G-763 - 10/26/2004 - TAX - Ordinances Supporting DocumentsT.
•
O
AGENDA ITEM
Regular Board of Trustees Meeting
of
October 12, 2004
SUBJECT: Extension of Utility Tax
FROM: Darrell Langlois
BUDGET SOURCE/BUDGET IMPACT: Revenues are currently utilized in the General Fund
and Infrastructure Fund
RECOMMENDED MOTION: I move that the Village Board adopt the attached ordinance
which extends the imposition of the utility tax on natural gas and electricity at the rate of
5% through December 31, 2005.
Background/History:
The Village first imposed utility taxes on various utilities in 1991. When the tax was originally
imposed, the enabling 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,
2004.
When the 2004 -2008 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 non -
home rule sales tax referendum was successful and will result in additional revenues in excess of
$2 million annually, due to restrictions on this revenue sources (public works items), it has been
planned that 100% of the utility tax would be redirected to the General Corporate Fund in order
to fund operating programs, begin to increase cash reserves back to the six month level, etc.
Although the Village Board has not yet considered either the 2005 Budget or 2005 -2009 Five -
Year Financial Plan, action on this item is requested at this time in order to give appropriate
notice to the utilities of the Village's intent to continue imposition of these taxes.
Please let me know if you have any questions or comments
Last saved by Default J MORMuttaxextension doc
Last printed 10/7/2004 2 33 PM -ZO
E:���
billing the client for whom he actually has a dispute.
Attorney Spiroff stated it would depend on the situation. In certain situations it might
be appropriate and some it may not be appropriate. You need a set of facts first and the
answer given to you.
9 NEW BUSINESS
A. CONFIRMATION OF APPOINTMENTS - None.
B. ORDINANCES & RESOLUTIONS
11 .ORDINANCE 2004- TX- UT -G -7, "AN ORDINANCE FURTHER AMENDING
ORDINANCE G -470, ESTABLISHING A UTILITY TAX WITHIN THE
VILLAGE OF OAK BROOK, IL"
The Village first imposed utility taxes on various utilities in 1991. When the tax
was originally imposed, the enabling 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, 2004.
When the 2004 -2008 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 non -home rule sales tax referendum was successful and will
result in additional revenues in excess of $2 million annually, due to restrictions on
this revenue sources (public works items), it has been planned that 100% of the
utility tax would be redirected to the General Corporate Fund in order to fund
operating programs, begin to increase cash reserves back to the six month level, etc.
Although the Village Board has not yet considered either the 2005 Budget or 2005-
2009 Five -Year Financial Plan, action on this item is requested at this time in order
to give appropriate notice to the utilities of the Village's intent to continue
imposition of these taxes
Motion by Trustee Yusuf, seconded by Trustee Korin, for passage of Ordinance
2004- TX- UT -G -40, "An Ordinance Further Amending Ordinance G -470,
Establishing a Utility Tax Within the Village of Oak Brook, IL" which extends the
imposition of the utility tax on natural gas and electricity at the rate of 5% through
December 31, 2005.
Trustee Zannis pointed out that the Board is asking to keep this utility tax prior to
setting the budget. She commented that it is taxing the people then let's build the
budget given this anticipated extra revenue and she has been an opponent on this.
VILLAGE OF OAK BROOK Minutes Page 16 of 21 OCTOBER 12, 2004
9. B. 1)
She indicated that it was passed when she was on vacation and she was not
supportive of it then. She has preached that it be reduced a percent at a time. She
asked this when the sales tax revenue was increased $2,500,000 and she prefers to
have the tax at 4% so that the budget is set accordingly.
President Quinlan noted that $2,500,000 is projected revenue stream and the
Village has yet to realize that at this time. Trustee Zannis suggested that the Board
not pass this until they know the amount This would be a huge message to our
community to do the right thing in servicing our community.
Trustee Yusuf recommended the garbage pickup be done first as 100% of the
revenue is returned to the residents as this will return 30 to 35% to our residents.
The remaining amount to our corporate residents.
Trustee Aktipis disagreed with Trustee Yusuf and suggested that the Village still
would have the collection of garbage and reduce the utility tax also He
recommended waiting for an analysis of the situation from the Finance Director and
then reviews those figures to make those decisions.
Trustee Yusuf asked if the Board passed the utility tax at 5 %, at what point could it
be amended to 4% with still providing adequate notice- to the utility suppliers.
Finance Director Langlois explained that it is a three -month lag. He stated that the
six -month operating revenue is short $1,200,000 presently and the projected
increase in sales tax revenue will be used for garbage pickup. Finance Director
Langlois suggested continuing this agenda item to the October 28, 2004 Board
meeting for staff to review the projected revenues.
Motion by Trustee Aktipis, seconded by Trustee Yusuf, to continue this agenda
item to the next Village Board meeting. ROLL CALL VOTE:
Ayes: 5 - Trustees Aktipis, Craig, Korin, Yusuf and Zannis.
Nays: 0 - None.
Absent: 1 - Trustee Caleel. Motion carried.
Manager Boehm explained that staff has done some projections in that garbage
service if billed to the municipality would cost approximately $460,000 and for
consideration of the financial impacts of the garbage service and others. He stated
that last year's Village budget was balanced by numerous deferrals of capital items.
Staff is looking at the budget process and will make recommendations to the Board.
They are trying to implement those deferrals over the Village's five -year program
There are a lot of needs that have been unfunded for the last several years and it is
hoped that they are not lost.
Trustee Korin stated the issue of the Village paying for the garbage is a very
VILLAGE OF OAK BROOK Minutes Page 17 of 21 OCTOBER 12, 2004
I
B. 1)
popular one and she realized that the Village previously paid for the garbage. It
would be great if that could occur again but she personally believes it is much more
important that the Village bring the reserves up to the six -month level before the
�r Board even considers the garbage issue.
Trustee Zannis stated that it can be taken with everything including the telephone
systems, landscaping, and screening of the HVAC or the outside wall. President
Quinlan asked that the Board return to the agenda as both of those items have been
continued.
2) ORDINANCE 2004- LC -AL -G -761, AN ORDINANCE AMENDING TITLE 4,
CHAPTER 1 SECTION 8A OF THE VILLAGE CODE OF THE VILLAGE OF
OAK BROOK ILLINOIS RELATIVE TO THE NUMBER OF AUTHORIZED
LIQUOR LICENSES
THI IV Oak Brook Lessee, LLC has made application to the Village of Oak Brook
for a Class D & E liquor licenses for the hotel establishment located at 1909 Spring
Road (formerly Hyatt Regency Oak Brook Hotel). Documentation requirements
have been fulfilled. The Liquor Manager and the General Manager John Merrill will
remain and both have BASSET training and their criminal background checks have
been previously processed.
The applicant has requested that this application be brought before you for your
consideration at your regular meeting of October 12, 2004. A representative of the
establishment will be in attendance at the Village Board meeting. Enclosed for your
review is the following documentation:
a. Application for a Liquor License
b. Floor Plan
c. Certificate of Insurance
d. Menu
The Village Attorney has drafted the ordinance that deletes a Class D & E liquor
licenses (formerly the Oak Brook Hyatt Regency Hotel) and increases the Class D &
E liquor licenses for the new owners of the hotel. The Class D liquor license is for
catered events by the hotel off of their premises and the Class E is for liquor served
within the hotel restaurants, banquet rooms and meeting rooms. Provided that all
ordinance requirements are met, the Local Liquor Commissioner Kevin Quinlan
would presumably issue a class E liquor license to THI IV Oak Brook Lessee, LLC
located at 1909 Spring Road.
Motion by Trustee Yusuf, seconded by Trustee Korin, for passage of Ordinance
2004- LC -AL -G -761 "An Ordinance Amending Title 4, Chapter 1, Section 8A of
VILLAGE OF OAK BROOK Minutes Page 18 of 21 OCTOBER 12, 2004
t
AN ORD
N
ORDINANCE 2004- TX -UT -G -760
INANCE FURTHER AMENDING ORDINANCE G -470,
ESTABLISHING A UTILITY TAX WITHIN
��THE VILLAGE OF OAK BROOK, ILLINOIS
WHEREAS, on July 23;1991 the Village Board passed and the Village President approved
Ordinance G -470 entitled "An Ordnance Establishing a Utility Tax Within the Village of Oak Brook,
DuPage and Cook Counties, lllinois ";,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 interest of the Village of Oak Brook to again extend the imposition of
said tax through and including December 31,' 2005
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 That Section 5 -1 -5 of Title 5 ofNthe Village Code is hereby amended by deleting the
year "2004" where it appears, and replacing same wit�the year "2005"
r
Section 2: That Section 5- 1 -6(B) of Title 5 of the Village Code is hereby amended by deleting
therefrom the year "2004" and "2005" where they appear, \and replacing same respectively with "2005" and
"2006"
Section 3- That this Ordinance shall be in full force and effect from and after its passage, approval
and publication in pamphlet form as provided by law
Approved this 12th day of October, 2004
Passed this 12th day of October, 2004
Ayes
Kevin Qbjnlan
Village PrI �sident
t
Nays
Absent::
Abstain z
ATTEST.
Linda K. Gonnella, CNC
Village Clerk y
•
AGENDA ITEM
Regular Board of Trustees Meeting
of
October 26, 2004
SUBJECT: Extension of Utility Tax
FROM: Darrell Langlois
BUDGET SOURCE/BUDGET IMPACT: Revenues are currently utilized in the General Fund
and Infrastructure Fund
RECOMMENDED MOTION: I move that the Village Board:
Adopt the attached ordinance which extends the imposition of the utility tax on natural gas
and electricity at the rate of 5% through December 31, 2005. (Option 1)
or
Adopt the attached two ordinances which (1) extends the imposition of the utility tax on
natural gas and electricity through December 31, 2005 and lowers the rate to 4% and (2)
adjusts the ten rate tiers of the Muncipal Electricity Tax to approximate 4% of gross
receipts. (Option 2)
Background/History:
The Village first imposed utility taxes on various utilities in 1991. When the tax was originally
imposed, the enabling 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,
2004.
When the 2004 -2008 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 non -
home rule sales tax referendum was successful and will result in additional revenues in excess of
$2 million annually, due to restrictions on this revenue sources (public works items), it has been
Last saved by Default I \ FINANCE \DLANGLOI \WORD \uttaxextension doc
T act nrnnted 10/77/7004 10 21 AM
planned that 100% of the utility tax would be redirected to the General Corporate Fund in order
to fund operating programs, begin to increase cash reserves back to the six month level, etc.
Although the Village Board has not yet considered either the 2005 Budget or 2005 -2009 Five -
Year Financial Plan, action on this item is requested at this time in order to give appropriate
notice to the utilities of the Village's intent to continue imposition of these taxes.
This issue was continued from the meeting of October 12, 2004 so that the Board could obtain
further information as to whether consideration could be given to reducing the rate of tax to 4 %.
As a practical matter, if the Board elects to lower the rate of tax on both electric and natural gas
service, it is required that a second ordinance be adopted since most of the utility tax on electric
service is collected using the Municipal Electricity Tax, which is a ten rate tier per kilowatt hour
tax (there is no sunset provision on this tax; thus, continuing the tax at the present rate does not
require Village Board action).
Recommendation:
It is recommended that one of the options be selected at this time so that the Village can give
notice to the utilities as to what the rate of tax will be for 2005.
Please let me know if you have any questions or comments.
Last saved by Default I \ FINANCE \DLANGLOI \WORD \uttaxextension doe
'
T ,� +.,.... +o� ini11nnna 1011 Ana
}
8. UNFINISHED BUSINESS-
A. CONFIRMATION OF APPOINTMENTS - None.
B. ORDINANCES & RESOLUTIONS
1) ORDINANCE 2004- ZO- V -EX1 -S -1086, BUTLER NATIONAL GOLF
COURSE — 2616 YORK ROAD — "AN ORDINANCE GRANTING A
VARIATION FROM THE PROVISIONS OF SECTION 9 -6 -3 -V OF TITLE 9
( "STORM WATER, FLOODPLAIN, AND SEDIMENTATION AND EROSION
CONTROL REGULATION ") OF THE VILLAGE CODE OF THE VILLAGE
OF OAK BROOK RELATIVE TO RELOCATING EXISTING BUNKERS
AND TEE BOXES WITHIN THE FLOODWAY OF SALT CREEK (Butler
National Golf Club — 2616 York Road, West of York, South of 22nd Street, East
of Jorie Boulevard, Oak Brook, IL 60523 (170 acres) P.I.N. #s 06 -26 -401 -002,
06 -26- 202 -002, 06 -25 -101 -002, 06 -25- 300 -018)
The golf course is built within the floodway of Salt Creek. The work that Butler
National Golf Club will do pursuant to this variation will allow the golf course to
be more accessible sooner after a flooding experience. Any impact of the
revisions will be contained within the Butler National Golf Club property There
should be no impact either upstream or downstream from the site.
Motion by Trustee Aktipis, seconded by Trustee Yusuf, for passage of Ordinance
2004- ZO- V -EXl -S -1086, "An Ordinance Granting A Variation From The
Provisions Of Section 9 -6 -3 -V Of Title 9 ( "Storm Water, Floodplain, And
Sedimentation And Erosion Control Regulation ") Of The Village Code Of The
Village Of Oak Brook Relative To Relocating Existing Bunkers And Tee Boxes
Within The Floodway Of Salt Creek (Butler National Golf Club — 2616 York
Road, West of York, South of 22nd Street, East of Jorie Boulevard, Oak Brook,
IL 60523 (170 acres) P.I.N. #s 06 -26- 401 -002, 06 -26- 202 -002, 06- 25- 101 -002,
06 -25- 300 -018)" granting a variation to Butler National Golf Club to
permit the relocation of existing bunkers and tee boxes within the floodway of
Salt Creek. ROLL CALL VOTE:
Ayes: 6 - Trustees Aktipis, Caleel, Craig, Korin, Yusuf and Zannis.
Nays: 0 - None.
Absent. 0 - None. Motion carried.
E 2) UTILITY TAX ORDINANCE OPTIONS
a. 5% RATE -- AN ORDINANCE FURTHER AMENDING ORDINANCE G-
470. ESTABLISHING A UTILITY TAX WITHIN THE VILLAGE OF OAK
VILLAGE OF OAK BROOK Minutes Page 11 of 21 1 October 26, 2004
IN
8. B. 2) a.
BROOK, ILLINOIS — SUNSET DATES ONLY
b. ORDINANCE 2004- TX -UT -G -763, "AN ORDINANCE FURTHER
AMENDING ORDINANCE G -470, ESTABLISHING A UTILITY TAX
WITHIN THE VILLAGE OF OAK BROOK, ILLINOIS and ORDINANCE
2004- TX -UT -G- , "AN ORDINANCE AMENDING CHAPTER 4
(MUNICIPAL ELECTRICITY TAX) OF TITLE 5 (MUNICIPAL TAXES) OF
THE VILLAGE CODE OF THE VILLAGE OF OAK BROOK
The Village first imposed utility taxes on various utilities in 1991. When the tax
was originally imposed, the enabling 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, 2004
When the 2004 -2008 Five -Year Financial 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 non -home rule sales tax referendum was successful
and will result in additional revenues in excess of $2 million annually, due to
restrictions on this revenue sources (public works items), it has been planned that
100% of the utility tax would be redirected to the General Corporate Fund in order
to fund operating programs, begin to increase cash reserves back to the six month
level, etc. Although the Village Board has not yet considered either the 2005
Budget or 2005 -2009 Five -Year Financial Plans, action on this item is requested at
this time in order to give appropriate notice to the utilities of the Village's intent to
continue imposition of these taxes.
This issue was continued from the meeting of October 12, 2004 so that the Board
could obtain further information as to whether consideration could be given to
reducing the rate of tax to 4 %. As a practical matter, if the Board elects to lower
the rate of tax on both electric and natural gas service, it is required that a second
ordinance be adopted since most of the utility tax on electric service is collected
using the Municipal Electricity Tax, which is a ten rate tier per kilowatt hour tax
(there is no sunset provision on this tax; thus, continuing the tax at the present rate
does not require Village Board action).
Trustee Yusuf suggested setting priorities which he indicated his first priority
before doing that is to institute free scavenger pickup which returns 100% of those
funds to our residents. He offered that he would be happy to reduce the utility tax
further if funds were available but the Board should prioritize what needs to be
VILLAGE OF OAK BROOK Minutes Page 12 of 21 October 26, 2004
8. B 2)
done.
Trustee Caleel called some points to the Board's attention relative to a reduction in
the utility tax but also in terms of payment of garbage collection. Almost a year
ago the Board asked for referendum to increase the sales tax by .25% which gave
the Village in excess of $2,000,000 for the Village's shortfall in the budget
process. Fortunately, the residents approved that referendum and the Village will
receive an estimated $2,250,000 for the year beginning July 1, 2004. There is a
delay by the State of Illinois as the State's payment is delayed by three months to
the municipality. The Village's first payment was $190,000
The budget last year was presented to the Board with a $1,000,000 deficit and the
Board returned it to the staff and Finance Director Langlois to balance the budget.
The budget was reduced by $900,000 to $1,000,000 by removing items that were
necessary to purchase. Now the Board is discussing a 1% reduction in the utility
tax which amounts to approximately $400,000, garbage collection cost of
$400,000 and some items that were not purchased at a cost of approximately
$100,000. He suggested the $2,000,000 is already spent from the .25% tax
increase and the Village was in difficulty of having a balanced budget with six
/ months of operating funds in reserve. Now the Board is discussing spending funds
before the budget is being addressed.
Finance Director Langlois explained that the utility tax is scheduled to expire at
the end of the year and typically there is a forty -five (45) day notice requirement in
order to change the tax He suggested that the Board pass the utility tax at 5% then
the Board could review the budget and lower it if necessary at that time.
Trustee Zannis asked Attorney Spiroff that when it comes budget time, the Village
has an ordinance that states the Village should have a six -month cash reserve. She
asked if the Board has a legal obligation to fulfill that guideline. Attorney Spiroff
stated there is a legal obligation but indicated there is no penalty for failing to
comply as it is a statement of policy by the Board of Trustees. She asked if a
citizen could file a complaint that the Board of Trustees is not following the law.
Trustee Caleel indicated that the Board discussed the last time the Village was not
on the margin of having a six -month cash reserve and that it would pass a new
ordinance stating it would be a four -month reserve. The Board did not take that
action as the budget was reduced.
Trustee Zannis stated she was not in favor of the 5% utility tax and she was not in
favor when it was voted. She strongly wishes it to be reduced as she believes it is
owed to the citizens of Oak Brook. She indicated the Board's first obligation
VILLAGE OF OAK BROOK Minutes Page 13 of 21
�5
October 26, 2004
8. B. 2)
should be the ordinance rather than the garbage collection.
Trustee Caleel responded that it is not that the Board of Trustees does not want to
do it but that there is a $2,000,000 shortfall of where the budget was last year at
this time. If the Board approves a utility tax reduction and then approves the
Village paying for garbage pickup, all of the funding will have spent.
Trustee Zannis remarked that if the Village has a shortfall of $1,000,000 and the
Village will have infusion of $2,250,000 from the sales tax revenue that would
leave $1,250,000 to be on par. Trustee Caleel then responded that the Village does
not meet the six -month requirement and the financial projections indicate it will be
even worse.
Trustee Zannis suggested that the Finance Director would need to build his budget
based on the direction the Board of Trustees presents to him If the Board states
that it is necessary to fulfill the six -month ordinance commitment, then the budgets
will be built accordingly. If this is not done, then the budgets will be built
accordingly.
Trustee Caleel offered that the Board have everything remain as it is now and after
the budget is before the Board, then determine whether the Village could afford
garbage collection and /or decrease the utility tax rate by 1%. Then the Board
could also determine how to address the Village's financial situation and would
the Village have a six -month cash reserve.
Motion by Trustee Yusuf, seconded by Trustee Korin, for passage of Ordinance
2004- TX -UT -G -763, "An Ordinance Further Amending Ordinance G -470,
Establishing A Utility Tax Within the Village of Oak Brook, Illinois ". ROLL
CALL VOTE:
Ayes: 5 - Trustees Aktipis, Caleel, Craig, Korin and Yusuf.
Nays: 1 - Trustee Zannis.
Absent: 0 - None Motion carried.
C. AWARD OF CONTRACTS
1) RESOLUTION 2004- AG- SW- D -EX1 -R -888, "A RESOLUTION
AUTHORIZING EXECUTION OF AGREEMENT FOR RESIDENTIAL
MUNICIPAL WASTE AND RECYCLING COLLECTION SERVICES"
At the Village Board meeting of October 12, 2004, the Board approved a motion
to reject all proposals received for the Oak Brook Municipal Waste Hauler and
Recyclables Collection Service (refuse, recycling, and landscape waste). Further,
VILLAGE OF OAK BROOK Minutes Page 14 of 21
October 265 2004
OF UAk
o h
G r Qj
CUUNT`i
Viflage of
yak Brook
1200 Oak Brook Road
Oak Brook, IL 60523 -2255
website
www.oak - brook.org
Administration
630 990 3000
FAX 630 990 0876
Community
Development
630 990 3045
FAX 630 990 3985
Engineering
Department
630 990 3010
FAX 630 990 3985
Fire Department
630 990 3040
FAX 630 990 2392
Police Department
630 990 2358
FAX 630 990 7484
Public works
Department
630 990 3044
FAX 630 472 0223
Oak Brook
Public Library
600 Oak Brook Road
Oak Brook, IL 60523 -2200
630 990 2222
FAX 630 990 4509
Oak Brook Sports Core
Bath & Tennis Club
700 Oak Brook Road
Oak Brook, IL 60523 -4600
630 990 3020
FAX 630 990 1002
Golf Club
2606 Yoik Road
Oak Brook, IL 60523 -4602
630 990 3032
FAX 630 990 0245
October 27, 2004
Sterling Codifiers, Inc.
Attention: Robertson S. Rollins, General Manager
7600 Mineral Drive
Coeur d'Alene, ID 83 814
Dear Rob:
The Village Board, at their Board Meeting of Tuesday, October 26, 2004, passed
and approved the following ordinance:
�/� RDINANCE 2004- TX -UT -G -763 AN ORDINANCE HER
AMENDING ORDINANCE G -470, ESTABLISHING A UTILITY TAX
WITHIN THE VILLAGE OF OAK BROOK, ILLINOIS
The above Ordinance is being forwarded to your for inclusion in the Code of
Ordinances of the Village of Oak Brook. I would appreciate your acknowledging
receipt of this Ordinance.
Sincerely,
Richard B. Boehm
Village Manager
RBB /jr
Enclosure