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Title:
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Dept/ Agency: Law
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Authorization of Tax Settlement Agreement and Refund
Claimant: City of Elizabeth and ELRAC, LLC
Settlement Amount: $1,867,807.80
Funding Source:
Additional Information:
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...Title
Dept/ Agency: Law
Action: ( ) Ratifying (X) Authorizing ( ) Amending
Purpose: Authorization of Tax Settlement Agreement and Refund
Claimant: City of Elizabeth and ELRAC, LLC
Settlement Amount: $1,867,807.80
Funding Source:
Additional Information:
...body
WHEREAS, the Municipal Council by Ordinance 6PSF-d adopted on July 1, 2025 granted authority to the Corporation Counsel to settle any claim for a sum not to exceed $53,000.00 without the approval of the Municipal Council; and
WHEREAS, the City of Newark, the City of Elizabeth and ELRAC, LLC entered into a Release and Settlement Agreement dated February 28, 2026 (the "Agreement") to resolve disputes regarding Motor Vehicle Rental Tax and Payroll Tax obligations arising from ELRAC's operations at 132 Carson Road and 2052 McCarter Highway; and
WHEREAS, pursuant to the Agreement, the City of Newark agreed to refund to ELRAC, LLC the net amount of One Million Eight Hundred Sixty-Seven Thousand Eight Hundred Seven Dollars and Eighty Cents ($1,867,807.80); and
WHEREAS the Agreement provides that the refund shall be paid in four (4) equal installments of Four Hundred Sixty-Six Thousand Nine Hundred Fifty-One Dollars and Ninety-Five Cents ($466,951.95); and
WHEREAS, the Corporation Counsel, based upon all facts and circumstances surrounding the matter, deems it is in the best interest of the City to resolve this matter by payment in the amount set forth above; and
NOW, THEREFORE, BE IT RESOLVED BY MUNICIPAL COUNCIL OF THE CITY OF NEWARK, NEW JERSEY, THAT:
1. The Corporation Counsel is hereby authorized on behalf of the City of Newark to execute and accept the terms of the Settlement Agreement and Release, attached hereto.
2. Upon receipt by the Corporation Counsel of all documents deemed necessary, the Director of Finance is hereby authorized and directed to issue payment in the amount of One Million Eight Hundred Sixty-Seven Thousand Eight Hundred Seven Dollars and Eighty Cents ($1,867,807.80) which payment will be made payable to ELRAC, LLC. In four (4) equal installments of Four Hundred Sixty-Six Thousand Nine Hundred Nine Hundred Fifty-Five Cents ($466,951.95), in accordance with the terms of the Agreement.
3. Annexed hereto is the Certification of Funds issued by the Director of Finance, City of Newark, which states that there are available sufficient legally-appropriate Fund 026, Account #38740, Budget Reference 2026, in the amount of One Million Eight Hundred Sixty-Seven Thousand Eight Hundred Seven Dollars and Eighty Cents ($1,867,807.80) for the purpose set forth herein.
4. A copy of the Comptroller's Certification shall be filed in the Office of the City Clerk along with this Resolution by the Corporation Counsel.
5. The Corporation Counsel shall file a fully executed copy of the Settlement Agreement and Release in the Office of the City Clerk.
6. This Resolution shall be effective upon adoption in accordance with applicable State Law.
7. The Settlement Agreement and Release and Resolution does not admit, nor should it be construed as an admission of liability or violation of any law, statute or regulation or a breach of any duty by the City of Newark, its agents, officers and/or employees whatsoever and is entered into based upon recommendations of the Corporation Counsel and to eliminate all risks and future litigation costs.
STATEMENT
This Resolution authorizes the Corporation Counsel on behalf of the City of Newark to enter into a Settlement Agreement and Release to settle claim with the City of Elizabeth and ELRAC, LLC resolving disputes regarding Motor Vehicle Rental Tax and Payroll Tax obligations and authorizing the refund payment of $1,867,807.80 in accordance with the Agreement.