G-1134 - 10/09/2018 - TAX-UTILITY - Ordinances Supporting DocumentsBOT AGENDA Page 1
BOARD OF TRUSTEES MEETING
SAMUEL E. DEAN BOARD ROOM
BUTLER GOVERNMENT CENTER
1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
October 9, 2018
SUBJECT: Extension of Gas Utility Tax
FROM: Jason Paprocki, Finance Director
BUDGET SOURCE/BUDGET IMPACT: Revenues are currently utilized in the General Fund
RECOMMENDED MOTION: I move that the Village Board adopt Ordinance 2018-TX-UT-
G-1134, “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, 2019.
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,
2017.
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 rec eiving 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 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
ITEM 6.C.1
BOT AGENDA Page 2
are expected to amount to approximately $227,000 in 2018. Expected receipts for 2019 are
expected to be consistent with 2018 projected collections.
When the 2018-2022 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
considered either the 2019 Proposed Budget or 2019-2023 Proposed Five-Year Financial Plan, the
Village Board is aware of potential revenue issues facing the Village in the future and eliminating
this tax could have an impact o n services provided. 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 appropria te 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 2018-TX-UT-G-1134, “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, 2019.
Additions are bold and double-underlined; deletions are struck through.
ORDINANCE 2018-TX-UT-G-1134
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, 2019.
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, 2018 2019.
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 2018 2019, which shall be due January 31,
2019 2020.
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 2017-TX-UT-G-1134
Further Amending G-470, Utility Tax,
Page 2
APPROVED this 9th day of October 2018.
Gopal G. Lalmalani
Village President
PASSED this 9th day of October 2018.
Ayes:
Nays:
Absent:
ATTEST:
Charlotte K. Pruss
Village Clerk