HomeMy WebLinkAbout1025 - Cricket Settlement BILL NO. 2010- 049 ORDINANCE NO. /���
AN ORDINANCE APPROVING A SETTLEMENT AGREEMENT WITH CRICKET
WHEREAS, the City of Riverside, Missouri (the "Plaintiff°) is a putative class member in a
lawsuit to recover unpaid Business License Taxes (as defined in the Settlement Agreement
described below), which lawsuit is styled City of University City, Missouri, et al. v. AT&T Wire/ess,
Services, fnc., ef al., No. 01-CC-004454, and is pending in the Circuit Court of St. Louis County,
Missouri (the "Lawsuit"); and
WHEREAS, the Plaintiff and Cricket (as defined in the Settlement Agreement) wish to avoid
the expense and uncertainty of continued litigation and desire to settle their dispute(s) without
further litigation; and
WHEREAS, a settlement agreement settling the Lawsuit was signed by the named plaintiffs
(as class representatives) and Cricket, and was filed with and preliminarily approved by the Circuit
Court of St. Louis County on June 28, 2010 (the "Settlement AgreemenY'); and
WHEREAS, the Plaintiff and Cricket 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 Plaintiff has received a Notice of
Cricket Class Action Settlement and Approval Hearing, incorporated herein by reference, and a
Cricket Municipal Tax Settlement Claim Form, incorporated herein by reference, which identify the
Past Tax Payment (as defined in the Settlement Agreement) that will be paid to the Plaintiff
pursuant to the Settlement Agreement after the Settlement Agreement becomes Final (as defined in
the Settlement Agreementj; and
WHEREAS, the Plaintiff desires to approve and accept the Settlement Agreement and the
Past Tax Payment;
NOW THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE CITY
OF RIVERSIDE, MISSOURI, AS FOLLOWS:
SECTION 1—APPROVAL OF SETTLEMENT AGREEMENT. The City of Riverside,
Missouri hereby approves, accepts, and adopts all terms and provisions of the Settlement
Agreement as a binding and enforceable agreement between the City of Riverside, Missouri and
Cricket, and as if the City of Riverside, Missouri was an original signatory thereto.
SECTION 2— APPROVAL OF PAST TAX PAYMENT. The City of Riverside, Missouri
further approves the Past Tax Payment of $1,959.77 as shown on the Cricket 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 of Riverside, Missouri against Cricket
as provided for in the Settlement Agreement.
SECTION 3— EXECUTION BY CITY ADMINISTRATOR. The City Administrator of the City
of Riverside, Missouri, on behalf of the Plaintiff, is hereby authorized and directed to execute the
Cricket Municipal Tax Settlement Claim Form and any other documents necessary under the
1 I
BILL NO. 2010- 049 ORDINANCE NO. JD�.s�
Settlement Agreement.
SECTION 4— RESERVATION OF RIGHTS. The City of Riverside, Missouri, reserves the
right to conclude settlement agreements with other wireless telecommunications service providers
in the Lawsuit depending upon the circumstances of each case.
SECTION 5— EFFECTIVE DATE. This Ordinance shall be in full force and effect after
passage and approval as required by law.
BE IT REMEMBERED that the above was read two times by heading only, passed and
approved by a majority of t e soard of AI rmen and APPROVED by the Mayor of the City of
Riverside, Missouri, this ���. day of , 2010.
Ka leen L. Rose, Mayor
- ATTEST:
� ���obt... z'�c�-u.t�1�0 �
Robin Littrell, City Clerk
APPRO ED AS TO FORM:
cy hom on, City Attorney
2
CITY 4F
��� RIVERSII�
��� �....-.'' ��s���.�����
Upsirearn �rorn ordinory.
2950 NW Vivion Road
Riverside, Missouri 64150
MEMO DATE: July 28, 2010
AGENDA DATE: August 3, 2010
TO: Mayor and Board of Aldermen
FROM: Nancy Thompson, City Attorney
RE: Cricket Communications Settlement Agreement
BACKGROUND: Passage of the ordinance formally approves the settlement agreement with
Cricket Communications and is required to move forward with the settlement in
the telecommunications class action lawsuit previously discussed with the Board.
Settlement agreements have previously been approved in the lawsuit with
Verizon, US Cellular, AT&T Mobility, Sprint-Nextel and Alltel.
As additional background, the City has an ordinance imposing a business license
tax in the amount of 5% on gross receipts from the providers of
telecommunications services within the City. Cricket has agreed to pay 27% of
the applicable Business License Tax on gross receipts from the date it began
offering service (September I, 2006) through December 31, 2007. It will pay
100% of the business license tax for tax periods commencing on and after
January I , 2008.
Cricket's situation is somewhat different than the other providers who have
previously entered into settlement agreements in the class action lawsuit
because a significant amount of their business is prepaid. Prepaid services are
not covered by the Mobile Telecommunications Sourcing Act. The Settlement
Agreement provides that Cricket will pay gross receipu taxes on prepaid
services, based on a sourcing method that allocates prepaid revenue to each
municipality based on customer's physical or billing address. If the physical
address is unknown, the payment will be based on the place of sale.
place of sale.
The City will receive the back tax payment within 30 days after the Court enters
its final order of dismissal in the case and such order becomes final. Entry of the
order of dismissal is anticipated on October 19` Payment to the City should be
mailed on or before December 29, 2010.
RECOMMENDATION: Staff recommends approval of the ordinance.