The City of Palos Heights has entered into an agreement with an auditing firm to investigate what it described as a shortfall in funds received from ComEd for utility taxes in previous years.
At the May 19 city council meeting, Alderman Michael McGrogan stated “the staff has kept an eye on what kind of funds we’re getting back monthly for a number of years, and found a significant variance for the month of February, which is not explained by the difference of one or two extra days.”
The issue stems from the payment of utility taxes charged by the city and collected by power providers, like ComEd. The power company collects the taxes on residents’ monthly utility bills and gives that money to the charging municipalities on a monthly basis.
“The amount of money we receive has remained largely consistent for years, except for the month of February,” McGrogan said.
The city charges a 5% tax on the gross receipts of the sale of electricity to its residents and businesses, plus an additional charge between .21 and .558 cents per kilowatt hour, depending on usage.
Financial data provided by City Administrator Adam Jasinski shows that consistently between January 2020 and March 2026, the city receives somewhere between $30,000 and $70,000 per month from ComEd in utility taxes, with the highest payments consistently coming in the summer months of July and August, when payments reach into the $50,000 to $70,000 range, and a secondary, smaller spike in December and January, when payments are in the mid-to-high-$40,000 range. These numbers are explained by increased power usage in these periods for air conditioning and holiday lights. During the rest of the year the payments tend to stay between $30,000 and the mid-$40,000s.
The period of notable discrepancy came in February 2024 and February 2025, when utility tax payments to Palos Heights from ComEd totaled $10,590 and $14,616.50. These payments were more than $20,000 lower than the next lowest tax payment for the month of February, which came in 2023 and amounted to $37,694.83. Similarly, the numbers for 2026 were back in the typical range for the month at $40,381.54.
Despite the obvious discrepancy, McGrogan stated that the city’s investigations into the matter “have not gotten very far” which has necessitated the contracting of a third-party firm.
The city council voted unanimously to approve a professional services agreement with Azavar Audit Solutions to conduct an audit of the city’s ComEd tax revenues.
Upon completion of its audit, if Azavar discovers that ComEd does owe money to Palos Heights, the firm will pursue payments from the power company.
McGrogan noted that the hope is Azavar, as a specialist in this field, will be more successful than the city has been at addressing the issue.
“This firm specializes in telling companies like ComEd ‘wait, I think you owe us money,’” McGrogan noted in his report to the city council.
There is no upfront charge for the services noted in the agreement, however, if they are successful in recovering unpaid tax funds from ComEd, they will receive 45% of the recovered funds as a service fee. Azavar’s fees include the cost of retaining a law firm to assist in the fund recovery efforts.
“If we don’t do it, we won’t get anything,” McGrogan stated. “This is a way for us to get something back.”