Lyons Township High School wants to move on from an eight-year lawsuit that ended with a judge ruling mostly in their favor.
The high school is asking its taxpayers and alumni to urge the Lyons Township Treasurer’s Office not to appeal the judge’s decision.
The Township Trustees of Schools sued LTHS District 204 in 2013, claiming the school owed it about $4.7 million in unpaid fees and expenses, and overpayment of interest income.
But on May 21, Circuit Court Judge Jerry Esrig authorized the township treasurer’s office to collect only $764,789 from LTHS.
A letter signed by LTHS Superintendent Timothy Kilrea and posted on the high school’s website recently asks residents, community members and alumni to email the township trustees and the treasurer, urging them not to appeal the court’s decision and to hire an independent auditor to fully account for all unallocated investment income under the treasurer’s office’s control.
The Lyons Township Trustee of Schools president and treasurer could not be reached for comment.
According to court documents, as far back as 1988, LTHS has been trying to separate from the township treasurer’s office, whose role is to invest tax revenue and provide cost-effective financial services for 14 school districts and educational entities within its boundaries, including Western Springs Elementary District 101, La Grange District 102, La Grange District 105, Highlands District 106, and Pleasantdale District 107.
Each member district is required to pay a proportionate share of the treasurer’s office expenses, but LTHS officials argued they were paying more than their fair share.
LTHS District 204 historically has had the largest fund balance of any of the member districts, usually about 25% of the total of the pooled funds. The high school also has its own business office, which district officials said can handle its finances more efficiently and capably than the township treasurer.
Former Lyons Township Treasurer Robert Healy in 1999 advised the township trustees of “an increasingly strained relationship” between LTHS administrators and the treasurer’s office.
LTHS officials said, after negotiations, Healy agreed the money the high school spent on certain business operations, such as payroll, accounts payable and computer processing, would be credited against the fees the treasurer’s office charged. According to meeting minutes, the township trustees were aware of this arrangement.
From 2000 to 2012, LTHS staff sent memos explaining what costs they would deduct from the treasurer’s office invoices each year.
It was not until 2013, after it was revealed Healy had used his position to embezzle more than $1 million of school funds, that newly elected township trustees disputed the arrangement was valid.
But the judge said over 12 years, the township school trustees and their staff never objected to the arrangement or the amount of the accounting credits, so LTHS did not have to reimburse them for those amounts.
“It is inconceivable that the (treasurer’s office) Trustees were unaware of the credits to LT for accounting services and the payment of LT audits,” the judge wrote. “The evidence strongly suggests and the court finds that the Trustees had actual knowledge in real time.”
The township treasurer’s office claimed LTHS also owed about $1.6 million in interest income mistakenly credited to its account, but the judge denied that claim.
Esrig wrote the township school trustees lacked diligence when they failed to conduct a forensic audit after learning of Healy’s embezzlement and the possibility of over-allocations.
The court ruled, however, the high school should pay its pro rata share of certain expenses it had contested between 2013 and 2019, including the treasurer’s office’s legal expenses, computer software costs and a public relations firm’s services.
The court authorized the treasurer’s office to deduct a total of $764,789 from LTHS’ fund balance to cover those payments.
More Top Picks Best Rv Solar Panel Kits For Boondocking
LTHS’ officials claim the treasurer’s office spent more than $4.1 million on the lawsuit, a cost which has been born by the member school districts, while LTHS’ insurance company paid its legal bills.
“This lawsuit could have and should have been avoided,” the school district states on its website. LTHS wants to be able to withdraw from the treasurer’s office without further litigation.