For the past few years taxpayers of Park Ridge-Niles School District 64 constantly have been told how D-64’s financial management has been so wonderful that the District won’t have to go to referendum this year, as was expected back in 2007 when the last D-64 funding referendum was passed.

So a recent article in the Park Ridge Herald-Advocate (“District 64 board members OK plans for $1.2M project at Lincoln Middle School,” 04.04.17) got our attention. Not because of the headline, even though wasting $1.2 million of taxpayer money on not-really-“secured” vestibules for yet another D-64 school is hardly sound fiscal management. Or effective “security,” for that matter.

What pinged our radar was tucked away in the last paragraph of that H-A article: School officials are holding a “public hearing” at tomorrow night’s School Board meeting regarding the Board’s “plan to sell $20.7 million worth of working cash bonds (“WCBs”), allegedly to fund “mandated health and life-safety repairs to district facilities” – which bonds reportedly will be issued “in stages over the course of several years.”

For those of you unfamiliar with school finance, the purpose of WCBs is pretty much what the name indicates: To provide short-term working cash to cover a district’s temporary cash flow needs or operating, deficits. It’s not to do long-term capital improvements, including those masquerading as “health and life-safety repairs.”

So why, pray tell, does D-64 need almost $21 million of short-term borrowing for “working cash”?

Didn’t D-64 Board president Tony “Who’s The Boss?” Borrelli – after obtaining permission from Supt. Laurie “I’m The Boss!” Heinz, of course – assure us just last Fall that (as quoted in a H-A article, “School board president: District 64 exceeding financial projections made prior to 2007 referendum,” Oct. 7, 2016) “the district is operating in the black and not operating within a deficit spending pattern”?

Didn’t financial guru Luann Kolstad proclaim – as reported in that same Oct. 7 article – that, as of June 2016, the district’s operating fund balance was $48.1 million, or 60 percent of annual operating expenses, which is twice the District’s 30% target and means D-64 already is sitting on $24 million more taxpayer dollars than they say they need?

Can you say “slush fund”?

What we didn’t know until reading the article in last week’s H-A (“District 64 projects include maintenance work, vestibule, library makeover,” April 18), however, is that at its March 13 meeting the D-64 Board voted to issue $9.25 million of “debt certificates” – thereby pushing the slush fund balance to over 70% of the District’s reserve target.

Why didn’t we know it?

Because this opaque School Board, with the able assistance of propaganda minister Bernadette Tramm, didn’t publicize it.

And our clueless local press apparently didn’t understand it or care enough about it to do its job: The first mention of “debt certificates” was in that April 4 H-A article, three weeks after the March 13 meeting at which the Board voted to issue them. And no “official” evidence of that vote appeared in print until last week, when the draft minutes of that March 13 meeting were finally posted on the District’s website as part of tonight’s Board meeting packet.

According to a fact sheet published by Stifel, a financial services firm that advises governmental bodies as well as businesses and individuals, debt certificates are a pricier type of financing that requires no voter approval or even a Bond Issue Notification Act (“BINA”) hearing. So it should come as no surprise that this secretive-bordering-on-dishonest D-64 Board would look to borrow $9+ million using debt instruments that don’t require taxpayer approval or even require a public hearing like tonight’s, which they are required to have for the issuance of WCBs.

And in typically deceitful D-64 Board fashion, the minutes of that March 13 meeting fail to mention the discussion during that meeting of the likelihood that the interest on those debt certificates will cost District taxpayers at least an additional $2.7 million of interest at the expected rate of 3.36% – something you would have to watch the meeting video (from the 51:36 mark to the 58:55 mark) to discover – thereby pushing the total cost of these debt certificates up to approximately $12 million over their 15 year life, paid off at the rate of $800,000 per year starting next fiscal year.

What is more problematic, however, is how this Board may have cheated D-64 taxpayers out of any opportunity to force a referendum on the WCBs.

That’s because the Board also voted on March 13 to declare its intention to issue the $20.75 million of WCBs. WCBs require a devious legal device known as a “Back Door Referendum” that puts the burden on the taxpayers to get petition signatures from 10% of the District’s 33,263 registered voters – or 3,326 – within 30 days of publication of a notice of that intention. Otherwise, no referendum need be held.

If you listen closely to the District’s bond advisor’s colloquy with Borrelli (at from the 1:00:08 mark to the 1:04:50 mark of the meeting video), you will hear her describe what sounds like a “plan” to publish the required BINA notice, which starts the 30-day back-door period running, immediately after the authorization vote.

Not surprisingly, you won’t find that information in those meeting minutes, either. But they do report that, just like with the debt certificates, the $20 million WCB authorization passed unanimously – only with far less discussion.

Which means that if the District published its notice of intent on, let’s say, the Ides of March (03.15), the 30-day back-door period ran out on April 14; and the WCB authorization has become bullet-proof from referendum.

Which makes tonight’s “public hearing” on those WCBs a mere technical requirement that has been turned into just another meaningless charade by a D-64 Board whose members operate on the theory of “the taxpayers be damned.”

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