North Aurora finance director reports midyear revenue gains; grocery tax set to expire Jan. 1, 2026; water capital needs highlighted

Finance Director Jason Paprock presented the village’s six‑month financial update, reporting midyear revenues above budget in several categories while flagging an imminent state change to the grocery tax and significant upcoming water‑fund capital needs.

Paprock said sales tax is the general fund’s largest revenue source, accounting for just under half of general‑fund receipts. He said the village budgeted $6,300,000 for sales tax this year and currently projects roughly $7,100,000–$7,200,000 in actual receipts at year end. Paprock explained the state grocery tax will expire Jan. 1, 2026; municipalities may adopt a local ordinance and file with the Illinois Department of Revenue by Oct. 1 to retain the tax locally. He said staff will discuss whether to pursue that option during the coming budget process.

Paprock reported income tax distributions are up from prior years and that he is projecting about $3,078,000 (versus a budgeted $2,800,000). Building‑permit revenue was variable: recent years saw unusually large permit receipts from major remodels, and this year’s projected permit revenue is about $638,000 versus last year’s near $898,000 actual. Use tax and sales tax shifts from state law (the leveling‑the‑playing‑field changes) are continuing to affect year‑to‑year comparisons.

On expenditures and reserves, Paprock said the general‑fund beginning fund balance was $9.3 million (about 64.9 percent of budgeted transfers and expenditures), above the village policy of 40–50 percent. The board’s capital transfers rely on annual surplus to build capital project reserves; staff said recent transfers have increased the capital projects fund balance to about $14.5 million as of June 1 but that planned public‑works facility construction and advances have and will draw that balance down.

Paprock also reviewed two tax‑increment financing (TIF) districts: United TIF property‑tax increment year‑to‑date was about $993,000 (an increase tied to development in the area), and Route 31 TIF receipts were roughly $396,000; Route 31 TIF expires Aug. 25 and the village will discuss options for closing or reallocating remaining funds. He noted a $250,000 DCEO grant applied to a land‑swap transaction tied to the United TIF.

Turning to enterprise funds, Paprock said water sales have been relatively flat even after a 12.5 percent rate increase June 1 and that the village has budgeted about $3,054,000 for water sales this year; projected year‑to‑date receipts were slightly above last year. Staff said major capital projects remain, including a central water tower with a total project cost described as roughly $7.6 million; Paprock said the village is working with a consultant on a master water study and an accompanying rate study to determine appropriate rate path and timing.

Paprock described possible options to bridge capital funding — including re‑phasing projects, charging a monthly capital fee or accelerating rate increases — and said the board will get more detailed budget presentations in March as the FY2026 budget process proceeds. No final budget decisions were made at the meeting.

Procedural note: At the end of the regular meeting, the board moved to adjourn into executive session to discuss equity acquisitions. A motion to adjourn was made and seconded; the chair called the vote and received unanimous “aye” on the voice vote. The board then moved into executive session.

Ending: Staff will return with more detailed budget projections and water‑fund rate study conclusions during the March budget presentations and before any ordinance action on grocery tax retention or rate changes.