(50 ILCS 320/3)
(from Ch. 85, par. 7203)
Sec. 3.
Definitions.
As used in this Act, unless the context requires otherwise:
(a) "Commission" means a financial planning and supervision commission created pursuant to this Act.
(b) "Fiscal emergency" means the existence of any one or more of the following conditions:
(1) The existence of a continuing default in the
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| payment of principal and interest on any debt obligation for more than 180 days. |
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(2) The failure to make payment of over 20% of all |
| payroll to employees of the unit of local government in the amounts and at the times required by law, ordinances, resolutions, or agreements, which failure of payment has continued for more than 30 days after such time for payment, unless at least 2/3 of the employees affected by such failure to pay, acting individually or by their duly authorized representative, consent in writing to an extension. |
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(3) The insolvency of the unit of local government, |
| being a financial condition such that the unit is (A) generally not paying its debts as they come due unless they are the subject of a bona fide dispute or (B) unable to pay its debts as they become due. |
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(c) "Governing body" means the board or other body of officers having authority to levy taxes, make appropriations, authorize the expenditure of public funds or approve claims for any unit of local government.
(d) "Unit of local government" shall have the meaning provided as specified in Article VII, Section 1 of the Illinois Constitution, and further means only those units of local government which have a population under 25,000.
(Source: P.A. 86-1211.) |
(50 ILCS 320/5)
(from Ch. 85, par. 7205)
Sec. 5.
Establishment of commission.
(a) This subsection (a) applies through December 31, 1992.
(1) Upon receipt of a petition for establishment of a
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| financial planning and supervision commission, the Governor may direct the establishment of such a commission if the Governor determines that a fiscal emergency exists. |
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(2) Prior to making such determination, the Governor |
| shall give reasonable notice and opportunity for a hearing to all creditors of the petitioning unit of local government who are subject to the stay provisions of Section 7 of this Act. The determination shall be entered not less than 60 days after the filing of the petition. A determination of fiscal emergency by the Governor shall be a final administrative decision subject to the provisions of the Administrative Review Law. The court on such review may grant exceptions to the stay provisions of Section 7 of this Act as adequate protection of creditors' interests or equity may require. The commission shall convene within 30 days of the entry by the Governor of his or her determination of the fiscal emergency. |
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(3) (A) The Commission shall consist of 7 Directors.
(B) One Director shall be appointed by the chief |
| executive officer of the unit of local government. |
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(C) One Director shall be appointed by the |
| majority vote of the governing body of the unit of local government. |
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(D) Five Directors shall be appointed by the |
| Governor, with the advice and consent of the Senate. The Governor shall select one of the Directors to serve as Chairperson during the term of his or her appointment. Of the initial Directors so appointed, 3 shall be appointed to serve for terms expiring 3 years from the date of their appointment, and 2 shall be appointed to serve for terms expiring 2 years from the date of their appointment. Thereafter, each Director appointed by the Governor shall be appointed to hold office for a term of 3 years and until his or her successor has been appointed as provided in Section 8-12-7 of the Illinois Municipal Code. Directors shall be eligible for reappointment. Any vacancy which shall arise shall be filled by appointment by the Governor, with the advice and consent of the Senate, for the unexpired term and until a successor Director has been appointed as provided in Section 8-12-7 of the Illinois Municipal Code. A vacancy shall occur upon resignation, death, conviction of a felony, or removal from office of a Director. A Director may be removed for incompetency, malfeasance, or neglect of duty at the instance of the Governor. If the Senate is not in session or is in recess when appointments subject to its confirmation are made, the Governor shall make temporary appointments which shall be subject to subsequent Senate approval. |
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(b) This subsection (b) applies on and after January 1, 1993.
(1) Upon receipt of a petition for establishment of a |
| financial planning and supervision commission, the Governor may direct the establishment of such a commission if the Governor determines that a fiscal emergency exists. |
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(2) Prior to making such determination, the Governor |
| shall give reasonable notice and opportunity for a hearing to all creditors of the petitioning unit of local government. The determination shall be entered not less than 60 days after the filing of the petition. A determination of fiscal emergency by the Governor shall be a final administrative decision subject to the provisions of the Administrative Review Law. The court on such review may grant exceptions to the stay provisions of Section 7 of this Act as adequate protection of creditors' interests or equity may require. The commission shall convene within 30 days of the entry by the Governor of his or her determination of the fiscal emergency. |
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(3) A commission shall consist of 11 members:
(A) Eight members as follows: the Governor, the |
| State Comptroller, the Director of Revenue, the Director of the Governor's Office of Management and Budget, the State Treasurer, the Executive Director of the Illinois Finance Authority, the Director of the Department of Commerce and Economic Opportunity and the presiding officer of the governing body of the unit of local government, or their respective designees. A designee, when present, shall be counted in determining whether a quorum is present at any meeting of the commission and may vote and participate in all proceedings and actions of the commission. The designations shall be in writing, executed by the member making the designation, and filed with the secretary of the commission. The designations may be changed from time to time in like manner, but due regard shall be given to the need for continuity. The Governor shall appoint a chairman of the commission from among the 8 members described in this subparagraph (A). |
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(B) Three members nominated and appointed as |
| follows: the governing body and chief governing officer of the unit of local government shall submit in writing to the chairman of the commission the nomination of 5 persons agreed to by them and meeting the qualifications set forth in this Act. Nominations shall accompany the petition for establishment of the financial planning and supervision commission. If the chairman is not satisfied that at least 3 of the nominees are well qualified, he shall notify the governing body of the unit of local government to submit in writing, within 5 days, additional nominees, not exceeding 3. The chairman shall appoint 3 members from all the nominees so submitted or a lesser number that he considers well qualified. Each of the 3 appointed members shall serve for a term of one year, subject to removal by the chairman for misfeasance, nonfeasance or malfeasance in office. Upon the expiration of the term of an appointed member, or in the event of the death, resignation, incapacity or removal, or other ineligibility to serve of an appointed member, the chairman shall appoint a successor pursuant to the process of original appointment. |
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Each of the 3 appointed members shall be an |
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(i) Who has knowledge and experience in |
| financial matters, financial management, or business organization or operations, including experience in the private sector in management of business or financial enterprise, or in management consulting, public accounting, or other professional activity; and |
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(ii) Who has not at any time during the 2 |
| years preceding the date of appointment held any elected public office. |
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The governing body and chief governing officer of the |
| unit of local government, to the extent possible, shall nominate members whose residency, office, or principal place of professional or business activity is situated within the unit of local government. |
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An appointed member of the commission shall not |
| become a candidate for elected public office while serving as a member of the commission. |
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(4) Immediately after his appointment of the initial |
| 3 appointed members of the commission, the chairman shall call the first meeting of the commission and shall cause written notice of the time, date and place of the first meeting to be given to each member of the commission at least 48 hours in advance of the meeting. |
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(5) The commission members shall select one of their |
| number to serve as treasurer of the commission. |
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(Source: P.A. 93-205, eff. 1-1-04; 94-793, eff. 5-19-06.) |
(50 ILCS 320/8)
(from Ch. 85, par. 7208)
Sec. 8.
Financial plan.
(a) Within 120 days after the first meeting of the commission, the presiding officer of the governing body of the unit of local government, in conjunction with the financial advisor provided by the commission, shall submit to the commission a detailed financial plan, as approved or amended by ordinance or resolution of the governing body, containing the following:
(1) Actions to be taken by the unit of local
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(A) Eliminate all fiscal emergency conditions |
| determined to exist pursuant to this Act; |
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(B) Satisfy any judgments, past due accounts |
| payable, and all past due and payable payroll and fringe benefits; |
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(C) Eliminate the deficits in all deficit funds;
(D) Restore to construction funds and other |
| special funds moneys from such funds that were used for purposes not within the purposes of such funds, or missing from the construction funds or such special funds and not accounted for; |
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(E) Balance the budgets, avoid future deficits in |
| any funds, and maintain current payments of payroll, fringe benefits, and all accounts; |
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(F) Avoid any fiscal emergency condition in the |
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(G) Restore the ability of the unit of local |
| government to market long-term general obligation bonds under provisions of law applicable to such local governmental units generally. |
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(2) The legal authorities permitting the unit of |
| local government to take the action enumerated pursuant to paragraph (1) of this subsection (a). |
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(3) The approximate dates of the commencement, |
| progress upon, and completion of the actions enumerated in paragraph (1) of this subsection (a) and a reasonable period of time expected to be required to implement the plan. The unit of local government, in consultation with the commission and the financial advisor, shall prepare a reasonable time schedule for progress toward and achievement of the requirements for the financial plan, and the financial plan shall be consistent with that time schedule. |
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(4) The amount and purpose of any issue of debt |
| obligations that will be issued, together with assurances that any such debt obligations that will be issued will not exceed debt limits supported by appropriate certifications by the treasurer of the local governmental unit. |
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(5) Assurances that the unit of local government will |
| establish monthly levels of expenditures and encumbrances. |
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(6) Assurances that the municipality will conform to |
| statutes with respect to budgets and appropriation ordinances. |
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(7) The detail, the form, and the supporting |
| information that the commission may direct. |
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(b) The financial plan developed pursuant to subsection (a) of this Section shall be filed with the financial advisor and the financial planning and supervision commission. After consultation with the financial advisor, and upon completing the procedures and findings required by subsection (c) of this Section, the commission shall either approve or reject any initial or subsequent financial plan. If the commission rejects the initial or any subsequent financial plan, it shall forthwith inform the governing body of the unit of local government of the reasons for its rejection. Within 30 days after the rejection of any plan, the presiding officer, with the approval of the governing body by the passage of an ordinance or resolution, shall submit another plan meeting the requirements of this Section to the commission and the financial advisor for approval or rejection by the commission.
(c) Prior to the approval of any initial or subsequent financial plan, the commission shall give reasonable notice and opportunity for a hearing to all creditors of the unit of local government. Any initial or subsequent financial plan passed by the unit of local government shall be approved by the commission if it complies with the requirements of this Section, and if the commission finds that (1) the plan is bona fide and can reasonably be expected to be implemented within the period specified in the plan, (2) the plan is a good faith plan reasonably anticipated to alleviate the fiscal emergency of the unit of local government and (3) the plan is in the best interest of the unit of local government and its creditors.
(d) The determination of the commission under this Section to approve or deny approval of the financial plan shall be a final administrative decision subject to the provisions of the Administrative Review Law.
(e) Any financial plan may be amended subsequent to its adoption in the same manner as the passage and approval of the initial or subsequent plan pursuant to this Section.
(Source: P.A. 86-1211.) |
(50 ILCS 320/9)
(from Ch. 85, par. 7209)
Sec. 9.
Powers of commission and financial advisor.
(a) The financial planning and supervision commission, or when authorized by the commission, the financial advisor, shall have the following powers, duties and functions:
(1) To review all budgets, tax levy ordinances, bond
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| and note ordinances or resolutions, and appropriation ordinances of the unit of local government in order to determine whether they are consistent with the financial plan and, when considered in connection with revenue estimates, whether a balanced budget will result. |
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(2) To order the unit of local government to meet and |
| negotiate with its creditors. |
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(3) To inspect and secure copies of any document, |
| ordinance, resolution, or instrument pertaining to the effective financial accounting and reporting system, debt obligations, debt limits, financial plan, balanced appropriation ordinances, report of examination or audit, statement or invoice, or other worksheet or record of the municipality; provided that any attorney-client privilege shall remain inviolate. |
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(4) To inspect and secure copies of any document, |
| instrument, certification, records of proceedings, or other worksheet or records of any official or employee of the unit of local government or any other local governmental unit in the State. |
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(5) To consult with the creditors of the unit of |
| local government. To consult with the officials of the unit of local government regarding any necessary or appropriate steps to bring the books of account, accounting systems, and financial procedures and reports of the unit of local government into compliance with systems of accounting recommended by the State Comptroller pursuant to "An Act concerning accounting systems for units of local government", approved September 3, 1985, and regarding desirable modifications and supplementary systems and procedures pertinent to the unit of local government. |
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(6) To provide assistance to the unit of local |
| government in the structuring or the terms of, and the placement of sale of, debt obligations of the unit of local government. |
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(7) To perform all other powers, duties, and |
| functions as provided under this Act. |
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(8) To make and enter into all contracts and |
| agreements necessary or incidental to the performance of its duties and the exercise of its powers under this Act. |
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(9) To consult with officials of the unit of local |
| government and make recommendations for cost reductions or revenue increases to achieve balanced budgets and carry out the financial plan. |
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(b) In the event that the financial planning and supervision commission determines that the proposed budget, tax levy, bond or note issuance or revenue estimates do not comply with the financial plan of the unit of local government, the financial planning and supervision commission shall be authorized to:
(1) Make any revisions to the financial plan, |
| appropriation ordinances, tax levy ordinance, bond or note ordinance or appropriation ordinance deemed necessary or advisable for submission to the governing body of the unit of local government for approval and implementation; |
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(2) Review and determine the extent of any deficiency |
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(3) Require the unit of local government to provide |
| documentation to substantiate to the extent and in the manner deemed necessary or advisable any item of revenue or expenditure; |
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(4) Recommend that the unit of local government file |
| a petition under Chapter 9 of the United States Bankruptcy Code. Not later than 30 days after the conclusion of its investigation, the commission shall make a written report to the unit of local government of all findings, determinations and recommendations. |
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(c) The governing body of the unit of local government and the officers and employees of any other governmental unit in this State are authorized and directed to diligently and promptly assist the financial planning and supervision commission in the prosecution of its duties, including the furnishing of any and all materials, including justification documents, as may be required.
(d) Annually on or before the first day of April during the fiscal emergency period, the commission shall make reports and recommendations to the General Assembly concerning progress of the unit of local government in eliminating fiscal emergency conditions, failures of the unit of local government to comply with this Act, and recommendations for further actions to attain the objectives of this Act, including legislative action to make provisions of law more effective for their purposes or to enhance revenue raising or financing capabilities of the local governmental unit. The commission may make such interim reports as it may determine to be appropriate for such purposes and shall make such additional reports as may be requested by resolution of either house of the General Assembly.
(Source: P.A. 86-1211.) |