Special Districts In part because of language in the 1890 Illinois Constitution which limited the amount of debt which each governmental body could incur, new special purpose governmental bodies were created to perform additional or supplementary services when existing governments had reached their debt limits. Illinois has more governmental bodies than any other state in the union. Our law firm has represented many of these special districts for both as corporate attorneys and as consultants. Among these special districts which we provide services are community colleges, fire protection, library, sanitary and water districts, and other specialized inter-governmental agencies. Typically these governments are created under sketchy statutory language which, unlike the law that governs full service governments like counties and municipalities, leaves much to the imagination as to their powers and duties. In addition, only sparse case law can be used to fill in the gaps in the statutory language. For that reason, the firm's experience in providing day-to-day representation of these special districts for many years, helps us to provide their elected and appointed officials with the necessary "rules of the road."
We always begin our evaluation of legal questions with a close examination of the particular statutory language which creates or authorizes the special district. Then our lawyers review certain "catch-all" provisions of Illinois law which provide direction for cases where there are no specific directions for that special district. Finally, analogies can be drawn between the rules which apply to governmental bodies whose statutory authority is more clearly delineated. Sometimes questions can be resolved, when such governments move into an innovative areas, by combining their rather obscure powers with that of other governments in an inter-governmental agreement. An example is an agreement which can allow a special district to use the power of, a municipality to condemn property or to help to fund a project of joint interests to both governments.
Frequently Asked Questions About Special Districts
1. Does the Open Meetings Act, Tort Immunity Act, or Freedom of Information Act apply to our district and to its committees?
ANSWER: These three important statutes apply to all special districts and their committees. The obligations of the Acts sometimes fall harder on special districts because they often do not have the levels of staff assistance available to other governmental units. Nonetheless, meetings can only be held if they comply with the provisions of the Open Meetings Act, and requests by members of public for documents must be answered within the same 7 or 14 day time limit as is applicable to all governments. The prohibition against discussions by a majority of a quorum of members of the governing body or its committees of subjects which can only take place in an open meeting can create problems for governments entities which have five or fewer members. Since three is a quorum of five and two a majority of a quorum; no two members of such a corporate authorities or its committees can discuss public business in a closed session, except as specifically allowed in the Open Meetings Act. Repeat efforts to have this anomalous law changed have, to date, failed. In a more positive way members of special governments are entitled to the very substantial immunities contained within the Illinois Tort Immunity Act.
2. Who gets to authorize expenditures in special districts?
ANSWER: While there are some differences in the statutory language, in general the rule prevails that only the corporate authorities or someone specifically authorized by the corporate authorities may spend funds or obligate the district. Individual members of a library district or a fire protection district board have no independent authority to expend funds. Sometimes motions are made to authorize heads of committees within such special districts to expends funds up to a particular amount so long as that sum is within an approved budget. While such officials can, at their own risk, expend funds, hoping for later ratification, situations have occurred where these officials have found themselves personally liable for the contract which they thought they were making on behalf of their district.
3. Can employees of such special districts acquire tenure?
ANSWER: Absent a provision created a civil service board for a particular special district most special districts hire their employees in an "at-will" relationship. That means that the employees can be discharged without the requirement of a notice or hearing. In some ways, however, the exception to that rule is tending to swallow up the rule itself. Special districts do have the power to voluntarily recognize labor unions and in the event that they have more than 35 covered employees they are required to, upon request, engage in collective bargaining. Collective bargaining agreements can establish certain rights in employees which are equivalent to tenure rights. Some special districts have the ability to create certain offices and to cause the appointment of individuals to the offices, in some cases, for multi-year terms. Under those circumstances the office holders can often only be discharged after some formal process has taken place. Even in a non-union setting public employers can sometimes agree to provisions within employee handbooks which have the equivalent of granting greater rights to the employees than they would be entitled to under the standard provisions of the state statutes. Finally, governmental employees, not otherwise entitled to any tenure rights may have a right to notice and a hearing in the event that the employer discharges them in such a public way as to harm their future professional career. The governing board of a special district needs to receive clear direction, from its attorney, as to the particular rights and powers it has regarding the selection and discharged of its officers and employees. Our attorneys have broad experience in helping special district governments deal with labor and personnel problems.
4. What role do special districts have in the creation of tax increment financing districts?
ANSWER: Illinois cities and villages are given the almost exclusive role in determining whether economic development should be encouraged through the use of tax increment financing districts. These districts, have the ability, to capture for up to 23 years some or all of the added real estate tax revenues paid on parcels of land after they have been improved under the terms of redevelopment agreement. Not all developments are entitled to apply for tax increment financing benefits. Usually the municipality hires a consulting firm to write a study to determine whether the proposed property and the project are entitled to seek the creation of a TIF. The theory behind this tax incentive is that, "but for" the creation of the TIF, the property would continue in its underdeveloped state. Special districts, under their theory, would have nothing to lose by the creation of a TIF since they are guaranteed the base amount of taxes which they previously received and will ultimately gain an infusion of new taxes when the period during which the diversion of tax dollars takes place is ended at the termination of the TIF. Usually a wise municipality calls in all affected taxing districts to discuss the creation of a TIF prior to engaging in full negotiations with the developer. The amount of the TIF rebate, the number of years during which the TIF will be in existence and possibly an agreement to share a portion of the income in each year with the taxing bodies are all subjects for negotiations. The governmental body is required, by law, to share certain preliminary information, and to convene a meeting of all taxing bodies which will affected by the TIF at which the comments of the taxing bodies can be received and a report by them as to whether the project complies with statutes can be received by the municipality. The taxing bodies do not, however, have veto authority over the project. The money which is diverted from tax dollars can be allocated to the benefit of the developer by the municipality in a number of ways. Possible benefits include the acquisition of property difficult to acquire at a reduced costs or even a grant to a developer which promises to carry out a particular development plan. The funds can also be used for public improvement associated with the development such as sewer, water, roads or parking structures.
5. Can an elected official serve on the Board of more than one governmental body?
ANSWER: Often an elected official of the State Legislature, the County Board, or a municipality may also wish to serve as an elected member of the Board of a Special District. The holding of such multiple elected offices should not be confused with serving as a member of a governmental body and as a delegate of that body to an intergovernmental entity. That latter arrangement ordinarily does not result in any issues regarding incompatibility of offices. State law does not permit an individual to serve as an officer for two governments where the decisions to be made on the governing board of either governmental body might be compromised by service in a similar capacity for another government. The problem is most acute where the two governmental bodies engage in numerous contracts are likely to encounter, areas of adverse litigation, or where the goals of the governments may be inconsistent. The Illinois Attorney General has issued hundreds of opinions regarding the compatibility or incompatibility of certain offices. These decisions do not have the force of law and only serve as an expression of the advice of that office, which should be carefully considered. If a public official accepts an incompatible office, and the conflict is upheld by a court of law, the result is the automatic abandonment of the first office. The individual can continue to serve in the second office accepted. A lawsuit seeking to raise the issue of incompatibility can be filed by the Attorney General, the local State's Attorney or even, after unsuccessfully requesting those parties to take the action, by a citizen of the government itself. A simple or occasionally conflict between serving on one government and on another should not automatically cause incompatibility to exist. Where such conflicting decisions are infrequent, the person serving on the boards of both governments can simply take no action on the matter where the infrequent conflict occurs. The decisions of Appellate Courts in these areas are sometimes surprising, since a long-standing Appellate Court case concluded, for example, that the Mayor of a municipality could serve as a representative to the General Assembly.
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