Appeal from the Circuit Court of Ogle County. Nos. 98--TX--12 99--TX--29 00--TX--25 Honorable John E. Payne, Judge, Presiding.
The opinion of the court was delivered by: Justice O'malley
Plaintiff, Commonwealth Edison Company, appeals the judgment of the circuit court of Ogle County granting summary judgment in favor of relator, John H. Coffman, county treasurer and tax collector of Ogle County (defendant), and denying summary judgment to plaintiff. Plaintiff contends that the Byron Forest Preserve District (Forest Preserve) improperly levied taxes to retire certain bonds that were issued in violation of the Local Government Debt Reform Act (Debt Reform Act) (30 ILCS 350/1 et seq. (West 2000)) and the Downstate Forest Preserve District Act (Downstate Act) (70 ILCS 805/1 et seq. (West 2000)), and are therefore unlawful and void. We affirm.
In 1989, the Forest Preserve decided to acquire certain land and construct a golf course. On December 21, 1989, the board of commissioners of the Forest Preserve adopted Ordinance No. 893, authorizing the issuance of $3,525,000 of general obligation land development bonds (alternate revenue source), series 1989 of the district (1989 alternate bonds), pursuant to section 15 of the Debt Reform Act (30 ILCS 305/15 (West 2000)). The ordinance provided that individual $5,000 bonds with an issue date of December 30, 1989, were to be sold on the municipal bond market to raise the funds needed for the golf course. The bonds were to accrue semiannual interest as high as 9%, with $100,000 of the bonds maturing and fully payable on December 30, 1993; $125,000 on December 30, 1994, 1995, and 1996; $150,000 on December 30, 1997, and 1998; $175,000 on December 30, 1999, and 2000; and further staggered maturities for the remaining half of the $3,525,000 issue through December 30, 2009. The ordinance also provided that the indebtedness resulting from the bond issue would be payable from two sources. One source, called "pledged revenues," was the principal proceeds the Forest Preserve might realize from issuing general obligation bonds and from other Forest Preserve funds appropriated for such payment. The other source of payment, called "pledged taxes," was an ad valorem tax levied against the taxable property within the district.
The 1989 alternate bonds complied with section 15(b) of the Debt Reform Act (30 ILCS 305/15(b) (West 2000)). Section 15(b) requires publication of the ordinance authorizing the bond issuance and a notice of the Forest Preserve's intent to issue bonds. It allows the voters to petition for a referendum on the question of issuing the bonds, termed a "backdoor referendum." The voters in the Forest Preserve District did not seek a backdoor referendum in connection with the 1989 alternate bond issue.
In 1997, the Forest Preserve adopted Ordinance No. 97--7. The ordinance provided that the Forest Preserve would issue $900,000 of nonreferendum general obligation bonds (1997 G.O. bonds), of which $392,000 was earmarked to pay the principal and interest due on the maturity dates of December 30, 1997, and June 30, 1998, for the 1989 alternate bonds.
In June 1998, the Forest Preserve adopted Ordinance No. 98--2. The ordinance provided that the Forest Preserve would issue $3,120,000 of general obligation bonds, series 1998 (alternate revenue source) (1998 alternate bonds). The Forest Preserve issued the 1998 alternate bonds in order to raise money to refund the outstanding 1989 alternate bonds, thus enabling the Forest Preserve to restructure the Forest Preserve's debt incurred in developing the golf course. Once again, the ordinance provided that the indebtedness incurred in conjunction with the 1998 alternate bonds would be payable from two sources: general obligation bonds the Forest Preserve might issue and funds appropriated for the purpose (pledged revenues), and ad valorem taxes levied against taxable property within the district (pledged taxes). The 1998 alternate bonds were also issued in compliance with section 15(b) of the Debt Reform Act, and the voters did not seek a backdoor referendum.
On November 30, 1998, plaintiff filed a complaint objecting to the real estate taxes levied against its Ogle County property for the 1997 tax year. Plaintiff objected to the $392,000 of the 1997 G.O. bonds earmarked to refund the 1989 alternate bonds as improper under the Debt Reform Act.
On December 19, 1998, the Forest Preserve adopted Ordinance No. 98--10. The ordinance provided for the issuance of $1,395,000 of nonreferendum general obligation bonds (1998 G.O. bonds), of which $495,000 was earmarked as a revenue source to pay the principal and interest due on the 1998 alternate bonds on December 30, 1998, and June 30, 1999.
On November 8, 1999, plaintiff filed a complaint objecting to the portion of the 1998 G.O. bonds that were issued in order to provide a revenue source to refund the 1998 alternate bonds that were maturing. Once again, plaintiff contended that the Forest Preserve had not followed the requirements of the Debt Reform Act.
On November 16, 1999, the Forest Preserve adopted Ordinance No. 99--6. The ordinance provided for the issuance of $1,452,000 of nonreferendum general obligation bonds (1999 G.O. bonds), of which $502,000 was allocated to provide a revenue source to pay the principal and interest due on the 1998 alternate bonds on December 30, 1999.
Also on that date, the Forest Preserve adopted Ordinance No. 99--7, which provided for the issuance of $53,000 of nonreferendum general obligation bonds bearing an issue date of June 23, 2000, and maturing on July 7, 2000 (2000 G.O. bonds). The $53,000 was allocated to pay the interest due on June 30, 2000, on the 1998 alternate bonds.
On November 15, 2000, plaintiff filed a third tax objection complaint. Plaintiff objected to that portion of the 1999 G.O. bonds allocated to pay the principal and interest accruing on the 1998 alternate bonds. Plaintiff also objected to the 2000 G.O. bonds. Plaintiff again contended that these bonds were illegally refunding the 1998 alternate bonds coming due on December 30, 1999, and June 30, 2000.
Defendant filed motions for summary judgment in each of the three tax objection actions. Plaintiff filed cross-motions for summary judgment. On December 12, 2001, the trial court heard the parties' arguments on the motions and cross-motions for summary judgment. On that date, the trial court issued its oral ruling, granting defendant's motions and denying plaintiff's motions for summary judgment. The trial court determined that, when the Forest Preserve adopted Ordinance No. 893, it specifically provided for funding via the issuance of general obligation bonds. The trial court concluded that the bonds to which plaintiff objected were not issued to refund the 1989 alternate bonds or the 1998 alternate bonds but were issued to provide a revenue source to pay off the 1989 and 1998 alternate bonds, as mandated ...