Expanding Senior Sewer Exemption

Expanding the Senior Sewer Exemption: There are two different discounts available to seniors
for the sewer service charges on the unified utility bill: Senior Sewer Exemption and Senior
Sewer Refund. If the City were to expand the Senior Sewer Exemption to seniors living in 2 to
6 flat buildings, the estimated annual revenue loss is $10 million to $11 million.
Background
Both the Senior Sewer Exemption and Senior Sewer Refund require eligible seniors to be 65
years of age or older and to own and occupy as their principal residence the property receiving
the exemption.
Senior Sewer Exemption
Under this exemption, seniors living in single-family homes, or multi-family units that are
individually metered, are exempt from paying 100 percent of their sewer charges. The sewer
exemption reduces an eligible seniors total water-sewer bill by 50 percent. With the sewer
exemption, seniors also will receive a 50 percent reduction in the water-sewer utility tax as the
tax will only be charged to the water portion of a seniors bill.
Senior Sewer Refund
Under this rebate, seniors that live in a condominium, co-op or townhouse may qualify for a
refund, in lieu of the exemption. Currently, the amount of the refund is $50.00 per qualified
residence, per calendar year. The deadline to apply for the Senior Sewer Refund is July 1st of
each year.
Revenue Impact
There are 66,000 senior households receiving the Senior Sewer Exemption at an annual cost to
the City of $24.5 million. An estimated 7,000 senior households receive the Senior Sewer
Rebate at an annual cost to the City of $350,000 in 2015.
Based on Cook County data, there are 18,000 units (based on the number of Property Index
Numbers) in 2 to 6 flat buildings that receive the senior homestead exemption. The County data
is categorized by 2 to 6 flats and the data does not indicate the number of units receiving the
senior homestead exemption located in 2 to 4 flats.
Using the Citys current water-sewer rate of $3.81 per 1,000 gallons for water and $3.81 per
1000 gallons for sewer and the median annual water consumption for both metered and nonmetered multi-family dwellings of 169,000 gallons, expanding the senior sewer exemption
would result in an annual revenue loss to the City of between $10 million and $11 million.
.

Current meter/non-metered allocation

Tax Rate

Utility Tax
Rate

Year
Current
2017
2018
2019
2020
2021

Combined
Tax Rate
Revised Tax Including
Required Utility Tax
Combined
Tax
Including
Utility Tax Utility Tax

n/a

n/a
0.59
1.28
2.01
2.51
2.51

7.7%
16.8%
26.4%
32.9%
32.9%

$
$
$
$
$

n/a
8.21
8.90
9.72
10.13
10.13

Annual Bill

Bill
Increase

Annual Bill

Bill
Increase

$
$
$
$
$
$

685.80
738.90
801.00
874.80
911.70
911.70

$
$
$
$
$

n/a
53.10
115.20
189.00
225.90
225.90

- 50% decrease in non-metered accounts

Utility Tax
Rate

Year
Current

Combined
Tax
Including
Utility Tax Utility Tax

n/a
2017
2018
2019
2020
2021

8.1%
17.7%
29.0%
34.8%
34.8%

$
$
$
$
$

n/a
0.62
1.35
2.21
2.65
2.65

$
$
$
$
$

n/a
8.24
8.97
9.83
10.27
10.27

Annual Bill

Bill
Increase

$
$
$
$
$
$

$
$
$
$
$

685.80
741.60
807.30
884.70
924.30
924.30

n/a
55.80
121.50
198.90
238.50
238.50

Estimated Municipal Pension Funding Assuming Immediate ARC

Budget Year

2017

Payment Year

2018

2018

2019

Pension Escrow

Earnings on Escrow

Property Taxes

124,706,000

Corporate Fund

Enterprise Fund Share

Water-Sewer Tax
Total City Contribution
Required Water Sewer Tax per
1,000 gallon consumption

2019

2020

2020

32,631,079
-

2021

2021

2022

2022

2023

52,662,159

59,905,860

54,110,182

51,264,463

1,330,500

2,677,920

4,145,116

5,297,632

$ 124,706,000

124,706,000

124,706,000

109,719,000

109,719,000

$ 109,719,000

$ 109,719,000

$ 109,719,000

109,719,000

110,880,000

113,280,000

$ 115,840,000

$ 118,400,000

$ 120,960,000

123,520,000

380,326,079

380,326,079

$ 380,326,079

$ 380,326,079

$ 396,571,163

396,571,163

693,000,000

708,000,000

$ 724,000,000

$ 740,000,000

$ 756,000,000

772,000,000

3.98

3.98

$ 124,706,000

3.98

$ 124,706,000

3.98

4.15

4.15

WaterSewerTaxImpactonLaundryOperators

LaundryMats:Thereareapproximately500licensedlaundryoperatorsintheCityofChicago.Aswithallwatersewer
accounts,theselaundryoperatorswillseea7.7percentincreaseintheirutilitybillsin2017.

Background

TheCityhasapproximately500licensedlaundrybusinesseslocatedinwardsacrossChicago.Accordingtodataprovided
totheCitybytheIllinoisCoinLaundryAssociation,commercialwashercapacityacrossChicagovariesfrom18lbs/20lbs
upto75lbs/80lbs,andthemajorityoflaundrymatsutilizequarterpricing.Therefore,anyincreaseinpricingwouldmost
likelyoccurin$.25increments.Additionally,theaveragefrontloadcommercialwasherutilizesbetween3to4gallons
perpoundoflaundry.1

PotentialImpact

Thefollowingchartprovidestheestimatedimpactperloadoflaundryforlaundrymatcustomersutilizinga30lbs/35lbs
washer.2

Year

AverageGallonsperLoad WaterSewerTax AverageCostperLoadIncrease

2017
2018
2019
2020&2021

100
100
100
100

0.59
1.28
2.01
2.51

$0.06
$0.13
$0.20
$0.25

TheOfficeofBudgetandManagementexaminedasampleoflaundrymatoperatorstodevelopanestimatedimpactof
thewatersewertaxonutilitybillsforthoseoperators.Basedonthesampling,theaverageyearlywaterconsumption
forlaundrymatsis360,000gallons.Thebelowchartprovidesacalculationonthepossiblemonthlyimpacttowater
sewerbillsforlaundrymatsbasedontheaverageyearlyconsumptionofwater.

Water
Sewer
Charge
Charge
Tax(Water
Tax(Sewer Water&Sewer Avg.MonthlyBill
YOYRate
Year
Portion)
Portion)
Charges+Tax
forLaundryMats
Increase
(per
(per
1,000gal)
1,000gal)
Current
$3.81

$3.81

$7.62
$27,432

2017
$3.81
$0.295
$3.81
$0.295
$8.21
$29,556
7.70%
2018
$3.81
$0.640
$3.81
$0.640
$8.90
$32,040
8.40%
2019
$3.81
$1.005
$3.81
$1.005
$9.63
$34,668
8.20%
2020
$3.81
$1.255
$3.81
$1.255
$10.13
$36,468
5.20%
2021
$3.81
$1.255
$3.81
$1.255
$10.13
$36,468
0.00%

Basedonthisanalysis,customerscouldseebetweena$.25to$.50increaseinthecostperloadoflaundryby2020and
2021,varyingbythesizeofthewasher.

AccordingtotheAllianceforWaterEfficiency
Theseestimatesarebasedontheaveragenumberofgallonsusedin3035lbwashers,thetypicalcommercialwasher,providedby
theIllinoisCoinLaundryAssociation.

Local and National Comparative Tax Burden

$50,000 Income Level
25%

20%

15%

10%

5%

0%

*The Chicago Increase includes the four year property tax increase imposed by the City for police and fire pensions as well as the CPS property tax increases
for teacher pensions and capital investment.