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posted: 3/18/2014 5:30 AM

Batavia raises sales tax, electric rates

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Come May 1, customers will pay more for electrical service in Batavia.

And starting July 1, shoppers will pay more sales tax on some items they buy in Batavia.

The city council Monday approved both measures to deal with the increased costs the city pays for electricity.

"None of us are happy about this vote, but we all realize this is a necessary vote. This also affects us as residents, too," Alderman Lisa Clark said before the electrical rate vote. Clark is chairman of the public utilities committee.

Aldermen Jamie Saam, Kyle Hohmann and Martin Callahan voted against increasing the electrical rates and monthly charges. They also voted against the home-rule sales tax increase, and were joined by Alderman Dave Brown.

The sales tax was increased a half-cent per dollar, bringing the city's top sales tax rate to 8 percent from 7.5 percent.

The increase will expire July 1, 2017, an idea suggested by Alderman Nick Cerone. He said that would "put the onus" on the future council to revisit the issue.

Finance director Peggy Colby estimates the sales tax bump could add another $1.5 million to the city's general fund.

And if that weren't used to pay to buy electricity, she estimated the city would have had to raise electrical rates as high as 16 percent to cover its costs.

Alderman Lisa Clark pointed out that nothing in the ordinance bound the city to spend the sales tax on electricity. But City Administrator Bill McGrath said the staff will present budgets to the council that do so.

"This is a crutch to get through hopefully the next two or three years and is done," Brown said.

The sales tax increase will not apply to groceries. It also won't apply to medicines, medical appliances and supplies used by diabetics, such as syringes and urine test strips

It also won't apply to the sale of vehicles, boats, snowmobiles, airplanes or other personal property items titled with the state.

Energy rates were increased for all classes of customers, from residential to industrial, for 2014.

Residential customers will pay 6.5 percent more for energy, and $4, or 40 percent, more a month for the customer charge. In 2015, their energy rates will again jump 6.5 percent.

Demand rates and customer charges for large commercial and industrial users would also increase both years.

The city's electrical costs have gone up due to its investment, through the Northern Illinois Municipal Power Agency, in the building and operation of the coal-fired Prairie State Energy Campus, from which it must purchase electricity.

The costs of that electricity are higher than was anticipated when the council approved the investment in 2004 and 2005.

A disgusted Yvonne Dinwiddie, a civic activist who closely watches spending by Batavia government, said after the meeting that she plans to create a referendum for voters to rescind the city's home-rule powers.

Under home rule, the city can institute, and raise, some taxes without getting permission from voters. The city attained home rule when the population grew past 25,000 in 2010.

She had contemplated taking action before, but the decision on the electrical rates and the sales tax increase cemented the idea, Dinwiddie said.

Dinwiddie was the organizer of a referendum in 2010 that thwarted the Batavia Park District's plans to build a recreation center downtown.

In 1991, she organized an advisory referendum opposing a photo radar traffic enforcement plan the city council was considering.

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