Illinois Official Reports
Appellate Court
G.I.S. Venture v. Novak, 2014 IL App (2d) 130244
Appellate Court G.I.S. VENTURE et al., Plaintiffs-Appellants, v. JOHN LOTUS
Caption NOVAK, County Treasurer and ex officio County Collector of
Du Page County, Illinois, Defendant-Appellee (Board of Education of
Bensenville Elementary School District No. 2; Board of Education of
Itasca School District No. 10; Marquardt School District No. 15;
Board of Education of Queen Bee School District No. 16; Board of
Education of Keenyville Elementary School District No. 20;
Benjamin School District No. 25; Board of Education of West
Chicago Elementary School District No. 33; Lombard Elementary
School District No. 44; Villa Park/Lombard School District No. 45;
Butler School District No. 53; Board of Education of Darien School
District No. 61; Hinsdale Township High School District No. 86;
Du Page High School District No. 88; Board of Education of Fenton
Community High School District No. 100; Wheaton Warrenville
Community Unit School District No. 200; Westmont Community Unit
School District No. 201; Elmhurst Community Unit District No. 205,
Intervenors-Appellees).
District & No. Second District
Docket Nos. 2-13-0221, 2-13-0222, 2-13-0224, 2-13-0225,
2-13-0226, 2-13-0227, 2-13-0228, 2-13-0229, 2-13-0230, 2-13-0231,
2-13-0232, 2-13-0233, 2-13-0234, 2-13-0235, 2-13-0236, 2-13-0237,
2-13-0238, 2-13-0239, 2-13-0244 cons.
Filed September 30, 2014
Rehearing denied October 31, 2014
Held In consolidated actions arising from taxpayers’ objections to
(Note: This syllabus defendant school districts’ transfer of money in working cash funds to
constitutes no part of the educational funds resulting in improper accumulations of money in
opinion of the court but the educational funds that warranted refunds to the taxpayers, the
has been prepared by the taxpayers’ stipulation to the evidence provided by the school districts
Reporter of Decisions that no such improper accumulations resulted established that the
for the convenience of school districts were entitled to judgment as a matter of law, and the
the reader.) trial court’s entry of summary judgment for the districts was affirmed.
Decision Under Appeal from the Circuit Court of Du Page County, No. 00-T-02; the
Review Hon. Paul M. Fullerton, Judge, presiding.
Judgment Affirmed.
Counsel on Evan B. Karnes II, John A. Powers, and Everardo Martinez, all of
Appeal Karnes Law, Chtrd., of Chicago, for appellants.
Robert B. Berlin, State’s Attorney, of Wheaton (Lisa Anne Hoffman
and Donna B. Pindel, Assistant State’s Attorneys, of counsel), for
appellee.
Panel JUSTICE McLAREN delivered the judgment of the court, with
opinion.
Presiding Justice Burke and Justice Spence concurred in the judgment
and opinion.
OPINION
¶1 Plaintiffs, G.I.S. Venture et al. (the taxpayers), appeal from the trial court’s orders granting
summary judgment in favor of defendant, John Lotus Novak, County Treasurer and ex officio
County Collector of Du Page County, and 17 school district intervenors (collectively, the
Districts) on 54 tax-rate objections spanning 13 years. We affirm.
¶2 I. BACKGROUND
¶3 These consolidated cases arise out of tax objections involving the Districts’ transfers of
assets held in their working cash funds to other district funds. In the lead case, under which the
other objections have been consolidated, West Chicago School District No. 33 (the District)
issued bonds of almost $4 million to fund its working cash fund in 1998. During the course of
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the 1998-99 fiscal year, the District permanently transferred the net proceeds of the bond issue
to its operations and maintenance (O&M) fund. The District then adopted a 1999 tax levy for
educational purposes, which was extended at the maximum statutory rate; the District also
extended maximum levies for both the O&M and the working cash funds. The taxpayers filed
objections, arguing, inter alia, that, according to the School Code (Code) (105 ILCS 5/1-1 et
seq. (West 1998)), the assets transferred from the working cash fund to the O&M fund should
have been properly transferred to the educational fund; therefore, the 1999 levy for educational
purposes resulted in an illegal and void tax rate and produced excessive taxes in the amount
that had been improperly transferred.
¶4 After the District intervened, the trial court granted summary judgment in favor of the
District and denied the taxpayers’ cross-motion for summary judgment. On appeal, this court
affirmed in part, reversed in part, and remanded the cause. See G.I.S. Venture v. Novak, 388 Ill.
App. 3d 184 (2009). We concluded that the Code did not provide for a general permanent
transfer of assets from the working cash fund to any fund other than the educational fund and
that the District “could not properly permanently transfer the money from the working cash
fund to the O&M fund; repayment was required.” Id. at 191. Although we reversed the trial
court’s grant of summary judgment in favor of the District, we also affirmed the denial of
summary judgment to the taxpayers, finding:
“Genuine issues of material fact remain as to whether the working cash fund assets, if
added to the educational fund, result in an excessive accumulation of assets in the
educational fund. Even though the 1999 educational fund levy was extended at the
maximum rate, a proper permanent transfer to that fund may result in a proper
accumulation of money in that fund. In that case, the taxpayers would not be entitled to
judgment. Therefore, additional hearings are required.” Id. at 192.
After concluding that partial summary judgment should have been entered “as to the
permanent nature of the transfer and that any abatement or abolishment should have inured to
the benefit of the education fund,” we remanded the cause “for further proceedings consistent
with [the] opinion to determine if the abolishment, when properly applied, would result in an
improper accumulation of assets in the education fund.” Id.
¶5 On remand, the Districts filed motions for summary judgment on 54 objections concerning
the Districts’ transfers from working cash funds in tax years 1998 through 2010. The District
noted that the method for determining whether a tax levy results in an excess accumulation of
assets had been established by our supreme court in Central Illinois Public Service Co. v.
Miller, 42 Ill. 2d 542 (1969), and involved comparing the total assets available in a fund to both
the average annual expenditure of the fund for the past three fiscal years and the amount
expended in the last fiscal year. In Miller, the total assets available in the fund for the tax year
at issue were 2.84 times the average annual expenditure for the past three fiscal years and 3.24
times the expenditure in the last fiscal year. Id. at 543. The court concluded that the tax levy
resulted in an excess accumulation. Id. at 545. The Districts also cited this court’s application
of the Miller analysis in In re Application of the People ex rel. Anderson, 279 Ill. App. 3d 593,
598 (1996), in which we found that calculations of 1.8 times the average annual expenditure
for the past three years and 1.61 times the previous year’s expenditure fell “well below” what
Miller found to be excessive and that the objectors had failed to sustain their burden of proving
an excess accumulation. The District then attached as exhibits affidavits and worksheets
regarding calculations of the “Funds/Average Expenditure Ratio” for each district and relevant
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fiscal year. None of the calculations revealed a ratio that exceeded 1.49516. The taxpayers
filed a written stipulation stating that, for each district and relevant year:
“had the School District properly transferred its Working Cash Fund amount directly
into its education(al) fund, no excess accumulation(s) would have occurred in the
School District’s education(al) fund as calculated under analyses set forth in Central
Illinois Public Service Co. v. Miller, 42 Ill. 2d 542 (1969) and In re Application of the
People ex rel. Anderson, 279 Ill. App. 3d 593 (2d Dist. 1996).”
¶6 The trial court granted the motions for summary judgment, stating:
“Now, the plaintiff taxpayers have filed what they have styled as an offer of
stipulation concerning possible excess accumulations in the school districts’
educational funds if the school district had properly transferred working cash funds to
the educational funds. There were no objections to the facts presented and there were
no objections to the law presented by the movants.
This Court had found that in G.I.S. Venture, the Appellate Court remanded the case
to this Court with instructions to determine whether the transfer of the working cash
fund if, quote, properly applied, end of quote, to the educational fund would have
resulted in an improper accumulation of assets in the educational fund.
Plaintiffs have now stipulated to this essential fact as applied to each of the
objections at issue. For those reasons and as well as what [sic] this Court agrees with
the movants right now, [I]t’s going to grant the defendant intervenor’s motion for
summary judgment ***.”
The court found “no just reason to delay appeal” of its judgment pursuant to Illinois Supreme
Court Rule 304(a) (eff. Feb. 26, 2010). After the court denied the taxpayers’ motion for
reconsideration, this appeal followed.
¶7 II. ANALYSIS
¶8 The taxpayers contend that the trial court erred in granting the motions for summary
judgment. Summary judgment is appropriate only when “the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue as to
any material fact and that the moving party is entitled to a judgment as a matter of law.” 735
ILCS 5/2-1005(c) (West 2012). “A triable issue precluding summary judgment exists where
the material facts are disputed, or where, the material facts being undisputed, reasonable
persons might draw different inferences from the undisputed facts.” Adams v. Northern Illinois
Gas Co., 211 Ill. 2d 32, 43 (2004). The use of summary judgment is to be encouraged as an aid
in the expeditious disposition of a lawsuit; however, it is a drastic means of disposing of
litigation and should be allowed only when the right of the moving party is clear and free from
doubt. Springborn v. Village of Sugar Grove, 2013 IL App (2d) 120861, ¶ 24. We review
de novo a trial court’s grant of summary judgment. Id.
¶9 A taxing body has broad discretion in estimating the amount of revenue necessary to carry
out its lawful objectives; it is presumed that the taxing body has properly discharged its duty
and has not abused its discretion in making its levy. Anderson, 279 Ill. App. 3d at 596. The
objector bears the burden of overcoming this presumption and showing a clear abuse of
discretion. Id. The unnecessary accumulation of money in the public treasury is against the
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policy of the law, and a levy or tax rate that results in such an unnecessary accumulation is
illegal. Id.
¶ 10 In the tax rate objection complaint against the District, the taxpayers sought a refund of
1999 real estate taxes “by reason of excessive and illegal assessments, levies and taxes
extended.” The reason the taxpayers gave for their objection to the District’s tax levy for
educational purposes was the “Excess Rate $0.7774,” which was further described as follows:
“A portion of the Working Cash Fund was abated through the transfer of funds to
operating funds of the District other than the Educational Fund. Implicit within the
School Code is a requirement that such abatement should only be accomplished
through a transfer to the Educational Fund. Courts have held that such assets should
operate to reduce the amount of taxes necessary to be levied for such purposes and the
current levy is excessive to the extent of the transfer.”
¶ 11 The taxpayers sought a tax refund for an excessive levy in the educational fund. This court
remanded the cause in G.I.S to determine whether, if the transferred funds were properly
applied to the educational fund, that fund would possess “an improper accumulation of assets.”
G.I.S, 388 Ill. App. 3d at 192. The taxpayers stipulated to the results of Miller calculations that
were not only far below the results that Miller found to demonstrate excess accumulation but
also below the results that the Anderson court concluded failed to sustain the taxpayers’
burden. The material facts are undisputed, and reasonable persons could not draw different
inferences from those undisputed facts. See Adams, 211 Ill. 2d at 43. Summary judgment in
favor of the Districts was proper.
¶ 12 For all the arguments that the taxpayers raise, they inexplicably fail to cite, let alone
address or analyze, either Miller or Anderson. Instead, the taxpayers emphasize People ex rel.
Meyers v. Chicago & North Western Ry. Co., 1 Ill. 2d 255 (1953), the only case that the
taxpayers relied upon in G.I.S. to argue that summary judgment should have been granted in
their favor. See G.I.S., 388 Ill. App. 3d at 191. In Meyers, the school districts transferred
money from their building funds to their educational funds after, pursuant to statute, adopting
resolutions of transfer that provided that the money being transferred was not necessary for
building-fund purposes; immediately thereafter, the districts adopted budget ordinances
“which reflected the amounts so transferred as budgeted items of building fund expenditures”
and included those amounts in the certificates of levy for the following year. Meyers, 1 Ill. 2d
at 261. The supreme court found that each school district involved had acted inconsistently:
“formally declaring by resolution that its building fund resources are in excess of its
needs for building purposes and then, at or about the same time, officially declaring, in
the levy resolutions and in the formal certificates of levy, that it does require a
designated amount for building purposes. Both statements cannot be true and it is
obvious that had no transfers been made to the respective educational funds their
ensuing building fund needs and levies would have been lessened by the amounts
transferred.” Id. at 263.
¶ 13 While this court generally approved of Meyers’ analysis regarding an improper transfer of
assets between funds (“Similarly, the District’s practice here is not contemplated by statute and
is condemned by this court.” G.I.S., 388 Ill. App. 3d at 192), we did not follow its holding that
the trial court had “erred in overruling this series of objections made to so much of the rate
extended in each district as was necessary to replace the amounts transferred to the educational
fund.” Meyers, 1 Ill. 2d at 263. Instead, we specifically found:
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“Genuine issues of material fact remain as to whether the working cash fund assets, if
added to the educational fund, result in an excessive accumulation of assets in the
educational fund. Even though the 1999 educational fund levy was extended at the
maximum rate, a proper permanent transfer to that fund may result in a proper
accumulation of money in that fund. In that case, the taxpayers would not be entitled to
judgment. Therefore, additional hearings are required.” G.I.S., 388 Ill. App. 3d at 192.
¶ 14 Meyers predated Miller and its excess accumulation analysis by 16 years, and Miller more
properly applies here. The question at issue in this case on remand was not whether the
District’s transfer of assets to the O&M fund was proper; it was not. The question was whether,
had the District properly transferred the working cash fund assets to the educational fund, the
subsequent educational fund levy would have resulted in an improper accumulation of assets
therein. Only then would the taxpayers have been entitled to the requested refund of 1999 real
estate taxes “by reason of excessive and illegal assessments, levies and taxes extended.” The
Districts provided evidence that no such improper accumulation of assets would have resulted,
and taxpayers stipulated to that evidence. No genuine issue as to any material fact remained,
and the Districts were entitled to judgment as a matter of law. Therefore, the trial court did not
err in granting summary judgment in favor of the Districts.
¶ 15 III. CONCLUSION
¶ 16 For these reasons, the judgment of the circuit court of Du Page County is affirmed.
¶ 17 Affirmed.
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