Board holds third budget review; staff proposes continuing grocery tax and accelerating water-rate increase to $5.95

Village staff presented the third review of the draft budget April 7 and highlighted two potentially impactful revenue and rate policy items: whether to continue the local grocery tax after a statewide change and whether to accelerate planned water-rate increases.

Jason, a village staff member presenting the budget, told the board that the state will eliminate the grocery tax on Jan. 1, 2026, but municipalities may continue a local grocery tax. He said North Aurora currently collects an estimated $600,000 to $750,000 annually in grocery-tax revenue and that the village plans to budget $250,000 for the remainder of the current fiscal year (because the statewide change takes effect Jan. 1, 2026). "Local grocery tax is paid both by residents and non residents," Jason said, noting that the village’s retail base (Woodman's, Target) makes the revenue significant. He said the board can later repeal a local grocery tax if revenues improve.

On water rates, staff reviewed a previously proposed five-year plan and recommended accelerating to the final-year rate of $5.95 per 1,000 gallons sooner. Jason said the current rate is $4.79 and the plan had scheduled $5.27 next year; the proposal would move the rate to $5.95 now. Staff framed the increase as needed to cover rising operating costs (electricity, supplies), planned capital projects and mandated programs such as lead-service-line replacement. The presentation listed significant water projects including a new water tower estimated at $7.6–7.8 million, lead-service-line replacement work (staff estimated $3 million for private/public lead-line replacements but noted larger neighborhood examples reaching about $7 million when mains must also be replaced), treatment-plant improvements and well upgrades. Staff said the water fund reserve could fall from an estimated $6.2 million this year to about $3.5 million next year without additional revenues.

Trustees asked questions about the magnitude and timing of the increases. One trustee urged a more gradual approach; others said they understood the capital pressures. Jason and other staff said they expect an EEI water-system master plan this spring or early summer that will provide a longer-term capital and rate recommendation and that the current proposal is intended to provide flexibility to fund near-term mandatory work.

Why it matters: continuing a local grocery tax would preserve a substantial recurring revenue stream (estimated $600,000–$750,000 annually) and the proposed water-rate acceleration would significantly raise residential bills but is tied to large, mandated water-system investments.

Next steps: staff will finalize budget numbers; the board will need to decide whether to adopt a local grocery tax and the proposed water-rate schedule as part of the final budget process. No formal vote on either item occurred at the April 7 meeting.