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Antioch Village
Board Approves Ordinances Enacting a Municipal Utility Tax
On November 16, 2009, the
Village Board of Trustees approved ordinances enacting municipal
utility taxes on electric, natural gas and telecommunication
services for business and residential services within the Village of
Antioch corporate limits. Due to utility company implementation
procedures, the municipal utility tax for telecommunication services
is expected to begin in July 2010. The utility tax for both electric
and natural gas services will begin in January 2010.
Of 270 Chicago collar county
communities including those who are homerule, only 16 do not levy a
utility tax, and Antioch is the only full service village
providing fire, park, police and public works services that does not
levy a utility tax. For a number of years the Village of Antioch has
managed to cover operating expenses without the need to levy a
utility tax. This could only be accomplished by underfunding
reserves, delaying capital projects, postponing the replacement of
obsolete equipment and borrowing money. As a non-homerule community,
the Village has limited opportunities to generate revenues beyond
what is provided by taxes.
In light of the recent
statewide tax revenue shortfalls, it is no longer possible for the
village to continue to offer essential services to residents without
additional revenues. On average it is estimated that each home in
the Village of Antioch will incur a total tax increase of $12.11 per
month. Businesses will incur a slightly higher tax depending on
their utility requirements. This levy will provide the Village with
over $1,000,000 in additional revenues. All of these funds will be
used to increase fund reserves, fund capital projects, repay debt
and pay for the utility costs in the village.
Copies of the ordinances are
provided below, and monthly financial reports regarding the utility
tax will be placed on this webpage once they are collected.
Taxes collected above are held in a
separate fund.
Disbursements totaling $165,182 for
payment of interest on the 2010 Economic Recovery Zone Bonds were
made from this fund. $32,584 of the interest payment was reimbursed
by the Federal Government.
Frequently Asked Questions
What is a utility tax?
Why does the
Village need additional revenue?
What will the utility tax
do?
How did we get here?
What
could have been done to avoid this situation?
What's in it for
your $12.00 per month?
Is there a time frame for the collection of the tax or is this a
"forever" tax?
Don't
property taxes already pay for these services?
Will the tax be only on Antioch residents and businesses or will it
be on Antioch Township residents also?
What is considered a taxable utility?
Is there a consideration of expanding this to water/sewer, cable or
refuse disposal?
What
are the actual % amounts of tax on each utility?
How will totals be determined? Who will do the collecting?
Will a handling fee be collected?
What is a
utility tax?
A utility tax is tax put on telecommunications, natural gas and
electricity bills by the Village to generate revenue to be used for
the operation or improvement of the Village. In most cases it
is approximately 5% of the utility bill or a total of $12.00 per
month for an average resident.
Back to FAQ
Why does the
Village need additional revenue?
The Village is in a revenue crisis due to the downturn in the
economy that has sharply decreased tax revenues and development
fees. Costs needed to run, maintain and improve the Village
have been increasing. Our revenue crisis will end when
revenues go back to typical levels and solid economic growth
produces revenues that can be used to fund capital maintenance and
improvement. We have no control over the amount of money we
receive from the taxing bodies and our only means to increase
revenues as a non-homerule village is through a utility tax.
Back to FAQ
What will the utility tax
do?
Funds collected from the utility tax will be placed into a Utility
Tax Fund that will be subdivided and earmarked for an emergency
reserve fund, capital fund, utility expenses and debt retirement.
The village will be able to provide the services our residents
expect, fund infrastructure and capital, repay debt and build
financial reserves that will repair our credit rating and protect us
the next time there is an economic downturn.
Back to FAQ
How did we get here?
The Village previously had a utility tax in place and decided to
repeal it in 2004 while the village was in a robust growth mode.
Since that time fund reserves have been dwindling and the need to
maintain an expanded infrastructure have been growing. If the
Utility Tax had remained in place several years ago and the money
had been directed to reserves and capital funds, we would not be
facing this difficult situation. All expenses in the village
are funded by a combination of taxes, fees and grants. In the
past when impact fees from commercial and residential development
were plentiful, funds could be diverted to infrastructure and
capital without affecting day to day operations. In the
economic conditions we now face with the drop in development, impact
fees are all but nonexistent and fund reserves are dangerously low.
With increasing costs and declining revenues the General Fund can no
longer support both day to day operations and capital /
infrastructure expenditures.
Back to FAQ
What
could have been done to avoid this situation?
If one could have predicted the downturn in the economy, then a fund
reserve could have been established in advance and it is likely the
utility tax would have been utilized sooner or not repealed in 2004.
To meet the challenge before us we have reduced expenses, reduced
employees and delayed needed projects and purchases to keep the
village solvent. We can do nothing, however, to maintain our
village in the future without additional funds for capital. It
is important to keep in mind that we did not cause the crisis we now
face. The collapse of the worldwide economy was beyond our
sphere of influence. In the last 10 years, however, we failed
to establish fund reserves in order to prepare for this situation
and necessary steps were not taken to protect our village. The
utility tax will begin to reverse this trend.
Back to FAQ
What's in it for
your $12.00 per month?
The Village staff strives to protect the quality of life we enjoy in
Antioch. This is done by providing life safety services such
as police, fire and emergency services. Other services such as
community development, parks and recreation, and public works
provide safe and attractive environments for residents to use and
enjoy. With a portion of the tax to be dedicated to
infrastructure, future improvement to streets or parks can be
realized. Without the implementation of the utility tax, these
services and infrastructure are in jeopardy of being diminished.
For an average of $12.00 per month, the residents will have a safe,
clean village that offers its residents the quality of life they
expect with the amenities they enjoy.
Back to FAQ
Is there a time frame for the collection of the tax or is this a
"forever" tax?
The time period is indefinite. The Village may consider
elimination of the tax after: 1)
The reserve fund is established at a sufficient amount,
2) The infrastructure is in good shape,
3) The fleet is in good shape,
4) The capital plan is funded by another source, and
5) Acceptable levels of general fund services have sufficient
revenue It may take some time before the
tax can be reduced or eliminated as the need for maintaining the
infrastructure and funding capital will not come to an end.
Back to FAQ
Don't property taxes already pay for these services?
The village receives 1% of the 7.08% in Property Tax collected by
Lake County from residents of the Village of Antioch. A
$250,000 home in Antioch generates about $380 for all general
services provided. This will amount to approximately
$1,800,000 of the $10,600,000 needed to provide general services to
the residents in FY 2010.
Back to FAQ
Will the tax be only on Antioch residents and businesses or will it
be on Antioch Township residents also?
Only the Village of Antioch residents and businesses will be
affected. The Village has no authority to go outside the
municipal boundary. Back
to FAQ
What is considered a taxable utility? Is there a consideration
of expanding this to water/sewer, cable or refuse disposal?
Only telecommunications, natural gas and electricity are considered
taxable at this time. The Village is reviewing the water and
sewer rates and may raise the rates if a study shows that the rates
are not sufficient to support enterprise activities.
Back to FAQ
What are the actual % amounts of tax on each utility?
Telecommunications - 6.0%, Gas - 5.0%, Electric - not a percentage
but a scale, so much for the KW/hours until a point then a lower
amount to the next point and so on.
Back to FAQ
How will totals be determined? Who will do the collecting?
Will a handling fee be collected?
Totals are determined by the utility companies based on usage or
volume as indicated on the utility bills. The utility
companies will collect per KW/hour, therm and billing time used.
No handling fees are proposed.
Back to FAQ
If
you have further questions that are not addressed above, please click here
to email your question.
Contact Us
Village of Antioch
874 Main Street
Antioch, IL 60002
Phone: 847-395-1000
Fax: 847-395-1920
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