Last February, Mayor Ken Mueller signed a resolution calling for the village to spend $170,000 in TIF funds to help pay for a used platform ladder fire truck.
But that’s not what happened.
Instead, the money was taken from the village’s Illinois 159/Boul Avenue Special Business District fund and village leaders are not sure why that happened.
Village officials discovered the incorrect fund was used after Jim Rauckman, the former mayor of Swansea, complained that the $170,000 should be returned to the TIF fund because he believes TIF funds may have been used improperly to help pay for the 2002 Smeal/Spartan fire truck that cost $340,000.
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Rauckman’s attorney, Esther Seitz of Springfield, sent letters to the village on Nov. 17 and Dec. 17 raising concerns about the TIF spending.
On Dec. 21, the Village Board went into a closed session to discuss Rauckman’s complaint.
And now Rauckman has filed a lawsuit alleging the Village Board violated the state’s Open Meetings Act when the board went into the closed session.
Rauckman’s lawsuit states the Village Board should not have gone into a closed session simply because he retained an attorney and challenged how the TIF funds were spent.
Public bodies must have a lawyer’s written, explicit and recent threat that a lawsuit will be filed for board members to go into a closed session because they believe litigation is probable or imminent, according to the suit filed on Jan. 25.
“We were not threatening litigation. We had no plans to litigate on the TIF issue,” Seitz said in an interview. “We simply asked that the TIF fund be reimbursed by the village’s general revenue fund.”
Mark Rohr, the village’s attorney, said he could not comment on the pending litigation.
But before the lawsuit was filed and after Seitz sent a letter on Jan. 11 saying Rauckman was considering a lawsuit, Rohr wrote Seitz a letter on Jan. 21 defending the Village Board’s action.
I’m not really sure what the end result of what Mr. Rauckman is trying to achieve out of this.
Swansea Trustee Matt Lanter
“There was ample reason for the board to believe that litigation was probable, despite your later protestations to the contrary,” Rohr wrote.
Mueller also declined to comment on the lawsuit.
Trustee Matt Lanter thinks “it’s a shame” the village will have to spend taxpayers’ money fighting the lawsuit.
“I’m not really sure what the end result of what Mr. Rauckman is trying to achieve out of this,” Lanter said. “I think it would have been more straightforward and professional if he just came to the board and asked a question or if he wrote a letter himself.”
Before the lawsuit was filed, Seitz asked Swansea to publicly release the audiotape of the closed-session and Rohr declined to do this.
What took place in there that they don’t want the public to know?
Jim Rauckman, former mayor of Swansea
“What took place in there that they don’t want the public to know?” Rauckman asked.
Rauckman’s lawsuit says he wants the court to:
▪ Enter an order confirming the village violated the Open Meetings Act by conducting the closed-session meeting on Dec. 21 about Rauckman’s complaint.
▪ Direct the village to release the minutes and audiotape of the meeting.
▪ Order the village to stop committing any further violations of the Open Meetings Act.
▪ Assess against the village legal costs incurred by Rauckman.
Resolution not followed in two ways
Lanter, who is chairman of the Finance Committee but was not the chairman of the committee last spring when the fire truck was purchased, said the village leaders have not been able to determine why money was taken out of the business district account instead of the TIF account.
“There’s no paperwork that shows why that was done,” Lanter said.
Rohr told Seitz the funds were “mistakenly” withdrawn from the TIF fund.
In addition to this error, the village also did not use the bank that trustees directed it to use. The resolution about buying the fire truck directed village officials to borrow $170,000 from the Bank of Belleville to help pay for the fire truck. Instead, the village drew $170,000 from a line of credit from the Bank of Springfield. This resolution was passed by the board on Jan. 29, 2015, and signed by Mueller on Feb. 17.
To correct the record on the two errors, the Village Board is scheduled to vote on two proposed ordinances and a resolution on Monday night:
▪ One ordinance would ratify that the village had paid $170,389 to the Bank of Springfield from the village’s general fund.
▪ In an effort “to avoid any further controversy concerning the funds used to purchase the fire truck,” a second ordinance calls for $170,000 to be transferred from the general fund to the business district fund to reimburse the money taken out of the business district fund for the fire truck.
▪ A resolution would amend the original fire truck resolution to say that the $340,000 cost of the fire truck would come from the village’s general fund.
“What the previous board adopted was not carried out and so now what we need to do is fix what actually was done,” Lanter said. “So basically the paperwork is correct.”
Rauckman, who was mayor from 2009 to 2013 and chose not to run for re-election, said, “I don’t believe what they’re telling us. There’s no way they inadvertently wrote the check out of the wrong fund.”
Former Swansea mayor believes TIF and business district funds should not be used for vehicle purchases.
In a TIF district, property values are frozen at their current levels for a 23-year period and any additional revenue generated by a rise in property values is channeled into a special fund. Metro-east towns typically use this money for infrastructure improvements and economic incentives in the district.
In Swansea’s business district, shoppers pay an extra 1 percent in sales tax. Lanter said there are some sites that were excluded from this tax, including Schnucks at 2665 N. Illinois St.
Lanter said Swansea’s business district fund has about $1.55 million in it.
Rauckman said the business district fund is “restricted” like the TIF district fund.
“The story is still the same,” he said. “It’s a restricted fund.”
Swansea board to consider an ordinance that would send $170K from the general fund to the business district fund “to avoid any further controversy concerning the funds used to purchase the fire truck.”
He said based on the rules governing money in the business district and TIF funds, the money should be used for infrastructure improvements to attract businesses to Swansea and not for purchasing vehicles such as a fire truck.
Rohr disagreed. In a Dec. 30 letter to Seitz, he said, “… I believe that the issue of the village’s use of tax increment financing funds toward the purchase of a fire truck could well be justified.”