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Saint Charles presents draft 2025–26 budget with capital priorities and utility pressures
Summary
City staff presented a draft FY2025–26 budget showing a balanced general fund, proposed transfers to support water and capital projects, and deferred capital items while flagging rising personnel and health insurance costs and the need for a utility rate study.
Bill Hanna, the city’s budget director, presented an overview of the draft budget for fiscal year 2025–26 at the Government Operations Committee meeting. "Tonight is a presentation of an overview of the draft budget for fiscal year 2025–26," Hanna said, and walked members through revenues, expenditures, staffing and capital priorities.
The draft shows the general fund operating budget balanced with roughly $64,800,000 in revenues and expenditures. Hanna told the committee the city plans to recommend increased transfers in the current year — from the general fund to the water fund and to the capital fund — to front-load funding for near-term capital work. He said the city is recommending raising the general-fund transfer to the water fund from $1,100,000 to $2,250,000 and to the capital fund from $1,200,000 to $2,500,000 in the forecasted column to help fund projects.
Hanna emphasized rising personnel costs and health insurance as the primary drivers of the operating cost increases: personnel accounts for roughly 67% of general fund expenditures and wages and benefits are driving a roughly $2.2 million year-over-year increase. Hanna said health insurance costs are budgeted about 10% higher than last year.
On capital, the draft identifies about $8.3 million for Rose and about $3.2 million for other core projects in the general capital fund, and roughly $12.3–12.4 million total in the capital projects fund. Utilities include major projects: the Well Aged/Well Capacity expansion (budgeted near $8.9–11.7 million, to be funded in part with an IEPA low-interest loan) and the Seward Trunk Main Phase 2b (about $8.46 million funded by an interfund loan). Hanna said the water fund’s dedicated revenues cover roughly $9 million of $11 million operating obligations, leaving about $2 million per year on a cash basis for capital without borrowing or additional subsidy.
Committee members pressed staff for detail. Alderman Petrella asked whether the budget addressed which services were outpacing revenue; Hanna pointed to personnel and core operating services as the main drivers. Several members discussed the need for a utility rate study; staff said a rate study is planned to align rates with utility master plans and capital needs. Staff also flagged that certain capital projects were deferred to future years; held-off projects listed in the presentation included additional bridge and creek work, sidewalk gap implementation, and some IT and roof projects.
Hanna and Heather (city staff) told the committee the draft budget document has been reorganized to improve transparency, consolidate some accounting units and add links to the city strategic plan; the city also aims to pursue the Government Finance Officers Association budget award. The draft will return for follow-up questions April 7; the public hearing and City Council approval are scheduled for April 21.
Ending: Staff recommended committee members forward questions to Director Hanna before the April 7 follow-up so staff can research responses. No formal vote was taken on the draft budget at the meeting; committee members were asked to return to the item for further discussion and to the public hearing date noted above.
