The Naperville City Council is on track to pass a $613.7 million budget for 2024 that city officials say will require no new taxes or fees.
Council members were presented with the proposed spending plan at a budget workshop Tuesday night, the last of three held over the past few months to nail down the city’s asks, needs and disbursements for next year.
Because a council straw poll indicated general support for the spending plan, staff opted to cancel a fourth budget workshop scheduled for next month. The council is to vote on the final budget in late November or early December, according to city officials.
The big takeaway from the meeting was Naperville is planning to improve services next year without imposing new costs on taxpayers. Expenses are to increase by about 1.6% over this year’s amended budget of $604.1 million, a much smaller year-to-year gap than the 12% jump from 2022 to 2023 in last year’s budget. The 1.6% bump is also less than the current 3.7% rate of inflation, staff said.
Revenues are projected to be $593.3 million, up less than a percent from 2023.
Overall, the budget staff put forward supports an expansive, $150.44 million capital improvement plan and the hiring of 18 new full-time employees. And it all can be done without an increase in the city’s property tax rate. Rather, staff expect a slight drop — to the lowest the rate’s been in decades.
54-year low
Naperville’s proposed budget anticipates a 0.6280 property tax rate, a low the city hasn’t seen since 1969, according to city Finance Director Rachel Mayer.
To maintain a low rate, the city is continuing to take advantage of incremental growth in its equalized assessed valuation, or EAV, Mayer said. Intended to bring all property in Illinois to a uniform level of assessment, the EAV is calculated by applying a state equalization factor to properties’ market values.
Naperville’s EAV growth is estimated to be 9% in 2024, far more than the city has seen for the past two years, city officials said.
The extra boost is because EAV projections are tied to an atypical reassessment of property values that only happens every few years, Mayer said.
Called the quadrennial reassessment, the process considers real estate market trends over the past four years. That review cycle fell in line with planning for the 2024 budget, meaning market values for 2021 and 2022 — which saw higher than normal housing prices coming out of the pandemic — factored into an increased EAV in Naperville’s 2024 budget, Mayer said.
Meanwhile, next year’s property tax levy — what the city actually plans to collect from taxes — was constructed using an average, historical EAV growth rate of 4%. That yielded the city a total 2024 tax levy of $56.98 million.
The conservative levy — paired with higher valued homes — results in a lower tax rate from the city, Mayer said. In turn, that could mean slightly smaller tax bills for some residents.
Mayer explained that with the rate proposed for 2024, the average Naperville homeowner would save about $25 on the city’s portion of their bill, assuming all other factors are equal.
Capital improvements
While keeping rates low, the spending plan staff proposed also budgets more than $150 million for the city’s capital improvement program, a 7.2% increase from this year’s approved program. The investment covers a slew of projects, from replacing water mains built between the 1980s and early 2000s to catching up on a backlog of major street projects.
About $20 million of the funds are earmarked for a long-term improvement project at the Springbrook Water Reclamation Center. Already underway, the city is planning to completely revitalize the plant by 2030 through a series of upgrades.
A handful of reasons are driving the multiyear venture, city officials said, including changes to state regulations, aging infrastructure and growing demand. Capital investment in Springbrook through next year will just start to chip away at what is expected to be a $180 million endeavor.
Major funding sources for the capital improvement projects include home rule sales tax, state and local motor fuel taxes, federal and state grant funding, and utility charges. Of the $150 million budgeted for the program, more than $44 million will be funded through bonds.
Generally, bonds and existing cash balances will help offset some capital costs for 2024, city officials said.
New personnel
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Alongside capital improvements, the other factor behind Naperville’s small budget increase next year is new personnel.
In all, the spending plan budgets for 18 additional full-time employees across several departments, including two HR positions; two IT positions; a transportation manager; staff to process building permits more quickly; someone to oversee city purchases and contracts; a grant coordinator; three public works positions; and six police officers.
The added positions warranted some questions, and pushback, from council members Tuesday night, but not enough to require any changes to the hiring plan.
Naperville’s preliminary 2024 budget is available in full at https://www.naperville.il.us/government/city-finances/annual-budget-and-financial-report/.