Local Government

Documents reveal push by Lake in the Hills Sanitary District to close Kane County land purchase

Lake in the Hills Sanitary District officials appeared desperate to close any land deal they could in Kane County to foil attempts to consolidate it into village government, records show.

Private email communications between district officials and engineers, attorneys and real estate brokers reveal a frenzied attempt in recent months to expand the district across the county line in order to exempt the district from a new law that allows county boards to consolidate some of the state’s almost 7,000 units of local government.

In one memo, officials pondered the possibility of offering existing Kane County homeowners up to $30,000 to annex to the district. In another proposed deal, they examined owning just an acre – that plan would have involved buying 5 acres to avoid local subdivision ordinances, then selling four of them.

And despite the frenzy of wanting to acquire land in Kane County – sometimes examining offers far above current market prices – agencies representing the sanitary district made it clear their clients had no plans whatsoever for the land. In one case, they assured the seller that the land would sit empty for at least a decade.

The sanitary district’s plans to buy 13.88 acres off Square Barn Road just over the county line are on hold pending a judge’s ruling as to who actually gets to run the district – the old trustees behind the push for land or the new ones appointed by the McHenry County Board who want to undo the whole thing.

McHenry County Board Chairman Jack Franks, D-Marengo, who repeatedly has accused the sanitary district of dirty tricks to avoid consolidation, said the emails paint an infuriating picture. The emails and other documents were obtained during the discovery process in the county’s legal action to stop the land deal from being consummated and upholding its selection of new trustees.

“This shows that these guys were willing to spend millions of taxpayer dollars for any land, anywhere in Kane County, even though they never needed it, and never would use it, so they could protect their fiefdom and keep consolidation from happening,” said Franks.

‘The tightest of schedules’

The 11-square-mile sanitary district, created by voters in 1963 to handle wastewater management and pollution control, serves about 40,000 residents in Lake in the Hills, Crystal Lake and Huntley. Homeowners pay a small property tax and a monthly fee for services.

Under a state law written by Franks during his final term as a state lawmaker, the County Board can eliminate governments that are entirely within county limits, and to which the board appoints a majority of the trustees, such as the sanitary district. But a sanitary district with boundaries in multiple counties is exempt from the law. What’s more, those trustees are chosen by state lawmakers, not county boards.

Although sanitary district officials have maintained that they had planned for years to expand into Kane County, a review of their meeting minutes dating back to 2014 shows no mention of annexing or acquiring property. Former Trustee David McPhee, who quit after his January appointment to the Lake in the Hills Village Board, has said the topic never was discussed during his almost nine years with the sanitary district.

Emails show that expanding into Kane County became a priority after Franks, who pledged during his campaign to use the consolidation law, was elected County Board chairman in November. It took on a more urgent tone several months later, when the former Lake in the Hills village president publicly supported consolidation.

In a February post on Facebook, then-Village President Paul Mulcahy said consolidating the district into the village could “provide efficiencies, cut costs and eliminate one hand in the taxpayers’ pockets.” He also called the extra layer of government a competitive disadvantage for luring development.

“In all our neighboring communities, sanitary services are provided by the municipalities – there is one-stop shopping for a developer. Consolidation puts us on a level playing field in the very competitive game of economic development,” Mulcahy wrote.

Mulcahy has since been succeeded by Village President Russ Ruzanski, who along with the Village Board is open to pursuing consolidation if they conclude it is in the taxpayers’ best interest.

Sanitary District Manager Rick Forner emailed Mulcahy’s post to the two remaining trustees, Shelby Key and Terry Easler, as well as to Brett Postl, president of Rolling Meadows-based Postl-Yore & Associates, the district’s engineering firm since 2006. Postl wrote back urging the district to “make the deal” to buy the land the district was pondering at the time.

Postl said Friday that he and district officials had in fact been discussing expanding south since 2014, but that it was Mulcahy’s post that made pursuing expansion a top priority.

“I think that Mulcahy really kicked it off, and the district wanted to complete this thing we’ve been working on for three years,” Postl said.

Derke Price, the attorney representing Key and Easler in their legal fight and who was retained by them as trustees to oversee the annexation and land purchase, could not be reached for comment.

The land deal in question fell through, but records show it was one of several that the sanitary district raced to close. Emails to various potential sellers stated that the district wanted to work quickly to buy land on “the tightest of schedules.”

Key and Easler voted in April to annex a strip of right of way along the length of Square Barn Road, which ends a mile and a half south of the southern boundary of the sanitary district’s service area. State law allows sanitary districts to annex along roadways without the need for contiguous parcels to help facilitate bringing service lines to properties.

As for buying land that would be contiguous to the strip, the emails showed that trustees and their representatives weren’t picky – as long as the property was in Kane County.

One acre will do

Although trustees settled on a cost of $950,780 for the 13.88-acre sale now held up by a judge’s restraining order, emails show they were willing to go much higher for other properties.

Trustees pondered spending $1.37 million, and maybe going up to $1.5 million, for parts of two parcels. An April 21 memo from Postl-Yore, besides floating the idea of offering homeowners between $25,000 and $30,000 to annex, presented options of offering $1.4 million for 20 acres of a 30-acre parcel, or up to $1.9 million for the whole thing.

And in at least one instance revealed in an early April exchange of emails, the district considered buying only an acre.

An April 3 email conversation between Postl and real estate professionals proposed buying 5 acres – anything smaller would require going through a subdivision ordinance – and eventually reselling four of them, perhaps back to the seller at the same price per acre the district would have paid.

“We don’t need much property and will ultimately resell all but an acre or so,” Postl wrote.

Postl made it clear that the asking price was higher than current market price, but added that his clients were entertaining it only because, “We are on a very tight schedule for reasons known to the buyer.”

Despite the tight schedule, that email and others in the chain stated that the sanitary district had no development plans for the property, and would not do anything with it within the next 10 years. The seller had a concern regarding how a sale would affect a long-term lease a farmer had to farm the property.

“The purchased property will remain vacant for the foreseeable future. The farmer will be able to cultivate the field for some time to come. The buyer simply needs to own approximately 1 acre of property on Square Barn Road to meet certain requirements placed on them,” Postl wrote.

The court decides

It will be up to McHenry County Judge Thomas Meyer to settle the matter, which he could as early as Aug. 16, when the case is scheduled for a hearing. Simply put, Meyer has to determine which set of trustees gets to make the decisions.

The County Board in June appointed two new trustees, constituting a majority of the three-member sanitary district board. One fills McPhee’s vacancy after his resignation. The other replaces Key, whose term expired and whom Franks refused to nominate after Key sent a letter with April’s sewer bills – written on village stationery – pledging to fight consolidation and urging customers to call their County Board members. Franks called the move improper and alleged that it violated the state ban on using taxpayer-funded resources for political purposes.

Although the district has maintained that the mailers were privately funded, a March 31 invoice from the company that prints the district’s bills charged the district $1,538.62 for printing, folding and inserting the mailers. On June 8, Ancel Glink, the law firm representing Key and Easler, cut the sanitary district a check for that exact amount, according to discovery records.

New Trustees Eric Hansen and Kyle Kane voted last month to undo the annexation and rescind the land deal. But Price alleges in a court filing that Hansen and Kane’s appointment was illegal. He argues that the sanitary district officially became a multicounty entity with the Square Barn Road annexation and the land purchase, thus taking the ability to appoint trustees out of the County Board’s hands and putting it into the hands of state lawmakers whose district boundaries include the sanitary district’s.

Although Price had first asked the McHenry County State’s Attorney’s Office to take up the matter, the office has sided with Franks and the County Board, concluding that the appointment authority rests with them.

Even if Meyer rules in the county’s favor, consolidation of the district into the village is far from a foregone conclusion.

Under the law, the County Board must conclude that the district provides either unnecessary or duplicative services, conduct an audit and publicly release its findings of fact before passing an ordinance abolishing it. It also would require buy-in from the Lake in the Hills Village Board, which would pick up the district’s duties.

Residents of the sanitary district have the option of gathering enough signatures to force the proposed elimination to a voter referendum.

Village staff estimate that consolidating the sanitary district could save $400,000 a year. About $675,000 of the district’s $6 million budget comes from its property tax levy, with the remainder generated by user fees.

The sanitary district has countered that it charges the least by far of any county municipality that offers water and sewer services.

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