Village of Lisle Hands Out $3,400 "Gifts of Public Funds" for Personal Benefit

PUBLIC FUNDS MAY NOT BE USED FOR PERSONAL BENEFIT

The starting point for any analysis concerning the misuse of public funds begins with the principle that public funds must be expended for an authorized public purpose. An expenditure is made for a public purpose when its purpose is to benefit the public interest rather than private individuals or private purposes.

Once a public purpose is established, the expenditure must still be authorized. 

A public official possesses only those powers that are conferred by law. An Illinois public official only has the authority to authorize expenditures of public funds for a public purpose. 

The Illinois Constitution states that public funds may only be expended for a public purpose.

The prohibition against using public funds for personal purposes does not mean that no personal benefit may result from an expenditure of public funds. For example, the payment of a public employee’s salary confers a personal benefit on the employee, but it is an legal expenditure of public funds because it is procuring the services of the employee for public purposes.

The misuse of public funds occurs when the personal benefit conferred by a public expenditure provides no public benefit. The salaries of elected and appointed officials are set by state and local laws. Augmenting the salary of elected and appointed officials with gifts of public funds has no public purpose. 

VILLAGE OF LISLE "GIFTS OF PUBLIC FUNDS"

Lisle Watchdog asked the Village of Lisle to provide copies of records that included the "public purpose" of the expenditure of $3,400 in "gift cards" purchased between July 24, 2013 and April 28, 2014. 

The Village responded that they had no records that contained the public purpose and/or public benefit for the expenditure of $3,400 in public funds to purchase gift cards.

Unlike the previous year, this year the Village Board did NOT give themselves gifts nor did the staff purchase gift cards for themselves this year. The gifts purchased last year for staff, the Mayor and Trustees were included on their W2's as taxable income as required by law. Salaries for Mayor and Trustees are set by Village Code. 2013 W2's for the Village Board show that each was paid more than the salary set by Ordinance due to the gifts they gave themselves. 

Last year the Village gifted $5,350 in public funds. 

This past year, the number reduced to $3,400 as the staff and elected officials did not get gifts this time around. The total amount of public funds expended by the Village of Lisle on GIFT CARDS for individuals without any public purpose exceeds $8,700. 

2014  - $ 3,400 "Gift Card" Expenditures for Personal Benefit: 

$ 500  Gift Cards Pizzaria Bombola 4/21/2014. 

          Personal Use: 

              $ 100 - Jeff Simeral 

              $ 100 - Larry Rogers

              $ 100 - Ed Young 

              $ 100 - Brett Lauten

              $ 100 - Barb Sasssen.

$ 450   Gift Cards Yerbabuena Restaurant 4/22/2014

           Personal Use: 

              $ 50 - Tracey Cook 

              $ 100 - William Murray

              $ 100 - Richard Brom

              $ 100 - Thomas Marcet

              $ 100 - Denniss Hoornstra

$ 700   Gift Cards Tairyo House 4/22/2014

           Personal Use: 

             $ 100 - Kitty Murphy

             $ 100 - Charles Rego

             $ 100 - Richard Thorn

             $ 100 - Richard Gaven

             $ 100 - Daniel Patt

             $ 100 - Maragret Sima

             $ 100 - Kevin Montgomery

$ 700   Gift Cards Chef Paul Bavarian Lodge 4/22/2014

           Personal Use:

             $ 100 - Pat Caweizel

             $ 100 - John Mueller

             $ 100 - Lee Herrara

             $ 100 - Diane Lauriden

             $ 100 - David Heysen

             $ 100 - Chuck Johnwick

             $ 100 - Yvonne Daniels

$ 900   Gift Cards Chinn's 34th Street Fishery 

           Personal Use:  

            $ 100 - Richard Brink

            $ 100 - Randy Russell

            $ 100 - Michael Suirek

            $ 100 - Lou O'Brien

            $ 100 - Richard Cooke

            $ 100 - Bret Richter

            $ 100 - Joe Knott

            $ 100 - Scott Fotre

            $ 100 - Tom Maschmeier

$ 105.95  Gift Card Jewel Food Store 8/15/2013

            Personal Use:

            $ 100 - David Duusoi Khan

$105.95  Gift Card Jewel Food Store 12/3/2013 

            Personal Use:

            $ 100 - Jay Dave

REFERENCES:

(1) State Statute: Illinois Municipal Code.
(65 ILCS 5/3.1-50-5) (from Ch. 24, par. 3.1-50-5) 
    Sec. 3.1-50-5. Establishment. All municipal officers, except as otherwise provided, shall receive the salary or other compensation that is fixed by ordinance. Salaries or other compensation shall not be increased or diminished so as to take effect during the term of any officer holding an elective office. The salaries, fees, or other compensation of any appointed municipal officer, not including those appointed to fill vacancies in elective offices, may be increased but not diminished so as to take effect during the term for which the officer was appointed. (Source: P.A. 87-1119.)


(2) Village of Lisle Code.

As soon as possible after the original appointment of members of said planning and zoning commission or upon the appointment of a new member for the remainder of an unexpired term, the president shall designate a chairman of the planning and zoning commission subject to confirmation by the corporate authorities. Said commission may have a secretary, a staff or both, and such other officers as may in their judgment be necessary. All members and all officers of said planning and zoning commission shall serve without compensation with the exception of the secretary, who may receive such compensation as may be fixed from time to time by the corporate authorities and as may be provided for in the annual appropriation ordinance. (Ord. 2003-3451, 4-7-2003, eff. 5-1-2003)

(3) Illinois Constitution 

ARTICLE VIII. SECTION 1. GENERAL PROVISIONS
    (a)  Public funds, property or credit shall be used only
for public purposes.
    (b)  The State, units of local government and school
districts shall incur obligations for payment or make
payments from public funds only as authorized by law or
ordinance.
    (c)  Reports and records of the obligation, receipt and
use of public funds of the State, units of local government
and school districts are public records available for
inspection by the public according to law. (Source: Illinois Constitution.)

(4) You Owe Me - Study University of California.
In a series of experiments, we show that, even without incentive or informational effects, small gifts strongly influence the recipient’s behavior in favor of the gift giver, in particular when a third party bears the cost. Subjects are well aware that the gift is given to influence their behavior but reciprocate nevertheless.

Alarm Sounds: Lisle Woodridge Fire District Fails to Respond

We are not talking about a fire alarm. 

We are talking about a "financial alarm" first raised over two (2) years ago. 

The alarms went off - but the Lisle Woodridge Fire Department did not respond.  

No one responded.

(1) Crowe Horwath Sounds First Alarm

Back in 2012, DuPage County hired Crowe Horwath to conduct an assessment of 24 agencies whose governing body board members are appointed by the county. The five (5) trustees of Lisle Woodridge Fire District board are appointed by the County Board Chairman with the advice and consent of the County Board. LWFD Trustees earn a salary of $4500/year to attend one meeting per month. LWFD trustees also receive additional compensation in the form of pension contributions and life insurance, per the total compensation disclosure posted on the LWFD website. 

Yes, it is quite disturbing that the LWFD board which levies about $20 Million in property taxes annually is appointed  - not elected by the people. 

  

Crowe Horwath issued their final report "DuPage CountyAssessment of Boards and Commissions" on May 20, 2012.  

Crowe Horwath sounded the first Lisle Woodridge Fire District "Financial Alarm."

***  No one responded.

(2) Moody's Sounds Second Alarm

In June 2014, Moody's downgraded the Lisle Woodridge Fire District's rating.  

Moody's: 

"The Aa3 issuer rating reflects a recent trend of underfunding annual pension payments, highlighting the financial risk stemming from the district's elevated pension liabilities and statutory requirements that require the district to fully fund its employer contributions. Additionally, the rating incorporates the district's sizeable tax base located in Du Page County (Aaa) in the Chicago (Baa1 negative) metro area; sizable operating reserves and healthy cash balances; and manageable debt profile with a minimal direct debt burden and no expectation to issue additional debt in the foreseeable future. The A1 rating on the GOLT Notes is notched once off the district's issuer rating and reflects the inherently weaker security, which does not benefit from a dedicated property tax levy."

Moody's also cited financial challenges of the LWFD:

- Multi-year trend of material tax base depreciation.

- Exposure to underfunded defined benefit pension liabilities coupled with a recent trend of underfunding pensions relative to actuarial standards. 

***  No one responded.

(3) Taxpayers Sound Third Alarm

Who do taxpayers hold accountable for the declining financial situation of the LWFD?

Back in May 2012, Crowe Horwath had warned DuPage County of the financial decline and risks of the Lisle Woodridge Fire District:

"The Lisle-Woodridge Fire Protection District is considered a stable organization that is showing indications of decline if it does not act soon to develop plans to ensure its sustainability, to establish fund balance reserve policies and to develop a formal capital plan. The District must also address pension and OPEB funding issues to manage these costs to ensure they do not escalate out of control."

Crowe Horwath's final report included these recommendations:

Develop a Financial Plan

• We recommend that the District complete further analysis and prepare a long-term financial plan. 

The District’s net assets have declined by over $2.750 million in the past several years. Current and unknown economic concerns could place future financial constraints on the District. This District will have to consider future pension and OPEB financing issues and provide a plan to address these costs that have increased significantly over the past few years. A long-term financial plan is important for the District to understand the steps necessary to stabilize its financial condition.

The District relies heavily on property taxes, therefore, Property Tax Extension Limitation Law (PTELL) or “tax caps” limit the annual growth of the District’s primary revenue source to the consumer price index. We recommend that the District consider property tax caps within a long-term financial plan to better understand the circumstances necessary to accomplish its financial goals. Therefore, a long-term financial plan is needed to better understand the parameter it is under.

Develop Capital Plan

• We recommend that the District evaluate its capital program and document its needs in a formal multi-year capital improvement plan. 

The District includes one year of its capital projects vehicle replacement and facilities improvement funds within the annual appropriation. A multi-year capital improvement plan will help the District to understand its significant capital needs in the short and long-terms and will provide more information for decision makers. The Capital Plan should also include an evaluation of equipment needs based on an evaluation of the potential for equipment sharing with other municipalities and fire protection districts."

Lisle Watchdog submitted a FOIA on Sept 29, 2014 for a copy of the Long-Term Financial Plan prepared in response to Crowe Horwath's 2012 recommendations. 

LWFD responded that they did not have a long-term financial plan. 

*** Nothing was done.

Three Alarm LWFD Financial "Fire"

The financial situation at the LWFD has now reached "Three Alarm" status. 

Sounding the alarm: (1) Crowe Horwath, (2) Moody's, (3) Taxpayers.

Who will respond to the alarm?