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09/20/89 Thomas J. Broeckl Et Al., v. the Chicago Park District

September 20, 1989

THOMAS J. BROECKL ET AL., APPELLANTS

v.

THE CHICAGO PARK DISTRICT, APPELLEE



SUPREME COURT OF ILLINOIS

544 N.E.2d 792, 131 Ill. 2d 79, 136 Ill. Dec. 106 1989.IL.1450

Appeal from the Appellate Court for the First District; heard in that court on appeal from the Circuit Court of Cook County, the Hon. Arthur L. Dunne, Judge, presiding.

APPELLATE Judges:

JUSTICE RYAN delivered the opinion of the court. JUSTICE MILLER took no part in the consideration or decision of this case.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE RYAN

This appeal involves the validity of mooring fees imposed by the Chicago Park District. Two issues are presented. The first is whether the park district's practice of charging mooring fees in excess of the expenses and costs actually incurred is permissible. The second issue is whether the statute that permits the park district to charge nonresidents of Chicago a higher fee than residents is unconstitutional and void.

The defendant, the Chicago Park District, charges mooring fees that exceed operation and maintenance costs of recreational boating harbors. The defendant also charges nonresidents of Chicago a 25% higher fee than it charges residents. As a result of these practices, it is alleged that the defendant makes a 100% to 500% profit. The plaintiffs filed a class action in the circuit court of Cook County, contending that this profit-generating activity is illegal. The plaintiffs additionally contended that both the statute authorizing the park district to charge nonresidents higher mooring fees (Ill. Rev. Stat. 1987, ch. 105, par. 333.23n(g)) and the park district's practice of charging nonresidents higher fees are unconstitutional. The trial court held that the park district could make a profit by charging mooring fees that exceed operating and maintenance costs. The trial court also held the park district's practice of charging nonresidents higher fees, and the statute authorizing this practice, unconstitutional and void.

Both parties appealed. The appellate court affirmed the trial court's holding that the park district could generate a profit by charging fees that exceed costs. The appellate court, however, found that the practice of imposing higher fees upon nonresidents was constitutional, and thus reversed the trial court's decision on this issue. 170 Ill. App. 3d 1063.

We acknowledge that the concept of "profit" in the context of the park district's operation is vague and elusive. Nevertheless, we must examine the issue raised by plaintiffs of whether the park district may generate a "profit" by charging fees that exceed costs. The appellate court rejected the plaintiffs' argument that the park district is required by law to limit fees to an amount approximating the cost of furnishing and maintaining the moorings. The court reached this Conclusion after examining several portions of the statutory scheme (Ill. Rev. Stat. 1987, ch. 105, par. 333.1 et seq.) that authorize and regulate park district functions, and finding specific language indicating that the park district could make a "profit" through the rental of harbor spaces. (170 Ill. App. 3d at 1065-66.) The appellate court also relied upon this court's opinion in MacNeil v. Chicago Park District (1948), 401 Ill. 556. We have reviewed the applicable statutory authority and the MacNeil decision, and agree with the appellate court's decision that the park district may derive a profit from the mooring fees.

We begin by examining the statutory authority that creates and confers powers upon the park district. (See Ill. Rev. Stat. 1987, ch. 105, par. 333.1 et seq.) After reviewing the applicable grant of statutory authority, we agree with the appellate court's Conclusion that the legislature intended that the park district operate the harbors at a profit; that is, it did not intend to limit the park district to charging fees that only cover the cost of operation. (See Ill. Rev. Stat. 1987, ch. 105, par. 333.1 et seq.) We first find evidence of this intent in sections 26.1 through 26.10 of the statute, which authorize the park district to charge rental fees for mooring boats in the city's harbors. (Ill. Rev. Stat. 1987, ch. 105, pars. 333.23 l through 333.23u.) The specific authorization to charge fees is found in section 26.3(g) of the park district statute (Ill. Rev. Stat. 1987, ch. 105, par. 333.23n(g)), which provides that the park district may "establish and collect fees for all facilities and services, and compensation for all materials furnished. Fees charged nonresidents of such district need not be the same as fees charged to residents of the district." We note that this language does not create a limitation on the amount of fees, and it thus indicates a legislative intention that the determination of the amount to be charged is within the discretion of the park district.

We note that the statute authorizes the park district to charge nonresidents more than residents. Because the operating cost of providing moorings to nonresidents is the same as the cost of providing moorings to residents, we agree with the appellate court that "this statutory provision reflects a legislative intention not to tie the fees charged for moorings to defendant's costs and expenses for furnishing and maintaining the moorings." (170 Ill. App. 3d at 1066.) If the legislature had intended that the fees charged for moorings were to be limited to actual costs, the legislature would not have explicitly stated that nonresidents could be charged higher fees.

Further support for the park district's argument that the legislature intended that it generate profits from the harbors is found in section 26.7, which authorizes the park district to issue revenue bonds to acquire, construct, enlarge, improve, operate, and maintain its harbors. (Ill. Rev. Stat. 1987, ch. 105, par. 333.23r.) Subsection (l) of this section provides that the park district ordinance that governs such bond issues may include "covenants as may be deemed necessary or desirable to assure a successful and profitable operation of the harbor and facilities, and prompt payment of the principal of and interest upon the bonds." (Emphasis added.) (Ill. Rev. Stat. 1987, ch. 105, par. 333.23r(l).) This language reveals a legislative intention that the park district be authorized to conduct a profitable operation of its harbors. In short, we reject the plaintiffs' argument that the mooring fees must mirror actual costs. We agree with the appellate court's deductive reasoning that "[s]ince mooring fees are the Chicago Park District's main source of revenue from the harbors, if a profitable operation of the harbors is to be accomplished, it can only be accomplished through profits derived from mooring fees." 170 Ill. App. 3d at 1066.

Section 26.8 of the statute further supports this Conclusion. (Ill. Rev. Stat. 1987, ch. 105, par. 333.23s.) This section provides that the park district may receive revenues from the operation of its harbors in excess of the requirements for retirement of revenue bonds or for payment of maintenance, operation, depreciation, rehabilitation and expansion of the harbors. After all such bonds have been paid, the revenues may be transferred to the general corporate fund of the park district and used for the maintenance, operation, repair and development of the harbors or "for any corporate purpose." (Ill. Rev. Stat. 1987, ch. 105, par. 333.23s.) The legislature would not have included this provision if it had not intended that the park district make a profit through operation of the harbors. The fact that the statutory language explicitly provides that any amount of money earned could be used for either harbor purposes or any corporate purpose indicates that the legislature did not intend that the park district restrict fees to actual costs.

The plaintiffs argue, however, that the statutory scheme detailed above does not apply in the instant case because it only applies to bonded facilities. The statute provides that revenues from the facilities (bonded moorings) may be used for any corporate purpose once the bonds have been paid off. We believe that this authorization demonstrates that mooring fees from nonbonded moorings may also be used for general corporate purposes because once the bonds are paid, bonded facilities become nonbonded facilities. Because there is no apparent reason why the legislature would allow only bonded ...


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