DRAINAGE DISTRICT LIENS FOR ASSESSMENTS
by Amy Bullock, ATG Law Clerk

Introduction

In 2000, approximately one thousand residents of Champaign, Illinois, opened their mailboxes to find a special "surprise." The unexpected delivery was a $2,000 "additional" assessment billing from the Phinney Branch Drainage District, payable in installments of $100 annually for 20 years. Citizens responded, "what is the Phinney Branch Drainage District?" and "do I really have to pay this?"

The general theory behind drainage districts is to create an organization with governmental authority that can help landowners drain excess water from their property over the lands of others. This article will discuss the basic features of drainage districts in Illinois, Indiana, and Wisconsin, and the effects they can have upon real property interests.

Purpose of Drainage Districts

"Drainage districts are created and governed by the Drainage Code for the purpose of ensuring waters will not accumulate on higher land as a result of the acts or omissions of landowners of lower elevation." In re Goose Creek Drainage District No. 1 in the Town of Goose Creek, 307 Ill App 3d 82, 717 NE 2d 522, 240 Ill Dec 429 (4th D 1999). Drainage codes generally govern the construction, maintenance, improvement and abandonment of drains. Drains are generally defined as ditches, channels and water courses that carry away surplus water falling or coming upon lands. See 70 ILCS 605/1-2(a); IC 36-9-27-2(a); Wis Stat § 88.01(8).

Creating New Drainage Districts

Drainage districts are traditionally created by petition. Usually there are no restrictions on who may file a petition but the petition should be signed by a certain percentage of landowners in the proposed district - at least 20 percent in Illinois and 50 percent in Wisconsin. 70 ILCS 605/3-3; Wis Stat § 88.27. A typical petition for organization of a drainage district must contain the following elements: (1) a description of the lands to be incorporated into the district; (2) the names and addresses of the owners of record; (3) a general description of the proposed drainage improvements; and (4) a request that the court officially recognize the drainage district. See 70 ILCS 605/3-3; IC 36-9-27-54; Wis Stat § 88.28. In addition to a petition, Illinois law also provides for organization of a drainage district by referendum. See 70 ILCS 605/3-26.

As of June 30, 2001, landowners in Indiana can no longer petition to establish a drainage district. 2001 Ind Legis Serv 276-2001. In Indiana, county drainage boards have jurisdiction over drainage districts and all regulated drains. After June 30, 2001, no new drainage districts will be created unless a county executive turns over maintenance and repair of a regulated drain from the county drainage board to a drainage district. IC 36-9-27-26.5. Thereafter, Indiana landowners can still petition the county drainage board for construction of a new drain. IC 36-9-27-54.

The petition is filed with the circuit court of the county (Illinois and Wisconsin) or the county surveyor (Indiana). 70 ILCS 605/3-3; IC 36-9-27-54; Wis Stat § 88.28(1). There is a hearing on the petition, where the court or the county board will hear objections concerning the petition's sufficiency and form. See 70 ILCS 605/3-7; Wis Stat § 88.29(3). In Indiana, the county surveyor is responsible for verifying the sufficiency of the petition. IC 36-9-28-54.

Once the petition is filed either the temporary commissioners (Illinois), the drainage board (Wisconsin), or the county surveyor (Indiana), will inspect the areas in the proposed district, as well as any other lands that may be benefited or damaged by the drain. An important element in forming a drainage district is ensuring that all the lands affected by the drain are included in the drainage district. See 70 ILCS 605/5-3; IC 36-9-27-57; Wis Stat § 88.29(2). Usually an engineer is hired to help determine the specifications of the proposed drains, prepare surveys and maps, and estimate the cost. The report describes the recommended drainage system for the area, whether lands should be added or excluded from the proposed district, estimated costs for construction, and estimated costs for annual maintenance of proposed drainage system.

Notice must be given for all court hearings and board hearings, whether the hearing concerns the sufficiency of the petition, the proposed boundaries of the district or the assessment levied against the land. Usually, sufficient notice includes publication in a newspaper of general circulation in the county and a notice mailed to all the owners named in the petition for the proposed district. See 70 ILCS 605/3-6, 3-18, 4-22, 5-6; IC 36-9-27-40, 52, 58; Wis Stat § 88.05.

Upon completion of these reports, the hearing on district organization will resume. After hearing objections and considering the filed reports the court will determine whether the district should be organized. Under Illinois law the court shall order the organization of a drainage district if it finds the cost of the work will not exceed the benefit to the land. 70 ILCS 605/3-23. Wisconsin law requires that the court must find all of the following prior to ordering an organization of a district: (1) the petition is sufficient in form; (2) the described lands in the proposed district will be improved; (3) the public health and welfare will be benefited; (4) the costs of work will not exceed 75 percent of the benefits to be derived from the proposed work, and; (5) the drain will not substantially harm fish or wildlife habitat, scenic beauty, or conservation of natural resources. Wis Stat § 88.34. Under Indiana law, the drainage board will approve construction of a new drain if all of the following conditions are met: (1) the construction is practicable; (2) the proposed drain would improve public health; and (3) the proposed drain would produce benefits greater than its cost. IC 36-9-27-56.

Powers and Duties of Drainage Districts

Once formed, the drainage district's commissioners must oversee construction and keep existing drains in good condition. Drainage district commissioners, their agents and employees can enter the lands of others for purposes related to the construction, repair, and maintenance of the district's drains or for any other purpose necessary to their duties as drainage district commissioners. See 70 ILCS 605/4-14; IC 36-9-27-33; Wis Stat § 88.13. Drainage districts and boards can also pay the cost of damages to land or purchase lands necessary for the construction or expansion of a drain. 70 ILCS 605/4-17; IC 36-9-27-62(2); Wis Stat § 88.21(6).

In Indiana and Wisconsin, a county drainage board has jurisdiction over the drainage districts in its county. County drainage boards in Indiana consist of the county executive or two to five persons appointed by the county executive and the county surveyor. IC 36-9-27-5. Where the county contains a consolidated city, that city's board of public works comprises the drainage board. IC 36-9-27-5. Drainage districts in Indiana are primarily responsible for keeping and maintaining the non-regulated drains in their districts and for fixing annual assessment rates based on the estimated costs of maintenance for the year. IC 14-27-8-18, 20.

In Illinois, drainage district commissioners can be elected or appointed by the court. See 70 ILCS 605/4-1 to 8. Under Illinois law, a drainage district is a public corporation and the commissioners act as corporate authorities of the district. 70 ILCS 605/4-14. The district can adopt and use a corporate seal, sue and be sued, hire legal counsel, engineers, and other employees, and do all acts that are necessary for the construction, maintenance, or repair of the drains within the district. Id.

Wisconsin law provides for commissioners to be appointed by the court, only when a county does not already have a county drainage board. Generally, there are three drainage commissioners who serve three-year staggered terms. Drainage boards in Wisconsin are also public corporations with such powers as granted to corporations by law. Wis Stat § 88.17(5).

Assessments and Liens

Drainage districts have the power to levy special assessments attaching to the land benefited by the drain and to pay the costs of construction, repairs, and annual maintenance on the district's drains including all incidental expenses. Assessments are based on the benefit the drain provides to the land. The total assessments against any land may not exceed the benefits to the land. See 70 ILCS 605/5-1; IC 36-9-27-62; Wis Stat § 88.63.

Under Illinois law, once the court has ordered the organization of a drainage district, the drainage commissioners prepare and submit the assessment roll to the court and a hearing is scheduled. Prior to a hearing on the assessment roll, any interested party may file a written request for a jury trial where questions of benefits and damages are submitted to the jury. 70 ILCS 605/5-7. At the hearing the court will consider objections and will either order modifications to the assessment roll or confirm the assessment roll as is. Once the order is issued, the clerk of the court makes certified copies of the roll and files copies of the assessment roll in the recorder's office of each county in which district land is located. 70 ILCS 605/5-14.

The county drainage board in Wisconsin has the power to levy assessments for costs related to the construction, maintenance, repair, or any other lawful expenditure of a drainage district. Wis Stat § 88.23. Once a new drainage district is organized, the county drainage board prepares a report on the construction's layout, estimates the cost, and assesses benefits and damages to land within the district. Wis Stat § 88.35. When complete, upon sufficient notice, the board conducts a hearing on its report where anyone who feels aggrieved may object. Wis Stat § 88.36. Upon confirmation of the report, construction or repair of district drains begins.

In Indiana, once a petition for construction of a drain is approved, the county surveyor prepares a final report involving necessary surveys, maps, profiles, etc. IC 36-9-27-61. When the final report is complete the county board prepares a schedule of assessments, annual assessments, and damages, including the names of the landowners affected and a description of the land assessed. IC 36-9-27-62. Owners of lands affected by the proposed plan must file written objections at least five days prior to the hearing on the assessment schedule. IC 36-9-27-65. Failure to make certain objections, including objections that the amount of damages assessed is inadequate or that the amount of benefits levied is excessive, equals a waiver of that objection to any final action of the board. Id.

Under Indiana's Code, the factors to be considered in assessing benefits are as follows: (1) the watershed affected; (2) the number of acres in each tract; (3) the volume of water running through the drain; (4) the use of the land; (5) whether there is any increased value to the land because of the drain; and (6) the location of various tracts in relation to the main trunk of the drain and the soil type. IC 36-9-27-112.

In addition to assessments for construction or reconstruction of a drain, drainage boards and districts also have the power to levy annual assessments for maintenance and repair of the drain. Such assessments cover only minor repairs and maintenance such as cleaning and removing small obstructions. Generally the amount of annual assessments is determined and recorded at the time the drain is constructed. Then once a year the drainage board or the district will inspect the drains and determine if the annual assessment needs to be levied that year. The district can request that all or only a portion of the annual assessment be levied. Annual assessments continue until they are changed or terminated by the district.

Under Illinois law, once a circuit court orders the organization of a drainage district, the commissioners must prepare an assessment roll. The assessment roll includes the land owners, a description of the land "in words, figures, or both; provided that, in counties in which a real estate index number system has been established ... the index number must be used in addition to the legal description." 70 ILCS 605/5-3. The assessment roll shall also include the amount of benefits levied against the tract (including annual benefits), compensation to be paid to each tract, and other information. The commissioners must submit with the assessment roll an affidavit that they conducted a diligent search of public records to determine the names and addresses of the owners of land within the district and subject to assessment. If the names and addresses of land owners are not known the names and addresses of the person who paid the general taxes on the land should be taken from the Collector's books and included in the assessment roll. Id. The assessment roll is what is recorded after the district is organized and the assessments are ordered.

Wisconsin's Code states, "[i]mmediately after the issuance of a drainage board order levying any assessments for costs, whether original or supplemental, the drainage board shall record in the office of the register of deeds in each county in which the assessed lands are situated a certified copy of the order, including a true description of each parcel of land in that county that was so assessed and the amount that it was assessed." Wis Stat § 88.40. No other more specific information is required under the statute.

Indiana law provides that once the full cost of the construction, reconstruction or maintenance is known "the board shall apportion this cost to the tracts of land assessed in proportion to the benefit percentage previously assigned to each tract." IC 36-9-27-84. "The board shall certify the list of assessments apportioned under section 84 of this chapter to the auditor of each county in which there are lands to be assessed." IC 36-9-27-85. Assessments for construction and reconstruction are extended by the county auditor on the "ditch duplicate." Id.

How an Assessment Becomes a Lien

Once the order confirming an assessment is recorded, the assessment becomes a lien upon the land. 70 ILCS 605/5-17; IC 36-9-27-89(a); Wis Stat § 88.40(2). The lien takes priority to all other liens except tax liens. IC 36-9-27-89(a); Wis Stat § 88.40(2). The lien is not released until the assessment is paid. 70 ILCS 605/5-17, 5-21; IC 36-9-27-89(b); Wis Stat § 88.40(3). Indiana law provides the lien terminates when it is paid in full or the last day of the fifth year after the last payment became due. IC 89(b). The Code in Illinois provides that if the proceeds of a foreclosure sale are not adequate to pay both delinquent taxes and drainage assessment, the proceeds are split pro rata. Skillet Fork River Outlet Union Drainage District v Central Lumber Co, 31 Ill 2d 312, 201 NE2d 447 (1964).

Generally drainage statutes provide for assessments to become due from one to four months after the order confirming the assessments. The court may also order assessments due in annual or semi-annual installments with interest. Every year the drainage commissioners shall certify to the appropriate party a list of unpaid assessments. Delinquent assessments shall be collected in the same manner as general taxes. 70 ILCS 605/5-24; IC 36-9-27-86; Wis Stat § 88.43. Except, liens for drainage assessments are not a personal obligation of the owner and only the land that is benefited by the assessment can be sold for delinquency. IC 36-9-27-86(c)(1); Wis Stat § 88/40(2).

Illinois law states when drainage assessments become delinquent, "the district treasurer shall file a lien notice in the office of the recorder of the county." 70 ILCS 605/5-17(b). The notice shall include the following information: (1) name of the district; (2) name of person to whom notice of assessment roll was given; (3) a description of the land being assessed; (4) date the assessment was due; and (5) amount for which the lien is claimed. Id.

In Indiana, the county auditor's office should also have a listing of unpaid assessments and taxes as a public record. See IC 6-1.1-22-5. Under Wisconsin law, "[e]ach town, village and city clerk shall insert in the tax roll for each year, but in a column separate from the general tax, the amounts certified to that clerk by the secretary of the board." Wis Stat § 88.42.

Conclusion

Generally, drainage statutes are designed to improve upon lands by giving landowners power to construct and maintain proper drainage. Drainage statutes also function to prevent landowners, like those in the Phinney Drainage District, from finding a "surprise" waiting in their mailbox by requiring notice of hearings and recording of liens.

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