McHenry County Blog

Yesterday, McHenry County Blog started outlining what was mentioned about the court-determined illegal actions of the prior board–three of whose members were re-elected–in notes of the 7:30 PM to 12:15 AM Grafton Township board meeting last Thursday night.

The topic kept coming up in the discussion of the motion to add Township Supervisor Linda Moore’s name to that of newly-elected Trustee Gerry McMahon on the list of board members censured who have been censured.

Trustee Rob LaPorta, clearly the leader of the board majority, was among those to comment on the township hall lawsuit during the debate to move the censure resolution from the bottom to the top of the agenda:

“We were forced to hire an attorney because our names were on the lawsuit.”

McMahon returned to the court action brought by Grafton Township citizens, directing his comments to Moore:

“You started all of this by encouraging all this litigation against the township.

“You hurt the township. You should resign. You do not have a clue how to run a township.”

“We have to take responsibility for the decisions we make,” Moore replied.

“I admit I don’t think I made a good decision.

“Get over it.

“I don’t take kindly to your accusations,”

Barbara Murphy then said.

The reply from Moore,

“We can’t made decisions based on our legal (advice) alone. Just because a lawyer makes a recommendation doesn’t (mean it’s right).

“You believe what Mr. Kelly told you to do. Now, it turns out not to be the right thing to do.”

I have over four pages of notes on LaPorta’s reading of the condemnation resolution, but he was reading so fast, they are incomplete. After looking over the text sent to me by Trustee Rob LaPorta, I don’t see anything concerning the new township hall except Moore’s termination of Kelly as township attorney and her refusal to present his bill for payment.

But, my guess is those items stimulated the censure movement.

When it got to public comment time after the censure and paying of bills Tammy Lueth, a plaintiff in the suit to invalidate the board’s decision to build a new township hall, came to the podium with a stack of agendas and minutes.

“I’ve been through all the agendas for the last four years.”

She told of the decision at the annual meeting to approve the new township hall.

“You weren’t right.

“You took it upon yourself to appeal (Judge Michael Caldwell’s) decision. The Appellate Court ruled you guys didn’t do what you should have done.

“You spent more time bickering about $400 in chamber of commerce fees (than you did when it) took you six minutes to approve land acquisition.

“That was all brought about by the former supervisor (John Rossi) and some trustees.”

She added that she had to spend $12 in a Freedom of Information Act request to get minutes which ought to be on the web site.

Cutting Lueth’s comments short was McMahon, the only current trustee who did not vote for the new township hall and land acquisition:

“You’re into your three minutes.”

Trustee Betty Zirk, one of the three remaining trustees who supported the new township hall, pointed out the rules on the specificity of agendas changed in 2007.

“Now we have to be very specific,” she said.

McMahon returned to the undercurrent of the meeting:

“On some points you are right. What (attorney Jim) Kelly said to us was that he thought it was winnable.

“I’ve learned my lesson…

“I think you opened a can of worms and you hurt the township.”

McMahon then offer his opinion on the chances of passing the court-ordered referendum during next November’s general election:

“We can’t win a referendum. We will never get the PR out.”

The official part of the agenda when the discredited deal was next on the agenda.

Read about it tomorrow.

There was a leitmotif during the almost five-hour meeting of the Grafton Township Board on Thursday night.

Not too light, though.

More like an elephant plunging through the local Republican Party, setting up all Grafton Township incumbents for defeat at the hands of the Democratic Party in 2013.

Although the subject was only listed on the agenda once, a recurring undercurrent about the stunning court-mandated reversal of the trustees’ majority’s votes to sell the current township hall to its own Road District—complete with non-refundable $66,000 commission to real estate agent and Republican County Board member Marc Munaretto—to finance the building of a new township hall that would have cost the taxpayers over $5 million (with interest) was just under the surface.

But, it kept popping up during the meeting, especially during the debate over the resolution to censure Township Supervisor Linda Moore.

Surely, the

• loss of the prestige of having a new township hall, plus
• loss of the bronze plaque which would contain the trustees’ names, plus
• loss of face, plus
• the election loss of Supervisor John Rossi, the man who convinced them to do the deal, and
• the threat of having to pay their own legal fees

were among the inspirations for the multi-page censure resolution, which was not provided to Moore before the meeting, indeed not until after the kangaroo court passed its judgment.

(After the meeting I asked Rob LaPorta for a copy. He told me that his copy had notes on it, but said he would ask the lawyer to email it to me. While I was writing this article Saturday morning, I got a copy from LaPorta that indicates it will be published in pamphlet form “by authority of the township board” during December.  Click to enlarge.)

The trustees can’t reverse Judge Michael Caldwell’s court decision and confirmation of that decision at a rehearing now that it has been upheld by the 2nd Appellate Court, but they can censure one of its original plaintiffs, which, incidentally, was mentioned in the meeting and they can attack the most public messenger to divert public attention from their own court-determined illegal board majority actions.

Here’s the court suit reference from Gerry McMahon, who was elected because Moore put his literature in with her own during the Republican primary election campaign. (I know that because I helped distribute it one cold winter Saturday.)

The board was discussing a motion to move the censure resolution from almost the end of the agenda to the top.

(The trustees clearly did not want the Northwest Herald reporter to miss that part of the meeting since Herald reporters often do not stay until the end of late meetings, as was the case Thursday night when the adjournment was about 12:15 AM.  Better a story on censure than on the incredibly bad audit of ally John Rossi’s last year in office.  The strategy worked.  Not a word was printed in the NW Herald about the audit.)

Moore had told the board that she had conferred with an attorney about the censure resolution, which, incidentally, she did see before passage.

“Our legal bills (since she took office in April) are at $69,000,”

Moore said.

Among the other things McMahon, censured himself last month, said was,

“I heard your remarks about the courts.

“You started this all. That has cost immense legal bills. That was personal and vindictive…You have cost $600,000. When you don’t get your dictatorial way, you go around (the board, to court, for instance—McMahon was talking so fast my note taking couldn’t keep up.)

“When you are in the minority you should reg(?) and live with this. This is simple. If you would do the thing the majority wants everything would be (alright).”

Moore replied,

“Judges don’t award rulings because somebody (has something personal and vindictive). Governments can do anything they want until somebody says they are wrong.”

Moore then pointed out,

“Legal fees were $40,000. The trustees hired that attorney…We’ve got to stop wasting taxpayer dollars.”

“Where do we start?” Trustee Barbara Murphy (one who voted for the new township hall, but was the first incumbent to figure out that something illegal had been done and say the resulting loan had to be repaid) expressed her frustration. The frustration started out with the trustees being disturbed that Moore would not put items they wanted to discuss on the agenda, which led to the township’s attorney being instructed to prepare it. The attorney is paid $200 an hour.

Then, Murphy referred to the township hall dispute

“We were green when we took the last four years.

“I thought we (were following good advice).

“It’s done. They won it. It’s over. When you fired (Jim) Kelly (as township attorney), you expected us not to have a lawyer?

“I feel like there’s no working with you.”

More tomorrow.

First is was Trustee Gerry McMahon.

Last night it was Supervisor Linda Moore.

Trustee Rob LaPorta read what sounded like a bill of particulars listing all the actions that he considered improper and the four trustees, all of whom have been at odds with Moore since she beat incumbent Supervisor John Rossi by 30 votes in this past spring’s Republican primary election.

“Could I have a copy?” Moore asked after the vote was taken.

The main thrust of primary Moore’s campaign was to reverse the approval of a new $3.5 million township hall ($5 million with interest) the then-board, three of whom were re-elected, approved.

Nothing in the resolution of censure referred to Moore’s and her allies’ success in forcing the loan to be repaid and putting the sale of the current township hall to the township road district in jeopardy.

Grafton Township is the second McHenry County governmental board to go in for censure.

The first was the McHenry County College Board. The five-member board majority censured colleagues Donna Kurtz and Scott Summers for changing their mind on using taxpayer-backed bonds to build a minor league baseball stadium at the Crystal Lake McHenry County College campus.

The Grafton Township meeting ended about 12:15 AM and I stayed to the bitter end.

The board passed its levies with one minute to spare, yesterday being the deadline.

The Road Fund is asking for $732,788. On the non-road side, the total is $999,200.

“We’ll only get an additional $19,000 no matter what we do.

There seems to be a one-day problem with public notice. The levy must be filed with the county clerk by December 19th, but it has to be posted 20 days.

Hard to figure out how both requirements can be met.

Back when I was McHenry County Treasurer in the late 1960’s about ten percent of the tax bills were paid under protest. My non-lawyer’s guess is there might be some folks talking to tax protest attorneys about the two deadlines.

Yesterday, I started a series about the Grafton Township audit by Eder, Casella & Company on outgoing Township Assessor John Rossi’s last year in office.

Astonishingly, the firm sent it to his successor, Linda Moore, and asked her to sign off on the audit as being “correct.”

Maybe this is routine practice brought on by auditors having been sued, but expecting a replacement official to approve her predecessor’s bookkeeping strikes me as really strange, especially when “material weaknesses” were found in internal control.

The $10,000 audit will be considered at tonight’s meeting at the Huntley Park District building at 7:30.

But, we’re only halfway through the first page of the transmittal letter.

“We believe the following deficiencies constitute material weaknesses,”

the missive continues.

First up are “Financial Statement Adjustments.”

“Management is responsible for the accuracy and completeness of all financial records,” the firm of Certified Public Accountants state.”

In a long paragraph this sentence leaps out,

“During the course of our audit, material misstatements of financial records were found, resulting in adjusting entries…Management agreed with the adjustments and they were included in the 2009 financial statements.”

No mention as to the identity of “management” was included in the transmittal letter.

Next on the list is the lack of a “Policies and Procedures Manual.” That’s pretty much what I found when I became McHenry County Treasurer. Memory of the office’s employees was the location of our manual.

What’s such a manual supposed to contain?

“…enough detail that another person could fulfill the requirements of a particular process by following the explanations.”

“Account Reconciliations…were not apparently reconciled to the actual balances.” The firm recommends that be done on a monthly basis. Sounds like Huntley School District 158 in times past.

“Expenditure Posting” brought the comment, “General Assistance Fund reported expenses that were not specific to that fund, including capital outlay expenses for the Town Fund.”

In other words, expenses were paid for the proposed new township hall out of funds that were supposed to go to help the poor.

Under “Internal Control Recommendations” the comment is made that turns up often in small operations about the same people receiving the money, writing the checks and reconciling the bank accounts.

But, the most significant seems to be

“Disbursements do not have proper documentation, for example, supporting invoices.”

And,

“Purchase orders are not used and only verb al approval is required to generate a purchase.”

And,

“Check sequence is is not consistently reviewed.”

And,

“Procedures to categorize expenditures are not in place.”

“Ineffective” is the adjective the CPA’s use to describe township controls regarding disbursements.

Finally, there’s a comment about the Grafton Food Pantry:

“Activity of the Grafton Food Pantry has not been reported in the financial statements…because it does not qualify as a component unit.”

In a letter from Moore to the auditing firm the following appears:

“There are no material transactions that have not been properly recorded in the accounting records underlying the financial statements except the lack of documentation for the money transferred by phone to the food pantry.”

The part in bold face type was added by Moore to the suggested language from the audit firm in a letter verifying records.

More coming.

The Grafton Township Board did not select the low bidder to perform its audit last year. It picked Eder, Casella & Company out of McHenry.

The firm’s transmittal letter has some pretty stiff comments, which I’ll outline below.

On top, however, is a place for a sign-off on its contents.

Here’s what the person signing the document agrees to:
“I(We) have examined the attached draft and find it to be correct.”

If I were the new township supervisor, having beaten John Rossi and criticized his handling of township finances, you wouldn’t get my signature.

The letter is addressed to the Board of Trustees, so many one or more of the trustees will see fit to affix his or her John Hancock.

If would like my agreeing my predecessor as McHenry County Treasurer in 1966 had done everything right. (She may have. I thought enough of Audrey Walgenbach to keep her on as my chief deputy, but, how would an incoming elected official know what had happened the year before?)

In any event, when the audit came in 1967, I didn’t have to vouch for the auditor’s having been correct.

Right in the first paragraph is this startling statement:

“Accordingly, we do not express an opinion on the effectiveness of the Township’s internal control.”

Whoa!

The firm says its audit was not designed for that purpose. Even though “we considered its internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements.”

The justification?

“Auditing standards generally accepted in the United States of America.”

The examination performed on those internal controls “would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, we identified certain deficiencies in internal control that we consider to be material weaknesses.”

Everything clear?

So, what’s a “control deficiency?”

They exist “when the design or operation of a control does not allow management or employees…to prevent or detect misstatements on a timely basis.”

To be continued.

Getting rid of the deals that went down to build a new town hall on Haligus Road without a referendum was the primary campaign promise that propelled challenger Linda Moore to a 30-vote Republican primary victory over Grafton Township Supervisor John Rossi.

The message was

“What is someone put a second mortgage on your home…without asking your permission?

“Your Grafton Township Supervisor and his township trustees have done something very close to that.

“Borrowing $3.5 million to build a new township hall without voter approval…in the middle of a recession…while spending less than $17,000 last year helping people in need with General Assistance…is bad government.

“You will have to pay that $3.5 million – PLUS interest – back with your property taxes.

“If you want an elected official who will ask your opinion before you are put into debt

“Vote for Linda Moore for Grafton Township Supervisor”

Put on a yard sign, the message was

NO TAXATION WITHOUT REFERENDUM

A court case led by Dan Ziller, Jr., in which Moore was a co-plaintiff forced to repayment of a $3.5 million township loan intended to pay for most of that building.  Judge Michael Caldwell made the decision.

(Ziller ran an unsuccessful write-in campaign for township trustee in which he emphasized the $3.5 million loan on his yard signs.)

It also forced a voter referendum on whether to borrow $3.5 million to build a new township hall.

Another $611,000 was raised by selling the current town hall to the to the Township Road District. Moore said last night that transaction did not end up in the minutes.

(Two different legal entities were created by the General Assembly resulting from township road commissioners wanting less oversight from township boards.)

In any event, the township hall is now controlled by the Road Commissioner Jack Freund. He has to be repaid over $611,000. He was planning to do so by charging the Town Fund rent, plus kicking in the difference from Road Fund taxes. The township board even paid a $66,000 commission on the transaction to McHenry County Board member Marc Munaretto.

When I left the Grafton Township meeting last night, the board was hiding behind closed doors so the public could not hear what its members were saying or what the two lawyers present were advising.

Newly-elected Township Supervisor Linda Moore had not fared well earlier, as she had been advised that her 7 PM meeting had been improperly posted and the 7:30 meeting, which has also been improperly, but not fatally wrongly posted, had gone according to the majority bloc of four trustees plans.

But when the doors at the Huntley Park District opened, the board took action to “unwind” the loan Grafton Township took out to buy its own township hall (after taxpayers had already paid for it once).

Only Moore’s erstwhile running mate Gerry McMahon voted against

When the vote was taken, Moore wasn’t the lonely girl that she was before going in

So, what happened?

“We were informed by the township attorney that the way things were done were not in accordance with the law,” Moore told me, “and it left the township open to suit.“In order to avoid further legal expenses, four of the five members of the board voted in favor of Barb Murphy’s motion to unwind the selling of the township property to the Road District.”

At the October board meeting Trustee Barbara Murphy signaled her desire to undo the Town Hall loan:

“My own opinion—I say we do the unwind. Put it all back to where it was and start from scratch.“Frankly, in my own opinion, I’m tired of this garbage.“I’m tired of it.

“I’m tired of it. (I want it done.)”

For the second time in four days, Grafton Township Trustees boycotted a meeting called by newly-elected Supervisor Linda Moore.

Moore was criticized by township attorney Keri-Lyn J. Krafterfer in a November 6th letter for not having included items on her agenda requested by Trustee Robert LaPorta.

They included

• Motion to approve Board rules that were originally submitted by Trustee LaPorta and approved by Trustees in a Grafton Special Meeting that Supervisor Moore did not attend (because of being physically indisposed, I was told).
• Discussion and motion to approve Senior Transportation Fees and Fee Change procedure.
• Inclusion of Huntley Chamber Bill and Attorney Kelly’s open bills on warrant and motion to approve full payment of.
• Motion to define, complete and approve FOIA stating Clerk Fergo as the person to assemble, report on, and delegate FOIA request completions.
• Motion to approve Grafton Township maintenance of Haligus Road property.
• Motion to approve ‘new location’ of Grafton Township Food Pantry inclusion on Grafton Township website and Posting in Grafton Township Offices.
• Motion for authorization to have assessor’s office research available office space within Grafton Township for consideration of a lease and/or purchase agreement.
• Distribution, review, discussion and motion to approve or reject township audit.

These items Moore included in her Monday meeting agenda, but complained at that boycotted meeting that Township Clerk Dina Frigo had removed them from the door of the township hall.

In a letter to Township Attorney Krafthefer, dated November 16th, said the removal “was witnessed by a reliable source.”

Frigo, who Thursday indicated she did not know where the missing trustees were, apparently knew they were not showing up Monday night and joined their boycott.

But Frigo did post a notice for a 7:30 PM Wednesday township meeting called by Trustees Betty Zirk and Rob LaPorta.

Many of the items listed above in LaPorta’s request to Moore were included, as well as others, including

• new locks for Frigo’s office
• paying bills that would have been approved at last Thursday’s meeting
• establishing a procedure for receiving and distributing the trustees and clerk’s mail
• establishing a township investment policy

The changes seems to have had the advice of an attorney.

Moore posted her own agenda for a meeting at the same location—the Huntley Park District at 12,015 Mill Street in Huntley—but starting a half an hour earlier at 7 PM.

At the 12-minute meeting tonight, Sun City resident Ralph Wehnes had some comments:

“Is this really a major problem with you and John Rossi?…It looks like something is going on that’s going to cost somebody a lot of money.”

“It already has,” Moore replied.

Commenting on Rossi, whom Moore defeated by 30 votes in the Republican primary election, she said, “I haven’t spoken with Mr. Rossi since I kidded with him about other people being able to do the job.”

Asked about the problems, Moore suggested,

“Three of the board were on the previous board. I think it’s a case of sour grapes.”

Moore also wasn’t happy at the new attorney’s having suggested in writing,

“Further, there is nothing to prevent the Township Trustees from boycotting the regular meeting with your proposed agenda and posting their own notice of a special meeting with an agenda including their items.”

The attorney wrote that it would be “happy” to prepare the agenda.

In a November 16th letter, Moore asked if “the clerk need(s) to follow the same rules you laid out in your recent opinion letter and include the supervisor’s agenda items on her agenda.”

Moore’s agenda items were not included in the Zirk-LaPorta agenda.

Moore also asked,

“If three or more trustees have a daisy chain telephone conversation and decide to boycott township meetings, twice in a row, does this constitute a violation of the open meetings act?”

Both sides of the dispute are sending the McHenry County State’s Attorney copies of their missives.

Pete Gonigam of the First Electric Newspaper got Marc Munaretto to talk to him about the $66,000 commission paid him by Grafton Township when Supervisor John Rossi and the trustees sold the Grafton Hall to the Grafton Township Road District.

Prior to publishing the list of who got what out of the aborted deal, McHenry County Blog left repeated phone and email messages Munaretto asking for an explanation.  There was no reply.

Gonigam refers to the deal as “a transaction so apparently simple it would almost amount to a bookkeeping entry.”

Munaretto said that he found a $1.1 million offer, but a higher offer came through.

The township board, however, sold the property to the road district for $611,000.

As Gonigam puts it,

“How $611,000 trumped a $1.1 million offer is part of what makes trying to unravel the Grafton Township controversy something like trying to sort out a plate of spaghetti.”

And, so far this information has not been published by either of the daily Heralds.

Very interesting.

Both the lack of coverage…

and the deal.

The following has been received from the office of Jim Bishop, attorney for Dan Ziller, Jr., et al, in their successful case against the Grafton Township Board’s attempt to build a new township hall without voter approval:

The Illinois Appellate Court officially ended the legal battle of the stalled Grafton Township Town Hall project. No negotiations with respect to settlement are either appropriate or necessary.

The Appellate Court ended all speculation with its Decision of September 18, 2009, ruling in favor of the Grafton Township residents that filed suit against Grafton Township Officials, the Appellate Court ruled that there must be a the then Township Supervisor, John Rossi and the other Trustees.

The Appellate Court has ruled that the issue must be placed on the ballot for the vote of the residents of Grafton Township at the November 2010 General Election. The referendum will determine whether the project to construct a new township hall, estimated to cost in excess of $5 million, will proceed.

For more than seven months, the residents of Grafton Township have pleaded with, and finally sued, the Grafton Township Board of Trustees to delay the construction until a referendum could be placed on the ballot concerning this important matter.

Over a period of many months, the Grafton Board of Trustees refused to halt the project necessitating the litigation.

The Appellate Court sided with the residents on all issues in the Court’s 12 page published Opinion.

Grafton Township Supervisor Linda Moore, who has been steadfastly opposed to the Town Hall construction project, has been continuously thwarted by the actions of the majority of the Trustees, which led to the recent resignation of Township Attorney, Joseph Gottemoller.

The continued refusal of the majority of the Grafton Township Trustees may well lead to additional litigation against the Township in order that the residents may see certain financial and other documents relating to various expenditures over the past 4 years.

James Bishop, attorney for the Plaintiffs in the “town hall” litigation has recently filed a Freedom of Information request with the Township Clerk, Dina Frigo, and has indicated that should the Trustees continue to refuse to provide such financial documentation, another lawsuit will be forthcoming.

Among financial documentation sought by Bishop are annual

• Township audits for the years 2006-2009, 
• monthly bank statements, check registers, 
• contracts relating to the sale of the existing township property, 
• contracts and other documentation. 

By law, the township is required to respond to Bishop’s FOI request early next week.

= = = = =
Seen at the Grafton Township meeting when attorney Joe Gottemoller rendered his resignation are, from left to right, Township Clerk Dina Frigo, Township Trustees Rob LaPorta, Betty Zirk and Gerry McMahon. Trustee Barbara Murphy has her back to the camera. Township Supervisor Linda Moore was medically indisposed. If you wish, you can read Gottemoller’s parting advice to the board.

After winning his clients’ suit against a Grafton Township board that decided to build a new township hall without notifying, let alone asking township residents for their opinions, Crystal Lake attorney Jim Bishop is filing a Freedom of Information request asking for extensive financial and other information.

“We’re going to file a Freedom of Information request and if the informatin is not immediately forthcoming, we will file an appropriate suite,” Bishop told me.

What’s being sought?

• Financial records since Fiscal Year 2006
• Check register for that four-year period
• Bank statements for the township general and general assistance funds
• Records of purchases and disposition of personal property purchased by the township

The Grafton Township supervisor during that period was John Rossi. Linda Moore defeated him in the Republican primary election by 30 votes. The Democrats ran no candidates for township office.

Grafton Township operated a food pantry, which Rossi turned into a not-for-profit corporation. Since his loss, it has moved out of the township building.