Category Archives: Public Building Commission

Peoria Public Schools, Public Building Commission

PBC to D150: Get your act together and spend this money!

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The Public Building Commission is worried. They still have $30 million more in bonding capacity, and they might not get to spend it if District 150 doesn’t get its act together soon.

You may recall that the Public Building Commission (PBC) was established in 1955, but school districts used it so much in the 1980s that there was significant voter backlash, which led to the state legislature making school districts ineligible to get funding through the PBC after 1993. Well, District 150 didn’t let that stop them. In 2006, thanks to then Senator Shadid and Representative Schock, District 150 got access to the PBC once again, but only until July 1, 2011. According to a Journal Star article from earlier in the year, “any project needing funding must be significantly completed by July 2011.” And that means there’s not much time left.

Spending PBC money is a win-win for District 150 and the PBC, but not for voters and taxpayers. If municipal organizations stop borrowing from the PBC, it will cease to exist, so the PBC has to keep marketing itself to other governmental bodies. Executive secretary for the PBC James Thornton has been doing just that. For months now, he’s been trying to cajole District 150 to find a way to max out the PBC’s bonding capacity. Of course, the benefit to District 150 is they get to raise taxes for capital projects without having to get voter approval.

District 150 has a new Harrison School and a new Glen Oak School under construction, and they have done remodeling and enlargement at Richwoods, Northmoor, Lindbergh, and Kellar. After all that, they thought they had used up all their PBC bonding capacity, but surprise! Due to recent annexation, the total Equalized Assessed Value of property in Peoria went up. Since the PBC’s bonding authority is set as a percentage of EAV, its bonding capacity also increased. So now the PBC and District 150 are just looking for a project — any project — that will allow them to spend this extra money.

To hear some board members talk about it, they view it as some sort of moral imperative that they use every last dollar of bonding capacity (also known as debt) — that they take full advantage of this “opportunity” to access the PBC before the five-year window closes. Thus, they are doing back bends to try and please the PBC. That’s one of the biggest reasons why they closed Woodruff High School.

That’s no way to make educational decisions. And it’s not in the best interests of taxpayers, either.

Peoria Public Schools, Public Building Commission

District 150 finances in question

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Several days ago, I mentioned that audit reports the last several years for District 150 have been warning about inadequate internal controls. Things are no different this year, the Journal Star reports.

The internal financial review controls at District 150 are at the very least inadequate, resulting in errors, unsubstantiated account balances and generally leaves the district without an accurate day-to-day report of its cash flow, according to a letter from the district’s auditors.

I had also wondered how Cahill could keep his job with such terrible audit reports year after year. Apparently Cahill wondered that himself, according to an e-mail he wrote that the Journal Star acquired through a Freedom of Information Act request:

Cahill said he believed the [audit] letter, received from District 150 this week through a Freedom of Information Act request, would be used in calling for his termination, according to an e-mail from his District 150 account to a Chicago attorney, received through a separate FOIA request.

“The attached will be used by several board members who, I suspect, will call for my firing,” the Feb. 5 e-mail states. “What the management letter does not disclose is that most if not all the items reported have been the norm in the district for more than 14 years, according to auditors (Ron Hilton, Dennis Baily, and Helen Barrick), and cover the terms of at least three controller-treasurers.”

Interesting defense. He’s basically saying that internal controls have always been inadequate, so he shouldn’t be held responsible for their continuing to be inadequate. Not very convincing.

But here’s what really slays me. The headline for this story is “District 150’s books a mess.” But another report filed just hours before this one has the headline: “District 150: Finances in order.” This latter story is about District 150’s meeting with the Public Building Commission to assure them that the district’s finances are not a problem.

Nine District 150 representatives filled a small meeting room before the Public Building Commission of Peoria on Thursday, reassuring its members that the school district is on the right financial path.

“I want to reassure this particular body that the Board of Education immediately began taking action in January to adjust expenditures to meet those predicted revenue shortfalls,” Superintendent Ken Hinton told PBC members. “This board, this administration is completely dedicated in seeing that our school district is solvent.”

Not that this was at all necessary. PBC members appear unconcerned with District 150’s budget woes.

When asked whether the PBC has any concerns about the district’s financial solvency and the district’s ability to repay the bonds, Goldstein and Thornton said “no.” Both men also noted the commission had no concerns about Cahill’s departure.

Really? No concerns at all? The district “has projected it will have a $4.3 million deficit and possible $9 million-plus revenue shortfall next year,” and they fired their controller/treasurer, and their audit reports have been deplorable, but the PBC has no concerns? I guess if you’re an unelected body, unaccountable to the voters, you can afford to take such a cavalier attitude with property tax money.

Museum Block, Peoria County, Peoria Public Schools, Public Building Commission, State Legislation, Taxes

Higher taxes on the way

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A couple of bills are wending their way through the State legislature and are sure to find their way into your pocketbook soon:

  • SB 2071 — School Construction Bonds. Sponsored by Senators Koehler and Risinger, this little bill gives District 150 even more borrowing power by letting the district exceed debt limitations if they use the Public Building Commission (PBC) for matching construction funds. The Journal Star reported on this on March 13: “Part of the intention…, said District 150 Treasurer Guy Cahill, was to use the PBC money as matching funds if the state ever re-authorizes a school construction program.” So if this passes and the state gives them school construction money in the future, evidently the school board would be able to match that grant with PBC funds, which are paid back by taxpayers — with interest. Remember that PBC funds are accessible without a referendum; there’s no accountability to the voters, other than voting out the school board members (a process that takes a number of years, and would only be effectuated after the money is borrowed and spent).

  • SB 2077 — County Code Retailers’ Occupation Tax for Public Facilities. This is also sponsored by Senators Koehler and Risinger, and it just passed the Senate 47-4 yesterday (April 1). It now goes to the House. WMBD-TV had this story: “A bill allowing Peoria County voters to decide whether they want to pay a special sales tax for the proposed riverfront museum passed the Illinois Senate Tuesday…. County officials say it would provide another source of funding for the proposed multi million dollar facility, although the size of the proposed tax hasn’t been determined.”

    The good news is that this tax is subject to referendum. They can only impose this tax if the voters approve it. And, just to sweeten the deal, the county could put a sunset provision on the tax, meaning it would expire on a certain date and a new referendum would have to be approved to reinstate/extend it.

    But here’s the thing — the museum is only one of the many possible uses for this tax. It could also be used for other public facilities, like nursing homes. This opens up many possibilities. They could try to sell a tax referendum that wouldn’t just be for the museum (which has little support), but also for other public facilities that need funding help (which have higher support). That could set up a quandary for voters, and could sway the outcome. Even if that scenario doesn’t happen, the county will now have a new potential revenue source, and they’ll likely find a way to coerce voters into approving it, with or without museum funding (e.g., “if you don’t approve this public facility tax, you will be throwing Bel-Wood residents out onto the street — have you no conscience?!”).

Peoria Public Schools, Public Building Commission

PBC bonding authority raised due to annexations

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In an earlier post, I asked how the Public Building Commission’s bonding authority went from $60 million to $72 million in a short time. Journal Star reporter Dave Haney has the answer:

The $72 million request would essentially put the PBC at the limit of its bonding authority, beyond the $60 million limit previously reported. The PBC has since retired some debt as well as gained more bonding authority through the city annexing more property – the basis by which the PBC’s bonding authority grows, allowing up to five percent of the city’s assessed value.

Another hidden cost of annexation to the taxpayer.

Peoria Public Schools, Public Building Commission

Is District 150 authorized to use PBC bonding authority?

Peoria LogoProbably. After all, the Illinois General Assembly passed Senate Bill 2477 at the end of 2006 in order to give District 150 the ability to access the Public Building Commission for five years.

Or did they?

They did amend the Public Building Commission Act, but they didn’t specifically name District 150. Instead, they changed the definition of “municipal corporation” so that it made an exception for any school that met certain criteria. This amended definition would “include a school district that (i) was organized prior to 1860, (ii) is located partly within a city originally incorporated prior to 1840, and (iii) entered into a lease with a Public Building Commission prior to 1993, and its board of education.”

The idea here was to write the definition so narrowly that only District 150 would qualify. That means District 150 would have to meet all three criteria in the legislation. Peoria’s public school system was chartered by the state in 1855, so the first criterion is met. And of course District 150 most recently entered into a lease with the PBC about 1991-1992 for Lincoln Middle School ($5 million) and Valeska-Hinton Early Learning Center ($7 million), so criterion number three is met.

But what about the second criterion: a school district that “is located partly within a city originally incorporated prior to 1840”? Well, now that’s an interesting question. The City of Peoria was incorporated April 21, 1845. 1845 is obviously not “prior to 1840.” So some have made the case to me that District 150 is therefore not eligible for PBC funding under SB2477.

On the other hand, the Village of Peoria was incorporated on March 11, 1835. Perhaps this is the date of which the bill writers were thinking. But the legislation doesn’t say anything about a “village.” It says “a city originally incorporated prior to 1840.” Cities and villages are two separate and distinct municipal corporations in Illinois.

Splitting hairs? Maybe. But then again, maybe that split hair could save the taxpayers upwards of $60 million they would be forced to pay without a referendum. So, perhaps it’s not such a crazy question after all: Is District 150 authorized to use PBC bonding authority?

Museum Block, Public Building Commission

Rumor mill: Museum “Plan B”

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Tonight at the council meeting, Councilman Bob Manning asked the museum group what they would do if the New Markets Tax Credits funding didn’t come through, or if not enough of it came through for them to be able to move forward on the museum. As he put it, “What’s ‘plan B’?”

The answer he got from Jim Vergon, President of the Lakeview Museum board, was that they would go back to federal, state, and local governments and ask them again for help to make up the difference.

But I’ve heard a rumor that the real “plan B” is for the museum to get money through the Public Building Commission, which of course would be collected through property taxes, all without a referendum or any council action whatsoever. “How can that be,” you ask, “when they’re a private organization and not a public one?” The rumor mill says that Rep. Dave Leitch is already working on legislation that would take care of that problem. Hey, he did it for District 150 — who says he couldn’t amend the law again to allow a “public” museum? He got the city council to use public dollars to guarantee a private loan for Firefly Energy. I wouldn’t be too quick to pass this off as an impossibility.

Of course, this is all unsubstantiated rumor. Take it with a grain of salt… but keep an eye on your wallet just in case it turns out to be true.

City of Peoria, Peoria Public Schools, Public Building Commission

For all you who love our high Peoria taxes…

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Peoria Public Schools logo…get ready for your taxes to go up some more, courtesy of School District 150 with the cooperation of the Illinois State Legislature.

On Nov. 29, the Illinois House joined the Senate in overriding the Governor’s amendatory veto of SB2477 and allowing School District 150 to get bonding authority from the Public Building Commission for a period of five years to build new school buildings. The Governor’s veto would have required a referendum to obtain the bonding authority, but thanks to the override, the taxpayers will not get a say.

Now, instead of our tax rate going down in the next couple of years as older PBC bonds are retired, the tax rate will stay the same or possibly (likely, in my opinion) go up.

Here’s an interesting quote reported by WHOI News:

“I think the most important thing for students, parents and the people looking to relocate to the school district is their children will be in modern educational facilities that are designed for students in the 21st century,” [District 150 Treasurer] Cahill said.

Let me ask you, dear readers, are “modern educational facilities that are designed for students in the 21st century” the “most important thing” to you? Do you think it’s the most important thing for those looking to relocate? When you’re evaluating a school district, is the most important thing to you the age of the school buildings?

Or do you think student performance might be a bigger factor? Or maybe crime? Or what about good teachers? How about taxes? Do you think property taxes have an effect on where people choose to live?

Of course all those things are more important. Nobody moves into a school district because they have shiny new buildings. A building never taught a child. And taxes and student achievement are the biggest reasons people choose to live in Morton, Germantown Hills, or even East Peoria, rather than Peoria.

So the school board keeping the tax rate up while simultaneously focusing all their energy on issues with no correlation to student achievement (i.e., new school buildings) is only going to exacerbate the district’s problems.

Public Building Commission, State Legislation

Our legislators get their facts wrong again

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Last time Rep. Schock spoke on SB2477 on the House floor, he said the City Council supported the legislation, which was not true. Yesterday, Sen. Shadid took to the Senate floor to argue for overturning the Governor’s veto (which is surprisingly easy in Illinois, needing only a 3/5 majority instead of the 2/3 required at the federal level). He pointed out that the District 150 board passed a levy cap of .60% at a recent board meeting, which is true. But then he went on to state that the current levy is .62%, so the levy would go down for Peorians. That’s false. As I reported in a previous post:

First, the school district capped the tax rate at .60%. And, as you can see from Part 1 of this post, the current rate is .5578%. So, even by their own definition it will be a tax increase — an increase of .0422%. And, of course, since this supposed “cap” is only set by the school board and not state law, it could easily be repealed at any time.

Where did I get my information? From the Peoria County Clerk’s office — the ones who actually figure our tax bills. The levy figure came from the 2005 Tax Computation Report (there is no 2006 report yet). So, once again, lawmakers are making decisions based on faulty information provided by those who are supposed to be representing our interests.

But instead of representing the people, Shadid has chosen instead of represent the school board. Let’s hope Koehler doesn’t follow in his footsteps.

Peoria Public Schools, Public Building Commission, State Legislation, State of Illinois

BREAKING NEWS: Illinois Senate overrides Governor’s veto on SB2477

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The Illinois Senate today voted 45-11 to override Gov. Blagojevich’s amendatory veto of SB2477, and Sen. Shadid got a round of applause as this was his last public act before leaving office.

SB2477 would give Public School District 150 the ability to use the Public Building Commission to raise funds for school construction. Blagojevich’s veto amended the bill to require a referendum to access PBC funds. If the House follows suit and overrides the Governor’s veto, the bill will become law as is, and the PBC could sell bonds on behalf of the school board for renovation or construction of school buildings without taxpayer approval via referendum.

UPDATE: Today, I’m unveiling a new feature on my blog: audio! Click the play button below to hear the Senate action today on SB2477:

[audio:http://www.peoriachronicle.com/wp-content/uploads/Audio/SB2477.mp3]

I’m still working out the kinks a bit — for instance, you’ll notice there’s a buzz in the audio; that’s because my current setup for recording is analog and I have a bit of 60-cycle interference. I’ll try to fix that for the future.

My thanks to 1 Pixel Out for the WordPress embedded audio plug-in.

Peoria Journal Star, Peoria Public Schools, Public Building Commission

Journal Star could use some remedial civics classes itself

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Speaking of the Journal Star’s editorial yesterday, they sum up their case for PBC funding with this condescending paragraph:

But again, the primary criticism comes from those who’ve never quite come to grips with the fact that they live in a republic, not a direct democracy. Should District 150 regain its PBC connection, perhaps it should spend those funds constructing a building in which they teach civics, the lessons of which seem lost on a certain segment of the population.

Translation: if you’re against the school being able to get funding through the Public Building Commission (PBC), then you’re an ignorant boob in need of remedial education.

Maybe the editors of the Journal Star should attend those civics lessons instead. They can start by studying the words of Thomas Jefferson in the Declaration of Independence, where he says that governments “deriv[e] their just powers from the consent of the governed.” Thus, if the people don’t want the school board to have the power to spend tax money on new schools without a binding referendum, that is perfectly within the rights of the citizens of a republic.

Indeed, one needn’t throw out the school code or the Constitution, nor do they need to resort to direct democracy, in order to place reasonable limits on their representatives in our current form of government. In the case of the PBC, these limits already exist, and those who oppose PBC funding are not arguing for new legislation, but the status quo.

And since when is it the job of our legislators to represent other municipal corporations? Are Schock and Shadid representatives of the school board or the people? In this case, they’re acting as representatives of the school board, since the people clearly don’t consent to additional bonding authority being given.

And since the Journal Star thinks PBC funding should be available to all, why are they in favor of SB2477 which would only grant this bonding authority (a) for 5 years, and (b) only for Peoria Public School District 150? The Journal Star should be fundamentally opposed to this abridgment of our republic and advocate instead a bill that would completely repeal the 1993 law that stripped all school boards from using the PBC. Of course, such a bill would never pass the legislature, because it’s easier for representatives from elsewhere in Illinois to pass laws that don’t affect their constituents.

Here’s another civics lesson from Bob Bratt: citizens of Illinois have the right under Illinois’ constitution “to make known their opinions to their representatives and to apply for redress of grievances.” In other words, voting our representatives out of office is not our only avenue for participation.