City Council

MINUTES WOODSTOCK CITY COUNCIL SPECIAL MEETING October 31, 2021 City Council Chambers A special emergency meeting of the Woodstock City Council was called to order at 4:00 PM on Sunday, October 31, 2021 by Mayor Michael Turner in the Council Chambers at Woodstock City Hall. This meeting was noticed as required by the Open Meetings Act. All Councilmembers were notified of the meeting as were any others who have requested such notification. The purpose of this meeting was to address the Illinois General Assembly’s HB3136 which passed through both houses on Thursday, October 28, 2021 and was further amended on Thursday, October 28, 2021 to preempt home rule authority if an ordinance imposing an amusement tax on persons who participate in the playing of video gaming terminals was not in place before November 1, 2021. This special and emergency meeting was to consider an ordinance imposing a tax upon the amusement of playing a video gaming terminal in the City of Woodstock. Mayor Turner noted this meeting is being held both in person and remotely via Zoom, explaining how a member of the public attending remotely may participate. He explained the Consent Calendar process, invited public participation, and noted, as is the City’s policy, this meeting is being live streamed with a recording archived should members of the public wish to view it in the future. A roll call was taken. COUNCIL MEMBERS PRESENT IN THE COUNCIL CHAMBERS: Darrin Flynn, Lisa Lohmeyer, Wendy Piersall, and Mayor Michael Turner. Gordon Tebo arrived at 4:05 PM. COUNCIL MEMBERS ATTENDING REMOTELY: Bob Seegers, Jr. COUNCIL MEMBERS ABSENT: Tom Nierman. STAFF PRESENT IN THE COUNCIL CHAMBERS: City Manager Roscoe Stelford, Economic Development Director Garrett Anderson, IT Director Dan McElmeel, and City Clerk Cindy Smiley. STAFF ATTENDING REMOTELY: City Attorney Ruth Schlossberg. III. FLOOR DISCUSSION A. Public Comments There were no comments forthcoming from the Public. B. Council Comments There were no comments forthcoming from the Council. CONSENT AGENDA Noting there was only one item on the Consent Agenda, with the consensus of the City Council the Consent Agenda was dissolved by Mayor Turner.  Woodstock City Council 10/31/21 Page 2 of 4 MANAGER’S REPORT NO. 190 Item A-1 - Ordinance – Establishment of a Video Gaming Push Amusement Tax Mayor Turner provided background information on this item, noting it came about due to an amendment to a bill, which had been inactive over the past several months, but was passed in Springfield on Thursday. Stating the bill puts limitations on Home Rule Communities, he noted it was passed with the provision a municipality must put this tax in place before November 1, 2021 or the municipality would never be able to enact a Push Tax. He stated this amendment was passed on Thursday, October 28 with the City becoming aware of it on the morning of Friday, October 29. Mayor Turner stated several discussions have taken place since that time between the City Attorney, City Staff, and himself. He stated it was his decision that in the interest of Woodstock, Council should consider this action, as failure to do so would mean a failure to consider the opportunity for the revenue it would bring. He noted several other communities in McHenry County have held or are holding similar meetings today to address this issue, stating it is not unique to Woodstock. At the request of Mayor Turner, City Attorney Schlossberg provided additional information and history regarding this issue. She noted a similar ordinance was passed by some communities about a year ago, following which there was some litigation of their actions. She stated Woodstock has been waiting to see what happened with that litigation, noting the state legislature is now forcing action. She opined the City has the right to enact this ordinance, which was created by the Illinois Municipal League, noting other communities are doing the same. In response to questions from Mayor Turner, Ms. Schlossberg confirmed if the City does not act on this at this time, there is no opportunity to do so in the future, per the state legislation. She further stated, passage of this ordinance would not preclude Council from repealing it or reducing it in the future. Mayor Turner stated he has received feedback that the proposed push tax is not really 1% or $.01 as people can play various amounts, which would result in varying amounts of tax. He stated he is open to bringing this to Council and is sensitive to making changes, if necessary, opining Council should consider input from businesses after some time has passed to see its effect. He stated he is not willing to forgo discussion today; however, because it is Council’s responsibility to do so. Mayor Turner noted the administration of this push tax is up in the air and, as such, Council is discussing and voting on the tax, but it is his recommendation the administration of it be left up to City Staff. He stated it is his intention not to go into arrears, but to begin to enforce the tax when it goes into effect. He opined the City should begin to collect the tax when the administrative procedures go into effect rather than day one. In response to a question from Mayor Turner, Ms. Schlossberg acknowledged this is permitted. The floor was opened for Council discussion. Opining this is not really a tax on the individual, Councilman Tebo agreed this should be discussed and passed. Mayor Turner stated others would disagree and feel it is a tax on the individual. Discussion followed of the reports provided in the Staff Report, showing the amounts wagered and distributed and the net terminal income. In response to questions, Mr. Stelford noted 30% is taxed and distributed between the state and the municipality with the municipality receiving 5%. He stated the establishment, and the gaming operators receive 70%, explaining how this is calculated. Discussion followed of where the push tax will come from, with Ms. Schlossberg stating the City has the authority to levy a tax on the player not on the operator and this has to be worked out  Woodstock City Council 10/31/21 Page 3 of 4 administratively. She stated the question for the future is the collection of the fee using the technology; however, as a legal matter, this must be an additional fee on the player. In response to further discussion, Mayor Turner stated the amount of revenue this might generate will be significant, with Councilman Tebo stating it will not come from the businesses, but will come off the top. He opined the City should pass this ordinance and then delve into the details of how it affects the businesses, expressing his feeling it will not impact them as much as some of the correspondence indicates. In response to Councilman Tebo’s statement that constituents will ask why the City needs the money, Mayor Turner stated like any household, the City must look at what goes out and what comes in. He opined sometimes this type of tax is more palatable than something like property tax. He stated the state has granted the City the ability to use video gaming as a revenue stream, which means the City does not have to implement other revenue sources or receive as much from them. He opined this would take some pressure off property taxes in the future, because it is another revenue stream. In response to a question from Councilwoman Piersall, Mayor Turner stated this ordinance has been passed by Crystal Lake, McHenry, and Algonquin, but was not passed by Prairie Grove. Mr. Stelford stated Crystal Lake passed a placeholder ordinance. In response to a question from Mayor Turner concerning a placeholder ordinance, Ms. Schlossberg stated it would be her advice to pass the ordinance with more clear-cut language that is before Council, rather than a placeholder ordinance to avoid any ambiguity. Discussion followed of possible language changes to the ordinance, with Ms. Schlossberg opining the City should pass an enforceable ordinance, noting the state legislature’s action requires municipalities pass the ordinance today and abate at a later date, if that is the wish. She stated the City should not get into a position where someone could state it did not satisfy the statutory requirement. Mayor Turner stated it is the City’s responsibility to bring in revenue and provide services to the community, opining this is an opportunity the state will take away if the ordinance is not passed today. He stated the question is, does the City wish to take advantage of this. In response to Councilwoman Lohmeyer’s questions, Mr. Stelford stated the ordinance must be passed now or the City will never have the opportunity to implement this revenue source. He stated Council could specify whatever amount it wishes, but suggested keeping this ordinance the same as those passed by the other communities, as indicated by Ms. Schlossberg. He noted the amount could be reduced at some point in the future. Mayor Turner agreed, noting if litigation occurs down the road, it would be beneficial to have the same ordinance as the other communities. In response to a question from Councilman Flynn as to how the number of “pushes” is determined, Mr. Stelford opined the City will have to collect the information from the gaming operators. He stated he would be shocked if they are not already providing this information to the businesses. Ms. Schlossberg stated one of the operators is already providing this information in another community. In response to a question from Councilman Flynn, Mr. Stelford agreed if the terminal owner did not make this available to the City, the $.01 would have to come from the business owner, describing how this is similar to sales taxes. Ms. Schlossberg noted the City has recently imposed other local taxes, such as the additional Motor Fuel Tax, talking about how this is done with the businesses allowed to take a small administrative fee.  Woodstock City Council 10/31/21 Page 4 of 4 Noting the owner of a gas station can adjust his price per gallon to cover the MFT, Councilman Flynn stated the push tax will cut into the business owner’s revenue and will affect the City’s businesses. He expressed support of passing the ordinance now and coming back when the details are really known to be sure it is in the best interest of the businesses. Councilman Seegers stated he has been vocal about the City’s businesses not requiring gaming revenue in order to succeed. He understands this is available in other cities, but stated the type of businesses he would like to see should not rely on gaming activity. He stated he would like the video gaming activity to not subsidize the businesses, noting he, therefore, has no problem with a push tax. Councilman Seegers noted there is a “sin tax” on smoking and drinking, stating he does not see any difference with this push tax. He opined if one company can make the number of pushes available, he is sure the others can figure it out. Councilman Seegers opined the Council should absolutely act on this ordinance and then take another look at it in the future if it feels differently. Councilman Tebo opined the businesses will find a way to make money, stating he does not believe they will be hurt by this. He agreed Council should pass the ordinance today and then take another look at it later. There were no comments forthcoming from the Public. Motion by D. Flynn, second by G. Tebo, to approve Ordinance 21-O-61, identified as Document #1 An Ordinance Pertaining To Amusement Taxes for the City of Woodstock. Councilman Seegers lost internet connectivity at 4:48 PM and, therefore, left the proceedings. In response to a question from Mayor Turner, there were no further comments forthcoming from the Council. A roll call vote was taken. Ayes: D. Flynn, L. Lohmeyer, W. Piersall, G. Tebo, and Mayor Turner. Nays: none. Abstentions: none. Absentees: T. Nierman and B. Seegers. Motion carried. Mayor Turner thanked all for their attendance. He stated the City will continue to look at this to be sure the goal is reasonable and appropriate and will take steps to inform everyone. FUTURE AGENDA ITEMS There were no further additions, deletions, or corrections to tentative Future Agendas. ADJOURN Motion by W. Piersall, second by L. Lohmeyer, to adjourn this special meeting of the Woodstock City Council to the next regular meeting on Tuesday, November 2, 2021, at 7:00 PM in the Council Chambers at Woodstock City Hall. Ayes: D. Flynn, L. Lohmeyer, W. Piersall, G. Tebo, and Mayor M. Turner. Nays: none. Abstentions: none. Absentees: T. Nierman and B. Seegers. Motion carried. The meeting was adjourned at 4:57 PM. Respectfully submitted, Cindy Smiley City Clerk