Home Rule and Ficticious Official Meeting Minutes?

In a recent Journal-Standard news story regarding the proposed annexation of numerous properties referred to as "doughnut hole" parcels it was stated that "Freeport currently falls below the 25,000 citizen threshold to be permitted home rule."  Here is the photo of the pertinent section of the  article.

The newspaper's assertion regarding home rule is not is not entirely accurate.  Illinois municipalities which were at 25,000, or grow to this number, are automatically granted home rule status under the 1970 Illinois Constitution.  Any municipality or county may become home rule by referendum.  So far the only Illinois County to be home rule is Cook.  Rockford voters took away home rule by a citizen led initiative in the 1980s which Illinois statutes allow however, the task of collecting 10% of registered voters' signatures is daunting but doable.  If the census counts Freeport at less than 25,000 we will not cease to be home rule.  However the city clerk will be required to put the question to Freeport voters if the same question has not been voted upon in the previous two years.  Here is the exact statute:

If the City of Freeport has been being responsible with its use of these vast and liberal home rule powers, why would City Manager Crow or any member of the Freeport City Council be afraid of a referendum asking voters if we wished to remain home rule?

As stated above home rule was given to all Illinois' municipalities with a population of 25,000 or more when the 1970 Illinois Constitution was adopted.  Home rule units have broad powers to tax and to incur debt without limitation.  Home rule units are not necessarily bound by state statutes that other units of government must follow (see Tutty's previous article) unless the Illinois General Assembly sees fit to specifically "preempt" home rule powers.  An example of this state preemption is the "property transfer tax" that we have in Freeport.  The Freeport City Council with the administration of Mayor Richard Wies followed the lead of other home rule municipalities and created this tax in 1992.  Sometime later the Illinois General Assembly preempted this power and now home rule units must pass a referedum to create a property transfer tax.  Freeport and other municipalities' transfer taxes have been grandfathered, hence the seller of any Freeport property will pay four-dollars per every $1,000 of sale price.  In some places the buyer pays and there may be rules about such things as having the water bill or others things paid before stamps are issued.  Always look for the hidden property taxes when you buy a property in Illinois, thanks to home rule, it can vary from town to town.



Home rule is the reason there has not been one singe binding referendum regarding taxes or borrowing, despite plenty of both within the City of Freeport.  Since 1992 the Freeport City Council has been using home rule as their ace-in-the-hole.  Every time a budget came up short or there was a special "economic development" project the city council just could not live without, a tax was created and bonds were floated---not necessarily in that order. And here we are today.

Moving to a city manager form of government has proven that city managers are as adept at abusing home rule powers as elected mayors and the Freeport City Council is only too willing to go along with nary a public question raised.

Whenever the city council suspends the rules to push a general obligation bond issue through in a single reading with less than ten minutes of real public discussion.  That's abuse of home rule powers period.  Without home rule a referendum would be required on any general obligation bond.  The city council uses home rule to avoid so much as public notice or public hearing.  They borrow money and put essentially what is a lien against our property without so much as formally telling Freeport citizens, the ones that must retire the debt.

However, the most recent $2.7 million bond issue shows just how secretive (or inept) the Freeport City Council and Freeport City Clerk truly are, according to an "Extract of Mintues" which was made a part of the bond ordinance (#2019-21) and included with the agenda for the April 1, 2019 meeting.  This "Extract of Minutes" only had one sentence/paragraph of real content, all the rest was just technical items such as who was there and who approved the motion and how the individual council members voted.  Here is a picture of this paragraph, which is essentially a lie that has been certified by the Freeport City Clerk as "true and correct".  Here is the sentence/paragraph as contained in the certified (legally admissible) copy of Ordinance #2019-21 beginning with "The Mayor announced...".

 

 

First off, Mayor Jodi Miller did not "announce" anything, at the beginning of the meeting she asked a representative of Spear Financial to take the podium for a "presentation of the bond financing".  The representative from Spear said it would be a 15-year bond issue with an interest rate of 3.05%.  Tutty thinks the interest rate came in higher than this presentation.  Perhaps Manager Crow or Mayor Miller can use their Sunday Journal-Standard column to explain the math behind the picture which follows so that these numbers contained in the certified ordinance work out to 3.05% interest rate.  Tutty's hope is the math can be explained and that the city council and public at large were not misled as to the actual interest amount.

 

Alderman McClanathan did ask the Spear representative about Freeport's bond rating which it was noted is suffering from pensions, outstanding debt, and a weak economy.  So our city council, in response....borrows more money.

Again, back to the "Extract of Minutes" and the things Mayor Miller, through approved and certified meeting minutes is alleged to have "announced" for the city council and public at large benefit but were never  actually disclosed during the meeting.  Not one single time did the term "home rule" come up and not once was there mention of "direct annual tax" or of the "tax levy for said bonds".

 

Tutty encourages readers, including the Freeport City Council to go back and watch the video (there is a link at the bottom of this paragraph) of the meeting and then ask yourselves why are official and certified City of Freeport documents more fiction than fact.  How does that happen?  We have a mayor, a city manager, eight council members and a couple of attorneys yet it takes Tutty to read the agendas, the finished ordinances and it's associated filings, to notice that the City of Freeport has essentially certified a lie? Are any of them down there actually reading the things in front of them?  And if they are, why did they not do what they said they did?  These are legal documents and knowingly certifying the false should come with a penalty in Tutty's opinion.
https://www.youtube.com/watch?v=VH83yGaX1ng&t=2221s

 

One interesting thing that did get uttered by Manager Crow was at the beginning of the meeting right after the representative from Spear addressed the council, Manager Crow  said that they'd been "contacted by several area banks that purchased the bonds".  This was said before the Freeport City Council voted to even approve said measure.  This begs the question as to if the Freeport City Council and Mayor Miller are working for Freeport citizens or the bankers that Manager Crow sits with on the board of the Freeport Partnership?

 

This issue points out, a best the haphazard way business has been conducted at Freeport City Hall and is reason enough why the Freeport City Council should never, ever suspend the rules unless there is a bona fide emergency.  Obviously, the Freeport Council needs more time to read and thoroughly review that which has obviously slipped past them, although it was right in front of them the entire time.  How do official documents become more fiction than fact Freeport City Council?

 

This city council has now earned the reputation of being a first reading, suspend the rules, figure it out later, public body.  In Tutty's humble opinion, the citizens of Freeport deserve much better than the facts this post discloses.

 

As always, yours in honesty, Tutty Baker, tutty.baker@gmail.com

 

 

Home Rule Abuse 101

Tutty chuckled when he read last Sunday's Journal-Standard editorial regarding the importance of "published notices" to creating an engaged citizenry. However, Tutty does agree with the essence of the editorial that published public notices are an important part of keeping the local electorate informed and engaged (voter totals in the last Freeport municipal election prove Freeport voters are anything but engaged).  As the editorial stated, "public participation and scrutiny make governing such a hassle, but arguably a public ignorant of what its elected officials are doing in their name is the priciest option of all of taxpayers."

fair use copyright for the purpose of public education claimed

The legal notices are the first place Tutty looks in the almost daily local newspaper.  They are about the only real local news.  Most local news stories consist of a press release from the institution covered or local officials telling the newspaper and radio what's going on, as if any institution or government official should be granted automatic credibility by local reporters.  Another fact, Journal-Standard reporters appear not to read the public notices themselves.  There was recently a published notice and the subsequent pubic hearing regarding the appropriation ordinance.  If it is state statute that these notices be published for public benefit.  Wouldn't it be prudent for the newspaper to do a follow up story, perhaps point out questions or concerns about the ordinance itself and reminding citizens of the date and time when their voice may be made part of the official record?

The Illinois General Assembly recognized a long time ago that unless they wrote a statute requiring local units of government to inform their constituents on important issues, they wouldn't do it.  Therefore when it comes to public expenditures and taking on local debt public notices are almost always required to be published.  Numerous examples abound.

However, the City of Freeport, by virtue of the 1970 Illinois Constitution and a population of 25,000 or greater, is what is known as a home rule unit of local government.  Local units of government that are not home rule operate under the legal parameters of "Dillon's Rule" and have only the power specifically granted to them through Constitutional or Statutory authority.  Illinois' home rule units are freed from Dillon's Rule and do not need state constitutional authority or general assembly approval through statute in order to approve legislation (and taxes).  Many of these issues are foreclosed to non home rule units.  As a matter of fact, home rule units have the ability to act in direct contravention of Illinois' statutes--including those that require public notice as the Freeport City Council recently proved, although members of the council were probably not aware of how they were exercising home rule.

At the March 11th Freeport City Council Committee of the Whole agenda item #10 was a "Discussion Regarding Infrastructure Bonds", the electronic version of the agenda contained a link to a "timeline" and to a copy of the "Preliminary Official Statement" a legal document required by the Securities and Exchange Commission.  Discussion on this issue began just after the 1 hour 21 minute mark with Manager Crow highlighting the timeline and technical considerations and telling the council the money ($2.72 million of money Freeporter's have yet to earn) will be used for roads and that "we" as if he is member of the council, will need to suspend the rules at the April 1st council meeting and the pass the ordinance in one reading.  Alderman Peter McClanathan stated that they intended to use two-dollars from the last capital improvement increase on our water bills to pay back the bond and also listed a few of the roads that would be repaired, However, Tutty has not yet found an official list of what streets will be worked on and the subsequent bond ordinance does not list any.  Of course the Committee of the Whole voted unanimously to move the issue forward after just four and a half minutes of discussion.  Below is the link to the video of the meeting.
https://www.youtube.com/watch?v=IEUsko3Wj5A

At the April 1st Freeport City Council meeting the issue was now numbered as Ordinance #2019-21 and sure enough City Manager Crow asked the Freeport Council to suspend the rules and put a debt issue through on first reading.  The city council has behaved like this for years on bond issues.  The excuse is always the same, that they need to move right now to lock in "lock in the rates".  All the while ignoring the fact that municipal bond rates have been anything but volatile for the past decade.  Manager Crow as well as Alderman McClanathan both justified suspending the rules because they alleged this bond issue had been discussed for "months" and "extensively" (without specific citation) prior to the two meetings written of here.  Once again, it was claimed that this money was being borrowed for road repairs although the ordinance still does not mention any specific streets.  Meeting minutes mention specific streets but meeting minutes, unlike ordinances, are not legally enforceable.  Manager Crow also alleges that two-dollars of the capital improvement fund will be used to retire this debt.  However, while it might be this city manager and city council's intent to retire the debt using this money, future managers and councils do not have to abate the property tax this general obligation bond creates.  This ordinance is not binding upon future councils or even this council if they want to change their mind and fund this bond in another way.  So in reality, the Freeport City Council is borrowing $2.72 million of money Freeporters have yet to earn without a legally enforceable specific purpose stated anywhere within Ordinance or Official Statement beyond "road improvements".  All together with the issue of suspending the rules and voting on the ordinance, both of which passed unanimously, the council spent a total of less than three-minutes discussing and asking questions regarding an issue which indebts their constituents.  Here is a link to the video of that council meeting with this issue beginning at the 32:40 mark.
https://www.youtube.com/watch?v=VH83yGaX1ng

So with less than eight-minutes of public discussion, and no real pertinent questions from the council, such as the current level of debt outstanding, the citizens of Freeport now have $2.72 million dollars in new debt placed directly upon their shoulders without a legally enforceable purpose beyond "road improvements".  All the while the public is paying an attorney to sit up front and remain silent.  Tutty will put his legal knowledge of Illinois home rule against any local attorney.

With out home rule none of this would be legal.  First off, without home rule, general obligation debt can not be taken on without a referendum.  Secondly, there is a statute in Illinois known as the Bond Issue Notification Act (hereinafter referred to as BINA).  Here is a link to BINA.
http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=514&ChapterID=7

BINA requires any governmental unit which wishes to sell non-referendum general obligation bonds to publish notice and to hold a public hearing.  Because BINA does not preempt home rule powers.  The City of Freeport can not be legally compelled to follow BINA--- a statute which was put in place to notify and provide transparency, therefore protecting the public's right to know what their elected officials are doing on their alleged behalf.

In their defense, there is no way for the Freeport City Council, and perhaps even their attorneys, to know just how much they are reliant upon home rule powers with this debt issuance.  Local lawyers simply rely upon bond counsel and the attorneys for the bond house looking to sell the bonds.  Local attorneys don't write the ordinance, the bond house does and if a local attorney even reviewed this ordinance package they did a very poor job.  And the big bond houses that write the ordinances are great at keeping all the ways home rule authority is used out of the ordinances.  It wasn't always like this.  In the past, Freeport bond ordinances included specific denotations to where home rule was being used.  Here are photos of excerpts from previous City of Freeport general obligation debt issuances.

Obviously, City Manager Crow, working hand in hand with the bond house, appears very comfortable in limiting the amount of knowledge the Freeport Council is privy to requiring their very liberal use of home rule powers.  And if the City Council is in the dark, how can the public or the local newspaper be expected to know what's going on?

Another limitation which applies to non-home rule municipalities that the City of Freeport can completely ignore is the statutory debt limit.  Currently this limit is 8.625% of their current assessed value.  The photo below is taken from a book used by the Illinois Institute for Continuing Legal Education and titled Home Rule and Intergovernmental Cooperation and Conflict. 

fair use copyright claimed for the purpose of public education.

Tutty wonders if any members of the Freeport City Council have an inkling of the current debt load that they've placed squarely on the shoulders of Freeporters throughout the past two decades, and if they have a clue, without asking Manager Crow, where to look.  Tutty will tell you that it is well over the 8.625% that non-home rule municipalities are legally limited to, and this is very dangerous, especially if municipal bond rates increase dramatically or the City of Freeport loses home rule powers.  Of course Manager Crow is doing his best not to inform the Freeport Council or their constituents how home rule powers are being used.

Throughout the country many people are upset that some people support "Democratic Socialism".  Here in Freeport it is just plain socialism there is nothing democratic about using home rule authority to sneak a public debt issue through without so much as public notice and with less than ten-minutes of public discussion with nary a pertinent public question from any member of the Freeport City while they all vote in unison.

So where is the Stephenson County Republican Party on the obvious socialism of Freeport City government.  Are either of our Republican members of the Illinois General Assembly going to propose a statutory debt limit for home rule units or create a preemption in BINA so home rule units must follow this statute as well?

Where do you stand Representative Chesney and Senator Stewart?  Are you comfortable with City Manager Crow and the big bond houses keeping yourselves and fellow Freeport constituents completely in the dark about how they are using home rule to create debt that we have yet to earn the money to pay back?

More on the City of Freeport's 27-year history on the abuse of home rule will be forthcoming.

As always, yours in honesty, Tutty Baker tutty.baker@gmail.com