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Vernon Hills presents balanced draft budget for FY2027 with major capital drawdowns planned
Summary
Village staff presented a draft FY2027 budget that projects balanced operations, strong reserves and multiple capital draws — including a large placeholder for a police station renovation — while assuming conservative 3% sales-tax growth and $1.5 million transfer to capital.
The Village of Vernon Hills presented its draft fiscal year 2027 budget on March 3, outlining a balanced operating plan that maintains unusually strong reserve levels while funding several near-term capital priorities.
Director Lyons summarized the draft book and slides made public at village hall and online, saying the village projects fiscal 2026 general revenues near $42.1 million, about $4.0 million over the adopted budget, driven largely by stronger sales-tax receipts and approximately $1.8 million in one-time escrow proceeds tied to the recently acquired Cuneo Mansion property. "Our general fund reserve can sustain over a year of operations with no revenues," Lyons said, describing the village's liquidity and triple-A bond rating.
The draft FY2027 plan assumes municipal sales-tax growth of 3% over the prior-year projection and sets municipal sales tax at $21.9 million. The proposed general fund revenues total about $41.3 million with proposed general fund expenditures of roughly $36.3 million, producing a projected net increase in the fund balance to about $50.8 million by April 30, 2027. Staff cautioned that the budget uses a conservative sales-tax assumption relative to recent historical averages.
The proposal reflects a staffing plan with 93.8 full-time-equivalent positions, down from 102.5 in FY26, mainly because dispatch services transitioned to Lake Com. The draft includes a 3% cost-of-living adjustment for nonunion employees and targeted step increases where contractually required.
Capital spending in FY27 rises substantially to accommodate an expected police department renovation: staff included a placeholder of about $8.1 million in capital fund expenditures this year tied to preconstruction and initial construction activity, financed temporarily from capital reserves with planned replenishment through future general-fund transfers. Director Lyons said that, "the capital fund is serving as a financing vehicle for project expenditures during construction," and staff expects to present a guaranteed maximum price and additional details later in the process.
Other FY27 highlights in the presentation included: a planned $1.5 million transfer from the general fund to the capital fund (up from $1.0 million), an increase in the golf subsidy to $200,000, and $475,000 in VERF (vehicle-and-equipment-replacement fund) spending for new police radios. Lyons also summarized the TIF fund positions: the Town Center TIF is expected to retire in FY27 while the Melody Farm and Hawthorne Mall TIFs remain active and continue to generate increment revenue that is used for debt and developer incentives.
Police and records demands were a recurring theme in department presentations. A police department representative said the department is seeing a steep increase in FOIA requests that include audio or video; the department reported that year-to-date for 2026 roughly 61% of FOIA requests seek audio/video and that processing those requests requires substantial staff time for redaction and quality control. The police requested additional records resources during the budget presentation to respond to that trend.
Next steps: staff said the public hearing on the proposed fiscal 2027 budget is scheduled for March 16, with final adoption targeted for the April 7 village board meeting. The draft budget and supporting materials remain available at village hall and on the village website for public review.
