Gurnee presents FY 2025-26 draft budget showing $3.1M net use of fund balance, proposed transfers to capital and water funds

Gurnee Village staff on March 3 presented a draft fiscal year 2025-26 budget that proposes total revenues across all funds of about $101.4 million and a net planned use of fund balance of roughly $3.1 million for the coming year.

The budget presentation, led by Finance Director Brian Gosnell and Village Administrator Pat Moots during the joint budget workshop and regular board meeting, front‑loaded several large items: a $4.0 million proposed transfer from the general fund to support the capital program (initially described as $2.75 million to the capital fund and $1.25 million to the water and sewer fund), continued funding for pensions above actuarial requirements, and retention of healthy fund balances. Staff emphasized no property‑tax increase in the proposal.

Why it matters: staff said the general fund is projected to end FY25‑26 with roughly $33.4 million (about 70.4% of expenditures less transfers), slightly above the village policy target of 60–65%. The plan preserves a multi‑year capital program while attempting to maintain reserves that the village says protect its AAA/AA‑type credit standing and ability to respond to unexpected costs.

Key budget figures and drivers - Total proposed revenues (all funds): $101.4 million (up ~2.3% year over year per staff). - Net use of fund balance (all funds): about $3.1 million, including drawdowns in several restricted or dedicated funds (capital improvement, water & sewer, fleet services). - General fund proposed revenues: about $53.4 million; projected year‑end general fund balance: $33.4 million (≈703.8% of expenditures less transfers, per staff presentation — staff note: percent presented in materials is percent of expenditures less transfers). - Capital fund: staff proposed using surplus transfers to support a record capital program (transportation, buildings, water/sewer). After planned transfers and spending, capital fund still projects a multi‑million dollar balance. - Water & Sewer: FY25‑26 capital drawdowns are included (staff noted about $3.3M drawdown in the water & sewer fund accumulated reserves); staff recommended a 6% rate assumption for planning; JAWA wholesale charges are expected to increase (~5%). - Health insurance fund: projected negative fund balance at year‑end in the draft; staff proposed transitioning from a self‑insured model to a governmental pool to reduce long‑term liability. - Personnel: total budgeted full‑time equivalents (FTEs) listed at 260.65 (an increase of 17.25 FTEs in the draft), with public safety representing roughly 73% of authorized staffing; staff noted consolidation of county dispatch (LACOM) will temporarily inflate then reduce FTE counts when positions transfer out.

What staff highlighted about funding risks and policy items Staff identified several external and one‑time items that could change the budget picture: rising health‑care costs (driving the review of health insurance options), expansion of the Internet sales tax collection (net positive for sales tax receipts but shifting use tax receipts), the January 2026 grocery tax repeal (staff said the repeal will affect only one month on a cash basis in the next fiscal year), possible state legislative changes to Tier 2 pension benefits (staff flagged a pending bill in Springfield that could increase the village’s unfunded liabilities if enacted), and upcoming large water‑main replacements.

Proposed changes after bid results During the meeting staff noted the low bid on the Stoney Island water main replacement project came in about $1.0 million under the budgeted amount. Because of that saving staff proposed reconsidering the previously planned surplus transfer mix: rather than strictly keeping the $2.75M/$1.25M split, staff asked trustees to consider shifting up to $1.0M to the golf course fund to start funding a multi‑year irrigation replacement project (the golf course irrigation estimate was previously about $3.0M). Staff invited trustees to review and indicate any preferences before the April 7 public hearing.

Next steps and timeline Staff said they would bring the final levy/rate decisions and the budget ordinance to the board for the April 7 public hearing and potential adoption. The formal agenda on that night will include (1) the budget ordinance, (2) the surplus transfer decision, and (3) any water rate resolution the board adopts. Staff said a second workshop on March 17 would be held only if trustees requested additional discussion.