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FY2027 Budget Kickoff and Preliminary Fiscal Outlook
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Introduction
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Presentation of the Village’s FY2027 budget process, preliminary fiscal outlook, budget development strategies, and anticipated review schedule.
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Recommended Action
Staff recommends that the Village Board reviews the FY2027 Budget Kickoff presentation, discuss the preliminary fiscal outlook and budget development framework, and provide feedback to guide preparation of the Village Manager’s Recommended FY2027 Budget. No formal action is requested.
Prior Board Action
The Board has taken the following prior action:
On December 2, 2025, the Village Board adopted the FY2026 Annual Budget.
There is no prior Board action specific to the FY2027 budget development process with the exception of approving software licensing agreements with Euna (for budget development) and BS&A Software (to move from on-premise to the cloud).
Background
Development of the annual budget is a core service priority that supports responsible financial management, transparency, and continuity of Village operations. The FY2027 budget will be prepared in alignment with the Village Board’s adopted goals and the Village Manager’s operational priorities.
The Village began the FY2027 budget process in June 2026. The process includes several changes intended to improve coordination, transparency, and long-term efficiency:
• Departments are preparing and reviewing budget requests through Euna Budget, with the public-facing budget book planned through OpenBook.
• The Village transitioned its core financial operations from the prior on-premise system to BS&A Cloud.
• The review sequence begins with operating budgets, followed by personnel and capital planning, with earlier submission deadlines and additional review stages.
• Non-personnel operating budgets are being developed within a targeted 3% growth ceiling, while departments identify efficiency opportunities of approximately 2% of their FY2026 non-personnel budgets.
• New full-time-equivalent requests will be evaluated based on direct service-delivery needs, operational capacity, and alignment with Board goals and Village Manager priorities.
• Department narratives will be shorter and more public-facing, with an increased focus on measurable outcomes, FY2027 initiatives, efficiency efforts, and alignment with Board priorities.
The preliminary fiscal outlook reflects uncertainty in federal grant funding, borrowing costs that remain elevated relative to the unusually low-rate environment of prior years, continued competition for specialized employees, slower State revenue growth, and lower projected Village distributions because the enacted FY2027 State budget did not increase the Local Government Distributive Fund allocation.
The presentation also distinguishes between changes in General Fund liquidity caused by one-time capital activity and the Village’s recurring operating outlook. The projected General Fund balance declines from approximately $47.3 million at FY2025 year-end to approximately $27.9 million in FY2026. A significant portion of this decline reflects the use of available cash to advance eligible capital expenditures.
The Village expects to issue approximately $18 million in general obligation bonds to reimburse eligible capital expenditures and restore a substantial portion of General Fund liquidity. The bond proceeds are not recurring operating revenue and will create future debt-service obligations. Any bond issuance will be considered under a separate agenda item and is not authorized by this budget kickoff presentation.
Separately, preliminary long-range projections indicate that recurring operating expenditures may grow faster than recurring revenues if left unaddressed. The FY2027 budget process will therefore focus on expenditure discipline, operational efficiencies, service prioritization, and sustainable recurring revenue decisions. All financial estimates remain preliminary and may change based on FY2025 audit results, FY2026 year-end activity, final bond sizing and eligible reimbursement amounts, updated revenue estimates, personnel costs, and other budget assumptions.
Timing Considerations
The July 21, 2026 presentation provides an early opportunity for Board feedback before the Village Manager’s Recommended FY2027 Budget is finalized. The anticipated budget schedule is as follows:
June-July: Department budget drafts, operating baseline meetings, and personnel forecasts.
August: Village Manager’s Office review, capital plan development, and an initial Board review scheduled for August 20.
September-October: Department budget presentations to the Finance Committee; Capital Improvement Plan adoption is anticipated on October 27.
November: Budget follow-up, tax levy review, and presentation of the Recommended Budget anticipated on November 19.
December: Truth in Taxation hearing, if required, and the budget adoption anticipated on December 1.
Dates are subject to adjustment based on the pace of departmental review and Board or Finance Committee direction.
Financial Impact
There is no direct budget impact associated with receiving this informational update. This item does not authorize expenditures, revenue changes, tax increases, staffing additions, or debt issuance. The FY2027 budget, tax levy, Capital Improvement Plan, and any general obligation bond issuance will return to the Board through separate actions.
The presentation describes preliminary budget-development parameters, including a targeted 3% ceiling on growth in non-personnel operating budgets and an efficiency-opportunity target of approximately 2% of FY2026 non-personnel operating budgets. These parameters are management tools for development of the proposed budget and do not constitute final appropriations or service-level decisions.
Operations Impact
Budget development is a core operating responsibility of the Finance Department, the Village Manager’s Office, and all Village departments. The FY2027 process requires departmental budget preparation, multiple review meetings, personnel forecasting, capital planning, and development of public-facing narratives and performance information.
Implementation of Euna Budget, OpenBook, and BS&A Cloud changes the workflow for the current budget cycle and requires staff training and data validation. These changes are intended to streamline future budget cycles, improve consistency, and support enhanced transparency. No additional staffing or changes in work assignments are authorized by this agenda item.
DEI Impact
There is no direct DEI impact associated with receiving the FY2027 Budget Kickoff presentation. The budget process will affect the allocation of resources and delivery of services across the community; therefore, specific program, staffing, fee, and service-level proposals will be evaluated for equity impacts as they are developed and presented for consideration.
The planned public-facing budget format is intended to improve accessibility by providing shorter narratives, clearer performance outcomes, and more transparent financial information. Additional accessibility and language considerations will be addressed as public materials are finalized.
Community Input
There has been no formal community engagement conducted specifically for this kickoff item. The presentation will occur during a public Village Board meeting, and the Finance Committee has reviewed related fiscal trends and financing considerations during public meetings in 2026.
Additional opportunities for public review and comment will occur through Finance Committee budget presentations, publication of the proposed and recommended budget materials, the Capital Improvement Plan process, the tax levy review, and the Truth in Taxation hearing, if required.
Staff Recommendation
Staff recommends that the Village Board reviews the FY2027 Budget Kickoff presentation and provide feedback on the preliminary fiscal outlook, budget-development parameters, public communication approach, and anticipated review schedule. Staff will incorporate Board direction into continued development of the Village Manager’s Recommended FY2027 Budget.
Advantages:
• Provides early alignment between the Board, Village Manager’s Office, Finance Department, and operating departments before major budget recommendations are finalized.
• Clearly distinguishes one-time capital financing and liquidity restoration from the recurring operating outlook.
• Allows staff to incorporate Board feedback before departmental presentations and the Recommended Budget are completed.
• Supports a transparent and timely budget process using consistent expenditure, efficiency, and performance expectations.
Disadvantages:
• The financial outlook is preliminary and may change as audit results, year-end activity, bond reimbursement amounts, revenue estimates, and personnel costs are updated.
• The presentation does not resolve specific policy choices regarding service levels, revenues, staffing, capital priorities, or the tax levy; those decisions will occur later in the budget process.
Alternatives
Alternative 1:
The Board may receive the presentation without providing specific feedback or direction.
Advantages:
• Allows staff to continue the budget process under the proposed management framework and timeline.
• Preserves the Board’s ability to consider specific policy choices when the proposed budget and departmental recommendations are presented.
Disadvantages:
• May result in less alignment regarding fiscal assumptions, presentation of the General Fund outlook, or budget-development priorities.
• Concerns raised later in the process could require additional revisions and compress the schedule before budget adoption.
Alternative 2:
The Board may direct staff to revise one or more fiscal assumptions, budget-development targets, communication elements, or timeline milestones before proceeding.
Advantages:
• Allows specific Board concerns to be incorporated at an early stage of budget development.
• Provides an opportunity to reconsider the proposed expenditure-growth ceiling, efficiency target, fiscal presentation, or review schedule.
Disadvantages:
• Material changes may require departments to revise completed work and could delay Finance Committee or Board review milestones.
• Additional analysis may be required before staff can determine the operational and financial effects of revised direction.
Anticipated Future Actions
Staff anticipates returning to the Board and Finance Committee throughout the remainder of 2026. Anticipated actions include:
• Initial Board budget review on August 20, 2026.
• Department budget presentations to the Finance Committee during September and October.
• Capital Improvement Plan adoption anticipated on October 27, 2026.
• Tax levy review and presentation of the Village Manager’s Recommended FY2027 Budget anticipated on November 19, 2026.
• Truth in Taxation hearing and adoption of the FY2027 Budget anticipated on December 1, 2026.
• Separate Board consideration of any general obligation bond issuance or other financing action referenced in the fiscal outlook.
Prepared By: Kevin Bueso, Chief Financial Officer
Reviewed By: Louis Hall-Makarewicz, Deputy Chief Financial Officer
Approved By: Kevin J. Jackson, Village Manager
Attachment(s):
1. FY27 Budget Kick-Off Presentation