Carlinville still can’t find authority to form nonprofit water company – claims nobody has questioned it yet

CARLINVILLE, IL. (ECWd) –

Tap-dancing around the issue of statutory authority, the City of Carlinville once again avoided officially answering the question.

The city also voted to give $3000 to a nonexistent corporation.

During Carlinville’s December 4, 2017 public meeting, discussion involved whether or not the city has any statutory authority to form, or help form, a nonprofit private corporation to later enter into a contract with to provide water to Carlinville’s residents.

We have always voiced our opinion that the answer is “NO” – there is no authority for the city to participate in this manner.

Two things cited by Carlinville’s acting attorney, but still nothing in writing, purporting to give them the authority. Carlinville cited Article VII, Section 10 of the Constitution and an Appellate Court Case from 1982: Village of Sherman v. Village of Williamsville. We will discuss these (and more) below.

It appears there is still some confusion in Carlinville between those advocating for this regional water concept and those opposing it. The ONLY issue we see with this entire process is with the City of Carlinville (or any local government) participating in forming a nonprofit (a non-governmental entity) and forming it with another nonprofit as a partner. Form a Water Commission, etc, and get on with providing water the proper way. This cannot happen with Jersey County Rural Water Company (private corporation) participating. Others may oppose this due to its location and not legitimately looking at other options, but ECWd opposes this because we believe there is no authority under current Illinois law for this to happen the way it is currently being pursued.

We have discussed this in earlier articles, there are several legal/legitimate ways to do this; all of them are a public body (local government), and none of them involve forming a nonprofit or allowing a nonprofit to participate in its governance:

• Form a multi-county water commission
• Operate under an intergovernmental agreement
• Form a new water district encompassing the desired territory
• Form a Municipal Joint Action Water Agency

We believe the driving force behind this entire “regional water nonprofit concept” is the Jersey County Rural Water Company – they cannot participate in any of the above plans of action, and by the same token, a local government cannot participate in the single plan JCRWC has been pushing towards.

Article VII, Section 10 of the Illinois Constitution:

This section’s title should be the first red flag when trying to apply it to city’s authority to form a nonprofit with other local governments AND a non unit of local government (a private corporation named Jersey County Rural Water Company).

It is not possible to enter into an “Intergovernmental Agreement” with a non-governmental entity.

SECTION 10. INTERGOVERNMENTAL COOPERATION
(a) Units of local government and school districts may
contract or otherwise associate among themselves, with the
State, with other states and their units of local government
and school districts, and with the United States to obtain or
share services and to exercise, combine, or transfer any
power or function, in any manner not prohibited by law or by
ordinance. Units of local government and school districts may
contract and otherwise associate with individuals,
associations, and corporations in any manner not prohibited
by law or by ordinance. Participating units of government may
use their credit, revenues, and other resources to pay costs
and to service debt related to intergovernmental activities.
(b) Officers and employees of units of local government
and school districts may participate in intergovernmental
activities authorized by their units of government without
relinquishing their offices or positions.
(c) The State shall encourage intergovernmental
cooperation and use its technical and financial resources to
assist intergovernmental activities.
(Source: Illinois Constitution.)

Village of Sherman v. Village of Williamson:

While this case from 1982 (here) discussed Art VII, Section 10, of the Constitution, the underlying issues were whether or not Williamson could back out of a contract it legally entered into when it created a Water Commission with the Village of Sherman. The Court recognized Art VII, Sec 10, and the Illinois Municipal Code as authority to create the Commission (since it was actually created pursuant to an intergovernmental agreement). The Court further stated this is exactly the kind of local government cooperation the constitution wanted to encourage. No private corporation involved in this case.

Buffalo Sewer Commission v. Boggs

The 3d Appellate Court in a 1982 case also talked about Art VII, Section 10 (here) and the Illinois Municipal Code. Once again, all parties involved were local governments and a Sewer Commission (formed pursuant to an intergovernmental agreement). Connelly V. Clark County (here) also discussed Art VII, Sec 10 and clearly indicates that that “Intergovernmental cooperation is the voluntary participation of units of local government in joint undertakings…” No private corporation involved in this case.

Board of Education v. Cahokia District Council No. 58

This 1982 5th Appellate District case (here) appears to place limits on Art VII, Sec 10, of the Constitution and defined the term “prohibited by law” as found in Sec 10. This Court stated that “a school board may not contract to delegate or surrender a duty conferred upon it by statute or to surrender discretion granted it by statute” and:

“This long established common law rule has been accepted in the Illinois Constitution of 1970, article 7, section 10(a), which states, “Units of local government and school districts may contract and otherwise associate with individuals, associations, and corporations in any manner not prohibited by law or by ordinance.” (Ill. Const. 1970, art. 7, § 10(a).) As school districts are given certain express and implied powers by the School Code of 1961 (Ill. Rev. Stat. 1979, ch. 122 par. 1-1 et seq.), any attempt to alienate those powers by contracting them away would dilute the effect of the Code and would be “prohibited by law.”

We understand that to mean, in the case of Carlinville (for instance), if the Municipal Code or Intergovernmental Cooperation Act gives a municipality the express and implied powers to provide water to its residents, and describes how to provide for it, it cannot use Art VII, Sec 10, to contract or surrender those powers away to a private nonprofit corporation. Such action would be “prohibited by law” and could not be authorized.

Moving on… –

Alderman Cindy Campbell doesn’t understand what the issue is. The bottom line is the city participating in forming this nonprofit corporation is not allowed under state law. Form the regional water concept as a public body and get on with providing water. It is not that difficult, and when all of this gets ironed out, the current nonprofit idea will either implode or will be formed properly (as a public body).

Don’t claim it’s OK to do because Gateway Regional Water Company has done it. Just because someone did it in violation of law does not give you the right to do the same thing. It doesn’t work for speeding tickets “Officer, I was driving 90 miles per hour because that guy in front of me was going just as fast” – and it won’t work for this situation either.

Yes, Alderman Campbell, you WILL have to provide all the information related to the expenditure of these public funds. You WILL have to bring the receipts for purchases and everything else these public funds are used for.

This attorney tried to define “quasi-public” and stated the Central Macoupin County Rural Public Water District he is the attorney for is a “quasi-public body with a private board.” He could not be further from reality.

The Central Macoupin County Rural Public Water District is a public body with board members appointed by the county. It is not a private board. It is not a “hybrid” anything – it is PUBLIC. It falls under the Public Water District Act, 70 ILCS 3705 (here) – no “quasi” about it. It is subject to the Freedom of Information Act, the Open Meetings Act, the Constitution, and every other state statute applicable to local governments.

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