The final part of attorney Tim Dwyer’s tax protest case against Algonquin Townshp:
C. REGARDLESS OF WHETHER THE COURT TREATS THE ALGONQUIN TOWNSHIP LEVIES TOGETHER, ALL OF THE INDIVIDUAL 2014 LEVIES ARE EXCESSIVE AS A MATTER OF LAW
In the event the Court decides that each individual fund must be attacked separately, the entire 2014 levied issued by the Algonquin Board of Trustees still remains excessive under the case lase cited herein.
The figures cited in Exhibit C are those numbers taken directly from the Township’s own audit. Incredibly, during a deep recession, the citizens of Algonquin Township paid more ad volerem taxes because the levy rates increased (see Exhibit C, page 24) and assessed valuation tumbled.
Nevertheless, the net position of Algonquin Township increased by $2,680,056 from fiscal year 2011 until the end of fiscal year 2014. See Exhibits A, page 4, and Exhibit C page 31.
By the end of fiscal year 2014, the Township had $11,711,225 for annual expenses of $4,598,404. See Exhibits A-C.
Insofar as the Town Fund is concerned, the Township had $3,166,393 at its disposal at the end of fiscal year 2014 for an average, three-year expenditure of $1,521,385, or 2.08 times that which was necessary for fiscal year 2015.
Nevertheless, the Township issued a levy of $1,578,539.
This levy is void under the case law cited herein, and should be rebated to the Tax Objectors.
Likewise, the public assistance levy of $221,832 is void.
The average annual expenditure was $147,047.
However, the Assistance Fund is not listed in the Audit; rather, there is a section called “other funds”. Exhibit C, page 3.
In spite of the Supreme Court’s admonition in Mariotta, the Township continues to levy grossly in excess of that which is needed.
The existing balance of $488,531 is over 3.19 times that which is necessary for the ensuing year. See Exhibit C, page 13.
The same is true of every Fund levied by the Township for the benefit of the Road District. For example, the Social Security Fund has a three-year average of $57,654, but an ending balance of $164,187.
This is 2.8 times the amount necessary for the ensuing fiscal year.
Likewise, the Retirement Fund (I.M.R.F.) has a balance of $212,763 as of fiscal year 2014, but a three-year, average, annual cost of $81,791.
Clearly, this is over twice that which is necessary for the ensuing year.
The Miller ratio on the Social Security Fund is therefore 2.99.
As such, the levy is excessive, illegal and void as to the instant Tax Objectors.
The Equipment and Building Fund is likewise excessive and illegal.
That Fund holds a balance of $2,653,927 as of the end of fiscal year 2014. Exhibit C, page 13.
The annual, three-year expenditures were $1,004,490 in 2014, $1,176,903 in 2013 and $1,248,112 in fiscal year 2012.
The levy of $1,129,890 is void as a matter of law, as the Miller ratio is 2.14.
So too is the Audit Fund.
Incredibly, the Township continues to levy in excess of $10,000 annually for this fund, where it has a balance of $74,271 and an annual average cost of just over $3,000.
This is 24 times the necessary amount.
Indeed, the levy amount itself is over three times the average annual cost.
The same is true of the Insurance Fund, which has a balance of $175,468.
But the annual, three-year average cost remains $57,567.
Given the reserves of $175,468, the Miller ratio is 3.04.
This Fund, like all the Township Funds, remains unnecessarily bloated.
The final fund is the Road and Bridge Fund.
The Road and Bridge Fund has only $2,822,451. Exhibit A, page 13.
The average, three-year expense of the Fund was $2,013,670.
However, according to the 2014 audit, the Township has $1,484,967 in unrestricted funds, which can be used for any purpose, (Exhibit C, page 4), and $1,051,174 in investments. Exhibit C, page 23.
Even without the investment funds, the Miller ratio is 2.13 times that which is necessary for the ensuing fiscal year.
As stated in the Township’s own audit, the Township possesses $11,711,225 to pay for a three-year average annual expenditure of $4,598,404.
As such, the Township has several million dollars to offset any Fund “deficiency” under Miller.
Essentially, what the Township has done is to levy the smaller funds to the maximum until such time as its available funds to pay actual expenses has wildly exceeded any realistic expectation.
Should the Court have any doubt that the Township Board has abused its fiduciary duty to the public, it need only review the Township’s budget (on page 9 of Exhibit C) of the Township’s own audit.
Initially, the levy is based upon the budget.
That is, a municipal entity can only spend that which it has budgeted and levied.
The budgeted amount should always be higher than the actual cost.
But, the Algonquin Township budget overstates the actual costs by nearly two million dollars. Exhibit C, page 9.
The budget is $5,149,400 and the actual expenses were $3,169,485. Exhibit C, page 9 details that the Township systematically and repeatedly overestimated expenses (such as insurance) and underestimated revenues.
The Township levy was $5,849,370.
Even though the estimated budget wildly exceeded the actual costs, the levies issued by the Township added nearly another $700,000.
Incredibly, the Road District actually levied amounts in excess of that which was budgeted, another illegal maneuver.
Perhaps most importantly, this entire analysis (the Miller ratio) has been applied to Algonquin Township without even considering the actual 2014 levy amounts.
In this regard, it is imperative to note that Miller, decided in 1969, is only one case in a long line of cases where all Illinois Courts, including the Miller panel, has decided any governmental tax levies are made for the ensuing fiscal year.
“It has long been the fixed policy of this State not to permit the unnecessary accumulation of monies in the public treasury,” Miller, 42 Ill. 2d at 543.
Finding that the government had almost twice that which was needed, the Miller court held no levy would be valid. 42 Ill.2d at 545.
When units of government fail to apply excess revenue to the next year’s budget and levy, courts will interfere where taxing bodies have accrued unnecessary accumulations, Allegis, 379 Ill.App.3d at 328, Mariotta v. Metropolitan Water Reclaimation District, 159 Ill.2d 393 (Ill. 1994)), [holding that when excess revenues are not applied to the next year’s budget and levy, the taxpayers are prejudiced].
In the controversy at bar, the Township has amassed significant wealth, and the resident taxpayers are incurring tax rates of 12-13%.
As a matter of law, the levies adopted by the Township are unnecessary, excessive and illegal.
As a public entity operating during a severe recession, the Township’s levies remain a breach of the fiduciary duty owed to the taxpayers.
WHEREFORE, for the reasons stated herein, Plaintiff Tax Objectors, pray that the Court adjudicate the matters raised herein, and find, pursuant to 35 ILCS 200/23-5, et. sec., that the Tax Objectors have proven that Intervenor, Algonquin Township, has adopted illegal levies in 2014, that the illegal rate is .02783 percent, enter judgment of $259,668.84 as to all of the taxpayers in Exhibit B hereto with tax rate codes within the jurisdiction of Algonquin Township, together with the statutory interest accrued pursuant to 35 ILCS 200/23-30, and order that the McHenry County Treasurer, and Ex-Officio McHenry County Collector, issue a check payable to the Dwyer Law Office for payment to the resident taxpayers, pursuant to further Order the Court.
WOLF REALTY INC., ET AL.,
One of their counsel
Timothy P. Dwyer
Dwyer Law Office