County budget faces $27M gap as fund reserves projected to deplete by 2027

The Kane County Finance Committee convened on April 23, 2025, to discuss the county's financial outlook and budgetary challenges as they prepare for the upcoming fiscal year. The meeting highlighted significant concerns regarding the sustainability of the county's budget, particularly the reliance on fund balance reserves to cover expenses.

The 2025 county budget is set at $419 million, a decrease from the previous year's budget of $439 million. However, actual expenditures for 2024 were only $313 million, indicating that 71% of the budget was utilized. The general fund's budgeted expenses for 2025 have risen to approximately $140.4 million, which constitutes 34% of the total budget. The anticipated revenues for the general fund are projected at $112 million, resulting in a budget gap of $27 million, slightly improved from a previous gap of $29 million.

A critical point of discussion was the potential depletion of fund balance reserves. If the county continues to draw from these reserves at the current rate, it could run out of funds by 2027. The committee noted that the general fund has already utilized $5 million in 2023 and is expected to use around $10 million in 2024. For 2025, the budget initially called for $29 million from reserves, which has since been adjusted to $27.8 million. This trend raises alarms about the long-term viability of the county's financial health.

Committee members expressed concerns about the implications of using fund balance reserves, particularly in light of a newly established policy requiring a minimum reserve of 90 days of operating expenses. Currently, the general fund does not meet this requirement, with only $28 million available as of mid-April. The timing of property tax revenue, which is not expected until June and September, contributes to this shortfall.

The meeting also addressed the structure of the general fund, which comprises six separate accounts for accounting purposes. This complexity has led to confusion regarding the availability of funds and their intended uses. The committee discussed the need for clearer reporting and potential reallocation of restricted funds to alleviate budgetary pressures.

Looking ahead, the committee emphasized the importance of identifying stable revenue sources and exploring cost efficiencies across departments. They acknowledged that many county functions are mandated but do not specify funding levels, creating challenges in budget planning. The discussion concluded with a call for a thorough review of all expenses and potential reallocations to ensure the county can maintain its financial obligations without compromising essential services.

As Kane County navigates these financial challenges, the Finance Committee's discussions underscore the critical need for strategic planning and fiscal responsibility to secure the county's economic future. The next steps will involve further analysis of revenue forecasts and potential adjustments to the budget to address the identified gaps.