5248 - 77 Reject Penn Central's cash settlement

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RESOLUTION NO. 5248 BY: Messrs. Brockman, Chinnock, Magnotto, McBride, Salmon, Sinagra, Usher AN EMERGENCY RESOLUTION rejecting J~nn Central's offer of a 44% to 50% cash settlement on accrued taxes due the City of Lakewood, Ohio and urging Congress to support the enactment of House Bill 8882 to amend the Regional Rail Reorganization Act of 1973 to authorize the Secretary of Tr~ansportation to guarantee notes issued to State and Local taxing authorities to secure payment of real property tax obligations owed by a railroad in reorganization. · WHEREAS, the City of Lakewood, Ohi~ is owed a significant sum of money from accrued real property taxes from the Penn Central Transportation Company, and WHEREAS, the Penn Central Transportation Company is presently involved in bankruptcy proceedings wherein the Federal Reorganizational Court has devised a plan for the satisfaction of these tax arrearages, and WHEREAS, one of the two alternatives is for each municipality to accept a lump sum cash settlement equal to 44% to 50% of the actual amount owed and the second alternative is to accept a cash settlement of 20% of the total amount owed in cash and the balance in notes issued by the successor corporation to Penn Central Transportation Compan~ and WHEREAS, several financial difficulties for State and Local taxing authorities have been created by the non-payment of the Penn Central Transportation Company tax delinquencies; that the Federal Government must bear primary responsibility for the financial situation as Congress decided, in the National interest, that Penn Central continue to operate although tremendous losses would be incurred, and WHEREAS, this resolution constitutes an emergency measure for the reason that taxing authorities must indicate their intention of settlement pursuant to the Compromise by October 19, 1977 or be accorded settlement of their claims under the plan of reorganization. BE IT RESOLVED BY THE COUNCIL OF THE CITY OF LAKEWOOD, STATE OF OHIO: Section 1. That the Council of the City of Lakewood hereby concur with and approve the Cuyahoga County Budget Commission's rejection of a settlement offer from Penn Central Transportation Company of its real property taxes in the amount of 44% to 50% of the actual amount owed. Section 2. That this Council, for the reasons above stated, does hereby express its strong support to House Bill 8882 to amend the Rail Reorganization Act of t973 to authorize the Secretary of Transportation to guarantee notes issued to State and Local taxing authorities to secure payment of real property tax obligations ~wed by a railroad in reorganization. Section 3. That this Council urges the leadership of the U. S. House of Representatives, as well as the U. S. Senate, to support House Bill 8882 for the reasons set forth. Section 4. That the Clerk of Council be and she is hereby authorized and directed to forward a certified copy of this resolution to the following leaders in the U. S. House of Representatives: Ms. Oakar, Mr. Moakley, Mr. Ashbrook, Mr. Vanik, Mr. Burke of Massachusetts, Mr. Mottl , Mr. Seiberling, Mr. Pease, Mr. Station, Mr. Conte, Mr. Applegate, Mr. Wylie, Mr. Cavanaugh, and Mr. V. Campanella, Cuyahoga County Auditor. Section 5. That this resolution is hereby declared to be an emergency measure for the reasons stated in the preamble hereof and providing it receives the affirmative vote of two-thirds of all members elected to Council, it shall take effect and be in force immediately upon its adoption and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. Approved/~~ ~ /~ ~'i Mayor