Judge dismisses sewer lawsuit against Fox Lake
A Lake County judge has dismissed a lawsuit accusing Fox Lake of misusing $2.2 million in sewer fees, ruling that the regional sanitary district that filed the litigation did not have a right to sue.
In response to the ruling, Kurt Stimpson, president the Lakes Region Sanitary District, resigned, stating in a letter that he "cannot ethically participate in a governmental system where tax- and fee-paying constituents have no representation."
The district, along with the villages of Round Lake and Round Lake Heights, sued Fox Lake earlier this year, alleging officials there misappropriated funds earmarked to treat sewage at its Northwest Regional Water Reclamation Facility. The lawsuit claimed fees sent by the district to Fox Lake were used to for village services from 2011 to 2015 instead of to treat sewage.
Lake County also was named a defendant because it is responsible for auditing Fox Lake's use of the sewer money.
County Administrator Barry Burton said Fox Lake and county officials previously worked out an agreement to ensure no money was unaccounted for and the plaintiffs were reimbursed as necessary.
"The lawsuit itself was kind of frivolous to begin with," Burton said. "We figured out what they (Fox Lake) owed and established a methodology to pay it back. And, in the end, no resident paid a dime more than they should have."
The sanitary district serves 22,000 residents in northwest Lake County, including Fox Lake, Round Lake, Round Lake Beach, Round Lake Park, Round Lake Heights, Hainesville, Lake Villa, and some unincorporated areas. Lakes Region collects service fees from its residents, then sends the funds to Lake County, which in turn sends the money to Fox Lake to operate its treatment facility.
The lawsuit claimed the settlement between the county and Fox Lake underestimated the money involved, allowing Fox Lake to repay only $846,000 of the $2.2 million owed over 10 years, and did not charge interest for the money misappropriated.
However, Burton said county auditors went through the books, found that Fox Lake owed only $1.2 million, then were given about $400,000 in credits for money it should have charged but did not.
Hoffman's ruling emphasizes that Lakes Region could not sue because the settlement agreement resolved the issue.
After the decision, Stimpson sent a letter of resignation to district employees, members of the public, mayors whose villages are a part of Lakes Region, and the Lake County Board.
"Based on the ruling, neither the District nor our affiliates ... have any authority to represent the interests of our constituents," he wrote.