The Lake in the Hills Sanitary District’s plant, and complex, is the object of a county-driven consolidation with the Village of Lake in the Hills. (Photo courtesy of Lake in the Hills Sanitary District)

An Aug. 15 hearing in the courtroom of McHenry County Judge Thomas Meyer will focus on the ability of the McHenry County Board to appoint members of the Lake in the Hills Sanitary District Board, and also a subsequent vote that reversed the district board’s approval of an annexation and land purchase to extend its jurisdiction into Kane County.

It had resulted in a temporary restraining order on any actions being taken until the judge’s ruling.

At issue are two appointments made by the board, which provided a majority vote that is perceived to be favorable to county efforts at consolidating the district with the Village of Lake in the Hills proper. Conversely, the district has been painted as merely acquiring the land to foil consolidation attempts by becoming a two-county jurisdiction, a summary denouement that district officials maintain is untrue. They maintain discussions had been initiated in 2014.

The LITH Sanitary District Board convened July 6, with two newly appointed trustees, Kyle Kane and Eric Hanson, and a third remaining member, Terry Easler, seated in the audience while refusing to vote. The resultant 2-0 vote reversed the board’s April actions to annex property and a right-of-way along Square Barn Road that crossed into Kane County. A 2-0 vote also nixed an estimated $950,000 proposal to purchase 13.88 acres of farmland with road frontage.

The two new appointees had been named by the McHenry County Board, chaired by Jack Franks, a post attained in the November 2016 election, while surrendering his seat in the state General Assembly. The replacements were for Trustee Shelby Key, following the April expiration of his term without renewal, and resigned Trustee David McPhee, appointed last January to the Lake in the Hills Village Board.

LITH officials had undertaken a financial analysis on the benefits of consolidation of merging with the sanitary district, conducted during the first six months of the year, for presentation to the full board.

“We were requested to complete a preliminary evaluation pertaining to the potential benefits, or savings that can be achieved through dissolution of the district, and the consolidation of services,” said LITH Village Administrator Jennifer Clough.

“The Village Board did its due diligence to facilitate discussion in guiding their decision-making. The full board stands ready to work with the county on initial phases of such discussions, if they act on the authority,” she said. “The board knows this is an extensive process, and shares the

belief in giving the taxpayers relief. But in the interest of our constituents, this whole process still needs to be vetted.”

The study highlighted the district’s maintenance of six separate funds: General Fund, Audit Fund, Chlorination Fund, Illinois Municipal Retirement Fund, Public Liability Insurance Fund, and the Social Security Fund. The district is 99 percent funded by property tax revenues, with adequate reserves totaling more than $1 million.

Consolidation would bring annual savings of more than $258,000 in personnel costs, and approximately $100,000 in administrative costs in the larger areas of cost reduction. However, it showed that revenues would decrease by $600,000 and expenses would decrease by $400,000. The $200,000 gap could be covered by using the six governmental funds estimated balance or tap the fund reserves of $1 million. The figure was valid, as of April 30, 2017.

“The county would have to do the dissolution, forward an ordinance, then have to work out an intergovernmental agreement with the village to operate the district’s plant,” said LITH Sanitary District Supt. Rick Forner. “The county was given the authority to consolidate an agency, and we fit the mold for them. They don’t have a sanitary district, and I don’t think they want to operate it, at the county level. They have to work with the village, which doesn’t have one either.

“With the village taking over the district, they have to be capable of running it … as efficiently as it has in the last 50 years. The village has the highest water rate in the area, and their own treatment facility is the highest rate in the area,” he said. “We agree with government consolidation but this makes no sense. The district has not raised its rate since 2014, we have the lowest rate for wastewater treatment in the area.”

However, Franks has implied that the annexation and purchase moves were designed to avoid the consolidation efforts with the municipality by making the district into a two-county jurisdiction, effectively skirting his House Bill 229, signed into law by Gov. Bruce Rauner in August 2016. The measure permits Lake and McHenry counties to eliminate a taxing entity whose boundaries are totally encompassed within its own perimeters, and for which it appoints a majority of the trustees.

DuPage County was granted similar capabilities in 2013. A movement to reduce more than 7,000 units of government within the state of Illinois was propelled by Rauner, when he signed an executive order creating the Local Government Consolidation and Unfunded Mandates Task Force, in 2015. The 25-member group was charged with identifying issues in local government and school district consolidations, and inherent redundancies. Lt. Gov. Evelyn Sanguinetti was appointed chairperson, with Franks also named to the panel.

Political maneuvering has been alleged that the two appointees, Kane and Hansen, are favorable to Franks and the county board initiatives, and constitute a majority on the LITH Sanitary District Board. The July 6 session prompted attorney Derke Price to seek intervention through the McHenry County State’s Attorney’s Office to investigate the legality of the actions, and the appointments. Price also represents former trustees Easler and Key, and was also the attorney of record overseeing the annexation and land purchase.

The response came July 10 in the form of a temporary restraining order, signed by Judge Meyer, halting any further actions by the county board, the village, and the sanitary district until the matter was resolved in court, and decided by him. The filings by Price maintaining the annexation and purchase proposal ultimately validate the two-county designation are on hold.

“We asked for the order until it has been decided whether Mr. (Jack) Franks has the ability to appoint members to that board,” said McHenry County State’s Attorney Patrick Kenneally. “It’s called a ‘quo warranto’ action, where the judge decides who has the authority to appoint people. The action is usually applied to these type of disputes.”

Another matter was the August release of private emails between the district’s operations heads, village officials, and various legal and engineering professionals, during a discovery motion with the county’s filings. The implication was that a concerted effort was made to expedite the annexation and purchase transactions, prior to the April appointments.

“The emails didn’t come from Freedom of Information Act requests made to the sanitary district,” said Forner. “If you’re asking about the content, whether the purchase effort was escalated … yes, obviously. Board members wanted to get this business done, before the appointments were made.

“I feel the sanitary district is being targeted by Jack Franks, as a political issue, his campaign issue,” he said. “It’s not about consolidation it’s not about the district, it’s about his own aggrandizement. In 1995, developers laid piping in a subdivision that extended to the southernmost part of our southern boundary in anticipation of eventual expansion into Kane County. This isn’t something new.”

The Lake in the Hills Sanitary District serves nearly 40,000 residents in portions of Huntley, Crystal Lake, and Lake in the Hills.

–LITH Sanitary District consolidation fight set for court–