ORDINANCE NO. 080121
a settlement agreement with AT&T Mobility in the amount of $9,207,080.32;
authorizing the City Attorney to execute the necessary documents; reiterating
the Citys establishment of the current residential and business split for fees
payable by wireless telephone service providers going forward; authorizing
payment of attorneys fees of $460,354.02; estimating and appropriating revenue;
and recognizing an emergency.
WHEREAS, the City of
Kansas City, Missouri is a putative class member in a lawsuit to recover unpaid
Business License Taxes known as City of University City, Missouri, et al. v.
AT&T Wireless, Services, Inc., et al., No. 01-CC-004454, and is pending
in the Circuit Court of St. Louis County, Missouri; and
WHEREAS, the City and
AT&T Mobility wish to avoid the expense and uncertainty of continued
litigation and desire to settle their disputes without further litigation; and
WHEREAS, a settlement
agreement settling the litigation was signed by the named plaintiffs (as class
representatives) and AT&T Mobility, and was filed with and preliminarily
approved by the Circuit Court of St. Louis County on December 7, 2007; and
WHEREAS, the City and
AT&T Mobility have conducted an investigation and evaluation of the facts
and the law relating to the claims in the lawsuit and believe that the
Settlement Agreement is fair, reasonable, adequate and in the best interest of
all the parties; and
WHEREAS, pursuant to
the Settlement Agreement, the City has received a Notice of Class Action
Settlement and Approval Hearing, incorporated herein by reference, and a AT&T
Mobility Municipal Tax Settlement Claim Form, incorporated herein by reference,
which identify the total past tax consideration as defined in the Settlement
Agreement that will be paid and released to the City pursuant to the Settlement
Agreement after the Settlement Agreement becomes Final; and
recognition of the requirement of Section 818 Charter of Kansas City that the
settlement of tax claims in the manner proposed be authorized by law; and
Citys business license fee payable by telecommunications companies is 6% for
residential accounts and 10% for commercial accounts as provided in Sections
40-360, 40-361, and 40-369, Code of Ordinances, and that wireless providers
should, going forward, pay such amounts; NOW, THEREFORE
BE IT ORDAINED
BY THE COUNCIL OF KANSAS CITY:
Section 1. Approval
General Terms. That the City of Kansas City, Missouri approves, accepts,
and adopts all terms and provisions of the Settlement Agreement as a binding
and enforceable agreement between the City and AT&T Mobility, and as if the
City was an original signatory.
2. Approval Specific Amount. That the City approves the total
past tax consideration of $9,207,080.32 as shown on the AT&T Mobility
Municipal Tax Settlement Claim Form, along with the other relief provided in
the Settlement Agreement, as adequate consideration for the release of claims
by the City against AT&T Mobility as provided for in the Settlement
Section 3. Declaration
of Dual Rates. The City declares its intent that Sections 40-360, 40-361
and 40-369, Code of Ordinances, be interpreted and construed so that wireless
telecommunications service billed to residential addresses be deemed
residential in character and wireless telecommunications services billed to all
other addresses be deemed as commercial, industrial and all other users in character. AT&T
Mobility and other wireless carriers are therefore directed to pay gross
receipts taxes at the nonresidential rate specified by ordinance only for
service billed to addresses other than residential. This declaration and
direction shall continue until and unless otherwise declared by the City.
Section 4. Execution
of Documents. The City Attorney, on behalf of the City, is authorized and directed to execute the Settlement
Claim Form and any other documents necessary under the Settlement
Section 5. Other
Settlements. The City reserves the
right to conclude settlement agreements with other wireless telecommunications
service providers in the lawsuit depending upon the circumstances of each case.
Payment of Attorneys Fees. The City Attorney is authorized to expend a sum
equal to 5% of the recovery from this settlement, which is $460,354.02, for
payment of attorneys fees representing the difference between the payment of
20% of the fees earned by counsel and paid by AT & T Mobility and the 25%
fee arrangement agreed to by the City, upon receipt of the settlement.
Estimation of Revenue. That revenue in the additional amount of $460,354.02
is estimated in the following account in the General Fund:
Telephone Companies $460,354.02
Appropriation of Funds. That $460,354.02 is appropriated from the
Unappropriated Fund Balance of the General Fund to the following account in the
Telephone Settlement $460,354.02
Section 9. Severability.
The provisions of this ordinance are severable.
Section 10. Emergency.
That this ordinance appropriates money and is hereby recognized to be an
emergency measure within the meaning of Section 503 of the Charter of Kansas
City, and as such shall become effective in accordance with that section.
I hereby certify that
there is a balance, otherwise unencumbered, to the credit of the appropriation
to which the foregoing expenditure is to be charged, and a cash balance,
otherwise unencumbered, in the treasury, to the credit of the fund from which
payment is to be made, each sufficient to meet the obligation hereby incurred.
Director of Finance
as to form and legality:
Assistant City Attorney