Tag Archives: Block the Bonds

County Clerk throws out petitions without challenge

There’s an article in the print edition of the Journal Star today that I can’t find online. The headline is “Peoria County tosses ‘Block the Bonds’ petition,” with a subhead, “County Clerk rules Citizens for Responsible Spending failed to comply with Election Code.” Here’s what it says:

There will be no referendum on the issue of the bonds to pay for construction of the Peoria Riverfront Museum.

On Friday, Peoria County Clerk Steve Sonnemaker ruled the petitions filed to place the question on the ballot to be in “nonconformity of the Election Code.”

About 1,700 signatures were filed with the Peoria county Clerk’s Office on Monday requesting a referendum, far short of the 9,849 signatures the Citizens for Responsible Spending needed to withstand challenges to getting a question on the February or April ballots in Peoria County.

In a news release, Sonnemaker said the petitions “on their face, lack the required number of signatures and, therefore, do not comply with the Election Code.”

“The change in policy at this time is due to recent court cases that appear to require that the clerk has a duty to examine petitions to determine whether upon their face they are in apparent conformity with the Election Code. The State’s Attorney has this week addressed these court cases in a letter to the county clerk and advised that the clerk should examine for apparent conformity of the petitions based on the requirements of the Election Code and therefore, no referendum issue should be placed on the ballot,” the release states.

“Previously the clerk did not examine petitions for apparent conformity but relied on petition challenges that would be resolved by a three member Electoral Board as in keeping with policy set by the State Board of Elections.”

But Sonnemaker also said, “any action taken by the county clerk regarding petition conformity may be subject to challenge.”

Citizens for Responsible Spending mounted a monthlong petition drive aimed at halting the issuance of $41.6 [sic] million in bonds to help pay for the construction of the $140 million museum project shortly after the City Council and County Board approved redevelopment agreements allowing for construction to commence.

The group also was concerned that the project’s scope has changed since voters endorsed an April 2009 referendum, pumping $40 million of local sales taxes into the project. Some examples of the changes included the possibility an IMAX-brand theater might not be part of the project, the use of general obligation bonds to finance the project instead of revenue bonds and that state grants to move forward with construction have not yet been received.

The relevant statute is 10 ILCS 5/10-8, which states in part, “petitions to submit public questions to a referendum, being filed as required by this Code, and being in apparent conformity with the provisions of this Act, shall be deemed to be valid unless objection thereto is duly made in writing within 5 business days after the last day for filing the … petition for a public question.”

In court cases People ex rel. Giese v. Dillon (1914), North v. Hinkle (1998), and Haymore v. Orr (2008), Illinois courts have consistently found that the County Clerk has the authority to make certain judgments about whether petitions are “in apparent conformity with the provisions of [the] Act.” One of those judgments has to do with whether enough signatures have been gathered. The Haymore decision states:

[T]he Illinois Supreme Court explained that the responsibility for determining whether an election petition apparently conforms to the law rests with the town clerk. Dillon, 266 Ill. at 275-76. Specifically, the clerk’s duty is “to determine whether, upon the face of the petition, it is in compliance with the law.” Dillon, 266 Ill. at 276. If the petition on its face appears to comply with the statutory requisites, the clerk may not look outside the petition to determine whether in fact it does comply; he must submit the question to the voters.

For example, the Clerk cannot determine on the face of a petition whether the signatures are valid, or whether the person circulating the petitions met the legal requirements to do so.

However, the court continued, had the petition not appeared on its face to have complied with the statutory requisites, the clerk would have had no duty to submit the question to the voters. Dillon, 266 Ill. at 276. For example, by examining the face of the petition, a clerk can determine whether it contains the requisite number of signatures. Dillon, 266 Ill. at 276. If it does not, the petition is not in apparent conformity with the election statutes and the clerk has no duty to certify the question for the ballot. Dillon, 266 Ill. at 276.

So, based on that case law, the State’s Attorney has apparently instructed the County Clerk to throw out the petitions. It’s really a moot point because the petitions couldn’t withstand a challenge anyway. Still, it’s interesting that this is apparently the first time the Peoria County Clerk has made this kind of decision, since the State’s Attorney had to tell him to do it, and the Clerk felt it necessary to publish a press release about it.

1,623 signatures not enough to Block the Bonds

In the end, the effort to block the issuance of general obligation bonds fell short. In order to force the issue to a referendum, nearly 10,000 signatures would have to have been collected. The “Block the Bonds” supporters managed to gather 1,623. Considering that the group had only 30 days to gather signatures, and given the complex nature of the petition question (i.e., explaining what general obligation bonds are and why revenue bonds would be preferred), that’s a pretty good showing.

There are a couple lessons to be learned here.

First, the “back-door referendum” option only gives the illusion of offering voters some sort of recourse. In reality, the high number of signatures required in such a short time frame makes it practically impossible to force a referendum. I imagine it was designed that way.

Second, it’s impossible to hold elected representatives and staff accountable for their promises/commitments. Leading up to April 2009, taxpayers were promised that construction would not start until all private money was raised, that revenue bonds would be issued to mitigate the risk to taxpayers, and the maximum bond limit was $40 million. Now we’re starting construction before all the money is raised, general obligation bonds are being issued, and the amount is $41 million. Yet despite these substantial broken commitments, there is no practical recourse for voters. By the time the next election rolls around, the bonds will already have been issued, we’ll already be saddled with debt, and there’s not a thing anyone can do about it.

Some would say “that’s politics,” but I think it’s an affront to the voters. And even though the water is under the bridge on this bonding issue, the incumbents who voted for it should be voted out at the earliest opportunity simply because they’ve proven themselves untrustworthy. Who can believe a word they say?

WCBU news misses the mark

WCBU News this morning said that a successful effort to stop the issuance of general obligation bonds for the museum would be “a moot point” because the County Board could just use a different kind of bond to fund the project. Apparently the reporter fails to understand that the type of bond being used is the issue. If we were to stop the issuance of general obligation bonds and the County issued revenue bonds instead, then we will have prevailed. Hardly a “moot point.”

Usually WCBU does a good job reporting the news, but this story sorely missed the mark.

Urich memo raises questions about museum bonds

If you pick up a Journal Star this morning, you’ll see a “First in Print” article about the museum bonds debate:

Delays in issuing bonds, coupled with changes in the public financing of the Peoria Riverfront Mu­seum, could result in $1.6 million to $3.4 million in additional taxpayer costs, according to a memo is­sued by Peoria County Administrator Patrick Urich on Thursday…. According to Urich’s memo, feder­ally backed Build American Bonds will rebate 35 percent of taxes paid on the bonds issued before New Year’s Day. Urich projects any stall on issuing those bonds until next year could cost $2 million to $2.5 million.

The rebate could be extended at a lesser amount, which would potentially reduce taxpayers’ savings.

“It will cost the taxpayers money if we have to delay,” Urich said Friday.

The type of bonds has been the subject of debate since last week. General obligation bonds, according to Urich, save taxpayers money over a longer period of time because their interest rate is lower. With revenue bonds, the interest rate — and the risk to the bond holder — increases.

Question: Why didn’t Urich tell the voters about all the glories of G. O. bonds before the April 2009 referendum? Just to refresh your memory, here’s what the County said during the weeks leading up to the referendum in town hall meeting after town hall meeting:

If the referendum passes, the County Board has committed to issuing up to $40 million in Revenue Bonds for the museum…. Only money collected from the sales tax increase can be used to pay the Bonds off each year. If the annual payment cannot be met with the sales tax collection, the bond holders bear the burden, not Peoria County or the tax payers…. Why would anyone take the risk to invest in Bonds that may not be paid off annually? As with all investments, the higher the risk, the greater the return. A diverse risk portfolio is a prudent investment strategy, and Revenue Bonds represent a component of that strategy.

Note that the County didn’t say “general obligation bonds” or “Build America Bonds.” They said “Revenue Bonds.” They were very clear and specific. They acknowledged then that Revenue Bonds carry a greater return (that means a higher interest rate) for the bond-holder, but that the trade-off is that the bond-holder carries greater risk. The made it a selling point to the community that “the bond holders bear the burden, not … the taxpayers” if sales tax receipts were insufficient to cover the bond payments.

Now I want to know what has changed since the town hall meetings? Don’t tell me that Build America Bonds are new since then, because they’re not. Build America Bonds were established as part of the American Recovery and Reinvestment Act which President Obama signed into law on February 17, 2009. That was before the referendum, and before the town hall meetings which took place in March and April of that year.

If Revenue Bonds are such a bad, expensive funding mechanism, why did the County promote it in March and April 2009? Why did they sing the praises of mitigating risks to the taxpayer then, but now claim there are no risks to mitigate?

One last question. How can Build America Bonds be used on this project in the first place? The rules for these bonds specifically exclude “private activity bonds,” which are defined as bonds where “more than 10 percent of the proceeds of the issue are to be used for any private business use,” including non-profit businesses. The preamble to the County’s bond ordinance makes it clear that the bonds will “finance the acquisition, construction, and installation of facilities and improvements constituting the art, science, and education components of a new Peoria Riverfront Museum, and related facilities, improvements and costs.” The Peoria Riverfront Museum is a private, not-for-profit organization incorporated June 7, 2010, in the State of Illinois. It’s unclear to me how this project qualifies for Build America Bonds.

Last chance to vote on museum changes

A petition drive was launched today by Citizens for Responsible Spending, County Board members Brad Harding and Merle Widmer, and At-Large City Councilman Gary Sandberg. It’s an effort to allow Peoria County residents the opportunity to vote on whether or not to issue $41 million in general obligation bonds to construct the proposed Peoria Riverfront Museum.

Why? Because things have changed since April 2009 when the revenue to pay for the bonds was approved by the voters. Back then, we were promised they would issue revenue bonds, so as to limit the exposure of Peoria County taxpayers and protect our general sales tax receipts. Now they’re trying to issue general obligation bonds. Back then, they made it very clear there was going to be an IMAX Theater — the contract was just sitting on their desk waiting to be signed as soon as the referendum passed! Now they say IMAX isn’t compatible with their mission. Back then, the County assured us that they would insist that all the private financing be raised and in hand before construction would begin. Now they’re planning to start construction before the private money is raised, before vital grant money is awarded, before they own the land, before the bonds are issued, before the bond hearing is held, and even before Caterpillar has voted on the redevelopment agreement.

In short, the County has betrayed the trust of the Peoria County taxpayers. They’ve reneged on their promises. They’ve broken their word. Peoria County residents deserve better.

The last available option to residents is to gather signatures to put the museum funding on the ballot so we can vote on their real plan, not the bill of goods we were sold in the Spring of 2009.

For more information, or to get involved, please go to BlocktheBonds.com.