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R-706 - 05/12/1998 - TAX - Resolutions Supporting Documents H 9g77 77 o, IOUNi S' ILLAGE OF OAK BROOK I _' 00 0 A K BR00-K Rai AP ILLINOIS MEMORANDUM FAV r 090 Oh;b DATE: May 8, 1998 TO: Village President and Board of Trustees FROM: Stephen B. Veitch,Village Managers SUBJECT: Resolution Requesting ICC Action on Electric Utility Tax Rates RECOMMENDATION: That the Village Board approve the attached resolution requesting that the Illinois Commerce Commission promulgate alternative maximum electric utility exise tax rates for the Village of Oak Brook. At the Committee-of-the-Whole meeting on April 13, we described for the Board the actions that the Village will need to take in response to enactment of the electric utility deregulation legislation last year. The attached resolution is the first step in converting from the gross receipts based utility tax to the kilowatt hour based tax. The statute specifies a schedule of maximum exise tax rates for the ten usage tiers. Municipalities are free to establish rates based on that schedule through a process of adjusting those rates proportionately to yield the appropriate revenue target (the"Proportional Method"). No ICC action or approval is needed for rates established under the Proportional Method. The Act also sets up a process for determining tax rates unique to the municipality where such rates would more perfectly accomplish the revenue and taxpayer neutrality intended in the Act (the "Alternative Method"). Technically, the ICC is charged with the responsibility for promulgating such rates using information provided by the utility through the requesting municipality. In order to receive the rates in time to consider adopting them effective with bills rendered after September 1 (thereby including consumption after August 1, the date on which residential electric rates will be reduced 15 %l, it is necessary to submit a request to the Commission by mid-May. The municipal consortium of which the Village is a part is organizing a joint filing in order to facilitate this process. TT II "1 Vide President and Board of Trustees May 8,1998 Page 2 We have received data from ComBd that suggests rates under both the Proportionate and Alternative methods. They do not appear to us to be materially different from one another,but we do not really know at this point what constitutes materiality in this context and, consequently, we do not yet know which method we will recommend to the Board in the form of an ordinance later this summer. We do know;however,that we will not have the option of recommending rates derived through the Alternative Method if we do not request ICC action now. Accordingly, in order to keep open the option of setting rates under the Alternative Method. I recommend adoption of the attached resolution. Please let me know if you have any questions. /sv attachment E s The net effect is that employees still receive a total of twelve days to select, but will receive holiday premium pay if they work on Easter. Motion by Trustee Caleel, seconded by Trustee Savino, to pass Ordinance 98-PL-G-610, "An Ordinance Amending Article VI Of The Personnel Rules& Regulations Of The Village Of Oak Brook", as presented and waive the full reading thereof. ROLL CALL VOTE: Ayes: 4 - Trustees Bartecki, Caleel, Kenny and Savino. Nays: 0 - None. Absent: 2 - Trustees McInerney and Shumate. Motion carried. S} QN 98-TX-UT-R-706 A RF.SOLUTIOI`' RES. 98-Tt-t:T- R [1ESTIN TH I . 1NOI4 OMM i1RCE COl\; : t y S:�N R-706 TQPROMULGATE ALTERNATIVE /1AXIMUM MLJNI ?AL REQUESTING THE ICC UTILITY TAX RATES FOR THE UST.;ANI?CONSUMPTION TO PROMULGATE OF ' . _ TRI ITY IN THE VILLAGE OF OAK BROOK. ALTERNATIVE MAXIMUM M MCIPAL ILLINOIS: UTILITY Taf RATES I FOR USE AND The resolution requests that the Illinois Commerce Corn-mission (ICC) CONSUMPTION OF promulgate alternative maximum electric utility excise tax rates for ELECTRICIT the Village of Oak Brook. At the Committee-of-the-Whole meeting on April 13, 1998, staff described for the Board the actions that the Village will need to take in response to enactment of the electric utility deregulation legislation last year. The resolution is the first step in converting from the gross receipts based utility tax to the kilowatt hour based tat. The statute specifies a schedule of maximum excise tax rates for the ten usage tiers. Municipalities are free to establish rates based on that schedule through a process of adjusting those rates proportionately to yield the appropriate revenue target(the "Proportional Method"). No ICC action or approval is needed for rates established under the Proportional Method. The Act also sets up a process for determining tax rates unique to the municipality where such rates would more perfectly accomplish the revenue and taxpayer neutrality intended in the Act (the "Alternative Method"). Technically, the ICC is charged with the responsibility for promulgating such rates using information provided by the utility through the requesting municipality. In order to receive the rates in time to consider adopting them effective with bills rendered after i September 1 (thereby including consumption after August 1, the date on which residential electric rates will be reduced 15%), it is VILLAGE 01' OAK BROOK Minutes 5 of 9 May 12, 1998 Iflil�'r• 7v 4 necessary to submit a request to the Commission by mid-May. The municipal consortium,of which the Village is a member, is organizing a joint filing in order to facilitate this process. Motion by Trustee Caleel, seconded by Trustee Kenny,to pass Resolution 98-TX-UT-R-706, "A Resolution Requesting The Illinois Commerce Commission To Promulgate Alternative Maximum Municipal Utility Tax Rates For The Use And Consumption Of Electricity In The Village Of Oak Brook, Illinois",as presented and waive the full reading thereof. ROLL CALL VOTE: Ayes: 4 - Trustees Bartecki, Caleel, Kenny and Savino. Nays: 0 - None. Absent: 2 - Trustees McInerney and Shumate. Motion carried. C. AWARD OF CONTRACTS: No Business. 8. DEPARTMENTAL REPORTS-LIAISON ASSIGNMEM: DEPARTMENTAL REPORTS - ngjneerine: Trustee Bartecki -All pavement patching for the 22nd LIAISON ASSIGN- Street/York Road Project is complete,and two(2)lanes are open in each MENTS direction except for daily lane closures(usually between 7 a.m. -4 p.m.). Finance and Hotel Committee: Trustee McInerney -Village Manager Veitch reported that during April,staff'implemented Smyth Systems for the Golf Club computer applications. The system is functioning well and staff anticipates implementation at the Bath and Tennis Club during the middle of May. The 1997 Audit was completed during April, and the report as well as the Management Letter was on tonight's agenda for acceptance and to be placed on file. The revised investment policy of the Police Pension Fund was adopted during April to accommodate the recent legislative changes increasing the limit on equity investment to 35%(a Village Board objective). The Firefighters' Pension Fund investment policy is in draft form and will be considered at their next regular meeting. Village Manager Veitch continued by reporting that a marketing campaign status report has been prepared by the Hotel Marketing Subcommittee. Fire: Trustee Kenny - April fire calls totaled 95, ,vitli Mutual Aid given 5 times and received 3 times. Ambulance calls totaled 75, with Mutual Aid giver. 5 times and received 5 times. On April 7, 1998, fire units responded to a request for aid from NICOR for a gas main break at 2813 Meyers Road. On April 8, 1998, fire units responded to a smell of smoke in Marshall Fields. Light smoke was encountered by first-in companies who located the source of VILLAGE OF OAK BROOK Minutes 6 of 9 May 12, 1998 I,__.