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COMMENTS
THOMAS W. KELTY, Chief Counsel, RECENT HAPPENINGS This month's article is devoted to a variety of matters that have collected in my "in box" over the past few months. These brief discussions of legislation and cases focuses on particular areas of municipal law as opposed to broad general principles. PREVAILING WAGE ACT Public Act 86-799 (H.B. 568) effective January 1, 1990, has made several changes to the Prevailing Wage Act. This Act controls the wages that are to be paid to workers and other laborers in the construction of public works projects. First, the definition of public works has been expanded to include all projects "financed in whole or in part with bonds issued under Division 74 of the Illinois Municipal Code . . . the Industrial Building Revenue Bond Act . . . the Illinois Development Finance Authority Act... or the Build Illinois Bond Act ..." The amendment of the Prevailing Wage Act to include projects financed with Industrial Revenue Bonds has the effect of making economic development projects for which the municipality loans money subject to the prevailing wage. In effect, this amendment may diminish the viability of financing provided by municipalities through the issuance of industrial revenue bonds because of increased costs to the private developer as a result of the payment of prevailing wages on development projects. The second amendment to the Act requires that all bid specifications of a unit of government must list the current rates to be paid to laborers, workers, and mechanics in the locality in which the work is to be performed under the proposed contract. The amendment continues by providing that if the Department of Labor revises the rates during the pendency of the contract, the revised rates shall apply to the contract let pursuant to the specifications and it imposes the burden of notifying all contractors and subcontractors of the changes on the public body. This amendment will result in increased costs to municipalities on public works projects because contractors and subcontractors must protect themselves in the bidding process against an increase in the rates by the Department of Labor. Only two methods are available to a contractor to insure that the contractor does not get caught between a contracted amount and the Department of Labor. First, the contractor could demand the inclusion of a "change in pricing" clause which would require an increase in the contract amount by change order in the event that the Department of Labor rates were revised. Alternatively, the contractor could simply increase his price and assume the risk that the Department of Labor will not raise the labor rate during the construction period. The third amendment addresses remedies for a failure to pay prevailing rates to a worker pursuant to such a contract. In the event that a contractor or any subcontractor pays less than the prevailing rates the worker is entitled to recover the difference between the amount paid and the published rates plus attorney's fees as allowed by the court. In addition, the contractor or subcontractor "shall" be liable to the Department of Labor for twenty (20%) percent of such underpayment with a two (2.0%) percent penalty for each month following the date of underpayment by the contractor. Finally, this third amendment creates an independent cause of action with the Department of Labor to prosecute actions for underpayment of wages. A final amendment to the Act revises the method of publication of contractors and subcontractors who violate the act. Under the revised statutory language, the contractor or subcontractor is not to be included on the published violators list until two separate occurrences of violations have been found. The contractor or subcontractor continues to have a right to a hearing on the placement of that contractor on the list. CABLE TELEVISION LEGISLATION AND REGULATIONS The hue and cry of municipalities and cable consumers around the United States has not gone unheeded by the United States Congress. After the advent of the Cable Communications Policy Act of 1984 removing virtually all local control of cable television systems, the problems of cable consumers and franchisors have become obvious. During the current session of the United States Congress, four Bills have been introduced to reintroduce some regulation of basic cable rates and other features of the provision of cable television services ranging from returning local control of rates to franchisors to tying basic cable service rates to the Consumer Price Index. Recently, authors and other commentators on the current state of cable television have tended to indicate that it is unlikely that rate regulation will be returned to franchisors, however, these same commentators believe that some limits will be imposed on cable television operators to cap off unrestricted rate increases and to require minimum levels of April 1990 / Illinois Municipal Review / Page 11 service to subscribers. Municipalities should avoid being "sandbagged" as they were in 1983 when the Cable Communications Policy Act was adopted. Those franchisors experiencing difficulties with their cable systems by reason of rate increases or other subscriber complaints should correspond with the League office or the Illinois congressional delegation to let them know of the problems and difficulties. It is only through this channel of communications that municipal officials can be assured that proper consideration will be given to municipal concern in the drafting of a 1990 Cable Television Act. As future developments occur in the congressional arena regarding the four legislative proposals currently pending, they will be reported to you by the League.
OMNI OUTDOOR ADVERTISING, INC. V.
COLUMBIA OUTDOOR ADVERTISING, INC. In this action, a billboard company sued a Columbia Outdoor Advertising (COA) and the City of Columbia, South Carolina alleging violations of the Sherman Anti-Trust Act because of the COA's and Columbia's successful conspiracy to keep OMNI out of the outdoor advertising market. At a jury trial, Columbia and COA were held liable for violations of the Sherman Anti-Trust Act. No monetary damages were awarded against the city. On appeal, Omni argued that because of the conspiratorial nature of the action by the city it should not be granted immunity from liability pursuant to the state action exemption most recently articulated in Town of Hallie v. City of Eau Claire (471 U.S. 34). Hallie provides an anti-trust immunity standard under the state action exemption when there is a demonstration that anti-competitive activities were authorized by the state pursuant to state policy to displace competition with regulation or monopolize public services. According to the Supreme Court "The municipality need not be able to point to a specific, detailed legislative authorization in order to assert a successful (state action immunity) defense to an anti-trust suit. Rather, ... it would be sufficient to obtain (state action exemption) immunity from municipality to show that it acted pursuant to a clearly articulated and affirmatively expressed state policy . . ." The Federal Appeals Court found that the statutory scheme adopted by the State of South Carolina evidenced such a pattern of state policy which "clearly contemplates" the displacement of competition through a system of regulation. In addition, the appellate court found that the anti-competitive effect of the South Carolina statutory scheme was reasonably foreseeable. Therefore, in the absence of any extenuating circumstances, the state action exemption to anti-trust liability would have applied to Columbia. However, the court found that the conspiratorial nature of the conduct by the City of Columbia destroyed the availability of the state action exemption to the city. In this case, the conduct submitted as evidence of the conspiratorial acts were a meeting between the mayor of the municipality and the defendant business owner. In addition, the passage of an ordinance by the city council was found to be in furtherance of the conspiracy. In short, the city was held liable for acts that are ordinarily considered commonplace. However, these commonplace acts conducted with the cooperation of a market competitor resulted in the destruction of anti-trust liability benefiting the city.
HARRIS TRUST AND SAVINGS BANK V.
VILLAGE OF BARRINGTON HILLS In this case, Harris filed a disconnection petition against the Village of Barrington Hills. The petition was filed with the circuit court and at trial, based upon conflicting expert testimony, the trial court found that disconnecting the property would "unreasonably disrupt" the growth prospects in plan and zoning ordinances of the village. By this finding, the court found that all of the statutory prerequisites to disconnection did not exist and denied the disconnection petition. On appeal, the Appellate Court reversed the finding as against the manifest weight of the evidence. The Illinois Supreme Court affirmed the holding of the appellate court and analyzed Paragraph 7-3-6 of the Municipal Code and its application to disconnection petitions. Previous cases interpreting this paragraph had applied a "liberal construction" to the paragraph. This liberal construction of the paragraph discounts the future growth prospects of a municipality and the disruption that may occur as a result of the disconnection. According to the Supreme Court the legislature only Page 12 / Illinois Municipal Review / April 1990 intended that the court should consider the development which would occur in the remaining part of the municipality "but for" the disconnection. The court continued by stating that "neither the future development of the site nor the future development of the village are proper considerations under this prong of the statute." Additionally, the Supreme Court held that the facts to be considered in judging a petition for disconnection must be limited to those which exist at the time of the hearing on the petition. Finally, the court concludes its analysis of the statute itself by pointing out that the legislature has amended this paragraph on several occasions subsequent to the initial holding of the Illinois courts establishing the "liberal construction" rule. According to the Supreme Court, the failure of the legislature to amend the statute to invalidate the "liberal construction" doctrine, indicates the acceptance by the legislature of that doctrine. Applying the liberal construction standard to the case at bar, the Supreme Court found that the evidence adduced by the village at the trial was inadequate. It noted that neither of the "experts" called by the village to testify on the growth prospects of the village after the disconnection were competent to testify that market reaction would unreasonably disrupt the village's growth prospects and plan and zoning ordinances. According to the Supreme Court, their testimony was unsupported by any evidence, economic or otherwise, to buttress their position. Because the court found that they were incapable of rendering these opinions and since no additional evidence was introduced to support their opinions, the court indicated that their testimony was not credible and should be discounted by the court in its consideration of the case. The value of this case to Illinois municipal law is two fold. First, after a court action interpreting a statute affecting municipality in which it is believed that the judicial interpretation is inconsistent with legislative intent, municipalities must seek the assistance of their legislators in correcting the deficiency, if one exists. Second, municipalities pursuing legal challenges in the land use area must assure themselves the expert witnesses they use are fully qualified and well-prepared. Although municipally-employed planning, zoning and land use personnel may be competent to make the judgments to which they will testify based upon their experience and longevity in municipal government, Illinois courts will not necessarily view these experts in the same light. When judged against an evidentiary standard requiring the eliciting of the qualifications as a proper foundation for the witnesses and experts, the municipally-employed planner may be at a disadvantage compared to the independent expert. •
April 1990 / Illinois Municipal Review / Page 13 |
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