The third time could be the charm for state legislation allowing Lyons Township High School to chart its own financial future and withdraw from control of the Lyons Township School Treasurer’s Office.
A bill introduced May 10 by House Minority Leader Jim Durkin, a Republican from Western Springs, also allows five surrounding elementary districts and the La Grange Area Department of Special Education cooperative to break from the treasurer’s office and appoint or elect their own treasurers.
Durkin has sponsored two similar bills since 2014, which passed the House but were blocked by Democrats in the Senate.
But the latest version stipulates that any changes as a result of districts withdrawing will not affect legal action pending against LTHS.
High school officials have been seeking to leave the treasurer’s office since 2014, soon after the district was sued by the treasurer’s office for $4.4 million, including $2.6 million in back fees for financial services.
The legal outcome, which remains unresolved, was a sticking point for Sen. Steve Landek, a Bridgeview Democrat, who held the first bill in committee and amended the second bill to require the high school to set aside $6.5 million in escrow in case it lost.
Although a Senate version hasn’t been introduced, Landek said he has met with Durkin and agreed to work on legislation “amenable to all” over the summer. “We are both committed,” he said.
The lawsuit followed charges in 2013 that former Treasurer Robert Healy stole more than $1.5 million in school funds during his 24 years on the job. A Better Government Association investigation uncovered a host of financial irregularities and a glaring lack of oversight by a three-member elected board charged with managing the office.
Healy pleaded guilty in 2015 to stealing $100,000 and is serving a nine-year sentence at the Taylorville Correctional Center.
The school treasurer’s office is responsible for investing more than $280 million in assets and managing payroll and expenses for 13 school districts in La Grange, Western Springs, Burr Ridge and surrounding towns.
LTHS officials contend no money is owed, because an agreement was reached in 1999 in open session with Healy so that the high school would process its own payroll and accounts receivable and payable, and receive a credit from the treasurer’s office to avoid paying twice for the same function.
Both the high school and treasurer’s office boards approved operating procedures based on the agreement, LTHS officials have said.
Township School Treasurer Susan Birkenmaier said negotiations are continuing in the lawsuit and no trial date has been set. The treasurer’s office legal expenses are more than $1 million, she said.
Birkenmaier said the treasurer’s office offers member districts greater returns by pooling money for investments, providing financial expertise and offering services smaller districts may not be able to afford, as well as economies of scale in processing financial transactions.
But area school officials have been critical of fees charged by the office with no voice on how the money is spent, as well as legal expenses.
In addition to LTHS, La Grange elementary districts 102 and 105, as well as the La Grange Area Department of Special Education, are on record seeking to withdraw from the treasurer’s office and handle their own finances.
Durkin’s bill also names Western Springs District 101, LaGrange Highlands District 106 and Pleasantdale District 107 in Burr Ridge as eligible to withdraw if those school boards choose to do so.
Birkenmaier said it’s unclear whether the treasurer’s office could remain viable if more than half the member districts leave.
“It would be speculative at this point,” she said. “The legislation would have to pass first before we’re in a position to see how the districts or this office would be impacted.”
Durkin noted most township school treasurer offices were eliminated in the 1960s, except for Cook County, and area districts should have the option of exercising local control over their finances.
State law requires township treasurer offices in Cook County to handle all financial transactions. Districts may withdraw only if an amendment is passed, or by a lengthy process contingent on whether other school boards in the township agree and a majority of township residents approve the matter by referendum.
