Shelby Co. (ECWd) –
The Shelby County State’s Attorney was asked during the last county board meeting if the board had the power to finance the farming operation. Her response was common for a criminal prosecutor rather than a well-versed local government law attorney. We say common because, in the criminal side of legal matters, prosecutors deal with very specific criminal statutes that are commonly viewed in isolation from other statutes, unlike local government law where statutes must be read in harmony with many other powers granted to the government.
The interaction in question can be viewed below.
The State’s Attorney responded that she believes the county can finance the operation of the farm by pointing to the power to contract. The fact a county can enter into contracts misses the mark as you cannot read one statute in isolation from all the others, unlike the criminal code. While we agree the county has contracting authority, even that power is limited as we point out below.
“It is a well-established rule that the powers of the multifarious units of local government in our State, including counties, are not to be enlarged by liberally construing the. statutory grant, but, quite to the contrary are to be. strictly construed against, the governmental entity. (Arms v. City of Chicago · (1924), 314 Ill. 316, 145 N.E. 4071 Connelly v. Clark. county: (197j), 16 Ill. App. 3d 947.) “
December 10th, 2021, I sent the State’s Attorney an email with this link for the Attorney General Index of Opinions. The purpose in providing it was to offer assistance on matters she would surely be dealing with in the County. We have found, more often than not, there are few “new” issues popping up with the local government powers. Most issues in local government have been addressed at some time or another and these opinions are a good starting point.
In the 1999 opinions, note the first one listed, “Authority to Borrow Money“. The opinion addressed two questions, whether a county has the power to borrow money from a financial institution and execute a multi-year installment note.
We need only address the AG answer to the first question, which is much different than the State’s Attorney’s off-the-cuff opinion during the last meeting.
According to the Attorney General’s opinion, the answer is NO, the County can not borrow money from a financial institution subject to repayment installments.
“Although several statutory provisions authorize counties to borrow money for particular purposes, generally in conjunction with the issuance of bonds payable from a particular revenue stream or a specific tax, no statute specifically authorizes a county to borrow money from a bank or other financial institution subject to repayment in installments.”
The AG opinion even cites case law on the matter.
“It has long been the rule that the power to borrow money is not an incident to local political government, and a county cannot borrow money in the absence of express authority of law to do so.
“The power to borrow money is not implicit in statutes generally authorizing county authorities to manage their corporate affairs; such provisions only give the county board the power to manage and control county funds and transact county business according to law. Strodtman. v. County of Menard, 55 Ill. App. at 126.”
For those who missed the very first board meeting we attended in Shelby County, we urged the board to not focus on having their attorney present at every meeting but rather document any legal questions they have and present them to the State’s Attorney who then has time to research them and get back to the board at a later time. Doing this prevents off-the-cuff verbal opinions and should result in well-researched written opinions being provided.
We have not yet found any case on this point which would contradict the AG’s opinion. Unless there are such cases, it appears there is doubt on the matter since a State’s Attorney believes one thing and the AG has documented another. Such doubt goes against the government when applying Dillon’s rule.
All the above arguments aside, the County Code is crystal clear when it comes to contracts, which was the claimed authority to borrow money by the State’s Attorney.
“55 ILCS 5/5-1005) (from Ch. 34, par. 5-1005)
Sec. 5-1005. Powers. Each county shall have power:
3. To make all contracts and do all other acts in relation to the property and concerns of the county necessary to the exercise of its corporate powers.
What was not mentioned is very important.
“(55 ILCS 5/6-1005) (from Ch. 34, par. 6-1005)
Sec. 6-1005. Contract or obligation in excess of appropriation. Except as herein provided, neither the county board nor any one on its behalf shall have power, either directly or indirectly, to make any contract or do any act which adds to the county expenditures or liabilities in any year anything above the amount provided for in the annual budget for that fiscal year.
It goes on to say, emphasis added: “Except as herein provided, no contract shall be entered into and no obligation or expense shall be incurred by or on behalf of a county unless an appropriation therefor has been previously made.”
Considering there was agreement during the meeting that the county did not have the funds needed in the budget, their own limiting powers say they can not enter into a contract that adds to the county expenditures or liabilities in any year.
As you can see, one statute provides the power to contract, just as the State’s Attorney stated, however, another statute places restrictions on that power, which was ignored in the opinion provided off the cuff.
If the budget is amended to include an expenditure, then they could enter a contract authorized by powers given but they would still be restricted from borrowing money from a financial institution unless it is tied to a specific corporate power given as outlined in current law.
As you can see, this is just one example of why it is so important to question everything and demand documentation to support a position. There are several more examples of conflicting positions being taken on matters in Shelby County that we will write about in future articles.
A copy of the Attorney General Opinion can be downloaded at this link or viewed below.AG opinion on borrowing (003)
PKPosted at 15:14h, 15 March
Yah, that statement of belief probably just confused the committee that brought the idea to the board in the first place. That committee seems to be in a mode to evaluate one option at a time…sell, lease, finance farm operations, etc. Gotta like that the chairperson is not succumbing to seasonal pressures.
E. Nirma StitzPosted at 17:48h, 17 March
Hello. I am writing with a suggestion for the county board on the county farm. If the farmer planted corn, let it grow, then turned it into a public use “Worlds Largest Corn Maize”, could this remedy the situation? People could even bring Dogz. Even Dogz that like to make messes.😉