Rule 23 Order filed
April 16, 2004;
Motion to publish granted
May 27, 2004.

JUSTICE WELCH delivered the opinion of the court:

In these consolidated appeals, the Financial Oversight Panel for East St. Louis SchoolDistrict No. 189 (Oversight Panel) appeals from decisions of the circuit court of St. ClairCounty declaring that the Oversight Panel had acted arbitrarily and capriciously in rejecting aproposed contract between the Board of Education of East St. Louis School District No. 189(School Board) and the architectural firm of Kennedy and Associates, Inc. (KAI); declaringinvalid, and enjoining the Oversight Panel from enforcing, its Directive 03-1(a), which directedthe School Board to negotiate an appropriate contract with an architectural firm other than KAIor face disciplinary action, including the possible removal of members from office; andordering the Oversight Panel to approve and execute the School Board's proposed contract withKAI. Because the trial court's finding that the Oversight Panel acted arbitrarily andcapriciously in rejecting the proposed contract between the School Board and KAI is contraryto the manifest weight of the evidence, we reverse the orders of the circuit court of St. ClairCounty.

In July 2002, the School Board submitted to the Oversight Panel for its approval aproposed contract between the School Board and KAI for architectural and engineeringservices in connection with the construction of two new school buildings. On July 31, 2002,the Oversight Panel rejected the proposed contract for the stated reason that KAI was notprequalified with the Capital Development Board (CDB), as required. When KAI subsequentlyreceived temporary or conditional prequalification from the CDB, the Oversight Panel againrejected the proposed contract in October 2002, because that prequalification was"probationary."

On November 7, 2002, the Oversight Panel issued its Directive 03-1, directing theSchool Board to conduct a search for an architectural and engineering firm to work on the twoschool construction projects. The School Board complied with Directive 03-1, and five firmswere selected to interview with an unofficial committee composed of representatives ofseveral interested bodies, including both parties hereto. That committee ranked KAI secondand Wm. B. Ittner, Inc. (Ittner), first. Nevertheless, the School Board, in official action at itsnext meeting, ranked KAI first and Ittner second. Accordingly, the School Board negotiateda contract with KAI and submitted it to the Oversight Panel for approval. On January 29, 2003,the Oversight Panel rejected this contract as well and issued its Directive 03-1(a), directingthe School Board to negotiate an appropriate contract with a firm other than KAI. Directive03-1(a) also provided that, if the School Board failed or refused to act in accordance with thedirective, the Oversight Panel would initiate disciplinary action against the School Board,which could include the removal of School Board members from office.

On February 5, 2003, the School Board filed, in the circuit court of St. Clair County,an amended complaint,⁽¹⁾ count III of which seeks a declaratory judgment that the OversightPanel had acted in violation of and outside the scope of its authority in rejecting the proposedcontract between the School Board and KAI, a declaratory judgment that Directive 03-1(a) isinvalid, and an injunction against the Oversight Panel enforcing its Directive 03-1(a) orinstituting disciplinary action against the School Board or its members.⁽²⁾

In its pretrial memorandum to the court, the Oversight Panel argued that what theSchool Board was really seeking in its complaint was judicial review of an administrativedecision, which could only be had pursuant to a writ of certiorari based on the record of theadministrative proceedings, and not on a de novo evidentiary trial before the court. The trialcourt rejected this argument, pointing out that by statute the Oversight Panel had the power tosue and be sued and finding that the School Board's complaint was not one for administrativereview but was an independent action seeking a declaratory judgment and an injunction. Accordingly, a de novo evidentiary trial was held.

The Oversight Panel's first argument on appeal is that this ruling by the trial court waserroneous as a matter of law. The Oversight Panel points out that it is an administrative agencyand argues that its status controls the analysis herein-as an administrative agency, its decisionsare subject only to administrative review. We disagree. It is not the status of the agency thatcontrols whether judicial review of its action is appropriate or available, but it is the nature ofthe action or decision taken that controls.

The parties agree that the Administrative Review Law (735 ILCS 5/3-101 et seq. (West2002)) does not apply to decisions made by the Oversight Panel, because the statute creatingand empowering the Oversight Panel (105 ILCS 5/1B-1 et seq. (West 2002)) does not soprovide. If the statute creating or conferring power on an administrative agency does notcontain an express reference to the Administrative Review Law and provides for no other formof review, then common law certiorari is a general method for reviewing the action ofagencies and tribunals exercising administrative functions. Smith v. Department of PublicAid, 67 Ill. 2d 529, 541 (1977). Where a final administrative decision has been rendered andthe circuit court may grant the relief that a party seeks within the context of reviewing thatdecision, the circuit court has no authority to entertain independent actions regarding theactions of an administrative agency. Stratton v. Wenona Community Unit District No. 1, 133Ill. 2d 413, 427-28 (1990). However, we agree with the trial court that certiorari is a whollyinappropriate vehicle for the type of relief sought by the School Board in this case because theOversight Panel was not acting in a quasi-judicial role in rejecting the contract with KAI andissuing its Directive 03-1(a) and there is no final administrative decision of the OversightPanel for review.

The common law writ of certiorari provides an avenue of appeal from an action by acourt or other tribunal exercising quasi-judicial functions. American Federation of State,County & Municipal Employees, Council 31, AFL-CIO v. Department of CentralManagement Services, 288 Ill. App. 3d 701, 710-12 (1997) (American Federation). Quasi-judicial proceedings are designed to adjudicate disputed facts in a particular case. AmericanFederation, 288 Ill. App. 3d at 711. Quasi-judicial hearings concern agency decisions thataffect a small number of persons on individual grounds based on a particular set of disputedfacts that have been adjudicated. American Federation, 288 Ill. App. 3d at 711. It is only inthis type of proceeding that a sufficient record is developed in the administrative agency toallow review by a writ of certiorari. The purpose of the writ is to have the entire record of theinferior tribunal brought before the court to determine, from the record alone, that the inferiortribunal proceeded according to the applicable law. American Federation, 288 Ill. App. 3d at710. Therefore, generally, judicial review of an agency action can only occur where there hasbeen a final agency determination, which usually follows some sort of adversarial proceedinginvolving the parties, a hearing on the controverted facts, and an ultimate disposition renderedby an impartial fact finder. Board of Trustees of Addison Fire Protection District No. 1Pension Fund v. Stamp, 241 Ill. App. 3d 873, 881 (1993).

Administrative agencies can also act in a quasi-legislative manner, which actions are notsubject to review by a writ of certiorari. American Federation, 288 Ill. App. 3d at 712; Cityof Highwood v. Obenberger, 238 Ill. App. 3d 1066, 1075 (1992). Quasi-legislativeproceedings are designed to promulgate policy-type rules or standards and involve generalfacts affecting everyone. No individual rights are at stake in a quasi-legislative proceeding. American Federation, 288 Ill. App. 3d at 711. A hearing conducted in a quasi-legislativeproceeding is intended to be an information-gathering forum in pursuit of legislative facts,rather than an adversarial adjudication of the rights of the individual. American Federation,288 Ill. App. 3d at 711. Quasi-legislative actions of an administrative agency can be reviewedin a declaratory judgment action if it is alleged that the action is unlawful. Woolfolk v. Boardof Fire & Police Commissioners of Village of Robbins, 79 Ill. App. 3d 27, 29 (1979).

The action of the Oversight Panel in rejecting the KAI contract and issuing its Directive03-1(a) is more akin to a quasi-legislative action than it is to a quasi-judicial action. There wasno adjudicatory hearing held to determine individual rights or disputed facts. Indeed, there wasno hearing at all on the disputed facts raised in the School Board's complaint for declaratoryrelief and injunction. Accordingly, there is an insufficient record on which a reviewing courtcould base a determination regarding the propriety of the Oversight Panel's action. In a casesuch as this, review by a writ of certiorari is wholly inappropriate. See Sturm v. Block, 72 Ill.App. 3d 306, 310-11 (1979).

We are supported in our decision by the only two reported decisions challengingactions of the Oversight Panel, one of which, like the case at bar, challenged the OversightPanel's rejection of a proposed contract. East St. Louis Federation of Teachers, Local 1220v. East St. Louis School District No. 189 Financial Oversight Panel, 178 Ill. 2d 399 (1997). In that case, as in the case at bar, the action was commenced by the filing of a complaint fora declaratory judgment and injunctive relief. The Oversight Panel had rejected a proposedemployment contract with the superintendent of the school district and directed the SchoolBoard not to enter into the contract or it would face disciplinary action. The School Boardvoted not to follow the directive; the Oversight Panel voted to remove the School Boardmembers from office. The School Board filed a complaint for a declaratory judgment and aninjunction against their removal from office. The case proceeded as an action for a declaratoryjudgment and injunctive relief. On appeal to the Illinois Supreme Court, the court confirmedthat the case was not appropriate for judicial review. East St. Louis Federation of Teachers,Local 1220, 178 Ill. 2d at 426.

The case of East St. Louis Federation of Teachers, Local 1220 v. East St. LouisSchool District No. 189 Financial Oversight Panel, 311 Ill. App. 3d 987 (2000), a challengeto the Oversight Panel's hiring of employees to perform school district work, also proceededas a declaratory judgment action.

Our position is also supported by the definition of "administrative decision" containedin section 3-101 of the Administrative Review Law:

" 'Administrative decision' or 'decision' means any decision, order[,] ordetermination of any administrative agency rendered in a particular case, which affectsthe legal rights, duties[,] or privileges of parties and which terminates the proceedingsbefore the administrative agency." 735 ILCS 5/3-101 (West 2000).

Although, as the parties agree, this statute does not apply to the case now before us, we believethat we can still gain guidance from its language. The rejection by the Oversight Panel of theKAI contract and the issuance of its Directive 03-1(a) neither affects the legal rights, duties,or privileges of the parties, that is, the School Board and/or its individual members, norterminates the proceedings before the administrative agency. The proceedings before theadministrative agency will only terminate when the School Board complies with Directive 03-1(a) or when disciplinary actions for its failure to comply are initiated and concluded. Onlyat that point will there be a decision of the Oversight Panel which affects the legal rights,duties, or privileges of the parties and terminates the proceedings before the administrativeagency. Only at that point will there be a record sufficient for the circuit court to review. Onlyat that point will administrative review of the Oversight Panel's final decision be appropriateand available. See Pinkerton Security & Investigation Services v. Department of HumanRights, 309 Ill. App. 3d 48 (1999). Accordingly, we conclude that the trial court did not erras a matter of law in holding that this action was not one for administrative review and inholding a de novo evidentiary trial.

At the conclusion of the de novo evidentiary trial and after receiving written closingarguments, the trial court entered an order in favor of the School Board and against theOversight Panel. The trial court found that the Oversight Panel had acted arbitrarily andcapriciously in rejecting the contract with KAI in that it had relied on nonfinancial aspects ofKAI's past performance on other projects in the school district and had failed to properlyconsider all the evidence before it. The trial court found that the Oversight Panel's rejectionof KAI was not based on the evidence before it, but on personal bias of a majority of the panelmembers. The trial court found that Directive 03-1(a) was merely a subterfuge by which thepanel could impose its preferred architect upon the School Board, which the law does notallow. Accordingly, the trial court declared that the Oversight Panel had acted in violation ofand beyond the scope of its statutory authority in rejecting the proposed contract with KAI andthat Directive 03-1(a) is invalid, and the court enjoined the Oversight Panel from enforcingDirective 03-1(a) or otherwise initiating disciplinary procedures against the School Board orits members.

The Oversight Panel's next argument on appeal is that the trial court erred as a matterof law in ruling that the panel did not have the statutory authority to reject KAI as a party to theproposed contract because, according to the trial court, that contract was within the dollar limitset by the school district's budget and financial plan. The Oversight Panel asserts that the trialcourt held that the panel was required to approve the contract with KAI because it was withinthe budget and financial plan for the school district. The Oversight Panel grossly misreads thetrial court's order. The trial court made no such ruling.

In East St. Louis Federation of Teachers, Local 1220 v. East St. Louis School DistrictNo. 189 Financial Oversight Panel, 178 Ill. 2d 399, 410 (1997) (Local 1220), the IllinoisSupreme Court held that the statute creating and empowering the Oversight Panel (105 ILCS5/1B-1 et seq. (West 1994)) does not limit the panel's authority to review contracts to thestrictly financial aspects of a contract, that is, the dollar amount, but grants the panel broaderpowers of contract oversight. In that case, the Oversight Panel rejected the proposed renewalof a contract with the superintendent of schools, even though the contract fell within the dollarlimit for the salary set by the school district's budget and financial plan. The panel expressedconcerns that the superintendent did not have sufficient financial expertise to keep thedistrict's budget balanced. The School Board voted to renew the contract despite the OversightPanel's rejection, and the Oversight Panel voted to remove the members of the School Boardfrom office. On appeal, the supreme court held that the Oversight Panel was within its rightsin rejecting the proposed contract for reasons other than the dollar amount of the proposedsalary. The court stated:

"Nor is it contrary to the purpose of the statute for the Panel to require certain financialexpertise of the superintendent to insure the financial well-being of the school district. It is certainly as important to the fiscal health of a school district in financial troubleto have a superintendent who can manage a budget as it is to have a superintendentwhose salary is within that budget. The Panel was thus within its authority in refusingto renew a contract that did not require sufficient financial expertise of thesuperintendent." Local 1220, 178 Ill. 2d at 410.

The Oversight Panel argues that the trial court in the case at bar ruled contrary to theholding of Local 1220 when the trial court ruled that the panel had no authority to reject theKAI contract because its dollar amount was within the limit set by the school district's budgetand financial plan. The trial court did not so rule. Indeed, the trial court recognized the holdingof Local 1220 that the Oversight Panel may look beyond the mere dollar amount of theproposed contract in considering whether to approve it. The trial court merely pointed out thatthe dollar amount of the proposed contract did, in fact, fall within the budget and financial planset for the school district. Accordingly, the Oversight Panel could not, and did not, reject thecontract on that basis. The trial court then went on to discuss the reasons used by the OversightPanel to reject the contract and found them to be arbitrary and capricious because they werenot reasons the legislature intended the panel to consider (nonfinancial aspects of thecontract), they were not based on the evidence before it, and they were a pretext to cover uppersonal bias on the part of panel members. The trial court did not misconstrue the SchoolDistrict Financial Oversight Panel and Emergency Financial Assistance Law (105 ILCS 5/1B-1et seq. (West 2002)), and the court complied with the law as set forth in that statute and Local1220.

The Oversight Panel next argues that the trial court erred in finding that the panel actedarbitrarily and capriciously in rejecting KAI as a party to the proposed contract with the SchoolBoard. The parties dispute the appropriate standard of review. The Oversight Panel, clingingto its argument that this is an administrative review proceeding, argues that our review shouldbe de novo, and the School Board argues that we should review the trial court's decision foran abuse of discretion.

Because we have found that this action is one for declaratory relief, we will apply theabuse-of-discretion standard. While the grant or denial of declaratory relief is discretionary,the trial court's exercise of discretion is not given the same deference as it is in other contexts. Instead, it is subject to an independent, searching review. Schneiderman v. Kahalnik, 200 Ill.App. 3d 629, 633 (1990). Its findings of fact will not be disturbed unless they are against themanifest weight of the evidence. Schneiderman, 200 Ill. App. 3d at 633; State Farm MutualAutomobile Insurance Co. v. Dreher, 190 Ill. App. 3d 182, 184-85 (1989).

The trial court found that the Oversight Panel had acted arbitrarily and capriciously andthat its actions were invalid and unenforceable. After having carefully reviewed the record onappeal, we find the trial court's findings of fact to be contrary to the manifest weight of theevidence and its decision to be an abuse of discretion. Although the Oversight Panel's actionsin rejecting and expressing its reasons for rejecting KAI may not have been as methodical andwell documented as they could have been, we cannot conclude that the panel's actions werearbitrary and capricious. The record reflects that the Oversight Panel had serious concernsabout KAI's competence and ability to efficiently complete the school construction projectswithout problems that would result in additional costs to the school district. These concernswere based in part on what the panel knew about KAI's past performance on school districtprojects, which included a high volume of change orders due to errors or omissions on the partof KAI. Ultimately, the Oversight Panel's decision was based on its judgment that entering intoa contract with KAI would in all likelihood end up costing the school district more money thanwould entering into a contract with a different architectural firm.

Agency action is arbitrary and capricious if the agency (1) relies on factors that thelegislature did not intend for the agency to consider, (2) entirely fails to consider an importantaspect of the problem, or (3) offers an explanation for its decision which runs counter to theevidence before the agency or which is so implausible that it could not be ascribed to adifference in view or the product of agency expertise. Greer v. Illinois Housing DevelopmentAuthority, 122 Ill. 2d 462, 505-06 (1988). The standard is one of rationality. Greer, 122 Ill.2d at 506. The scope of review is narrow and the court is not, absent a clear error of judgment,to substitute its own reasoning for that of the agency. Greer, 122 Ill. 2d at 506.

The trial court found that the Oversight Panel's decision was arbitrary and capriciousbecause (1) the panel relied on factors which the legislature did not intend for the panel toconsider, such as the nonfinancial aspects of the past performance of KAI in the district, aswell as facts regarding KAI's prequalification status because KAI was in fact prequalified at thetime of the panel's ultimate decision in January 2003, (2) the panel entirely failed to consideran important aspect of the problem, being the reasonableness of the volume of change orderson the Lansdowne project that had been due to errors and omissions on the part of KAI, andfailed to consider that the project came in well under budget, and (3) the panel's explanationsfor not approving KAI were contrary to the evidence before the panel and were based on "somepersonal bias" of the majority of the panel members against KAI and in favor of Ittner.

Our review of the record on appeal reveals that the trial court's findings of fact arecontrary to the manifest weight of the evidence presented to it, and its decision was an abuseof discretion, for the following reasons: (1) the panel did not rely on factors which thelegislature did not intend for it to rely on, because the panel's decision was based on itsfindings that entering into a contract with KAI would have an adverse financial impact on theschool district, (2) the panel did not fail to consider important aspects of the problem, becauseevidence of the reasonableness of the volume of change orders on the Lansdowne project dueto KAI's errors and omissions was not known to the panel at the time its decision was made,and it did consider that the Lansdowne project came in under budget, and (3) there is absolutelyno evidence in the record on appeal of any "personal bias" on the part of any panel membereither against KAI or in favor of Ittner.

Beginning in the spring and early summer of 2002, the Oversight Panel became awareof some problems KAI was having on other school district construction projects. KAI wasalready working on several construction projects for the school district under preexistingcontracts. In May 2002, the School Board expressed interest in awarding KAI a contract tobuild two new schools for the district. At the same time, the Oversight Panel became awarethat KAI had lost its prequalification status with the CDB, a requirement for any architecturalfirm wanting to contract with the School Board. KAI had let its prequalification status lapseby failing to file a form with the CDB. Richard Mark, chairman of the Oversight Panel,testified that it concerned him that a firm as large as KAI would allow its prequalification tolapse. Nevertheless, in June 2002, the Oversight Panel approved a contract with KAI torenovate some classroom space in an existing school building for an amount not to exceed$50,000. According to Richard Mark, this was a relatively small project, and the OversightPanel set aside its concerns about KAI in light of the size of the project.

In July 2002, the Oversight Panel became aware of a high number of change orders onthe Lansdowne school, another project on which KAI was working. These change orders wereattributed to errors and omissions on the part of KAI and had cost the school district anadditional $1 million.

On July 31, 2002, on the advice of the financial administrator, the Oversight Panelrejected KAI as a party to a contract to build the two new schools. The stated reason wasbecause KAI had lost its CDB prequalification due to low performance scores. The panel wasalso aware of the costly change orders on the Lansdowne project. Richard Mark, the panelchairperson, felt that if KAI could not even meet the minimum prequalification standard, therewas no point in considering it for the projects; prequalification was a threshold issue. Marksaw no inconsistency in the panel's approval of KAI for the classroom renovation contractbecause that was a different type of project that did not require CDB prequalification.

KAI was again proposed as a party to a contract to build the two new schools in October2002. The financial administrator again recommended rejection of KAI because, although ithad received CDB prequalification, that prequalification was only probationary. By this pointin time, the Oversight Panel had engaged in many discussions about problems with otherprojects on which KAI was working for the school district: a local contractor had complainedthat KAI had not paid him, there were delays with KAI projects, there were errors andomissions on KAI's design with respect to the Dunbar school, and the CDB had publiclyaccused KAI of being at fault for delays and change orders on the Lansdowne school and hadstated that the CDB would never hire KAI again. Problems with KAI kept cropping up. Accordingly, the Oversight Panel again voted to reject KAI as a party to a contract at itsOctober 2002 meeting. The stated reason for the rejection was that KAI's CDBprequalification was only probationary. The CDB had granted KAI only temporary orconditional prequalification until the end of the year on the condition that KAI complete andfinalize two other projects it was working on with the CDB. Richard Mark admitted someconfusion regarding exactly what KAI's status with the CDB was, but the panel knew that KAIdid not have full prequalification and that the CDB had some problems with KAI. In any event,the Oversight Panel could not understand why the School Board was so insistent on a contractwith KAI when there were so many problems with KAI.

Richard Mark testified that by October 2002, he probably would not have approved acontract with KAI even if it had full CDB prequalification status. He explained that the schooldistrict used two architects, KAI and Ittner. With Ittner there were rarely any problems. WithKAI, there were constantly problems, every month. Mark did not believe it made any sense toenter into a new contract with a firm with which there were already so many problems.

Following the October 2002 panel meeting, the Oversight Panel issued its Directive 03-1 directing the School Board to conduct a search for qualified architects to work on the twonew schools. Five architectural firms were interviewed by a committee that includedrepresentatives from the Oversight Panel, the State Board of Education, and the local SchoolBoard. KAI was one of these firms. The committee ranked KAI second out of five, and itranked Ittner first. Nevertheless, at its next meeting, the School Board voted to rank KAI firstand Ittner second.

At its December 2002, meeting, the panel learned that the School Board had rejectedthe ranking of the committee and had ranked KAI first and Ittner second. The panel agreed tosend the School Board a letter inquiring why it had ranked the architects differently from thecommittee. Again, Richard Mark expressed that it made no sense to the panel why the SchoolBoard was so insistent on an architectural firm with which there were so many problems, whenthe district had another architect with whom there were few problems.

The School Board responded to the panel's letter of inquiry in January 2003. TheSchool Board explained that it was pleased with KAI's experience and past performance withthe school district and that it intended to use KAI's design of the Dunbar school as aprototypical plan for the two remaining schools. Accordingly, the School Board felt that KAIwas most qualified to design those two remaining schools. The School Board also expressedconcern with Ittner because it already had a heavy workload with five other constructionprojects in the district. The School Board expressed, however, that it was pleased with Ittner'sexperience and past performance in the district.

Richard Mark testified that by December 2002 neither he nor the other panel memberswanted to contract with KAI. The school district had two architects. With one there were few,if any, problems. With KAI there were constant problems. Those problems were costly to thedistrict.

At its January 2003 meeting the Oversight Panel again rejected a proposed contract withKAI for the stated reason that there had been no satisfactory resolution of earlier panelconcerns. For the first time, the minutes of the panel meeting reflect and identify what thoseconcerns were. The minutes of every other meeting at which this issue had come up simplyreflected that KAI was being rejected on the basis of its lack of prequalification status.

Richard Mark admitted that at the times the panel voted to reject KAI, the OversightPanel did not have every piece of relevant information regarding KAI and not all the panel'sinformation was completely accurate. Nevertheless, Mark explained that all the panel couldbase its decisions on was the information that it had at the time of the meeting at which itsmembers voted.

Ann Duncan, a member of the Oversight Panel, testified consistently with Richard Mark. She emphasized that the stated reason for the rejection of KAI, such as the lack of CDBprequalification, was not the only reason the panel rejected KAI. The panel had other concernsabout KAI, but they were not always included in the minutes of the panel meetings as reasonsfor the rejection. Duncan admitted that she based her rejection of KAI on therecommendations of the financial administrator and on statements by Susan Weitekamp, anemployee of the State Board of Education who provides assistance to the Oversight Panel. However, Duncan respected these people and felt it was reasonable to rely on theirrecommendations and statements. Saundra Hudson, the third member of the Oversight Panel,testified consistently with Richard Mark and Ann Duncan.

James F. Tapscott is the financial administrator for the Oversight Panel. In April orMay 2002, he first learned that KAI had lost its prequalification with the CDB. Beginning inthe spring of 2002, Tapscott also began hearing from Richard Wells, who overseesconstruction projects for the school district, of change orders and errors and omissions byKAI on the Lansdowne school project. Despite this negative information, KAI was approvedfor the renovation project on the Jackson school because Richard Wells had indicated that hebelieved it was a small enough project that KAI could handle it. Tapscott recommended againstapproving KAI for the new construction projects at the panel's July 2002 meeting, because KAIwas not CDB prequalified and because he was getting bad reports on its performance on otherdistrict construction projects. Because prequalification was an initial hurdle and because thepanel did not want to harm KAI's reputation, the stated reason for the rejection in July 2002was the lack of CDB prequalification. Tapscott would not have recommended approving KAIfor a contract in July 2002 even had it been prequalified. Tapscott based his recommendationssolely on reports he had received from Richard Wells and Susan Weitekamp. He did notconduct any investigation of his own and did not request any documentation from Wells orWeitekamp to support their statements. Tapscott felt comfortable relying on reports fromthese individuals because he was hearing the same reports from everyone, including the CDB.

In October 2002, Tapscott again recommended against approving KAI for the two newconstruction projects for the stated reason that KAI's prequalification was only probationary. The unstated reason for recommending a rejection was the poor performance of KAI on otherdistrict construction projects. Tapscott recommended against an approval again in January2003, because the earlier concerns about KAI had not been resolved. In January 2003, whenTapscott recommended against approving KAI for a construction contract, he believed thatKAI's design errors were responsible for at least one-half of the more than $1 million inchange orders on the Lansdowne school. Only after the Oversight Panel had voted to rejectKAI did Tapscott learn that KAI was only responsible for $300,000 in change orders on theLansdowne project, purportedly a reasonable amount. Ittner was working on severalconstruction projects for the school district during this time period. The Ittner projects wereall on time and under budget, with minimal change orders. There were no problems orconcerns with any of the Ittner projects. The KAI projects were not completed on time, wereover budget, or had excessive change orders.

Susan Weitekamp testified that she is employed by the State Board of Education andthat one of her job duties is to assist the Oversight Panel with respect to the schoolconstruction project program. She provides the same services to every other school districtin Illinois. She has a college degree in architectural technology. Weitekamp based her reportsto the Oversight Panel on information she had obtained from Richard Wells and the CDB. Sheconfirmed that she had given to the Oversight Panel the information regarding variousproblems with KAI on existing construction projects and problems KAI had with the CDB, onwhich the panel relied in rejecting the proposed contract with KAI.

Richard Wells testified that his education is in economics and banking and that he isemployed by the school district as executive director of business and operations. He has notraining in architecture or construction. Wells was hired by the School Board with the approvalof the Oversight Panel. He believed he could be fired from his job by either party. One of hisjob duties was to act as a liaison between architects and engineers and the school district ondistrict construction projects. He provided information to both parties regarding the status ofthe various district construction projects. Wells believed that KAI was qualified to work onany size construction project in the district. Wells confirmed that Susan Weitekamp did gether information from him, but he stated that Weitekamp did not always properly understandthat information.

We now address the trial court's findings. The trial court found that the panel had reliedon factors which the legislature did not intend for it to rely on, such as the nonfinancial aspectsof the past performance of KAI in the district and its prequalification status. As the IllinoisSupreme Court held in Local 1220, 178 Ill. 2d at 410, in deciding whether to approve acontract, the Oversight Panel has broad powers of contract oversight and can look beyond themere dollar amount of a contract to determine whether it will have a negative impact on theschool district's "fiscal health." In Local 1220, the Oversight Panel looked beyond the dollaramount of a proposed contract with the district superintendent, that is, her salary, and examinedher ability to perform the job. The Oversight Panel looked at the superintendent's pastperformance in the district and concluded that she lacked sufficient financial expertise to keepthe budget balanced. The Illinois Supreme Court found that the Oversight Panel had beenwithin its rights in rejecting a contract that did not require sufficient financial expertise of thesuperintendent, stating, "It is certainly as important to the fiscal health of a school district infinancial trouble to have a superintendent who can manage a budget as it is to have asuperintendent whose salary is within that budget." Local 1220, 178 Ill. 2d at 410.

Similarly, the Oversight Panel in the case at bar was within its rights in examining thecompetence and level of expertise of KAI in deciding whether to approve or reject a contractinvolving KAI. These were not factors that the legislature did not intend for the panel toconsider. Ultimately, the Oversight Panel concluded that entering into a contract with KAIwould be too costly and would not contribute to the "fiscal health" of the school district.

The trial court also found that the panel had failed to consider important aspects of theproblem: that KAI was not responsible for the bulk of the change orders on the Lansdowneproject, but its responsibility for those change orders was within reasonable limits, and that theLansdowne project came in under budget. While it may not have been clear to the trial court,it is clear to this court after reviewing the record on appeal that the panel had no knowledgethat KAI was not responsible for the bulk of those change orders at the time it made itsdecision in January 2003 to reject KAI. The record is clear that at that time, the panel had beeninformed, and believed, that most of the $1.2 million in change orders were due to the errorsand omissions of KAI. The panel also knew that the Lansdowne project had come in underbudget, but this information was not enough to offset all the negative information the panel hadabout KAI's past performance in the district.

Finally, the trial court found that the panel's decision was not based on the evidencebefore it but was based on the personal bias of the panel members against KAI and in favor ofIttner. There is absolutely no evidence in the record to support this finding. Even Dr.Nathaniel Anderson, the superintendent of schools for the school district, testified that thereason Richard Mark, chairman of the Oversight Panel, rejected KAI was all the problems thedistrict had with KAI, not because of some unstated, illegitimate reason. Dr. Anderson didtestify, however, that the dispute between the School Board and the Oversight Panel regardingKAI was really about power. Dr. Anderson also confirmed that there were many fewerproblems with Ittner than with KAI and that the school district's relationship with Ittner wasbetter than its relationship with KAI.

The Oversight Panel's decision rejecting a proposed contract between the School Boardand KAI was not arbitrary and capricious but was a reasoned decision based on information thepanel had regarding repeated and continuing problems the district had with KAI in the past andthe possibility of those problems arising in the future to the financial detriment of the schooldistrict. The trial court's decision to the contrary is not only against the manifest weight of theevidence but is an abuse of the trial court's discretion. Accordingly, we reverse the trial court'sjudgment declaring that the Oversight Panel acted arbitrarily and capriciously in rejecting theproposed contract with KAI.

Because the trial court based its decision that Directive 03-1(a) was invalid on itsfinding that the panel's rejection of the proposed contract with KAI was arbitrary andcapricious, and because we have reversed that finding, we also reverse the trial court'sdeclaration that Directive 03-1(a) is invalid, and we reverse the injunction against itsenforcement. We reject the trial court's finding that Directive 03-1(a) "was merely asubterfuge by the Panel to assert its 'preferred architect' upon the Board, and in essence anattempt to force them to negotiate with the Panel's choice[,] being Wm. B. Ittner, Inc.," as beingcontrary to the manifest weight of the evidence. As we have stated, the record contains noevidence of any personal bias on the part of panel members in favor of Ittner. Further, we notethat Directive 03-1(a) did not direct the School Board to negotiate a new contract with anyparticular architect but instead directed it to negotiate a contract with an architect other thanKAI.

Accordingly, we reverse in its entirety the trial court's order of April 10, 2003.

The final issue presented for our review relates to certain postjudgment proceedings. After the filing of the notice of appeal from the declaratory judgment and the injunction, theSchool District filed a petition for a rule to show cause pursuant to section 2-701(c) of theCode of Civil Procedure (735 ILCS 5/2-701(c) (West 2002)). That section pertains todeclaratory judgment actions and provides that if further relief based upon a declaration ofrights becomes necessary or proper after the declaration has been made, an application maybe made by petition to any court having jurisdiction for an order directed to any party to showcause why the further relief should not be granted forthwith. 735 ILCS 5/2-701(c) (West2002). The School Board's petition for a rule to show cause sought a court order mandatingthat the Oversight Panel approve the proposed contract with KAI for architectural andengineering services for the subject projects immediately. The Oversight Panel filed aresponse in which it asserted that the circuit court had lost jurisdiction over the cause by virtueof the filing of its notice of appeal from the order of April 10, 2003, that the School Board hadwaived its right to further relief by failing to seek it in the complaint for a declaratoryjudgment, and that the School Board had failed to present the Oversight Panel with a proposedcontract for its review and approval.

Oral arguments were heard on the petition for a rule to show cause and the responsethereto on May 6, 2003. Thereafter, on May 8, 2003, the circuit court entered an order findingthat it had jurisdiction over the petition, granting the petition, and directing and mandating theOversight Panel to approve and execute the proposed contract between the School Board andKAI for architectural and engineering services for the remaining school construction projects.

The Oversight Panel appeals from this order, challenging both the trial court's findingof jurisdiction and the propriety of the injunction ordering that it approve the contract. In lightof our reversal of the trial court's order of April 10, 2003, which had found that the panel hadacted arbitrarily and capriciously in rejecting the proposed contract, we reverse this furtherorder of the trial court, which was based thereon.

For the foregoing reasons, the orders of the circuit court of St. Clair County enteredApril 10, 2003, and May 8, 2003, are hereby reversed.

Reversed.

HOPKINS, J., concurs.

1. Counts I and II of the amended complaint are still pending before the trial court and arenot pertinent to this appeal.

2. The complaint was subsequently amended to name as additional plaintiffs the individualmembers of the School Board. Our references to the School Board include these plaintiffs.