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Finance director: Normal's assessed value surged but water fund and contingency levels warrant caution
Summary
The town's financial trend report shows a sharp increase in assessed value and generally healthy reserves, but staff warned of risks to the water capital and contingency reserves and flagged the need to revisit rate and capital assumptions during the 2026-27 budget process.
Normal'At a Sept. 15 council meeting the Town of Normal's finance director presented the fiscal year 2024-25 financial trend and condition report, reporting strong assessed-value growth and healthy reserves while cautioning about the water fund and contingency reserves in the five-year outlook.
The report showed extraordinary assessed-value growth in the most recent tax year: a 17.1% increase that added more than $200 million to the town's Equalized Assessed Value (EAV). The director said the growth included substantial residential, commercial and industrial increases and noted that the shift toward more commercial and industrial value reduces the relative share of property-tax burden on households.
On revenues, the director highlighted a divergence in state versus local sales-tax results for the year. The state-collected sales tax component fell about 8.4% while the local sales-tax component rose roughly 2.6%; staff suggested the change could reflect lower purchases of large-ticket, state-taxed items (vehicles, boats) during the year. The town also recorded higher investment returns by moving cash into short-term money-market positions as longer-term instruments matured.
On reserves and funds, the director reported the general fund ended the year with a strong reserve position above target, though the town intentionally planned a modest drawdown in the adopted budget. Pension funding for IMRF remained strong at about 90% funded; police and fire pension funded ratios were reported in the 50s-to-60s range, with council and staff noting ongoing actuarial work and contribution plans.
The finance director gave a cautious outlook for the water fund. "We've got this as negative outlook for the Water Fund. We're at 30.9% projected for this current fiscal year... and that gets down to 3.4% in the out years," he said, calling attention to capital spending plans and operating pressures that could require rate adjustments or changes to planned capital work. Councilmembers and staff reminded the audience that the council has a previously approved 2% water/sewer rate increase through April 2028; the director said that may not be sufficient to cover projected capital and operating cost increases.
The presentation concluded with the finance director noting that the town enters the 2026-27 budget process from a solid starting point but will need to evaluate contingency and equipment reserves and consider how to fund capital priorities in the coming years.
Next steps: Staff will carry the trend-analysis findings into the budget process, and council will consider rate and capital decisions as part of the 2026-27 budget deliberations.
