FINANCIAL ADVISORY BOARD AGENDA ITEM
ACTION REQUESTED:
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Receive the year-to-date budget report through March 31, 2026.
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DEPARTMENT: Finance Department
SUBMITTED BY: Braeden Smith, Budget Analyst
BOARD/COMMISSION REVIEW:
N/A.
BACKGROUND:
The report summarizes revenue and expenditure activity recorded through March 31, 2026.
DISCUSSION:
Revenue Summary by Category
Focusing on the City’s major funds, the General Fund revenues total $36.48M through the first quarter, representing an increase of 4.4% from 2025. Utility based revenues collected in the Electric and Water Utility Funds are both higher than they were through the first quarter of 2025. Electric Utility Fund revenues total $41.33M which was 95.1% of projection and a slight increase of 0.4% from 2025. While Water Utility Fund revenues were up 11.4% compared to 2025, totaling $21.72M. Driven by strong Home Rule Sales Tax (HRST) receipts, Capital Project Fund revenues are up 35.2% compared to 2025, totaling $7.40M through the first quarter.
State Shared Revenues
State shared revenues consist of individual revenue streams such as Sales Tax, State Income Tax, Motor Fuel Taxes, PPRT and Local Use Tax. As a category, State Shared Revenues total $25.51M, which is up 4.3% compared to this point in 2025 and 10.5% over projected revenues through the first quarter.
• Sales taxes make up the largest portion of State Shared Revenues, accounting for $15.37M, representing a year-over-year increase of 12.6%. The first three months of sales tax recorded in 2026 are representative of sales made at the end of 2025, so the changes in legislation related to online and out-of-state sales continue to impact year-over-year comparisons. Starting in April, Sales Tax as a category may see a slight decline in revenues as it would be the first month with the new grocery tax legislation in effect. The decline would be offset in the grocery tax revenue account.
• State income taxes total $6.65M, which is an increase of 3.9% compared to this point in 2025. Revenues through March are roughly 25% of the budget and indicate state income tax is coming in as expected. However, the State’s budget includes a 3% reduction to LGDF funds (i.e., income tax) distributed to municipalities. Staff will continue to monitor this throughout the year.
• MFT and Transportation Renewal Fund revenues show a sharp year-over-year decline in this report. However, this is largely due to the timing of when receipts were recorded and will be reflected in the April report. Staff estimates revenues may be slightly ahead of projections due to increased fuel prices.
Local Taxes
Local Taxes consist of locally established taxes such as HRST, Food and Beverage Taxes, Real Estate Transfer Taxes, and Hotel/Motel Taxes.
• Through March, HRST revenues total just under $7M, representing an increase of 20.2% compared to this point in 2025. HRST revenues through March are 8.2% higher than projected. Positive growth continues to be seen through increased prices on goods, as well as legislative changes that move dollars toward HRST and away from Use Taxes.
• Food and Beverage Tax revenues through March total $1.88M, of that amount $1.65 million is from the citywide Food and Beverage Tax and the Downtown specific portion adds an additional $226K. The year-over-year increase in Food and Beverage Tax revenue is 8.8%. Continued development around the City including a number of new restaurants opening in the Block 59 Business District is creating positive growth in this space.
• Real Estate Transfer Tax revenues total $913K, which is an increase of 5.6% compared to this point in 2025, and 6.1% higher than the projection. Through March the average sale price across residential properties and the number of stamps issued is higher than it was through this point in 2025 leading to increased revenues.
• Other Local Tax revenues of note include Hotel/Motel Tax which accounted for roughly $870K worth of revenues (predevelopment incentive rebates); and Local Gas Tax revenue which totals $577K through the first quarter.
Service Charges
Electric service charges are the largest individual revenue stream within the Service Charges space. Electric charges through March total $40.76M, which is an increase of 5.3% compared to this point in 2025. Planned rate increases and increasing energy costs are driving the year-over-year increases within Electric Charges.
Water Charges through March total nearly $12.60M, representing an annual increase of 4.3%. Additionally, Wastewater Charges have increased by nearly 23% compared to this point in 2025, totaling $9.56M. Rate increase set in the most recent rate study and fluctuation in consumption are driving the increases seen in Water and Wastewater revenues. The increase in Wastewater revenue is driven by a new annual capital contribution from the City of Warrenville for its share of Springbrook plant improvements.
Ambulance Fees total $2.81M through the first quarter, which represents roughly a 6% increase compared to the revenues in the first quarter of 2025. Through March Ambulance fee revenues are slightly over projections and represent 30.2% of the total anticipated revenue for 2026. This increase is primarily due to a hospital billing issue that delayed a significant number of 2025 invoices, resulting in their payment in 2026.
Other Revenues
Daily Parking Fee revenues total $323K through March, which represent an increase of 7.2% compared to 2025. Occupancy levels in the commuter lots continues to increase, leading to stronger than anticipated revenues through the first quarter.
Electric Use Tax revenues are up nearly 29% compared to 2025 with revenues totaling just over $2 million. This increase is largely driven by the increased electric rates and the rate correction that was made to the commercial Electric Use Tax in late 2025.
Although the majority of revenues are strong through the first quarter, one area in which revenues continue to decline is across Cable TV Franchise and PEG Fees. This is a trend staff anticipates continuing as consumers shift away from traditional cable service provides. Through the first quarter Franchise Fees and PEG Fees are both down by 6.7%.
Expenditure Summary by Category
Looking at the City’s major funds, General Fund expenditures ended the period at $34.7M, 94.7% of projected and 9.3% higher than this time last year. The Capital Projects Fund ended at $3.1M, 84.4% of projected and running 4.5% higher than the prior year. The Water Utilities Fund totaled $18.0M, at 91.8% of projections and up 17.5% from last year, while the Electric Utility Fund totaled $36.2M, at 96.9% of projections and down 1.9% from last year.
Salaries, Wages, and Benefits
Across all funds, salaries and wages were under projections by $2.4M, or 7.4%, a variance attributable to spending for regular pay, which accounts for nearly the full difference. Looking at the three major funds, regular pay fell below projections in the General Fund by $986K, in the Electric Utility Fund by $601K, and in the Water Utilities Fund by $342K.
Benefits associated with payroll, including pension contributions, payroll taxes, and employer insurance contributions, came in 8.0% below projections for the quarter.
• Pension benefits of $2.5M were 24.3% lower than projected. The primary variance is the timing of payments for the fire and police pensions, of which $437K will be recognized in April.
• Employer insurance premium contributions of $5.6M were largely in line with budget projections, with slight variances in each category.
• Medical insurance slightly exceeded projections, while other contributions were lower than projected. Variances in insurance costs can be attributed to individual employee plan selections.
Healthcare
The City’s healthcare costs are rising, mirroring the national trend after several years of coming in below average.
• HMO, HSA, and PPO benefits totaled $3.8M and were 3.3% above projections and 3.9% higher than the same period in 2025.
• Dental insurance benefits followed a similar pattern totaling $306K, which is 3.1% more than projected and 4.8% higher than at this time in 2025.
• Offsetting these overages, prescription drug program costs of $775K came in 15.6% below projections and 16.4% lower than the prior year. Workers’ compensation costs totaled $114K, which is 81.4% lower than projected and 67.5% lower than at this time in 2025.
Purchased Items
This expenditure category includes all items purchased from third-party vendors, including purchased electricity and water.
• Purchased electricity from the Illinois Municipal Electric Agency totaled $28.1M, which exceeded projections by 4.5%. Increased energy sales, as well as rising transmission costs, contributed to the overage.
• Purchased water from the DuPage Water Commission totaled $6.1M, 5.5% below projections. Purchased Water trends depend on weather and consumption patterns throughout the year.
• Other purchased items totaling $3.5M were under projections by 28.1%. The underage is mainly attributable to less spending on operating supplies in the Electric Utility, where transfers to their capital outlay accounts offset warehouse purchases. Other categories that realized lower-than-estimated costs include fuel, telephone, and electric costs, along with technology hardware.
Purchased Services
Expenses related to services provided by third parties ended the quarter 11.7% under budget at $10.2M.
• Software and hardware maintenance totaled $2.8M for the period, which was 15.2% lower than projected, driven primarily by IT spending in this area falling short of projections by $316K.
• Operational service totaled $1.2M for the period, which was 11.7% lower than projected. The most notable variances are attributable to decreased spending for Public Works winter operations and traffic signal maintenance. Building and grounds maintenance also trailed projections, finishing 22.8% below projections at $1.1M.
Capital Outlay
Expenditures related to capital outlay totaled $11.5M, which is 15.5% lower than projections, but 31.6% higher than in 2025.
• Technology project spending totaled $1.7M, or 119.4% more than projected. Most of the variance is related to public safety mobile radio network expenses.
• Infrastructure costs of $8.9M came in 18.1% below projections, largely due to the timing of the North Aurora Road Underpass project.
• Vehicle and equipment expenses across the city were approximately 60.8% lower than projected at $375K. This is attributable to outstanding vehicle purchases in the Electric and Water Utilities that have been ordered but not delivered or expensed.
• Building improvement costs of $582K were 43.5% lower than projected, but 37.1% higher than this time in 2025.