EC calls out schools for $1 million in back payments
By Michelle L. Quinn Post-Tribune correspondent June 21, 2014 8:32PM
Updated: June 22, 2014 2:02AM
EAST CHICAGO — The School City of East Chicago’s buses are about to be banned from using the civil city’s facilities over a more than $1 million tab it owes.
In a letter dated June 3, city attorneys Joe Allegretti, Steve Bower and Anthony DeBonis told the East Chicago School Board it has 30 days to come up with $1,037,000 it owes under a February 2009 lease agreement to use the civil city’s bus barn and gas pumps at 5400 Cline Ave. The lease agreement calls for the School City to pay $42,000 per month for use of the barn, while gas usage is “at will.”
The School City’s total bill as of July 3 — the day in which it will no longer have use of city facilities — is $1,008,000, putting it exactly two years behind in payments. Gas expenses, meanwhile, are $29,029.
“The City has been cognizant of the effect that ceasing fuel allocations could have on the student population during the 2013-2014 school year, and for this reason has refrained from taking action until the school year ended,” the attorneys wrote. “It is our hope that the parties can ring these issues within the 30-day period.”
The letter said the city received a response from School City attorney Richard Lesniak in May, the first of which it had received about the matter since 2012 “despite numerous letters that the City has sent (the School City) on this matter.” That letter, the city attorneys said, doesn’t propose a solution to the late payments.
In his May 30 letter, Lesniak said fuel charges billed to the school district have been paid up-to-date but that paying the lease agreement would be “absolutely impossible.”
Lesniak went on to say that the School City has a deficit of $3.5 million between its budget deficit and appropriation, and pointed out that the lease was crafted during the administration of former Mayor George Pabey, when Pabey appointed the Board of Works, the School Board and the city attorney, whom Lesniak believes was also the School City attorney at the time.
School Board of Trustees President Jesse Gomez called the agreement a “strange arrangement with a pretty expensive price tag,” noting it was crafted under a previous, appointed school board.
“I can’t understand why a previous board would agree to pull money out of the School City to put into the payroll of the Civil City,” Gomez, a former city councilman, said. “We could’ve built our own facility for that money.”
Gomez said the School City did try to keep up with the payments, but as school funding keeps getting cut, it became more difficult to pay.
“We’re operating with the skeleton staff (in the schools),” Gomez said.
City attorney Carla Morgan told the Post-Tribune that one taxing unit of government cannot finance another and that the city has reached out to the school district several times about the matter. And had the school district reached out to the city earlier, the city would’ve certainly worked with the School City in good faith.
“The School City cannot realistically expect to continue to reap the benefits of the Interlocal Bus Barn agreement while refusing to meet its legal obligations under the agreement and pay sums to the city, while failing to ask to renegotiate the lease agreement,” Morgan said.
Gomez said that should the matter not be resolved, the School City is working on other arrangements for the summer school session and beyond. The new school superintendent, Youssef Yomtoob, will also need to be brought up to speed on the matter.