Taxpayers who sued win another $240K back from Marengo District 154

After losing a similar lawsuit by local taxpayers, Marengo High School District 154 has agreed to pay back another $241,000 in taxes to property owners who claimed the district levied an “excessive” amount in 2023.

More than 400 plaintiffs – including residents, homeowners associations and businesses – filed a tax rate objection lawsuit against the school district in November for the 2023 tax year in McHenry County court. District 154 agreed to pay $241,130 in another recent settlement, according to court records.

This comes after the school district was ordered by the court to pay back nearly $364,000 to the same taxpayers who filed a separate lawsuit claiming the district levied excessive amounts in 2022, according to court documents. Judge Joel Berg took the taxpayers’ side after a bench trial that was held last month. In total, the district paid back $605,000.

Plaintiffs claimed excessive accumulation of money in the school district’s operations and maintenance fund for the 2023 tax levy year – the same fund they claimed had larger-than-warranted fund balances the prior tax year. According to the complaint, more than $2.2 million was in the account, plus another $438,055 received before the 2023 tax levy, which resulted in unnecessary maximum levy. Three years before, District 154 transferred $2.5 million from the fund to its capital projects fund, according to the lawsuit.

“In the years prior to the 2023 levy, District No. 154 was accumulating funds in its O&M Fund, for the purpose of illegally transferring those funds to its Capital Projects Fund, without passing a referendum, in violation of the Illinois School Code,” plaintiff attorney Timothy Dwyer said in the complaint.

The group of taxpayers also filed a lawsuit against Riley School District 18, an elementary district that feeds into Marengo Community High School, for similar tax levy complaints. The elementary district agreed to pay the plaintiffs an even larger rebate of $1.2 million in a settlement last year, according to court documents.

The district will not have to go back and recalculate for the following tax levy years because “the 2023 levy requested was already lower than an allowable rate based on the 2022 levy and so was the 2024 levy,” District 154 Superintendent David Engelbrecht said in an email to the Northwest Herald.

The judgment will not have a direct impact on District 154’s education fund, but “every financial impact on a school district has to be considered on how it impacts the overall budget and the students it serves,” Engelbrecht said.