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R-872 - 02/10/2004 - AGREEMENT - Resolutions Exhibitse EXHIBIT A INTERGOVERNMENTAL JOINT DEFENSE AGREEMENT AMONG CERTAIN DUPAGE COUNTY MUNICIPALITIES RELATED TO THE INFRASTRUCTURE MAINTENANCE FEE ACT THIS JOINT DEFENSE AGREEMENT is entered into as of March 11, 2004) by each municipality executing a signature page confirming that it is a party to this Agreement (the "Parties "); WITNESSETH: WHEREAS, various telephone service providers in the State of Illinois, customers of wireless telephone service providers, and customers of landline telephone service providers have been engaged in litigation (the "Cook County Litigation ") against municipalities and other public agencies of the State of Illinois in relation to the enforceability and constitutionality of the Illinois Municipal Telecommunications Infrastructure Maintenance Fee Act, 35 ILCS 635/1, et seq., (the "IMF Act "); and WHEREAS, the Illinois Supreme Court has held that the IMF, Act is unconstitutional as applied to customers of wireless service providers; and i i WHEREAS, the Illinois Supreme Court has not decided whether the IMF Act is constitutional as applied to customers of landline service providers; and WHEREAS, in March 2003, the Circuit Court of Cook County certified the Cook County Litigation as a class action (a) identifying plaintiffs as members of three sub - classes and (b) identifying defendant municipalities as members of three sub - classes, as specified in the court's order of March 28, 2003 (and as clarified in the court's order dated August 5, 2003); and WHEREAS, the Circuit Court of Cook County issued notices to the I Parties advising them of their rights to opt out of the two defendant sub - classes in the Cook County Litigation related to the wireless service providers (the "Wireless Sub - Classes"), and the Parties have exercised their options to opt out of the Wireless Sub - Classes; and WHEREAS, because the Parties have opted out of the Wireless Sub - Classes, the Parties expect that they, or any one or more of them, may become separately engaged in litigation related to the IMF Act; and r WHEREAS, the Parties have common interests in the issues related to the IMF Act and they desire to act jointly when in litigation related to the IMF Act and to provide funds to pay legal fees and other expenses associated with such litigation in accordance with the terms of this Agreement; and r WHEREAS, the Parties have determined that this Agreement shall: become effective as of March 1, 2004, if it has been approved and executed by not fewer than 14 Parties as of February 29, 2004; 1 NOW, THEREFORE, in consideration of the mutual promises and obligations stated in this Agreement, the Parties agree to the following terms and provisions: Section 1. Recitals. The foregoing recitals are incorporated into this Agreement as substantive provisions of this Agreement. Section 2. Purposes and Intent of this Agreement. The lawsuits filed by telecommunications services providers and others to achieve repayment of fees paid to the Parties pursuant to the IMF Act are matters of great mutual concern to the Parties. The Parties opted out of the Cook County Litigation because they believe they have common defenses against the claims made by the plaintiffs in the IMF Act litigation. The Parties believe their interests may be better served outside of that litigation and there will be advantages for each of them in acting jointly in response to any IMF Act litigation that may result from the Parties' decision to opt out of the Wireless Sub- Classes. Thus the Parties by this Agreement havei formed the DuPage IMF Act Defense Group. It is the intent of the Parties that if one or more of them is named in a lawsuit seeking repayment of fees made pursuant to the IMF Act, the Defense Group will act to jointly defend against the claims in that lawsuit in the manner set forth in this Agreement, paying for that defense with the Litigation Fund defined in Sections 3 and 6 of this Agreement. The Parties intend to act jointly even if such lawsuit is filed elsewhere than DuPage County, such as in Cook County where the Cook County Litigation is pending or in Will County or Kane County in, which certain'of the Parties have a physical presence. Also, the Defense Group may determine to defend against actions in the Cook County Litigation, if any, in response to the Parties' determinations to opt out of that litigation. Also, the Defense Group may decide to itself initiate, and to pay for from the Litigation Fund, legal proceedings related to the validity of the IMF Act. Notably, the Parties do not have equal financial risk related to litigation involving the IMF Act. Some Parties have received more IMF Act Fee Revenue than other Parties and thus, in terms of dollars, have more at stake. For this reason, the cost sharing provisions of this Agreement are calculated on a; partial proportional basis so that the Parties with greater risk bear a greater proportion of the costs. At the same time, the membership of the Steering Committee created in Section 5 of this Agreement has been defined to assure that municipalities of all "risk levels" are represented, including the opportunity for at least two of the Parties with greater financial risk to be a Steering Committee member. Section 3. Definitions. The following words or terms shall have the meaning ascribed to them: -2- "Administrator" means the municipality or other entity selected by the Defense Group to administer the Litigation Fund and undertake such other activities as determined by the Defense Group. See Subsections 4D and 6A of this Agreement. i "Appointed Counsel" means the attorney or attorneys recommended by the Steering Committee and approved by the Defense Group to represIent the interests of the Defense Group. "DuPage IMF Act Defense Group" or "Defense Group" means all��, of the Parties to this Agreement. See Section 4 of this Agreement. i " M " means the DuPa e Mayors and Managers ers Conference, of which C g y g each Party is a member and which has volunteered to assist the Defense Group with internal communications. "Extraordinary Costs ": See Subsection 6E of this Agreement. "Group Total.IMF Act Fee Revenue" means the sum of all of the Parties' IMF Act Fee Revenue. "IMF Act" means the Illinois Municipal Telecommunications Infrastructure Maintenance Fee Act, 35 ILCS 635/1 et seq. "IMF Act Fee Revenue" means the amount of fees collected by a Party pursuant to its IMF Ordinance for both wireless and landline services providers from January 1, 1998, through February 7, 2002. "IMF Ordinance" means all of the ordinances, resolutions, or other governing codes or regulations of a Party pursuant to which that Party collected IMF Act Fee Revenue. "Litigation Fund" means the money contributed by the Parties to be managed and spent in accordance with Section 6 of this Agreement. "Parties" means the municipalities that have executed this Agreement and have not withdrawn, or been expelled, from the Defense Group. 1 Shared Costs means the costs for Appointed Counsel, including attorney's fees, out -of- pocket expenses, cost advances, paralegal expenses, court costs, court reporter and transcript expenses, experts' fees and expenses, and the like, and including extraordinary costs determined by the Steering Committee to be appropriate for reimbursement from the Litigation Fund. See Subsection 6D of this Agreement. -3- "Steering Committee" means the committee defined in Section 5 ' of this Agreement. Section 4. Defense Group. A. Mutual Defense. The Parties hereby create the DuPage IMF Act Defense Group. The Defense Group shall act in the manner set forth in this Agreement to defend any one or more of the Parties in any lawsuit challenging payments made pursuant to the IMF Act. The Defense Group also may itself initiate, and pay for from the Litigation Fund, legal proceedings related to the validity of the IMF Act in the name of one or more of the Parties. B. Composition. The Defense Group shall be comprised I of one , representative of each Party, who shall be the chief administrative officer of the Party or her or his designee. That designee, if any, shall be a person who does not compromise any attorney- client privilege or other privilege of the Defense Group. C. Meetings; Notice; Voting. 1. The initial meeting of the Defense Group shall be held on Friday, March 12, 2004, at 10:00 a.m. at the Naperville Electric Service Center, 1392 Aurora Avenue, Suite 200. Thereafter, the Defense Group shall meet from time to time at the call of its chairperson or the request of any five members of the Group. A simple majority of the Parties shall constitute a quorum for conducting the business of the Defense Group. The Defense Group shall determine the procedures and protocol for its meetings as needed. All meetings of the {Defense Group shall be confidential. 2. Notice of a Defense Group meeting shall be given to each Party through the Administrator and shall be made as far in advance of a meeting as practicable, preferably at least seven calendar days except when a time - sensitive matter demands attention sooner. 3. Except as otherwise specifically provided in this Agreement, all actions for which the Defense Group determines a vote is necessary shall require the affirmative majority vote of those present at a meeting, but no action can be taken unless at least one -third of all Parties, vote in favor of that action. D. Responsibilities. The Defense Group generally shall be responsible for making the policy decisions and major operational decisions affecting the PParties, such as: 1. Selecting an Administrator to administer the Litigation Fund and undertake such other activities as determined by the Defense Group; In 2. Hiring Appointed Counsel as recommended by the Steering Committee by simple majority vote or, by a two - thirds vote of all Parties', hiring Appointed Counsel other than as recommended by the Steering Committee; 3. Determining whether to initiate litigation; 4. Determining whether, when, and how much to replenish the Litigation Fund; 5. Considering amendments to this Agreement; 6. Reviewing each notice of pending payment of an invoice for Shared Costs and, for cause, advising the Steering Committee within three business days of an objection to payment; and 7. Making decisions on matters referred to it by the Steering Committee. Section 5. Steering Committee. A. Formation; Composition: There shall be a Steering Committee of the Defense Group comprised of five of the Parties. The Steering Committee generally shall make day -to -day operational decisions and the defense and general litigation strategy decisions for the Defense Group. The Steering Committee shall be selected as follows: 1. The Defense Group shall be divided into the following four-;classes, based on level of IMF Act Fee Revenue collected by the Parties: • Large —Class A • High Average —Class B • Low Average —Class C • Small —Class D The revenue ranges for the four classes, and the assignment of the Parties to the classes, shall be determined by the Defense Group. The Defense Group does not intend the creation of the four classes to be overly exacting, but rather generally representative of the range of IMF Act Fee Revenue so that all ranges — large, high average, low average, and small —are represented on the Steering Committee. t 2. The Steering Committee shall include one Party from each of the four classes and the Party in Class A that has the highest total IMF';Act Fee Revenue. The Parties of a class shall select the representative of that class. If there are not enough Parties in a class willing to serve on the Steering Committee, then that spot on the Steering Committee shall -5- be filled by a Party from Class B or C, whichever of those classes has more Parties in it. B. Representative. A Party's representative on the Steering Committee shall be the chief administrative officer of the Party or her or his designee. That designee, if any, shall be a person who does not compromise any attorney - client privilege or other privilege of the Steering Committee. That representative may be, but need not be, the same person as that Party's representative to the Defense Group. C. Meetings. The Steering Committee shall meet periodically at times and places determined by the Steering Committee. All meetings of the Steering Committee shall be confidential. D. Responsibilities. The Steering Committee shall be responsible, in general, for the following matters: 1. Expeditiously researching and making a recommendation on whether and who to engage as Appointed Counsel. The manner of research, and the type of recommendation, shall be determined by the Steering Committee, provided that the Steering Committee shall present the qualifications of at least two lawyers or law firms to the Defense Group and shall make a recommendation regarding which of those lawyers or law firms should be hired to serve as Appointed Counsel; 2. Making decisions regarding defense and litigation strategy In consultation with Appointed Counsel, if any; 4 3. Making recommendations to the Defense Group regarding decisions that, in the determination of the Steering Committee, should be made by the Defense Group, including without limitation whether 1tigation should be initiated by the Defense Group; 4. Conferring regularly with Appointed Counsel, if any, and generally supervising all litigation within the scope of this Agreement; 5. Overseeing the administration of the Litigation Fund and making recommendations to the Defense Group regarding that fund; 6. Reviewing and approving invoices for Shared Costs, and providing o notice of pending payment to the Defense Group at least three business days before payment is made; 7. Determining, at the request of a Party, whether a cost qualifies as an extraordinary cost that may be paid from the Litigation Fund (see Subsection 6E of this Agreement); i I on 8. Providing a status report to the Defense Group, not less often than once each calendar quarter and also whenever requested by the Defense Group, which report shall include, among other things, the status of all litigation and a financial report including all expenditures from the Litigation Fund; and 9. Determining whether a matter brought before the Steering Committee should be referred to the Defense Group. E. Notices of Court Dates. In addition to the duties listed in Subsection D of this Section, the Steering Committee shall cause each Party to be notified as expeditiously as possible of upcoming court dates. Each Party may attend any court proceeding. j Section 6. Litigation Fund. A. Creation; Administration. The DuPage IMF Act Defense Group shall create and maintain a Litigation Fund to pay Shared Costs. The Litigation Fund shall be administered by the Administrator in the manner determined !by the Defense Group or, at the request of the Defense Group, determined by the Steering Committee. It is the desire of the Defense Group that one of the Parties will agree to serve as Administrator. ► B. Initial Fund Amount. The initial amount of the Litigation Fund shall be $100,000, contributed as follows: $50,000 contributed in equal amounts from each Party plus $50,000 contributed by each Party in the same percentage that such Party's IMF Act Fee Revenue bears to the Group Total IMF Act Fee Revenue. Each Party's contribution thus is expressed as follows: ($50,000 _ X) + [$50,000 x (Y _ Z)] where X is the number of Parties, Y is the Party's IMF Act Fee Revenue, and Z is the Group Total IMF Act Fee Revenue. Each Party shall make its initial contribution on or before February 29, 2004, to the DMMC. The DMMC shall keep the initial contributions until the Defense Group selects an Administrator or otherwise determines how the contributions will be administered. C. Additional Fund Amounts. The Defense Group, at the recommendation of the Steering Committee, shall determine from time Ito time whether, and in what amount, additional money should be contributed to the Litigation Fund. The Defense Group shall set a lump sum amount, which 'shall be contributed by the Parties in the same manner as the initial fund amount—,", that is, one -half equally and one -half proportionately. The contribution shall b;e made within 45 days after notice and a request therefor. -7- D. Shared Costs. Shared Costs, which are defined in Section 3 of this Agreement, shall not include fees and costs of attorneys other than the Appointed Attorney or salaries or other compensation paid to employees or agents of a Party. 'Specifically, but not by way of limitation, a Party's service to the Defense Group or the Steering Committee shall not be considered a Shared Cost as a general ]matter, the Parties expecting and intending that each Party will contribute to the operation of the Defense Group at its own expense except for extraordinary costs. j E. Determining Extraordinary Costs. A finding that a cost qualifies as an extraordinary cost for repayment from the Litigation Fund shall be made by the Steering Committee at the request of a Party in advance of that cost being incurred, except in an emergency or when it otherwise is impractical to secure a determination in advance. F. Fund Balance Non - Refundable. All money contributed , to the Litigation Fund shall be non - refundable, regardless of a Party's withdrawal or expulsion or any other circumstance except only dissolution of the Litigation 'Fund. G. Fund Dissolution; Distribution of Remaining Funds. The Defense Group shall determine when the Litigation Fund shall be dissolved. All money in the Fund at the time of dissolution shall be distributed equally to all of the; Parties (without regard to the fact that the remaining funds may have been contributed proportionately). No funds shall be distributed to a former Party. Section 7. Payment to Skokie Defense Fund. Each Party may make a payment to the Village of Skokie in support of the defense of the Cook 'County Litigation. The recommended payment, already approved by some Parties, is an amount equal to that Party's population times $0.10, minimum $500.00. Section 8. Confidentiality. All matters related to the business] of the DuPage IMF Act Defense Group shall be confidential and all Parties shall treat and keep all such business as confidential at all times to the fullest extent permitted by law. Section 9. Withdrawal; Expulsion. i A. Withdrawal. A Party may withdraw from the DuPage IMF Act Defense Group at any time, subject to the provisions of this Section 9. B. Automatic Expulsion for Nonpayment. If a Party does not ; pay an approved contribution within the time provided, then that Party shall be in default of this Agreement. If such a default is not cured within 14 days after notice from the Administrator or such additional time granted in advance by the Steering Committee, then that Party shall be expelled from the Defense Group automatically and without any vote or other action required by the Defense Group or the Steering Committee. In C. Required Terms on Withdrawal or Expulsion. A withdrawing or expelled Party (1) shall pay in full all previously approved contributions to the Litigation Fund, (2) shall not be entitled to the refund of any money from the Litigation Fund, and (3) shall continue to keep all business of the Defense Group confidential to the fullest extent permitted by law. The Defense Group shall cause all actions or defenses in the name of or on behalf of a withdrawn or expelled member to be discontinued. Section 10. Amendments. This Agreement may be amended only by an affirmative vote of three - fourths of the Parties, which vote shall be taken at a meeting for which notice was given to the Parties at least five business days in advance. Section 11. Execution of Agreement in Counterparts; Effectiveness. This Agreement may be executed with counterpart signatures of the Parties. This Agreement shall become effective on March 1, 2004, so long as it has been approved and executed by at least 14 Parties on or before February 29, 2004. IN WITNESS WHEREOF, each of the Parties whose signature page is attached hereto has caused this Agreement to be properly approved and executed on its behalf by authorized representatives of that Party. APPROVED: Name of Municipality: Villa M Name: KevJ Title: ATT) By: Name Title: Date of Execution: Village President i i Linda K. Gonnella Village Clerk i February 10, 2004 BE