CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the ordinance approving an amendment to the City of Naperville 2025 Annual Budget for the Naper Settlement Agriculture Hub Exhibit (requires six positive votes)
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Finance Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
On December 3, 2024, the City Council approved ordinance 24-126 adopting the 2025 Annual Budget of $641,148,599.
The City’s budget is organized by funds. Each fund is comprised of numerous expenditure accounts and each of those accounts is assigned an annual budget. While individual accounts may go over budget, those are typically offset by other accounts being under budget, and no action is required. However, budgetary compliance is maintained at the fund level. Best practice and generally accepted accounting principles (GAAP) dictate that any fund exceeding budgeted expenses by a material amount should be corrected through a budget amendment.
In April, Naper Settlement leadership met with the City Manager and Finance Director to discuss an amendment to the 2025 Annual Budget for the purpose of funding the local match of a capital project for which significant grant funds have been awarded.
DISCUSSION:
The 2025 - 2029 Capital Improvement Program (CIP) adopted as part of the 2025 Annual Budget includes Naper Settlement CIP# NS066 - Agriculture Hub Project. The project will establish a centerpiece exhibit in the Mary and Richard Benck Family Agriculture Center as detailed in Attachment 1.
The total budget for this project is $1,500,000, with $850,000 of that amount included within the CIP for 2026 through 2028. The Naperville Heritage Society secured two state grants totaling $774,000. A portion of those grants requires local matching funds to be provided through the Naper Settlement CIP budget. Private donations will also supplement grant dollars. Naper Settlement is asking to advance this project into the 2025 budget to ensure that the dollars required for the local match are obligated to the project, thus securing the state grants.
While evaluating this request, the Finance Department noted that a substantial fund balance of over $1,000,000 has accumulated in the Naper Settlement Fund over the past three years. This is the primary operating fund for Naper Settlement within the City’s budget. Historically, the Finance Department has recommended that significant fund balances not be held in the Naper Settlement Fund and should be drawn down appropriately. One-time capital projects represent an appropriate use of fund balance.
Naper Settlement agreed that increasing the 2025 budget using excess fund balance would be an acceptable way to secure the local match for the grants. Naper Settlement is requesting $500,000 be added to the 2025 budget, which would cover the full local contribution to the project. In return, Naper Settlement would eliminate its future funding request for NS066 in the 2026 budget. This would make available $850,000 for other future City projects.
FISCAL IMPACT:
This budget amendment increases the 2025 budget for the Naper Settlement Fund by $500,000 for a revised budget of $6,010,428. The total revised 2025 budget is $641,648,599. Assuming passage of this amendment, the Naper Settlement Fund will retain more than $500,000 in fund balance, which will be addressed in the 2026 budget.