Local Government Q&A Test your knowledge of municipalpractices and procedures with the questions and answers below. Click here to sumbit a question to Ancel Glink.
Municipal Q&A - July 2002
1) How can a municipality regulate wireless internet service providers?
2) What can be done about IMRF Overfunding?
1) This question was prompted by the emergence of wireless internet service providers ("WISP") that wish to offer that service in Illinois municipalities. Below we will first summarize the means by which a wireless network will operate. This will provide a context for our discussion of the permissible regulations which may be applied to such a service.
The wireless internet service proposed to be offered is based on a network architecture called a multipoint-to-multipoint network, or a mesh network. A mesh network requires every recipient of the wireless services to also serve as part of the infrastructure of the network to permit the re-transmittal of the original signal across various links in the mesh. By employing this type of design a mesh network eliminates certain limitations associated with traditional wireless networks, such as line-of-sight requirements. In other words, if the end user is located where there is no direct view of the main signal source it can still receive a signal by employing the intervening users as a link. For a WISP to deliver this type of service, a special type of antenna is required to be installed on each subscriber's home. This antenna is called a wireless router. Each wireless router contains a casing which is approximately 4 ½" W x 4 ½" D x 10" H with an antenna protruding about 19 ½". In addition, each wireless router serves as both the modem for the host and as a part of the infrastructure of the network. In this manner, the WISP must perform an ostensibly commercial use on each and every residential home where a wireless router is installed.
Next we will discuss the scope of powers which a local government may exercise to regulate this type of wireless internet service. We first examined whether any federal regulations exist which are relevant to this service. Unlike cellular tower antennas and residential satellite dishes, the FCC has not adopted any regulations which purport to preempt a local government's zoning authority. Nor has the FCC adopted any enabling rules which grant local governments additional authority, as for cable franchises. In addition, because of the bandwidth which is used for these networks, Federal law is silent on this type of use.
Based on the foregoing, communities must rely on whatever authority is granted under State law to regulate wireless internet services. As we discussed above, a WISP will be performing a commercial use in a residential zone wherever its wireless routers are installed since each router is a required part of its infrastructure for the provision of its services. Due to this conflict, a municipality, under its zoning powers, may require a WISP to obtain a special use permit to operate a commercial use in a residential district. Through this process a community may also write standards regarding the location, height and appearance of the routers on homes. This change generally will require an amendment to the zoning ordinance and a public hearing.
Because the service requires routers to be installed on every subscriber's home, a municipality may also choose to regulate the manner in which installations are performed under its building and electrical codes. In the interest of the public's health and safety, we have authority to require installations be performed by a licensed electrical contractor or other professional which meets reasonable standards. Alternatively, a community may require only an inspection of every installation to assure it complies with the applicable safety codes. This may also require a regulation or ordinance change.
Finally, a certain provision of the service contract would require subscribers to permit the wireless router to remain on their home for an extended period after service is canceled. The sustained use of the router after a subscriber cancels falls under at least a home rule municipality's ability to regulate the relationship between a landlord and tenant. In the exercise of this authority a home rule municipality could pass an ordinance protecting homeowners' rights to not have their property used for an extended time without their specific approval after they canceled the service.
In summary, service providers are planning to offer wireless internet services to residents by way of a mesh network that will expand with the addition of each new subscriber. As part of the provision of this service the WISP may require each subscriber to install a wireless router, which serves as both a modem and part of the network infrastructure. Due to the commercial component of this use a municipality is authorized to regulate this use under the Zoning Code. Further, it could amend its Code to provide for special installation requirements for the benefit of residents' health, safety and welfare. And, ultimately, a home rule community could enact a landlord/tenant ordinance designed to prevent a provider from requiring that subscribers leave the routers on roofs after service has been canceled or to provide other consumer protection.
If you have any questions regarding the scope of municipal authority or the technology proposed to be used please contact Adam Simon or Stewart Diamond.
2) The employees of many governmental bodies are entitled to benefits under the Illinois Municipal Retirement Fund. That is a fund administered by the State, but the actuarial base upon which contributions are developed is dependent upon the demographics of individual governmental bodies. There is an elaborate actuarial formula which IMRF utilizes to inform governments of the money which must be produced each year to fund their required IMRF contribution. The contribution is a combination of money contributed from the employees and from the governmental employer. Some governments simply assume that the amounts demanded by IMRF each year are "written in stone." While it is clearly the obligation of all governmental bodies to adequately fund their IMRF obligations, that State agency has often been found to have taken an excessively conservative approach in computing the amounts due from some public employers. Prior to the imposition of tax caps, governments were less concerned about the money to be paid to the IMRF, since the amount of that levy was unlimited and did not diminish the amounts which could be levied under other funds. For those governmental bodies whose tax levies are subject to a tax cap, payments in excessive amounts to IMRF simply diminish the amount of money which can be used for other purposes.
Challenging the amount demanded by IMRF in its annual letter to your governmental body requires a number of steps. First, a financial advisor must be employed who can evaluate the amount which your government currently has allocated to it in the IMRF Trust Fund, along with your specific demographics. That financial consultant will check the assumptions which have been made by IMRF and may conclude that even using these assumptions, an error has been made. More frequently, however, some of the assumptions made by IMRF are inaccurate, and the consultant can produce an actuarially-sound opinion to support the need for smaller contributions which reduced amount may extend over several years.
At that point, our firm, which has worked with the consultant, will attempt to convince the IMRF that fewer tax dollars are necessary for your government to meet its statutory obligation. Sometimes, we have been successful at that stage In other instances, it is necessary for for the government to consider filing a lawsuit against the Illinois Municipal Retirement Fund seeking a declaratory judgment and a mandamus or mandatory injunction to prevent a demand for more money than is actuarially justified. Often, filing a complaint will result in a compromise being worked out, which significantly reduces the amounts of contributions necessary. In a rare case, a full trial may be necessary to determine whether the court will support reduced contributions.
In addition to the legal skills necessary to bring about this result, there are also certain other aspects where Ancel, Glink can be of assistance. A governmental body should only undertake this kind of an effort, where the amount of the reduced payments are substantial, after its employees are made aware of the nature of its efforts. No public employer should undertake such an effort until it has explained to its employees that, even payments in the reduced amount will not in any way jeopardize their right and ability to fully receive pension benefits when due. Employees must be helped to understand that there is very little benefit to them in over funding pension payments. Such over funding often prevents the community from providing other fringe benefits or improved working conditions for the employees.
Ancel, Glink is prepared to evaluate this matter both for our regular corporate clients, and for governmental bodies which we would serve as special counsel. Sometimes, a suit of this nature, arises out of our firm's employment as special counsel to a government to assist it in evaluating issues regarding labor and personnel matters. If you have questions about this particular Ancel, Glink service, please contact Robert K. Bush, 312/782-7606.
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