G-1173 - 11/24/2020 - TAX-UTILITY - Ordinances ITEM 6.C.2
BOARD OF TRUSTEES MEETING
VILLAGE OF SAMUEL E. DEAN BOARD ROOM
OAK BR , K K . BUTLER GOVERNMENT CENTER
oz� 1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
November 24, 2020
SUBJECT: Extension of Gas Utility Tax
FROM: Jason Paprocki, Finance Director
J
BUDGET SOURCE/BUDGET IMPACT: Revenues are currently utilized in the General Fund.
RECOMMENDED MOTION: I move that the Village Board adopt Ordinance 2020-TX-UT-
G-1173, "An Ordinance Further Amending Ordinance G-470, Establishing a Utility Tax Within
the Village of Oak Brook, Illinois"which extends the imposition of the utility tax on natural gas
and electricity at the rate of 5%through December 31, 2021.
Back2round/History:
The Village first imposed utility taxes on various utilities in 1991. When the tax was originally
imposed, the tax was assessed on electric, natural gas, and telephone services within the Village.
The enabling utility tax ordinance included a one-year"sunset"provision so that the Village Board
could review both necessity and the rates of tax annually. The tax has been re-imposed each year
thereafter(at varying rates), and the current ordinance imposing this tax expires on December 31,
2019.
In the mid-1990's, the Village stopped assessing utility taxes on telephone service and instead
implemented a telecommunication tax,which effectively resulted in the Village receiving taxes on
long distance service instead of just local telephone service. Furthermore, due to deregulation of
the electric industry, beginning in 1998 the Village began implementation of an "electricity tax",
which is a ten-tiered tax rate structure that resulted in the phasing out of the gross receipts utility
tax (at the present time the rates are designed to approximate a 5% gross receipts tax).
Neither the telecommunications tax nor the electricity tax carries a sunset provision; thus, as a
practical matter, extending the sunset date only impacts the current 5% utility tax on natural gas.
Receipts from the utility tax on natural gas are deposited in the General Fund and are expected to RG
BOT AGENDA Page 1
amount to approximately $209,000 in 2020. Projected receipts for 2021 are expected to be
consistent with recent averages at $220,000.
When the 2020-2024 Five-Year Plan was completed, it was planned that these taxes were needed
at the rate of 5% for the duration of the five-year period. Although the Village Board has not yet
approved either the 2021 Proposed Budget or 2021-2025 Proposed Five-Year Financial Plan,both
documents were prepared with the assumption the 5% gas tax continues into the future.
Action is needed at this time to give notice to Nicor of the Village's intent to continue or
discontinue the imposition of these taxes. If at any time the Board decides to adjust the rate of tax,
the appropriate adjustment could be processed at that time, resulting in implementation of a new
rate approximately 90 days after that decision is made.
Recommendation:
I recommend the Village Board adopt Ordinance 2020-TX-UT-G-1173, "An Ordinance Further
Amending Ordinance G-470, Establishing a Utility Tax Within the Village of Oak Brook,
Illinois"which extends the imposition of the utility tax on natural gas and electricity at the rate
of 5%through December 31, 2021.
BOT AGENDA Page 2
THE VILLAGE OF OAK BROOK
COOK AND DUPAGE COUNTIES, ILLINOIS
ORDINANCE
2020-TX-UT-G-1173
AN ORDINANCE
FURTHER AMENDING ORDINANCE
G-470, ESTABLISHING A UTILITY TAX WITHIN
THE VILLAGE OF OAK BROOK, ILLINOIS
GOPAL G. LALMALANI, Village President
CHARLOTTE K. PRUSS, Village Clerk
JOHN BAAR
PHILIP CUEVAS
MICHAEL MANZO
MOIN SAIYED
EDWARD TIESENGA
ASIF YUSUF
Village Board
Published in pamphlet form by authority of the
President and the Board of Trustees of the Village of Oak Brook
on this the 24th day of November, 2020
Ordinance 2020-TX-UT-G-1173
Further Amending G-470,Utility Tax
Page 2
ORDINANCE 2020-TX-UT-G-1173
AN ORDINANCE FURTHER AMENDING ORDINANCE
G-470,ESTABLISHING A UTILITY TAX WITHIN
THE VILLAGE OF OAK BROOK,ILLINOIS
WHEREAS,on July 23,1991 the Village Board adopted Ordinance G-470 entitled"An Ordinance
Establishing a Utility Tax Within the Village of Oak Brook,DuPage and Cook Counties,Illinois";and
WHEREAS,certain changes,clarifications and extensions of Ordinance G-470 have been made
from time to time by the Village;and
WHEREAS,it is in the best interests of the Village of Oak Brook to again extend the imposition of
said tax through and including December 31,2021.
NOW,THEREFORE,BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF
THE VILLAGE OF OAK BROOK,DU PAGE AND COOK COUNTIES,ILLINOIS as follows:
Section 1: Recitals. The foregoing recitals are hereby incorporated into,and made a part of,this
Ordinance as the findings of the President and Board of Trustees of the Village of Oak Brook.
Section 2: Effective Date of Tax. Section 5-1-5,"Effective Date of Tax,"of Title 5,"Municipal
Taxes,"of the Village Code is hereby amended further to read as follows:
5-1-5: EFFECTIVE DATE OF TAX: The tax provided for in this chapter shall be based
on the"gross receipts",as herein defined,actually paid to the taxpayer for services billed
on or after October 1,1991,through and including December 31,2021.
Section 3: Taxpayer's Report Required. Section 5-1-6, "Taxpayer's Report Required,"of
Title 5,"Municipal Taxes,"of the Village Code is hereby amended further to read as follows:
5-1-6: TAXPAYER'S REPORT REQUIRED:
B. On or before the last day of every month thereafter,each taxpayer shall make a
like return to the village treasurer for the month preceding.The last such return
shall be for the month of December 2021,which shall be due January 31,2022.
Section 4: Severability. If any provision of this Ordinance or part thereof is held invalid by a
court of competent jurisdiction,the remaining provisions of this Ordinance shall remain in full force and
effect,and shall be interpreted,applied,and enforced so as to achieve,as near as may be,the purpose
and intent of this Ordinance to the greatest extent permitted by applicable law.
Section 5: Effective Date. This Ordinance shall be in full force and effect from and after its
passage,approval,and publication in the manner provided by law.
[SIGNATURE PAGE FOLLOWS]
Ordinance 2020-TX-UT-G-1173
Further Amending G-470,Utility Tax
Page 3
APPROVED this 24th day of November 2020.
Gopal G.Lalmalani
Village President
PASSED this 24th day of November 2020.
Ayes: Trustees Baar,Cuevas,Manzo,Saiyed,Tiesenga,Yusuf
Nays: None
Absent: None
ATTEST:
Of O-IA-
6,90
® Charlotte K.Pruss
`rG a Village Clerk
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