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  • Writer's pictureSteve Judge

SUPREME COURT LOOKS TO PLAIN LANGUAGE OF ANNEXATION AND TIF DISTRICT STATUTES TO DETERMINE LEGISLATIVE INTENT 

This month’s column discusses the recent Supreme Court of Illinois opinion in The Board of Education of Richland School District No. 88 v. The City of Crest Hill, 2021 IL 126444, affirming the Appellate Court’s finding that Illinois Municipal Code § 11-74.4-4(a) did not permit the City to “jump” a public utility right-of-way, located in a TIF district, to establish contiguity between two parcels.

 

The City of Crest Hill established a real property tax increment financing (TIF) district under the Tax Increment Allocation Redevelopment Act (TIF Act) (65 ILCS 5/11-74.4-1 et seq. (West 2018)). The School Board asserted the position that due to a public utility right-of-way, a portion of the TIF district did not adjoin or touch the rest of the district, making it non-contiguous and therefore invalid under § 11-74.4-4(a) of the TIF Act.

 

The City contended that pursuant to Illinois Municipal Code § 7-1-1, Annexation of contiguous territory, (65 ILCS 5/7-1-1), the City was permitted to “jump” a natural gas right-of-way while maintaining contiguity between the parcels. Under § 7-1-1:

 

For the purposes of this Article any territory to be annexed to a municipality shall be considered to be contiguous to the municipality notwithstanding that the territory is separated from the municipality by a lake, river, or other waterway or the territory is separated from the municipality by a strip parcel, railroad or public utility right-of-way, or former railroad right-of-way that has been converted to a recreational trail, but upon annexation the area included within that strip parcel, right-of-way, or former right-of-way shall not be considered to be annexed to the municipality.

65 ILCS 5/7-1-1.

 

The Appellate Court Found the City’s Reliance on Illinois Municipal Code § 7-1-1 Misplaced

 

Upon addressing the City’s Cross-Motion for Summary Judgment, the Appellate court found that:

 

“The School Board’s Motion for Summary Judgment pointed out that annexations and TIF are governed by independent sections of the Illinois Municipal Code. In the School Board’s view, the portion of the Illinois Municipal Code governing TIF did not allow the City to “jump” the 234.9 foot portion of the natural gas right-of-way to establish contiguity between parcels A and B. Again, the School Board argued that these parcels, not parcels B and C, were noncontiguous under the Act.” Board of Education of Richland School District No. 88A v. City of Crest Hill, 2020 IL App (3d) 190225.

 

In affirming the Appellate Court’s ruling in favor of the School Board, the Illinois Supreme Court stated that:

 

“the plain language of section 7-1-1 of the annexation division…clearly provides that the public-utility-right-of-way exception to the contiguity requirement for annexation is limited to article 7 of the Municipal Code. The TIF Act is found in article 11 of the Municipal Code, and thus, the plain language of the statute provides that this exception to contiguity for purposes of article 7 does not apply here.” The Bd. of Educ. of Richland Sch. Dist. No. 88A v. The City of Crest Hill (Ill. 2021).

 

“we recognize that the definition of contiguity, i.e., touching or adjoining in a reasonably substantial physical sense, for purposes of designating a redevelopment project area pursuant to the TIF Act, is consistent with the common-law definition applicable in cases involving municipal annexation. However, this definition does not incorporate the statutory public utility right-of-way exception for contiguity contained in the annexation division of the Municipal Code (id. § 7-1-1), particularly, as in this case, when the parcel of property to be excluded is owned by the utility company, is located outside the incorporated boundaries of the municipality and the boundaries of the redevelopment project area, and physically separates the parcels the municipality found to be contiguous for purposes of including them in the redevelopment project area pursuant to the TIF Act.” Id.

 

Impact on Pending Litigation Involving Annexation of Adjacent Highways

 

In the recently filed case of Village of Cherry Valley v. Cherry Valley Township, 2021 MR 358 (17th Cir.), the Village annexed certain parcels, stopping within 1100 to 2500 feet of a certain highway. The Township alleged that the highway should be included as part of the Village’s annexation under § 7-1-1 which states that where there is an annexation by a municipality, "The new boundary shall extend to the far side of any adjacent highway and shall include all of every highway within the area annexed." 65 ILCS 5/7-1-1.

 

The Township further contends that the legislative intent of the statute was to prevent municipalities from receiving the advantage of taking in new taxpayers, while avoiding the responsibility of maintaining the adjacent roads.

 

Under § 7-1-1, Highways are considered annexed even if they are not included in the legal description of the petition or the annexing ordinance. When roads under township jurisdiction are annexed by municipalities, these roads automatically become municipal streets under municipal jurisdiction. This could expose townships to potential liability if they continue to maintain roads arguably under municipal jurisdiction should an incident or injury occur on these roads.

 

While the Court in Board of Education of Richland School District No. 88A looked to the meaning of “contiguity”, the Cherry Valley court will need to look to the meaning of “adjacent”. Under § 7-1-1, the “…new boundary shall extend to the far side of any adjacent highway…”. Id.

 

According to Black’s Law Dictionary, adjacent is defined as “lying near or close to, but not necessarily touching”. Black’s Law Dictionary (10th ed. 2014). Illinois courts have not addressed how “near or close” the highway must be to the annexed land to be considered adjacent. It will be interesting to see how the Cherry Valley court rules on cross motions for summary judgment and how the court interprets the plain meaning of the statute to determine the legislative intent.

 

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