                                        No. 2--05--0604               Filed: 3-3-08
___________________________________________________________________

                                             IN THE

                              APPELLATE COURT OF ILLINOIS

                              SECOND DISTRICT
______________________________________________________________________________

ALLEGIS REALTY INVESTORS, ABN              ) Appeal from the Circuit Court
AMRO SERVICES COMPANY, PATRIOT             ) of Du Page County.
AMERICAN, AARON EQUIPMENT                  )
COMPANY, AETNA REALTY, B & G               )
REALTY, INC., WILBERT A. EICH,             )
Trustee, NOONEY- KRUMBACH,                 )
ILLINOIS TOOL WORKS, INC., INLAND          )
REAL ESTATE, GARY SOLOMON AND              )
COMPANY, and D.R. ZACONNE, Trustee,        )
                                           )
        Plaintiffs-Appellants,             )
                                           )
v.                                         ) No. 98--TO--10
                                           )
JOHN LOTUS NOVAK, County Treasurer         )
and ex officio County Collector of Du Page )
County, Illinois,                          )
                                           )
        Defendant                          )
                                           ) Honorable
(Lisle Township Road District,             ) Edward R. Duncan, Jr.,
Intervenor-Appellee).                      ) Judge, Presiding.
______________________________________________________________________________

       JUSTICE McLAREN delivered the opinion of the court:

       Plaintiffs, Allegis Realty Investors and other Du Page County taxpayers (Allegis), appeal from

the trial court's grant of summary judgment in favor of intervenor, Lisle Township Road District

(District), contending that there were material issues of fact precluding summary judgment. We

reverse and remand.
No. 2--05--0604


        Allegis filed tax objections under section 23--10 of the Property Tax Code (35 ILCS

200/23--10 (West 1996)), objecting to various taxes imposed by several units of local government.

At issue in this case is "Objection A," which alleged that the District had levied an unnecessary 1997

tax for general road and bridge purposes and had improperly accumulated funds. The District

intervened and filed a motion for summary judgment, which the trial court granted on December 15,

2004. The trial court subsequently denied Allegis's motion for reconsideration or rehearing, and this

appeal followed.1

        Allegis now contends that the trial court erred in granting summary judgment in favor of the

District. Summary judgment is appropriate where the pleadings, depositions, and admissions on file,

along with any affidavits, demonstrate that there exists no genuine issue as to any material fact and

that the movant is entitled to judgment as a matter of law. American River Transportation Co. v.

Bower, 351 Ill. App. 3d 208, 210 (2004). A court considering a motion for summary judgment must

construe the pleadings, depositions, admissions, and affidavits strictly against the movant and in favor

of the nonmoving party. American River Transportation Co., 351 Ill. App. 3d at 210. Summary

judgment should be granted only when the movant's right to judgment is clear and free from doubt;

where reasonable persons could draw divergent inferences from undisputed facts, summary judgment

should be denied. American River Transportation Co., 351 Ill. App. 3d at 210. This court will

review de novo a trial court's grant of summary judgment. American River Transportation Co., 351

Ill. App. 3d at 210.



        1
            This court ordered the parties to submit additional briefs on the application of Allegis Realty

Investors v. Novak, 223 Ill. 2d 318 (2006), to the case before us. We agree with the parties that the

issues in the case before us are not affected by the decision in that case.

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       Taxing bodies retain broad discretion in estimating the amounts necessary to carry out their

lawful objectives and may proceed to levy real estate taxes based upon these estimates. People ex

rel. Toynton v. Commonwealth Edison Co., 285 Ill. App. 3d 357, 360 (1996). The law presumes that

a taxing body has properly discharged its legal duty and has not abused its discretion in making a real

estate levy. Toynton, 285 Ill. App. 3d at 360. The law is clear that a tax objector bears a substantial

burden of proof in establishing that a taxing body has abused its discretion and has illegally

accumulated or diverted taxes. Toynton, 285 Ill. App. 3d at 360-61. The mere fact that a

discrepancy exists between the amount of money levied in a given year and the amount of money

needed is of limited significance. Toynton, 285 Ill. App. 3d at 360.

       However, the law is also clear that an unnecessary accumulation of money in the public

treasury is against the policy of the law, and a real estate levy or tax rate that results in such an

unnecessary accumulation is illegal. Toynton, 285 Ill. App. 3d at 361. While the courts play a

limited, though significant, role in reviewing taxpayer objections to governmental appropriations and

tax levies, the law is clear that courts will interfere in the taxing process when such interference is

necessary to prevent a clear abuse of discretion by a taxing body. Toynton, 285 Ill. App. 3d at 360-

61.

       Our supreme court set forth the proper method for analyzing excess accumulations of money

in Central Illinois Public Service Co. v. Miller, 42 Ill. 2d 542 (1969). In Miller, the court determined

the total funds available for the fiscal year by adding the fund balance at the beginning of the fiscal

year to the taxes extended for the prior year. This total was then divided by the average annual

expenditure from the fund for the previous three fiscal years. In Miller, the total funds available were

2.84 times the annual average expenditure for the past three fiscal years and 3.24 times the amount



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expended in the last previous fiscal year. The court then concluded that any further tax levy would

result in an illegal excess accumulation. However, the Miller test is not one to be applied with

mathematical precision (Toynton, 285 Ill. App. 3d at 362), and the term "accumulation" has been

equated with an amount that exceeds two to three times the foreseeable expenditures of the taxing

body. See Belke v. County of Peoria, 169 Ill. App. 3d 839, 844 (1988). Once such an accumulation

is shown, the taxing body is to be given an opportunity to present evidence showing the need for an

accumulation of such magnitude. See Toynton, 285 Ill. App. 3d at 363; In re Application of

O'Connor, 80 Ill. App. 3d 354, 357 (1980).

        Allegis argues that the District's levy was void because the District had accumulated excess

funds in the General Road and Bridge Fund. On April 1, 1997 (the first day of the 1997-98 fiscal

year), the General Road and Bridge Fund had a balance on hand of $899,767 and deferred revenue

of $221,750, for a total of $1,121,517 of available assets for the 1997-98 fiscal year.2 The record

showed actual expenses for the three previous fiscal years as follows: 1994-95: $326,020; 1995-96:

$371,752; and 1996-97: $471, 252, for a total of $1,169,024. The average expenses for these three

years was $389,675. Thus, the Miller equation results in a funds/average expenditure ratio of 2.88:1

and a funds/last previous fiscal year ratio of 2.38:1. This evidence is sufficient to make a showing

of excess accumulation and to overcome the presumption that the District did not abuse its discretion.

See Toynton, 285 Ill. App. 3d at 363 (evidence that challenged funds contained from 2.01 to 2.95

times the average annual expenditure was sufficient to show excess accumulation and overcome



        2
            In its objection, Allegis alleged that the fund assets totaled $1,170,884. On appeal, however,

Allegis bases its arguments on the total of $1,121,517. We will use this lesser total for purposes of

this appeal.

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presumption). Thus, the burden shifts to the District to justify the levy. See Toynton, 285 Ill. App.

3d at 362-63.

        Without citation to authority, the District argues that, while the necessity of a tax levy is a

question of fact, the issue of justification of the levy is a matter of law. Therefore, according to the

District, this court can review the various documents attached to the summary judgment pleadings

and determine, as a matter of law, that justification was established and that summary judgment was

appropriate. The District attached the affidavit of Michael J. Dow, Lisle Township highway

commissioner, and its fiscal year 1998-99 budget, which was adopted on March 10, 1998. Allegis

attached transcripts of Dow's deposition, which the trial court had ordered to be taken before ruling

on the motion for summary judgment, and various deposition exhibits. We disagree with the District's

argument.

        Highway Commissioner Dow stated in his affidavit that he prepares the annual tax levy in

October and November each year and files the ordinance in December. The budget for the following

year has not been prepared at the time the tax levy is prepared. In preparing the levy, he estimates

the remaining expenditures for approximately the second half of the current fiscal year, the

approximate expenditures for the ensuing fiscal year, and the approximate expenditures for the next

ensuing fiscal year. He also estimates what funds may be remaining at the end of the current fiscal

year.

        Dow stated that he is not an accountant or an economist, but that he uses his "best effort to

estimate the amount of taxes that will be necessary to be raised" each year to pay for anticipated

expenditures for the ensuing year "and also maintain a prudent reserve." It is his duty "to be

financially prepared for a worst-case scenario in case there is extraordinary snow removal or road



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repairs or other expenditures." The budget and appropriations ordinance that was attached was true

and accurate, and the amounts shown for the General Road and Bridge Fund "were anticipated to be

necessary expenditures for fiscal year 1998-99." If he had not levied the amount of taxes that he had,

he "may not have had sufficient funds to properly perform the duties" of highway commissioner "if

all anticipated expenses were actually incurred and also maintain a sufficient reserve of funds."

        In his deposition, when asked about his estimates for the 1997 levy, Dow stated:

                "The way the statutes are, in order to maintain our motor fuel tax, we must level [sic]

                the maximum tax and the only thing we do in November is do an estimate of where

                we have certain needs coming up, whether it is in the building and vehicle [sic] or

                whether it is in the road construction [sic], how we are going to use those monies and

                that is what is determined."

He explained that "we are controlled by the tax cap as far as the levy. *** I have no choice but to

levy that."

        Dow explained that the estimate of expenditures for a fiscal year "is usually based on our

previous year's experience or what I know our needs are going to be for that next fiscal year." When

asked if any documents existed that would show the calculated figure of the approximate estimated

expenditures for 1998-99, Dow explained, "No, because again, a lot of this is judgment calls by

myself as to what our needs are going to be." When asked for various calculations that Dow stated

in his affidavit were made in the ultimate calculation of the levy, Dow admitted that supporting

documentation concerning the levy did not exist, as it was destroyed after the levy was adopted. In

describing his calculation of a "prudent reserve," Dow stated:

        "I hate to be repetitious, but this is a general statement. We try to be prudent. I am sure that

        prudent can be relative, you know, to--from person to person because we need to know that

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        we have to have enough reserve to pay, you know, emergencies or costs that would come

        up."

The 1998-99 budget, which was attached to Dow's affidavit, did not exist when the levy was

prepared.

        Justification is not merely a matter of law. Issues of fact and credibility come into play when

the nature, extent, and reasonableness of the accumulation is examined. Dow stated that he used his

"best effort to estimate the amount of taxes that will be necessary" for the ensuing year's expenditures

and to maintain a "prudent reserve." He also indicated that he levied the maximum tax in order to

maintain motor fuel tax revenues and that the levy was "controlled" by the tax cap. These issues of

judgment, prudence, and perceived lack of control over the process are issues of fact. What those

efforts were, whether they were his "best" efforts and were reasonable, whether the reserve was

prudent, and whether imposing the maximum levy was reasonable are conclusions left to a fact finder,

not matters of law.

        However, Dow did not address facts; he talked about his opinion. Dow was unable to show

the calculations involved in his best efforts to produce the levy and determine a prudent reserve; these

involved "judgment calls" and were "relative." No supporting documentation for the calculations was

submitted, as it had been "destroyed" after the levy was adopted. Instead, the District submitted a

budget that did not exist when the levy was created and a self-serving affidavit, attempting to rebut

the presumptive evidence of excess accumulation with nothing more than Dow's opinion that he had

tried his best. Dow's opinion does not establish the reasonableness of, or lend credibility to, his own

actions and is insufficient to refute a ratio evidencing a substantial excess accumulation.

        In Toynton, the objector showed in its objections that the taxing bodies had Miller ratios

ranging from 2.01 to 2.95 in various funds. The taxing bodies responded, arguing that the balances

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were within discretionary parameters and listing some of the expenditures made from the funds;

however, they attached no affidavits or other evidentiary documents. Toynton, 285 Ill. App. 3d at

359. The objector and the taxing bodies filed cross-motions for summary judgment. No evidence

was presented during the hearing on the motion. The trial court granted the motion of the taxing

bodies, concluding that the objector had failed to meet its burden to show that the levy was illegal.

The appellate court found that the objector had overcome the presumption that the taxing bodies had

not abused their discretion, and it determined that the objector's evidence "raised a question of fact

regarding whether the tax levies were unnecessary and illegal" such that the taxing bodies were not

entitled to summary judgment as a matter of law. Toynton, 285 Ill. App. 3d at 363. However, the

court also concluded that the objector also was not entitled to summary judgment, as the objector's

evidence "that the funds contained excess accumulations does not automatically prove that the

challenged tax levies were illegal as a matter of law." (Emphasis in original.) Toynton, 285 Ill. App.

3d at 363. The court noted that no evidence had been presented regarding the taxing bodies' need

for accumulations in the challenged funds; therefore, the court remanded the cause for an evidentiary

hearing to allow the taxing bodies "the opportunity to present evidence in support of their claim that

the accumulations in the challenged funds are justified and not an abuse of discretion." Toynton, 285

Ill. App. 3d at 363.

       Similarly, in the case before us, evidence of good intentions in using "best efforts" and

maintaining a "prudent reserve" is not per se justification for the accumulation. Additionally, levying

the maximum tax rate possible is not a per se justification without establishing that there is a

reasonable basis to levy at the maximum possible rate. The issue of fact is not automatically morphed

into a matter of law by a taxing body's opinions regarding justification. If the evidence presented with

a motion for summary judgment is of such a nature that no reasonable person could disagree with it

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(for example, the cost of road salt had increased by 200%, and the accumulation was evidenced in

this line item), then the issue of justification may become a matter of law. However, the District has

submitted unsubstantiated opinion, rather than substantiated justification, for the amount of the levy.

The "evidence" presented by the District in this case does not come close to the level necessary to

establish, as a matter of law, that the accumulation was justified and that the District was entitled to

judgment. The proper course is to remand this case for an evidentiary hearing regarding any

justification for the accumulation.

        For these reasons, the judgment of the circuit court of Du Page County is reversed, and the

cause is remanded for further proceedings consistent with this opinion.

        Reversed and remanded.

        BOWMAN and CALLUM, JJ., concur.




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