G-1038 - 10/14/2014 - TAX - Ordinances Supporting Documents ITEM 6.F.10)
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AGENDA ITEM
Regular Board of Trustees Meeting
of
October 14, 2014
SUBJECT: Extension of Utility Tax
FROM: Sharon Dangles, Finance Director
BUDGET SOURCE/BUDGET IMPACT: Revenues are currently utilized in the General Fund
RECOMMENDED MOTION: 1 move that the Village Board adopt Ordinance G-1038,
"An Ordinance Further Amending Ordinance G-470 Establishing a Utility Tux 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 31,2015.
Background/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, 2014.
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).
ilf-y
Neither the telecommunications tax nor the electricity tax carries a sunset provision with it; 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 Corporate Fund and
are expected to amount to approximately $342,000 in 2014.
When the 2014-2018 Five-Year Plan was completed, it was projected that these taxes were
needed at the maximum rate of 5% for the duration of the planning period. Although the Village
Board has not yet considered either the 2015 Budget or 2015-2019 Five-Year Financial Plan, the
Village Board is well aware of potential revenue issues facing the Village making it highly
unlikely that any reduction in the rate for 2015 would be financially feasible. Action on this item
is needed at this time in order to give the required notice to the utilities of the Village's intent to
continue 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 that the current utility tax be extended at the 5%rate through December 31, 2015.
Please let me know if you have any questions or comments.
ORDINANCE 2014-TX-UT-G-1038
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, 2015.
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, 2014 2015.
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 2044 2015, which shall be due January 31,
2045 2016.
* * *
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]
Additions are bold and double-undedinest;deletions are struck through.
Ordinance 2014-TX-UT-G-1038
Further Amending G-470, Utility Tax,
Page 2
APPROVED this 14th day of October, 2014.
Gopal G. Lalmalani
Village President
PASSED this 14th day of October, 2014.
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk