2020-165 Ordinance Amending City Code Chapter 54.1, Video Gaming License, Section 4, Video Gaming License Fees

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Legal Department DATE: 12/3/2020 MEMO: TO: Mayor Julie Moore Wolfe&Members of the Decatur City Council FROM: Scot Wrighton,City Manager SUBJECT: Ordinance Amending City Code Chapter 54.1,Video Gaming License,Section 4,Video Gaming License Fees. SUMMARY RECOMMENDATION: It is recommended that the City Council amend the City Code to allow a two-month grace period for the payment of annual video game license fees,in light of the Governor's decision to shut down all video gaming terminals.Although this is the only action item requested at this time;the City Council may also discuss whether(at a future council meeting)they would like to take action on prorating or reallocating the annual video gaming fees. BACKGROUND: Annual licenses and fees for video gaming are due on January 1 st of every year. The city of Decatur assesses an annual fee of $500 per machine for the privilege of having and operating video gaming. Many local businesses have already paid these fees, and city staff expects additional payments to be received through December.Nonetheless,some business owners have requested that they be given additional time to pay these annual fees in light of the fact that the State of Illinois has ordered all video gaming terminals closed due to COVID.A two month deferral parallels the grace period offered to liquor license-holders by the City Council earlier in 2020. Some cities charge per machine video gaming fees to BOTH the local establishment AND the owner of the machines. The city of Decatur only charges the local business establishments. While the City Council is empowered to shift all or a portion of license fees to the owner of the machines,or to assess a fee to the machine-owner on top of the fees paid by the local establishment--the city's legal counsel has determined that there is nothing in the law preventing the owners of video gaming machines from just passing on extra fees to local businesses through increased rental fees. Council's avowed intent in considering this matter in the first place is to make license obligations simpler and less onerous for local businesses. This is likely best achieved by leaving the fee structure unchanged,and just giving more time to make the payments. It is not recommended that the fees due on January 1 or March 1 be prorated,because many businesses have already paid the full fee,it will reduce city revenue,and require the city to refund portions of fees already paid. INPUT FROM OTHER SOURCES: See attached letter from legal counsel ATTACHMENTS: Description Type City Council Memorandum Cover Memo Memorandum Cover Memo Ordinance Amending City Code Chapter 54.1,Video Ordinance Gaming License,Section 4,Video Gaming License Fees