Yorkville aldermen expected to pass 1% tax on restaurant meals, drinks

YORKVILLE – The Yorkville City Council is preparing to enact a 1% tax on restaurant food and drinks, including prepared meals for delivery, in order to generate revenue for the Lake Michigan water project.

The city is looking a $120 million price tag for constructing a pipeline and other infrastructure to connect Yorkville with the DuPage Water Commission and its lake source.

A clear majority of the eight-member council indicated support for implementing the restaurant tax, which would include tavern drinks, during a discussion at the June 13 council meeting.

The “places of eating” tax would take effect late this year, six months into the city’s annual budget cycle.

City officials estimate that the tax will generate about $700,000 a year.

Last year, the city implemented a water rate hike, with more increases expected to be phased in over the years.

Mayor John Purcell said the city needs to produce revenue from multiple sources in order to fund the pipeline project and the restaurant tax could be one of those sources, adding that the city could postpone another water rate increase.

“We know that whether we do this or not, water rates will go up,” Purcell said, adding that he believes the city needs to consider increasing the water connection fee for new homes.

Purcell said that the alternative to the meals and drinks tax would be to increase water rates again this year.

City Administrator Bart Olson said an increase of 15% to 18% would produce about the same $700,000 a year in revenue, costing the typical Yorkville household an additional $5 to $10 per month.

Aldermen have delayed a decision on whether to implement the restaurant tax or to increase water rates. They allowed the administration to include the $350,000 that either revenue source would produce for the second six months of the budget year.

However, with the city preparing to issue $11 million in bonds to finance water projects this year, it must commit to a revenue source and make a decision on the question of the meal tax or the water rate increase, Olson said.

Seven aldermen from the eight-member council were present at the meeting and six indicated they will support the restaurant meal tax.

First Ward Alderman Daniel Transier, 2nd Ward Aldermen Craig Soling and Joe Plocher, 3rd Ward Alderman Matt Marek and 4th Ward Aldermen Seaver Tarulis and Rusty Corneils said they favor implementing the tax.

“I don’t think people will notice on their bills,” Soling said.

Third Ward Alderman Chris Funkhouser worried that the restaurant tax could be increased, and said that other communities have higher rates for a meals tax.

“I want our businesses to be solid and stable,” he said.

First Ward Alderman Ken Koch was absent.

Last year, the city increased its base water rate for the first 350 cubic feet of water consumed from $17 to $24. A “volumetric” rate for every 100 cubic feet of water over the first 350 was increased from $4.30 to $4.80.

The typical residential household uses about 1,200 cubic feet of water per 60-day billing cycle, for a total cost of about $64.80.