Tuesday, November 17, 2015

McHenry County Blog -Algonquin Township’s Tax Protest Suit


Algonquin Township’s Tax Protest Suit

Posted on 11/17/2015 by Cal SkinnerNovember 17, 2015


Tax protest attorney Tim Dwyer is suing Algonquin Township on behalf of local property taxpayers for having too much money in the bank to justify levying real estate taxes.


Algonquin Township officials gathered in the Township Hall for the October, 2012, Board meeting.  Dan Shea and Russ Cardelli (to the left) still serve on the Board.  Lowell Cutsworth and Linda Lance (on the right) have been replaced by Larry Emery and Melissa Sanchez.

Here are the details:

In December 2014, Algonquin Township adopted its Tax Levy Ordinance.

The Township levy was for $1,800,368.00.

The Road District levy was for $4,048,930.00.

Although the Township and the Township Road District are separate entities for purposes of its tax levy, the Township audit incorporates both entities.

After Algonquin Township and the Algonquin Road District issued its levies in December of 2014, the last audit for both entities found that at the end of the 2013-14 fiscal year, the Township had $11,711,449 in cash and investments.

Prior to issuing its levies, the Township and the Township Road District had a three year average annual expenditure of $4,545,760, according to its own internal audits.

As of its last fiscal year or March 31, 2014, the Township and the Road District had assets of $11,711,225, according to its 2013-14 comprehensive audit.

The assets on hand, coupled with the tax revenue from its 2014 levy, puts the Township and the Road District having in excess of 15 million dollars, or three times the available funds for that which is necessary for its annual expenses.

Spending approximately 4.5 million dollars per year, the Township and the Road District had ample funds in order to meet their respective annual expenses without even imposing a levy.

According to its own audit, the Township, collectively, had investments of $4,356,863, which was almost as much as its three year annual expenditures.

This remains a violation of Illinois law, rendering both levies as excessive, invalid and illegal.

According to its own 2014 audit, prior to its levy for the Town Fund of $1,578,536, the Township had $3,166,393 in liquid assets for the Town Fund.

The $3,166,393, coupled with the levy of $1,578,536 exceeds 2.6 times the annual average expenditure of 1.8 million. 155. As such, the Town levy issued by the Township is invalid, excessive and illegal.

The same is true for the General Assistance Fund.

With respect to the Road Distict, the Road and Bridge Fund, coupled with the Equipment and Building Fund, the Road District had reserves in excess of $5,400,000.

The annual expenses for both of these Funds were approximately 2.4 million.

The tax levy revenue, coupled with the existing funds on hand, was nearly three times the amount of the annual expenditure.


Algonquin Township

As such, the Road and Bridge Fund, as well as the Equipment and Building Fund, are excessive, invalid and illegal.

In addition to the excess accumulation, the Road District levied funds in excess of that which was appropriated.

It is well settled in Illinois, that a municipal entity can only spend that which has been legitimately appropriated. In other words, the Levy Ordinance cannot exceed those line items delineated within the Budget and Appropriation Ordinance.

For its General Road Fund, the Road District appropriated $2,388,600, but levied for $2,576,076.

As a matter of law, the General Road Fund is void.

For its Social Security Fund, the Road District appropriated $70,000, but levied $71,068.

For its IMRF Fund, the Road District appropriated $100,000, but levied $129,890.

Similar to the General Road Fund, the levy for the aforesaid funds are void and illegal, and should be ordered rebated as a matter of law.

Here’s what the suit requests:

WHEREFORE, Plaintiff Tax Protestors pray that this Court consider the matters raised herein,
find, determine and otherwise adjudicate that the entire levies adopted by Algonquin Township and the
Algonquin Road District are illegal, void and/or excessive as a matter of law, order that the McHenry
County Treasurer issue full rebate payments to the Tax Objectors, award statutory interest pursuant to
35 ILCS 200/23-20, et. seq. and issue whatever further relief this Court deems just and appropriate

Last year at the initiative of newly-elected Trustee Larry Emery, the Town Fund levy was reduced 1%.

The above is from: http://mchenrycountyblog.com/2015/11/17/algonquin-townships-tax-protest-suit/

As part of the suit says,

While taxing officials are permitted a reasonable latitude in the accumulation of public funds to assure having funds on hand to meet legitimate expenditures as they occur, this discretion must not be abused.

No statutory authority exists for large accumulations to provide for possible emergencies, which may or may not occur, since emergencies engendered by unforeseen circumstances are amply provided for in the statute, and may not be anticipated, as no resource is ample to meet every emergency which could possibly occur…

The Illinois Supreme Court has repeatedly held that a tax levy can be made for the requirements for the ensuing year only, and may not be made to create a fund for possible future needs…

Absent a referendum, the accumulation of public funds beyond the actual requirements for the particular purpose for the ensuing year is illegal and contrary to the policy of the law, as well as being an imposition upon the taxpayer, depriving him or her of funds to which he is entitled.

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