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G-664 - 10/24/2000 - TAX - Ordinances Supporting Documents9'1 Founded June 19, 1962 MEMBER MUNICIPALITIES Addison Aurora Bartlett Bensenville Bloomingdale Bolingbrook Burr Ridge Carol Stream Clarendon Hills Darien Downers Grove Elmhurst Glendale Heights Glen Ellyn Hanover Park Hinsdale Itasca Lemont Lisle Lombard Naperville Oak Brook Oakbrook Terrace Roselle Schaumburg St. Charles Villa Park Warrenville Wayne West Chicago Westmont Wheaton Willowbrook Winfield Wood Dale Woodridge D UPAGE .MAYORS AND MANAGERS CONFERENCE an association of municipalities representing 1,000,000 people 1220 Oak Brook Road Oak Brook. Illinois 60523 -2203 (630) 571 -0480 Fax: (630) 571 -0484 September 13, 2000 MEMO TO: MAYORS / PRESIDENTS MANAGERS / ADMINISTRATORS FROM: STEPHEN B. VEITCH, DIRECTOR REGULATORY ISSUES COMMITTEE SUBJECT: UPDATE ON THE PRIMECO (TELECOM IMF) DECISION AND THE VILLAGE OF SKOKIE REQUEST Background Last January, the Cook County Circuit Court ruled in the Primeco decision that it was unconstitutional for Chicago to require wireless telecommunications providers to collect the City's two- percent telecommunications Infrastructure Maintenance Fee (RAF) from wireless customers. The court has not yet decided whether this means only that municipalities lose the ability to collect future IlviF payments or that municipalities also must refund some or all past IMF revenues. Update The Primeco judge has allowed another RAF suit against the Village of Skokie to be consolidated with Primeco, so that Skokie can be the "test case" of the validity of the one - percent, non - Chicago DAF. Statewide, at least 460 municipal- ities impose the one - percent ME The Primeco judge also is expected to decide by mid -to- late - October whether to allow other telecommunications companies (both wireless and landline) and their customers to intervene in the lawsuit as plaintiffs and to allow them to include other municipalities as defendants. Chicago already has appealed the Primeco decision to the Illinois Supreme Court. The IML has filed an amicus curae brief in the appeal, also arguing that the Primeco decision should be reversed. However, the Supreme Court appeal will not go forward until the Primeco trial court judge decides who all of the parties are (who has aright to appeal or to defend the decision on appeal). Regardless, the Supreme Court is expected to decide the appeal by late 2000 or early 2001. Unfortunately for municipal budget- making, it is difficult to predict whether the Supreme Court will uphold the RAF. One reason for this uncertainty is that the Court may name three new members before deciding the case. In April, I reported to you a stopgap strategy that some communities can use to address the uncertainty of the IMF. Those municipalities that currently impose the NF, but do not impose the utility tax on telecommunications (authorized by 65 ILCS 5/8 -11 -2) or the "messages tax" (authorized by 65 ILCS 5/8- 11 -17) to the maximum rate of 5 %, might consider switching from the IMF to one of these taxes (or to an increased rate of one of them). A municipality cannot levy both the utility tax on telecommunications and the messages tax. The messages tax is levied on only intrastate telecommunications, while the utilities tax is levied on both intrastate and interstate telecommunications. The City of Chicago also has prepared a draft legislative remedy that would attempt to 1) Correct the existing IMF statute so that the IMF would be regarded by the courts to be a permissible tax (rather than an improperly applied fee) and 2) Authorize all Illinois municipalities to increase the five percent maximum levy of the telecom- munications utility tax by the maximum IMF levy (two percent for Chicago versus one percent for all other municipalities) on the condition that the municipality discontinues the ME. It is uncertain whether this legislative remedy will be proposed during the fall veto session or during the 2001 regular legislative session. Village of Skokie Request On August 17, the NWMC requested the other COGs to consider helping the Village of Skokie with the costs of the Primeco appeal. The City of Chicago is not requesting any similar financial assistance. Recall that Skokie alone is defending the legality of the one - percent IMF imposed by over 460 municipalities statewide. On September 7, the Conference's Board of Directors asked that the membership be informed of Skokie's situation and the request for financial support. If your community would like to provide financial assistance to Skokie, please contact Barbara Meyer (Corporation Counsel, Village of Skokie) at (847) 933 -8270, 5127 Oakton Street, Skokie, IL 60077. Thank you. MEMO TO: FROM: SUBJECT: G� OF 041r � Q X90 o e e ia4 2 9cFCouNTr •���� VILLAGE OF OAK BROOK 1200 OAK BROOK ROAD OAK BROOK, ILLINOIS 60523 -2255 October 20, 2000 Village President & Board of Trustees Richard A. Martens, Village Attorney Municipal Taxes PHONE: 630 990 -3000 FAX: 630 990 -0876 W E B S I T E: www.oak - brook.org Attached is Steve's memorandum dated September 13, 2000 which updates the status of the litigation challenging the constitutionality of the Act authorizing the imposition of the Infrastructure Maintenance Fee. Given the uncertain future of the Act and the lengthy appeals which will likely follow any decision in the trial court, we are suggesting that the Village may wish to suspend imposition of the 1 % Infrastructure Maintenance Fee until such time as the Act is found valid by the Illinois Supreme Court or remedial legislation is enacted by the General Assembly, and the Village Board, by ordinance, reinstates this fee. To offset the suspension of the 1 % Infrastructure Maintenance Fee, we are suggesting that the Village increase the telecommunications tax from 2% to 3% in the interim. This is also the season for the Board to consider the utility tax on gas and electricity. I understand from Steve that no change is recommended for these utilities at this time. To accomplish the above suggestions, I have prepared the following ordinances: 1. An ordinance extending the Utility Tax at the current rate of 3 %; 2. An ordinance suspending the Infrastructure Maintenance Fee; and 3. An ordinance amending the Municipal Telecommunications Tax. Please note in Section 5- 3 -2(A) that the new rate of the Telecommunications Tax is at 3 %. All of these ordinances are effective January 1, 2001. We bring these matters to you for your consideration at your meeting on October 24, 2000. Respectfully submitted, c Richard A. Martens Village Attorney RAM:sps Attachment cc: Stephen B. Veitch, Village Manager Darrell Langlois, Finance Director A, J 7. B. 2) ORDINANCE #2000 -TX- TELCOM - IMFA -G -663, AN ORD 1100 -TX- ORDINANCE SUSPENDING CHAPTER 2 "MUNICIPAL TELCoM- TELECOMMUNICATIONS INFRASTRUCTURE IMFA -6-663 MAINTENANCE FEE" OF TITLE 5 OF THE VILLAGE CODE SUSPND TITL 5 OF THE VILLAGE OF OAK BROOK, ILLINOIS: TELE INFSTR MAINT FEE Motion by Trustee Caleel, seconded by Trustee McInerney, to approve Ordinance #2000- TX- TELCOM- IMFA -G -663, "An Ordinance Suspending Chapter 2 `Municipal Telecommunications Infrastructure Maintenance Fee' of Title 5 of the Village Code of the Village of Oak Brook, Illinois," as presented and waive the full reading thereof. ROLL CALL VOTE: Ayes: 6 - Trustees Butler, Caleel, Craig, Kenny, McInerney and Savino. Nays: 0 - None. Absent: 0 - None. Motion carried. 03) ORDINANCE #2000 -TX- TELCOM -G -664, AN ORDINANCE ORD 00 -TX- AMENDING CHAPTER 3 OF TITLE 5 OF THE VILLAGE TELCOM -6-664 CODE OF THE VILLAGE OF OAK BROOK ESTABLISHING A AMEND TITL5 MUNICIPAL TELECOMMUNICATIONS TAX: MUN TELE TAX Motion by Trustee Caleel, seconded by Trustee Craig, to approve Ordinance #2000 -TX- TELCOM -G -664, "An Ordinance Amending Chapter 3 of Title 5 of the Village Code of the Village of Oak Brook Establishing a Municipal Telecommunications Tax," as presented and waive the full reading thereof. ROLL CALL VOTE: Ayes 6 - Trustee Butler, Caleel, Craig, Kenny, McInerney and Savino. Nays: 0 - None. Absent: 0 - None. Motion carried. 4) ORDINANCE #200_0 -SC -S -973, AN ORDINANCE ORD a00 -SC- AUTHORIZING THE ISSUANCE OF A $64,082.55 S -973 REFUNDING NOTE OF THE VILLAGE OF OAK BROOK, RFND NOTE DUPAGE AND COOK COUNTIES, IL: SPRTS CORE The proposed ordinance authorizes the issuance of a Sports Core Refunding Note in the amount of $64,082.55 with Oak Brook Bank. The original borrowing of $300,000 commenced in 1992 and provided for the purchase of the Tennis Dome. The financing has been accomplished by means of a series of one -year notes due on October 28th each year, with the remaining principal balance being refinanced for an additional one -year term. The interest rate on the note is 4.81 %, VILLAGE OF OAK BROOK Minutes Page 5 of 10 4: October 24, 2000 � o e e O y G � O St F 0414t 9c��ouNTr VILLAGE OF OAK BROOK 1200 OAK BROOK ;ROAD OAK BROOK, ILLINOIS 60523 -2255 October 26, 2000 Sterling Codifiers, Inc. Attention: Robertson S. Rollins, General Manager 7600 Mineral Drive Coeur d'Alene, ID 83814 Dear Rob: PHONE: 630 990 -3000 FAX: 630 990 -0876 W E B S I T E: www.oak- brook.org The Village Board, at their Board Meeting of Tuesday, October 24, 2000, passed and approved the following ordinances: ORDINANCE 2000- TX -UT -G -662 AN ORDINANCE FURTHER AMENDING ORDINANCE G -470, "AN ORDINANCE ESTABLISHING A UTILITY TAX WITHIN THE VILLAGE OF OAK BROOK, DU PAGE AND COOK COUNTIES, ILLINOIS" ORDINANCE 2000 -TX- TELCOM - IMFA -G -663 AN ORDINANCE SUSPENDING CHAPTER 2 "MUNICIPAL TELECOMMUNICATIONS INFRASTRUCTURE MAINTENANCE FEE" OF TITLE 5 OF THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK, ILLINOIS /ORDINANCE 2000 -TX- TELCOM -G -664 AN ORDINANCE AMENDING CHAPTER 3 OF TITLE 5 OF THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK ESTABLISHING A MUNICIPAL TELECOMMUNICATIONS TAX The above Ordinances are being forwarded to your for inclusion in the Code of Ordinances of the Village of Oak Brook. I would appreciate your acknowledging receipt of these Ordinances. Z Vly, - Richard A. Martens Village Attorney RAM/jr Enclosure