The Authority To Transfer Money Between Operational Funds For Any Reason May Expire On June 30, 2016

By Alan Mullins and James Petrungaro

 May 20, 2016

Since 2003, the School Code (Section 17-2A) has permitted boards of education to transfer money between the Educational, Operations and Maintenance, and Transportation Funds for any reason provided that the board first conducts a hearing on the transfer and authorizes the transfer by resolution.  The authority to make transfers between those funds for any reason, however, is set to expire on June 30, 2016. Without an extension of the sun-setting provision, inter-fund transfers will be permitted only to meet a one-time, non- recurring expense in the other eligible fund.

House Bill 5529 would extend the current flexible transfer arrangement to June 30, 2019.  As of publication, the bill is set for third reading in the Senate.  We recommend that all business officials closely follow this bill. Although extensions have been authorized by the General Assembly in the past, given the climate in Springfield and thus the uncertainty of this bill passing before June 30, your District may be well- served to consider its inter-fund transfer needs before the current authority expires on of June 30, 2016.  Please take care to schedule enough time to publish the required statutory notice of the public hearing at least 7 days before the hearing and final board action.

REMINDER: Boards of education may also transfer interest earned on district money to the fund most in need of the interest income as determined by the board under Section 10-22.44 of the School Code. Boards of education may not transfer interest that has been earmarked or restricted by the boards, or earned on Illinois Municipal Retirement Fund money, Tort Immunity money, Fire Prevention, Safety, Energy Conservation and School Security Purposes money or Capital Improvements money.  Illinois State Board of Education rules require that boards of education adopt a resolution transferring the interest by June 30 of each year, otherwise the interest becomes part of the principal of the respective fund and can no longer be transferred as interest.  If your school board wants to transfer eligible interest income earned during the past fiscal year, it must do so by June 30th.

Tags:  Operations; Finance; Fund Transfer

 

ANOTHER EXAMPLE OF WHY CERTIFICATES OF INSURANCE ARE BASICALLY WORTHLESS

July 6, 2015


By: Alan M. Mullins


         Previously we told you that your District named as an additional insured on a certificate of insurance can be a legal illusion if the underlying policy provides that coverage is secondary to other applicable policies. A recent Court Decision reminds us why being named as an additional insured on a certificate of insurance may not seem what it implies.


         In this contract dispute, a construction contractor held a contract to renovating a condo and entered into a subcontract for plumbing work. The plumber caused damage to other condos. The contractor was sued and its insurance company defended it. The contractor’s insurance company then sought reimbursement from the plumber’s insurance company, since it was subrogated to the contractor’s rights.


         The plumber’s certificate of insurance named the contractor as an additional insured and said the plumber’s policy was the primary policy. However, the certificate also stated that the contractor was an additional insured “as required by written contract.” Therefore, the contractor only had to show that the subcontract required the plumber to name the contractor as an additional insured on its Commercial General Liability ("CGL") policy.


         The contractor did not meet this requirement, however, because it was sloppy with the subcontract. The subcontract required the plumber to name the contractor as an additional insured only on the certificate of insurance, not the insurance policy itself. Beyond the fact that certificates of insurance are generally not legally enforceable, the certificate actually provided that it was issued for information purposes only, did not confer any rights upon the certificate holder and did not amend or alter the policy.


         We remind you to be wary of certificates of insurance. If you want your District to be fully protected, your contracts must insist that contractors provide proof of a policy amendment, endorsement, rider, etc. that names the District as a primary additional insured. Do not hesitate to contact us to help you navigate this tricky contractual maze.

Illinois Adopts New Requirement for Student Religious Exemptions from Vaccinations

August 24, 2015

By Parker R. Himes and James A. Petrungaro

            On August 3, 2015, Governor Rauner signed into law Public Act 99-0249, which adds a requirement that parents or guardians of students claiming a religious exemption from vaccinations must complete and submit a Certificate of Religious Exemption before the exemption will be honored.  The Illinois Department of Public Health will make available the necessary certificate.

            Prior to adoption of the new legislation, parents or guardians of students claiming a religious exemption from vaccination were merely required to submit a signed statement of objection to the district.  Illinois now requires a standardized Certificate of Religious Exemption to claim a religious exemption from vaccinations.

            Notably, the title of the new form is a bit misleading.  The Certificate does not require, for example, a priest, rabbi or other religious leader to confirm the family’s religious beliefs.  Rather, the Certificate requires that the student’s health care provider explain in detail to the parents or guardians the risk to the student and to the population as a whole that would arise from abstaining from vaccinations.  After informing the parents or guardians of the risks, the health care provider must sign the Certificate confirming that risk information was provided to the parents or guardians.  The health care provider does not authorize the legitimacy of the family’s religious exemption.  In addition, the Certificate reflects the parents’ or guardians’ understanding that their child may be excluded from school in the case of a vaccine-preventable disease outbreak or exposure. 

            Parents or guardians must submit the Certificate to their child’s district prior to the child entering kindergarten, sixth grade, and ninth grade.  The Department of Public Health states that this new requirement will be in place for religious exemption requests beginning October 16, 2015.  The Illinois State Board of Education and the Department of Public Health will soon make the Certificate available on their websites.

            Should you find yourself confronted with an issue concerning student vaccinations, please contact an attorney at the Firm so we may guide you through the new process.

THE BOARD OF EDUCATION MUST DESIGNATE OR TRANSFER INTEREST EARNED DURING THE PAST FISCAL YEAR

REMINDER: THE BOARD OF EDUCATION MUST DESIGNATE OR TRANSFER INTEREST EARNED DURING THE PAST FISCAL YEAR BY JUNE 30, 2015 OR LOSE THE ABILITY TO TRANSFER THAT INTEREST TO THE FUND MOST IN NEED

April 9, 2015

By:  Alan M. Mullins & James Petrungaro

Section 10-22.44 of the School Code provides in part that boards of education may transfer interest earned on district money to the fund most in need of the interest income as determined by the board of education.  This transfer authorization does not apply to any interest that has been earmarked or restricted by the board of education, or earned on Illinois Municipal Retirement Fund money, Tort Immunity money, Fire Prevention, Safety, Energy Conservation and School Security Purposes money or Capital Improvements money.

The Illinois State Board of Education rules provide that unless otherwise specified by board of education resolution adopted by June 30 of each year, the interest becomes part of the principal of the respective fund and can no longer be transferred as interest. For example, if the district’s Transportation Fund earned $10,000 in interest during the past fiscal year, the board may pass a resolution by June 30, 2015 to transfer that interest to the Education Fund, if determined to be the fund most in need. In the alternative, the board may pass a resolution specifying that the interest   is   to   remain   interest   and   not   become   part   of   the   Transportation   Fund’s principal. Otherwise, that interest becomes part of the principal of the Transportation Fund after June 30 and is subject to the requirements regarding the transfer of principal from the Transportation Fund and not the less restrictive requirements regarding the transfer of interest.

If your school board wants to transfer, or designate as interest, eligible interest income earned during the past fiscal year, it must do so by June 30. Otherwise, the interest becomes part of the fund principal. Any transfers or interest designations must be accomplished through a resolution.  Please contact Alan Mullins if you have any questions regarding interest transfers or interest designations or if you need assistance preparing a resolution.

DO SCHOOL DISTRICTS REALLY HAVE TO OBTAIN A PERFORMANCE BOND AND A PAYMENT BOND FROM CONTRACTORS?

November 18, 2014

By Alan M. Mullins

School districts routinely require contractors to provide both performance bonds and payment bonds for school construction projects.   But are both necessary?   Can school districts be liable to subcontractors if they only obtain a performance bond?  The Illinois Supreme Court recently ruled that school districts would not be liable if they only received a performance bond and you may be surprised why.

In Lake County Grading Company, LLC v. Village of Antioch, a village obtained performance bonds from a contractor but did not obtain a separate payment bond.  The contractor went bankrupt and the sub-contractor sued the village for not obtaining a payment bond from the contractor. The village argued that it was not liable because the performance bond would have covered the subcontractor’s claim had it been filed within the required 180 days.  The Illinois Supreme Court agreed with the village.

The Bond Act provides that when contracts are for $50,000 or more, local governmental entities such as school districts must require contractors to furnish “a bond” and “the bond” shall cover the completion of the contract and payment for materials and subcontractors.   The Bond Act further provides that all such bonds shall guarantee: 1) the performance of the contract, and 2) that all people or entities that have contracts with the contractor or subcontractors will be paid, whether or not provisions to that effect are included in the bonds. Last, anybody who has a claim under a bond must file it within 180 days of the date the last item of work was completed or last item of material was finished.

 

It has been the general belief that contractors must provide two bonds, a performance bond and a payment bond. That view no longer prevails.  The Illinois Supreme Court ruled that the language described above requires only one bond from contractors and that bond will cover the completion of the contract and payment of material men and subcontractors even if it does not specifically say so.   In the case before the Supreme Court, the subcontractor did not have a claim against the village because filing a claim against the bond was its only remedy.  However, it could not file a claim against the bond because the 180 days for doing so had expired.

 

There are two practical effects to the decision.  Other than a bid bond, school districts can be safe in requiring only a performance bond when contracting for a construction project.  With this legal development, it may be appropriate for public bodies to reconsider the bond requirements typically included in their bid solicitations since it could mean lower construction costs.  We are prepared to assist you with your next RFP and contract drafting.  Furthermore, material men and subcontractors have to realize that if a contractor provides only one bond and that bond does not contain specific payment provisions they still have to file claims on that bond within 180 days.

FAQ – Firearm Concealed Carry Act

 November 5, 2014

By: Adam Dauksas

 Last Fall, Scariano, Himes and Petrarca, Chtd., alerted its clients as to the requirements of the Firearm Concealed Carry Act, which generally permits Illinois citizens to now carry concealed firearms in public.  As the law has begun to take effect, however, there have been some common questions that the Firm has received:

  •  Can a person drive onto a school’s parking lot with a concealed firearm and store it in their vehicle?

Yes. While the law makes it illegal for a licensed individual to carry a concealed firearm on or into the property of a public school, there is a limited exception regarding parking lots. A person may drive onto the parking lot of a public school with a concealed firearm in their vehicle and store it in a “case” out of plain view, inside of the locked vehicle. The law defines a “case” as a glove compartment or console that completely encloses the firearm, the trunk of the car, or a firearm carrying box, shipping box, or other container. In addition, the law provides that a person may carry a concealed firearm “in the immediate area” surrounding their vehicle within a school’s parking lot but only for the limited purpose of storing or retrieving it from the vehicle’s trunk; provided, however, the concealed firearm must be unloaded prior to exiting the vehicle.

  • Where do the signs that a school is required to post need to be located?

Signs stating that the carrying of firearms is prohibited must be clearly and conspicuously posted at the public entrances to school buildings, administrative offices, athletic fields, and parking lots (notwithstanding the exception noted above). The signs, a printout of which can be found here, must also be at least 4 inches by 6 inches in size.

  • Has the Illinois State Police Department issued any additional guidance about the “clear and present danger” reporting requirement?

Yes. The State Police have promulgated an administrative rule that addresses this issue, as well as made available a form and instructions for how school administrators are to report their determinations of students who constitute a “clear and present danger.” This form must be sent directly to the State Police within 24 hours of the determination being made. In addition, the administrative rule provides that reporting must be made consistent with the Family Educational Rights and Privacy Act (“FERPA”).

If your school district has any additional questions concerning the Firearm Concealed Carry Act or needs assistance in drafting its policy regarding “clear and present danger” reporting, contact Scariano, Himes and Petrarca, Chtd.

 

 

NEW RELIEF FROM ONEROUS FOIA REQUESTS MAY BE ON THE WAY

October 17, 2014

By James A. Petrungaro

A little-publicized piece of FOIA legislation that was rushed through both chambers of the General Assembly at the end of the last legislative session will soon be on its way to the Governor’s desk. If signed by Governor Quinn, House Bill 3796 would amend FOIA and create a new set of rules for responding to a “voluminous request.” Included in the relief would be additional time for the public body to respond and the ability to charge the requester fees for voluminous electronic records. The same legislation would also allow a public body to refer a requester to its website if the records requested, no matter their size, are publicly available on the website. A limited exception would apply where the requester can demonstrate an inability to access the Internet.

Scariano, Himes and Petrarca is tracking the legislation closely and, if signed by Governor Quinn, will provide a substantive review of the law’s new requirements.

PAC REJECTS ANOTHER BOARD’S PUBLIC COMMENT RULE

 October 10, 2014

By James A. Petrungaro

We recently reported that the Illinois Attorney General’s Public Access Counselor (“PAC”) rejected a public body’s requirement that an individual wishing to participate in public comment at a board meeting must publicly state her home address when providing comment to the board. In a new decision involving a separate dispute over the lawfulness of a public body’s prerequisite to addressing the board during public comment, the PAC has again ruled in favor of public access.

At issue was whether a County Board’s policy requiring anyone wishing to participate in public comment to pre-register in writing at least five-business days prior to the meeting. The PAC ruled that the onerous pre-registration requirement violates the Open Meetings Act because it does not further the speaker’s statutory right to address the board, subject only to reasonable rules of the public body that are tailored to preserve order and decorum at the meeting.   The PAC particularly noted that under the County Board’s rule, a member of the public would be obligated to register before the County was obligated to even post its meeting agenda.

Many school districts and other public bodies require some form of public comment registration at their meetings. These often take the form of a single sign-in sheet or individual public comment cards. The PAC’s decision does not address such a registration rule and we envision these requirements to be reasonably related to the orderly operation of the public meeting. Should you have any questions concerning your board’s public comment policy and rules, we are ready to assist you.

Appellate Court Sides with Municipality in Dispute with School District Over Application of Municipal Zoning Rules

September 29, 2014

By Anthony Scariano III

Recently, in Gurba v. Community High School District No. 155, the Illinois Appellate Court held that school districts located within home-rule municipalities are subject to local zoning ordinances. You may even recall the highly-publicized events that gave rise to the litigation.

In response to a failed inspection of the Crystal Lake South High School football bleachers, the school district decided to construct new $1.8 million bleachers. But the school district did so without notifying the City of Crystal Lake or seeking an exception from the city’s zoning code. Neighboring homeowners were disturbed by the new bleachers’ stature and proximity to their homes and eventually sued the school district. The school district maintained that it was not subject to the city’s zoning ordinances. The trial court ruled in favor of the city, and the school district appealed.

The Appellate Court rejected the argument that ISBE’s Health/Life Safety Code shields school districts from municipal zoning burdens. The court noted that the Health/Life Safety Code makes no mention of zoning issues and thus could not preempt the city’s zoning code.

The court recognized that the Illinois Constitution gives the State, not municipalities, broad authority when it comes to regulating education. However, the court stated that provisions of the Illinois Constitution infer that “in the case of a conflict between a home-rule unit and a school district, there is a slight bias toward the home- rule unit.”

Finally, the court held that because the School Code allows school boards to seek zoning variances regardless of whether they are located within a home-rule unit, the law indicates an intent for school districts to comply with municipal zoning regulations.

While the court’s decision only pertains to school districts located within home-rule municipalities, it underscores the importance of consulting with your attorney before construction projects begin. The court’s deference to the School Code’s provision on zoning may mean that schools need to seek local zoning oversight regardless of the municipality’s home-rule status.

ILLINOIS EAVESDROPPING LAW DECLARED UNCONSTITUTIONAL BY ILLINOIS SUPREME COURT

March 2, 2014

By James A. Petrungaro

 Today, the Illinois Supreme Court announced that the Illinois eavesdropping law (Article 14 of the Criminal Code) is unconstitutional because it criminalizes wholly innocent conduct and conversations never intended to be private, thus violating the due process protections of the U.S. Constitution.

Prior to its being declared unconstitutional, Illinois’ eavesdropping law was the only law in the country that required all parties to a conversation to consent to its recording. If even one person participating in a conversation failed to consent (expressly or impliedly) to the conversation being recorded, no matter the circumstances of the conversation, it would be a violation of the eavesdropping statute to record that conversation. Most other states require consent of only a single party to the conversation.

Considering two criminal cases where citizens were prosecuted for recording conversations without the consent of all parties (one case involved the recording of a phone conversation; the other involved the recording of a conversation with an attorney and a judge), the Supreme Court considered the over-reaching application of Illinois’ law and its criminalization of innocent conduct. For example, the Court noted that recording an open conversation in a public square or at a public sporting event – conversations that lack any reasonable expectation of privacy – would be criminal absent consent from each of the conversation participants.

With this ruling, the criminal aspect of the eavesdropping law in Illinois is no longer enforceable. Although the eavesdropping law includes a civil penalty as well, which the Court did not address in today’s decisions, it is likely that the lower courts will interpret the entire statute to be unconstitutional. While the Legislature may pass a more narrowly tailored law in the future that would prohibit the recording of truly private conversations, there is presently no general law against recording conversations.

With the eavesdropping law no longer enforceable, School Districts may face situations in which individuals either openly or surreptitiously record conversations with staff, administrators and/or board members. Scariano, Himes and Petrarca is analyzing the impact of the Court’s decision and is prepared to assist you as you encounter these situations.

THE ILLINOIS FIREARM CONCEALED CARRY ACT PROHIBITS FIREARMS ON SCHOOL GROUNDS AND ADDS REPORTING REQUIREMENT FOR ADMINISTRATORS

December 9, 2013

By Parker Himes

Under the recently enacted Firearm Concealed Carry Act (PA 098-0063), licensed Illinois citizens will be permitted to carry concealed firearms.

While concealed carry is now generally permitted in Illinois, it will still be illegal to carry a concealed firearm on the property, including parking areas, athletic fields, etc., of pre-schools, child care facilities, and public and private elementary and secondary schools.  Property, including parking areas, athletic fields, etc., under the control of a public or private community college, other college, or university will also be off-limits.  Further, concealed carry will be prohibited in any building or portion of a building under the control of a unit of local government.  These locations are a few of the “prohibited areas” listed in the law.

Another important aspect of the law concerns a new reporting requirement for school administrators.  Under the Act, the principal of an elementary or secondary school, or the principal’s designee, and the chief administrative officer of a community college, other college, or university, or designee, must report to the Department of the State Police, within 24 hours, when a student has been deemed a “clear and present danger” to himself or others. The Act defines “clear and present danger” as a student who “demonstrates threatening physical or verbal behavior such as violent, suicidal, or assaultive threats, actions, or other behavior as determined by a physician, clinical psychologist, qualified examiner, school administrator, or law enforcement agent.”

If you have questions about the impact of the Firearm Concealed Carry Act, we urge you to contact an attorney at the Firm so we may help with your specific concerns.

DuPage County Clerk Will No Longer Limit The Extension For The Transportation Fund

December 4, 2012

By: Alan Mullins

The DuPage County Clerk has historically had a practice of limiting the tax rate limit for school district transportation funds at 0.2%. When one of our DuPage County clients attempted to increase its transportation levy, the DuPage County Clerk replied that it would not extend the levy beyond the 0.2% limit.

Scariano, Himes and Petrarca challenged the Clerk and cited the Property Tax Extension Limitation Law section and School Code sections that must be considered when determining whether the transportation fund has a tax rate limit. We took the position that the transportation fund tax rate is to be unlimited.

Recently, the DuPage County Clerk changed its practice and agreed that the transportation fund levy is to be unlimited.  As a result, the County Clerk will now extend the levy beyond 0.2% for the transportation fund. If your District needs assistance with issuing its tax levies, do not hesitate to contact us for assistance.

BUS CONTRACTS NO LONGER MUST BE AWARDED TO THE LOWEST RESPONSIBLE BIDDER October 5, 2012

June 12, 2012

By: Adam Dauksas

Public Act 97-951, which took effect in August, amended the portion of the School Code relating to contracts in excess of $25,000 to provide that contracts for the transportation of all students – not just those with special needs or disabilities – are now exempt from the lowest responsible bidder requirement.

Transportation contracts must still be advertised in the same manner as other competitive bids, but are now to be awarded by first considering the bidder or bidders most able to provide safety and comfort for the students, the stability of their service, and any other factors set forth in the district’s RFP regarding quality of service, then price.

In addition, language was also added to the law which provides that no cause of action will lie against a school board for awarding a transportation contract in accordance with these changes unless “the cause of action is based on fraudulent conduct.”

Prior to these recent changes in the law, only transportation contracts for students with special needs or disabilities were exempt from the lowest responsible bidder requirement, and no limitation on a school board’s liability pertaining to transportation contracts was provided.  Thus, Public Act 97-951 represents a significant development in the law affecting school districts throughout Illinois.  Should your district have any questions about these changes or need assistance in developing a transportation bid package, please do not hesitate to contact Scariano, Himes and Petrarca, Chtd.

REMINDER: THE BOARD OF EDUCATION MUST TRANSFER INTEREST EARNED DURING THE PAST FISCAL YEAR BY JUNE 30, 2012 OR LOSE THE ABILITY TO TRANSFER THAT INTEREST

 May 18, 2012

By: Alan M. Mullins

Section 10-22.44 of the School Code provides in part that boards of education may transfer interest earned on district money to the fund most in need of the interest income as determined by the boards of education.  This transfer authorization does not apply to any interest that has been earmarked or restricted by the board of education, or earned on Illinois Municipal Retirement Fund money, Tort Immunity money, or Fire Prevention, Safety, Energy Conservation and School Security Purposes money.

The Illinois State Board of Education implementing rules provide that unless the board of education adopts a resolution transferring interest by June 30 of each year, the interest becomes part of the principal of the respective fund and can no longer be treated as interest.  For example, if the district’s Transportation Fund earned $10,000 in interest during the past fiscal year, the board may pass a resolution by June 30, 2012 to transfer that interest to the Education Fund, the fund determined to be the most in need.   Otherwise, that interest becomes part of the principal of the Transportation Fund and after June 30 is subject to the requirements regarding the transfer of principal from the Transportation Fund and not the requirements regarding the transfer of interest.

If your school board wants to transfer eligible interest income earned during the past fiscal year, it must do so by June 30.  Otherwise, the district loses the authority to transfer any interest.  Any transfers must be accomplished through a resolution. Please contact Alan Mullins in our Chicago office if you have any questions regarding interest transfers or if you need assistance preparing a resolution.

 

 

GIFT BAN ACT BASICS

November 12, 2010

By: Justino D. Petrarca and Jessica M. Bargnes

The ethical conduct of elected officials and governmental employees including school board members and district employees has come under increased scrutiny over the years.  As the date of the Illinois Association of School Board’s 2010 Joint Annual Conference approaches, Scariano, Himes and Petrarca, Chtd. would like to remind you about the prohibitions contained in the Illinois Gift Ban Act. The Act generally prohibits a board member or district employee from soliciting or accepting any “gift” - including food and drink - from any “prohibited source” as defined in the Act, or in violation of any State or federal law. 

1.          MANDATE

The Gift Ban Act generally prohibits public officials and/or employees from soliciting or accepting any gift from a "prohibited source."   The mandate covers Board members, employees (full and part time), and Board member or employee spouses and immediate family members residing with the Board member or employee.  This prohibition is very broad and applies unless the "gift" fits one of the exceptions noted in number 3 below.

2.          "PROHIBITED SOURCE"

A "prohibited source" is any person or entity which:

a.         Seeks official action from the Board, its members or employees;

b.         Does business or seeks to do business with the board, its members or employees;

c.         Conducts activities regulated by the Board, its members or employees;

d.          Has interests that may be substantially affected by the performance of duties of the Board, its members or employees; or

e.         Has registered or is required to be registered with the Secretary of State as a "lobbyist."

3.          GIFT BAN EXCEPTIONS

There are several exceptions to the Gift Ban Act.   Below we highlight only those most relevant to the upcoming IASB conference in Chicago.

The restrictions of the Act do not apply to:

a.         Opportunities, benefits and services available on the same conditions as for the general public (i.e. theater tickets).

b.         Anything for which the Board, its members or employees pay market value.

c.         Educational materials and "missions" having a close connection to the recipient's office or employment; that predominantly benefit the public, not the recipient; and that are approved by the recipient entity's local ethics officer in advance of the "mission" or receipt of materials.    If advance approval is not practicable, then approval must occur as soon thereafter as practicable, with a detailed explanation as to why advanced approval was not possible.    At the IASB conference, be conscious of those gifts distributed in the vendor exhibition hall.

d.          Travel   expenses   having   a   close   connection   to   the   recipient's    office   or employment,   and which predominantly   benefit the public, not the recipient. These travel expenses must be in a manner and style characteristic with the conduct of State business and are subject to the same prior approval requirements noted above.  Beware of limousines!

e.               Food and refreshments not exceeding $75 per person per calendar day.   In order to qualify for this exception the food must be either catered or consumed on the premises from which the food was purchased or prepared.

f.           Any item(s) from any one prohibited source during any calendar day having a cumulative total value of less than $100.   With this exception, a school board member or district employee most likely may accept the souvenirs offered at the IASB Joint Annual Conference vendor exhibition hall!

With regard to the IASB Joint Annual Conference,  we caution that the greatest scrutiny will be focused on the cost and location of hotel rooms, the occupants of those rooms (relatives,  friends,  etc.),  transportation expenses to,  from,  and during the conference, meals,   liquor purchases,  tours,  tickets to   events (plays, concerts, etc.), and other items/services of value that may not easily fit any of the noted exceptions.

If you have specific questions about the application of the Illinois Gift Ban Act, please do not hesitate to call Scariano, Himes and Petrarca.  We look forward to seeing you at the Illinois Association of School Board’s Joint Annual Conference!

Q & A - District Obligations Under the Amended Election Code

November 9, 2010

By Alan M. Mullins

Public Act 96-1008 moved the time period for filing candidate nomination papers from the second and third weeks of January to the second and third weeks of December.  For the April, 2011 school board election, the first day for filing nominating petitions is December 13, 2010, and the final day is December 20, 2010. The period for filing objections to nominating petitions begins after the last day for filing and continues for the five business days following the final filing date.  Accordingly, the last day for filing objections is December 28, 2010.  The amended Election Code provides that the office of the local election official, often the board or district secretary, must be open until 5 p.m. of that last day, regardless of the regular closing time for the office.  Given that most school districts will likely be out for winter break during at least a portion of the five business day period for filing objections, questions have arisen as to how a school district’s local election official can satisfy the legal requirements of the amended Election Code.

  •  Does the District’s Administrative Office have to remain open each business day during the time period for filing objections?

Yes.  The time period for filing objections begins Tuesday, December 21, 2010 and ends at 5:00 p.m. on Tuesday December 28, 2010.

  • What hours must a District’s Administrative Office Remain Open During the Objection Period?

District offices must remain open for at least seven hours on each of the five days objections may be filed.  The Election Code defines a “business day” as “any day in which the office of (the school district) is open to the public for a minimum of 7 hours.”  Days on which the office is not open for at least seven hours would not be a “business day” as defined by the Election Code.

  • Does the District’s Administrative Office have to remain open on December 23, 2010?

Yes.  Friday, December 24, 2010 is a State holiday.  However, Thursday, December 23, 2010 is not a State holiday. Accordingly, a District’s administrative offices must remain open on December 23, 2010.

We acknowledge that there are differing opinions and interpretations of the provisions of amended Election Code discussed herein.  While our reading of the statute is narrow and our advice conservative, a District minimizes its risk of violating the statute by remaining open for seven hours each business day during the objection period including on December 23, 2010, with the District’s administrative office remaining open until 5:00 on December 28, 2010.

If you have any specific questions regarding when your District’s office must remain open during the objection period, please contact Alan Mullins at 312-565-3100, Ext. 236 or amullins@edlawyer.com.

FOIA ALERT

 October 5, 2010

Many of our clients have recently received an extensive FOIA request from “Scott O’Connell” seeking disclosure of legal opinions issued to the school district by ISBE. We have prepared a model response to this request. If you have received this request and desire assistance in forming a response, please contact attorney James Petrungaro at 312-565-3100 ext. 257 or at jpetrungaro@edlawyer.com.

Recent Amendments to the School Code Provide School Districts Flexibility in Transferring Money Between Funds

September 7, 2010

By: Alan M. Mullins

The Governor recently signed two bills into law that provide school districts with more flexibility in transferring money between funds.  In the past, the School Code did not specifically provide that school districts could abate (partially abolish) their working cash funds and permanently transfer money to other funds, but school districts often did so.  In 2009, the Illinois Appellate Court ruled that school districts could abate their working cash funds, but could only permanently transfer the money to their education funds.  That ruling left many school districts open to tax rate objections for permanently transferring working cash fund money to funds other than their education funds.

In order to provide school districts more flexibility in transferring money between funds, the first bill, now Public Act 96-1277, amends the School Code to add Section 20-10.  That section specifically provides that school districts can abate their working cash funds and permanently transfer the money to any fund that is most in need of the money.  School districts can make such transfers if following the abatement, the working cash fund balance (including taxes levied for working cash fund purposes and not yet collected and amounts temporarily transferred from the fund and not yet reimbursed) equals at least .05% of the then current equalized assessed value of the taxable property in the district.

Further, in response to the pending tax rate objections that could have potentially cost school districts millions of dollars, the new legislation (Public Act 96-1277) also authorizes any working cash fund abatement made prior to July 26, 2010, provided the transfer satisfies the criteria set forth in Section 20-10 of the School Code discussed above.

The second piece of legislation (Public Act 96-1201), amends Section 17-2A of the School Code to extend the time period for school districts to make interfund transfers, subject to certain requirements, between the education, operations and maintenance and transportation funds from June 30, 2010 to June 30, 2013.

Challenging Property Assessments To Increase School Funds

April 19, 2010

By Alan M. Mullins

All taxing bodies have the right to appeal the assessed values assigned to properties within their boundaries, whether by initiating appeals or by intervening in the property owners’ appeals.  The Illinois Appellate Court recently held that a school district’s right to appeal a perceived under-valuation of a property is no less important than the property owner’s right to appeal a perceived over-valuation.

In Minooka Community High School District No. 111 v. Illinois Property Tax Appeal Board, the City of Aux Sable owned a natural gas extraction facility.  It appealed the 2004 assessed value of its property to the Property Tax Appeal Board (“PTAB”).  Once Aux Sable filed its appeal, the local school districts were precluded from initiating their own appeal of Aux Sable’s assessed value because PTAB will accept only one appeal for any property for a particular tax year.  PTAB requires other parties who wish to file related appeals to intervene in the pending appeal, which the local school districts did.

After the school districts filed their joint intervention, Aux Sable decided that it would rather accept the assessed value given its property than face the school districts’ appraisal evidence at a hearing, and thus filed a motion to voluntarily dismiss its appeal.   The school districts objected because they wanted their under-valuation claim heard. PTAB granted the motion to dismiss and the school districts appealed that decision to the Appellate Court.  In a victory for intervening school districts, the Appellate Court held that PTAB lacked the authority to dismiss an appeal over the school districts’ objections.  In essence, the Court held that even though the property owner abandoned its over- valuation claim, the school districts could continue to pursue their under-valuation claim.

In times of teacher layoffs and slim budgets, school boards cannot afford to ignore the undervaluation of properties within their districts. Yet we observe that by and large, our clients are under utilizing the property tax appeals process, thereby potentially leaving money on the table. If you are interested in challenging the undervaluation of properties within your District, either through intervention in an appeal or filing your own challenge, please contact Alan M. Mullins at 312-565-3100, ext. 236 or amullins@edlawyer.com.

School Districts Can Get Additional State Aid Due To Reductions In Their Total Assessed Values

April 16, 2010

By: Alan M. Mullins

One factor in calculating state aid for school districts is the total assessed values of property in the district. Generally, lower assessed property values results in more state aid.  Total assessed values are routinely reduced by Property Tax Appeal Board (PTAB) dispositions and certificates of error* after state aid has been awarded.  Except for Cook County, the State Board of Education automatically receives information regarding PTAB dispositions and recalculates state aid based on those dispositions.  However, ISBE does not receive information regarding reduced assessed values due to certificates of error, and it also does not receive information regarding PTAB dispositions for property in Cook County.  The result is that a school district can lose out on an increase in general state aid.

We are available to collect the information regarding certificates of error and to submit applications to the State Board of Education for recalculation of state aid for the 2001 thru 2007 fiscal years.  You may be aware of people who perform this service for a percentage of the additional state aid gained from the recalculation.  Scariano, Himes and Petrarca performs this service for clients at our regular hourly rate resulting in substantial savings to our clients.  If you would like assistance in applying for a recalculation of state aid, please contact Alan M. Mullins in our Chicago Office at 312-565-3100, ext. 236 or amullins@edlawyer.com no later than May 1, 2010 so that we can submit a timely application.

* A certificate of error is issued after property assessments have been certified for a particular year and the assessor discovers a mistake in the assessment of a property that will reduce the assessed value by less than $100,000 or discovers that the property did not receive an exemption for which it was due.