City presents preliminary FY26 budget: staff projects 4% sales-tax growth, flags new positions and major capital requests

City finance staff opened the FY2026 budget process with a preliminary presentation that outlined projected revenues, a small increase in IT costs, large-spend requests and a slate of proposed new positions.

“Welcome to the most wonderful time of the year. It is budget time. Stay calm,” Sandy (staff member) told the finance and administration committee at the start of the presentation.

Sandy said staff are taking a conservative approach to revenue projections. The presentation projects a 4% increase in food-and-beverage and general sales tax receipts, mirroring last year's projection. Use-tax receipts are projected to decline by about 33% (a trend staff attributed to post-Wayfair changes in online sales taxation), while state income tax receipts tied to per-capita and corporate profit growth are estimated to rise roughly 9%.

Key revenue and budget details presented by staff: - Sales tax (general and food & beverage): projected +4% year over year. - State use tax: projected −33% (staff said the Illinois Municipal League has been projecting declines tied to Wayfair changes). - State income tax share: projected +9%. - Utility and cable franchise revenues: largely flat to slightly increased; phone-franchise and some other lines continue a slow decline. - Video gaming license counts: down from 89 machines last year to 78 currently; video-gaming proceeds projected slightly higher based on year-to-date receipts.

IT and large-spend items: staff said the IT department cost center shows approximately a 1% increase over FY25, with planned equipment replacements and software/SaaS costs concentrated in hardware, software and personnel. The large-spend list mirrors projects presented in the September CIP packet and includes projects that may be shared across enterprise funds.

New position requests included (all submitted for review, not yet approved): a Public Works administrative assistant; a Public Works project engineer; a Public Safety social worker (staff said the department is pursuing a three-year grant from the Memorial Foundation but the request is not grant-dependent); a park specialist (tied to a possible takeover of Saint Ellen Mine Park); and requests to convert part-time sports park coordinator and park maintenance labor positions to full time.

Capital requests and clarifying figures highlighted by public comments and staff: - Proposed public-works operations building: $5,000,000 (listed in the CIP and discussed by members and residents). - Reeder Road sanitary sewer lift station: $2,750,000 listed in CIP materials. - Wastewater treatment bank/erosion work (CIP item 303401): $350,000 listed on the packet. - Community Park pavilion (CIP CP2607): $180,000 noted by staff as a projected cost on the list. - Bill O'Fallon Trust Fund balance: staff estimated roughly $1,000,000 available for projects or to remain invested.

Sandy described the schedule: staff will reconcile new Illinois Municipal League revenues before committee budget hearings begin Feb. 3–5; department-level committee presentations run through March with final review by the Finance Committee on Feb. 24 and first/second readings in April.

Public commenters used the budget presentation to highlight priorities. Ward 6 resident Ron Zellms urged the committee to prioritize the Public Safety social worker role; Ward 3 resident Vernon Ware asked for details on specific CIP items and urged that department-level meetings provide the technical answers. Staff repeatedly emphasized these are preliminary requests and appearing on the list does not guarantee final inclusion in the adopted budget.

Because the FY26 packet is an initial, conservative working set of requests and projections, staff asked council members to flag priorities before the department-level budget hearings begin.