Batavia Illinois – The 5th Ward

First budget meeting happened last night and will not be the last. We have increases and the overview and justification was spoken to. Busy week on city council!

The meeting, the first for the 2026 budget, began with thanks to city staff for their work, noting a learning curve due to recent retirements and reorganizations.

The 2026 budget’s core philosophy is to maintain and improve police, fire, and municipal services while addressing rising costs. The budget is guided by the 2024-2028 Strategic Action Plan.

Key challenges include:

• Inflation: Significant impacts on materials, construction services, and vehicle costs and lead times.
• Service Expectations: New residents and community growth have led to increased service demands and higher expectations.

Due to these pressures, staff determined that property tax and utility rate increases are necessary to sustain service levels and achieve strategic goals. The city’s proposed budget focuses on an “investment” strategy (accepting higher near-term costs for long-term savings) rather than an “austerity” strategy (deferring projects and risking service reductions).

Proposed 2026 Staffing Additions

Several new positions, which were put on hold from the previous year’s budget, are being proposed again:

• Two Police Officers: This addition would bring the number of sworn personnel back to 2010 levels, addressing growth from new subdivisions and senior living communities.
• Two Firefighters: A manning study recommended adding 12 firefighters incrementally. This addition (along with one hired last year) would place one new firefighter on each of the three shifts, aiding in the upgrade of the fire squad to Advanced Life Support (ALS).
• Two Management Analysts:
  • One analyst would be shared by the police and fire departments, with a primary responsibility of helping both departments achieve accreditation.
  • One analyst for Human Resources (planned for the second half of 2026) would address strategic plan initiatives.

Proposed Property Tax Increase

To return to a structurally balanced budget (after a deficit last year), a two-step property tax increase is proposed:

• 2026: A 10-cent increase, bringing the city’s rate to 86 cents per $100 of EAV.
• 2027: An additional 10-cent increase.

The 2026 increase would cost the owner of a $400,000 home approximately $125 per year (or $10.42 per month). It was noted that Batavia’s rate has been low for many years, and this increase would place the city in the middle of the pack compared to similar communities.

An alderperson noted the city’s portion of a resident’s total property tax bill is only about 10%, with the school district (at ~68-70%) being the largest portion. Therefore, this city increase is unlikely to erase recent savings residents may have seen from the school district retiring bonds.

Proposed Home Rule Sales Tax Increase

A 0.5% (half-percent) Home Rule Sales Tax increase is proposed. This would raise the total sales tax rate in Batavia from 8.0% to 8.5%.

• Purpose: Revenue from this increase (estimated at $1.2 million for six months) will be directed to the Building Capital Fund.
• Goal: To create a “savings account” for a new police department facility. This would build reserves, reduce the amount the city needs to borrow, and lower future debt costs.
• Context: Alderpersons supported this “savings” approach, noting it was used successfully to fund the two fire stations. It was also noted that a large portion of sales tax is paid by non-residents shopping in Batavia.

Proposed Utility Rate Increases

Rate increases are proposed for all three city utilities.

Electric Utility

• Context: This is the first proposed increase since 2015. The increase is necessary to service $5 million in bonds that will be issued in 2026 for infrastructure reliability improvements.
• Proposal:
  • A 3% increase to the per-kilowatt rate.
  • A $3.75 monthly increase to the residential base charge.
  • A $10 monthly increase to the small commercial base charge.
• Prairie State: In response to a question, staff clarified that the city’s contract with the Prairie State power plant is currently saving residents money. Because Batavia’s power cost is below the market rate, the city can sell excess capacity to the grid at a profit. This has kept the power cost adjustment factor (PPAF) stable, shielding residents from 10%+ bill increases seen by ComEd customers. This rate increase is for Batavia’s local infrastructure, not the cost of power.
• Net Metering: After clarification, staff confirmed the 3% increase will be factored into the reimbursement calculation for residents with solar panels.

Water and Sewer Utilities

• Context: Increases are needed to fund maintenance and replacement of aging infrastructure, much of which was built during the growth spurt of the 1990s.
• Proposal:
  • A 3% increase in water rates.
  • An 8% increase in sewer rates.
  • A new monthly Capital Fee (for both water and sewer) of $3.75 for residential and $7.50 for commercial customers. This fee will build a savings account for future capital projects.

Public Safety: Police Department Facility

Alderpersons asked for public clarification on why a new police facility is needed, especially after the recent City Hall renovation.

• Staff explained the City Hall renovation (completed ~2 years ago) was driven by security issues, environmental remediation, and the need to move public-facing services to the first floor.
• Very little was done to the police side, which has not been updated since the 1990s.
• A 2024 space needs analysis determined the current facility is inadequate:
  • Space: The department is 16,000 to 37,000 square feet undersized for a modern department.
  • Deficiencies: It lacks proper training facilities (mat room, simulation room), community engagement spaces, and adequate officer wellness spaces.
  • Recruitment: A modern facility is needed to remain competitive in attracting qualified officers.

Public Safety: Fire Department ALS Squad Upgrade

A significant discussion focused on the plan to use the two new firefighters to upgrade the fire department’s squad from Basic Life Support (BLS) to Advanced Life Support (ALS).

• The Problem: Tri-City ambulance response times are increasing as they are often dispatched from hospitals due to high call volumes. Currently, Batavia’s fire engines are ALS, and when they respond to EMS calls (65% of all calls), they are unavailable for fires.
• The Solution: An ALS squad can respond first and begin advanced care without taking a primary fire engine out of service.
• Staffing: The current squad is “browned out” (out of service) over 50% of the time due to staffing shortages (time off, training, etc.). Adding the new firefighters (one per shift) makes the squad reliably available.
• Equipment: The current 15-year-old squad vehicle cannot hold the three personnel or the conditioned (climate-controlled) equipment required for ALS. A new vehicle is necessary.
• Call Volume: The department now averages one call per day where all units are busy, forcing reliance on aid from other towns. In an ALS emergency, response time is critical.

Justification for Analyst Positions (vs. AI & Consultants)

Alderpersons questioned the need for new management analysts, asking about using AI or outside consultants instead.

• Consultants: Staff stated that hiring external consultants to manage the accreditation process would far exceed the cost of an in-house analyst.
• AI: Staff (including the Assistant City Administrator) explained that AI is already used as a tool (like a “high school level intern” for a first draft), and the budget includes more AI licenses. However, AI cannot replace the analyst’s primary functions, which are:
  • Implementation: Taking data and transforming it into policy, which involves working with people, changing procedures, and conducting training.
  • Coordination: Managing complex projects, facilitating community meetings, and coordinating outreach.
  • Accreditation: This is an ongoing process of data collection and analysis, not a one-time project.

Other Capital, Revenue, and Accounting Items

• Software Licenses: An alderperson noted large increases in software costs in departmental budgets. Staff clarified this is an accounting change. Software costs were previously held in the central I.T. budget; they are now being allocated to the departments that use them, explaining the I.T. budget’s decrease.
• Public Works Fuel Tanks: A $600,000 expense for new fuel tanks was questioned, given a new public works site is being considered. Staff replied the tanks are essential, must be replaced this year, and a new facility is not imminent.
• Motor Fuel Tax (MFT): An alderperson noted MFT (gas tax) revenue is declining and asked if the city receives any revenue from the state’s $100 EV registration fee. Staff was not aware of the city receiving any EV fee revenue and noted MFT funds 50% of the city’s road program.
• Use of Reserves: Staff emphasized that reserves should not be used for ongoing operational costs, as this is a sign of financial distress. Reserves have grown partly because budgeted projects and hires were deferred. The “days cash on hand” is a key sign of financial health, and these funds are appropriately used for large, one-time costs like a “down payment” on the new police station.

Next Steps

• November 11 (Mon): Utility rate ordinances will be presented at the COW meeting.
• November 18: Public hearing on the budget.
• November 25: Public hearing on the tax levies.
• December 1: Target date for budget passage.
• December 15: Target date for tax levy passage (a new law requires a 30-day posting period).
• The presentation slides will be posted on the city website.