DeKalb city manager presents 2026 budget package; council signals intent to hold city levy rate

City Manager Bill Nicholas presented a proposed FY2026 budget and related capital plans at a joint DeKalb City Council and Finance Advisory Committee workshop, urging council members to hold the city property tax levy rate at the same level as last year while committing to street, water and public-safety priorities.

Nicholas told the workshop the packet before members includes a narrative summary and detailed spreadsheets for the general fund, water fund and key capital funds and that the packet had been slightly amended before the meeting. "I would like to see us spend about $250,000," he said of proposed one-time capital spending for the city's 250th-anniversary observance, adding the money would likely transfer from the general fund reserve to the capital fund and be spent on symbolic, durable projects rather than one-time entertainment.

The recommendation to keep the city levy rate unchanged — the city manager cited an option to maintain last year's rate of roughly 0.622 — drew apparent support from the council. Council members nodded in agreement and the city manager said, "I'll bring that forward," indicating he will present a formal levy recommendation at the council meeting scheduled next week.

Why it matters: Nicholas framed the proposal around the city's revenue mix (property, sales/use, municipal utility and state income taxes), existing service and capital needs, and pension obligations. He said development-driven increases in equalized assessed value (EAV) have reduced the city's rate in recent years, but that faster revenue growth cannot be relied upon to cover rising costs for pensions, street maintenance and vehicle replacement.

Key budget proposals and figures

- Property tax/levy: Nicholas recommended keeping the city levy rate the same as last year (the background materials cite a rate around 0.622). He warned that, because average home values have increased (he cited roughly a 10% rise for homeowners), many taxpayers will see higher dollar amounts on tax bills even if the rate is unchanged.

- Streets: The packet proposes about $3,000,000 for street repair in FY2026. Nicholas described the $3 million as close to a high-water mark outside the current year's $4.5 million blitz, explaining that the city will prepare a new five-year pavement plan this winter to prioritize collectors such as West Hillcrest, and to sequence alternates and bid alternates. He said street-condition work over the past year reduced the percentage of streets rated near failure from about 45% to roughly 20%.

- Water infrastructure: The budget includes major near-term water projects: extending a transmission main to serve south-side growth and drilling a new shallow well expected to add roughly 1.4–1.5 million gallons per day of capacity. Nicholas said the transmission main project is planned so it can serve up to about 2,500 acres and that the city is pursuing low-interest EPA financing. A test well was planned for the fall to confirm aquifer conditions before full construction decisions.

- Public safety and personnel: The revenue side includes anticipated SAFER grant funding to support firefighter/paramedic hires and public-safety staffing. The city is adding positions (including a proposed senior analyst with capital-tracking responsibilities). Police staffing has increased from the low 60s to about 75 officers, Nicholas said; overtime remains elevated but is expected to level off as vacancies are filled.

- Capital replacements and equipment: The proposed capital/replacement program lists roughly $485,000 for assorted vehicle purchases and scheduled squad replacements (the packet cites about $300,000 for police squad replacements), continued funding for an aerial truck payoff, and equipment such as a crack-filling machine. The capital projects fund and motor fuel tax together are projected to contribute materially to street work.

- Debt and reserves: Nicholas said general obligation debt service will fall off in about five fiscal years, and the FY2026 projections still show a sizeable general fund balance (he referenced a projected reserve near 60% of annual expenditures under the presented scenario). He cautioned that continued use of the reserve to cover structural shortfalls is not a long-term fix.

Pensions and fiscal constraints

Nicholas reviewed the city's police and fire pension liabilities, noting unfunded liability estimates had fallen by about $1 million versus the prior year in the packet's actuarial snapshots and that investment returns and consolidation of certain accounts had helped. He and council members noted state-level changes to the statewide pension schedule (the city manager said the state might change an amortization assumption from 2040 to 2050) could reduce near-term pressure, but council members emphasized they do not expect Springfield to fully solve the structural pension challenge.

Discussion highlights and follow-up

- Council members and staff discussed how the proposed $3 million street program will fit into a new five-year pavement plan; City Engineer John Laskowski and public works staff will provide a detailed plan and alternates for the council to approve with bids expected in March.

- For water projects, Nicholas said the city will seek EPA low-interest financing and that some FY2026 budget money is intended to begin debt service; the test well will determine feasibility before the city commits to full drilling and construction.

- Airport and other items: The airport fund was not included in the packet; Nicholas said the airport has trended into the black in recent years and that smaller investments (fencing, snow removal equipment) are underway. He said larger runway upgrades to host larger commercial aircraft would be multimillion-dollar projects and no specific funding source has been identified.

Formal actions recorded at the workshop

The workshop included routine procedural approvals — voice votes to approve the agenda and to approve minutes listed in the packet — and a voice-vote adjournment. The council did not take a formal roll-call vote on the levy at the workshop; instead, members indicated a majority preference to hold the city levy rate steady and the city manager said he would present that recommendation at the next council meeting.

What comes next

Nicholas said he will bring a formal levy recommendation to the council at its upcoming meeting and will return with a five-year pavement plan and bid alternates for the street program. Staff will proceed with test-drilling for a shallow well and continue work on transmission-main designs and grant/loan applications. Council members asked staff for continued outreach and materials to help residents understand how assessed-value increases affect tax bills even when city levy rates remain unchanged.

Quotes

"I would like to see us spend about $250,000," City Manager Bill Nicholas said when describing a one-time capital allocation proposed for the city's 250th-anniversary projects.

"I'll bring that forward," Nicholas said after council members signaled support for holding the city levy rate at the same level as last year.

Ending

The workshop focused on translating revenue trends and recent development into a FY2026 budget that balances capital needs and long-term obligations. City staff will return to the council with firm levy paperwork, a five-year street plan and procurement bids in the months ahead.