by Carolyn Welch Clifford (Summer 2017)

An Illinois appellate court recently rounded out a trio of cases on the authority of local governments to enact administrative procedures to adjudicate claims for benefits from disabled firefighters and police officers under the Public Safety Employee Benefits Act (PSEBA) (820 ILCS 320/10) in the case of Englum v. City of Charleston, 2017 IL App (4th) 160747.

Previously, the Illinois Supreme Court concluded that fire protection districts (which do not have non-home rule authority) lacked the statutory authority to create their own procedure by ordinance to determine disabled firefighters’ eligibility for benefits under Section 10 of PSEBA (Gaffney v. Board of Trustees of the Orland Fire Protection District, 2012 IL 110012). In contrast, the Illinois appellate court previously concluded that a home rule municipality had the authority to employ an administrative procedure for assessing claims under PSEBA (Pedersen v. Village of Hoffman Estates, 2014 IL App (1st) 123402).

In Englum, the Fourth District Appellate Court concluded that the City of Charleston – a non-home rule municipality – had the authority to enact an ordinance establishing administrative procedures to determine disabled firefighters and police officers’ eligibility for benefits under PSEBA.

Steve Englum, a police officer for the City of Charleston, challenged the City’s denial of health insurance benefits under Section 10 of PSEBA, by filing two actions with the circuit court: a complaint for declaratory relief, asking the court – instead of the City’s administrative entity – to determine his eligibility for benefits; and a complaint for injunctive relief, seeking to enjoin the City from conducting an eligibility hearing under the City’s ordinance. The City’s ordinance provided for an administrative hearing procedure overseen by a hearing officer appointed by the City’s mayor.

The circuit court ruled in Englum’s favor, determining that the proper procedure for determining PSEBA benefit eligibility was for the court, not the City. To decide his eligibility, the circuit court relied on the Illinois Supreme Court’s decision in Gaffney. The circuit court then held a hearing on the merits of Englum’s complaint for declaratory relief and awarded Englum benefits under PSEBA. The City appealed the decision to the Fourth District Appellate Court.

The appellate court framed the issue as a determination of whether the City – as a non-home rule municipality – had the authority to establish local administrative procedures to determine eligibility for benefits under PSEBA. It noted that no Illinois case had specifically addressed this issue; rather, the two cases that had addressed the related issues of whether a fire protection district and a home-rule municipality had the authority to establish such procedure were not dispositive here.

The Englum appellate court first noted that PSEBA itself was silent on the how to determine eligibility for benefits under Section 10 of the statute. The court further noted that non-home rule entities are governed by the concept of “Dillon’s Rule,” which provides that “non-home rule units possess only those powers that are specifically conveyed by the Constitution or by statute.”

While the Illinois Supreme Court concluded in Gaffney that the silence in PSEBA, coupled with the silence in the Fire Protection District Act (70 ILCS 705/0.01 et seq.) on authority to make administrative decisions on eligibility for PSEBA benefits, meant that a fire protection district lacked the authority to establish such procedures; the appellate court in the instant case distinguished the authority of a non-home rule village or city based on provisions in the Illinois Municipal Code (65 ILCS 5/1-2-1 and 10-4-1).

The appellate court noted that Section 1-2-1 of the Illinois Municipal Code (which is applicable to both home rule and non-home rule municipalities) provides in relevant part:

The corporate authorities of each municipality may pass all ordinances and make all rules and regulations proper or necessary, to carry into effect the powers granted to municipalities . . . (65 ILCS 5/1-2-1)

Furthermore, the City specifically pointed to Section 10-4-1 of the Illinois Municipal Code (65 ILCS 5/10-4-1) that provides:

The corporate authorities of any municipality may provide by ordinance in regard to the relation between all municipal officers and employees in respect to each other, the municipality, and the people. (65 ILCs 5/10-4-1)

While acknowledging that one way a non-home rule municipality can exceed its power is to enact an ordinance that infringes on an already existing state statutory scheme, the silence of PSEBA on the process to determine eligibility – coupled with the authority under Sections 1-2-1 and 10-4-1 of the Illinois Municipal Code provided the basis for the City to enact its local PSEBA procedures to adjudicate its employees’ eligibility for benefits.

The appellate court further noted that it came to this conclusion despite precedent under Illinois case law that any doubt concerning the grant of power to a non-home rule entity is resolved against the non-home rule entity (citing Rajterowski v. City of Sycamore, 405 Ill.App.3d 1086 (2nd Dist. 2010)).

The appellate court further explained:

This Ordinance did not “frustrate the purposes” of the Safety Benefits Act. If anything, the Ordinance facilitated the purposes of the Safety Benefits Act. Therefore, the City was not preempted from establishing the administrative procedures provided by the Ordinance.

The appellate court did not find persuasive Englum’s argument that allowing a non-home rule municipality to enact its own procedures to administer PSEBA benefits would violate the equal protection clause of the Illinois Constitution, noting that such argument overlooks the nature of municipal authority to legislate at the local level. Furthermore, the appellate court was unpersuaded by Englum’s argument that allowing the City to usurp the circuit court’s fact-finding role through an administrative process would be “underhanded” and facilitate the City’s “ulterior” motives. In short, the appellate court concluded:

[T]he City had the authority to establish the administrative procedures contained in the Ordinance. Englum’s eligibility for section 10 benefits should have been determined by those  procedures instead of a complaint for declaratory relief.

The takeaways from the Englum decision in light of the Gaffney and Pederson cases for employers of firefighters and police officers are:

  • Both home rule and non-home rule municipalities should adopt by ordinance dministrative procedures for conducting a process and hearing to consider an application from their disabled firefighters and police officers, or their survivors, for PSEBA benefits.
  • Fire protection districts should adopt, at a minimum, some less formal procedures to determine the eligibility of their disabled firefighters or their survivors for PSEBA benefits. An appeal of a PSEBA decision by a fire protection district to the circuit court will be a declaratory judgment action — not an administrative review action.