Naper Settlement will need a $1 million from the city of Naperville to balance its books and close out 2021.
But before the Naperville City Council signs off Tuesday on an adjustment to last year’s budget, Mayor Steve Chirico has asked that settlement officials explains how they got into this deficit situation.
Speaking at a previous meeting, Chirico said the council needs to ask questions to “make sure that we’re comfortable with where we are and where we’re going.”
The historical museum has been bleeding financially in recent years, with revenue losses from the pandemic exacerbating the issue, according to city officials.
City Finance Director Rachel Mayer said in a memo to the council that over the last five years, property tax revenue and dollars collected from admissions, programming and rentals have not kept pace with the increasing cost of operating the museum complex.
The settlement has drawn from its fund balances to cover rising costs.
There was more than $1.14 million in reserve in 2016, but the pandemic accelerated the drawdown so that by the end of 2020, the settlement had a negative fund balance of $192,000, Mayer said.
To close the gap, the council approved a 40% increase for Naper Settlement’s portion of the property tax levy, which Mayer said is expected to adequately fund operations moving forward.
But spending by the settlement last year means there is going to be a projected negative balance of $965,000 when the books are closed for 2021, she said.
The levy increase does not address the existing negative fund balance, Mayer said.
Naperville resident Mary Lou Wehrli, a Naperville resident and former DuPage Forest Preserve District commissioner, spoke at the council’s April 19 meeting and said the city should reevaluate its agreement with the Naperville Heritage Society.
The agreement — created in 1979 and amended in 1983 and in 1987 — provides for the operation and maintenance of settlement through a property tax levy.
Wehrli said settlement officials need to explain how they are going to repay the city for the cost overruns.
The Naper Settlement fund is intended to be structurally balanced with property taxes levied by the city, Mayer said. If the fund becomes unbalanced, appropriate action should be taken to correct the imbalance, she said.
That is why staff is recommending a $1 million be transferred from the city’s general fund, where revenues exceed expenditures by more than $10 million in 2021, to the Naper Settlement fund to correct the imbalance for the start of 2022.
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Mayer said the transfer combined with the increased tax levy will stabilize the Naper Settlement fund.
The amendment also will increase the city’s 2021 budget from $502.4 million to $503.4 million.