do much of this, so District 204 officials said a deal was forged with Healy more than a decade ago to let the school system skip payment of certain fees.

Only problem: Healy’s now out the door, and documentation is a tad thin on any deal that might have been brokered. The school treasurer’s office now wants District 204 to cough up unpaid fees, saying state law requires the district to pony up even if it’s not using the treasurer’s office’s services. The school treasurer’s office also insists that other districts have been unfairly subsidizing the office because of District 204’s non-payments.

District 204 officials said they’ve been totally "transparent" about the fee arrangement and insisted they’re not gaming the system. District 204 School Board President Mark Pera said the school treasurer’s office has provided no evidence to support its contention that:

  • The school treasurer’s office board didn’t know about or approve Healy’s fee waiver.
  • The waiver foisted more financial burden on other school systems.

"There’s no substantiation to anything they say, to my knowledge," Pera said. "We’ve been asking for documentation for six months and we haven’t seen document one."

The president of the school treasurer’s office board, Mike Thiessen, who joined the agency after Healy’s problems came to light, said there’s thin documentation on both sides, not just with the school treasurer’s office.

But Pera and Thiessen agreed on one thing: they wish any deal with Healy had been made in writing, which apparently it wasn’t.

Either way, District 204 officials have decided to part company with the school treasurer’s office, so they’re pursuing legislation that would allow the school system to sever ties.

District 204 enlisted the help of state Rep. Jim Durkin (R-Western Springs) to draft a bill, which passed the Illinois House but has an uncertain future in the Illinois Senate.

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State Sen. Steve Landek (D-Bridgeview)

State Sen. Steve Landek (D-Bridgeview), the Democratic committeeman in Lyons Township and a sort of political godfather for the school treasurer’s office, initially put a brick on the bill in his legislative chamber. Now, the top Senate Republican, Christine Radogno, has picked up the measure, but it’s been sent to a sub-committee, where bills often go to die.

Landek relayed to the BGA that he’s "not convinced breaking away is the best" course, suggesting taxpayers are better served by keeping the consortium in tact. If participating districts started handling all of their own financial affairs, "you’re increasing the payroll . . . you’re increasing government," Landek said.

He added: "There’s a procedure for them to leave if they want to leave" – often through referendum – "they’re looking for the easy way out."

But Durkin said he sees things differently.

"We have a fairly sophisticated high school that should be able to do their own accounts receivable . . . and payroll," Durkin said.

As for the beef over fees, "if the township feels they’ve been wronged, . . . file suit, there’s a place for that to be hashed out," Durkin added.

That’s not out of the realm of possibility.

An April 19 letter from Thiessen to Pera said the school treasurer’s office "will examine all options available for recovery of these funds." Thiessen’s agency seems most confident about recouping roughly $285,000 in unpaid audit fees.

The good news here is that the school treasurer’s office is – finally – paying attention to finances and trying to professionalize the operation.

But let’s hope this dispute can be resolved soon – and outside the courts. Taxpayers would be paying for any litigation, and the stakes already are high enough.

This blog entry was written and reported by the Better Government Association’s Robert Herguth, who can be reached at rherguth@bettergov.org or (312) 821-9030.