Local Governments and Special Districts

How To Dissolve Local Government Units

By November 19, 2013 No Comments

Division 5-44. Local Government Reduction and Efficiency

(55 ILCS 5/5-44005 new)
Sec. 5-44005. Findings and purpose.
(a) The General Assembly finds:
(1) Illinois has more units of local government than
any other state.
(2) The large number of units of local government
results in the inefficient delivery of governmental
services at a higher cost to taxpayers.
(3) In a number of cases, units of local government
provide services that are duplicative in nature, as they
are provided by other units of local government.
(4) It is in the best interest of taxpayers that more
efficient service delivery structures be established in
SB0494 Enrolled LRB098 04716 OMW 34744 b
Public Act 098-0126order to replace units of local government that are not
financially sustainable.
(5) Units of local government managed by appointed
governing boards not directly accountable to the
electorate can encourage a lack of oversight and
complacency that is not in the best interest of taxpayers.
(6) Various provisions of Illinois law governing the
dissolution of units of local government are inconsistent
and outdated.
(7) The lack of a streamlined method to consolidate
government functions and to dissolve units of local
government results in an unfair tax burden on the citizens
of the State of Illinois residing in those units of local
government and prevents the expenditure of limited public
funds for critical programs and services.
(b) The purpose of this Act is to provide county boards
with supplemental authority regarding the dissolution of units
of local government and the consolidation of governmental
functions.
(55 ILCS 5/5-44010 new)

Sec. 5-44010. Applicability. The powers and authorities
provided by this Division 5-44 apply only to counties with a
population of more than 900,000 and less than 3,000,000 that
are contiguous to a county with a population of more than
3,000,000 and units of local government within such counties.

Public Act 098-0126(55 ILCS 5/5-44015 new)
Sec. 5-44015. Powers; supplemental. The Sections of this
Division 5-44 are intended to be supplemental and in addition
to all other powers and authorities granted to any county
board, shall be construed liberally, and shall not be construed
as a limitation of any power or authority otherwise granted.
(55 ILCS 5/5-44020 new)
Sec. 5-44020. Definitions. In this Division 5-44:
“Fire protection jurisdiction” means a fire protection
district, municipal fire department, or service organized
under Section 5-1056.1 of the Counties Code, Sections 195 and
200 of the Township Code, Section 10-2.1 of the Illinois
Municipal Code, or the Illinois Fire Protection District Act.
“Governing board” means the individual or individuals who
constitute the corporate authorities of a unit of local
government; and
“Unit of local government” or “unit” means any unit of
local government located entirely within one county, to which
the county board chairman or county executive directly appoints
a majority of its governing board with the advice and consent
of the county board, but shall not include a fire protection
district that directly employs any regular full-time employees
or a special district organized under the Water Commission Act
of 1985.
Public Act 098-0126(55 ILCS 5/5-44025 new)
Sec. 5-44025. Dissolution of units of local government.
(a) A county board may, by ordinance, propose the
dissolution of a unit of local government. The ordinance shall
detail the purpose and cost savings to be achieved by such
dissolution, and be published in a newspaper of general
circulation served by the unit of local government and on the
county’s website, if applicable.
(b) Upon the effective date of an ordinance enacted
pursuant to subsection (a) of this Section, the chairman of the
county board shall cause an audit of all claims against the
unit, all receipts of the unit, the inventory of all real and
personal property owned by the unit or under its control or
management, and any debts owed by the unit. The chairman may,
at his or her discretion, undertake any other audit or
financial review of the affairs of the unit. The person or
entity conducting such audit shall report the findings of the
audit to the county board and to the chairman of the county
board within 30 days.
(c) Following the return of the audit report required by
subsection (b) of this Section, the county board may adopt an
ordinance dissolving the unit 150 days following the effective
date of the ordinance. Upon adoption of the ordinance, but not
before the end of the 30-day period set forth in subsection (e)
of this Section and prior to its effective date, the chairman
of the county board shall petition the circuit court for an
order designating a trustee-in-dissolution for the unit,
immediately terminating the terms of the members of the
governing board of the unit of local government on the
effective date of the ordinance, and providing for the
compensation of the trustee, which shall be paid from the
corporate funds of the unit.
(d) Upon the effective date of an ordinance enacted under
subsection (c) of this Section, and notwithstanding any other
provision of law, the State’s attorney, or his or her designee,
shall become the exclusive legal representative of the
dissolving unit of local government. The county treasurer shall
become the treasurer of the unit of local government and the
county clerk shall become the secretary of the unit of local
government.
(e) Any dissolution of a unit of local government proposed
pursuant to this Act shall be subject to a backdoor referendum.
In addition to, or as part of, the authorizing ordinance
enacted pursuant to subsection (c) of this Section, a notice
shall be published that includes: (1) the specific number of
voters required to sign a petition requesting that the question
of dissolution be submitted to referendum; (2) the time when
such petition must be filed; (3) the date of the prospective
referendum; and (4) the statement of the cost savings and the
purpose or basis for the dissolution as set forth in the
authorizing ordinance under subsection (a) of this Section. The
county’s election authority shall provide a petition form to
anyone requesting one. If no petition is filed with the
county’s election authority within 30 days of publication of
the authorizing ordinance and notice, the ordinance shall
become effective.
However, the election authority shall certify the question
for submission at the next election held in accordance with
general election law if a petition: (1) is filed within the
30-day period; (2) is signed by electors numbering either 7.5%
of the registered voters in the governmental unit or 200
registered voters, whichever is less; and (3) asks that the
question of dissolution be submitted to referendum.
The election authority shall submit the question to voters
residing in the area served by the unit of local government in
substantially the following form:
Shall the county board be authorized to dissolve [name
of unit of local government]?
The election authority shall record the votes as “Yes” or
“No”.
If a majority of the votes cast on the question at such
election are in favor of dissolution of the unit of local
government and provided that notice of the referendum was
provided as set forth in Section 12-5 of the Election Code, the
county board is authorized to proceed pursuant to subsection
(c) of this Section.
Public Act 098-0126(55 ILCS 5/5-44030 new)
Sec. 5-44030. Trustee-in-dissolution; powers and duties.
(a) The trustee-in-dissolution shall have the following
powers and duties:
(1) to execute all of the powers and duties of the
previous board;
(2) to levy and rebate taxes, subject to the approval
of the county board, for the purpose of paying the debts,
obligations, and liabilities of the unit that are
outstanding on the date of the dissolution and the
necessary expenses of closing up the affairs of the
district if these funds are not available from the unit of
local government’s general fund;
(3) to present, within 30 days of his or her
appointment, a plan for the consolidation and dissolution
of the unit of local government to the county board for its
approval. The plan shall identify what functions, if any,
of the unit of local government shall be undertaken by the
county upon dissolution and whether any taxes previously
levied for the provision of these functions shall be
maintained;
(4) to enter into an intergovernmental agreement with
one or more governmental entities to utilize existing
resources including, but not limited to, labor, materials,
and property, as may be needed to carry out the foregoing
duties;
to enter into an intergovernmental agreement with
the county to combine or transfer any of the powers,
privileges, functions, or authority of the unit of local
government to the county as may be required to facilitate
the transition; and
(6) to sell the property of the unit and, in case any
excess remains after all liabilities of the unit are paid,
the excess shall be transferred to a special fund created
and maintained by the county treasurer to be expended
solely to defer the costs incurred by the county in
performing the duties of the unit, subject to the
requirements of Section 5-44035 of this Division. Nothing
in this Section shall prohibit the county from acquiring
any or all real or personal property of the district.
(b) For fire protection jurisdictions, the
trustee-in-dissolution shall not have:
(1) the powers enumerated in this Section unless the
dissolution of that unit of local government shall not
increase the average response times nor decrease the level
of services provided; and
(2) the power to decrease the levy that is in effect on
or before the date of dissolution of the fire protection
jurisdiction that affects the provision of fire and
emergency medical services.
(55 ILCS 5/5-44035 new)
5-44035. Outstanding indebtedness.
(a) In case any unit dissolved pursuant to this Division
has bonds or notes outstanding that are a lien on funds
available in the treasury at the time of consolidation, such
lien shall be unimpaired by such dissolution and the lien shall
continue in favor of the bond or note holders. The funds
available subject to such a lien shall be set apart and held
for the purpose of retiring such secured debt and no such funds
shall be transferred into the general funds of the county.
(b) In case any unit dissolved pursuant to this Division
has unsecured debts outstanding at the time of dissolution, any
funds in the treasury of such unit or otherwise available and
not committed shall, to the extent necessary, be applied to the
payment of such debts.
(c) All property in the territory served by the dissolved
unit of government shall be subject to taxation to pay the
debts, bonds, and obligations of the dissolved district. The
county board shall abate this taxation upon the discharge of
all outstanding obligations.
(55 ILCS 5/5-44040 new)
Sec. 5-44040. Effect of dissolution. Immediately upon the
dissolution of a unit of local government pursuant to this
Division:
(a) Notwithstanding the provisions of the Special Service
Area Tax Law of the Property Tax Code that pertain to the
establishment of special service areas, all or part of the
territory formerly served by the dissolved unit of local
government may be established as a special service area or
areas of the county if the county board by resolution
determines that this designation is necessary for it to provide
services. The special service area, if created, shall include
all territory formerly served by the dissolved unit of local
government if the dissolved unit has outstanding indebtedness.
If the boundaries of a special service area created under this
subsection include territory within a municipality, the
corporate authorities of that municipality may, with the
consent of the county, assume responsibility for the special
service area and become its governing body.
All or part of the territory formerly served by a dissolved
fire protection jurisdiction shall not be established as a
special service area unless the creation of the special service
area does not increase the average response times nor decrease
the level of service provided.
(b) In addition to any other powers provided by law, the
governing body of a special service area created pursuant to
this subsection shall assume and is authorized to exercise all
the powers and duties of the dissolved unit with respect to the
special service area. The governing body is also authorized to
continue to levy any tax previously imposed by the unit of
local government within the special service area. However, the
governing board shall not have the power to decrease the levy
that is in effect on or before the date of dissolution of the
fire protection jurisdiction that affects the provision of fire
and emergency medical services.
(c) Subsequent increases of the current tax levy within the
special service area or areas shall be made in accordance with
the provisions of the Special Service Area Tax Law of the
Property Tax Code.
(55 ILCS 5/5-44045 new)
Sec. 5-44045. Abatement of levy. Whenever a county has
dissolved a unit of local government pursuant to this Division,
the county or municipality shall, within 6 months of the
effective date of the dissolution and every year thereafter,
evaluate the need to continue any existing tax levy until the
county or municipality abates the levy in the manner set forth
by the Special Service Area Tax Law of the Property Tax Code.
(55 ILCS 5/5-44050 new)
Sec. 5-44050. Tax collection and enforcement. The
dissolution of a unit of government pursuant to this Division
shall not adversely affect proceedings for the collection or
enforcement of any tax. Those proceedings shall continue to
finality as though no dissolution had taken place. The proceeds
thereof shall be paid over to the treasurer of the county to be
used for the purpose for which the tax was levied or assessed.
Proceedings to collect and enforce such taxes may be instituted
and carried on in the name of the unit.
(55 ILCS 5/5-44055 new)
Sec. 5-44055. Litigation. All suits pending in any court on
behalf of or against a unit dissolved pursuant to this Division
may be prosecuted or defended in the name of the county by the
State’s attorney. All judgments obtained for a unit dissolved
pursuant to this Division shall be collected and enforced by
the county for its benefit.
Section 99. Effective date. This Act takes effect upon
becoming law.

Public Act 098-0126

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