HomeMy WebLinkAbout20-84 Resolution No. 20-84
RESOLUTION
AUTHORIZING SETTLEMENT WITH AT&T REGARDING
FRANCHISE FEES AND INTEREST
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS,
that the proposed settlement with AT&T regarding franchise fees and interest pursuant to the
attached Notice of Tax Liability and Assessment in the total amount of$40,177 is approved.
s/David J. Kaptain
David J. Kaptain, Mayor
Presented: June 10, 2020
Adopted: June 10, 2020
Vote: Yeas: 1 Nays: 0 Abstain: 1
Attest:
s/Kimberly Dewis
Kimberly Dewis, City Clerk
0 -z4
ELGIN MEMORANDUM
THE CITY IN THE SUBURBS
To: Mayor and City Council Members
From: Richard G. Kozal, City Manager
Date: 10 June 2020
Re: Other Business Item 04; AT&T Franchise Fee Audit; $40,177 Before Commission
Other Business Item XX on the regular city council agenda is a resolution accepting the proposed
settlement terms of a franchise fee audit with AT&T.
The city hired Azavar Audit Solutions (Azavar) in 2013 to audit payments the city receives from
utility taxes, franchise fees and utility service fees.
The AT&T franchise fee audit involved a review of its revenues as they relate to"gross revenues."
This audit identified errors relating to franchise fees to ensure all taxable gross revenues subject
to payment to the city under the franchise agreement were in fact taxed. Azavar negotiated with
AT&T to conclusively define the revenue categories that would be subject to tax under Elgin's and
approximately 50 other municipalities in Illinois. Examples of the revenue types now subject to
payment include broadcast fees, equipment revenues, advertising, late fees, and service reve-
nues among others.
After negotiation AT&T has relented and agreed to pay taxes based on the revised listing of rev-
enue categories. Under this resolution, AT&T has agreed to a back-tax liability of$40,177. Upon
approval of this resolution, Azavar will send a Notice of Tax Liability to AT&T (attached). Once
received, AT&T will remit a check in the approved amount.
Azavar's contract with the city provides for a forty-five percent commission on recovered funds.
Please contact me should you have questions or desire additional information.
RGK
c. William A. Cogley, Corporation Counsel
Debra Nawrocki, Chief Financial Officer
Attachment
III Mayor
David J. Kaptain
ELGIN City Council
DixonCorey D. Di
Terry Gavin
THE CITY IN THE SUBURBS
Baldemar Lopez
Rosamaria Martinez
Tish S. Powell
Carol Rauschenberger
Toby Shaw
F.John Steffen
City Manager
Richard G. Kozal
Notice of Tax Liability and Assessment
Via Certified Mail
AT&T Inc. and its Predecessors, Assigns, Holdings, Partners and Affiliates d/b/a AT&T.
c/o Cathy Candelario
Lead Tax Accountant
AT&T
11760 US Highway 1, Rm. 623
North Palm Beach, FL 33408
Violation Number: COE-001
Notice Date: 4/22/20
Taxing Municipality: City of Elgin, IL
Taxpayer: AT&T
Tax Period: January 1, 2015 through Present and Continuing
Account Summary
Cable Gross Revenues
Current Balance Due: $40,177 As of the date of this Notice.
Unpaid Tax: $34,320 Estimated unpaid franchise fees(based on data
provided by you).
Interest: $5,857 Interest calculated up to the date of this notice
and continues to accrue.
Total Amount Due: $40,177
150 Dexter Court, Elgin, IL 60120 847-931-6001 www.cityofelgin.org
Basis for Liability
The reason for the assessments in this Notice—which are based on the attached statutes and ordinances—is that during
the course of the audit,you provided data and documents that led the Municipality to conclude that there were gross
revenue charges for which franchise fees were not assessed.
You must pay and remedy these violations immediately or appeal this notice within the time allotted under the local
ordinance. Interest accrue daily until paid. In addition,failure to remedy the above violations will result in increased
interest thereafter.
If you have any questions about this notice, please contact me in writing.
Sincerely,
Richard G. Kozal, City Manager
City of Elgin
cc: Azavar Government Solutions
Enclosure
Schedule to Pay
Pay
To pay, immediately send your check, including franchise fees and interest,to the following location via:
Attn: Debra Nawrocki
150 Dexter Court
Elgin, IL
Make your check payable to the "City of Elgin, Illinois".
Appeal
You may appeal this assessment to the Comptroller in accordance with the State of Illinois Public Act 096-1422
and the local ordinance as provided herein. All correspondence must be in writing—no phone calls please.
Correct Our Records
If our records are not correct, send us proof of your prior payment, a copy of the return you filed for the listed
issue(s), or any other supporting documentation so that we can correct our records. In the event franchise fee
liability has been estimated due to your withholding of documentation or information,you should provide the
required documentation immediately. Please note that you will continue to accrue interest if the franchise fee
liabilities in the attached Notice remain unpaid while we review documentation. Send electronic documentation
to the Comptroller listed above.
Questions
If you have any questions regarding the attached Notice or would like to make arrangements for a payment
plan, you should immediately write to the Comptroller identified above.
3
LEGAL\25179956\1
Exhibit A
Total Before Total Amount
Franchise Fee Interest Interest Due from
No. Community Rate PEG Fee Rate Charges Charges AT&T
13 City of Elgin 5.00% 0.01 $34320 $5857 $40177