school who students have assisted in this case material this is a taxpayer action rock pursuing to and to enforce the school codes working calf statute what is squarely at stake here is the legislature's absolutely clear prohibit action and what the defendants did here which was use the district's working cash fund as a slush fund to just spend and all the defen all the ones that they are throw out every single one of them ignores the legislature's clear directive and should be rejected one of the things that the statute itself on its face could not be more clear in fact all their defenses dealing with the statute would be answered by if there's something more that the statute was intended to require please tel legislature said any ill we any intentional diversion from the work in cash on subjects the person board members to approve that people who spend  be for non school purposes well if it's for non school purposes or embezzlement or whatever vacations or drinks or whatever else the statute would be supreme super it wouldn't be necessary there's protections against that throughout the state the purpose of the working cash fund is one thing and one thing alone which is as this district did some years ago in the late one nine hundred ninety s it should have bonded borrowed five and a half million dollars to have a working hands fund which is there by law to just loan to other school funds in the tween receipt of taxes was therefore and any transfers from the working cash fund to another fund for another expenditure has to be documented by specific board approvals of each transfer specifying why the money is needed now how much is being loaned to the particular other fun and the statute requires that as soon as the tax receipts come in that it is paid back to the working cash instead what the board what this but the defendants here did was just sort of treat this is if this is the family checking account we just keep spending and as long as we got money and they spent beyond the legal appropriations other defendants say well what's the damage what's the harm they would be a windfall if the district got this money back but it's not because what it meant what happened here is that the board approved spending beyond the legal appropriation for particular amounts and in any number of ways but all we know is that the board spent more than was legally authorized to be spent for specific purposes and who's awake at this which that's the purpose of the statute is to make sure that there is not just a red light camera and a cross walk and pictures of schoolchildren and a crossing guard the statute is very clear if you spend working cash money if you divert working but the injuries suffered is to the school district not the plaintiffs so if that's so what injury was suffered by the school district by the transfers where that were made without the resolution as the district money was spent for illegal purposes the the appropriation each year identifies fund accounting identifies how much is going to be spent for education purposes transportation maintenance each thing is a separate appropriation that is how much you get to legally spend of the tack of the districts money each year if you spend more than that you violated the law you exceeded the district's legal spending and when you take it from the working cash back which obviously occurred here because when you go to the third one eighty four they talked specifically about this idea of abating or abolishing the working cash fund after the money has been illegally spent and that allowing circumvention of the of the prohibitions so easily would buy they cause they refer to it as allowing a repeated phoenix so what the district what what the board members who do is say look you know we know we only we have  of x amount of dollars twenty million so we're going to spend twenty five of the any year we have no money left we've obviously spent it out of the working cash fund well we violate the law but we grant ourselves a pardon absolution whatever and just abolish the working cash fund after it's been illegally spent doing that and so then next year the damage that is that the taxpayers now have to raise again that five million dollars every year that they spend in this fashion and take it from the working cash fund the taxpayers are going to have to raise not only the five million dollars that they borrowed in the past that was found but they do it again this year they get to raise another five million dollars and that's why we have taxed our county experts identification that this total eight hundred million dollars for the school district which is about the amount of one year's whole tax level and am that in the second district set that there's no right of sort of self help hardening yourself or the violation of that law because it be too easy to just say but we're going to ignore the lowenstein whatever we want we're going to spend the wor said crosswalks crossing or whatever to make a determination whether there indeed would be a windfall to the district make them presumably they're spending the money outside of the way it should be spent right but they're spending the money spending the money that at least some of those items probably could say well that's still a benefit to the school to us but we on the record we don't know how it was what their position is is to say the burden in these cases is you must not only allege that that working cash fund was spent you must also allege that it was spent for a non school purpose at this point we don't know exactly what occurred we do know that there was standing in each other in each of two or three funds for millions of dollars beyond the legal appropriation now whether you'd say well the school district got the benefit of that spending on this record that doesn't exist this is a question of whose burden at the pleading stage it is to show that money has been spent for non school purposes the answer i think and the right answer i believe is that if you spend money beyond the legal appropriation for a certain purpose you have violated the law you're you're not doing you're doing something that is illegal you're spending taxpayers money otherwise how is there accountability to the taxpayers the taxpayers i'm only talking with respect of the whole when fall is right and it seems like your position is you if it's illegal spending you don't care if it was a benefit to the district or not is that your position i mean yes if it's illegal spending from the working cash fine if you drain the working cash fund without going through the the purpose of financing operations between tax receipts you have to if you're going to spend from the working class fund you have to you have to identify what is being spent what is being borrowed to another fund and then you have to pay it back you can't just say well we have the end the year we had twenty million dollars legally spent over spent twenty five there's no money in the till so as a matter of law i think we would get summary judgment without problem and the fact that they violated the working cashman of it now where they then to have to show to then say well it was it would be a windfall to pay it back because we bought books we bought more buses we bought whatever if if that were the law then there really is no accountability there is no accountability for there's no discipline to legal standing there has to be that and you can say look the working cash on slush fund use it however you want have a nice day god bless you it's been  nice and that's the question but that's not what the legislature said legislature this is one of those cases in fact the only mention that this court has had of the working caste provisions has been in may and against both us where in general generally speaking public employees who are part of spending money that happens to wind up being illegal or excessive aren't personally liable and this court distinguish those cases where all those cash bond is to be used as follows it exists for this purpose if you want to take the money from the working cash bond and do something with it you have to just loan it to a but my question is how would damages ever be determined so for example i have million dollars comes out over this fine it's put into a general revenue fund of some sort and money is paid by you know million dollars in the district assets at the beginning the year five point four million was the working cash that was spent it wasn't transfer it wasn't even flipped into one of these other funds it's just what they did is they treated the whole thing as one big family accounting they just spent without discipline and so the amount that was in the working cash fun that is no longer there that's the damages you spend taxpayer money illegally violating the law it's you know it's not a you know to go through and say well you know there's this book we had you know you know if the show that you bought thirty nine books for thirty eight students in that case you know if if th and tax payers are entitled to money to be spent legally and when they when a budget is approved that's a transparent as an open guy thing the issue is open transparent government and when the district says we are going to spend your money we're going to spend during the course of the coming year we're going to spend twenty million dollars in the following four or five fund ways undercounting is very specific you have a legal appropriation for a specific purpose if you want to spend money for one purpose for a different purpose you have to make an open government legally transparent action so that the taxpayers know how their money is being spent in this case say well they had appropriated twenty million dollars or so and they have five million dollars that is sitting in the working cash account and in this case they  actually comes back to your question because this was shown the question about of beit sahour shift back to it but the question about whether you can live bill if their position is well if we overspent what the heck we can  the liability the way that this came up was that the district the board announced that they were going to go out with a tax anticipation notes and somebody in the back of the room basically raised their hand said you can't do that you can't issue tax anticipation notes borrowing again if you already got to work if you already have a working hash not the purpose of the working cash line is the same thing as tax anticipation those were funding operations to loan to the different operating accounts that have been appropriated from the working cash the you don't have to identify each expenditure you just it's very easy to say the end of the year look there's no money and there's no money left in the fact that's what happened and that's why the accounting for it is here because it didn't take it didn't take anybody else doing much more than balancing the checkbook to say look the money has criminal sanctions statute why are they insufficient because on a practical level the state's attorney generally will not prosecute for as i understand that  the rule of they adopted was for less than twenty million dollars in damages the criminal statutes are insufficient and you know they exist no doubt but if the legislature was content to say well we'll just wait until it's criminal until the state's attorney does it the fact is that's why you have taxpayer actions because taxpayers it's their money and they are in a great position as these tax payers were to say look this is illegal action this is action in the legislature said we want to have taxpayer actions to enforce the statute why why require the states attorney to do all the work why require the attorney general to do all the work taxpayer actions are a traditionally our traditional means certainly no annoy and you could say by common law taxpayer actions i mean we love them they accomplish their purpose they inforce the law they impose discipline but the fact the matter is the legislature very clearly said that players have a right to this action concert you started your argument i thought you did it maybe based upon the brief that this violation was the failure to adopt the resolution to transfer the money to the where it was going to be ultimately spent and then to provide a means of them the money would come back but then you seem to shift to talking about legal appropriations appropriations made or legal procreation stocktake of much the appropriation is made but your argument seems to be they spent in excess of the appropriation amount is that we are members done or is it the failure to undock a resolution having chickens and eggs the violation is spending working cash fund money is diverting working cash fund monies not in accordance with the law which is failure to adopt a resolution failure to adopt a resolution  because the money cannot be legally transferred out of the working cash fund except by a formal resolution and have the expenditure been within the amount of the appropriation work with would that be your only complaint then if the expenditures had been within the i mean the answer is yes but no there would have been then the money would have been illegal is that they they only have twenty five million dollars only if you have twenty five million dollars and twenty of it you can legally spend because of the appropriation amount yes if you spend more than that now they could during the course interviewed answer the question was i mean they certainly could if they get to the end of the year you get to a point at which you say oh my god look we didn't appropriate enough in this account we need to to transfer over the board can do that but it's a public it's a public action with board consideration that the taxpayers  made please the court counsel my name is james petron girl and i represent an individual name school district defendants with the exception of former superintendent dr record who is separately represented your honor my clients urge this court to affirm the decisions below and submit that there are several grounds upon which that may happen i spritz would like to address the posher of this case before the court this is not a taxpayer challenge to an excess of funds levy this is not a challenge seeking to obtain a reimbursement to taxpayers or to make taxpayers this is a challenge filed on behalf of the school district it's a derivative sham and as such the plaintiffs have to establish standing in other words harm to the school district there is no harm that's been alleged and there is no reasonable set of facts that can be alleged to establish that there is fine that there is harm to the school district specifically plaintiffs allege the board of education it encountered excess spending deficit spending and relied upon the working cash fund to do just that like the alleged that that's using the fund as a slush fund boards to permanently abolish the working cash fund and upon doing so one hundred percent of the balance of that fund goes to the education in other words the working cash fund can be used to supplement the operating funds of the district this recognized it school district ability to abolish its working cashflow and more recently in two thousand and ten the legislature codified what was always implied by section twenty dash nine and that's the school district's ability to abate the working cash fund to its operating funds and in two thousand and ten so that the district can do so to the fund any find any operating fund that the board determines to be most in need so it is not counter to the the inten legislature that a board of education or its administration collectively use funds in the working cash line to supplement its operating plans that's entirely consistent with the purpose of the staff because those spawn those funds therefore the dollars at question have not been illegally spent they've been spent consistently with the intent of the legislature it cannot be said that there's a damage to the school district therefore the place is lax standing in this issue the ultimate question in in this case is whether there was a quote unlawful diversion and i submit to this court that there are two principal reasons why there was not an unlawful diversion in this case first of all consistent with this court's previous determinations dating back as far back in one thousand thirty two in the case like an unlawful diversion occurs only where the original or the intent of the legislature in creating the permitted school districts to rely on the working cash fund to supplement their operating funds because the money at issue or any question here was used on legitimate school related purposes and counsel has an alleged otherwise in this compl not only today but in an argument before the courts below that that in fact is what's happened here particularly because these are as consequence out in the complaint the board allegedly agreed to a robust collective bargaining agreement wit teachers that it simply couldn't afford and there's little question that dollars at issue were actually spent on legitimate school related purposes and therefore pursuant to this court's decision and gates in the decisions that came there after that the appellate court relied upon there has been no one lawful diversion of funds in this case now there's an argument that's raised by the council and that has been or it raised by the court as well there was apparently a lacking resolution authorizing those violation of the article there may be the loss of office or a fine of up to ten thousand dollars imposed and counsels acknowledge that that's to be brought by the state's attorney that would be the appropriate remedy perhaps transfer of funds without an authorizing resolution that's even arguably a violation of the statute but the legislature was then careful to use separate language as to what is an unlawful diversion and a civil recovery is the plaintiffs are pursuing here imposing liability personally on ten former public services that specifically requires an unlawful diversion in the legislature's use of separate language in referring to a violation in the a square peg in a round hole they're bringing this case before it initially for the circuit and now before your honor's arguing that this is all about excess spending deficit spending that the board of education can't engage that's not what article twenty action under article one i further submit to this court that to the extent there was a lacking authorization in in a public resolution that that was secured by the board of education in late two thousand and nine when they ratified the the sending the balance to the education those resolutions under the under the doctrine of ratification become effective back to the days that any draws upon the working cash fund were made without the resolution being on time i also submit to this court that the very least the plaintiffs are seeking is the same action that they argue is illegal because the fund has been about the relief if any in this case would be the personal liability the dollars to be recovered to the school district would be would be sent to the education fund because there is no working cash money at this school district and so if we're going to impose liability and defendants and require them to send money reimbursed the district and that money is going to the education fund and that's the very obscene injurious applies in this case there may be a loss of funds to the school district because the working cash dollars were spent legitimately but that doesn't mean there was an injury to the school district and so i submit to this court that there is no reason when all those transfers all the documents anyway they are public documents not only through the but if you used to use the money for a hotel or dinner or whatever that would be still have them and it's public the through the budget documents the the annual financial reports that the districts are required to have annually that are posted on the district's web sites and also note on that issue that the purpose of the statute is to recover funds or the school district or certainly a resolution would provide transparency to taxpayers it's not that's not what the purpose of the enforcement provision in twenty six was intended for it's not to recover funds for taxpayers it's to cover funds for the benefit of schools if there's no for the five of the school code it says monies in the working cash on shall be transferred to another fun of the just picked only upon the authority of the school board which which from time to time by separate resolution direct the school treasurer to make transfers as may be required well dr richter was not a member of the school board dr recker is not the school treasurer so he is not subjected to the directives of section twenty dash five he doesn't fall within either category he was not a spender of the money not a transfer of the money and not the potential of the riser only the board do that so he is separate and stands alone in his particular status the plaintiffs never addressed this they just lumped all the defendants in together and make those allegations as to everyone and so first of all that he's not required to do anything under the statute so he can have no liability secondly even if the court were to find that which entitle some to toward immunity it in titles in the common law legislative immunity and the argument that plaintiff has raised that somehow if this is a ministerial function board resolution required in order to make these transfers once again he was not a member of the board and he's not the treasurer dr recker had no minister ministerial functions to be performed so again we just want to make those distinctions because plaintiffs not and so there can be no liability against dr wrecker under any view of the facts or the allegations made thank you your  up at the circuit court level in the second action it wasn't brought up on appeal it was brought up for the very first time before the supreme court so on that basis alone it's way in fact it's beyond a way of why people issue it's an admission in the underlying action your honor of having the transcript from the hearing before the circuit court judge just a crystal of admitted this issue had been met so this is a non issue there was a final judgment on the merits in the initial action which the committee defendants a tainted dismissal the second element is identity of causes of action here in illinois we follow the very liberal transaction  that the same transaction that brings about the causes of action and it absolutely is my client the auditor auditor three years for the district in issue financial statements it's those same audits that brought about the first two actions that were consolidated that my client had dismissed in a final judgment with prejudice real for a language and was an appeal that said those saying if you compare the complaints the allegations are almost identical so clearly under the transaction test under the river river park versus highland park case it's the same facts the only differentiation the plaintiffs try and argue for this issue was also admitted to as having been met in the appellate court level in fact if you look at the appellate court decision footnote three the court points out this issue appears to also have been conceded by plaintiff's counsel complaint leaves no doubt on this issue each suit was brought in the name of and for the benefit of unquote the distress these were tax payers bring it on their own behalf they were bringing it on behalf of a first district case nelson versus chicago park district why is nelson so relevant here today because mr crist lovers the attorney in that case he cited all the same supreme court the united states supreme court cases they were all clearly distinguished by the court not only was this argument the same argument that was presented to you denied by the first district mr kristoff was sanctioned for bringing it yet here before the spring court he brings all the same cases all the same argument there is absolutely an identity of the parties here and that's because they the real party in interest is the district case the south central case it was on insta all instances where individuals were bringing actions on their own behalf and in the taylor case they talk about this virtual representation issue that's not present today because the district is the party of interest here the last issue is there's some relief being asked by the plaintiffs as a result of three or four and that's clearly not admission of the case that they rely on is the case that was decided before a change in the supreme court rules the rules now clearly provide under three or four that the time for filing an appeal shall be provided by three or three shall mandatory language when you look at three three the notice of appeal must be filed within thirty days so again this is really more of a issue which was never brought up before today before the supreme court is another issue that they  taxpayers are going to have to do that taxpayers are going to have to levy on themselves again they do that once they're going to have to do it again and again and again and again oh the the argument that the public or any other public report showed the transfers that's not true the public reports didn't show any of the transfers the public reports the annual reports do show that amounts worse then and beyond the appropriation in i think two out of three of the phones but the public reports that community issued the board issue showed a balance of five and a half million dollars still in the working cash so that somebody going from the public reports would believe that there was still five and a half million dollars in the working cash fund and that it had not been  diverted in fact the statute says diverted or otherwise suspend believe  any such member other person shall be a liable for any sum that may be unlawfully diverted from the working cash fund or otherwise you so certainly you spend it on drinks and vacations or whatever maybe that's otherwise use i'll buy that but diverted from the working cash fund to spend the working cash fund and there's no money in the working cash fund it's been diverted if you want them to make it clearer please tell us how there could be this business about records being sort of not in the position that he would be subjected to liability the statute says any other person holding any office and he was also at the time sorry holding any office or employed by the district  he was also the c f o so the chief financial officer so at this point since we don't know exactly what people knew and when they knew it and what their involvement was it seems at the complaint stage all that we should be required to allege is there was money in the working cash fund it is not there now the money has been spent and all of the people who were involved in the in the expenditures of the district's money are fair game to be sued at this point we may decide down the road based on discovery that expenditures were for non school purposes or they were for school purposes and who was involved in it but that the complaint stage all we need to  money was wrongfully diverted from the working cash fund without following the legal procedures and hear all the people involved in the district's finance's if you require more than that excuse me you make it impossible to satisfy except for blatant embezzlement conversion you know when people start  pearing in in argentina or otherwise be on the jurisdiction of the illinois courts at that point it's too late but concomitant don't you have to tie your allegations to the statu that merely deficit spending accounts doesn't subject them but figuring out justice tice who was involved of the group that are the core involved in spending the districts money probably is derivative lea responsible on their underwriting you know at this point all we know is the treasure is clearly in and that implicates lloyds now the three o four issue i was the lawyer in the second in the second litigation and nelson and i plead not guilty on that one but that's the fact of the matter there was that there was a settlement of one set of claims and after that the board the park district then entered into a second agreement with the people who had for whom the park district had illegally built a soccer field and the park district in the second agreement after the first settlement voted to reimburse the latin school for the money that the latin school had expended to illegally build a soccer field on public land that was what we sued in the second case nelson i wasn't part of the first case but that's what we sued in nelson in in the nelson case and that's what  nelson was wrongly decided and nelson is wrongly decided not just on its facts but the idea of imposing race judicata so easily on people protecting the public this is fundamentally wrong that to say that the people i mean i wasn't the first case for you this morning to what i have concluded is that defendant uniformly cite finality as one of the most important things of justice and due process here they don't have any of those to bank on the fact is the rules that was patterned after the federal interlock atory appeal provision and if you don't take it up at that point in the federal courts you can still appeal you can still take it up on  at the end of the case there are lots of reasons why you may choose not to to take it up based on an interlock atory decision and that provides  the view that i think is i think that in adopting rules rules have to be clear not nuanced not interpret a bill in sixty different ways they are to provide assistance to the court in the parties in pursuing the case and if it is to believe that they failure to pursue an interlocutory appeal after three hours for a finding is made walker thank you very much for your arguments today in your excuse this time marshall the spring for