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R-1480 - 07/14/2015 - GOVERNMENT LEGISLATION - Resolutions Supporting Documents ITEM 4.13. '1) G� Of 04k vp �O v p ca moo= a � e e G O CF CO U NT4,`� AGENDA ITEM Regular Board of Trustees Meeting of July 14,2015 SUBJECT: Support for HB0298 -Municiplities to File for Federal Bankruptcy Protection FROM: Riccardo F.Ginex,Village Manager BUDGET SOURCE/BUDGET IMPACT: None RECOMMENDED MOTION: Motion to Approve Resolution 2015-GL-BD-R-1480,A Resolution in Support of 11130298,Allowing a Municipality to File a Petition and Exercise Powers Pursuant to Applicable Federal Bankruptcy Law Backeround/Historv: State Representative Ron Sandack of Downers Grove,has proposed legislation in House Bill 0298 that would provide indebted municipalities across Illinois with the ability to seek bankruptcy protection. Twenty-four(24) states currently allow local governments to file for bankruptcy under Chapter 9 of the U.S. Bankruptcy Code,which contains a provision requiring state authorization. Presently,Illinois statutes prohibit municipalities from doing so. Recommendation: The Board adopts the resolution as presented. Last saved by l,-vonachen V:\01 LegislativeGenManWgendas\WGENDA MEMOS\2015 Agenda Memos\071415\Agenda Item -Bankruptcy Resolution(2).docx Last printed 7/8/2015 11:53 AM RESOLUTION 2015-GL-BD-R-1480 A RESOLUTION IN SUPPORT OF HOUSE BILL 0298 PERMITTING MUNICIPALITIES TO FILE FOR FEDERAL BANKRUPTCY PROTECTION WHEREAS, Illinois state law currently makes no provision for a municipality to exercise recourse to the protections of United States Bankruptcy law when a municipality is beset by unfunded state mandates, irreversibly extractive collective bargaining agreements, and reduced support from traditional state funding sources; and WHEREAS, the Illinois Supreme Court has recently instructed "the government to control itself," and has cited James Madison's words that"you must first enable the government to control the governed; and in the next place oblige it to control itself." In Re Pension Reform Litigation, 2015 IL 118585 at 36, citing Federalist No. 51 (1788); and WHEREAS, the framers of the United States Constitution deemed it worthy and proper to set forth among the legislative powers in Article 1, Section 8 the power "to establish...uniform Laws on the subject of Bankruptcies throughout the United States"; and WHEREAS, for more than 200 years, federal bankruptcy law has provided a means to contain, reorganize, restructure and discharge the burden of unsustainable debts, including debts imposed over time which have turned out to be destructive and irresolvable by any other means within a relevant timeframe; and WHEREAS, it is the public policy of the United States, and should be the public policy of the State of Illinois, to outlaw any form of "debtor's prison" or financial involuntary servitude, simply to support a creditor class of extractive elites, and this public policy should protect not only citizens in private enterprise, but also in their role as public taxpayers within the boundary of Illinois municipalities; and WHEREAS, legislation has been introduced by Representative Ron Sandack before the Illinois legislature in the form of House Bill 0298, an Act concerning local government, to amend the Illinois Municipal Code to add new Section 8-1-19, to provide simply that"Any municipality may file a petition and exercise powers pursuant to applicable federal bankruptcy law," and this Bill is intended to become effective immediately upon passage; and WHEREAS, providing Illinois municipalities with access to federal bankruptcy law will extend the beneficial protections of bankruptcy law to help restructure crushing debt obligations, streamline government operations, balance budgets, and fix a boundary to heretofore perpetually increasing spending demands imposed upon municipalities with vanishing capabilities of paying for those demands; and WHEREAS, due to the fiscal emergency facing the State of Illinois, State sources of revenue for municipalities are facing reductions or in some cases cancellations of past funding, showing that the same State government that cannot even pay its own bills, continues to force up municipal costs while refusing to control its profusion of unfunded mandates and unbalanced budgets; and NOW, THEREFORE, BE IT RESOLVED by the President and Board of Trustees of the Village of Oak Brook, DuPage and Cook Counties, Illinois as follows: RESOLUTION 2015—GL-BD-R-1480 Permitting Municipalities to File for Federal Bankruptcy Protection Page 2 of 2 Section 1: The foregoing recitals are hereby incorporated into, and made a part of, this Resolution as the findings of the President and Board of Trustees of the Village of Oak Brook. Section 2: The President and Village Trustees of the Village of Oak Brook hereby endorse House Bill 0298, and commend Representative Sandack for his initiative to extend the protections of the United States Constitution more fully to the people of the State of Illinois, in their capacity as residents of municipalities impaired by the fiscal policies of the State of Illinois, by their unsustainable collective bargaining agreements, and other unsustainable financial obligations; and that it is the sense of the Village President and Village Trustees of the Village of Oak Brook that bankruptcy protections will enhance local control, reduce costs, empower local voters, increase competiveness in our community and throughout Illinois. Section 3: All resolutions or parts thereof in conflict with this Resolution are hereby repealed to the extent of the conflict. Section 4: The Village President and Village Clerk are hereby authorized to send a suitable copy of this Resolution to the Village's local State senators and representatives and the Illinois Governor. Section 5: This resolution shall be in full force and effect from and after its passage, approval, and publication as required by law. APPROVED THIS 14th day of July, 2015. Gopal G. Lalmalani Village President PASSED THIS 14th day of July, 2015. Ayes: Nays: Absent: ATTEST: Charlotte K. Pruss Village Clerk