The Future of the Upper Mississippi River Port District Legislation in the Hands of Voters

New economic development tool for Carroll & Jo Daviess Counties questioned

By Tom Kocal

Legislation created to help, not hinder, economic development efforts in Carroll County has been under constant criticism, primarily from two Carroll County Board members, since its beginning. Others in the county believe that the criticism is unfounded and comes from a basic lack of understanding of the language in the bill.

Senate Bill 1784 creates a Port District for Jo Daviess and Carroll Counties. This will provide the district with rights to construct, operate, and maintain port, harbor, water, and land facilities. These development rights include channels, and port-related facilities and services, such as airports, airfields, and terminals. It also permits the district to enter into any agreement or contract with any airport for the use of its facilities, as well as develop, expand, and construct those facilities as necessary. 

The bi-partisan legislation, sponsored by Sen. Mike Jacobs (D-36, Moline) was signed into law in August 2009, creating the Upper Mississippi River International Port District (UMRIPD). Representatives Jim Sacia (R-71, Pecatonica) and Jerry Mitchell (R-Sterling) also sponsored the bill on the House side.

But Gerald Bork and Ron Preston don’t trust the language of the bill. Both are elected members of the Carroll County Board from District II, both from Mt. Carroll. Bork is also the Chairman of the Carroll County Democrat Central Committee.

In the summer and fall of 2009, they successfully collected petitions “signed by not less than 5% of the registered voters of the county,” as stated in Section 38 of the bill. The petition stated that “We, the undersigned . . . request that the question of whether Carroll County, Illinois should be disconnected from the Upper Mississippi River International Port District be submitted to the Electors of the County.”

The State Board of Elections approved the petitions on Nov. 16, resulting in the issue being placed on the ballot Feb. 2, 2010 for Carroll County citizens to decide the fate of this economic development tool (See the Jan. 13, 2010 issue of The Prairie Advocate, page 11, for complete wording of the proposition on the sample ballot).

Is a new, unconstrained taxing body created?

The Prairie Advocate questioned Bork and Preston about the petition. Since no reason or explanation for disconnect was given on the petition itself, what were the reasons given to those who signed it?

Bork replied that SB 1784 “was very specific in wording that would be used on a petition for disconnection.”

Bork felt that “many of the signers had no knowledge of Carroll County being in a Port District,” and that “a new Taxing Authority had been created.”

Preston said that SB 1784 concerns the tax payers of both Carroll and Jo Daviess Counties.

“I believe a bill having a direct affect on each tax payer living within the two designated counties, should have been extensively explained to the voting population. We, as tax payers, do not often get the opportunity to make decisions affecting us both in the present and our future generations. The petition simply asked people to agree to put the question on the ballot, nothing else.”

Section 42 states that “The Port District may, after referendum approval, levy a tax for the purpose of financing and maintaining utility and infrastructure costs of the District annually at the rate approved by referendum. This tax shall not exceed 0.05% of the value of all taxable property within the Port District as equalized or assessed by the Department of Revenue.”

This clearly sets forth the requirement that no new taxes could be imposed without the expressed consent of the voters.

Ed Olds of Mt. Carroll, Carroll County’s Democrat appointee to the Port Authority Board, agreed.

“What the legislation does not do. if I read it correctly, is give the Port Authority (PA) any taxing power without voter approval (Section 42 of the act). It appears to me, again from my reading of the act, that anything the PA does must be paid for from revenues derived from revenues the PA generates from operation of the PA. Those might be rents (Section 7 h and 8), grants, loans, or appropriations from governments (Section 13), or borrowing (Section 17 a, which must be paid back with proceeds from the revenues or income of the PA (Section 17 b of the act).”

Rep. Jim Sacia, who helped write the legislation, concurred.

“Only upon approval of the voters may the port district levy such a property tax to support the infrastructure of a utility district. Modeled similarly after other port district acts, voter approval was essential. With those protective provisions, the Taxpayers’ Federation of Illinois was neutral to the district’s creation.”

If a Utility District is created, are there limits to it’s boundaries?

Section 42 does give the Port Authority the “authority to create and operate a utility district . . . within the boundaries of the District providing that municipal utilities or annexation into a municipality utility district is not possible. The Port District shall have all responsibility and authority to provide and maintain water, sewer, gas lines, surface water drainage, roads, and rail infrastructures . . . to provide private utilities including electrical power, steam power, natural gas, telecommunications and data networking systems.”

“This authority is vital to the success and location of any new business or industry within the UMRIPD, just as it is for any local city or village,” said William Jahnke, Carroll County’s Republican appointee to the Port Authority Board. Jahnke, from Lake Carroll, is also running for a seat on the Carroll County Board in District 3. “Without updated, adequate infrastructure, the chances of development are slim to none.

“The Act, while allowing for the creation of a Utility District, has minimal geographic restrictions within the County,” Jahnke continued. “The focus of this legislation is the Savanna Depot Park property. In reality, there are practical limits to it’s range. The Depot Park has a fully developed water (three wells) and sewage treatment system that has the capacity to service 7,000 people. The systems current load of just over 50 people is substantially below capacity.

“This excess capacity is a key economic benefit in the Port Authority’s future expansion abilities. Due to the distance of the Depot facilities to any nearby towns, such as Savanna (10 miles), it is not practical to consider extending this infrastructure to areas substantially outside of the current Depot Park area.”

Can the Port Authority take properties off the real estate tax rolls?

Bork said many did not realize “that all property of every kind belonging to the UMRIPD shall be exempt from taxation.”

Michael Doty, Carroll County Administrator, disagreed.

“We’re not taking anything away from the property tax base,” Doty stated. “Sure, the Port Authority could take some property and turn it into an administration building, which would take it off the tax rolls, just like all government property. But they’re not going to just gobble up property and then not develop it. It does them no good, and just becomes a liability to own worthless property.”

Doty added that in the event the Port Authority makes the decision to own and lease property, the tenant would pay the appropriate property tax to the Carroll or Jo Daviess County coffers, whichever the case may be.

Several presentations have been made to local leaders and citizens by Doty regarding the Upper Mississippi River International Port District Act, outlining the following key facts:

- The Act allows for the creation of water, rail, air and other transportation facilities;

- It is a tool to enhance the creation of jobs and businesses within the Port District;

- It encourages businesses needing transportation facilities to build near the port facilities in Carroll and Jo Daviess counties;

- No new taxes can be levied without voter approval in regards to a utility district;

- No taxes for the operation on the Port District.

There is no authority to do anything tax-related without voter approval, and no authority at all for levying a tax for operations.

It is solely an economic development tool.

Why were both Carroll and JoDavies Counties included in the Upper Mississippi River International Port District?

“The focus of this legislation was for the development of the Savanna Depot Park property, which when fully released by the Army will encompass approximately 3000 acres,” Jahnke said. “This area is prime for business development with it’s rail access, riverfront potential and existing sewer and water infrastructure. The Park land is split between Carroll and Jo Daviess Counties, with the majority of the infrastructure improvements contained in the Carroll County southern portion. The disconnect of Carroll County from the UMRIPD would literally eliminate the development potential of the Park as provided for in this Act.”

Diane Komiskey, Executive Director of the Jo-Carroll Depot Local Redevelopment Authority (LRA), told The Prairie Advocate, “The Port Authority should remain with Carroll and Jo Daviess Counties. For us at the depot, trying to market property and have to explain that it will apply to the Jo Daviess County portion of the Savanna depot, but not the Carroll County portion, would make our marketing efforts very tedious and challenging. We have enough challenges as it is with trying to redevelop a closed military base.”

Komiskey added, “It is unfortunate that folks did not understand and/or fully grasp that there is not any authority to tax granted to the Port Authority. That would be left to the voters to decide.”

Eminent domain abuse?

Bork also expressed concern that the petition signers were not aware of the “many ways the Port District could acquire property, including Eminent Domain.” While Section 12 of the Act does provide for Eminent domain, this power is limited and can be only exercised within the limitations of the Eminent Domain Act. The practical reality is that there will be significant territory (approx. 3000 acres) in the Depot Park for the purposes of business development and expansion.

“The districts powers of eminent domain are the same as those shared by municipalities, counties, and other local governments,” Rep. Sacia explained. “Any such eminent domain proceedings must follow the limitations and requirements set forth within the state’s Civil Procedure Code and the Eminent Domain Act. The Illinois Constitution, state law, and case law have provided protections for property owners.

“But even with those protections, the Illinois Legislature took further steps in 2006 to further protect Illinois property owners with a comprehensive reform of the laws governing eminent domain in our State,” Sacia continued. “The Act codifies protections to property owners in 5 different categories of eminent domain by helping to ensure that land may only be taken for public use and that it is never taken unnecessarily.”

Preston said the Port Authority Board would consist of one person appointed by the governor and two representatives from each county who would be appointed by the county board chair. That concerns him.

“That is a panel of 5 to make impactful decisions affecting the entire populations of both Carroll and Jo Daviess Counties.”

“Preston must remember that the various school boards are an authority, that with a majority vote with of their respective boards, can increase the tax rate levy against the assessed evaluation in their respective districts,” Jahnke replied. “The County Board, by a majority vote, has the ability to establish budgets and set expenditure levels that are also not approved by the voters.”

Preston also expressed concern that “SB1784 designates a port authority to serve both counties; however, it does not state a location. This translates into locating the port authority anywhere within the two counties.

“A port authority has the right of eminent domain. I think most people understand this means the port authority has the same power as the state to take private property for it’s’ purposes. If the port authority deems it necessary to widen the river to complete their business, they have the right to widen the shore line by 40 feet. Do the people living on the edge of the river want the shore line taken back 40 feet? This would be covered by eminent domain.

“We need to consider the impact a port authority would have on our lock system, wing dams, fishing for both sport and business, fly ways for water fowl, and general recreation,” Preston said. The ‘Mighty Mississippi’ and its back waters teem with fish, birds and wild life, once gone cannot be recreated.”

Doty explained that the power of Eminent domain as provided for in the act only extends to privately owned properties and does not extend to State or Federal properties. Additionally, Fish and Wildlife has strict regulations relative to recreation and habitat on its managed lands. The addition of any non-private lands to the Port Authority would have to be accomplished by mutual agreement.

If it’s such a good idea, why were Whiteside and Rock Island Counties not included as originally proposed?

This question, posed by Bork, was answered by Rep. Sacia, and Rep. Jerry Mitchell (R-90th, Sterling).

“This will be the Upper Mississippi’s first port district on the Illinois side of the river,” Sacia said. “One important role that the new port district may play is as a successor to the Jo-Carroll Depot Local Redevelopment Authority (LRA). The LRA is charged with the gradual, piecemeal privatization, and development of the former Savanna Military Depot. LRA’s intergovernmental agreement is between Jo Daviess and Carroll Counties.”

“Although the initial proposal included Whiteside and Rock Island, the legislation authorizing the district’s creation was further refined to provide that the district be further localized and commensurate with existing port districts acts,” Mitchell said.

Similar Regional Port Districts in Illinois include Havana, Heart of Illinois, Illinois International, Illinois Valley, Jackson-Union Counties, Joliet, Kaskaskia Mid-America, Mt. Carmel, Regional, Seneca, Shawneetown, Southwest, Tri City, Waukegan, and White County.

Conclusion? Vote ‘NO’ to stay IN the Port District

“In short, I think the Port Authority gives our counties the right to try and utilize the natural benefits of our area,” Olds said. “By that I mean the Mississippi, the railroads that run through our communities, and the huge agricultural commodity base to generate jobs and business. And, based on my reading of the legislation, the costs must be born by the revenue from the business generated. I think there are certainly open questions, but the legislation is there to be read by anyone and any action would have to be taken by the board of locally appointed citizens.”

At the October 2009 meeting of the Carroll County Comprehensive Economic Development Strategy (CEDS), Rep. Sacia was invited to address the group as part of their Legislative Outreach program. He specifically addressed the new legislation.

“[T]he new Port Authority legislation is a real hot-button item for me,” Sacia told CEDS. “It’s a magnificent piece of legislation, in that the authors were very cognizant of insuring that we weren’t creating a tax monster for the rest of the counties, or Carroll County, where it’s located. You are now the 16th Port Authority in the State, and each of them is truly an economic engine, once they get their legs under them and get up and operating. We’ve created a positive tool for both Carroll and Jo Daviess Counties, and you can thank LRA Director Diane Komiskey for her hard work and input.”

“The port district is a valuable economic development tool for all of Carroll and Jo Daviess counties,” Komiskey stated. “Its benefits are not limited to the Savanna Depot Park. Nothing in the legislation limits its incentives to the Savanna Depot Park.

“It  could spur development of rail-served areas anywhere in the two counties. It could benefit existing and planned waterfront developments anywhere that they are permitted in the two counties. It could benefit an airport anywhere in the two counties.

“It is extremely important for voters to understand that they are not being asked whether they want a port district established. It already exists in Carroll and Jo Daviess counties. It has no taxing authority without voter approval. They are not being asked to give it taxing authority.

Komiskey stressed that the voters “are being asked whether they want Carroll County to lose an added incentive for development in the Depot Park and elsewhere in Carroll County. They are being asked whether they want to lose this recent addition to the Depot Park economic development tools: the Jo-Carroll Enterprise Zone, HUBZone and Foreign Trade Zone. If voters are saying YES to jobs, then they must vote NO to removing this incentive for job creation.

A copy of the new law can be found at:http://www.ilga.gov/legislation/publicacts/96/PDF/096-0636.pdf