Finance Committee reviews FY2027 budget that draws $7.2 million from reserves and proposes 5.5% water-rate increases

The Mundelein Village Finance Committee on March 23 reviewed a proposed fiscal year 2027 budget that staff said would be balanced against a conservative $38.8 million revenue estimate but rely on a $7.2 million draw from reserves to cover planned capital and personnel costs.

Mr. Gunther, who presented the materials to the committee, said FY26 revenues are tracking about $2,000,000 above prior projections and expenditures about $1,000,000 below, producing a roughly $3–3.5 million positive swing heading into the April 30 year end. "Revenues are coming in just about $2,000,000 higher than what was projected," Gunther said.

Gunther told trustees the village's revenue mix has changed: sales tax receipts now surpass property tax revenue, and anticipated state reporting changes will fold use tax into the sales-tax category. He said the draft FY27 budget assumes approximately $38.8 million in revenues and a total budget of roughly $87–88 million; that year-over-year increase reflects large multi-year projects, notably a $4 million water-meter project and about $1.9 million in capital work at the Archer Business Center.

To balance the proposed FY27 budget, Gunther said staff plan to use $7,200,000 from reserves. He provided a breakdown: about $2.3 million toward personnel obligations (wage increases and pension costs), roughly $1,000,000 attributable to rising insurance premiums, $1.9 million for capital improvements at the Archer Business Center (including a roof replacement), and a $1.3 million transfer from the general fund to an equipment fund to pre-fund vehicles and other capital needs. "That $7,200,000 is being used from reserves to balance that budget for this year," he said.

Gunther recommended adding four full-time equivalent positions in FY27 — one police officer, one firefighter, one event planner and one flexible position to be allocated where needed — while noting that police had requested five new officers but staff proposed funding one. He said roadwork remains a priority, with about $5.6 million budgeted for resurfacing, reconstruction and associated projects, and that recent bid savings on MFT-funded work allowed the village to add streets to this year's program.

On utilities, Gunther said the board previously agreed to a five-year plan that would impose 5.5% annual increases to water rates to help fund operational needs and the water-meter project; staff will present a fee ordinance reflecting that rate at a future board meeting.

Trustee Lambert asked whether the planned reserve draw represented recurring personnel costs that would require future reserve draws. Gunther replied that most of the $7.2 million covers nonrecurring capital (roof, equipment fund, water-meter project), though some components — notably pension and insurance obligations — are ongoing and less predictable.

Gunther also described the Archer Business Center as an ongoing financial challenge: staff have added tenants but vacancies persist, and water intrusion and an aging roof have required interim repairs. He said the village is marketing the property and seeking a long-term solution but included a one-time $1.9 million infusion in the proposed budget as a contingency.

Committee members present indicated they were comfortable forwarding the proposed FY27 budget to the full Village Board for consideration at its April 13 meeting.

Votes at a glance: The committee approved the Finance Committee meeting minutes from Aug. 25, 2025, by voice vote earlier in the meeting. The committee later adjourned by voice vote.