TRANSMITTAL LETTER FOR BOARD MEETING OF JUNE 20, 2024
COMMITTEE ON JUDICIARY
Mr. Brian A. Perkovich, Executive Director
Title
Authority to settle tax rate objections for the years 2010 through 2014 for an estimated amount of $1,795,501.00 plus interest
Body
Dear Sir:
Objections to the District's 2010 through 2014 tax levies are pending in the Circuit Court of Cook County. After extensive negotiations between the parties over the past year, the Law Department recommends settlement of the objections for tax years 2010 through 2014 for a total of five (5) mills.
Based upon the most recent available data from the Cook County Treasurer as to the percentage of equalized assessed valuation paid under protest, five mills amount to approximately $1,795,501.00. This averages to approximately $359,100.00 per year. The payout is only an estimate based upon the most recent data supplied by the Treasurer and could increase or decrease depending upon the final percentage of equalized assessed valuation paid under protest.
If the settlement is approved by the parties and the Court, the Treasurer will calculate the precise payout at the time the funds are disbursed. Such disbursement will occur as a holdback by the Treasurer from future District tax revenues and will include statutory interest calculated through the date of payment at the rate of 2.7%, 1.5%, 3%, 1.7%, and 1.5% per year for 2010 through 2014, respectively. This recommended settlement amount including interest represents less than 1% of the tax levies for 2010-2014 and amounts to approximately 0.13% of the 2024 budget.
The specific claims of the objectors for the 2010 through 2014 years under protest exceed one billion dollars. While the Law Department is confident that it could successfully defend the District from the majority of objectors' claims, loss of even 1 objection for a single year out of the 97 objections asserted could result in a payout that is many times the amount of the recommended settlement. For example, in the last tax rate case to go to trial, the City of Chicago was found liable for 52 mills at the trial court, even though it had prevailed on 22 of the 25 objections lodged against it. After appeal, the matter was settled for over $13 million dollars.
Additionally, the recommended settlement saves the District the high cost of proceeding with expert discovery and trial. In light of the District's potential exposure and the unpredictability of litigation, the settlement is in the best interests of the District. The recommended settlement compares favorably with prior settlements of similar claims and settlements reported by other major taxing bodies.
The General Counsel recommends that the Board of Commissioners approve the settlement on the above-mentioned terms and that she be authorized to execute such documents as may be necessary to effectuate the settlement.
Requested, Susan T. Morakalis, General Counsel, STM:JTM:ATF:MSZ:nl
Recommended, Brian A. Perkovich, Executive Director
Disposition of this agenda item will be documented in the official Regular board Meeting Minutes of the Board of Commissioners for June 20, 2024