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LT refusing to pay $2 million bill from township school treasurer's office

Published: Thursday, Aug. 22, 2013 3:52 p.m. CDT • Updated: Tuesday, July 29, 2014 9:57 p.m. CDT

LA GRANGE – Lyons Township High School District 204 is refusing to pay a $2 million bill for services from the Lyons Township School Treasurer's Office because of an agreement the district said it made with the treasurer’s office in 1999.

Superintendent Tim Kilrea said that although there was no official intergovernmental agreement made between the district and treasurer’s office, both sides determined that the district would pay its own staff to perform bookkeeping duties and in turn not pay the township school treasurer, who manages public funds for 13 districts in the western suburbs, including District 204.

Kilrea said the district has provided the office with 13 years of a paper trail affirming the agreement. The treasurer’s office would send invoices to the district, which then sent back invoices from its in-house treasurer showing that the services had in effect been outsourced from the township school treasurer to district staff. The documents were approved in open meetings, Kilrea said.

District 204 has handled parts of its own bookkeeping since prior to the 1970s, and the 1999 agreement was put in place so the district wouldn’t have to pay double for services it was already conducting in-house, Kilrea said.

“We paid our folks in-house to do this,” he said. “So, therefore, to insinuate that we have been receiving something for nothing is totally incorrect.”

The district has been trying to separate itself from the office, but a bill filed by state Rep. Jim Durkin to remove the district from the township school treasurer’s jurisdiction was shut down by the Illinois Senate in April.

"The township treasurer is a layer of government that exists only in Cook County (outside of Chicago)," Kilrea said in a separate email statement. "Multiple high school and elementary school districts in Cook County have separated from their respective township treasurer office. It is an unnecessary unit of local government and serves no useful purpose as it relates to LT. What LT is seeking is not unique and we have received support from multiple member school districts currently being served by the Lyons Township School Treasurer’s Office."

The treasurer’s office, though, said District 204 owes the $2 million because it has no record of the 1999 agreement and the district has not produced a record indicating the agreement was voted on by its board, said Mike Thiessen, a member of the board of trustees that works alongside the township’s treasurer.

Thiessen was hired after the August 2012 resignation of former Lyons Township School Treasurer Robert Healy, who was charged Aug. 15 with stealing more than $1.5 million over a 20-year period from the 13 area districts whose money he managed. LT is by far the biggest district in the group.

In addition to stealing money, Healy withheld information about investments and cash reserves from the districts and operated without legitimate oversight, Thiessen said. Until District 204 can show the agreement was approved by its board, the treasurer’s office will continue to demand the money, he said.

"The only record we can see is that there was a conversation in the finance committee meeting at LT,” Thiessen said. “ … It doesn't appear that it was ever voted on by the full board."

Thiessen said the treasurer’s office is in the process of determining where the $2 million will go if it receives payment of the bill. Some of it could go to other districts that might have paid more for services because District 204 was not making payments, Thiessen said.

Although the district handles much of its own bookkeeping, the township school treasurer still manages $37-38 million of the district's reserve funds, Thiessen said. But the district hasn’t paid the office in about 11 years, he said.

Kilrea said bills the district received from Healy were never itemized and that the district therefore cannot be expected to pay for an unknown percentage of services. He also said other districts overseen by the treasurer have failed to pay bills.

“I just would wonder if they’re going to go after all of those funds that weren’t paid in full by the other districts,” Kilrea said.

Thiessen said he hopes it doesn’t take a lawsuit to solve the problem.

“I hope that we'll work it out,” Thiessen said. “We have to look at what happens for our other districts. We might need to seek some council from the other school districts. [Legal action] is not out of the picture, but it’s the last option.”

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