2027 Annual Budget Public Hearing

The public hearing was held to outline the 2027 Batavia municipal budget, which serves as the second year of the city’s general fund stabilization plan. The city is facing mounting financial pressures driven by historically deferred capital projects, soaring inflation in construction and infrastructure materials, dwindling utility reserves, and higher borrowing rates approaching 5%. The administration’s goal is to smooth out necessary funding increases over time to avoid drastic, sudden rate spikes for residents while maintaining a balanced operating budget.

• Tax and Revenue Adjustments: The property tax rate is proposed to increase by 10 cents, bringing it up to 0.96. The 0.5% retail sales tax implemented last year is being maintained without a sunset clause to fund a future police facility and its ongoing debt service.
• General Fund Expenditures: The budget reflects a deficit driven by specific one-time expenditures: a $988,412 cost for a 27th payroll (which occurs every 11 years) and TIF cash flow transfers.
• Development Incentives: The budget accounts for incentives provided to QT9 (a software company bringing up to 100 jobs and a $12 million downtown investment) and the Residences at Riverpoint (a $27 million project creating 72 affordable apartments near the downtown area).
• Healthcare Costs: Annual healthcare costs rose 17%, driven significantly by GLP-1 prescriptions. However, the Human Resources department implemented a program to reduce these specific medication costs and introduced TAP telehealth, which is estimated to save the city $500,000 annually by avoiding traditional insurance claims.
• Utility Rate Increases: To address reduced reserves and fund critical infrastructure, the budget includes a 3.5% increase for electric, an 8% increase for water, and an 8% increase for sewer. Combined, these add an average of $13.21 per month to a typical residential utility bill. The water division is actively working with EEI on a master plan to address regulatory upgrades and end-of-life equipment replacements.
• Alderperson Inquiries on Utility Rates: An Alderperson noted that the water operational reserves look very healthy at 500 days and suggested that the city update its website to explicitly mention upcoming 5-to-10-year capital projects to better justify the 8% water rate increase to the public.
• Alderperson Inquiries on Levy Increases: An Alderperson requested a layman’s explanation for the steep 20.42% combined property tax levy increase (comprising a 5.1% pension levy rise and a 29% operating non-pension levy rise). The City Administrator attributed the steep jump to inflation and the increased cost of providing services to a growing population.
• Alderperson Inquiries on Data Center Delays: Alderperson Fahrenbach questioned how the delayed data center project impacts the 2027 budget. The City Administrator clarified it has no immediate impact because the anticipated revenues strictly offset the expenditures for offsite improvements; the only loss is the delayed collection of future property and franchise taxes.
• Alderperson Inquiries on Budget Variances: Alderperson Fahrenbach asked why the previous year’s projected $4.1 million deficit ultimately resulted in an $822,375 surplus. The Finance Director explained the surplus was largely due to higher-than-expected destination-based sales taxes from remote retailers, incomplete capital projects, and unfilled vacancies in the police and fire departments.
• Alderperson Inquiries on Household Tax Impact: An Alderperson sought clarification on conflicting tax impact estimates for a $400,000 home. The City Administrator confirmed the impact is a $120 annual increase, factoring in the recently increased $8,000 homestead exemption.
• Alderperson Inquiries on General Fund Reserves: Alderperson Fahrenbach questioned why the city is raising the levy by 20.42% while holding a highly funded 164 days of general fund reserves. The City Administrator explained that drawing down reserves to cover ongoing operational costs is fiscally irresponsible and would negatively impact the city’s Moody’s bond rating. The city intends to use those robust reserves to reduce borrowing costs for upcoming street reconstructions and the new police facility.
• Alderperson Inquiries on Interest Earnings: An Alderperson inquired about the interest earned on those reserves. The Finance Director reported the city makes $1.7 million across all funds ($600,000 in the general fund), securely invested in government vehicles like Treasury bills, municipal bonds, and Illinois funds.
• Alderperson Inquiries on Future Savings: An Alderperson asked if the 10-cent property tax increase was intended to rebuild drawn-down reserves (it is not; it solely covers the current budget) and suggested the administration implement a formal savings plan for the 27th payroll rather than repeatedly funding it out of emergency reserves.
• Public Comment: A resident inquired if the 0.5% sales tax would sunset once the new police station is built. The Finance Director confirmed it would not, as it will service a 20-year debt and future facility maintenance. The resident also asked if the city is effectively enforcing its 3% hotel tax on short-term rentals; staff confirmed they actively collect fees from the approximately ten short-term rentals currently operating in the city.

Fire Chief Succession Planning

With the current Fire Chief retiring in approximately seven weeks, the committee needed to determine whether to conduct an internal or external search for a replacement. The discussion centered on ensuring the next leader can adapt to the city’s changing landscape while properly addressing departmental issues without bias.

• City staff have been proactively preparing internal candidates using the Labor Management Institute for leadership training and enrolling three individuals in a Chief Fire Officer program.
  
  Several alderpersons emphasized the importance of getting actual candidates identified, distribute their resumes, and start the interview process as there were only seven weeks left to select a new fire chief.
• An Alderperson requested that the Human Resources Director hold town halls with the rank-and-file firefighters across all shifts to gather input on the desired qualities for the next chief.
• The committee agreed to follow a process mirroring the police department’s successful succession strategy by initially posting the job internally to see if a qualified candidate emerges before looking externally.
• The Mayor provided historical context, noting that external hires in the past typically left after a few years to pursue other opportunities, whereas internal promotions historically yielded more stability.

Wagner Road Gate

The city has been engaged in a long-standing conversation with a neighboring municipality (Aurora) regarding a gate on Wagner Road that restricts traffic flow, which local officials argue unfairly burdens their own residential streets. Because the neighboring city has failed to respond officially to alternative proposals—such as a “pork chop” road design suggested in 2023—the committee discussed implementing measures to force negotiations or close the issue.

• The committee agreed to send a formal demand letter to Auroa giving them a December 1st deadline to respond, explicitly threatening to install their own gate at the border if communication remains stalled.
• Multiple residents living near the gate provided emotional public comments vehemently opposing its removal, citing the safety of neighborhood children and claiming the gate successfully prevents the area from becoming a thoroughfare for Walmart traffic.
• One resident presented road wear statistics (ESL values), arguing that passenger vehicle traffic causes negligible wear and tear, effectively costing the city zero dollars in maintenance regardless of traffic volume.
• Another resident pointed out that the current configuration satisfies 218 households across several subdivisions, urging the council to accept the non-conforming road structure as a political “win”.
• A resident expressed concerns that if the gate were removed and the road placed under construction for a “pork chop” design, it would severely disrupt school bus routes.
• An Alderperson expressed frustration that the neighboring community desires access to surrounding streets while demanding to keep their own area closed off, framing it as a major quality-of-life and justice issue for the broader community.

Residential Street Speed Limit Reduction

To improve pedestrian and bicycle safety and stay ahead of modern transportation trends, the committee debated lowering residential street speed limits to 25 mph. The discussion was informed by a 2024 HR Green speed study, forcing the council to balance safety priorities against high implementation costs and strict legal liabilities.

• Replacing all necessary speed limit signs to strictly comply with a blanket 25 mph rule would cost an estimated $250,000 to $300,000.
• Several Alderpersons supported lowering limits on major collector streets as well, not just local residential roads, to maintain speed consistency across the community.
• A major concern raised by staff was liability and the potential loss of tort immunity if the city ignores the professional traffic engineering study or fails to post individual signs properly according to state statutory limits.
• The committee opted to wait for a formal legal opinion from the City Attorney regarding tort immunity before authorizing any phased or city-wide rollout of the new speed limits.

Consent Agenda, Ordinances, and Project Status

Routine approvals were needed for various municipal codes, rate adjustments, and city contracts to ensure continued operations and accurate fee schedules heading into the next fiscal year.

• Insurance flood limits were reduced to $5 million for the wastewater treatment plant to offset premium costs from Travelers.
• Cemetery charges were officially amended, increasing columbarium fees by 1% and plot fees by 3% annually for the next three years.
• Ordinances were formally passed to increase utility usage rates for electric, water (which includes a new 12-inch tap fee), and sewer.
• A downtown speed limit reduction to 20 mph was approved, though physical sign installation will be delayed due to the ongoing leaf collection season.
• The City Administrator reported updates on several ongoing projects, including interior renovations at the Batavia Public Library, the installation of upcycled wind turbine benches for the North River Street Plaza, and the donation of unused COVID-era picnic tables to the Batavia Park District.
• The Batavia Community Band is scheduled to perform a patriotic concert at the local VFW post on Veterans Day.
• The council agreed to participate in adopting a family for the holidays through the United Way.

Entity Type	Entity Name
Businesses & Corporations	Costco, Walmart, QT9, EEI, HR Green, Pulte, ComEd, Travelers, Prairie State, TAP, Sycamore Speedway, Drendel Jensen Law Group, Moody’s
Schools & Educational Institutions	Hooverwood School, Rotolo (Middle School), Batavia High School, Glenbard West High School, Marmion
Organizations & Non-Profits	Field Museum, Labor Management Institute, VFW, United Way, Batavia Community Band, Kirkland Farms Homeowners Association
Government & Public Entities	Batavia Park District, Batavia Public Library, IEPA
Real Estate Developments	Residences at Riverpoint

AGENDA: https://bataviail.community.highbond.com/Portal/MeetingInformation.aspx?Id=265

By: Jim Fahrenbach

How the Proposed Batavia 2027 Budget Impacts Your Taxes & Utilities