VILLAGE OF BURR RIDGE W MEMORANDUM

TO: Mayor, Trustees, Village Attorneys, and Village Clerk

FROM: Village Administrator Doug Pollock and Staff

DATE: June 8, 2018

SUBJECT: Administration Weekly Memo

Calendar and Meetinq Hiqhliqhts o Sunday, June 10: Car Show - 10 AM to 2 PM; Burr Ridge Village Center . Monday, June 11: Board of Trustees - 7 PM; Village Hall Board Room o Wednesday, June 13: Board of Fire and Police Commissioners - 7 PM; Village Hall Conference Room o Thursday, June 14: Local School Committee - 7 PM; Village Hall Board Room . Friday, June 15: Concert on the Green - 7 PM to 8:30 PM; Village Green o Monday, June 18: Plan Commission - 7 PM; Village Hall Board Room . Wednesday, June 20: Bike Committee - 6:30 PM; Village Hall Conference Room o Monday, June 25: Board of Trustees - 7 PM; Village Hall Board Room . Wednesday, July 4: lndependence Day - Village Hall Closed Staff Hiqhliqhts and Updates

Businesses Meet with Com Ed and Village: On Friday, June 8, Mayor Straub, Village staff and local business representatives met with Com Ed officials to discuss outages that occurred over the Memorial Day weekend as well as ongoing problems with the reliability of local electric service. There were several hours-long outages that weekend that had a significant impact on businesses. Represented at the meeting were the Village Center, Hampton Social, Topaz, Two Bostons, Kohlers Spa, LifeTime Fitness, Marriott Hotel, and Crowne Plaza Hotel. Com Ed will provide a summary report next week that will detail the issues and action steps to be taken.

Residents File Complaintwith USDOE OCR: On Friday, June l,local residents filed the complaint regarding Hinsdale High School District 86 with the Department of Education Office of Civil Rights. There were over 800 signatures collected for the complaint. A copy of the complaint is on the Village's web site.

lvliscellaneous Memo 6t8t2018 Page 1 of 3 Legal Notice for Buege Lane/Ruzicka Annexation Agreement: The legal notice for the public hearing for this Annexation Agreement was published last week. The hearing is scheduled for the June 25 Board ofTrustees meeting. Also on that agenda will be consideration of the petition to rezone the Malek property on the east side of Buege Lane.

Wolf Road Pedestrian Crossing Update: Cook County returned its review comments for the Wolf Road Pedestrian Signal Project to our engineering consultant on NIay 10th. This is the third review by Cook County. The latest plan review comments include the addition of items into the scope of work that will increase the cost of the pOect. The revised cost estimate is $40,200 which is still within the range of the Village's previous estimates and will be shared by the Village, the Pleasant Dale Park District, and the Pleasantview School District (with $9,369 paid by Com Ed through the Powering Safe Communities program). We anticipate advertising for bids this month, with a bid opening and contract award in mid-July. Construction would be expected to start in mid- August.

Road Program Work on Burr Ridge Streets: The Village's Road Program is well undeMay. Milling and paving was completed this week on Bucktrail Drive and Deerview Court. Next week, weather permitting, work may include paving on Shore Drive and Shore Ct, curb installation and pavement milling on Peppermill Court, and patching on Greenbriar Court. All roads remain open with brief interruptions while paving. We would like to thank those residents and businesses in advance for their patience while crews are working in their neighborhood on projects that are vital to our Village's infrastructure.

Tollway to Meet with Residents on June 13: Residents of The Heatherfields requested that staff and Tollway officials attend their June 13 homeowners meeting at the Village Hall (7pm) and that we invite Tollway officials to attend as well. The Tollway will be represented at the meeting and we have inviled several interested residents from north of Plainfield Road to attend as well.

Latex Paint Recycling Program: DuPage County has set up Latex Paint Recycling Program at the Woodridge Greene Valley Wastewater Treatment Facility, 7900 S. Route 53, Woodridge. The Program will run Monday through Saturday, 8:00 ANI - 2:00 PM, between June 25 and August 4, 20'18. Attached isaflyerwith more details.

Annual Scavenger Service Rate lncrease: As per the Village's contract with Groot lndustries, effective for all service provided after August 1, 2018 there will be a 2.5% increase in the monthly service rate for garbage pickup. The standard monthly rate will increase from $16.85 to $'17.27 per month. Services provided and pick up days remain the same. For further information, please refer to thiiltk on the Villaqe web site.

Reports and Briefinqs

IML Spring Legislative Session Summary:Attached is the lllinois l\4unicipal League 2018 Spring Legislative Session Summary dated June 4, 2018.

I\,fiscellaneous Memo 6t4t2018 Page 2 of 3 o DMMC Legislative Update: Attached is the DuPage Mayors and Managers Conference Legislative Update dated April 13, 2018.

DP:bp Encl ec: Department Heads Assistant to the Village Administrator

lvliscellaneous Memo 6t8t2018 Page 3 of 3 APPENDIXA Groot lndustries Elk Grove Village, IL Scave Services P osal PRICE ITEM YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 (8/L/t7- (8/t/78- (8/t/te- (B/t/20- (8/t/21- 7 /31/tAl 7 /31/r9l 7 /31/2O'l 7 /3t/2tl 7 /31/221

Unlimited collection of refuse $16.85 $77.27 st7 .7 0 $18.14 $18.s9 using either 95-gallon or 65- Per month Per month Per month Per month Per month gallon cafts and recycling [2.50lo Increase) [2.570Increase) (2.5% Increase) [2.5% IncreaseJ using 65-gallon carts with 95- gallon carts available upon requesL Groot will provide additional cart rental for those residents who have additional waste for $5.00/month.

Landscape waste using Kraft No additional charge paper bags or containers not exceeding 50 lbs. Optional 9S-gallon or 65-gallon containers will be provided by the hauler at a price of $5/cartlmonth

Senior discount (65 years and $ 16.10 $16.50/ $16.91 $ 17.3 3 $77 .7 6 olderl Per month Per month Per month Per month Per month (4.5% Discount) [4.50/o Discount] [4.5% DiscountJ [4.50lo Discountl (4.50/o Discountl

Cost for Top ofDrive empty $24.85 $25.47 $26.L1- $26.7 6 $27.43 cart return option Per month Per month Per month Per month Per month (2.5%o Increasel [2.50lo Increase) [2.5%o Increase) (2.50lo Increasel

Cost for backdoor refuse $3 3.70 $34.54 $35.40 $36.29 $37.20 service option (recycling and Per month Per month Per month Per month Per month landscape waste at the curb) [2.5% Increase) (2.50lo lncrease) [2.5% Increase) (2.5% Increasel Residents will be permitted No additional charge to place unlimited bulk items which are not banned from Illinois landfills out for weekly collection

Collection of white goods $2 5.00 $25.63 $26.27 $26.93 $27.60 [refrigerator, freezer, oven, (2.5% Increase) (2.50lo Increase) [2.570Increase) (2.570 IncreaseJ stove, washer, dryer, dishwasher, etc.) Emergency Collection upon request ofthe Villaqe

Truck (x1) $175.00 $179.38 $183.87 $188.47 $ 193.18 ($175lhour) [2.5% IncreaseJ (2.50lo IncreaseJ (2.5%o Increase) (2.5%o lncreasel

Labor (x1) $45.00 $46.13 $47.28 s4A.46 $49.67 [$45/hourl [2.50lo Increase) (2.5% Increase) (2.50/o Increase) [2.5% Increase)

Disposal $58.50 $59.96 $61.46 $63.00 $64.58 (2.570Increase) [$58.50/tonl (2.50/o IncreaseJ (2.570Increase) (2.5% lncrease)

19 20r8 ffi I Spring a I I 'T: s U

June 4, 2018 Message to Our Members from IML Executive Director Brad Cole

Being the formal voice for lllinois municipalities at the Sfafehouse is a primary responsibility of the lllinois Municipal League (lML). IML was founded in 1913, and throughout those 105 years has continuously worked for the benefit of municipalities at both the state and federal levels.

Our legislative advocacy allows us to provide a tangible return on your investment in lML. We appreciate your membership and are pleased to provide the following summary of the 2018 spring legislative sesslon.

Throughout fhrs sesslon of the lllinois General Assembly, IML reviewed over 3,000 new bills, constitutional amendments and resolutions on behalf of our membership. Further, IML pursued an aggressive legislative agenda intended fo asslsf municipal officials, protect local authority and prevent harmful legislation from becoming law.

This summary will be supplemented by future documents detailing what happened during this legislative sesslon. Watch for our "Bills Approved by Both Chambers" document, an updated "Repoft on Preemption Legislation" and other documents in future rssues of the weekly Statehouse Briefing.

Once again, thank you for your membership in the lllinois Municipal League. lf you have any questions or comments, please feel welcome to contact me either by phone at (217) 525-1220 or email at [email protected]. Thanks. - BC

GeneralAssemb Passes n Fiscal Year 2019 Budget

One of the last actions the General Assembly took was to approve a state budget for State Fiscal Year (SFY) 2019, which starts on July 1 , 2018. The budget legislation (available via this link) was signed into law today by Governor Bruce Rauner.

State Budget Legislation Partially Restores LGDF Cut

The General Assembly approved a state budget that partially restores the 10% cut to the Local Government Distributive Fund (LGDF) adopted in the SFY 2018 budget. ln the SFY 2019 budget, LGDF distributions are reduced by 5o/o. Municipalities and counties will receive 5.757o/o of total state income tax collections during SFY 2019.

IML advocated aggressively for the restoration of this cut. Our efforts included frequent conversations with the legislative leaders about rescinding the cut and testifying at the Senate Joint Appropriations Committee hearing in support of the full distribution of LGDF. IML coordinated with the regional councils of governments as well as elected and appointed municipal officials in conducting a statewide roll call to pointedly ask legislators if they would oppose a budget that doesn't fully restore the 10% cut that was adopted in the SFY 2018 budget. lt is disappointing that we were unable to achieve our goal of full funding, but IML will continue that fight next year and every year thereafter. Sales Tax Administrative Fee Reduced

The budget reduces the administrative fee on locally imposed sales taxes trom 2Yo to 1 .5%. While this may be an improvement for municipal revenues, the reduced rate still far outweighs the actual costs incurred by the state to administer the collection of locally imposed sales taxes and needs to be further reduced. Based on information from the lllinois Department of Revenue (IDOR), the actual percentage needed to cover costs of the collection is closer to 0.5%.

IML initially proposed legislation (HB 4101 - Reo. Anthonv Deluca. D-Chicaqo Heiohts/SB 2249 - Sen. Michael Hastinqs, D-Tinlev Park) in tall2017 to reduce the administrative fee to 1%. While the legislation did not advance, IML pushed for the fee to be reduced during the budget process. tML will continue its advocacy to reduce or eliminate this adminastrative fee. IML thanks Rep. DeLuca and Sen Hastings for their leadership on this issue.

CPPRT Divercions Continue

The budget includes a total of approximately $300 million in diversions from Corporate Personal Property Replacement Tax (CPPRT) revenues. These diversions continue the frustrating erosion of local revenues that has occurred over the last several years out of CPPRT. IML opposes any CPPRT diversions and has proposed finding a longterm solution to eliminate the annual fight to retain this funding.

Marketplace Fairness Act

During the spring session, the Senate took up legislation that would allow the state to recoup use taxes for purchases made by lllinoisans from oulof-state sellers. Currently, the seller must have a physical presence in the state before the state can require collection of sales and use taxes.

The proposal (SB 2577 - Sen. . D-Elqin/Reo. Anna Moelter. D-Etojn) would require that the Use Tax apply to any purchases made through a seller who undertakes 200 transactions in lllinois or has gross receipts of more than $100,000 annually from lllinois residents.

The language from SB 2577 was included in the Budget lmplementation leg islation (HB 3342 - Rep Arthur Turner. D-Chicaqo/Sen. , D-Chicaqo) as a part of the budget.

The legislation mirrors a statute in South Dakota that is the subject of a United States Supreme Court case, South Dakota v. Wayfair.Ihe Supreme Court is expected to deliver an opinion on that case in June. lf the U.S. Supreme Court upholds South Dakota's law, the lllinois law would generate some revenues that have been lost to lnternet sales starting on October 1, 2018.

IML supports the Marketplace Fairness Act and has been a strong proponent of similar legislation both at the state and federal levels.

IML Pursues A regsive 2018 State Legislative Agenda

IML introduced an expansive agenda with several initiatives intended to provide financial relief to municipal governments. Much of our agenda drew significant opposition from interest groups and political factions restricting the bills from advancing through a difficult political environment. IML's successful initiatives are below.

An IML initiative (SB 2638. Sen. James Clavborne, D-East St. Louis/ReD. Anthon DeLuca, D-Chicaqo Heiohts) to clarify that local governments can continue filing their annual audit statements with the Comptroller using the cash-basis method of accounting was approved by the General Assembly. Under the bill, local governments can choose whether to file their annual audits on a cash-basis or accrual method of accounting. Local governments that file their audits using the accrual method after June 30, 2019, would be obligated to continue filing their audits using accrual. This initiative was introduced in response to the Comptroller's attempt to unilaterally mandate accrual-based filings.

Another IML initiative (SB 2328. Sen. Linda Holmes, D-Aurora/Reo. Maroo l\4cDermed. R-Mokena) approved by both chambers would protect the value of the exemption allowed within the Local Government Professional Services Selection Act for the Qualifications-Based Selection (QBS) process. The bill increases the exemption threshold from $25,000 to 940,000 and indexes it to inflation. Contracts for professional services from architects, engineers and land surveyors valued at less than $40,000 would be exempt from the full QBS process.

Both of these bills will now be sent to the Governor for his consideration. IML will be communicating with the administration asking for his signature on both pieces of legislation. ln a continuing effort to reduce pension cost obligations facing municipalities, IML drafted and Sen. Pam Althoff (R-McHenry) introduced tive bills (SB 3422. 3423. 3424. 3425 and 3426) proposing to consolidate the over 650 downstate and suburban municipal public safety pension funds. The proposals would consolidate the funds to varying degrees, including merging them into the lllinois Municipal Retirement Fund (IMRF), creating separate funds for police and firefighters and consolidating existing pension fund assets for investment purposes.

IML provided testimony about these bills during an April subject matter hearing in the House Personnel and Pensions Committee. We are presently pursuing an independent cost savings analysis for each bill to inform legislators and stakeholders about how each bill would benefit municipalities and taxpayers.

On May 29, 2018, Senate President John J. Cullerton filed Senate Amendment #1 to SB 317. The proposal would allow for downstate police and fire pension boards to opt in to either a Downstate Police Pension lnvestment Fund or a Downstate Fire Pension lnvestment Fund that would assume the investment authority of the local boards. A local pension board would have the option to transfer its investment authority (only) to the downstate fund.

The legislation reduces training requirements for local pension fund trustees and allows both downstate investment funds to contract with either the lllinois Municipal Retirement Fund (IMRF) or the lllinois State Board of lnvestment (lSBl) for administrative, investment, professional, technical or other services or facilities. lt also directs the Commission on Government Forecasting and Accountability (COGFA) to analyze the merits and feasibility of investment consolidation, in direct response to a request from lML.

IML believes that while this proposal takes a step in the right direction, further discussion and modifications will be necessary to achieve significant additional efficiencies and lower costs for communities. IML is continuing to review the language and will work with the Pension Fairness for lllinois Communities Coalition (PFICC) to determine next steps.

IML Advocates For TIF in Task Force's Discussions

The 2017 school funding legislation (SB 1947 - Sen. , D-Bunker HilURep. Will Davis, D- East Hazel Crest) called for the creation of the Tax lncrement Financing (TlF) Reform Task Force. This Task Force met in the fall and throughout the spring legislative session, and IML attended and reported on those meetings. With significant input from IML and other constituent groups, the Task Force authored a final reoort , available via this link. which was released on June 1,2018

IML presented significant information that illuminated the powerful positive economic impact TIF has on communities throughout lllinois. IML also submitted comprehensive reform proposa ls in a Februarv 6 memo, an Aoril 17 memo and an April 23 memo that would improve collaboration with other taxing districts, increase opportunities to utilize TlF, expand flexibility to fund projects within a municipality and ease the burdens of TIF district administration. IML also informed the Task Force that any issues that would restrict municipal authority would be opposed. These proposals and other information, including proposed reforms from other organizations, are available online at iml.oro/tif. Data from the lllinols Department of Revenue (IDOR) also established that TIF funding has only a small impact on school funding in the vast majority of lllinois communities that employ this critical development tool.

However, there are a handful of communities where significant portions of the municipality are within TIF districts. Local school officials expressed concern about the impact of TIF on their resources within these communities. School officials were also critical of the ability of municipalities to establish TIF districts despite the objection of the local school district, and questioned the equity of TIF increment transfers between TIF districts, particularly when those transfers diverted funds out of the school district that generated the increment. A more timely and equitable distribution of surplus funds was also proposed by school officials.

Representatives of the Cook County Clerk's office called for increased reporting on the use and distribution of TIF funds and more vigorous oversight of TIF administration. School officials echoed these sentiments, and a significant number of the members of the Task Force seemed supportive of addressing the reporting and oversight issues.

As the recommendations from the forthcoming repo( matriculate to legislation, IML will remain engaged to protect TIF as an economic development tool and to ensure reform measures do not impose unnecessary burdens or restrictions.

General Assembl Continues to Preempt Munici pal Authority in Hiring

Legislation prohibiting home rule municipalities from hiring a flre chief who does not possess specific statutory credentials or who has not served as a firefighter in the appointing jurisdiction for at least 10 years was approved by the General Assembly (SB 2619 - Sen. Neil Anderson, R-Andalusia/Reo. Kathleen Willis, D-Addison). IML actively opposed the bill and will request that Governor Rauner veto the legislation.

A similar bill (SB 1304 - Sen. Neil Anderson. R-Andalusia/Rep. Kathleen Willis. D-Addison) affecting non-home rule municipalities was enacted into law in 2017 over the objections of lML.

Le islation Ex andin Definition of Firefighter Passes

Three pieces of legislation expanding the definition of flrefighter advanced out of both chambers and now go to the Governor's desk for his signature or veto. These bills are intended to apply to full-time paramedics who don't perform firefighting activities.

HB 126 (Reo. Kathleen Willis. D-Ad dison/Sen. Linda Holmes. D-Aurora) includes paramedics employed by a unit of local government within the definition of firefighter for the purposes of collective bargaining.

HB 127 (Reo. Kathleen Willis, D-Addison/Sen. Linda olmes, D-Aurora) adds paramedics and emergency medical technicians employed by a unit of local government under the definition of firefighter and makes them eligible for benefits under the Public Safety Employee Benefits Act (PSEBA).

HB 5221 (Reo. Kathleen Will is, D-Addison /Sen. Linda Holmes, D-Aurora) changes the definition of an eligible employee under the Public Employee Disabality Act (PEDA) to include individuals employed as full{ime paramedics or fireflghters who perform paramedic duties.

IML opposed all three bills based upon the increased costs that municipalities could face and will urge the Governor to veto each bill. Legislation Attemptin Another CPPRT Diversion Fails to Advance

An |ML-opposed bill (SB 2260, Sen. Jil Tracv. R-Quincv/Rep. Dan Burke, D-Chicaoo) to reallocate up to $4.3 million in CPPRT revenue to certain school districts during SFY 2018 was approved by the Senate but failed to advance in the House. IML testified in the Senate Education Committee against any further diversions of CPPRT from municipalities, highlighting the other revenue cuts municlpalities have seen on top of CPPRT diversions. lf enacted into law, CPPRT funds would have been taken away from other local governments, including municipalities, in order to fund eligible schools.

The continued reductions in CPPRT fundang to municipalities has caused a shift in allocations that IML considers inconsistent with the purpose of CPPRT's original enactment. We have already begun examining how to address CPPRT funding for municipalities and other entities as a long{erm issue with the General Assembly.

Pro ert Tax Freeze Le islation Not Addressed

IML has consistently advocated against legislation proposing to permanently freeze property taxes. We have expressed our sentiment in meetings with legislators and administration staff both individually and when property tax freeze legislation is considered by House and Senate commiftees. We are pleased to report that the General Assembly did not make a serious effort to advance any prope(y tax freeze legislation during the spring session.

This issue will continue to be a topic of discussion for many years, which is why we encourage municipal officials to clearly explain to their residents the purpose and use of local property tax funds.

IML Protects Municipal lnterest in Consolidation Discussion

Government consolidation was once again a prime topic of conversation among General Assembly members. IML remains actively engaged in all discussions of consolidation that could impact municipal government.

One proposal (HB 5777 - Reo. Sam Yinqlinq, D-Round Lake Beach/Sen. Tho mas Cullerton. D-Villa Park) sought to reduce the signatures required to initiate a referendum on consolidation of contiguous municipalities to 250 electors in each municipality. A favorable outcome of the referendum would trigger the consolidation provisions found in the Union of Contiguous Municipalities statute.

IML opposed this legislation as the petition requirement was far too low and inconsistent with the number of signatures required to rnitiate other form of government referenda. ln addition, the statute proposed for amendment pre-dates the 1970 lllinois Constitution. While the House sponsor was willing to address some of IML's concerns, without substantial additional amendments, IML remained opposed to the legislation.

The measure passed the House on April 27, 2018, but due to IML'S advocacy was not called for a vote in the Senate and was amended by the Senate sponsor to make changes to the Counties Code instead.

Consolidation will likely continue to be a popular subject in the General Assembly. IML will continue to advocate to protect municipal interests in consolidation legislation.

Lead Water Service Line Re lacement Mandate Pending

080 Sen. Heather S n D- would mandate that municipalities and community water suppliers create a plan within one year of the bill becoming law to remove all known lead service lines within 10 years of plan completion. The cost of this mandate would be significant, and IML opposes the bill because municipalities would be solely responsible for funding the lead service line mitigation SB 3080 did nol advance during the spring session, but IML anticipates future efforts to move the issue forward. We will continue to advocate against the high costs associated wlth the proposed legislation while exploring more workable solutions.

SALT Workaround Le islation Debated; IRS to Determine Regulations

The Senate approved HB 4237 (Reo. Jonathan Carroll. D-Northbrook/Sen. , D-Deerfield) and sent the legislation to the House on Mav 24, 2018. The House sponsor elected to hold the bill because of disagreements with how the bill was amended in the Senate.

The House sponsor has filed an amendment to SB 3238 (Sen . D-Oak ParuReo Jonathan Carroll, D-Northbrook) to incorporate a more generous tax credit and require that the charitable funds get written authorization from the lnternal Revenue Service (lRS). Both proposals attempt to create a mechanism to get around the federal government's State and Local Tax (SALT) deduction cap enacted as a part of the Tax Cuts and Jobs Act signed into law in December 2017.

Both proposals would appear to allow taxpayers to receive a property or income tax credit in exchange for charitable contributions to funds established and controlled by public bodies for public use. IML opposed the legislation due to the lack of clarity about the impact this could have on municlpal revenues at the state level and the ability to deduct these charitable contributions on federal tax returns.

The IRS announced on Wednesday , May 23,2018, that it is currently developing regulations to address the ability to claim donations to public bodies as charitable donations.

IML opposed both pieces of legislation, and they currently remain in the House. IML urges the General Assembly to wait for guidance from the IRS and to seek further clarity on how this new program will work at the state level.

IML to Provide Guidance on Service-Member Emplo ment Le islation

SB 3547 (Sen. Thom as Cullerton, D-Villa ParUReo. Linda C oa Lavia, D-Aurora) would create the Service-Member Employment and Reemployment Rights Act. The bill seeks to address the employment rights of service members, including employment protections and benefits for public employees who are members of a reserve component. This legislation could have an impact on municipalities. The bill was approved by both chambers. lf signed into law, the effective date will be January 1 , 2019.

IML will be working with stakeholders to develop guidance on what municipalities must do to comply with this legislation if it were to be enacted into law.

General Assembl Considers Aviation Fuel Tax Legislation

An amendment to SB 482 (Sen. John Cullerton. D-Chicaoo/Reo. Michael Zalewski, D-Riverside) was approved by the House on the last day of session, but the bill did not receive a final vote in the Senate The bill as amended intends to bring lllinois into conformity with federal rules that require aviation fuel tax revenues to be used strictly for airport-related purposes.

lllinois received a deadline extension of June 30, 2018, to comply with the federal requirements and avoid possibly jeopardizing federal transportation funding. A second deadline extension may now be required since the General Assembly adjourned without passing conforming legislation.

IML is opposed to SB 482 because it requires municipalities to seek approval from the lllinois Department of Transportation (IDOT) before aviation fuel tax revenues are distributed to eligible communities based upon the sale of aviation fuel within their jurisdictions. IML drafted an alternative bill (HB 5825 - Reo. Robert Pritchard, R-Svcamore) that would require municipalities to confirm with the lllinois Department of Revenue (IDOR) that aviation fuel tax revenues were spent for airport-related purposes after the money had been distributed to the municipalities where the point of sale occurred. IML will continue our advocacy to resolve this issue of federal compliance and has formally requested a meeting with IDOR to work on this issue over the summer months.

Our Advocac Continues

Once again, thank you for your membership and be assured that, despite the General Assembly's adjournment, IML continues to aggressively advocate at both the state and federal levels on behalf of our 1,298 municipalities. Thank you. lllinois Municipal League 500 East Capitol Avenue Springfield, lL 6270'l [email protected] 217 -525-1220 630.333.7444 OSH EA. MATTHE}V@GMAI L.COM WWYV. MOCONSULTINGINC.COM

t 23 EA'sr OcoEN SUITE I O I A, HlNsoArt, ltrrNors 6052 t CONSULTING

Matthew O'Shea- President Sarah Kuhn - Vice President May 31,2018

The need to pass a full fiscal year's budget prior to heading home to face voters in the November elections dominated the 201 8 Spring Legislative Session. The past three years have been marked by political bickering between the first-term Republican Governor and the democratically controlled GeneralAssembly. Last summer, Illinois emerged from a record budget stalemate with the General Assembly passing a budget and an income tax increase over the Governor's veto. Prior to that, the state operated without a budget for the two fiscal years.

For the first-time since the Governor took office, Govemor Bruce Rauner and the four legislative caucuses reached a bipartisan agreement on the state budget prior to the May 3l't adjoumment deadline. The deal is the result of weeks of negotiations between the four causes and the Governor's Office. Legislators on both sides of the aisle praised the bipartisan process. Governor Rauner, who remained relatively quiet regarding budget talks, indicated today that the budget is a step in the right direction and he intends to quickly sign the budget into law.

The Fiscal Year l9 budget allocates $38.5 billion in General Revenue Funds and $80.26 billion All Funds, which represents funding for a full fiscal year. The budget deal also contains $1.5 billion in supplemental appropriations for Fiscal Year 18 which includes $402 million for the Department of Corrections to pay old bills, $442 million for HFS to process Medicaid vouchers-including vouchers associated with accelerated processing of pending long-term care applications, $63 million for union back pay and funding for all Court of Claims special awards. Lapse period spending for FY l8 is extended by one month. The FY l9 budget also includes $7.7 billion in new capital appropriations and $13.06 billion in re-appropriated capitalprojects. The budget contains a 5%o cut to the Local Government Distributive Fund, which is down from the l\oh cut recommend by the Governor. The new fiscal year begins July l't.

The FY l9 budget represents an increase of $l.l billion over FY 18. The budget relies on revenue from the income tax increase passed last year, $600 million in cuts, savings generated from pension changes, and the sale of the Thomson Center in Chicago. Lawmakers on both sides of the aisle have been working collaboratively with the Governor's office for weeks to craft what they called a "balanced" budget. The budget makes the mandatory pension payment and fully funds state employee group health insurance. Pension cost shifts were not included in the final budget, nor were any of Governor Rauner's previous demands for term limits or reforms to property taxes, worker's compensation or pensions. The budget also does not provide a way to pay down the state's bill backlog which currently stands at nearly $7 billion. Three cost saving changes were made to the pension program. Inactive vested employees will be given a pension buyout option ($41 million savings), Tier I members who file an application to retire will be given a COLA buyout option ($382 million in savings), and the 6%o salary rule will be lowered to 3o/o ($22 million savings). The Governor's Office of Management and Budget is authorized to issue $l billion in General Obligation bonds to fund the two buyouts. The Human Services budget includes a six percent increase for the Department of Healthcare and Family Services and a one percent increase for the Department of Human Services. The budget includes a new pharmacy critical access rate and increases rates for ambulance services, Specialized Mental Health Rehabilitation Facilities, child care and TANF benefits. Adult dental is added into the Medicaid budget for next fiscal year. Wage increases for DSP workers are also funded in the FY l9 budget. Previous tax credits granted to for for-profit hospitals will be extended for five years. The budget also transfers $200 million GRF to the Healthcare Provider Relief Fund to assist Long-Term Care Facilities with their backlog of Medicaid determinations. The budget includes $53 million to address the needs of the Quincy Veteran's Home.

Funding for Elementary and Secondary Education is increased by $400 million over FY 18. The budget includes $350 million in funding for the new evidenced based funding model for K - l2 education and includes a $50 million increase in funding for Early Childhood Education. Funding for higher education is increased $60 million over FY 18. Higher education institutions receive a two percent increase in funding, and MAP grants are extended to four years. The budget also allots $25 million to a new grant program, AIM HIGH that will provide additional tuition assistance.

Funding for public safety remains relatively flat and reflects most of the Governor's introduced budget. The budget includes funding for a new State Police cadet class and funds the two cadet classes from FY 18.

The FY 19 budget provides for $7.7 billion in new capitalappropriations and S13.06 billion in re- appropriated capital projects. The new spending includes:

. TRANSnoRTATIoN: $2.9 billion for FY 19 multi-year plan and other capital projects;

. CnpItlL DEvELoPMENT BolRn: $1.7 billion for capital improvements on various state facilities;

. Drp.tRtMENT oF CoMMERCE AND Ecoxorrlc OppoRruNIrv: $1.4 billion for grants to local communities for capital improvements;

. EPA: $ 1.1 billion for grants to local communities for wastewater and drinking water projects;

. DoIT: $400 million to implement the Governor's information technology upgrades at state facilities;

. Statn Bolno oF EDUCATIoN: $81 million in school construction and maintenance grants;

. MILITARY AFFAIRs: $55.5 million in construction and maintenance of National Guard facilities'

. AncHItECT oF THE CAnITIL: $20 million for maintenance of the Capital building;

. Punuc HBaLtu: $16.1 million for health-related capital projects;

. SOS: $13.7 million for grants to local governments for construction and maintenance;

. IEMA: $6.6 million for safety and security improvements; and

. AcTCULTURE: $2.6 million for improvements to the two state fair grounds.

As usual, the final days of the spring session were busy. A motion in the House to override the Governor's veto of SB I 93 (Raoul/Hoffman) failed by a vote of 67 -49. The bill creates the Worker Protection Unit within the Office of the Illinois Attorney General to intervene in, initiate, enforce, and defend all criminal or civil legal proceedings on matters and violations relating to the Prevailing Wage Act, the Employee Classification Act, the Day and Temporary Labor Services Act, and the Wage Payment and Collection Act. The bill is now dead.

Omnibus gaming legislation, S87 (Link/Rita) was briefly revived at the end of session but quickly stalled. Gaming legislation from last year was assigned to committee and subsequently amended. The legislation failed in committee. The billwould authorize 6 new casinos in Chicago, the south suburbs, Lake County, Rockford, Danville, and unincorporated Williamson. The bill also authorizes video gaming at racetracks; and extends advance deposit wagering. The measure does not address fantasy sports betting, internet gaming or sports betting. The House sponsor indicated that he expects to address those industries and their regulations in the coming months. The sponsor plans to work on the bill over the summer and revisit the issue in the Fall Veto Session.

The GeneralAssembly considered two wage history bills in the final days of session. HB 4163 (Moeller/Castro) passed out of the Senate 3 I - l6- I . This bill would prohibit employers from inquiring about salary and wage history by adding new standards that limit employer defenses and adding new compensatory and punitive damage penalties on businesses who are not compliant. While the bill passed the Senate, the sponsor placed a procedural hold on the legislation preventing it from being sent to the Governor at this time. SB3l00 (Bertino-Tarrant) passed the . This bill only prohibits the inquiry about or using of a job applicant's wage, salary, and benefits history. It does not diminish employer defenses or enhance and expand legal remedies and fines as HB 4163 does. SB 3100 now heads to the lllinois House for Consideration.

Illinois became the 37th state to ratify the Equal Rights Amendment to the United State Constitution with the passage of SJRCA4 by a vote of 72-45.

The Illinois House approved HB 4165 (G. Harris/Koehler) which requires legislative authority before the state can apply for any federal waiver that would reduce or eliminate any protection or coverage required under the Patient Protection and Affordable Care Act (ACA) that was in effect on January 1,2017, including, but not limited to, any protection for persons with pre-existing conditions and coverage for services identified as essential health benefits under the ACA. Critics of the legislation argue that the legislation reduces the state's flexibility. The bill now heads to the Senate for consideration.

The lllinois House narrowly approved HRl025 (Madigan), by a vote of 6l-52, which supports the implementation of a progressive income tax in Illinois. The measure is non-binding. Any change to the state's income tax structure would require the passage of a constitutional amendment. Passage of constitutional amendment requires a 3/5 vote of both the House and Senate and approval by voters.

The House approved SB 482 (J. Cullerton/Zalewski) which is jet fuel sourcing legislation that allocates the portion of the sales tax at issue, based on enplanements. A new amendment was filed and adopted in the House. The Senate adjourned before considering the legislation.

The Illinois House considered SB I 531 (Raoul/Greg Harris) which increases oversight of alternative retail electric and gas suppliers (ARES and ARGS). The legislation, which was requested by Attorney General Lisa Madigan, provides various consumer protections and increases transparency around rate pricing by requiring ARES and ARGS to include a "price-to-compare" utility supply rate on all marketing materials, during phone or door-to-door solicitations and on every customer's utility bill. It also requires disclosure of price changes and prevents suppliers from automatically renewing a customer's contract without the customer affirmatively opting-in to new terms. Suppliers will also be required to submit their rates to the ICC and the Attorney General's Office quarterly. Additionally, the legislation seeks to protect public energy assistance funds by ensuring that LIHEAP and PIPP (Percentage of Income Payment Plan) funds do not go toward paying the higher prices for electric and gas supply that ARES and ARGS charge. Critics of the legislation argued that the recent rules enacted by JCAR need time to take effect and have an impact. The bill failed on the last day of session by a vote of56-54-1. The sponsor put the bill on postponed consideration and the bill can be taken up at a later time.

Below is a listing of legislation that passed this week and will be heading to the Governor:

a Worker's Compensation: The Illinois General Assembly overwhelming approved a handful of changes to the worker's compensation system, S8904 (Hastings/Hoffman). The bill creates a new right of action to allow medical providers to file claims for interest due on late payments in Circuit Court. The amendment raises the interest rate on late payments from I to 2 percent prospectively and requires workers' compensation insurers to use electronic billing, already in law. SB 904 now heads to the Governor's desk. a State Employee Back Pay: The General Assembly approved H84290 (Costello/Manar) which provides back pay to state employees. a Omnibus Insurance Legislation: The Illinois General Assembly approved omnibus insurance legislation SB 1737 (Hoffman/Munoz). The comprehensive legislation includes the Allstate and CNA Guarantee Fund Bill, reinsurance collateral, limited plans, and a negotiated version of Worker's Compensation Rate Review. SB 1737 now heads to the Governor's desk. a Car-jacking: In the final days of session, the General Assembly made changes (HB I 804 J. Cullerton/Andrade) to a law that allows persons arrested for car -jacking to avoid accountability in court. Both bills passed and are now headed to the Governor's desk. a Medical Cannabis: The Illinois General Assembly approved SB 0336 (Harmon/Cassidy) which requires the Department of Public Health to establish the Opioid Alternative Pilot Program to allow the use of medical cannabis for persons diagnosed with a condition where an opioid has been or could be prescribed. The pilot program sunsets on July 1,2020. The bill now heads to the Governor's desk. a Tobacco 2l: A measure to raise the legal age to smoke from l8 to 2l years of age,5B2332 (Morrison/Lilly), narrowly passed by a vote of 6l-49-l in the Illinois House this week. The bill now heads to the Governor's desk for consideration. a Gun Dealer Licensing: The General Assembly approved compromise legislation, S8337 (Harmon/Willis), to create the Gun Dealer Certification Act. The final bill was extensively negotiated and received bi-partisan support in both chambers. SB 337 now heads to the Governor's desk. Governor Rauner amendatorily vetoed previous versions of the Gun Dealer Licensing Act. The sponsor filed trailer legislation on HB59l3 (Willis). HB 5913 is currently pending in the House Rules Committee. a Firearm Restraining Order: The Illinois Senate approved H82354 (Willis/Morrison) which creates the Firearms Restraining Order Act to provide a mechanism to confiscate firearms from persons who pose immediate danger to themselves or others. The bill now heads to the Governor's desk. a Firearm Waiting Period: The Illinois House approved legislation S83256 (Sims/Carroll) which requires a 7?-hour waiting period for delivery of all guns after purchase. SB 3256 passed both houses but the Senate sponsor placed a procedural hold on the bill to keep it from being sent to the Govemor. a Omnibus Medicaid Legislation: The General Assembly approved legislation, SB 185 I (Hunter/Greg Harris), which makes several changes to the Medicaid program. The bill creates a Health care Advisory Working Group to address transition of DCFS wards. The legislation also addresses ambulance industry payment concerns, increases rates for Medically Complex children and creates a new rate for psychiatric hospitals. The legislation guarantees for safety-net hospitals in the event that neither the new st. assessment, nor the bridge, are approved by July I The amendments require the Department of Healthcare and Family Services to make monthly advances to safety-net hospitals in the full amount of their current total assessment payments. a PACE projects: The House approved (582773 lAlthofflLang) which amends the Property Assessed Clean Energy Act to provide that a unit of local government may sell or assign assessment contracts. The legislation clarifies that the term "energy efficiency improvement" includes energy efficiency projects as defined in the lllinois Finance Authority Act. The Term "energy project" includes new construction. The House also approved legislation (SB43 / Bertino-Tarrant) which amends the Illinois Finance Authority Act to add PACE projects to the list of projects under the Act. Both bills now head to the Governor's desk. a Vendor Payment: Both chambers approved S82858 (Steans/Greg Harris), which authorizes the State Treasurer to invest in account receivables from state vendors awaiting payment for 90 days or longer and makes the State Treasurer a qualified purchaser under the Vendor Payment Program. The sponsor said the issue is still under negotiation and will be amended in the House. The sponsor indicated that this legislation would allow the state to pay down $1 billion in the state's bill backlog and allows the state to earn $l million in interest. SB 2858 now heads to the Governor's desk. a Mental Health Parity: The GeneralAssembly approved a bipartisan compromise, SB I 707 (Raoul/Lang), to further mental health parity in lllinois. The legislation makes several changes for persons with mental health and substance abuse needs including creating new definitions, implementing new tracking requirements for the Department of Insurance and the Department of Healthcare and Family Services, data sharing with the General Assembly and removing barriers to treatment. SB 1707 now heads to the Governor's desk.

This week, Govemor Rauner announced a plan to spend $l l billion on Illinois'roads and bridges over six years, including $2.2 billion in state and federal funding for fiscal20l9. The proposed 2019-2024 highway improvement program would improve 1,945 miles of road and 525 bridges maintained by the state, based on existing funding levels. The program also includes money for upgrades to more than 750 miles of local roads and 922,933 square feet of local bridges. More than 80 percent of that money is expected to come from the federal government. The six-year program calls for $1.34 billion in state funding, primarily from Illinois'gas tax and vehicle registration fees. Details on the program can be found here.

WellCare Health Plans announced plans this week to acquire Medicaid insurer Meridian Health Plan for $2.5 billion. The deal is expected to be finalized by the end of the calendar year. The acquisition will increase WellCare's Medicaid business. Meridian currently serves l.l million Medicaid, Medicare Advantage and health insurance marketplace members in Michigan, Illinois, Indiana and Ohio; including 508,000 Medicaid members in Michigan and 565,000 Medicaid members in Illinois as of May l. It also covers 27,000 Advantage members, and 6,000 Michigan health insurance exchange members. The merger will increase WellCare's Medicaid membership of 4.3 million at the end of the first quarter by 40% and give the insurer the number one market share in six states. In addition, WellCare will add Meridian's in-house pharmacy benefit manager, MeridianRx, to its portfolio.

Pending any unforeseen circumstances, the General Assembly is expected to adjourn until the Fall Veto Session. Attention is expected to turn to the November elections. All constitutional offices, including the Governor, all I l8 House seats and 39 of the 59 Senate seats are up for election in November. First-term Republican Governor Bruce Rauner is facing a challenge from billionaire businessman J.B. Pritzker. The upcoming election is expected to be a bitter and expensive battle. As always, we will continue to keep you updated on any developments.