Batavia Illinois – The 5th Ward

We unfortunately had audio issues during the June 23, 2026 Committee of the Whole meeting and although it was posted to YouTube, there’s no audio after the twelve minute mark.  Fortunately, it was the shortest meeting in years (<40 minutes) and didn’t have much on the agenda.  Batavia’s auditor did walk through their yearly audit which is summarized below, along with an update on the large chimney downtown.

Audit Scope, Opinions, and Internal Controls

Independent Auditor’s Report

• Audit Entity: The financial statements were audited by the independent accounting firm Sikich LLC.
• Audit Opinions: The auditors issued an unmodified opinion (clean bill of health), asserting that the financial statements fairly present the financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Batavia as of December 31, 2025.
• Scope Exception: The financial statements of the Firefighters’ Pension Trust Fund and the Police Pension Trust Fund were audited under standard auditing standards (GAAS) but were not audited in accordance with Government Auditing Standards.

Internal Control Over Financial Reporting

• Deficiencies & Weaknesses: During the testing of internal controls, the auditors did not identify any deficiencies that they considered to be material weaknesses or significant deficiencies.
• Compliance: The results of compliance tests disclosed no instances of reportable noncompliance or other matters required to be reported under Government Auditing Standards.

Detailed Line-Item General Fund Revenue Analysis

The General Fund significantly outperformed its conservative budgetary benchmarks for the fiscal year ended December 31, 2025. Below is the precise line-item performance of the revenues collected:

Revenue Source	Original & Final Budget	Actual 2025 Receipts	Variance (Over / Under Budget)
Property Taxes – General	$10,854,500	$10,784,102	($70,398)
Retailers’ Occupation Tax	$6,675,000	$7,580,283	$905,283
Home Rule Sales Tax	$4,775,000	$5,586,947	$811,947
Utility Tax	$3,570,000	$3,590,855	$20,855
Illinois State Income Tax	$4,560,000	$4,726,435	$166,435
Investment Income	$500,000	$1,225,277	$725,277
Local Use Tax	$656,700	$234,129	($422,571)
Video Gaming Tax	$180,000	$226,732	$46,732

Possible Causes for Variances:

• Sales and Home Rule Tax Surpluses: Driven primarily by robust consumer spending and an unexpected state collection/distribution adjustment that concluded in early 2025.
• Investment Income Spike: Caused by continuing high interest rates combined with larger cash pools available for short-term investment.
• Local Use Tax Shortfall: Affected directly by sweeping changes in how the state handles online sales tax collections and redistributes them back down to local home-rule units.

Granular Breakdown of General Fund Expenditures

The city maintained a tight grip on internal spending, allowing total expenditures ($32,841,177) to land well below the final approved budget of $34,420,850.

Departmental Spending Details:

• Police Department: Spent $12,920,100 against a $12,964,827 budget. Regular wages made up $6,421,327, while overtime exceeded benchmarks at $385,443 (due to special patrols and shift coverages). Dispatch costs via Tri-Com cost the city $289,825.
• Fire Department: Totaled $7,333,647 against a $7,618,351 budget. Regular wages were $3,318,320, part-time help cost $634,539, and ambulance billing via Tri-City Ambulance totaled $261,865. Overtime was efficiently managed at $296,879.
• Information Systems: Totaled $2,502,225 against a $2,789,029 budget. Major costs included $443,411 for software licenses, $493,054 for direct computer equipment updates, and $220,539 for contractual labor.
• Economic & Community Development: Totaled $2,043,423. This included $1,295,667 in regular administrative salaries and $153,970 specifically for outsourced plumbing inspections.
• Administrative Reimbursements: The city utilized an accounting mechanism to credit the General Fund $2,800,000 from the enterprise utility funds to accurately cover the shared administrative costs of running utility billing, management, and common operations.

Proprietary Funds Cash Flow and Non-Cash Activities

The enterprise utilities generate substantial cash from user charges, but their financial statements show unique operational differences when looking at cash flows and non-cash activities.

Statement of Cash Flows (Operational Receipts vs. Investing):

• Electric Fund: Brought in $48,973,758 from customers, paying out $40,636,493 to vendors (purchased power costs) and $3,912,231 directly to employees. Net operational cash flow was $4,312,024. It also pulled in a powerful $1,051,190 in interest from short-term investment vehicles.
• Waterworks Fund: Receipts from users totaled $6,238,254. Net cash from operating activities sat at $2,461,311. The fund spent $6,816,440 directly on buying capital assets.
• Sewerage Fund: Collected $8,026,309 from users and an additional $594,300 in infrastructure connection fees. Operational cash generation was $2,016,476.

Major Non-Cash Activity:

• The Sewer utility experienced a notable non-cash loss on the disposal of capital assets totaling $927,742. This write-off was caused by decommissioning outdated plant structures to make space for the ongoing $48 million treatment plant upgrade.
• The Waterworks utility absorbed $40,517 in contributed capital assets, representing physical infrastructure (water lines) built by private subdivision developers and subsequently turned over to city ownership.

Risk Management and Self-Insurance Reserves

The city manages its potential exposures to liability, workers’ compensation claims, and employee medical costs through internal service funds.

Self-Insured Health & Workers’ Compensation Programs:

• Health Insurance Fund: Operated with total revenues of $4,923,710 (comprising $3,811,795 in employer premiums and $784,089 from employee payroll deductions). Total medical claims paid during the year were $4,431,155.
• IPBC Cooperative: The city handles health exposures via the Intergovernmental Personnel Benefit Cooperative. Batavia carries stop-loss coverage for catastrophic claims exceeding $50,000 per individual. Batavia’s terminal reserve with the cooperative was valued at $676,719.
• Workers’ Compensation: Total operating expenses were $570,259, of which $145,697 went to purchasing commercial stop-loss premiums and $409,062 went directly to claims payouts. The city self-insures up to $700,000 per individual injury claim.

Historical Statistical Trends, Demographics, and Operating Data

Demographic & Economic Indicators (10-Year View)

• Population Stagnation: The city’s population has flattened, tracking at 26,045 from 2016 through 2020, and shifting slightly upward to 26,098 for 2021 through 2025.
• Wealth Accumulation: Per capita income has surged upward significantly, moving from $38,565 in 2016 to $58,410 in 2025. Total personal income in the community reached $1.52 billion.

Principal Local Employers (2025 Market Share)

The local employment footprint shows excellent institutional diversity, insulating the city from industrial downturns:

1. Fermi/US Dept of Energy: 2,100 employees (11.22% of total city employment).
2. Suncast Corporation: 1,000 employees (5.34% of total city employment).
3. Unit School District #101: 700 employees (3.74% of total city employment).
4. Aldi, Inc.: 500 employees (2.67% of total city employment).
5. Agco Corporation: 365 employees (1.95% of total city employment).

Municipal Infrastructure Logs

• Transportation Grid: The public works department maintains 123 total street miles (115 urban miles and 8 rural miles).
• Utility Delivery Footprint: The subterranean footprint features 139 miles of water mains, 143 miles of sanitary sewers, and 115 miles of storm sewers managed within city limits. The water grid feeds 1,875 public fire hydrants.
• Public Safety Volume: The Police department recorded 400 Part I Crimes and 815 Part II Crimes during 2025. The Fire department handled 5,205 emergency calls and successfully extinguished 63 active fires.

Project Update: Old Pal Joey’s Chimney Demolition

• Location: River Street (Former Pal Joey’s location)
• Current Status: Active Demolition Underway

Project Details & Background: Demolition work has officially begun on the large chimney attached to the old Pal Joey’s building on River Street.

Reason for Previous Delays: The project experienced a temporary hold-up due to the highly specialized nature of the work. Because the main building is remaining intact, the project required a vendor with experience in safely dismantling and removing a massive chimney from an older structure without causing damage to the rest of the attached building or requiring a full-site demolition. 

Documents: https://bataviail.community.highbond.com/Portal/MeetingInformation.aspx?Id=256

Author: Jim Fahrenbach

Historic Smokestack Demolition: A Batavia Council Decision – December 1, 2025 Meeting