Normal proposes $233.5 million FY2026–27 budget; staff flags waste subsidy and water/sewer capital gaps

Normal city staff on Tuesday presented a proposed $233,500,000 fiscal year 2026–27 budget and asked the Town Council for direction on service fees, capital spending and a planned bond issue.

Finance Director Andrew Hune told the council the general fund in the proposed plan is roughly $105,000,000 — the first time the town’s general fund has exceeded $100 million — with the largest revenue source being sales taxes (about 42% of general fund revenue). Hune said sales tax collections have recovered from a prior year dip, producing an average increase of about $3.8 million per year over the five‑year outlook.

Hune said the town projects $233.5 million in total expenditures across funds, driven largely by capital projects and transfers. “We have $233,500,000 of expenditures for 26‑27,” he said, adding that the five‑year capital plan totals about $188,000,000 with transportation the largest category. Hune also identified a planned $12,000,000 bond issue to help finance an underpass project and said a recent multi‑year Axon contract is reflected in the five‑year projections.

One of the budget’s highlighted operating issues was curbside waste collection. Staff reported the program generates about $4.6 million annually at the current $32 per month rate but costs about $5.6 million to run, leaving roughly a $1 million shortfall that is being subsidized from other town revenues. Hune presented three options to address the gap: change service levels; raise the monthly fee (an immediate $10/month increase would close the current shortfall, Hune said); or adopt an indexed multi‑year rate schedule. City Manager Pam Reese clarified the proposed budget before council does not include any rate increases and that the curbside information was being provided to prompt future discussion.

Hune said the town seeks to maintain best‑practice reserve targets — a 15% general fund target and higher targets for enterprise funds — and described several targeted reserves (vehicle and equipment replacement, pension contributions, and fund balance policies). He noted the water, sewer and stormwater capital reserves are under strain: the water operating target of 20% is being met, but capital reserves have been drawn down to meet operating needs, and he flagged an estimated $12,000,000 of sewer plant or enforcement replacements and other multi‑million dollar sewer projects that are not currently programmed.

Council members asked for more granular information on several items, including the composition of the $22 million year‑over‑year increase (Hune said capital carryovers and the underpass contribute), the debt‑service implications of the $12 million bond issue, and usage data for bulky waste, brush and other less‑frequently used curbside services. Several council members urged staff to present utilization and frequency statistics before any fee changes are proposed.

Council and staff also discussed workforce changes: the proposed budget removes some unfilled positions and adds a few roles, including a temporary third assistant fire chief for succession planning, an information‑technology operations manager, and a part‑time cultural arts associate. Hune told the council the town aims to bring forward a final budget document for formal approval in March.

What’s next: staff will supply follow‑up data requested by council and return the final budget in March for adoption; the council also discussed the timing of any rate deliberations for water, sewer or garbage service.