2009-51RESOLUTION NO. 2009- 51
A RESOLUTION APPROVING A MUNICIPAL GAS USE TAX
COLLECTION AGREEMENT BETWEEN THE VILLAGE OF BUFFALO GROVE AND
NORTHERN ILLINOIS GAS COMPANY, D /B /A NICOR GAS COMPANY
WHEREAS, the Village adopted Ordinance 2009- enacting a Municipal Gas Use Tax
imposing a tax on gas purchased at retail for use or consumption in the Village, and;
WHEREAS, the Village has authorized the execution of an agreement with the Nicor Gas
Company to provide for the collection of the Municipal Gas Use Tax, and;
WHEREAS, the Village and Nicor Gas Company have negotiated the terms and conditions
pursuant to which Nicor Gas Company shall collect the Municipal Gas Use Tax and render other related
services.
NOW, THEREFORE, BE IT RESOLVED BY THE PRESIDENT AND BOARD OF TRUSTEES
OF THE VILLAGE OF BUFFALO GROVE, COOK AND LAKE COUNTIES, ILLINOIS that:
Section 1. The Municipal Gas Use Tax Collection Agreement between the Village of Buffalo
Grove, Illinois and Northern Illinois Gas Company, d/b /a Nicor Gas Company will begin for the
gas billings beginning on or after January 1, 2010.
Section 2. The Village Manager is authorized and directed to execute the Agreement. A copy of
said Agreement is attached hereto and made a part hereof.
AYES: 5 — Braigan, Glover, Berman, Trilling, Sussman
NAYES: 1 — Stone
ABSENT: 0 -- None
PASSED: December 21 , 2009. APPROVED: 'December 21 , 2009.
ATTEST:
Villag erk
APPROVED:
Village President
Municipal Gas Use Tax Collection Agreement
between
the Village of Buffalo Grove, Illinois
and
Northern Illinois Gas Company,
d /b /a Nicor Gas Company
9238432.2
MUNICIPAL GAS USE TAX COLLECTION AGREEMENT
This Municipal Gas Use Tax Collection Agreement (this "Agreement ") is entered into as
of this 1 St day of February, 2010, by and between Northern Illinois Gas Company, d/b /a Nicor Gas
Company, an Illinois corporation (the "Contractor "), and the Village of Buffalo Grove, Illinois
(the "Municipality "), a municipal corporation and home rule unit of local government existing
under the Illinois Constitution.
RECITALS
WHEREAS, on December 21; 2009, the Municipality adopted Ordinance No. 2009 -53$9
which was subsequently amended by Ordinance No. 2010 -06, adopted by the Municipality
on February 1. 2010 (the "Tax Ordinance ") pursuant to which the Municipality found that:
(a) the Municipality is a home rule unit under subsection (a) of Section 6 of Article VII of
the Illinois Constitution of 1970;
(b) subject to said Section, a home rule unit may exercise any power and perform any
function pertaining to its government and affairs for the protection of the public health, safety,
morals and welfare; and
(c) in furtherance of its home rule powers, it is necessary and desirable for the Municipality
to amend its ordinances regarding taxation by creating a municipal gas use tax; and
WHEREAS, as a result of such findings, the Municipality adopted the Tax Ordinance
imposing a Municipal Gas Use Tax (the "Tax ") on gas purchased at retail for use or consumption
in the Municipality; and
WHEREAS, the Municipality authorized the execution of an agreement with the
Contractor to provide for the collection of the Tax; and
WHEREAS, pursuant to Section 10 of Article VII of the Illinois Constitution of 1970, the
Municipality is authorized to contract and otherwise associate with individuals, associations, and
corporations in any manner not prohibited by law or by ordinance; and
WHEREAS, the Municipality and the Contractor have negotiated the terms and
conditions pursuant to which the Contractor shall collect the Tax and render other related services.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the Municipality and the Contractor agree as follows:
ARTICLE 1.
INCORPORATION OF RECITALS
The recitals set forth above are incorporated by reference as if fully set forth herein.
ARTICLE 2.
DEFINITIONS
The following terms shall have the meanings ascribed to them for the purposes of this
Agreement:
"Account" means an account that a Person has with the Contractor.
"Agreement" means this Municipal Gas Use Tax Collection Agreement, including all
exhibits attached hereto and incorporated herein by reference, and all amendments, modifications
or revisions hereto made in accordance with the terms hereof.
"Contractor" has the meaning set forth in the first paragraph of this Agreement.
"Customer" means a Person on the Customer Account List who has a Customer
Account.
"Customer Account" means an Account that a Customer has with the Contractor.
"Customer Account List" means a list of addresses of Customer Accounts from which
the Contractor will collect the Tax.
"Exempt Customer List" means a document issued by the Municipality listing the
names, addresses, account numbers, facilities and meter locations of (i) the Municipality, (ii)
Persons exempt bylaw from the payment of the Tax (other than by an ordinance of the
Municipality), and (iii) Persons who are exempt from payment of the Tax pursuant to an
ordinance of the Municipality.
"Fee" means the compensation payable to the Contractor for the services provided under
this Agreement as more specifically defined in Article 5 of this Agreement.
"Municipality" has the meaning set forth in the first paragraph of this Agreement.
"Person" means any individual, firm, trust, estate, partnership, association, joint stock
company, joint venture, corporation, limited liability company, municipal corporation or political
subdivision of this state, or a receiver, trustee, conservator or other representative appointed by
order of any court.
"Records" means those records and accounts with respect to the Tax on each Customer
Account on the Customer Account List, which are kept by the Contractor in the ordinary course
of its business.
"State" means the State of Illinois.
"Tax" has the meaning set forth in the Recitals to this Agreement
"Tax Collection Services" means the services described in Article 3 of this Agreement.
"Tax Ordinance" has the meaning set forth in the Recitals to this Agreement.
9238432.2 2
ARTICLE 3.
SERVICES OF THE CONTRACTOR
3.1 Tax Collection General Provisions
The Contractor shall perform the services (the "Tax Collection Services ") described in
Section 3.2.
The Contractor is acting as an independent contractor in performing under this
Agreement and nothing herein is intended or should be construed as in any way creating or
establishing the relationship of partners or joint venturers between the Municipality and the
Contractor, or as constituting the Contractor or any officer, owner, employee or agent of the
Contractor as an agent, representative, fiduciary or employee of the Municipality for any purpose
or in any manner whatsoever.
The relationship of the parties with respect to the subject matter of this Agreement,
including without limitation the performance of the Tax Collection Services, is strictly
contractual and neither party shall have any rights or obligations with respect to the Tax
Collection Services other than as are expressly provided in this Agreement. Without limiting the
generality of the foregoing, it is specifically understood and agreed that the rights and obligations
of the Contractor with respect to the subject matter of this Agreement shall not be deemed to
incorporate or be amended, modified or varied in any respect by (i) the provisions of any
ordinance (including the Tax Ordinance), mandate or directive that the Municipality has adopted
or may adopt in the future even if such ordinance, mandate or directive purports to amend,
modify or vary any rights or obligations of the Contractor or to impose any performance
standards, charges, damages, assessments, fines or penalties on the Contractor with respect to, or
in connection with, the subject matter of this Agreement or (ii) the provisions of any existing or
future license, franchise, grant or other agreement.
3.2 Tax Collection Services
A. Collection From Customers
The Contractor will bill the Tax to each Customer on the Customer Account List by
including the Tax on the bills issued to the Customer for the Customer Account. The Tax will be
billed at the rate of five cents ($.050) per therm of gas delivered and billed by the Contractor to
such Customer Account. The Contractor will collect the Tax remitted along with any other
amounts owed to the Contractor, including any gas and service charges, and any charges
pursuant to Sections 9 -221 and 9 -222 of the Public Utilities Act.
The Contractor will include the Tax on any bill issued to a Customer on the Customer
Account List on or after February 1, 2010.
9238432.2 3
B. Review of Customer Accounts
1. Municipality Cooperation with Respect to Customer Accounts
During the Term, the Municipality shall cooperate with the Contractor with respect to the
review of Customer Accounts subject to the Tax, including, but not limited to, reviewing
Customer Account Lists as described herein.
2. Initial Customer Account List
The Contractor shall provide the Municipality with the Contractor's initial Customer
Account List prior to, or shortly following, commencement of the Tax Collection Services. The
Municipality shall promptly review the Customer Account List provided by the Contractor and
inform the Contractor in writing of changes to (including additions to, deletions from or other
changes to) the Customer Account List. within thirty (30) days of receipt of such Customer
Account List. If the Municipality informs the Contractor of changes to the Customer Account
List and provides supporting information for such changes, the Contractor shall use reasonable
efforts to implement any such changes, unless it disputes any such changes from the
Municipality, in which case it shall notify the Municipality of the same and the Contractor and
the Municipality shall use their best efforts to promptly resolve the same.
3. Changes to Customer Account List
The Municipality acknowledges that, during the Term, the Contractor will add Customer
Accounts to, delete Customer Accounts from and make other changes to the Customer Account
List as the Contractor is informed of changes related to Customer Accounts. In addition, if the
Municipality informs the Contractor in writing of suggested changes to the Customer Account
List and provides supporting information for such changes, the Contractor shall use its
reasonable efforts to implement any such changes, unless it disputes any such changes from the
Municipality, in which case it shall notify the Municipality of the same and the Contractor and
the Municipality shall use their best efforts to promptly resolve the same.
As a means of assisting the Municipality to confirm the accuracy of the Customer
Account List on an ongoing basis during the Term, the Contractor may periodically provide to
the Municipality a current Customer Account List. The Municipality shall promptly review such
Customer Account List and inform the Contractor in writing of changes to (including additions
to, deletions from or other changes to) the Customer Account List within thirty (30) days of
receipt of such Customer Account List. If the Municipality informs the Contractor in writing of
changes to the Customer Account List and provides supporting information for such changes, the
Contractor shall use reasonable efforts to implement any such changes, unless it disputes any
such changes suggested by the Municipality, in which case it shall notify the Municipality of the
same and the Contractor and the Municipality shall use their best efforts to promptly resolve the
same. If the Municipality fails to so inform the Contractor in writing of changes to the Customer
Account List, the Contractor shall be .entitled to assume that the Municipality does not propose
any changes to the current Customer Account List.
9238432.2 4
4. Accuracy of Customer Account List
The Customer Account Lists shall be compiled by the Contractor from information
contained in the Contractor's customer records as such records exist from time to time based on
information received by the Contractor from the Municipality in accordance with this Section
3.2B and from other sources of information normally used by the Contractor in the ordinary
course of its utility business. The Customer Account Lists are intended to contain the accurate
addresses of all Customers who use or consume gas within the Municipality. However, the
Municipality specifically acknowledges that the Customer Account Lists compiled by the
Contractor in the ordinary course of its business may include mistakes, errors and omissions and
that, as a consequence, the Customer Account Lists may fail to include some Persons who use or
consume gas within the Municipality or they may include some Persons who do not use or
consume gas within the Municipality. The Contractor makes no representation or warranty that
the Customer Account Lists will be free from mistakes, errors and omissions. The Contractor
shall have no responsibility or liability to the Municipality for any such mistakes, errors or
omissions in any Customer Account Lists including, without limitation, any responsibility or
liability related to the collection of the Tax from Accounts on the Customer Account Lists or
related to the failure to collect the Tax from Accounts not on the Customer Account Lists.
C. Responsibility for Providing Exempt Customer List
1. Initial Exempt Customer List
It shall be the obligation of the Municipality to provide the Contractor in writing with the
Exempt Customer List before the commencement of the Tax Collection Services. In the event
the Municipality does not provide the Contractor with an initial Exempt Customer List before the
commencement of the Tax Collection Services, the Contractor thereafter may, but shall not be
obligated to, compile an initial Exempt Customer List based upon its judgment, made in good
faith, of Persons who would qualify as exempt from the Tax and, if the Contractor elects to
compile an initial Exempt Customer List, the Contractor shall promptly provide the Municipality
in writing with such Exempt Customer List. Upon receipt of the Exempt Customer List by the
Contractor, the Contractor shall not include the Tax on any bill issued to a Person on the Exempt
Customer List from and after the first day of the second month following the date of receipt of
the Exempt Customer List, unless the Contractor disputes the inclusion of any Person on the
Exempt Customer List, in which case it shall notify the Municipality of the same and the
Contractor and the Municipality shall use their best efforts to promptly resolve the same. In the
event the Municipality does not timely provide the Contractor with an initial Exempt Customer
List and the Contractor elects to compile an Exempt Customer List, the Contractor may exclude
the Tax on any bill issued to a Person on the Exempt Customer List from and after the date the
Contractor compiles such Exempt Customer List. The Municipality shall be responsible for
updating the Exempt Customer List and shall promptly notify the Contractor of any such updates
as they occur.
2. Addition of Persons to Exempt Customer List
Upon receipt by the Contractor of any written update to the Exempt Customer List from
the Municipality adding Persons to the Exempt Customer List, the Contractor shall not include
9238432.2 5
the Tax on any bill issued to a Person added to the Exempt Customer List from and after the first
day of the second month following the date of receipt of the updated Exempt Customer List,
unless the Contractor disputes the addition of any such Person to the Exempt Customer List, in
which case it shall notify the Municipality of the same and the Contractor and the Municipality
shall use their best efforts to promptly resolve the same.
3. Removal of Persons from Exempt Customer List
Upon receipt by the Contractor of any written update to the Exempt Customer List from
the Municipality removing Persons from the Exempt Customer List, the Contractor shall include
the Tax on any bill issued to a Person removed from the Exempt Customer List from and after
the first day of the second month following the date of receipt of the updated Exempt Customer
List, unless the Contractor disputes the removal of any such Person from the Exempt Customer
List, in which case it shall notify the Municipality of the same and the Contractor and the
Municipality shall use their best efforts to promptly resolve the same.
4. Accuracy of Exempt Customer List
The Contractor makes no representation or warranty that the Exempt Customer Lists will
be free from mistakes, errors and omissions including, without limitation, mistakes, errors or
omissions by the Contractor in (i) compiling an initial Exempt Customer List in the, event the
Municipality fails to timely provide the Contractor with an initial Exempt Customer List or (ii)
incorporating information received from the Municipality in the preparation or update of the
Exempt Customer Lists. The Contractor shall have no responsibility or liability to the
Municipality for any such mistakes, errors or omissions in any Exempt Customer Lists including,
without limitation, any responsibility or liability related to the failure to collect the Tax from
Accounts on the Exempt Customer Lists or related to the collection of the Tax from Accounts
not on the Exempt Customer Lists.
D. Remittance
The Contractor will remit the Tax collected, net of its Fee, to the Municipality on or
before the last day of the first calendar month following the calendar month in which the Tax is
collected. The Contractor may remit payment for a calendar month on the basis of estimates
made by the Contractor in good faith of the Tax to be billed and collected, and the Fee due, for
that calendar month and, in such case, the Contractor will adjust as soon as reasonably
practicable subsequent monthly remittances to account for differences between the Contractor's
initial estimate of Tax collections, and Fee due, for such calendar month and Contractor's actual
Tax collections and the actual Fee due for such calendar month. The Contractor may from time
to time change its methodology for estimating in good faith the Taxes to be billed and collected,
and the Fee due, for a calendar month. The Contractor ultimately shall only be responsible for
remitting to the Municipality the actual amount of Tax collected by the Contractor, net of the Fee
applicable thereto, and shall have no obligation to pursue collection efforts on behalf of the
Municipality to collect any Tax billed by the Contractor that is not paid. If the Contractor's
remittances for a calendar month are based on estimates and the amounts of such estimates are
less than the actual Tax ultimately collected for such calendar month, the Contractor shall be
responsible for remitting to the Municipality (if not otherwise accomplished through the
9238432.2 6
adjustment procedure above) the amount, without interest, by which the Tax actually collected
for such month, net of the Fee applicable thereto, exceeded the Contractor's previous remittances
for such month. If the Contractor's remittances for a calendar month are based on estimates and
the amounts of such estimates are more than the actual Tax ultimately collected for such calendar
month, the Municipality shall be responsible for remitting to the Contractor (if not otherwise
accomplished through the adjustment procedure above) the amount, without interest, by which
the Tax actually collected for such month, net of the Fee applicable thereto, is less than the
Contractor's previous remittances for such month.
E. Customer Payments; Collection of Tax by Municipality
The Tax shall be due and payable by a Customer to the Contractor by the due date of the
bill on which the Tax is included. The Municipality shall not assess or attempt to collect any
Tax from a Customer, provided, however, that the Municipality may attempt to collect the Tax
from Accounts subject to dispute between the Municipality and the Contractor pursuant to
Section 3.213., but only during such period as a dispute exists between the Municipality and the
Contractor related to such Accounts and, provided, further, that the Municipality shall assume all
liability related to the collection of the Tax from such Accounts and the Contractor shall have no
responsibility or liability related to the collection of the Tax from such Accounts or related to the
failure to collect the Tax from such Accounts. In the event that a Customer attempts to pay the
Tax to the Municipality, the Municipality shall use its best efforts to direct the Customer to pay
the Tax to the Contractor.
F. Records and Audits
1. Records
The Contractor shall use good faith efforts to retain for a three -year period from the date
any billing of the Tax Records sufficient to reflect properly such Tax due, billed, collected and /or
remitted to the Municipality, and the amount of any Fees deducted by the Contractor as payment
for the Tax Collection Services.
Any Records transmitted, disclosed or otherwise made available to the Municipality
pursuant to this Agreement shall not include identifying information pertaining to the Customer.
2. Audits
The Contractor shall keep the Records open to reasonable audit, inspection, copying and
abstracting by the Municipality at the Contractor's office at reasonable times during business
hours that are agreed to by the Contractor, at the Municipality's expense (which shall include
reimbursement of all costs of the Contractor related to any such audit, inspection, copying or
abstracting, including labor and overhead charges for employees and agents of the Contractor
responding to audit requests) and subject to the Contractor's customer confidentiality policies.
Audit requests shall be provided to the Contractor in writing and shall be limited in scope to
Records relating to billing and collection of Tax from Customers for the three -year period
preceding the date of the audit request. The Contractor shall determine, in its discretion, the
manner and format in which such Records are provided to the Municipality. Each employee or
9238432.2 7
agent of the Municipality participating in the audit shall agree in writing to comply with the
confidentiality obligations of the Municipality as specified in Section 3.4 of this Agreement.
If, after conducting an audit, the Municipality believes that the Tax should have been
collected from certain Accounts or that the Tax should not have been collected from certain
Accounts, the Municipality shall notify the Contractor in writing and provide supporting
information as appropriate. The Contractor shall use reasonable efforts to commence or
discontinue collection of the Tax from such Accounts, as applicable, on a prospective basis,
unless it disputes the Municipality's position with respect to any such Account, in which case it
shall notify the Municipality of the same and the Contractor and the Municipality shall use their
best efforts to promptly resolve the same. The Municipality shall be solely responsible for
collecting the Tax from or refunding the Tax to such Accounts, as applicable, for periods prior to
the date that the Contractor commences or discontinues collection of the Tax from such
Accounts. Upon the request of the Municipality, the Contractor may provide reasonable
assistance to the Municipality in the Municipality's collection or refunding of the Tax.
G. Liability for Tax Refunds, Disputes
Liability for the Tax shall rest exclusively with the Customer. The Contractor shall not
be liable to remit any Tax not actually collected. To the extent a subcontractor or assignee that
collects the Tax pursuant to this Agreement is required to transfer the amount of the Tax
collected to the Contractor for remittance to the Municipality, the Contractor is responsible for
remitting to the Municipality only that portion of the Tax actually received by the Contractor
from the subcontractor or assignee.
Any Customer's claim for a refund or other dispute regarding the amount of Tax owed or
collected shall be directed to and handled by the Municipality, not the Contractor. In no case
shall the Contractor be liable to refund any Tax to a Customer or other amount collected and
remitted to the Municipality pursuant to this Agreement. The foregoing shall not limit the
Contractor's ability to refund the Tax in such cases where the Contractor reasonably determines
that a refund is appropriate and, in any such case, the Contractor shall be entitled to
reimbursement from the Municipality for such refund to the extent the amount of the refunded
Tax previously had been remitted by the Contractor to the Municipality.
H. Amendments to Tax Ordinance
In the event that the Tax Ordinance is amended, the Municipality shall provide notice to
the Contractor within 14 days of the date that any amended ordinance is passed. If the amended
ordinance changes the rate of the Tax, then the Contractor shall collect the Tax at the new rate
with respect to bills issued for a Customer Account on or after: (i) the effective date of the new
rate of the Tax pursuant to the amended ordinance, which shall be the first day of a calendar
month; or (ii) the first day of the calendar month following that date which is three months after
the date on which the amended ordinance is passed, whichever is later. If the Tax Ordinance is
amended without the prior written concurrence of the Contractor in any manner other than to
change the rate of the Tax, the Contractor may at any time from and after the date such amended
ordinance is passed terminate this Agreement upon thirty (30) days' written notice to the
Municipality.
9238432.2 8
3.3 Subcontracts and Assignments
A. Assignment by Contractor
1. Merger or Asset Sale
The Contractor may, without the consent of the Municipality, transfer its rights and
obligations under this Agreement, in whole, but not in part, in connection with a merger or a
sale, transfer or conveyance of all or substantially all of the Contractor's assets.
2. Collection Agencies
The Contractor may, without the consent of the Municipality, subcontract, assign or
delegate all or any portion of the Tax Collection Services to one or more collection agencies or
law firms in the ordinary course of the Contractor's business and consistent with the
requirements of this Agreement. Furthermore, the Contractor may, without the consent of the
Municipality, permit any of its authorized agents listed on the Contractor's published "Directory
of Company Authorized Collection Agents and Company Offices ", for example, a bank or a
savings and loan, to accept payments from Customers on behalf of the Contractor.
3. Gas Supplier Agreements
The Contractor may enter into an agreement with a gas supplier to provide billing
services to the Contractor. In the event the Contractor enters into such an agreement with a gas
supplier, the Contractor may, at the Contractor's sole discretion, (a) continue to collect the Tax
with respect to Customers purchasing gas from the gas supplier, (b) subcontract, assign or
delegate, without the consent of the Municipality, all or any portion of the Tax Collection
Services to the gas supplier with respect to Customers purchasing gas from the gas supplier, or
(c) provide notice to the Municipality that those Customers purchasing gas from the gas supplier
will not be considered Customers for purposes of this Agreement and will be removed from the
Customer Account List on the first day of the month following such notice, in which case the
Municipality may enter into a separate agreement with the gas supplier to collect the Tax from
such Customers.
4. Other Assignments
Except as otherwise permitted pursuant to this Section 33A., the Contractor shall not
subcontract, assign, delegate or otherwise transfer all or any part of its rights or obligations under
this Agreement without the express written consent of the Municipality, such consent not to be
unreasonably withheld. Any attempted subcontract, assignment, delegation or transfer made
without such express written consent shall be void and of no effect.
5. Conditions of Assignment
All subcontracts or assignments permitted pursuant to this Section 33A. (with the
exception of transfers permitted pursuant to Section 33A.1. and Section 3.3A.3 and subcontracts
or assignments where the Municipality approves otherwise pursuant to section 3.3A.4.) shall be
deemed conditioned upon performance by the subcontractor or assignee in accordance with the
9238432.2 9
r
terms and conditions of this Agreement. If any such subcontractor or assignee approved by the
Municipality pursuant to Section 3.3A.4. shall fail to observe or perform the terms and
conditions of this Agreement, the Municipality shall have the right upon written notification to
require the performance of this Agreement by the Contractor personally or through any other
Municipality- approved subcontractor or assignee.
B. Effect of Municipality Consent
No subcontract or assignment with respect to this Agreement (with the exception of
transfers permitted pursuant to Section 3.3A.1. and subcontracts or assignments where the
Municipality approves otherwise pursuant to Section 3.3A.4.), nor any acceptance of or payment
for any Tax Collection Services by the Municipality, shall relieve the Contractor of any of its
obligations hereunder.
C. Assignment by the Municipality
Without the express written consent of the Contractor, such consent not to be
unreasonably withheld, the Municipality shall not subcontract, assign, delegate or otherwise
transfer all or any part of its rights or obligations under this Agreement. Any attempted
subcontract, assignment, delegation or transfer made without such express written consent shall
be void and of no effect.
Notwithstanding the foregoing, the Municipality may, without the consent of the
Contractor, (i) assign or otherwise transfer, in whole or in part, its rights to receive the Tax
collected hereunder in connection with any debt financing transaction, and (ii) subcontract,
assign or delegate all or any part of its rights of assessment and enforcement with respect to the
Tax.
3.4 Confidentiality
The Contractor and the Municipality hereby agree not to disclose to third parties any
information provided to either the Contractor or the Municipality by the other (or by such other
party's agents, contractors, or subcontractors), or obtained by either party in the performance of
its obligations under this Agreement. This Section 3.4 shall not apply to the following: (a)
information available from public sources, (b) information made public by a party other than the
Municipality or the Contractor, (c) disclosure by the Contractor to affiliates of the Contractor, or
to the Contractor's agents or subcontractors which is necessary for the Contractor to perform its
obligations under this Agreement, (d) disclosure required, in the opinion of the disclosing party's
legal counsel, by law, judicial or administrative order or where such disclosure is necessary to
comply with Federal or state securities laws, (e) disclosure required by any lender providing
financing to the Contractor or the Municipality or from whom such financing is sought, (f)
disclosure to a Customer regarding his Tax liability or payment, (g) general instructions and /or
general information regarding the Tax provided to the public and/or to Customers, (h) disclosure
to the Illinois Commerce Commission, and (i) disclosure required under the Illinois Freedom of
Information Act.
Furthermore, the Municipality acknowledges that the Contractor's obligations pursuant to
this Agreement, including its obligations to provide information or access to information,
9238432.2 10
particularly Records, to the Municipality, are subject to the Contractor's customer confidentiality
policies. The Municipality further acknowledges that such customer confidentiality policies may
limit the Municipality's access to such information. The Municipality also acknowledges that
any Records transmitted, disclosed or otherwise made available to the Municipality pursuant to
this Agreement shall not include identifying information pertaining to the Customer.
3.5 Compliance with Laws
The Contractor and the Municipality shall at all times observe and comply, in all material
respects, with all applicable laws, ordinances, rules, regulations, policies and executive orders of
the federal, state and local government which may affect the performance of this Agreement.
ARTICLE 4.
TERM
4.1 Term of Agreement
A. Original Term
This Agreement shall take effect as of the date hereof and shall continue until February 1,
2011 (subject to paragraph B below) or until this Agreement is terminated in accordance with its
terms, whichever occurs first.
The Contractor's duty to perform the Tax Collection Services shall begin with bills
issued to Customers on February 1, 2010 and shall cease (unless otherwise extended hereunder)
with respect to bills issued on or after February 1, 2011.
B. Extension
This Agreement shall automatically extend for successive one -year periods after the
original one -year term unless either party elects to terminate this Agreement by written notice
delivered to the other party no later than thirty (30) days prior to the end of the then current term
or this Agreement is otherwise terminated in accordance with its terms.
ARTICLE 5.
COMPENSATION
As compensation for the Tax Collection Services provided hereunder, the Contractor
shall be paid a fee (the "Fee ") equal to 3% of the amount of Tax collected by the Contractor, its
subcontractors or its authorized agents and remitted in accordance with Section 3.2D. The
Contractor shall be entitled to deduct the applicable Fee from each remittance of Tax to the
Municipality. Payment of the Fee for any Tax actually collected and remitted to the
Municipality in accordance with Section 3.2D., whether before or after the effective date of the
termination of this Agreement, shall be in accordance with this Article 5.
9238432.2 11
ARTICLE 6.
DISPUTES
The Municipality and the Contractor shall use their best efforts to resolve any disputes
arising under this Agreement including disputes as to whether the Contractor failed to remit or
timely remit any Tax collected. During any period of dispute resolution, the Contractor shall
continue to perform the Tax Collection Services and will be entitled to collect its Fee under
Article 5.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
7.1 Contractor's Representations and Warranties
In connection with the execution of this Agreement, the Contractor hereby represents and
warrants to the Municipality that the Contractor is legally authorized to execute this Agreement
and to perform or cause to be performed the Tax Collection Services.
7.2 Municipality's Representations and Warranties
In connection with the execution of this Agreement, the Municipality hereby represents
and warrants to the Contractor that the Municipality:
(A) is a municipality duly constituted and validly existing within the meaning of
Section 1 of Article VII of the 1970 Constitution of the State and is a home rule
unit of government under Section 6(a) of Article VII of said Constitution;
(B) has full power and authority as a home rule unit of government to impose the Tax
and to execute this Agreement; and
(C) has duly authorized all necessary action to be taken by it for the imposition of the
Tax and the execution and performance of this Agreement.
ARTICLE 8.
TERMINATION
8.1 Termination Right of Municipality
The Municipality shall have the absolute right to terminate this Agreement by a notice in
writing from the Municipality to the Contractor setting forth the effective date of such
termination:
(A) if the Tax is preempted, repealed, or determined by a court of competent
jurisdiction to be unconstitutional or otherwise invalid; or
(B) upon thirty (30) days' written notice to the Contractor.
9238432.2 12
If the Municipality elects to terminate this Agreement under this Section 8.1., all Tax
Collection Services to be provided hereunder shall cease with respect to bills issued on and after
the effective date stated in the notice, which date shall be the first day of a calendar month.
8.2 Termination Right of Contractor
The Contractor shall have the absolute right to terminate this Agreement by a notice in
writing from the Contractor setting forth the effective date of such termination:
(A) if the Illinois Commerce Commission issues an order prohibiting the Contractor
from performing all or part of the Tax Collection Services;
(B) if the Tax is preempted, repealed, or determined by a court of competent
jurisdiction to be unconstitutional or otherwise invalid; or
(C) upon thirty (30) days' written notice to the Municipality.
If the Contractor elects to terminate this Agreement under this Section 8.2., all Tax
Collection Services to be provided hereunder shall cease with respect to bills issued on and after
the effective date stated in the notice, which date shall be the first day of a calendar month.
ARTICLE 9.
GENERAL CONDITIONS
9.1 Entire Agreement
A. General
The Contractor and the Municipality acknowledge that this Agreement shall constitute
the entire agreement between the parties and no other warranties, inducements, considerations,
promises or interpretations shall be implied or impressed upon this Agreement that are not
expressly addressed herein and therein.
B. No Collateral Agreements
The Contractor and the Municipality agree that, except for those representations,
statements or promises expressly contained in this Agreement, no representation, statement or
promise, oral or in writing, of any kind whatsoever, by either parry, its officials, its agents or its
employees has induced the other party to enter into this Agreement or has been relied upon by
either party including any with reference to (i) the meaning, correctness, suitability or
completeness of any provisions or requirements of this Agreement; (ii) the nature of the Tax
Collection Services to be performed; (iii) the nature, quantity, quality or volume of any
materials, labor or other facilities needed for the performance of this Agreement; (iv) the general
conditions which may in any way affect this Agreement or its performance; (v) the compensation
provisions of this Agreement; or (vi) any other matters, whether similar to or different from those
referred to in clauses (i) through (v) above, affecting or having any connection with this
Agreement or the negotiation or performance hereof.
9238432.2 13
9.2 Counterparts
This Agreement is comprised of several identical counterparts, each to be fully executed
by the parties and each to be deemed an original having identical legal effect.
9.3 Amendments
No changes, amendments, modifications or discharge of this Agreement, or any part
hereof, shall be valid unless in writing and signed by the authorized agent of the Contractor and
by the Municipality or their respective successors and assigns.
9.4 Governing Law and Jurisdiction
This Agreement shall be governed as to performance and interpretation in accordance
with the laws of the State of Illinois without regard to principles of conflicts of law.
9.5 Severability
The invalidity of any one or more phrases, sentences, clauses or sections contained in this
Agreement shall not affect the validity or enforceability of the remaining portions of this
Agreement.
9.6 Interpretation
Any headings of this Agreement are for convenience or reference only and do not define
or limit the provisions hereof. Words of any gender shall be deemed and construed to include
correlative words of the other genders. Words importing the singular number shall include the
plural number and vice versa unless the context shall otherwise indicate. All references to any
exhibit or document shall be deemed to include all supplements and /or amendments to any such
exhibits or documents entered into in accordance with the terms and conditions hereof and
thereof. All references to any person or entity shall be deemed to include any person or entity
succeeding to the rights, duties and obligations of such persons or entities in accordance with the
terms and conditions of this Agreement.
9.7 Assigns
All of the terms and conditions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective legal representatives, successors, transferees and
assigns.
9.8 Invalid Tax or Exemption from Tax; Responsibility for Refunds and Collection
In the event that it is determined by a court or administrative agency of competent
jurisdiction that the Tax does not apply to the use of gas by a Customer from whom the Tax was
collected and remitted to the Municipality in accordance with this Agreement, it shall be the
Municipality's responsibility to make any necessary refunds; the Contractor shall not be
responsible for any refunds to the Customer, nor shall the Contractor be required to refund to the
Municipality any Fee retained by the Contractor with respect to the Tax collected from that
9238432.2 14
Customer. If, notwithstanding the foregoing, the Contractor is ordered by a court or
administrative agency of competent jurisdiction to make any necessary refunds, the Municipality
shall reimburse the Contractor for any such refunds made by the Contractor.
In the event that any aspect of the Tax is found to be invalid or unconstitutional by a
court of competent jurisdiction, it shall be the Municipality's responsibility to make any
necessary refunds; the Contractor shall not be responsible for any refunds of the Tax to
Customers, nor shall the Contractor be required to refund to the Municipality any Fee retained by
the Contractor with respect to Tax collected. If, notwithstanding the foregoing, the Contractor is
ordered by a court or administrative agency of competent jurisdiction to make any necessary
refunds, the Municipality shall reimburse the Contractor for any such refunds made by the
Contractor.
In the event that any exemption from the Tax is found to be invalid or unconstitutional by
a court of competent jurisdiction, it shall be the Municipality's responsibility to collect any
amounts of the Tax then due; the Contractor shall not be responsible to collect any such amounts.
If, notwithstanding the foregoing, the Contractor is ordered by a court or administrative agency
of competent jurisdiction to collect any amounts of the Tax then due, the Municipality shall
reimburse the Contractor for any costs of the Contractor related to the collection of such Tax.
9.9 AUseellaneous Provisions
Whenever under this Agreement the Municipality by a proper authority waives the
Contractor's performance in any respect or waives a requirement or condition to either the
Municipality's or the Contractor's performance, the waiver so granted, whether express or
implied, shall only apply to the particular instance and shall not be deemed a waiver forever or
for subsequent instances of the performance, requirement or condition. No such waiver shall be
construed as a modification of this Agreement regardless of the number of times the
Municipality may have waived the performance, requirement or condition.
Whenever under this Agreement the Contractor by a proper authority waives the
Municipality's performance in any respect or waives a requirement or condition to either the
Municipality's or the Contractor's performance, the waiver so granted, whether express or
implied, shall only apply to the particular instance and shall not be deemed a waiver forever or
for subsequent instances of the performance, requirement or condition. No such waiver shall be
construed as a modification of this Agreement regardless of the number of times the Contractor
may have waived the performance, requirement or condition.
9.10 Nonliability of Public Officials
No official or employee of the Municipality shall be charged personally by the Contractor
or by any assignee or subcontractor of the Contractor with any liability or expenses of defense or
be held personally liable to them under any term or provision of this Agreement or because of
the Municipality's execution or attempted execution thereof or because of any breach hereof.
9238432.2 15
9.11 Nonliability of the Contractor's Officers, Directors, Employees and Agents
No officer, director, employee or agent of the Contractor shall be charged personally by
the Municipality or by any assignee or subcontractor of the Municipality with any liability or
expenses of defense or be held personally liable to them under any term or provision of this
Agreement or because of the Contractor's execution or attempted execution thereof or because of
any breach hereof.
9.12 Consequential Damages; Fines; Etc.
Notwithstanding any other provision in this Agreement, neither the Municipality nor the
Contractor, or their respective officers, directors, employees, representatives or agents shall be
liable to the other for consequential losses or damages, including punitive or exemplary
damages, arising out of or incurred in connection with the Tax Collection Services. The
Municipality and the Contractor each hereby release each other and their subcontractors, officers,
directors, employees, representatives and agents from any such liability.
The Contractor shall not be liable to the Municipality for any fine, assessment, penalty,
forfeiture, fee, interest payment or other charge in connection with the Tax Collection Services
or this Agreement notwithstanding any present or future ordinance, mandate or directive adopted
by the Municipality that may purport to authorize the Municipality to assess any such fine,
assessment, penalty, forfeiture, fee, interest payment or other charge to the Contractor in
connection with the Tax Collection Services or this Agreement.
The Municipality shall not seek to impose any lien or encumbrance upon any property of
the Contractor, or seek to revoke, modify or refuse to renew or grant any license, right or
franchise of the Contractor as a means; directly or indirectly, to seek to compel compliance by
the Contractor with this Agreement or in connection with any dispute relating to the performance
of the Tax Collection Services or any obligations of the Contractor relating thereto.
9.13 Limitation of Liability
To the fullest extent permitted by law, the cumulative maximum liability of the
Contractor to the Municipality with respect to claims and costs arising out of the performance or
nonperformance of the Tax Collection Services shall not exceed the amount of the Contractor's
Fee paid to the Contractor during the period that is one year prior to the date on which the
Municipality commences an action against the Contractor.
9.14 Indemnification by Municipality Related to Imposition of Tax
The Municipality agrees to indemnify, defend and hold harmless the Contractor,
including its officers, agents and employees, against any liability, loss, costs and expenses,
including all costs of litigation and all reasonable attorneys' fees, that the Contractor, including
its officers, agents and employees, incur, sustain or are subject to that results from or arises out
of any claim, cause of action or litigation wherein another party asserts that any aspect of the Tax
(including any exemption from the Tax) is unconstitutional under the United States or Illinois
constitutions or otherwise invalid.
9238432.2 16
9.15 Limitation Period on Actions
No action, regardless of form, arising out of this Agreement, or alleging any breach of
this Agreement, may be brought by either the Contractor or the Municipality against the other
party more than three years after such an action accrued.
ARTICLE 10.
NOTICES
Notices provided for herein, unless expressly provided for otherwise in this Agreement,
shall be in writing and may be delivered personally or by placing in the United States mail, first
class and certified, return receipt requested, with postage prepaid and addressed as follows:
If to the Municipality:
If to the Contractor:
Village of Buffalo Grove
50 Raupp Blvd.
Buffalo Grove, Illinois 60089
Nicor Gas Company
1844 Ferry Road
Naperville, Illinois 60563 -9600
Attention: Billing Manager
With a Copy to: Nicor Gas Company
1844 Ferry Road
Naperville, Illinois 60563 -9600
Attention: Community Relations Manager
Changes in the above- referenced addresses must be in writing and delivered in accordance with
the provisions of this Article 10. Notices delivered by mail shall be deemed received three days
after mailing in accordance with this Article 10. Notices delivered personally shall be deemed
effective upon receipt.
ARTICLE 11.
AUTHORITY
11.1 Municipality's Authority.
This Agreement is entered into by virtue of the home rule authority conferred on the
Municipality under Section 6(a), Article VII of the 1970 Constitution of the State.
11.2 Contractor's Authority
Execution of this Agreement by the Contractor is authorized by bylaws or a resolution of
its Board of Directors, and the signature of each person signing on behalf of the Contractor have
been made with complete and full authority to commit the Contractor to all terms and conditions
of this Agreement.
9238432.2 17
IN WITNESS WHEREOF, the Municipality and the Contractor have executed this
Agreement on the date first set forth above—
VILLAGE OF BUFFALO GROVE
Its:
NORTHERN ILLINOIS GAS COMPANY, d/b /a/
NICOR GAS COMPANY
UO-A
Its:
9238432.1 18
IN WrrNESS WHEREOF, the Municipality and the Contractor have executed this
Agreement on the date first set forth above.
VHI AGE OF BUFFALO GROVE
Its: V %►1.K.� -rte t r
NORTHERN ILLINOIS GAS COMPANY, d/b /a/ Ak
NICOR GAS CO
By:
92384322 18
CONTENTS
Clause
Page
ARTICLE 1. INCORPORATION OF RECITALS
................... ............................... 2
ARTICLE 2. DEFINITIONS
ARTICLE 3.
..................................................................
. ... ...............................
SERVICES OF THE CONTRACTOR
3.1
3
Tax Collection General Provisions
3.2
.................
Tax Collection Services
A.
.......................................................... ............................... 3
Collection From Customers
B.
........ ...... ............................... 3
Review of Customer Accounts
C.
....... ...............................
.. 4
Responsibility for Providing Exempt• Customer List
D.
.. ...........................••.•
Remittance
E.
Customer Payments; Collection of Tax by Municipality
F.
......................... '
Records and Audits
G.
.................. ......... ......................
Liability for Tax Refunds, Disputes
H.
.. ....
Amendments to Tax Ordinance
3.3
• .............................. . 8
Subcontracts and Assignments .................
A.
... . 9
Assignment by Contractor ,.....
B.
Effect of Municipality Consent..
C.
............................................................. 20
Assignment by the Municipality............................................. '
3.4
, .10
Confidentiality ..........................................
3.5
........................................ .10
Compliance with Laws....
ARTICLE 4..
......... .. .....................:......... ..... .......11.,
Term. ..
4.1
Term of Agreement ........................................... ......................,....11
A.
Original Term .........................................................:................
B.
.............................11
Extension ..........:......................................
ARTICLE 5.
............................... .11
.............................
COMPENSATION
ARTICLE 6.
....................... ............................... .. ............................... 11
DISPUTES ....................
ARTICLE 7.
...................... ......12
REPRESENTATIONS AND WARRANTIES
7.1
..............................................
Contractor's Representations and Warranties
7.2
......................... ..........12
...................
Municipality's Representations and Warranties
ARTICLE 8.
............................ .......... ............12
TERMINATION .............................................
8.1
............................... ............12
Termination Right of Municipality ...............
8.2
............................... ........... .............12
Termination Right of Contractor
ARTICLE 9.
............................................ .............................13
GENERAL CONDITIONS
9.1
............................. .....13
Entire Agreement ...............
A.
................................................... .. .............................13
General ...........
B.
...........
............................... .........13
. .................... ...............................
No Collateral Agreements .......
............................... .............13
.. ...............................
9238432.2
CONTENTS
Clause Page
9.2 Counterparts ............................................................................ .............................14
9.3 Amendments ........................................................................... .............................14
9.4 Governing Law and Jurisdiction ............................................. .............................14
9.5 Severability ............................................................................. .............................14
9.6 Interpretation ......................:.................................................... .............................14
9.7 Assigns .................................................................................... .............................14
9.8 Invalid Tax or Exemption from Tax; Responsibility for Refunds and
Collection................................................................................ .............................14
9.9 Miscellaneous Provisions ........................................................ .............................15
9.10 Nonliability of Public Officials ............................................... .............................15
9.11 Nonliability of the Contractor's Officers, Directors, Employees and
Agents..................................................................................... .............................16
9.12 Consequential Damages; Fines; Etc ........................................ .............................16
9.13 Limitation of Liability ............................................................. .............................16
9.14 Indemnification by Municipality Related to Imposition of Tax ..........................16
9.15 Limitation Period on Actions .................................................. .............................17
ARTICLE10. NOTICES .......................................................................... .............................17
ARTICLE11. AUTHORITY ................................................................... .............................17
11.1 Municipality's Authority ........................................................ .............................17
11.2 Contractor's Authority ............................................................ .............................17
9238432.2 _ll_