The Robert Blazier Administration Building.

A tax protest law suit filed last week targets the Crystal Lake Grade School district along with

• McHenry County
• Wonder Lake’s Harrison Grade School District 36
• Crystal Lake High School District 155
• McHenry Township
• McHenry Township Road District
• Algonquin Township
• Algonquin Township Road District

Today, we’ll look at what is said about the Crystal Lake Elementary School District.

Attorney Tim Dwyer argues,

While taxing officials are permitted a reasonable latitude in the accumulation of public funds to assure having funds on hand to meet legitimate expenditures as they occur, this discretion must not be abused.

He points to case law that set guidelines for excessive fund accumulation.

A 1952 Illinois Supreme Court case says,

Where a balance is on hand amounting to a little less than two years’ requirements, as established by recent prior experience, a levy is unnecessary.

A 1996 case ruled

we conclude that a tax objector can meet its burden to show an excessive accumulation by presenting evidence that the accumulation in the fund exceeds two to three times the average annual expenditures for the fund.

The facts marshaled in the suit include the following with regard to the Education Fund:

• District 47 levied $52,012,650.51 for educational purposes…
• As of June 30, 2014, per District 47’s own audit, District 47 had $41,244,744 in investments that were dedicated to the Education Fund.
• As of December of 2014, when District 47 levied $52,012.34 for its Education Fund, District 47 has $43,774,654 in investments for its Education Fund.
• Of the $43,774,654 that was invested, over $31,000,000 of the funds would not mature in the next fiscal year. The vast majority of the invested funds were to mature anywhere from fiscal year 2015-16 through 2019-20.
• Rather than using funds accumulated over the last few years, the District levied the maximum amount allowable, increasing its levy in accordance with the highest CPI rate allowable.
• In addition to the existing funds in investments of over $43 million dollars, District 47 receives over 25 million dollars in grants from the State and Federal government [most for the Education Fund].
• In addition to the existing funds of over 43 million dollars, the District has $7,613,859 in its “self insurance” fund. The self-insurance monies were levied under the Education Fund. As such, these funds must also be credited to the existing funds for the Education Fund.
• Given the amounts of existing cash District 47 had in relation to its Education Fund, there was no need to levy any funds whatsoever to meet the needs of the ensuing fiscal year.
• According to its own audit, as of June 30, 2014, District 47 had $189,000,000 in total assets.
• In cash and investments alone, District 47 had $123,681,785.
• Under no circumstances did District 47 have to levy $52,012.64 for educational purposes.
• With cash assets of $123,100,000.00, coupled with its annual revenue of over $100 million, existing funds are over 2 times of all of the annual needs of the District.
• In 2014, the year immediately after the December 2013 levy, District 47 invested $38,673,379, or over 50% of its 2013 levy amount… into Certificates of Deposits, which restricted access to these funds for anywhere between two to five fiscal years.
• That District 47 could invest over half of its entire 2013 levy in non-liquid investments clearly demonstrates that the District has accumulated excess funds in violation of Illinois law as it relates to its entire 2013 levy.
• Nevertheless, District 47 increased its 2014 levy and received more than 2 million more than its 2013 levy, using the maximum increase allowable under the Property Tax and Extension Limitation Law (“PTELL”) [Real Estate Tax Cap].

The complaint next goes after the District 47 Transportation Fund:

• In its 2014 levy, District 47 levied $2,072,061 for transportation purposes.
• As of July 1, 2014, District 47 had over 8 million dollars in long-term investments dedicated to its Transportation Funds.
• [When the levy was passed that December],  none of [that $8 m million was] to be used for the 2014-15 fiscal year.