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Review of the 2026 Fiscal Year Budget
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Introduction
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This is the first review of the proposed operating budget for Fiscal Year 2026. Staff will be available to review and answer questions on any of the following budgets.
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Recommended Action
There is no recommended action at this time.
Prior Board Action
There is no prior Board action associated with this specific item.
Background
The meetings pertaining to and leading up to the adoption of the Fiscal Year 26 budget will include a review of the major Funds (i.e. General, Parking, Water/Sewer, Health Insurance, and Self-Insured Retention Funds).
The capital improvement project funds were thoroughly discussed on September 11th, September 25th, and November 4th, and the CIP Document. Please note that the first budget year (2026) of the five-year capital plan has been incorporated into the operating budget document.
The General Fund, as presented in the Fiscal Year 26 Proposed First Draft Budget, is balanced, which includes an increase in fund balance appropriation of approximately $26,288,974. This transfer is for the Capital Improvement Plan projects, which include the Oak Park Streetscape.
Other changes within the budget are as follows:
1. The balanced budget reflects a property tax levy increase of 4.96%; which equates to an overall increase of $450,575 excluding debt service. The corporate levy has an increase of $595,478 or 3.21% from tax year 2024, whereas the police pension levy has an increase of 8.34% or $637,159 and the fire pension levy has an increase of 9.69% or $650,561. Both pension increases are reflected on the current actuarial report.
2. The fund balance at the end of Fiscal Year of 2024 was $45,874,149 and the 2025 Fiscal Year end projected fund balance is estimated at $43,852,062. The current policy states that the General Fund Balance objective is to have on-hand unreserved fund balance between 10% and 20% of the current year’s estimated operating expenditures.
3. Other Taxes reflect an overall decrease of ($477,295) or approximately (1.8%). Personal Property Tax and Motor Fuel Tax will have a slight increase.
4. Licenses/Permits/ Fines reflect an increase in by $121,600 or 5.37%. Building Permits remain flat, Street Permits reflect an increase of $25,000 and Multi-Family Dwelling License reflects an increase of $48,000 along with various accounts with small increases.
5. Charges for Services reflect a decrease of ($53,375) or (1.19%) over Fiscal Year 2025. The overall decrease represents a decrease in charges for Repairs, Scrap Revenue, Sale of Liquid Gas and Rental Property.
6. Interfund Transfers Revenue increase of by $1,760,00. This transfer represents a transfer from the obligated ARPA Fund Balance Fund for RSM CAD Software
7. Financing and Investment revenues reflects a decrease of ($1,047,7690) in interest revenue. The current Fiscal Year 26 budget for interest revenue represents a conservative projection.
8. Other Total Sources reflects a decrease of ($18,317,872) or (15.97%) which is due to the reduction from the fund balance.
9. Finance overall increase of $25,206,611. The major increase in the transfer to CIP of $26,447,115. Changes exist in the other transfers.
10. The Police budget increased $1,125,705 or 3.73%. The major increase is $637,159 for the police pension expense.
11. The Fire budget increased $847,086 or 4.17%. The major increases are $660,561 for the fire pension expense, an increase of $186,525 for salaries, benefits and the deposit for the fire truck.
Chapter 2 of the Municipal Code establishes the foundation for the Municipal Budget and provides:
• The Village Fiscal Year is January 1 - December 31 annually.
• The Board of Trustees must adopt the annual budget prior to the start of the Fiscal Year, and passage of the annual budget shall be in lieu of passage of the appropriation ordinance.
• On or before the Village Board of Trustees' first regular meeting in November of each year, the Village Manager shall submit to the Board of Trustees an annual Municipal budget which contains estimates of revenues together with recommended expenditures in conformity with good fiscal management practice.
The use of fund accounting for the Village’s revenues and expenditures is required as the Village is established under State Law as a municipal corporation and the Financial Accounting Foundation (FAF) requires the use of Generally Accepted Account Principles (GAAP) established by the Government Accounting Standards Board (GASB). Among the basic principles of governmental GAAP is fund accounting. Due to the diverse nature of governmental operations and the numerous legal and fiscal constraints under which those operations must be conducted, it is impossible to record all governmental financial transactions and balances in a single accounting entity. Therefore, unlike a small private business, which is accounted for as a single entity, a governmental unit is accounted for through separate funds, each of which is a fiscal and accounting entity with a self-balancing set of accounts. When compared to the private sector, fund accounting would most closely resemble a large publicly traded company that consists of a parent corporation and its subsidiaries, where each subsidiary maintains a separate set of accounting records and reports its numbers to the parent, which then consolidates all the information for investor reporting.
Timing Considerations
The budget must be adopted by December 31st according to the Municipal Code.
Budget Impact
The meetings pertaining to and leading up to the adoption of the Fiscal Year 26 budget will include a review of the major Funds (i.e., General, Parking, Water/Sewer, Health Insurance, and Self-Insured Retention Funds).
The complete 2026 Operating budget which, includes the CIP Document are scheduled to be presented to the Village Board on November 18th for review and formal adoption on December 9th. Please note, the first budget year (2026) of the five-year capital plan has been incorporated into the Operating budget document.
Staffing Impact
Staffing consideration is included within the budget.
DEI Impact
There is no DEI impact associated with this item.
Community Input
There has been no community input given in relation to this item.
Staff Recommendation
There is no staff recommendation for this item.
Alternatives
There are no alternatives associated with this item.
Anticipated Future Actions
Staff will bring the budget for adoption on December 9th.
Prepared By: Donna M. Gayden, Interim Chief Financial Officer
Reviewed By: Ahmad M. Zayyad, Deputy Village Manger
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. CIP Recommended Budget Summary
2. FY 26 Requested Budget Presentation
3. BS&A Budget Report by Function
4. 2026 Operating Budget