Friday, August 24, 2012
Settlement Between Northfield Township High School District 225 and Taxpayers Who Objected to Use of Tax Money to Pass Referendum
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release is entered into between the Board of Education of Northfield Township High School District No. 225 (collectively, “District”) and Citizens Organized to Save the Tax-cap (“COST”). The District and COST are the parties to this Agreement.
I. BACKGROUND
1. The District is a body politic and corporate, a public school district located in Cook County, Illinois, organized and operated pursuant to the Illinois School Code, 105 ILCS 5/10-1 et. seq.
2. COST is a voluntary unincorporated entity registered as an Illinois local political committee located in Cook County, Illinois, organized and operated pursuant to the Illinois Election Code, 10 ILCS 5/9-1 et. seq.
3. In July 2006, the District placed a Public Question (“Referendum” or “Referendum Question”) on the November 7, 2006, general election ballot asking the voters in the District whether the District should be allowed to issue bonds in the amount of $94 million “to finance or refinance the building and equipping of additions and renovations to the Glenbrook North and South High School buildings.”
4. On or about October 20, 2006, the District mailed 38,133 copies of a four page written communication (“Newsletters”) entitled “Special Referendum Edition” to residents of the District.1 On or about November 1, 2006, the District mailed 38,077 copies of a two page written communication (“Newsletters”) entitled “Referendum In Brief” to residents of the District that provided information about the Referendum. Exhibit A, the Newsletters.
5. COST opposed the Referendum, and urged voters to reject the District’s Referendum request.
6. At the November 7, 2006, general election, out of 31,338 votes cast on the Question, the Referendum Question was approved by a margin of 216 votes.
II. RECITALS AS TO LITIGATION
7. In May 2007, COST filed a Complaint initiating an administrative proceeding before the Illinois State Board of Elections, alleging that the District (“Corporate Respondent”) as well as individual Board of Education members Donna Rose Torf, Skip Shein, Wayne B. Berzon, Robert A. Boron, Steve G. Hammer, William Jeffrey, and Elias Metsakis (“Individual 1 “(T)the newsletters were products of a campaign directly related to the referendum …” Citizens Organized to Save the Tax Cap v. State Board of Elections, 392 Ill.App.3d 392, 398, 910 N.E.2d 605, 610.
Respondents”) violated the Illinois Election Code through certain specified and enumerated conduct as described in paragraph 8. Case number 07 CD 035. Exhibit B, the Complaint. (Collectively herein the Corporate Respondent and the Individual Respondents will be referred to as “Respondents”).
8. The Complaint alleged that the Respondents violated the Election Code in the following manner:
9. The gist of the Complaint is that the Respondents acted and qualified as a Local Political Committee as defined by the Illinois Election Code by spending more than the threshold $3,000 for publishing and mailing electioneering communications (i.e., the Newsletters) but failed to register and make required filings as a Local Political Committee under the Illinois Campaign Disclosure Act. The Election Code defined an electioneering communication as “any communication that … refers to a clearly identified question of public policy that will appear on a ballot ….” and is published within sixty days of an election.
10. In addition, the Complaint alleges that the Newsletters advocated for voters to vote for the Referendum; that the electioneering communications constituted contributions to an existing Local Political Committee in support of a Referendum; and that the Individual Respondents lacked authority under the School Code and under the Election Code to either expend public funds to advocate for electors to vote for the Referendum or to appropriate public funds for political or campaign purposes as contributions to a political committee.
11. Furthermore, COST alleges that since at least September of 2006 and through the November 7, 2006, election, the District carried out a planned campaign prepared by William Blair Co., to secure the passage of the referendum proposition. The District admits that it hired the Blair Co. to assist in accounting and financial issues related to School District business, including the Referendum; however the District denies that it carried out a campaign prepared by Blair to secure the passage of the Referendum.
12. In response to the Complaint, the District argued, and thereafter COST replied as
follows:
13. In June 2007, as required by the Election Code, a preliminary hearing was held on the allegations in the Complaint before a hearing officer appointed by the State Board of Elections.
14. On June 18, 2007, the hearing officer found in favor of the Respondents. (The hearing officer’s decision, adopted by the State Board of Elections, was subsequently reversed by the Illinois Appellate Court). The hearing officer recommended that the matter should not proceed to an Open Preliminary Hearing. His “finding of fact and recommendations” reported that “the facts are not in dispute.”
15. On August 1, 2007, the General Counsel for the State Board of Elections, through written correspondence to the members of the Board of Elections, concurred with the recommendation of the hearing officer.
16. On August 21, 2007, the State Board of Elections by a 6 – 2 vote, adopted the recommendations of the hearing officer and its general counsel and dismissed COST’s complaint. Exhibit C, Final Order. (The Board of Elections decision was subsequently reversed by the Illinois Appellate Court).
17. COST appealed the Final Order of the Board of Elections to the Illinois Appellate
Court. In May 2009, the Appellate Court reversed the Board of Elections and unanimously
ruled against the District’s two contentions, stating:
18. In December 2009, three years after the Referendum was on the ballot, the Illinois legislature amended the Election Code’s definition of “Electioneering Communication” apparently to bring Illinois law into conformity with the United States Supreme Court opinion in F.E.C. v. Wisconsin Right to Life 551 U.S. 449, 127 S.Ct. 2652. (2007). The Right to Life case was an “as applied” challenge to the federal ban on spending for Electioneering Communications, finding that before a communication can be found to be an electioneering communication it must be “susceptible to no other reasonable interpretation other than as an appeal to vote for or against a specific candidate.” The parties disagree whether the 2009 amendment has any application to the 2006 Referendum. COST asserts that the legislative changes have no relevance to the Administrative Proceeding; the District argues that the changes are relevant.
19. In January 2010, the State Board of Elections assigned this matter to Hearing Officer James Tenuto.
20. On March 5, 2010, the District filed a Second Motion to Dismiss the Complaint alleging, inter alia, that Board of Elections lacked jurisdiction and that the amendments to the Election Code referenced in paragraph 18 should be retroactively applied, and thus the Complaint should be dismissed. COST filed a response to the motion to dismiss and thereafter the District filed a reply.
21. In December 2010, Hearing Officer Tenuto directed the parties to appear on December 17, 2010, for the purpose of exploring settlement between the parties.
21.1 Since COST filed its Complaint with the Illinois State Board of Elections, the relief sought by COST has been full and transparent disclosure of the referendum spending of public funds by the District. COST has not sought recovery of Public funds, nor sought its attorneys’ fees and costs.
22. The Respondents and COST – in the interest of public disclosure, transparency of government, and in avoiding further costly litigation - have agreed to entirely settle and compromise the Lawsuit and all other issues and claims related to or arising out of the operative facts alleged therein.
23. It is understood that by entering into this Agreement, the parties herein – the for wrongdoing in connection this Lawsuit, and expressly deny any liability, fault, or wrongdoing.
III. RECITALS as to DISTRICT EXPENDITURES FOR THE REFERENDUM
A. OUT–OF-POCKET EXPENDITURES
24. In October 2006, the District paid Vis-O-Graphic of Willowbrook, Illinois, $7,492.20 to print the 86,600 Newsletters referenced in paragraph 3.
25. In October and November 2006, the District paid the U.S. Postal Service $5,486.31 for postage to mail the Newsletters to residents of the District.
26. Of the 10,390 Newsletters that were printed but not mailed out by the District, none were made available, directly or indirectly, to any political committee for campaign purposes. Some were made available to visitors to the School District in lobbies of the schools and the administration building; an unknown number were unused and destroyed after the election.
27. In October 2006, the District paid KTR Video Productions of Mundelein, Illinois, $5,225 to produce a 10 minute video that was broadcast on the School District cable stations approximately one week prior to the referendum election.
28. The Respondents state that the expenditures detailed in paragraphs 24 through 27 were the only out of pocket expenditures of School District funds made by the Respondents for any form of communication about the Referendum.
B. “IN-KIND” EXPENDITURES– STAFFING
29. Thirteen members of the School District administrative staff spent time organizing facts and data that supported information and communication with School District residents about the Referendum.
30. The afore described staff members held the following respective positions: Superintendent; Assistant Superintendent for Business Affairs; Director of Business Affairs; Assistant Superintendent for Education Services; Director of Human Resources; Director of Special Education; Director of Community Information; Principal, Glenbrook North High School; Principal Glenbrook South High School; Associate Principal of Curriculum and Instruction Glenbrook North High School; Associate Principal of Curriculum and Instruction, Glenbrook South High School; Associate Principal for Administrative Services, Glenbrook North High School; and Associate Principal for Administrative Services, Glenbrook South High School.
31. Six members of the School District administrative staff attended meetings in the community to provide information about the Referendum to the residents of the District. The staff members who attended these meetings were the Superintendent; Assistant Superintendent for Business Affairs; Director of Business Affairs; Director of Community Information; Principal, Glenbrook North High School; and Principal, Glenbrook South High School.
32. Two staff members spent approximately 20 hours producing videos concerning
the Referendum. (See paragraphs 34 through 37).
33. Total “in-kind” staffing expenditures for the referendum are represented by the District to be approximately 205 hours valued at approximately $15,850 as tabulated in Exhibits E, F, and G.
C. “IN-KIND” EXPENDITURES -- DISTRICT PRODUCED VIDEOS
34. In October 2006, the District produced only six “in-house” videos that the District contends were used to provide information to the community about the Referendum to School District residents through broadcasts on local cable television stations. The videos clearly identified the Referendum.
35. The School District broadcasts on local cable television through Comcast, a corporation that has franchise agreements to provide cable television to both the Village of Glenview and the Village of Northbrook. As required by the FCC, Comcast provides each Village with free access to two stations in their village on its cable broadcasting network. The Villages in turn have allowed the high schools in their communities to broadcast educational programming on one of Village’s cable stations. Glenbrook North High School broadcasts on one of Northbrook’s stations; Glenbrook South High School broadcasts on one of Glenview’s stations.
36. The District used the local cable television time for broadcasts in connection with the Referendum.
37. The Cable Television Programs were:
a. Program one: “Between the Lines Referendum Program” was a 29-minute video videotaped in October, 2006, with School District equipment. A former student interviewed the GBS Principal about the Referendum. This program was produced to provide information about the Referendum. The video was broadcast October 13 – 19, and November 4 – 6, 2006, approximately 10 times a day on the
School District cable station which broadcast to GBS residents.
i. Production supervisor for the video was the GBS Radio & TV instructor.
ii. A number of students from the GBS Advanced Television Production Class assisted with the production of this video.
iii. The program was produced both during and after school hours.
b. Program two: “Between the Lines Referendum Program” was a 29-minute video videotaped in October, 2006, with School District equipment. A student interviewed the GBN Principal about the Referendum. This program was produced to provide information about the Referendum. The video was broadcast October 13 – 19, and November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast to GBN residents.
i. Production supervisor for the video was the GBN Radio & TV instructor.
ii. A number of students from the GBN Advanced Television Production Class assisted with the production of this video.
iii. The program was produced both during and after school hours.
c. Program three: “Please Vote on November 7” was a 30-second “Public Service Announcement” (“PSA”) produced in October 2006 with School District equipment. In the PSA, the School District Superintendent reminded residents to vote on Election Day. The video was broadcast November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast
to GBS and GBN residents.
d. Program four: “Please Vote on November 7” was a 30-second “Public Service Announcement” (“PSA”) produced in October 2006 with School District equipment. In the PSA, the GBS Principal reminded residents to vote on Election Day. The video was broadcast November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast to GBS and GBN
residents.
e. Program five: “Please Vote on November 7” was a 30-second “Public Service Announcement” (“PSA”) produced in October 2006 with School District equipment. In the PSA, the GBN Principal reminded residents to vote on Election Day. The video was broadcast November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast to GBN residents.
f. Program six: A Board of Education meeting conducted on or about October 19, 2006, that addressed the Referendum was re-broadcast three times a day at 8:30 a.m., 1:00 p.m., and 5:30 p.m., on GBN cable outlet in a 59 minute format from approximately October 23, 2006, through November 2, 2006. The meeting was broadcast on the GBS station in approximately the same manner.
i. The program was produced by District staff.
ii. A number of students assisted with the production of this video.
iii. The program did not include videotaped citizen comments made at the meeting concerning the referendum.
38. The District represents based upon information received from Comcast, that fair market value to produce the videos described in paragraph 37 is approximately $1,350.
39. The District represents that fair market value of cable television time to broadcast the videos in paragraph 37 is $150 per hour.and totals approximately $25,050
40. Other than as set forth and disclosed in this Part III, the Respondents state that there were no other expenditures, either in cash or in-kind, for Electioneering Communications, as then defined under applicable statutes, in connection with the Referendum.
IV. RECITALS as to AGREEMENTS
41. Consideration. The consideration for this Agreement are the agreements herein contained, the adequacy and sufficiency of which are hereby expressly acknowledged by each of the parties hereto.
42. Payment. It is agreed and understood by the parties that there is no monetary aspect to the Settlement Agreement.
43. Publication.
a. The District shall publish the Agreement, including all exhibits, on the District’s web site as well as the GBN and GBS websites within thirty days of its execution, and shall keep the Agreement published on the websites for six months following the first publication. Publishing shall require that the links to the Agreement shall clearly appear on the first page of the Web sites.
b. The District shall publish paragraphs one through forty of the Agreement in a minimum of 10 point text, without exhibits, in the first District Newsletter published after thirty days following the execution of this Agreement. The publication shall be without editorial comment or additional text. The publication shall reference and provide a link to the website publications of the full
Agreement, including all exhibits.
44. Dismissal with prejudice. COST will cause the Administrative Proceeding before the Illinois State Board of Elections to be dismissed in its entirety against the District and the Individual Respondents with prejudice by appropriate final order of the Illinois State Board of Elections referencing this agreement, within five days of the execution of this Agreement by both parties.
45. Attorneys’ fees. The parties agree that each party is to bear their own attorneys’ fees and costs.
46. Releases and Discharges.
46.1 Based on and pursuant to the consideration set forth in paragraph 41 and on the release set forth in §46.2, the School District, for itself, and its agents, representatives, attorneys, insurers, reinsures, sureties and affiliates, including the Individual Respondents, and its respective successors and assigns (“District Releasing Entities”), does hereby absolutely, completely and unconditionally forever release, relieve, waive, relinquish and discharge COST, and its respective members, heirs, successors, assigns, representatives, agents, attorneys, insurers, officers, directors, employees, divisions of the foregoing entities, and other related entities, and each of them (the “COST Released Entities”) of and from any and all manner of claims, liens, demands, agreements, contracts, covenants, representations, warranties, promises, undertakings, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, fees, accounts, damages, judgments, losses, liabilities, reckonings and trespasses, of whatsoever kind or nature, whether by statute, in law or in equity, whether or not previously or presently known or unknown, suspected or unsuspected, contingent or otherwise, which the District, or
any of the other District Releasing Entities had, now has or hereafter may have or claim to have against any of the COST Released Entities based upon the Administrative Proceeding before the ISBE, including without limitation, any claims which were alleged or could have been alleged in the Administrative Proceeding; provided however, that the District expressly preserves the right to enforce its respective rights under this Agreement.
46.2 Based on and pursuant to the consideration set forth in paragraph 41 and on the release set forth in §46.1, COST, for itself and on behalf of its respective COST Released Entities, hereby absolutely, completely and unconditionally forever release, relieve, waive, relinquish and discharge the District and the District Releasing Entities of and from any and all claims, liens, demands, agreements, contracts, covenants, representations, warranties, promises, undertakings, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, fees, accounts, damages, judgments, losses, liabilities, reckonings and trespasses, of whatsoever kind or nature, whether by statute, in law or in equity, whether or not previously or presently known or unknown, suspected or unsuspected, contingent or otherwise, which COST or any of the other COST Releasing Entities had, now have or hereafter may have or claim to have, based upon the Lawsuit, including without limitation, any claims which were alleged or could have been alleged in the Administrative Proceeding; provided however, that COST expressly preserves the right to enforce his respective rights under this Agreement. COST and the COST Released entities acknowledge that the Individual Respondents are intended third party
beneficiaries of the foregoing release as if expressly named therein and that the dismissal with prejudice will extinguish forever any claims which COST brought or may have brought with respect to activities of the Individual Respondents in connection with the events giving rise to or related to matters alleged in the Complaint or in any of the recitals herein.
47. Non-Assignment of Rights. The parties to this Agreement warrant and represent that neither they nor any related entities have made or caused to be made any assignment, purported assignment, transfer or purported transfer of any right, claim, demand or cause of action covered by this Agreement and that they are the sole and absolute legal and equitable owners of all such rights, claims, demands and causes of action.
48. Entire Agreement. This Agreement constitutes the entire agreement entered into by the parties hereto with respect to the subject matter hereof, and supersedes and cancels all previous agreements, commitments and writings between the parties relating to settlement of the Lawsuit. This instrument is in writing signed by the parties hereto. This instrument shall be construed as a whole and not strictly for or against any one of the parties hereto. The parties agree that the Agreement shall be considered co-drafted by both parties.
49. Warranty of Capacity to Execute. The parties represent and warrant: that no other person or entity has, or has had, any interest in the claims, demands, obligations, or causes of action referred to in this Settlement Agreement, except as otherwise set forth herein; that the parties have the sole right and exclusive authority to execute this Settlement Agreement; and that the parties have not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations or causes of action referred to in this Settlement Agreement.
50. Law Governing. This Agreement shall be interpreted, construed and enforced pursuant to the substantive laws of the State of Illinois, without regard to any choice of law principles.
51. Forum Selection. The parties agree that any action brought to enforce the terms
of this Agreement and/or the Final Order of the Illinois State Board of Elections dismissing this
Administrative Proceeding shall be brought in the Circuit Court of Cook County, State of
Illinois.
52. Authorized Signatories. The parties acknowledge that the signatories below are over the age of 18 years and are bestowed with legal capacity to sign and bind this Settlement Agreement, and that the execution of this Agreement has been authorized by resolution passed by the Board of Education.
53. Execution in Counterparts. This Agreement may be executed by each of the parties hereto in separate counterparts and have the same force and effect as if the parties had executed it as a single document.
54. Severability. If any provision of this Agreement, or the application thereof to any person, entity or circumstances, shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected thereby, but rather shall be enforceable to the fullest extent permitted by law.
55. Voluntary Agreement: Advice of Counsel. The parties acknowledge and state that they have read this Agreement, that the legal effect and binding nature of this Agreement has been explained to them and that they are acting voluntarily and of their own free will, without the exertion of duress upon them in executing this Agreement, and that each of the signatories is duly authorized and empowered to execute this Agreement.
56. Confidentiality. It is understood by the parties that this Agreement is not confidential.
57a. Representations are True and Correct. Upon information and belief, the representations contained in this Agreement made by the District are true and correct
57b. Representations are True and Correct. Upon information and belief, the representations contained in this Agreement made by the COST are true and correct.
V. EXECUTIONS
A. By COST
I have read this Release and Agreement before signing and its legal effect has been explained to me by my attorney.
Signed, sealed and delivered this day of , 2012.
By: Lawrence T. Miller, Chairman of, and on behalf of, COST
_
STATE OF ILLINOIS )
COUNTY OF COOK )
SUBSCRIBED and SWORN to before
me this _______ day of _________ 2012.
Notary Public
B. By the Respondents
I have read this Release and Agreement before signing and its legal effect has been explained to me by the District’s attorney.
Signed, sealed and delivered this day of , 2012.
By: Skip Shein, President of the Board of Education Northfield Township High School District No. 225.
______
STATE OF ILLINOIS )
COUNTY OF COOK )
SUBSCRIBED and SWORN to before
me this _______ day of _________ 2012.
Notary Public
LIST OF EXHIBITS
A. The Newsletters – paragraph 3
B. The Complaint – paragraph 7
C Board of Elections’ Final Order – paragraph 16
D. Appellate Court decision – paragraph 17
E. List of thirteen administrators – paragraph 30
F. List of six administrators – paragraph 31
G. List of two staff members – paragraph 32
H. Summary Exhibit of District Expenditures in Cash and in-Kind
This Settlement Agreement and Release is entered into between the Board of Education of Northfield Township High School District No. 225 (collectively, “District”) and Citizens Organized to Save the Tax-cap (“COST”). The District and COST are the parties to this Agreement.
I. BACKGROUND
1. The District is a body politic and corporate, a public school district located in Cook County, Illinois, organized and operated pursuant to the Illinois School Code, 105 ILCS 5/10-1 et. seq.
2. COST is a voluntary unincorporated entity registered as an Illinois local political committee located in Cook County, Illinois, organized and operated pursuant to the Illinois Election Code, 10 ILCS 5/9-1 et. seq.
3. In July 2006, the District placed a Public Question (“Referendum” or “Referendum Question”) on the November 7, 2006, general election ballot asking the voters in the District whether the District should be allowed to issue bonds in the amount of $94 million “to finance or refinance the building and equipping of additions and renovations to the Glenbrook North and South High School buildings.”
4. On or about October 20, 2006, the District mailed 38,133 copies of a four page written communication (“Newsletters”) entitled “Special Referendum Edition” to residents of the District.1 On or about November 1, 2006, the District mailed 38,077 copies of a two page written communication (“Newsletters”) entitled “Referendum In Brief” to residents of the District that provided information about the Referendum. Exhibit A, the Newsletters.
5. COST opposed the Referendum, and urged voters to reject the District’s Referendum request.
6. At the November 7, 2006, general election, out of 31,338 votes cast on the Question, the Referendum Question was approved by a margin of 216 votes.
II. RECITALS AS TO LITIGATION
7. In May 2007, COST filed a Complaint initiating an administrative proceeding before the Illinois State Board of Elections, alleging that the District (“Corporate Respondent”) as well as individual Board of Education members Donna Rose Torf, Skip Shein, Wayne B. Berzon, Robert A. Boron, Steve G. Hammer, William Jeffrey, and Elias Metsakis (“Individual 1 “(T)the newsletters were products of a campaign directly related to the referendum …” Citizens Organized to Save the Tax Cap v. State Board of Elections, 392 Ill.App.3d 392, 398, 910 N.E.2d 605, 610.
Respondents”) violated the Illinois Election Code through certain specified and enumerated conduct as described in paragraph 8. Case number 07 CD 035. Exhibit B, the Complaint. (Collectively herein the Corporate Respondent and the Individual Respondents will be referred to as “Respondents”).
8. The Complaint alleged that the Respondents violated the Election Code in the following manner:
- failure to register as Local Political Committee;
- failure to file a statement of organization;
- failure to designate a chairman and a treasurer; and,
- failure to file financial disclosure reports, including any cash or in-kind contributions they may have received in the Referendum election. Ex. B, Complaint, ¶¶ 11 - 14 of Count I.
9. The gist of the Complaint is that the Respondents acted and qualified as a Local Political Committee as defined by the Illinois Election Code by spending more than the threshold $3,000 for publishing and mailing electioneering communications (i.e., the Newsletters) but failed to register and make required filings as a Local Political Committee under the Illinois Campaign Disclosure Act. The Election Code defined an electioneering communication as “any communication that … refers to a clearly identified question of public policy that will appear on a ballot ….” and is published within sixty days of an election.
10. In addition, the Complaint alleges that the Newsletters advocated for voters to vote for the Referendum; that the electioneering communications constituted contributions to an existing Local Political Committee in support of a Referendum; and that the Individual Respondents lacked authority under the School Code and under the Election Code to either expend public funds to advocate for electors to vote for the Referendum or to appropriate public funds for political or campaign purposes as contributions to a political committee.
11. Furthermore, COST alleges that since at least September of 2006 and through the November 7, 2006, election, the District carried out a planned campaign prepared by William Blair Co., to secure the passage of the referendum proposition. The District admits that it hired the Blair Co. to assist in accounting and financial issues related to School District business, including the Referendum; however the District denies that it carried out a campaign prepared by Blair to secure the passage of the Referendum.
12. In response to the Complaint, the District argued, and thereafter COST replied as
follows:
- District argued that the newsletters should not be considered electioneering communication because they fell within an exception that allowed communications made as part of a non-partisan activity designed to encourage individuals to vote.
- District argued that the Election Code allowed the use of public funds for “the dissemination of factual information relative to any proposition appearing on an election ballot.”
- Cost replied by arguing that the Newsletters were not “non-partisan” but advocated for the passage of the Referendum.
- Cost further replied that there is no statutory exception from the requirements of the Campaign Disclosure act for the spending of public funds in an election campaign for “Factual Communications.”
13. In June 2007, as required by the Election Code, a preliminary hearing was held on the allegations in the Complaint before a hearing officer appointed by the State Board of Elections.
14. On June 18, 2007, the hearing officer found in favor of the Respondents. (The hearing officer’s decision, adopted by the State Board of Elections, was subsequently reversed by the Illinois Appellate Court). The hearing officer recommended that the matter should not proceed to an Open Preliminary Hearing. His “finding of fact and recommendations” reported that “the facts are not in dispute.”
- The hearing officer reported that the District contends that the use of mailers “to advise taxpayers of an upcoming referendum and urging them to vote does not constitute ‘Electioneering Communications’; rather the mailing of the Newsletters is permitted under section 10 ILCS 5/9-1.4 (b) (3). Further the District contends that 10 ILCS 5/9-1.7 and 10 ILCS 5/9-3 is inapplicable in the instant case because 10 ILCS 5/9-25.1 permits the use of public funds to inform taxpayers of the upcoming referendum.”
- The hearing officer identified and decided the “threshold issue” as whether the sections of Article 9 (of the Election Code) should be considered as independent and separate statutory sections, or should be considered together.
- The hearing officer opined that “the Election Interference Prohibition Act modifies the applicability of 10 ILCS 5/9-1.7 and 10 ILCS 9-3 and that public funds should not be used in calculating whether the $3,000 reporting threshold had been met.”
15. On August 1, 2007, the General Counsel for the State Board of Elections, through written correspondence to the members of the Board of Elections, concurred with the recommendation of the hearing officer.
16. On August 21, 2007, the State Board of Elections by a 6 – 2 vote, adopted the recommendations of the hearing officer and its general counsel and dismissed COST’s complaint. Exhibit C, Final Order. (The Board of Elections decision was subsequently reversed by the Illinois Appellate Court).
17. COST appealed the Final Order of the Board of Elections to the Illinois Appellate
Court. In May 2009, the Appellate Court reversed the Board of Elections and unanimously
ruled against the District’s two contentions, stating:
- “Nothing in the statute (Election Code) suggests that it serves to absolutely exempt government entities from the disclosure requirements contained in the remainder of the Election Code.”
- “There is simply no evidence that these newsletters were exempted communications “made as part of a non-partisan activity designed to encourage individuals to vote or to register to vote.” Exhibit D, Appellate Court decision.
18. In December 2009, three years after the Referendum was on the ballot, the Illinois legislature amended the Election Code’s definition of “Electioneering Communication” apparently to bring Illinois law into conformity with the United States Supreme Court opinion in F.E.C. v. Wisconsin Right to Life 551 U.S. 449, 127 S.Ct. 2652. (2007). The Right to Life case was an “as applied” challenge to the federal ban on spending for Electioneering Communications, finding that before a communication can be found to be an electioneering communication it must be “susceptible to no other reasonable interpretation other than as an appeal to vote for or against a specific candidate.” The parties disagree whether the 2009 amendment has any application to the 2006 Referendum. COST asserts that the legislative changes have no relevance to the Administrative Proceeding; the District argues that the changes are relevant.
19. In January 2010, the State Board of Elections assigned this matter to Hearing Officer James Tenuto.
20. On March 5, 2010, the District filed a Second Motion to Dismiss the Complaint alleging, inter alia, that Board of Elections lacked jurisdiction and that the amendments to the Election Code referenced in paragraph 18 should be retroactively applied, and thus the Complaint should be dismissed. COST filed a response to the motion to dismiss and thereafter the District filed a reply.
21. In December 2010, Hearing Officer Tenuto directed the parties to appear on December 17, 2010, for the purpose of exploring settlement between the parties.
21.1 Since COST filed its Complaint with the Illinois State Board of Elections, the relief sought by COST has been full and transparent disclosure of the referendum spending of public funds by the District. COST has not sought recovery of Public funds, nor sought its attorneys’ fees and costs.
22. The Respondents and COST – in the interest of public disclosure, transparency of government, and in avoiding further costly litigation - have agreed to entirely settle and compromise the Lawsuit and all other issues and claims related to or arising out of the operative facts alleged therein.
23. It is understood that by entering into this Agreement, the parties herein – the for wrongdoing in connection this Lawsuit, and expressly deny any liability, fault, or wrongdoing.
III. RECITALS as to DISTRICT EXPENDITURES FOR THE REFERENDUM
A. OUT–OF-POCKET EXPENDITURES
24. In October 2006, the District paid Vis-O-Graphic of Willowbrook, Illinois, $7,492.20 to print the 86,600 Newsletters referenced in paragraph 3.
25. In October and November 2006, the District paid the U.S. Postal Service $5,486.31 for postage to mail the Newsletters to residents of the District.
26. Of the 10,390 Newsletters that were printed but not mailed out by the District, none were made available, directly or indirectly, to any political committee for campaign purposes. Some were made available to visitors to the School District in lobbies of the schools and the administration building; an unknown number were unused and destroyed after the election.
27. In October 2006, the District paid KTR Video Productions of Mundelein, Illinois, $5,225 to produce a 10 minute video that was broadcast on the School District cable stations approximately one week prior to the referendum election.
28. The Respondents state that the expenditures detailed in paragraphs 24 through 27 were the only out of pocket expenditures of School District funds made by the Respondents for any form of communication about the Referendum.
B. “IN-KIND” EXPENDITURES– STAFFING
29. Thirteen members of the School District administrative staff spent time organizing facts and data that supported information and communication with School District residents about the Referendum.
30. The afore described staff members held the following respective positions: Superintendent; Assistant Superintendent for Business Affairs; Director of Business Affairs; Assistant Superintendent for Education Services; Director of Human Resources; Director of Special Education; Director of Community Information; Principal, Glenbrook North High School; Principal Glenbrook South High School; Associate Principal of Curriculum and Instruction Glenbrook North High School; Associate Principal of Curriculum and Instruction, Glenbrook South High School; Associate Principal for Administrative Services, Glenbrook North High School; and Associate Principal for Administrative Services, Glenbrook South High School.
- The time spent by the above referenced administrators was approximately 150 hours as set forth in the attached Exhibit E, describing the administrator/staff person, their respective hourly compensation in salary and benefits, and the approximate number of hours expended.
- The aggregate value of the District time was approximately $11,750 as set forth in the attached Exhibit E describing the administrator/staff person, their respective hourly compensation in salary and benefits, and the respective number of hours expended as described, and totaling the extended value of time at the hourly cost/rate of compensation.
31. Six members of the School District administrative staff attended meetings in the community to provide information about the Referendum to the residents of the District. The staff members who attended these meetings were the Superintendent; Assistant Superintendent for Business Affairs; Director of Business Affairs; Director of Community Information; Principal, Glenbrook North High School; and Principal, Glenbrook South High School.
- The time spent by the above referenced administrators was approximately 35 hours as set forth in the attached Exhibit F describing the administrator/staff person, their respective hourly compensation in salary and benefits, and the approximate number of hours expended.
- The aggregate value of the District time was approximately $2,500 as set forth in the attached Exhibit F describing the administrator/staff person, their respective hourly compensation in salary and benefits, and the respective number of hours expended as described, and totaling the extended value of time at the hourly cost/rate of compensation.
32. Two staff members spent approximately 20 hours producing videos concerning
the Referendum. (See paragraphs 34 through 37).
- The time spent is as set forth in the attached Exhibit G describing the administrator/staff person, their respective hourly compensation in salary and benefits, and the approximate number of hours expended.
- The aggregate value of the District time was approximately $1,600 as set forth in the attached Exhibit G describing the administrator/staff person, their respective hourly compensation in salary and benefits, and the respective approximate number of hours expended as described, and totaling the extended value of time at the hourly cost/rate of compensation.
33. Total “in-kind” staffing expenditures for the referendum are represented by the District to be approximately 205 hours valued at approximately $15,850 as tabulated in Exhibits E, F, and G.
C. “IN-KIND” EXPENDITURES -- DISTRICT PRODUCED VIDEOS
34. In October 2006, the District produced only six “in-house” videos that the District contends were used to provide information to the community about the Referendum to School District residents through broadcasts on local cable television stations. The videos clearly identified the Referendum.
35. The School District broadcasts on local cable television through Comcast, a corporation that has franchise agreements to provide cable television to both the Village of Glenview and the Village of Northbrook. As required by the FCC, Comcast provides each Village with free access to two stations in their village on its cable broadcasting network. The Villages in turn have allowed the high schools in their communities to broadcast educational programming on one of Village’s cable stations. Glenbrook North High School broadcasts on one of Northbrook’s stations; Glenbrook South High School broadcasts on one of Glenview’s stations.
36. The District used the local cable television time for broadcasts in connection with the Referendum.
37. The Cable Television Programs were:
a. Program one: “Between the Lines Referendum Program” was a 29-minute video videotaped in October, 2006, with School District equipment. A former student interviewed the GBS Principal about the Referendum. This program was produced to provide information about the Referendum. The video was broadcast October 13 – 19, and November 4 – 6, 2006, approximately 10 times a day on the
School District cable station which broadcast to GBS residents.
i. Production supervisor for the video was the GBS Radio & TV instructor.
ii. A number of students from the GBS Advanced Television Production Class assisted with the production of this video.
iii. The program was produced both during and after school hours.
b. Program two: “Between the Lines Referendum Program” was a 29-minute video videotaped in October, 2006, with School District equipment. A student interviewed the GBN Principal about the Referendum. This program was produced to provide information about the Referendum. The video was broadcast October 13 – 19, and November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast to GBN residents.
i. Production supervisor for the video was the GBN Radio & TV instructor.
ii. A number of students from the GBN Advanced Television Production Class assisted with the production of this video.
iii. The program was produced both during and after school hours.
c. Program three: “Please Vote on November 7” was a 30-second “Public Service Announcement” (“PSA”) produced in October 2006 with School District equipment. In the PSA, the School District Superintendent reminded residents to vote on Election Day. The video was broadcast November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast
to GBS and GBN residents.
d. Program four: “Please Vote on November 7” was a 30-second “Public Service Announcement” (“PSA”) produced in October 2006 with School District equipment. In the PSA, the GBS Principal reminded residents to vote on Election Day. The video was broadcast November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast to GBS and GBN
residents.
e. Program five: “Please Vote on November 7” was a 30-second “Public Service Announcement” (“PSA”) produced in October 2006 with School District equipment. In the PSA, the GBN Principal reminded residents to vote on Election Day. The video was broadcast November 4 – 6, 2006, approximately 10 times a day on the School District cable station which broadcast to GBN residents.
f. Program six: A Board of Education meeting conducted on or about October 19, 2006, that addressed the Referendum was re-broadcast three times a day at 8:30 a.m., 1:00 p.m., and 5:30 p.m., on GBN cable outlet in a 59 minute format from approximately October 23, 2006, through November 2, 2006. The meeting was broadcast on the GBS station in approximately the same manner.
i. The program was produced by District staff.
ii. A number of students assisted with the production of this video.
iii. The program did not include videotaped citizen comments made at the meeting concerning the referendum.
38. The District represents based upon information received from Comcast, that fair market value to produce the videos described in paragraph 37 is approximately $1,350.
39. The District represents that fair market value of cable television time to broadcast the videos in paragraph 37 is $150 per hour.and totals approximately $25,050
40. Other than as set forth and disclosed in this Part III, the Respondents state that there were no other expenditures, either in cash or in-kind, for Electioneering Communications, as then defined under applicable statutes, in connection with the Referendum.
IV. RECITALS as to AGREEMENTS
41. Consideration. The consideration for this Agreement are the agreements herein contained, the adequacy and sufficiency of which are hereby expressly acknowledged by each of the parties hereto.
42. Payment. It is agreed and understood by the parties that there is no monetary aspect to the Settlement Agreement.
43. Publication.
a. The District shall publish the Agreement, including all exhibits, on the District’s web site as well as the GBN and GBS websites within thirty days of its execution, and shall keep the Agreement published on the websites for six months following the first publication. Publishing shall require that the links to the Agreement shall clearly appear on the first page of the Web sites.
b. The District shall publish paragraphs one through forty of the Agreement in a minimum of 10 point text, without exhibits, in the first District Newsletter published after thirty days following the execution of this Agreement. The publication shall be without editorial comment or additional text. The publication shall reference and provide a link to the website publications of the full
Agreement, including all exhibits.
44. Dismissal with prejudice. COST will cause the Administrative Proceeding before the Illinois State Board of Elections to be dismissed in its entirety against the District and the Individual Respondents with prejudice by appropriate final order of the Illinois State Board of Elections referencing this agreement, within five days of the execution of this Agreement by both parties.
45. Attorneys’ fees. The parties agree that each party is to bear their own attorneys’ fees and costs.
46. Releases and Discharges.
46.1 Based on and pursuant to the consideration set forth in paragraph 41 and on the release set forth in §46.2, the School District, for itself, and its agents, representatives, attorneys, insurers, reinsures, sureties and affiliates, including the Individual Respondents, and its respective successors and assigns (“District Releasing Entities”), does hereby absolutely, completely and unconditionally forever release, relieve, waive, relinquish and discharge COST, and its respective members, heirs, successors, assigns, representatives, agents, attorneys, insurers, officers, directors, employees, divisions of the foregoing entities, and other related entities, and each of them (the “COST Released Entities”) of and from any and all manner of claims, liens, demands, agreements, contracts, covenants, representations, warranties, promises, undertakings, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, fees, accounts, damages, judgments, losses, liabilities, reckonings and trespasses, of whatsoever kind or nature, whether by statute, in law or in equity, whether or not previously or presently known or unknown, suspected or unsuspected, contingent or otherwise, which the District, or
any of the other District Releasing Entities had, now has or hereafter may have or claim to have against any of the COST Released Entities based upon the Administrative Proceeding before the ISBE, including without limitation, any claims which were alleged or could have been alleged in the Administrative Proceeding; provided however, that the District expressly preserves the right to enforce its respective rights under this Agreement.
46.2 Based on and pursuant to the consideration set forth in paragraph 41 and on the release set forth in §46.1, COST, for itself and on behalf of its respective COST Released Entities, hereby absolutely, completely and unconditionally forever release, relieve, waive, relinquish and discharge the District and the District Releasing Entities of and from any and all claims, liens, demands, agreements, contracts, covenants, representations, warranties, promises, undertakings, actions, suits, causes of action, obligations, controversies, debts, costs, expenses, fees, accounts, damages, judgments, losses, liabilities, reckonings and trespasses, of whatsoever kind or nature, whether by statute, in law or in equity, whether or not previously or presently known or unknown, suspected or unsuspected, contingent or otherwise, which COST or any of the other COST Releasing Entities had, now have or hereafter may have or claim to have, based upon the Lawsuit, including without limitation, any claims which were alleged or could have been alleged in the Administrative Proceeding; provided however, that COST expressly preserves the right to enforce his respective rights under this Agreement. COST and the COST Released entities acknowledge that the Individual Respondents are intended third party
beneficiaries of the foregoing release as if expressly named therein and that the dismissal with prejudice will extinguish forever any claims which COST brought or may have brought with respect to activities of the Individual Respondents in connection with the events giving rise to or related to matters alleged in the Complaint or in any of the recitals herein.
47. Non-Assignment of Rights. The parties to this Agreement warrant and represent that neither they nor any related entities have made or caused to be made any assignment, purported assignment, transfer or purported transfer of any right, claim, demand or cause of action covered by this Agreement and that they are the sole and absolute legal and equitable owners of all such rights, claims, demands and causes of action.
48. Entire Agreement. This Agreement constitutes the entire agreement entered into by the parties hereto with respect to the subject matter hereof, and supersedes and cancels all previous agreements, commitments and writings between the parties relating to settlement of the Lawsuit. This instrument is in writing signed by the parties hereto. This instrument shall be construed as a whole and not strictly for or against any one of the parties hereto. The parties agree that the Agreement shall be considered co-drafted by both parties.
49. Warranty of Capacity to Execute. The parties represent and warrant: that no other person or entity has, or has had, any interest in the claims, demands, obligations, or causes of action referred to in this Settlement Agreement, except as otherwise set forth herein; that the parties have the sole right and exclusive authority to execute this Settlement Agreement; and that the parties have not sold, assigned, transferred, conveyed or otherwise disposed of any of the claims, demands, obligations or causes of action referred to in this Settlement Agreement.
50. Law Governing. This Agreement shall be interpreted, construed and enforced pursuant to the substantive laws of the State of Illinois, without regard to any choice of law principles.
51. Forum Selection. The parties agree that any action brought to enforce the terms
of this Agreement and/or the Final Order of the Illinois State Board of Elections dismissing this
Administrative Proceeding shall be brought in the Circuit Court of Cook County, State of
Illinois.
52. Authorized Signatories. The parties acknowledge that the signatories below are over the age of 18 years and are bestowed with legal capacity to sign and bind this Settlement Agreement, and that the execution of this Agreement has been authorized by resolution passed by the Board of Education.
53. Execution in Counterparts. This Agreement may be executed by each of the parties hereto in separate counterparts and have the same force and effect as if the parties had executed it as a single document.
54. Severability. If any provision of this Agreement, or the application thereof to any person, entity or circumstances, shall, for any reason and to any extent, be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other persons, entities or circumstances shall not be affected thereby, but rather shall be enforceable to the fullest extent permitted by law.
55. Voluntary Agreement: Advice of Counsel. The parties acknowledge and state that they have read this Agreement, that the legal effect and binding nature of this Agreement has been explained to them and that they are acting voluntarily and of their own free will, without the exertion of duress upon them in executing this Agreement, and that each of the signatories is duly authorized and empowered to execute this Agreement.
56. Confidentiality. It is understood by the parties that this Agreement is not confidential.
57a. Representations are True and Correct. Upon information and belief, the representations contained in this Agreement made by the District are true and correct
57b. Representations are True and Correct. Upon information and belief, the representations contained in this Agreement made by the COST are true and correct.
V. EXECUTIONS
A. By COST
I have read this Release and Agreement before signing and its legal effect has been explained to me by my attorney.
Signed, sealed and delivered this day of , 2012.
By: Lawrence T. Miller, Chairman of, and on behalf of, COST
_
STATE OF ILLINOIS )
COUNTY OF COOK )
SUBSCRIBED and SWORN to before
me this _______ day of _________ 2012.
Notary Public
B. By the Respondents
I have read this Release and Agreement before signing and its legal effect has been explained to me by the District’s attorney.
Signed, sealed and delivered this day of , 2012.
By: Skip Shein, President of the Board of Education Northfield Township High School District No. 225.
______
STATE OF ILLINOIS )
COUNTY OF COOK )
SUBSCRIBED and SWORN to before
me this _______ day of _________ 2012.
Notary Public
LIST OF EXHIBITS
A. The Newsletters – paragraph 3
B. The Complaint – paragraph 7
C Board of Elections’ Final Order – paragraph 16
D. Appellate Court decision – paragraph 17
E. List of thirteen administrators – paragraph 30
F. List of six administrators – paragraph 31
G. List of two staff members – paragraph 32
H. Summary Exhibit of District Expenditures in Cash and in-Kind
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