Village of Chatham – Water Works contracts based on fraud?

Sangamon  Co. (ECWd) –

Public officials tend to do what they want until people question those actions.  Then, more often than not, they will seek out an opinion that fits what they are doing or want to do, instead of an opinion that is based on well-grounded law.  What makes our work so much fun, yes we are having fun, is the fact we are not attorneys.  You see, the violations we uncover as so brazen even the common citizen can spot a fraud with a little bit of reading and there is no better joy than to prove attorneys wrong when you’re not one.

March of 2010, the South Sangamon Water Commission and the Village of Chatham entered into an intergovernmental agreement found here.  There are some very disturbing issues we found in that agreement that we believe may point to outright fraud to the public.  

From the contract: 65 ILCS 5/11-135-5, contracts entered into by water commissions for construction of
waterworks shall be “after advertising for bid;”

Yes, contracts entered into shall be “after advertising for bid”.  That means the lowest responsible bidder is to get the work. The legislative intent was to require bidding.

Does anyone not understand that?

From the contract:  “WHEREAS, although the Commission has obtained favorable bids for the construction of the water plant and for materials for its water transmission lines, its bids for labor for construction of water transmission lines have been unsatisfactory, and it is clear that better prices can be obtained through a negotiated process;”

The law mandates contracts may be entered after bidding and does not provide any language that allows them to disregard such bidding just because the bids are unsatisfactory in their opinion.  It appears this is their way of saying we are going to do what we want, the law be damned.  The whole purpose of bidding is to ensure private business  has a fair and equal opportunity to obtain a public contract.  The logic used in this contract points to a corrupt practice with full intent of circumventing bidding laws.

From the Contract: “WHEREAS, pursuant to Section 8-2-9 of the Municipal Code, (65 ILCS 5/8-2-9), a municipality has the power to waive bids with a 2/3 vote of trustees”

$1,000.00 dollar give away! 

Yes, the Edgar County Watchdogs will donate $1,000.00 to a charity of your choice to the first person who can produce Municipal Code, 65 ILCS 5/8-2-9 that states a municipality “has the power to waive bids with a 2/3 vote of trustees!”

The statutory citation in the contract deals with the municipality’s obligation to pass an appropriation ordinance.  Can you believe that the words “bids” and “trustees” is not even in the section they claim?  In fact, the only reference to a 2/3 vote on a matter in that citation has nothing to do with bids as they claimed in the contract.

“by a two-thirds vote of all the members of the body, may make transfers within any department or other separate agency of the municipal government of sums of money appropriated for one corporate object or purpose to another corporate object or purpose“

So how does an agreement get language placed in it with a claim it says one thing when in fact it is not even close to saying what they claim?  Was this an attempt to manipulate the process for personal gain by deceiving those signing the document?  Anyone looking at it would conclude it means what it says, however, as we have proven many times, just because it says it on paper does not make it so!

Assuming they transposed the 9 and the 2 in the contract citation, we find in 65 ICLS 5/Sec. 8-9-2 – PURCHASING AND PUBLIC WORKS CONTRACTS IN MUNICIPALITIES OF LESS THAN 500,000 – clearly states:

(a) In municipalities of less than 500,000 population, the corporate authorities may provide by ordinance that all supplies needed for use of the municipality shall be furnished by contract, let to the lowest bidder.

As you can read, this section only applies to supplies needed for use of the municipality, thus, any claim that they made a simple Scribner error won’t hold water.

From the contract:  “the Village may negotiate contracts for labor and equipment for construction of the water mains and raw water transmission mains, or it may hire workers, subject to the limitation that all workers shall be hired from a union hall and all contracts for labor will be with union shops in view of the Commission’s responsible bidding ordinance.”

The above statement from the contract is yet another paragraph that is wordsmithed and not consistent with the actual statutory citation. We believe what they are referring to is section 8-9-1, which is never mentioned in the contract.  That section states in part:

“the commissioner of public works or other proper officers to be designated by ordinance, shall superintend and cause to be carried out the construction of the work or other public improvement and shall employ exclusively for the performance of all manual labor thereon, laborers and artisans whom the municipality shall pay by the day or hour; and all material of the value of $20,000 and upward used in the construction of the work or other public improvement, shall be purchased by contract let to the lowest responsible bidder in the manner to be prescribed by ordinance. However, nothing contained in this section shall apply to any contract by a city, village or incorporated town with the federal government or any agency thereof.”

Does anyone see anywhere in the law that the workers “shall be hired from a union hall and all contracts for labor will be with union shops”?  No, the law does not mandate that yet that specific language was placed in this contract for a reason.  Who got this work? 

Considering the section of the law pertaining to a Water Works requires contract awards after bidding, we find it hard to comprehend how they can get around that specific statute, created for that specific purpose.  Considering Illinois is a Dillons Rule state, they only have the power granted by statute.  Without the power to “negotiate contracts for labor and equipment” being spelled out in law, we take the position this wording was done with an intent to misrepresent the law and possible to steer contracts to those they wanted.

More importantly, the very statute that authorizes the Village of Chatham to contract with the South Sangamon Water Commission has some other catches that appear to have not been complied with. 

65 ILCS 5/11-135-1:  “Whenever any municipality determines to pay, to advance or to obligate itself for its proportionate share of development costs as above provided, it shall adopt an ordinance declaring its intention to do so, fix the maximum amount of its share of the cost it proposes to pay, to advance or to obligate itself for, and the period over which it proposes to pay its obligation (not exceeding 5 years) and the maximum amount to be paid annually, if such obligation is to be paid in installments. The time of payment of any such installment obligation may be extended for a period of not exceeding five years from the final maturity date of the original obligation.
    From and after such ordinance becomes effective, it shall be the duty of the municipality to include an amount sufficient to pay the annual installments of its obligation each year in the next succeeding appropriation ordinances. No prior appropriation shall be required for a municipality to authorize the payments, advances or obligations herein provided for.

We welcome the Village of Chatham to produce the ordinance that fixed the maximum amount of its share of the cost it proposes to pay that also outlines the period of time and the maximum amount to be paid annually.

The current ordinances with the SSWC that we have obtained make no referenced to the fixing of a maximum cost share, time frame for those obligations, nor the maximum to pay annually.  If they are unable to produce such an ordinance it may well be another element of the potential fraud committed on the taxpayers of this Municipality.

Below are the two primary ordinances related to the water project.

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