Board of Trustees of Barrington Police Pension Fund v. Village of Barrington Ethics Board

THIRD DIVISION

March 26, 1997

No. 1-96-0745

BOARD OF TRUSTEES OF THE )

BARRINGTON POLICE PENSION FUND, )

)

Plaintiff-Appellant, )

) APPEAL FROM THE CIRCUIT

v. ) COURT OF COOK COUNTY.

)

VILLAGE OF BARRINGTON ETHICS )

BOARD, JAMES CONDILL, VIRGINIA ) HONORABLE LESTER D.

GRIFFITH, LYDIA FRANZ, GLENN ) FOREMAN, JUDGE PRESIDING.

LOAFMAN and DONN BRANSTRATOR, )

its members, )

)

Defendants-Appellees. )

JUSTICE GORDON delivered the opinion of the court:

The plaintiff, the Board of Trustees of the Barrington

Police Pension Fund (the Pension Fund Trustees), brought this

action against the Village of Barrington Ethics Board and its

members, James Condill, Virginia Griffith, Lydia Franz, Glenn

Loafman and Donn Branstrator (hereinafter collectively referred

to as the Ethics Board), the defendants, seeking declaratory and

injunctive relief. The plaintiff argued that the defendants had

no authority to regulate ethical conduct or to require the

Pension Fund Trustees to file ethics statements. The parties

filed cross-motions for summary judgment, and the trial court

granted summary judgment in favor of the Ethics Board. The

Pension Fund Trustees appeal.

On appeal, the Pension Fund Trustees raise two issues:

whether the Illinois Pension Code (the Pension Code) (40 ILCS

5/1-101 et seq. (West 1994)) preempts all local regulation of

pension fund trustees and whether the Barrington ethics ordinance

violates section 3-150 of the Pension Code (40 ILCS 5/3-150 (West

1994)).

The facts are not in dispute. Article 3 of the Pension Code

(40 ILCS 5/3-101 through 3-152 (West 1994)) provides for the

establishment of a police pension board by each municipality

having a population of 500,000 or less. 40 ILCS 5/3-101 (West

1994). Pursuant to that provision, the Village of Barrington

established the Board of Trustees of the Barrington Police

Pension Board, the plaintiff herein, to administer the pension

fund for the Barrington police officers. That board, and all

other police pension boards governed by Article 3 of the Pension

Code, is comprised of five trustees of which two are appointed by

the mayor or president of the board of trustees of the

municipality, two are elected by the active police officer

participants of the pension fund and one is elected by the

beneficiaries of the pension fund. 40 ILCS 5/3-128 (West 1994).

In addition to other powers and duties set forth in sections 3-

133 through 3-140.1 of Article 3 of the Pension Code (40 ILCS

3/133 through 3-140.1 (West 1994)), the pension fund trustees

have exclusive authority to control and manage the police pension

fund (40 ILCS 5/3-132 (West 1994)). They also owe fiduciary

duties to the pension fund participants and beneficiaries; can

allocate and delegate their fiduciary duties as provided in the

Pension Code; and are prohibited from engaging in certain

designated transactions involving conflicts of interest. 40 ILCS

5/1-109, 1-109.1, 1-109.2, 1-110 (West 1994). See 40 ILCS 5/3-

149 (making provisions of Article 1 applicable to Article 3).

Those prohibited transactions include the sale, exchange or lease

of property; the loaning of money; and the furnishing of goods,

services or facilities from the pension fund to a party in

interest for less than adequate consideration or from the party

in interest to the pension fund for more than adequate

consideration. 40 ILCS 5/1-110(a) (West 1994). Pension fund

trustees also are prohibited from dealing with the assets of the

pension fund for their own interest; from receiving consideration

for their personal accounts from any party dealing with the

pension fund; and from acting on behalf of any party whose

interests are adverse to the pension fund in a transaction

involving the pension fund. 40 ILCS 5/1-110(b) (West 1994).

The Village of Barrington Ethics Board, the defendant, is an

entity created by municipal ordinance to administer Barrington's

Code of Ethics applicable to all Barrington public officials,

elected or appointed, who were not employed by that village. The

Ethics Board is empowered to hold hearings, consider evidence,

and make findings and recommendations to the Village of

Barrington Board of Trustees regarding alleged violations of the

ethics code. Based upon those recommendations, the Village could

direct the filing of administrative or legal proceedings for the

purpose of imposing fines and/or removal of public officials from

office. Barrington Village Code, ch. 2, art. XIV, 2-195, 2-

196, 2-199 (1993).

Briefly summarized, the thrust of the Code of Ethics for the

Village of Barrington created under the ethics ordinance is to

avert conflicts of interest in public officials who come within

its scope. Accordingly, it contains various prohibitions against

advancing the personal, private and/or financial interests of the

public official or others. It prohibits the use of public

property for the public official's personal convenience or

profit. It forbids remuneration to the public official or a

family member from persons doing or seeking to do business with

the village and forbids the public official from having any

financial interest in any contract, work or business of the

village. The ethics code also forbids the disclosure of

confidential information concerning the village; the

representation of private interests before any village agency;

the private employment of the public official in a capacity that

is incompatible with the discharge of his duties as a public

official; and remuneration to the public official for appearances

on behalf of the Village. It requires the disclosure of any

financial interests in proposed legislation or other matters that

the Village Board of Trustees could reasonably be expected to

consider.

The Barrington ethics ordinance also requires that

Barrington public officials file annual disclosure statements.

In that statement the public official is required to acknowledge

(1) receipt of a copy of the Barrington Code of Ethics; (2) an

obligation to read that document; (3) that he or she is subject

to the provisions of the Code of Ethics; and (4) that he or she

is in compliance with the Code of Ethics (and/or to state the

extent of noncompliance). The public official must also make and

certify all disclosures required by the Code of Ethics.

On October 12, 1995, a written complaint was filed with the

Barrington Ethics Board against Ken Greffin, a trustee for the

Board of Trustees of the Barrington Police Pension Fund, alleging

that he had failed to file a disclosure statement as required by

the Barrington Ethics ordinance. The Ethics Board set the matter

for hearing on December 1, 1995. On November 27, 1995 the Board

of Trustees of the Barrington Police Pension Fund filed a

complaint for declaratory judgment and injunctive relief. The

Pension Fund Trustees sought a declaration that the Illinois

Pension Code is the exclusive regulatory legislation for pension

funds and that the defendants could not regulate the conduct of

pension fund trustees through the enactment of the Barrington

Ethics ordinance. The complaint also sought to enjoin the

defendants from exercising any jurisdiction over the Pension Fund

Trustees.

Cross-motions for summary judgment were filed by each of the

parties. After hearing, the court granted defendants' motion for

summary judgment finding that the Barrington Ethics Board could

enforce the Barrington ethics ordinance against the Pension Fund

Trustees.

A motion for summary judgment should be granted when "the

pleadings, depositions and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to any

material fact and that the moving party is entitled to judgment

as a matter of law." 735 ILCS 5/2-1005(c) (West 1994); Soderlund

Brothers v. Carrier Corp., 278 Ill. App. 3d 606, 663 N.E.2d 1

(1995). Appellate review of an order granting summary judgment

is de novo. E.g., Deloney v. Board of Education, 281 Ill. App.

3d 775, 666 N.E.2d 792 (1996); Hesselink v. R.L. Perlow Corp.,

265 Ill. App. 3d 473, 637 N.E.2d 575 (1994). In reviewing that

ruling, the appellate court must consider anew the facts and law

related to the case and determine whether the trial court was

correct. Shull v. Harristown Township, 223 Ill. App. 3d 819, 585

N.E.2d 1164 (1992).

The plaintiff contends that the Illinois Pension Code

preempts the Barrington ethics ordinance and renders it

unenforceable. See Lilly Lake Road Defenders v. County of

McHenry, 156 Ill. 2d 1, 619 N.E.2d 137 (1993) (when a statute or

ordinance is preempted, the subordinate legislative body's

enactment is suspended and rendered unenforceable by the

existence of the superior legislative body's enactment). In

support of this contention, the plaintiff relies upon the

following cases in which preemption was found to exist based upon

the legislature's adoption of a comprehensive scheme of

regulation: Village of Bolingbrook v. Citizens Utilities Co.,

231 Ill. App. 3d 740, 597 N.E.2d 246 (1992); Kirwin v. Peoples

Gas Light & Coke Co., 173 Ill. App. 3d 699, 528 N.E.2d 201

(1988); Hutchcraft Van Service, Inc. v. Urbana Human Relations

Comm'n, 104 Ill. App. 3d 817, 433 N.E.2d 329 (1982); and Illinois

Liquor Control Comm'n v. City of Joliet, 26 Ill. App. 3d 27, 324

N.E.2d 453 (1975). Those cases held that where the legislature

has not specifically limited or denied a governmental power to a

home rule unit, the courts must determine whether the

legislature intended to preempt the area as evidenced by the

adoption of a comprehensive scheme of regulation.

The cases cited by the plaintiff are no longer the law of

this State. The appellate court case of Village of Bolingbrook,

231 Ill. App. 3d 740, 597 N.E.2d 246, has been reversed by our

supreme court in Village of Bolingbrook v. Citizens Utility Co.,

158 Ill. 2d 133, 632 N.E.2d 1000 (1994)); and, in that reversal,

the court specifically declined to adopt the holding in Illinois

Liquor Control Comm'n v. City of Joliet that "'exclusivity ***

may be expressed *** by enactment of a comprehensive regulatory

scheme.'" Village of Bolingbrook, 158 Ill. 2d at 138, 632 N.E.2d

at 1002 citing Illinois Liquor Control Comm'n, 26 Ill. App. 3d at

32, 324 N.E.2d at 455. The supreme court cited to the home rule

provisions in sections 6(h) and (i) of article VII of the

Illinois Constitution of 1970 which state in pertinent part:

"(h) The General Assembly may provide specifically by

law for the exclusive exercise by the State of any

power or function of a home rule unit ***.

(i) Home rule units may exercise and perform

concurrently with the State any power or function of a

home rule unit to the extent that the General Assembly

by law does not specifically limit the concurrent

exercise or specifically declare the State's exercise

to be exclusive." Ill. Const. 1970, art. VII, 6(h),

(i).

In accordance with those provisions, the supreme court stated:

"We believe the language of section 6(h) is clear. In

order to meet the requirements of section 6(h),

legislation must contain express language that the area

covered by the legislation is to be exclusively

controlled by the State. [Citations.] It is not

enough that the State comprehensively regulates an area

which otherwise would fall into home rule power." 158

Ill. 2d at 138, 632 N.E.2d at 1002.

See Congress Care Center Associates v. Chicago Department of

Health, 260 Ill. App. 3d 586, 588, 632 N.E.2d 266, 268 (1994)

(stating that section 6(i)

"favors concurrent exercises of power by the State and

home rule units and places almost exclusive reliance on

the legislature rather than the courts to limit the

home rule units' exercise of their authority. Scadron

[v. City of Des Plaines] (1992), 153 Ill. 2d 164, 606

N.E.2d 1154, quoting [Baum, A Tentative Survey of

Illinois Home Rule: Powers and Limitations (pt. 2),]

1972 U. Ill. L. F. [559,] 579.")

The Village of Bolingbrook court applied these principles to

the Public Utility Act (Ill. Rev. Stat. 1991, ch. 111 2/3, par.

1-101 et seq. now at 220 ILCS 5/1-101 et seq. (West 1994)) which

had a stated policy that "public utilities *** be regulated

effectively and comprehensively" (Ill. Rev. Stat. 1991, ch. 111

2/3, par. 1-102 now at 220 ILCS 5/1-102 (West 1994)). Village of

Bolingbrook, 158 Ill. 2d 133, 632 N.E.2d 1000. Notwithstanding

that language, the court found that the Public Utility Act did

not contain express language of exclusivity so as to preempt

concurrent regulation by the home rule unit.

In the instant case, even if Article 3 of the Pension Code

is deemed to be comprehensive, as the plaintiff contends, that

fact would be extraneous since preemption analysis requires that

the statute specifically provide for the exclusive exercise of

authority by the State. Manifestly, Article 3 does not purport

to make itself the exclusive regulatory scheme with respect to

police pension funds so as to come within the supreme court's

holding in Village of Bolingbrook, 158 Ill. 2d 133, 632 N.E.2d

1000.

The plaintiff would contend that section 3-132 of Article 3

specifically grants exclusive power to the board of trustees for

the police pension fund. 40 ILCS 5/3-132 (West 1994) (the powers

and duties of the board include "[t]o control and manage,

exclusively, the pension fund ***") (emphasis added). However,

the exclusive grant of authority to the pension fund board under

section 3-132 is limited to the board's power to perform the acts

designated in Article 3 such as to pay pensions and other

benefits; to draw and invest funds; to pay expenses; to keep

records; to make rules; and to accept donations. E.g., 40 ILCS

5/3-133, 3-135, 3-138, 3-140, 3-140.1 (West 1994). See Benton

Police Department v. Illinois Human Rigths Comm'n, 160 Ill. App.

3d 55, 513 N.E.2d 29 (1987) (police pension board has exclusive

authority to deny reinstatement to police officer); Board of

Trustees of Police Pension Fund v. Illinois Human Rights Comm'n,

141 Ill. App. 3d 447, 490 N.E.2d 232 (1986) (police pension board

has exclusive authority over issues of eligibility to participate

in the police pension fund). No other provision in Article 3 of

the Pension Code contains express language of exclusivity.

Neither section 1-109 nor section 1-110 of the Code, made

applicable to Article 3 and which govern the pension fund

trustees' fiduciary duties and ethical obligations with respect

to conflicts of interests, purport to be exclusive.

Moreover, several other sections of the Pension Code

expressly allow for the exercise of concurrent home rule power.

See Hutchcraft, 104 Ill. App. 3d at 823, 433 N.E.2d at 333 ("if

the examination [of the statute] reveals an intent to preempt

only pro tanto, so much of the subject matter as is not covered

by the state scheme of regulation remains within the government

and affairs of the home rule unit and it may legislate

concurrently with the state to that extent"). Section 3-101 of

the Pension Code authorizes each municipality to "establish and

administer a police pension fund. (Emphasis added.)" 40 ILCS

5/3-101 (West 1994). Section 22-501.1 of the Pension Code states

that "[r]ules and regulations made by the Division [Public

Employee Pension Fund Division] pursuant to this Section shall

govern where conflict with local rules and regulations exists.

(Emphasis added.)" 40 ILCS 5/22-501.1 (West 1994). These

provisions either explicitly or implicitly establish a

legislative intent to allow municipalities to promulgate rules

and regulations with respect to police pension funds. Thus,

given the legislature's failure to specifically grant exclusive

authority to the State over all aspects of police pension funds

or to specifically exclude home rule authority to regulate the

fiduciary conduct of pension fund trustees; and given the

legislature's allowance of home rule units to "administer" police

pension funds and promulgate local rules and regulations; and

given the clear constitutional guidelines limiting traditional

preemption (see Village of Bolingbrook, 158 Ill. 2d 133, 632

N.E.2d 1000), we do not find that promulgation of ethical

standards by the Village of Barrington was preempted by the

Pension Code. As a result, the regulation of ethical conduct by

the pension board can be achieved concurrently by State and

municipal legislation. See Ill. Const. 1970, art. VII, 6(i).

Plaintiff also argues that, even if the Barrington ethics

ordinance is not preempted by the Pension Code, it nevertheless

violates section 3-150 of that Code. That section provides in

pertinent part:

"A home rule unit, as defined in Article VII of the

1970 Illinois Constitution or any amendment thereto,

shall have no power to change, alter, or amend in any

way the provisions of this Article." 40 ILCS 5/3-150

(West 1994).

The plaintiff argues that the Barrington ethics ordinance

changes, alters and amends the Pension Code by prohibiting

conduct by the Pension Fund Trustees not prohibited by the

Pension Code and by requiring the trustees to file annual

disclosure statements.

In accordance with rules of statutory construction, the

intent of the legislature must be ascertained and given effect;

and the most reliable indicator of legislative intent is the

language of the statute. E.g., In re S.G., No. 80688 (Ill.

February 20, 1997); Mitsuuchi v. City of Chicago, 125 Ill. 2d

489, 532 N.E.2d 830 (1988). Words of a statute are to be given

their common and popular meaning unless to do so defeats the

manifest intent of the legislature. E.g., Collins v. Board of

Trustees of Firemen's Annuity & Benefit Fund, 155 Ill. 2d 103,

610 N.E.2d 1250 (1993); Black Hawk Motor Transit Co. v. Illinois

Commerce Comm'n, 398 Ill. 542, 76 N.E.2d 478 (1947); DiMarco v.

City of Chicago, 278 Ill. App. 3d 318, 662 N.E.2d 525 (1996).

Section 3-150 of the Pension Code prohibits the change or

modification of existing statutory provisions. See Union

Electric Co. v. Illinois Commerce Comm'n, 39 Ill. 2d 386, 235

N.E.2d 604 (1968) (to alter is to change in one or more respects

but not entirely); Morris v. Broadview, Inc., 328 Ill. App. 267,

65 N.E.2d 605 (1946) (amend and alter are in general use and

their meaning is not uncertain; each means to change). See

generally Webster's Third New International Dictionary 373 (1993)

(defining change as "to make different in some particular but

short of conversion into something else: alter, modify"). Here,

the ethical ordinance reiterates certain of the prohibitions of

ethical conduct already contained in the Pension Code and

enumerates additional acts of prohibited conduct not encompassed

in that Code. Thus, if anything, the provisions of the ethics

ordinance complement rather than modify or change the regulatory

provisions of the Pension Code.

Plaintiff's reliance on Board of Trustees of Niles Police

Pension Fund v. Department of Insurance, 218 Ill. App. 3d 782,

578 N.E.2d 1102 (1991), is misplaced. In that case, the

municipality created a police pension board comprised of trustees

in excess of the number provided by statute. Here, as the

municipality did not enact an ordinance that was contrary to or

inconsistent with the terms of the statute, it did not violate

the home rule prohibition of section 3-150 of the Pension Code.

For the foregoing reasons, the judgment of the Circuit Court

of Cook County is affirmed.

Affirmed.

COUSINS, Jr., P.J. and CAHILL, J., concur.