CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Receive the preliminary 2025 year-end financial report
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Director of Finance
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
This report provides a preliminary, unaudited review of the City's 2025 budget through December 31. The report provides a high-level overview of the budget and details areas where revenues and expenses outperformed or fell short of expectations.
The report summarizes revenue and expenditure activity recorded through March 2, 2026. There will continue to be minor changes to the numbers presented as the City continues to pay outstanding 2025 invoices and finalizes year-end accounting entries in preparation for the annual financial audit.
DISCUSSION:
In 2025, the City benefited from generally favorable economic conditions. Strength in the state and local economies is reflected in increased revenues from real estate transfer tax, sales tax, and income tax. However, changes in consumer behavior are impacting local gas tax revenues and cable franchise fees. These moderating revenues make the City more dependent on the ongoing success of other revenue sources, such as property taxes, sales taxes, and state-shared income tax revenue. While property tax is stable, sales tax and income tax are economically sensitive. Further, income tax is also subject to the State's financial and political priorities, as evident in the State of Illinois' 2027 Proposed Budget, which includes a 3% reduction to state-shared income tax, which will limit future City revenue growth.
Economic and political uncertainty continued to make national headlines in 2025 due to escalating trade tensions and policy unpredictability. Instability at the federal and state levels can impact funding and services at the local level through unfunded mandates, fewer grant opportunities, and overall political and economic uncertainty. As such, Naperville leadership continues to ...
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