Metropolitan Water Reclamation District of Greater Chicago v. Civil Service Board of Metropolitan Water Reclamation District of Greater Chicago

                                                                SIXTH DIVISION
                                                                 June 27, 1997








No. 1-96-0151


METROPOLITAN WATER RECLAMATION DISTRICT  )
OF GREATER CHICAGO, a Unit of Local      )
Government, and F.D. O'BRIEN, Director   )           Appeal from
of Personnel,                            )        the Circuit Court
                                         )         of Cook County.
          Plaintiffs-Appellants,         )
                                         )
     v.                                  )         
                                         )         No.  95-CH-3670
CIVIL SERVICE BOARD OF METROPOLITAN      )  
WATER RECLAMATION DISTRICT OF GREATER    )        
CHICAGO, GAY-LLOYD LOTT, Chairman,       )            Honorable
R. MATTHEW SIMON, Member, JOHN L. ROACH, )          Edwin Berman,
Member, and SUZAN ZAMBRZYCKI,            )         Judge Presiding.
                                         )
          Defendants-Appellees.          )



     JUSTICE THEIS delivered the opinion of the court:
     Plaintiffs, the Metropolitan Water Reclamation District of
Greater Chicago (the District) and F.D. O'Brien as Director of
Personnel, appeal the trial court's order affirming a determination by
the Civil Service Board of the Metropolitan Water Reclamation District
of Greater Chicago and its members (the Board).  On appeal, the
District argues that:  (1) the Civil Service Board exceeded its
authority by granting Suzan Zambrzycki additional compensation without
a prior appropriation; (2) the Board exceeded its authority by
awarding Zambrzycki back pay commensurate with a salary level to which
she had not been appointed; (3) theories of contract or estoppel do
not entitle Zambrzycki to additional compensation; and (4) the Board
abused its discretion by reversing the director's decision without
finding the decision to be arbitrary and capricious.
     District employee and codefendant Suzan Zambrzycki was employed
as a civil service employee.  On May 29, 1991, Zambrzycki was
appointed to the classification of assistant personnel analyst.  The
District provided Zambrzycki a copy of the personnel rules for
classified service and the work rules.  On May 15, 1992, Zambrzycki
was reassigned to the examinations section of the personnel department
to assist the senior personnel analyst and the supervising personnel
analysts.
     On December 3, 1993, the director of personnel sent notice of
pending reassignments to department employees.  Zambrzycki was to be
reassigned to the training section of the personnel department. 
Zambrzycki filed a grievance with the director of personnel, claiming
that:  (1) the District could not reassign her from the examination
department; (2) she had been doing work above her classification for
the past 18 months; and (3) she was entitled to back pay because she
had performed the work of an associate personnel analyst since May 15,
1992.  Prior to this objection, Zambrzycki had never informed her
supervisor or the director of personnel that she believed she was
doing work above her classification.
     The director rejected Zambrzycki's claim, and Zambrzycki brought
her grievance before the Civil Service Board of the Metropolitan Water
Reclamation District of Greater Chicago (the Board).  Zambrzycki
presented the testimony of other employees who stated that Zambrzycki
had been performing the work of an associate personnel analyst since
approximately May of 1993.  Zambrzycki pointed to Work Rule 4.201
which provides that employees working in a higher capacity are
entitled to higher pay.  The Board held that Zambrzycki had no vested
interest in her job within the examination department.  However, the
Board determined that Zambrzycki had been doing work above her
classification for approximately six months and was entitled to back
pay pursuant to Work Rule 4.201.
     The plaintiffs challenged the Board's determination in the
circuit court.  The plaintiffs first argued that the Board failed to
find that the director of personnel's decision was arbitrary and
capricious.  In addition, the plaintiffs claimed that the Board's
findings were erroneous.  The plaintiffs argued that in the absence of
a prior appropriation for the higher pay, neither the District nor the
Board had the authority to award Zambrzycki the back pay.  In
justifying the Board's decision, the trial court stated that "they
tried to rectify an unfair proceeding" and that "any fair-minded
person, in my view, would have done the same thing."  The trial court
agreed that Zambrzycki had worked in a capacity above her
classification.  In affirming the Board's award, the trial court
stated:
          "If the person in charge can direct somebody under
          them to do a particular job that calls for a higher
          rate of pay without dotting I's and crossing T's to
          give them the position to require that pay, it
          would undermine the whole system.  It's just not
          right.  
               And I think when you balance equity against
          the chain of command, and what the statute says, I
          don't agree with you, Counsel, that I don't have
          the power to say this is an equitable issue and
          should be remedied.  
               Now I don't even have to say that either.  All
          I have to say is I deny your petition and let the
          Civil Service Commission ruling stand."   
     On appeal, we are presented with questions of law and fact.  We
will reverse the Board's factual determinations only if they are
contrary to the manifest weight of the evidence.  Raintree Health Care
Center v. Human Rights Commission, 275 Ill App. 3d 387, 655 N.E.2d 944
(1995).  We will consider questions of law, however, under a de novo
standard.  Illini Country Club v. Property Tax Appeal Board, 263 Ill.
App. 3d 410, 635 N.E.2d 1347 (1994).  Upon review, we find that the
Board's and the trial court's rulings are erroneous as a matter of law
and we reverse.
     On appeal, the defendants claim that the District was
contractually bound to pay Zambrzycki for associate level work.  This
argument rests upon interpretation of Work Rule 4.201, which provides
that "[i]f a position is filled in an acting capacity by an employee
receiving a lower rate of pay, the employee shall be paid at the
higher rate of pay for the period served in an acting capacity."  The
defendants contend that Work Rule 4.201 constitutes a contractual
promise by the District under the Illinois Supreme Court's holding in
Duldulao v. St. Mary of Nazareth Hospital Center, 115 Ill. 2d 482, 505 N.E.2d 314 (1987), because:  (1) the work rules expressly provide that
they inform employees of their rights and obligations; (2) the work
rules were distributed to and read by Zambrzycki; and (3) Zambrzycki
continued to work for the District after reading the work rules.
     Without determining whether the work rules would contractually
obligate the District to pay Zambrzycki at a higher level, we find
that the District is without authority to enter into such a contract
in the absence of a prior appropriation.  Accordingly, any contract is
null and void.  See Jordan v. Civil Service Commission, 246 Ill. App.
3d 1047, 617 N.E.2d 142 (1993).
     Section 5.8 of the Metropolitan Water Reclamation District Act
(the Act) provides:
               "No contract shall hereafter be made, or
          expense or liability incurred by the said board of
          trustees, or any member or committee thereof, or by
          any person or persons, for or in its behalf
          notwithstanding the expenditure may have been
          ordered by the said board of trustees, unless an
          appropriation therefor shall have been previously
          made by said board in the manner aforesaid.  No
          officer, head of a department, or commission 
          shall, during a budget year, expend or contract to
          expend any money or incur any liability, or enter
          into any contract, which, by its terms, involves
          the expenditure of money for any of the purposes
          for which provision is made in the appropriation
          ordinance in excess of the amounts appropriated in
          said ordinance.  Any contract, verbal, or written,
          made in violation of this section shall be null and
          void ***."  (Emphasis added.)  70 ILCS 2605/5.8
          (West 1994).
     We interpret this statute to bar Zambrzycki from receiving pay
for work at a higher level in the absence of a prior appropriation. 
The Illinois Supreme Court's interpretation of a similarly worded
statute in Chicago Patrolmen's Association v. City of Chicago, 56 Ill. 2d 503, 309 N.E.2d 3 (1974), supports our interpretation.  In Chicago
Patrolmen's Association, the court was asked to interpret the impact
of section 8-1-7 of the Municipal Code.  65 ILCS 5/8-1-7 (West 1994).
Section 8-1-7(a) provides that:
          "[N]o contract shall be made by the corporate
          authorities, or by any committee or member thereof,
          and no expense shall be incurred by any of the
          officers or departments of any municipality,
          whether the object of the expenditure has been
          ordered by the corporate authorities or not, unless
          an appropriation has been previously made
          concerning that contract or expense.  Any contract
          made, or any expense otherwise incurred, in
          violation of the provisions of this section shall
          be null and void ***."  (Emphasis added.)  65 ILCS
          5/8-1-7(a) (West 1994). 
The Illinois Supreme Court found that under section 8-1-7 "any
contract made without a prior appropriation is null and void." 
Chicago Patrolmen's Association, 56 Ill. 2d  at 508, 309 N.E.2d  at 6;
see also Lindahl v. City of Des Plaines, 210 Ill. App. 3d 281, 568 N.E.2d 1306 (1991).  Illinois courts have consistently followed this
principle, referring to it as the prior appropriation rule.  See,
e.g., Klekamp v. City of Burbank, 266 Ill. App. 3d 81, 639 N.E.2d 241
(1994).
     We find that the Illinois Supreme Court's reasoning in
interpreting section 8-1-7 of the Municipal Code is equally applicable
to the similarly worded section 5.8 of the Metropolitan Water
Reclamation District Act.  There is no basis for disregarding the
supreme court's reasoning simply because section 8-1-7 applies to
municipalities and section 5.8 applies to the Water Reclamation
District.  Accordingly, we find that in the absence of a prior
appropriation, Zambrzycki is not entitled to additional compensation. 
     Zambrzycki bears the burden of establishing that she is entitled
to the additional pay because an appropriation was made.  Klekamp v.
City of Burbank, 266 Ill. App. 3d 81, 639 N.E.2d 241 (1994).  A review
of the record reveals that Zambrzycki failed to present any evidence
that a prior appropriation was made for associate level work in her
department.  Furthermore, we find no evidence of a promotion or
transfer to a position which would justify a higher pay rate under
section 5.7a of the Act.  See 70 ILCS 2605/5.7a (West 1994). 
Therefore, we find that neither the District nor the Board had the
authority to award Zambrzycki back pay.
     Despite this, the Board and the trial court agreed that
Zambrzycki was entitled to the back pay on the basis of equitable
considerations.  However, while both the Board and the trial court
determined that Zambrzycki was performing associate level work,
neither tribunal analyzed Zambrzycki's claim under the heightened
standard which arises when attempting to equitably estop units of
local government.  "`While the doctrine of [equitable] estoppel has
been [applied] to municipal corporations ***, a finding of estoppel
against a public body is not favored ***.   ***  Equitable estoppel
should not be invoked against a public entity `except "under
compelling circumstances,"  where to do so would not defeat the
operation of public policy. "  Lindahl v. City of Des Plaines, 210
Ill. App. 3d 281, 295, 568 N.E.2d 1306, 1315-16 (1991), quoting Bank
of Pawnee v. Joslin, 166 Ill. App. 3d 927, 938, 939, 521 N.E.2d 1177,
1185 (1988), and People ex rel. Brown v. State Troopers Lodge No. 41,
7 Ill. App. 3d 98, 105, 286 N.E.2d 524, 528 (1972).
     The defendants may establish estoppel by showing: (1) an
affirmative act on the part of the District; and (2) that the
affirmative act induced substantial reliance to Zambrzycki's
detriment.  Halleck v. County of Cook, 264 Ill. App. 3d 887, 637 N.E.2d 1110 (1994).  Although the defendants need not prove fraud,
they must prove that the District had a fraudulent intent in passing
Work Rule 4.201.  See Lindahl v. City of Des Plaines, 210 Ill. App. 3d
281, 568 N.E.2d 1306 (1991); Bank of Pawnee v. Joslin, 166 Ill. App.
3d 927, 521 N.E.2d 1177 (1988).  In addition, the affirmative act
"must be [an act] of the municipality itself, such as legislation,
rather than the unauthorized actions of a ministerial officer."  Bank
of Pawnee, 166 Ill. App. 3d at 939, 521 N.E.2d  at 1185. 
     We find that equitable estoppel may not be applied against
plaintiffs as a matter of law.  The evidence does not support a
finding that Zambrzycki substantially relied upon Work Rule 4.201 to
her detriment.  The uncontradicted evidence demonstrates that
Zambrzycki's position consisted of extensive on-the-job training. 
Zambrzycki performed her work and received assistant level pay from
May of 1992 until December of 1993 without complaint.  She only
complained in December of 1993 when she was being transferred.  Under
Personnel Rule 4.04, employees who believe they are doing work outside
of their classification should notify the department head that a more
appropriate assignment or reclassification is required.  Zambrzycki
failed to follow these procedures.  
     Section 4.01 of the personnel rules further belies Zambrzycki's
claim of reliance.  Section 4.01 provides that "nor shall any person
*** be given any compensation for employment in the District, unless
he has been appointed to a position provided for and allocated to its
proper class in the classification plan."  Furthermore, persons
dealing with municipal corporations are "`charged with the knowledge
of the limitations of the power of that corporation for any contract
attempted to be entered into by any of its officials. "  Lindahl v.
City of Des Plaines, 210 Ill. App. 3d 281, 290, 568 N.E.2d 1306, 1312
(1991), citing May v. City of Chicago, 222 Ill. 595, 599-600, 78 N.E. 912 (1906).  Accordingly, even if we were to interpret Work Rule 4.201
in the manner suggested by defendants, Zambrzycki is charged with the
knowledge that plaintiffs lacked the authority to enter into such a
contract.  See Bank of Pawnee v. Joslin, 166 Ill. App. 3d 927, 521 N.E.2d 1177 (1988).  In light of the personnel rules, and the
extensive statutory prohibitions against receiving higher pay in the
absence of an appointment, we find that any reliance Zambrzycki may
have placed upon Work Rule 4.201 was unreasonable. 
     Finally, we find that "the circumstances *** are not
substantially compelling as to warrant the application of estoppel." 
Lindahl, 210 Ill. App. 3d 281, 296, 568 N.E.2d 1306, 1316.  The
personnel rules outline procedures to remedy Zambrzycki's claim of
being forced to work outside of her classification.  She failed to
follow these procedures and instead sought higher compensation from a
public body which did not appropriate such funds.  While we share the
trial court's concern for upholding the civil service system, we find
that acceptance of defendants' arguments would undermine the policies
underlying the prior appropriation rule.  We find, as a matter of law,
that the plaintiffs cannot be estopped from denying Zambrzycki higher
pay in the absence of an appointment and a prior appropriation. 
Therefore, the orders of the Board and the trial court are reversed.
     Reversed.
     GREIMAN, P.J., and QUINN, J., concur.