PARIS, IL. (ECWd) –
We wrote in December 2015 about RIDES threatening a lawsuit (here) and explained the situation pretty thoroughly.
RIDES-MTD filed the lawsuit a couple weeks ago.
The bottom line is that you must follow the law when dissolving a mass transit district (“MTD”), the county lacks authority to give any funds leftover to the new MTD, resolutions that violate law are invalid, MTDs must be dissolved lawfully and counties can only be annexed into a new district according to law.
The key elements we question are:
RIDES Mass Transit District sued Edgar County Treasurer for Breach of Contract
In a two-count complaint filed on August 8, 2016 and naming Edgar County Treasurer, Don Wiseman, as Defendant (in his official capacity), the RIDES-MTD based out of Harrisburg, Illinois, are complaining of “Breach of Contract” and also suing for “Writ of Mandamus”.
This is resulting from the alleged dissolution of East Central Illinois Mass Transit District, and Edgar and Clark County annexing into RIDES Mass Transit District in 2013. It is also another of the “lasting legacies” of former Edgar County board chairman Chris Patrick who obviously thought laws did not apply, thought that he was in charge, and nobody could change decisions made by the board. He resigned shortly after being elected.
So, let’s take a look at the lawsuit (below), shall we?
COUNT ONE – BREACH OF CONTRACT:
The suit claims breach of contract because Edgar County passed a Resolution saying they would give all left over funds from ECIMTD to RIDES-MTD upon annexation into the new district. (¶ 5)
The suit acknowledges two check were sent to the Edgar County Treasurer as proceeds from the dissolution and sale of ECIMTD assets. (¶ 7 and 8)
The suit claims it purchased a building in Paris “on reliance” of the money to be transferred to RIDES from liquidation of ECIMTD.
RIDES finally prays for judgment against Edgar County Treasurer in the amount of $152,150.49 from the June 17, 2013 resolution, plus costs for the suit.
COUNT TWO – MANDAMUS:
This COUNT is asking for the Court to order the Edgar County Treasurer to immediately pay the funds to RIDES, based on their assumption of the “validity” of the June 17, 2013 resolution.
Now we can examine the statutes governing counties and mass transit districts.
As a reminder: We are not attorneys and this is not legal advice,
it is simply our interpretation as we read the various laws that may or may not apply to this situation.
First and foremost, Illinois is a Dillon’s Rule state, and as such, local governments have and can yield only those powers granted them by the Legislature and contained in law. No matter how much it is wanted or needed, it cannot be accomplished without an enabling statute authorizing it.
COUNTIES CANNOT MAKE LAW
Second, a Resolution or Ordinance cannot be enacted that is contrary to state law. A local government cannot make “law” and any such attempt is automatically invalid on its face and unenforceable – no matter the form it takes.
TREASURER AND CONTRACT
The Treasurer did not make any contract, is not permitted by law to make a contract with a mass transit district, and could never breach a contract he is not a party to and did not make. The County Board passed the Resolution, and they are solely responsible for any breach of the Resolution (“contract”). Failure to comply with an invalid and unenforceable Resolution cannot be considered a “breach of contract”, because the contract must first be a valid contract, capable of being breached. This was not such a contract. This was never a contract to begin with.
The June 7, 1013 Edgar County Board Resolution
This Resolution purports to state that “all assets received by Edgar County Treasurer upon the dissolution of the East Central Illinois Mass Transit District shall be transferred, assigned, and conveyed by the County Treasurer to Rides Mass Transit District as the County’s contribution to Rides Mass Transit District.”
So this Resolution says the county will give the funds to RIDES, now we must find out if the county has the authority to give these funds to RIDES (see Dillon’s Rule, above), or if any other law stipulates how the remaining funds are to be distributed.
The Local Mass Transit District Act – Section 9 – Dissolution
This Section was changed on June 1, 2015, to eliminate the requirement that a County approve of the dissolution and to eliminate the wording “or other adequate services are or can be made available”. Where the remaining funds go and to whom they are paid remains essentially unchanged, other than allowing payments to municipalities in whole or part within the district – previously is was only if those municipalities “created” the district.
The only option was to dissolve the current district, and dispose of its assets according to law (Section 9 of the Local Mass Transit District Act). Then, if needed, annex into an existing contingent mass transit district according to other provisions of the Local Mass Transit District Act.
…any funds remaining after the sale and disposition of its property shall be disposed of by payment to the treasurer of the county or municipality which created it…
According to our sources, RIDES has been repeatedly asked to provide proof thru any enabling statute that authorizes the county to distribute those funds to RIDES. No answer has ever been provided, other than simply reciting the invalid Resolution from June of 2013.
We are confident this lawsuit will fail on a Motion to Dismiss. The law is clear. The county applied the law properly in relation to this situation. Had the past board chairman took the time to listen to us prior to approving the Resolution, it would have never been approved in the first place, and we would not be discussing this lawsuit three years after the “dissolution” of ECIMTD.
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