City of Morris seeks to have RTA lawsuit heard in Grundy County
MORRIS – The city of Morris wants the lawsuit filed against it by the Regional Transportation Authority to be heard in a Grundy County courtroom.
The motion to transfer the venue from Cook to Grundy County was filed earlier this week at the Cook County Circuit Clerk’s office, Morris City Attorney Scott Belt said Friday.
“The city denies the allegations alleged in RTA’s complaint,” Belt said.
In March, the Chicago Regional Transit Authority filed suit against Morris, and previously against Channahon and other municipalities, for controversial taxing strategies.
The RTA named Morris and Bell Fuels – a wholesale petroleum distribution company – as defendants in the lawsuit. The lawsuit claims Bell Fuels is unlawfully routing all purchases through a small office at 519 Franklin St. in Morris, even though the company is headquartered in Stickney in Cook County.
The lawsuit cites a rebate agreement between Bell Fuels and the city signed in October 2001. In it, the city agreed to rebate 70 percent of all sales tax revenue generated at the Morris office back to Bell Fuels. At the time it was signed, such an agreement was allowable under Illinois law.
According to the original rebate agreement, Bell Fuels agreed to open a “single-order acceptance point for all Credit Sales” in Morris in exchange for the hefty rebate.
The RTA claims in its lawsuit that Morris and Bell Fuels are diverting a “significant” amount of sales tax revenue from Cook County and, subsequently, the RTA. At 6.25 percent, Morris’ sales tax rate is much lower than Stickney’s rate of 9 percent.
“There has been no challenge to the validity of the agreement when it was addressed in 2001,” Belt said.
He said RTA’s contention is the court made amendments to such agreements in 2004, but existing agreements such as Morris’ were excluded, Belt said.
A recent ruling from the Illinois Supreme Court prompted the Illinois Department of Revenue to issue an emergency amendment in January putting a stop to “artificially sourced sales.” This action stemmed numerous lawsuits against municipalities by RTA.
“We had a valid agreement in 2001, and we have a valid agreement today,” Belt said. “We will proceed forward to wprotect the city’s interest.”
Morris is requesting the case be heard in Grundy County since all the activity associated with Bell Fuels occurred in Grundy County, and most of the witnesses for the case are located here, Belt said.
RTA’s Chief of Staff Jordan Matyas said Friday its cases against Channahon, Kankakee and Sycamore all received motions to change venues as well, and all were denied by the court.
Matyas said he had not seen the motion yet, but he wasn’t surprised by the request.
“We will oppose it because we believe most of the business is done in Cook County, and we look forward to proceeding,” Matyas said.