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Home My WebLink About6.2 Motion to waive rules requiring two readings of an ordinance and adopt AN ORDINANCE TO AMEND UTILITY TAX SET FORTH IN ARTICLE XVI, SECTION 8.1601.1 OF THE VILLAGE CODE OF MOUNT PROSPECT, ILLINOISIL Mr�GauC'd'+rt;�iect\V FORTHSubject Motion to waive rules requiring two readings of an ordinance and adopt AN ORDINANCE TO AMEND UTILITY TAX SET SECTION1 OF • • OF MOUNTPROSPECT, ILLINOIS Meeting January 10, 2023 - SPECIAL MEETING OF • PROSPECT.BOARD Fiscal Impact Dollar Amount Budget Source Category CONSENT AGENDA Type Consent Information Chapter 8 - Article XVI of the Village Code imposes the Village's Electric Utility Tax. Current monthly electric utility tax rates in the Village of Mount Prospect are as below. The Village has not increased its utility tax rates since 2003. Range (KWH) Mount Prospect (in Cents) First 2,000.00 0.351 Next 48,000.00 0.236 Next 50,000.00 0.212 Next 400,000.00 0.185 Next 500,000.00 0.184 Next 2,000,000.00 0.132 Next 2,000,000.00 0.120 Next 5,000,000.00 0.105 Next 10,000,000.00 0.095 Next 20,000,000.00 0.080 The Village annually collects around $1.1 million in electric utility taxes, and the below table provides the summary of taxes collected in the last four years. 1 Year Amount 2021 $1,103,358 2020 $1,090,942 2019 $1,100,458 2018 $1,156,598 As the rates stand today, the Village of Mount Prospect has the lowest electric utility tax rates compared to surrounding towns. The attached table summarizes the rate comparison data. Based on the survey data, it can be concluded that the residents and businesses in the Village of Mount Prospect have enjoyed (from 41 percent to 70 percent) lower electric utility tax rates when compared to neighboring municipalities. With a possible data center coming to the Village, the staff is proposing increases in the electric utility taxes as listed below. With the proposed rates, the Village of Mount Prospect will still be lower compared to surrounding towns and will still be competitive and attractive for industrial/business users. On average, a family household uses 800 to 900 kWh of electricity per month, and 2 Mount % Lower Average Increase in Prospect Compared Numbers o Range (KwH) Current Proposed Town Percentage Rate vs. to Other Customers Average Towns First 2,000 0% -410o 0.351 0.351 0.592 (0.241) 22,785.00 Next 48,000 0% -39% 0.236 0.236 0.388 (0.152) 1,733.00 Next 50,000 0% -4000 0.212 0.212 0.352 (0.140) - Next 400,000 0% -45% 0.185 0.185 0.339 (0.154) - Next 500,000 0% -4400 0.184 0.184 0.330 (0.146) 8.00 Next 2,000,000 0.132 0.140 6% 0.314 (0.174) -55% - NextE5,OOO,000000[:J:: 125% -1100 0.270 0.302 (0.032) - Next 0.260 148% 0.289 (0.029) -10% - Next 10,000,000 163% -10% 0.095 0.250 0.278 (0.028) - for all 20,000,000 200% -10% 0.080 0.240 0.268 (0.028) - over On average, a family household uses 800 to 900 kWh of electricity per month, and 2 a small business normally uses anywhere from 5,000 to 15,000 kWh of electricity per month. The above -proposed rate structure is not proposing any rate increase up to 1,000,000 kWh. The proposed rate increase will impact only industrial users using more than 1,000,000 KWH, and as of today, the Village does not have any users in this category. The electric utility tax rates were discussed with the Finance Commission on October 27, 2022. The Finance Commission expressed their concerns that the ordinance seems to be targeting a particular industry, but acknowledged that the change in the rates are not impacting any of the existing users and the newly generated revenues from the electric utility tax will provide needed support and diversification of the current revenue sources. The Finance Commission unanimously recommended adopting the new electric utility tax rates as proposed. Staff has also consulted with the Village Attorney about the proposed rates and the Village Attorney confirmed that the proposed rates are within the guidelines prescribed by the State of Illinois legislation. In light of the above, staff is requesting approval of the attached ordinance. Alternatives 1. Approve the attached ordinance amending the electric utility tax rates. 2. Action at the discretion of the Village Board. Staff Recommendation Adopt the attached ordinance amending the electric utility tax rates. ATTACHMENTS: CornEd Municipal Tax Survey.pdf Electric_Rate_Ordinance_-_FY_2023.pdf KI Range (KWH) Mount Prospect First 2000 0.351 Next 48000 Cents per KWH Next 50000 0.212 Next 400000 Mt. Prospect vs. Average Next Range (KWH) Mount Prospect Arlington Heights Buffalo Grove Des Plaines Elk Grove Village Glenview Morton Grove Niles Palatine Prospect Heights Rolling Meadows Rosemont Wheeling Average Town Rate Mt. Prospect VS. Average Town % Lower First 2,000.00 0.351 0.628 0.628 0.588 0.628 0.556 0.628 0.428 0.628 0.560 0.628 0.571 0.628 0.592 (0.24) -41% Next 48,000.00 0.236 0.412 0.412 0.385 0.412 0.366 0.412 0.280 0.412 0.372 0.412 0.374 0.412 0.388 (0.15) -39% Next 50,000.00 0.212 0.371 0.371 0.347 0.371 0.346 0.371 0.253 0.371 0.340 0.371 0.337 0.371 0.352 (0.14) -40% Next 400,000.00 0.185 0.361 0.361 0.338 0.361 0.345 0.361 0.246 0.361 0.289 0.361 0.328 0.361 0.339 (0.15) -45% Next 500,000.00 0.184 0.350 0.350 0.328 0.350 0.340 0.350 0.239 0.350 0.288 0.350 0.318 0.350 0.330 (0.15) -44% Next 2,000,000.00 0.132 0.330 0.330 0.309 0.330 0.338 0.330 0.225 0.330 0.287 0.330 0.300 0.330 0.314 (0.18) -58% Next 2,000,000.00 0.120 0.324 0.324 0.304 0.324 0.294 0.324 0.221 0.324 0.247 0.324 0.295 0.324 0.302 (0.18) -60% Next 5,000,000.00 0.105 0.319 0.319 0.299 0.319 0.206 0.319 0.217 0.319 0.227 0.319 0.290 0.319 0.289 (0.18) -647. Next 10,000,000.00 0.095 0.314 0.314 0.294 0.314 0.144 0.314 0.214 0.314 0.206 0.314 0.285 0.314 0.278 (0.18) -66% Next 20,000,000.00 0.080 0.309 0.309 0.289 0.309 0.082 0.309 0.210 0.309 0.185 0.309 0.281 0.309 0.268 (0.19) -70% Range (KWH) Mount Prospect First 2000 0.351 Next 48000 0.236 Next 50000 0.212 Next 400000 0.185 Next 500000 0.184 Next 2000000 0.132 Next 2000000 0.12 Next 5000000 0.105 Next 10000000 0.095 Next 20000000 0.08 4 ORDINANCE NO. AN ORDINANCE TO AMEND UTILITY TAX SET FORTH IN ARTICLE XVI, SECTION 8.1601.1 OF THE VILLAGE CODE OF MOUNT PROSPECT, ILLINOIS WHEREAS, the Village of Mount Prospect is a home rule municipality as defined by Article VII, § 6 of the Illinois Constitution of 1970; and WHEREAS, the President and Board of Trustees of the Village of Mount Prospect desire to make certain amendments to the Village Code of Mount Prospect as set forth below; and WHEREAS, pursuant to the authority granted under the Illinois Municipal Code and in accordance with home rule authority granted to home rule municipalities, the President and Board of Trustees of the Village of Mount Prospect approve the amendments set forth below. NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT AND BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: ARTICLE XVI "UTILITY TAX", Section 8.1601.1 "Consumption Tax" to the Mount Prospect Village Code shall be amended to read in entirety as follows: 8.1601.1: CONSUMPTION TAX: A. Tax Imposed: 1. Pursuant to section 8-11-2 of the Illinois municipal code and any and all other applicable authority, a tax is imposed upon the privilege of using or consuming electricity acquired in a purchase at retail and used or consumed within the corporate limits of the village at the following rates, calculated on a monthly basis for each purchaser: a. For the first 2,000 kilowatt-hours used or consumed in a month, 0.351 cents per kilowatt-hour; b. For the next 48,000 kilowatt-hours used or consumed in a month, 0.236 cents per kilowatt-hour; c. For the next 50,000 kilowatt-hours used or consumed in a month, 0.212 cents per kilowatt-hour; d. For the next 400,000 kilowatt-hours used or consumed in a month, 0.185 cents per kilowatt-hour; e. For the next 500,000 kilowatt-hours used or consumed in a month, 0.184 cents per kilowatt-hour; f. For the next 2,000,000 kilowatt-hours used or consumed in a month, 0.140 cents per kilowatt-hour; g. For the next 2,000,000 kilowatt-hours used or consumed in a month, 0.270 cents per kilowatt-hour; h. For the next 5,000,000 kilowatt-hours used or consumed in a month, 0.260 cents per kilowatt-hour; i. For the next 10,000,000 kilowatt-hours used or consumed in a month, 0.250 cents per kilowatt-hour; 5 j. For all electricity used or consumed in excess of 20,000,000 kilowatt-hours in a month, 0.240 cents per kilowatt-hour. SECTION TWO: that this Ordinance shall be in full force and effect from and after its passage, approval and publication in pamphlet form in the manner provided by law. AYES: NAYS: ABSENT: PASSED and APPROVED this day of 12023. Paul Wm. Hoefert, Mayor ATTEST: Karen M. Agoranos, Village Clerk N.