Northern Illinois Builders Ass'n v. City of St. Charles
State: Illinois
Court: 2nd District Appellate
Docket No: 2-97-0847
Case Date: 07/06/1998
July 6, 1998
No. 2--97--0847
_________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
_________________________________________________________________
NORTHERN ILLINOIS HOME BUILDERS ) Appeal from the Circuit
ASS'N; GALLANT HOMES, INC.; THE ) Court of Kane County.
KRUGHOFF COMPANY; SHO DEEN, INC.; )
JOE KEIM BUILDERS, INC.; KEIM )
CORPORATION; and HAVLICEK BUILDERS, )
INC., )
)
Plaintiffs-Appellants, ) No. 92--MR--0013
)
v. )
)
THE CITY OF ST. CHARLES, )
)
Defendant-Appellee ) Honorable
) R. Peter Grometer and
(John R. Hall & Sons, Inc., ) Timothy Q. Sheldon,
Plaintiff). ) Judges, Presiding.
_________________________________________________________________
JUSTICE McLAREN delivered the opinion of the court:
Plaintiffs Gallant Homes, Inc.; The Krughoff Company; Sho
Deen, Inc.; Joe Keim Builders, Inc.; Keim Corporation; and Havlicek
Builders, Inc., (collectively the Builders) and plaintiff Northern
Illinois Home Builders Association appeal the trial court s
dismissal of the plaintiffs' second amended complaint seeking a
declaratory judgment that the defendant's ordinances mandating an
electric service connection fee is unconstitutional and invalid.
We reverse in part, affirm in part, and remand for further
proceedings.
Since 1892, the defendant, the City of St. Charles, a non-
home-rule municipality, has operated its own electric utility
system. The defendant, the sole provider of electrical current to
residences within St. Charles, buys electrical energy from
Commonwealth Edison at wholesale and distributes electricity to
customers through facilities owned by the defendant. The
defendant s electric utility system is financed by retained
earnings, not by bonds. Prior to 1972 the cost of connecting new
customers to the system was paid for by the income from the sale of
electric energy.
In 1990 the defendant adopted ordinance 1990-M-36 (the old
ordinance) (St. Charles Municipal Code 13.08.150 (passed April 16,
1990)), which provided that the cost of connecting new customers to
the system would be paid for by the new customers. Under this old
ordinance, new customers paid one charge, which was based on
standard increments of service capacity, i.e., $1,200 for 100 amps,
$2,400 for 200 amps, $4,800 for 400 amps.
In counts I and II, the plaintiffs alleged that the Builders
built single-family residential homes within the defendant s
corporate borders. The plaintiffs alleged that the Builders paid
the connection fees assessed by the defendant when they obtained
building permits. The complaint also alleged that the Builders had
an ownership interest in the property when they paid the connection
fees. Further, all the Builders, except The Krughoff Company and
Havlicek Builders, Inc., alleged that they continued to have a
property interest in the homes in which they paid the connection
fees. The plaintiffs sought a declaration from the court that the
old ordinance was invalid and an order for the return of the fees
with interest.
On January 7, 1992, the plaintiffs and John R. Hall & Sons,
Inc., filed a complaint for declaratory judgment against the
defendant. The complaint challenged the validity and
constitutionality of the defendant s ordinance. The trial court
denied the defendant s motion to dismiss, but then sua sponte
requested that the plaintiffs and John R. Hall & Sons, Inc., amend
their complaint. The plaintiffs and John R. Hall & Sons, Inc.,
filed an amended complaint for declaratory judgment on December 16,
1992. On December 21, 1992, the defendant adopted the new
ordinance.
On December 21, 1992, the defendant adopted ordinance 1992-M-
71 (the new ordinance) (St. Charles Municipal Code 13.08.135
(passed December 21, 1992)), which amended the old ordinance and
charged new customers two separate charges for connection, namely,
a service origination charge "of $1,500 plus four and one-half
percent (4
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