Finance Committee accepts FY2025 audit, flags water and sewer cash shortfalls and emergency mains

The Finance Committee voted to accept and place on file the city’s fiscal year 2025 financial audit and used the audit presentation to discuss weakened cash positions in the water and sewer funds and upcoming emergency main work.

John, a staff member who presented the audit highlights, told the committee that “the audit went well” and that auditors issued a “cleaner, unmodified opinion,” meaning the city’s financial statements were prepared in compliance with generally accepted accounting principles and auditors reported no material findings on compliance.

The audit presentation and committee discussion outlined the main budgetary changes and near-term concerns. The general fund’s change in fund balance increased by about $474,000 during the year; the general fund rose from roughly $2.3 million to about $2.8 million, a position staff described as improving though still below a six-month reserve target. Library fund cash rose sharply — staff said library cash increased by roughly $1.2 million to nearly $1.3 million, largely from donations — and TIF 1 and TIF 3 cash balances grew by about $1.1 million.

At the same time, staff reported that combined water and sewer fund cash balances fell by about $2.5 million, a decline attributed primarily to capital improvement spending. The presenter said the city paid down principal on an IEPA loan for the wastewater treatment plant while taking on additional low-interest IEPA borrowing with forgiveness components; net long-term debt increased as a result. Net pension liability reported in the audit for April 30, 2025, totaled about $15,600,580, an improvement of roughly $60,000 from the prior year.

Committee members discussed the policy implications of the water and sewer declines. One alderman urged caution on committing to new large, million-dollar projects until reserves recover. Staff said the city has not raised water and sewer rates since 2020 and that prior automatic yearly increases may or may not still be in force; an alderman asked staff to locate the ordinance that previously authorized automatic rate adjustments.

Staff also told the committee the city will advertise two emergency water-main replacement projects to be bid on Sept. 12; one stretch on Creve Coeur was described as badly deteriorated and could cost about $400,000. Another emergency main near the water tower on Malcolm Avenue has experienced multiple breaks, and addressing it will require working in the street where other utilities (fiber, gas, sewer) are present, a factor that raises costs but would allow paving where needed. A separate storm-sewer lining on Eighth Street was described as a relatively small, budgeted job of about $31,000–$32,000.

During discussion, an alderman suggested a five-year financial forecast for the water and sewer funds and a joint review by the finance chair and the water/sewer chair to consider whether rate adjustments should be proposed next February. Staff emphasized the value of low-interest IEPA loans with sizable forgiveness (staff noted examples of under 1% interest and about 40% forgiveness on eligible projects) but warned the county can only take on such large forgiven loans so many times without increasing recurring revenues.

Votes at a glance: The committee approved a motion to accept and place on file the fiscal year 2025 financial audit. The motion — “Accept and place on file the fiscal year 2025 financial audit” — was moved by Alderman LaViere and seconded by Alderman Jepsen. Roll-call votes recorded ayes from Alderman Dimas, Patak, Reynolds, LaBary, Jefferson and Crane. The motion carried.

The audit binder is on the committee desks and an electronic version is in the packet; staff said limited bound copies are available for members to borrow and return. Committee members ended the meeting with no additional formal direction beyond approving the audit and noting the need to revisit water and sewer rate and project planning.