Batavia Illinois – The 5th Ward

Every year the city goes through “budget season” where we balance city services, infrastructure needs, pension obligations, utilities and more to determine where we need to spend or invest.

Oddly, almost no one from the public shows up to these meetings and it’s probably the least understood process we go through, but has the most impact on individual households.

The interactive portal for the proposed budget can be found here: https://city-batavia-il-cleardoc.cleargov.com/27270/1127818/d

The populations most vulnerable to property tax increases, whether it’d be through reassessments or rate increases, are those on fixed incomes and starter families or anyone who “stretched” to live in Batavia.

Having known a few people in this situation over the years, being “taxed out” is a driver for people moving out of the city. Even if you’re not paying property taxes directly, you are indirectly through increased costs for rent, services, and goods.

The City of Batavia’s proposed 2027 budget focuses heavily on replacing or repairing aging infrastructure built in the 1980s and 1990s, while striking a balance between recurring municipal revenues and day-to-day expenses.

Total budgeted expenditures for 2027 are set at $173,364,686 against projected revenues of $163,184,207. Because much of Batavia was built out in a burst of expansion decades ago, the roads, water mains, sewers, and electric facilities installed during that period are reaching the end of their useful lives nearly simultaneously.

The 2027 budget represents an effort to fund these replacements before they become expensive emergencies, while continuing to adjust local revenues to meet the realities of inflation.

The 2027 Impact: Property Tax and Rate Increases

To address escalating operational costs and historical infrastructure deferments, the 2027 budget includes specific adjustments affecting local property owners and consumers.

• Property Tax Levy: The budget introduces the second step of a planned, phased property tax adjustment, proposing a 10-cent increase from $0.86 to $0.96 per $100 of Equalized Assessed Valuation (EAV, a figure representing one-third of a property’s market value used for taxation). Phasing the increase over two years was designed to lessen the burden on taxpayers in any single year while correcting the city’s structural deficit. For a typical $400,000 home, this represents an annual increase of about $119, or $9.88 per month. The city’s total portion of the property tax bill for a $400,000 home will be approximately $100 per month. This rate remains below the average of similarly situated Chicago-area suburbs.
• Utility Rate Adjustments: Batavia utilizes Enterprise/Utility Funds, business-type accounts strictly supported by user fees rather than property taxes, to manage its utilities. Effective January 1, 2027, utility rates will adjust as follows:
  • Electric: A 3.5% increase to the per-kWh and demand rates.
  • Water: An 8% increase.
  • Sewer: An 8% increase. These hikes are driven by a convergence of aging post-1980s infrastructure, stricter environmental regulatory mandates, and long-term debt servicing for the $78 million wastewater treatment plant expansion.
• Dedicated Home Rule Sales Tax: A dedicated 0.5% Home Rule sales tax is being collected to fund a new stand alone police station. Currently, the department resides in an outdated, severally undersized space in the northern half of the City Government Center built in the 1990’s. Because approximately 70% of retail sales in Batavia are generated by out-of-town shoppers, funding through a home rule sales tax shifts the burden largely away from property owners. Saving these funds in advance significantly reduces future bond borrowing; the city estimates that every dollar saved now avoids about 40 cents in future interest payments over the life of the bonds. The dedicated fund is projected to reach approximately $3 million in its first full year.

The Value to the Average Homeowner: What You Get for Your Investment

While paying an average of $100 per month in city property taxes requires a financial commitment, it is important to understand the direct return on investment for Batavia homeowners. That monthly contribution, supplemented by utility fees and sales taxes, funds the essential services and quality-of-life amenities that protect property values and keep the city running safely and smoothly.

• Robust Public Safety: Batavia residents benefit from responsive police and fire departments. The 2027 budget adds two new firefighters, allowing the city to upgrade a fire rescue squad from Basic Lifesaving (BLS) to Advanced Lifesaving (ALS) capabilities, meaning faster, higher-level medical care during critical emergencies.
• Proactive Community and Economic Development: The city’s active economic development efforts help offset residential taxes by bringing in commercial revenue. The city successfully negotiated to retain Batavia’s largest private employer and is facilitating the arrival of a new Texas Roadhouse on Randall Road. Ongoing annexation efforts and the swift build-out of new subdivisions like Ashton Ridge and Winding Creek continue to expand the city’s tax base.
• Reliable, City-Owned Utilities: Unlike many municipalities that rely entirely on private utility monopolies, Batavia owns and operates its own electric, water, and sewer utilities. This allows for local control over infrastructure, such as the multi-million dollar investments in undergrounding electric lines in neighborhoods like Woodland Hills to reduce storm-related power outages.
• Environmental and Neighborhood Upgrades: Homeowners benefit from comprehensive neighborhood maintenance, including localized drainage improvements, the dredging of Ridgelawn Pond, and the stabilization of Mahoney Creek. The city is also completing its lead service line replacement program at no direct cost to residents, making Batavia a lead-free community.

The Operating Budget vs. One-Time Deficits

The General Fund is the city’s primary operating account, financing day-to-day services like police, fire, and public works. On paper, the 2027 General Fund projects $49,830,148 in expenses against $46,500,050 in revenues, leaving a $3,330,098 gap. However, recurring day-to-day operations are actually structurally balanced. The accounting deficit is strictly the result of three specific, non-recurring expenditures:

1. A 27th payroll cycle: Because the city pays employees bi-weekly, the 2027 calendar year contains 27 pay dates instead of the usual 26, an anomaly that occurs every 11 or 12 years.
2. TIF Transfers: One-time transfers to Tax Increment Financing (TIF) District No. 3 to support the QT9 redevelopment and the 72-unit Residences at River Pointe affordable housing project.
3. Street Maintenance: A temporary draw on reserves to fund the 2027 street maintenance program.

Capital Investments & Community Infrastructure

The Capital Improvement Plan outlines the city’s multi-year strategy for major construction, rehabilitation, and large equipment acquisitions.

• Street and Active Transportation Improvements: A recent pavement condition survey revealed a $1.625 million annual funding gap required just to maintain current roadway conditions. Alongside the annual resurfacing program, the city is advancing preliminary engineering for the reconstruction of Hubbard Avenue (Kirk Road to Pierson Drive) and design engineering for the reconstruction of Main Street (Van Nortwick Avenue to Randall Road). The Safe Routes to School program will advance design engineering for sidewalk improvements along Willow Lane and Bluestem Lane near Rotolo Middle School.
• Water System Upgrades: Batavia has successfully replaced more than 1,250 lead service lines at no direct cost to residents or businesses. By acting early, the city secured $4.5 million in principal forgiveness and $9.5 million in zero-interest, 30-year state loans, bringing the cost down to about $11,400 per line—less than half the projected cost in neighboring communities. Moving forward, 2027 water capital will focus on rehabilitating Water Treatment Plant #2 and the deep wells.
• Electric Resilience: The Electric Utility will complete the grant-supported Woodland Hills undergrounding project and roll out smart meters. The utility is also launching a new outage notification system featuring a real-time public-facing map and text message reporting.

Public Safety Enhancements

The 2027 budget makes targeted investments in Police and Fire capabilities to address community growth and modern regulatory standards.

• Police Department: The department will migrate from its aging radio network to STARCOM21, the statewide digital radio system, allowing direct communication with neighboring departments and state partners during emergencies. Marked squad cars will be equipped with PepperBall launchers, providing a less-lethal tool to resolve dangerous situations. To manage a growing volume of digital and physical evidence, the part-time evidence custodian position will be converted to full-time. The department will also implement Axon Performance for policy compliance review and Axon Community Request, allowing residents to voluntarily share security camera video with police.
• Fire Department: Following a staffing study, the department will add two firefighters in 2027. This addition will enable the fire department to upgrade its current rescue squad from Basic Lifesaving (BLS) to Advanced Lifesaving (ALS). An ALS squad requires three personnel, and the current 15-year-old vehicle only holds two, necessitating the budget for a new conditioned squad vehicle capable of storing ALS equipment. Both fire stations will also receive exhaust removal systems to keep apparatus exhaust out of living and working areas.

Reserve Health & Long-Term Outlook

City policy mandates minimum cash reserves equivalent to 60 days of operations for the General Fund and 90 days for Utility Funds. Currently, Batavia’s reserves meet or exceed these floors, with the General Fund at 164 days, Electric at 91 days, Water at 529 days, and Sewer at 286 days. Maintaining adequate reserves, demonstrating structural balance, and executing a credible plan for long-term infrastructure needs are key factors evaluated by rating agencies. Protecting the city’s credit rating is essential to securing favorable interest rates when issuing future debt, such as the bonds required for the new police facility.

Resident Q&A: Understanding the Details

If utility rates are increasing, does that mean the city mismanaged the utility funds? No. For roughly a decade, the city did not raise electric rates, which kept bills low but forced the deferment of maintenance and capital work. From 2015 to 2025, electric utility spending grew by about 13%, but inflation rose 35% during that same period. In today’s dollars, the electric utility is operating on about 17% less than it had ten years ago, even as the cost of equipment like transformers has doubled. Similarly, water rates rose 33% since 2015 while inflation rose 53%. The proposed 2027 rate increases are necessary to service debt for system improvements and provide capital to maintain reliability.

Why are reserves being used to fix streets this year? Allowing streets to deteriorate requires full reconstruction later, which costs roughly seven times more than timely surface-level repairs. City Administration is recommending the use of reserves to fund the $1.625 million gap for 2027, with the goal of working with the City Council during the year to identify a permanent, dedicated funding source for future road maintenance.

What’s driving economic development and sales tax growth? Local development remains exceptionally strong, driving a projected 10% increase in citywide EAV. On the residential side, the Winding Creek and Ashton Ridge subdivisions are building out quickly. Commercially, Tesla and Dutchess Cannabis are generating meaningful new sales tax revenue, and a new Texas Roadhouse is expected to open in 2027. Furthermore, the QT9 tech company redevelopment on Water Street will bring a significant number of daytime employees to the downtown area.

Next Steps

The Batavia City Council will review the proposed budget during the Committee of the Whole meeting on November 3, 2026, at 7:00 p.m.

A formal public hearing will follow on November 10, 2026, at 7:00 p.m. in the Batavia City Council Chambers.

Final adoption of the budget and tax levy is anticipated on December 7, 2026. Residents are encouraged to attend these meetings or view the proposed budget in its entirety on the city’s website to stay informed about Batavia’s financial future.

Author: Jim Fahrenbach

Insights from Batavia’s First 2026 Budget Meeting