On the agenda: Dekalb meeting — data center (Oct 19)

SPECIAL JOINT MEETING
OF THE
CITY COUNCIL
&
FINANCE ADVISORY COMMITTEE
October 19, 2026
6:00 P.M.
DeKalb Public Library
Yusunas Meeting Room
309 Oak Street
DeKalb, Illinois 60115
A. CALL TO ORDER
1. City Council Committee of the Whole Call to Order and Roll Call.
2. Finance Advisory Committee Call to Order and Roll Call.
B. APPROVAL OF AGENDA
C. FINANCE ADVISORY COMMITTEE APPROVAL OF MINUTES
1. Minutes of the Finance Advisory Committee Meeting of October 20, 2025.
2. Minutes of the Joint Meeting of the City Council and Finance Advisory Committee
of November 17, 2025.
3. Minutes of the Joint Meeting of the City Council and Finance Advisory Committee
of August 17, 2026.
D. PUBLIC PARTICIPATION
E. CONSIDERATIONS
1. Consideration of Key Assumptions for the Fiscal Year 2027 City Budget.
F. ADJOURNMENT

Notice of a Special Meeting of the City Council and Finance Advisory Committee for October 19,
2026, at 6:00 p.m., called pursuant to Chapter 2 “City Council”, Section 2.05 “Special Meetings”,
of the Municipal Code of the City of DeKalb, Illinois.

SPECIAL JOINT MEETING
OF THE
CITY COUNCIL
&
FINANCE ADVISORY COMMITTEE
October 19, 2026
6:00 P.M.
DeKalb Public Library
Yusunas Meeting Room
309 Oak Street
DeKalb, Illinois 60115
A. CALL TO ORDER
1. City Council Committee of the Whole Call to Order and Roll Call.
2. Finance Advisory Committee Call to Order and Roll Call.
B. APPROVAL OF AGENDA
C. FINANCE ADVISORY COMMITTEE APPROVAL OF MINUTES
1. Minutes of the Finance Advisory Committee Meeting of October 20, 2025.
2. Minutes of the Joint Meeting of the City Council and Finance Advisory Committee
of November 17, 2025.
3. Minutes of the Joint City Council and Finance Advisory Committee Meeting of
August 17, 2026.
D. PUBLIC PARTICIPATION
E. CONSIDERATIONS
1. Consideration of Key Assumptions for the Fiscal Year 2027 City Budget.
City Manager’s Summary: Since the joint City Council and Finance Advisory Committee meeting
on August 17, City staff have continued to sift through the Annual Comprehensive Financial
Report (ACFR) for 2025, published in mid-June 2026, which reports financials for the fiscal year
that ended on December 31, 2025. Additionally, City staff have studied financial trends gleaned
from state-shared revenue reports for the first three fiscal quarters of 2026. Forecasting 2027
revenues remains somewhat speculative, because state reports of key revenues collected locally
and remitted to the state (e.g., 1% sales tax, local use tax, state income tax, and home rule tax)
are received by the City after a typical two-to-three-month interval. In brief, City officials are
looking at key income categories that reflect consumer spending in June and July of 2026.
Nevertheless, City financial staff are accustomed to the revenue forecasting challenges and, since
August, have developed more reliable working predictions for FY2027 City revenues that greatly
impact spending by the City’s operating departments. This report will also forecast operational
spending for both the General Fund and the Water Fund. Finally, this summary will take a closer
look at the general capital funds, which support local infrastructure and City fleets.

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 2 of 24

GENERAL FUND OVERVIEW
A. General Fund Revenue Assumptions
Although all General Fund revenue line items have been analyzed year-to-date, the principal
assumptions will need to be further reviewed as general revenues are recorded through the end
of the third quarter of 2026. The table below identifies the major General Fund revenue sources,
which are projected to comprise $43,294,275 or 74.33% of the total FY2027 General Fund
revenues:
Table 1

Major General Fund Revenues – 2027
FY2025
FY2026
Actual
Budget
Property Taxes

FY2027
Proposed

2027/2026
Amt
Change

% of
Total
FY27
Rev

FY2023
Actual

FY2024
Actual

Fire Pension Levy

3,865,258

4,210,990

4,545,033

4,903,669

4,903,669

-

8.35%

Police Pension Levy

3,245,669

3,503,961

3,781,933

4,075,370

4,075,370

-

6.94%

Total

7,110,927

7,714,951

8,326,966

8,979,039

8,979,039

-

15.28%

Sales & Use Taxes
State Sales Tax

6,976,228

7,190,557

8,324,279

8,184,170

8,823,736

639,566

15.02%

Home Rule Sales Tax

8,859,855

8,731,654

10,101,280

10,192,628

10,959,382

766,754

18.65%

4,754,039

4,991,741

237,702

8.49%

784,604

1,250,000

465,396

2.13%

Gross Receipts Taxes
Municipal Utility Tax

2,723,375

3,601,545

4,050,136
Other Income

Investment Interest

1,242,953

1,615,829

1,494,128

Intergovernmental
Federal – ARPA

1,837,285

1,194,389

SAFER

908,602

925,943

114,774

767,307

767,307

State Income Tax

6,435,093

6,842,062

7,266,073

7,356,148

7,523,070

-

-

-

-

0.00%

-

0.00%

166,922

12.80%

Summary
Total Major Revenues

36,094,318

37,816,930

39,677,636

41,017,935

43,294,275

-

74.33%

Other Rev Sources

13,244,945

14,740,940

13,371,627

14,188,588

15,466,906

-

25.67%

Total Gen Fund Rev

49,339,263

52,557,870

53,049,263

55,206,523

58,761,181

-

100.00%

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 3 of 24

FY2027 Proposed Major General Fund Revenues
OTHER REVENUE
SOURCES
26%

PROPERTY TAX - FIRE
PENSION
8%

PROPERTY TAX POLICE PENSION
7%

STATE SALES TAX
15%

STATE INCOME TAX
13%

TOTAL
GENERAL FUND
REVENUES
$58,761,181

HOME RULE SALES
TAX
19%

FEDERAL GRANTS SAFER
1%
INVESTMENT
INTEREST
2%

MUNICIPAL UTILITY TAX
9%

a) Police and Fire Property Tax Levies. The 2026 Spring session of the Illinois General
Assembly did not produce a bill that would address the long-term structural problem in the
unfunded state pension obligations. It is rumored that the Assembly will possibly vote to bring
the assets of the Police and Fire downstate public safety pension funds to a 90% funding level
by 2050 or 2055 instead of 2040 through an agreed bill. Nevertheless, state legislative action
in the veto session this Fall or the Spring 2027 session will not alter the City’s actuarial
responsibilities as laid out in the annual actuarial reports for the active and retired “lives”
covered by the City’s police and fire pension boards. There will be an upward spike in the
City’s pension obligations, partly owing to new hires but primarily owing (in 2026) to the
imperatives of the closed amortization system. The City will meet 100% of its current pension
obligations, but the City levies will not cover the entirety of that obligation. The balance will be
paid from other General Fund revenues as indicated in Table 2 that follows:

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 4 of 24

Table 2
Actual City Pension Funding and Pension Obligations
2024 Actuarial
Obligation

2024 Levy
Funding

Shortfall*

Shortfall %

Fire Pension

$5,343,974

$4,215,632

$1,128,342

21.11%

Police Pension

$4,130,481

$3,507,827

$622,654

15.07%

$9,474,455

$7,723,459

$1,750,996

18.48%

7.25%

8.49%

2025 Actuarial

2025 Levy

Shortfall*

Shortfall %

Obligation

Funding

Fire Pension

$5,802,043

$4,552,883

$1,249,160

21.53%

Police Pension

$4,615,568

$3,788,453

$827,115

17.92%

$10,417,611

$8,341,336

$2,076,275

19.93%

Shortfall*

Shortfall %

$1,107,092

18.42%

Total
Increase over PY

Total
Increase over PY

Fire Pension
Police Pension

9.95%

8.00%

2026 Actuarial

2026 Levy

Obligation

Funding

$6,010,761

$4,903,669

$4,858,896

$4,075,370

$783,526

16.13%

$10,869,657

$8,979,039

$1,890,618

17.39%

4.34%

7.65%

2027 Actuarial

2027 Levy

Shortfall*

Shortfall %

Obligation

Funding

Fire Pension

$6,361,700

$4,903,669

$1,458,031

22.92%

Police Pension

$5,073,899

$4,075,370

$998,529

19.68%

$11,435,599

$8,979,039

$2,456,560

21.48%

Total
Increase over PY

Total

Increase over PY
5.21%
0.00%
*To be paid from General Fund revenues other than property taxes

In terms of the total General Fund revenues, in 2003 about 12% of all operating revenues
were dedicated toward state Fire and Police pensions; the total in 2027 will be 19.50%.

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 5 of 24

The recent trend in combined City pension funding is shown in the graphic below:

City of DeKalb's Commitment to Fund Police and Fire
Pension Obligations
$170,340,341

$178,742,258

$93,549,501

2021

$186,468,741

$94,629,197

2022

$199,344,413

$98,504,265

2023

Combined Police and Fire Pension Liability Amount

$204,826,140

$105,321,467

2024

$214,348,379

$104,181,410

2025

$104,233,841

2026

Combined Police and Fire Pension Unfunded Amount

In 2026, the unfunded liabilities by fund according to the actuarial valuations from Foster &
Foster are as follows:
Fire: $58,179,880 (46.4% funded, up from 44% in 2025).
Police: $46,053,961 (56.5% funded, up from 54.4% in 2025)
Total: $104,233,841 (the total in 2025 was $104,181,410)
With a fiduciary obligation of such enormous magnitude, it is inescapable that the City’s annual
contribution is like paying only interest on an extraordinary credit card debt.
As noted in the past eight DeKalb City budgets and discussed in the August joint meeting of
the City Council and FAC, the solution is beyond local municipal resources. Across the state,
the estimated total of unfunded state Fire and Police pension liabilities is over $1 billion. The
answer, which can’t come soon enough, is a different amortization model. Amortizing a
pension system as if every obligation needs to be paid on a certain date – whether 2050 or
2040 – is politically and fiscally foolhardy.
The City’s operating reserve will diminish as the annual pension obligations increase and the
City meets the 100% funding target each year. It is estimated that the City’s General Fund
reserve will steadily diminish over the next 5 years to a point where it will no longer exceed
the policy threshold of 25% of the annual General Fund expenditures (see Table 3, below).
This trend is aggravated by annual transfers from the General Fund reserve to pay for streets,
vehicles, etc. because of the lack of sufficient general capital revenues.

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 6 of 24

Table 3

Further, the reduction in operating reserve will also accelerate if the City Council wishes to
flat-line or diminish the out-of-pocket taxes paid by local residents and businesses. The City’s
emphasis on local property tax reduction, spearheaded in recent years by Mayor Barnes, has
informed the proposed levies highlighted in the list of major General Fund revenues herein.
The City has provided leadership since 2018 when the Council realized the community was
at an economic crossroad: if unaddressed, the property tax burden on local businesses,
homeowners, and renters alike would put DeKalb in a non-competitive economic position. At
that time, DeKalb’s “aggregate tax rate” combining the rates of all local taxing bodies was
nearly 20% higher than the aggregate rates of the City’s nearest geographical competitors,
which averaged about $9.0009 per $100 EAV. The progress, led by the City of DeKalb in
reducing the aggregate property tax rate, is shown in the following table:
Year
2019
2020
2021
2022
2023
2024
2025

Aggregate Rate
11.65014
11.49927
11.06394
10.11155
9.41278
7.96687
7.89880

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 7 of 24

The City of DeKalb’s EAV, Levy, and Rate history from 2019 through 2025 is shown below:
Change in
DeKalb % Change in
Levy
DeKalb Levy

Year
2019

DeKalb
Rate
1.15493

DeKalb
Change in % Change
EAV
DeKalb EAV
in EAV
$585,726,839

DeKalb
Levy
$6,764,735

2020

1.06868

$610,333,062 $24,606,223

4.20%

$6,522,507

-$242,228

-3.58%

2021

0.98612

$694,171,673

$83,838,611

13.74%

$6,845,366

$322,858

4.95%

2022

0.89599

$794,561,930 $100,390,257

14.46%

$7,119,195

$273,830

4.00%

2023

0.81096

$952,383,378 $157,821,448

19.86%

$7,723,448

$604,253

8.49%

2024

0.62286

$1,339,235,605 $386,852,227

40.62%

$8,341,563

$618,115

8.00%

2025

0.63133

$1,422,263,872 $83,028,267

6.20%

$8,979,179

$637,616

7.64%

More than any other reason including the substantial “equalization factors” applied to the EAV
of properties in DeKalb Township in recent years, the ability of local taxing bodies to realize
the benefit of new construction in their levy decisions while lowering their property tax rates is
due to the continuing development of industrial values on DeKalb’s southside. The impact of
Meta alone on local taxing bodies is portrayed in the table that follows:
Table 4

Table 4 shows that Meta’s strong EAV growth has levelled with full occupancy and full
assessment, but the valuation and taxes Meta has generated will continue indefinitely to
provide unparallelled support for the services of our local taxing bodies. In fact, in the following
table it is clear that if the Meta data center had not been located in DeKalb, then the recent
City levies would have severely impacted local taxpayers:

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 8 of 24
Homeowner Example
2024 EAV
Township Muliplier
2025 EAV
Less Homestead Exemption
Net Taxable Value

$
$
$
$

143,576
1.0951
157,230
6,000
151,230

City of DeKalb Without Meta Data Center
Levy
EAV
Tax Rate ( Levy/EAV )
Homeowner Taxable Value
Homeowner Tax Due

$
$

Levy
EAV
Tax Rate ( Levy/EAV )
Homeowner Taxable Value
Homeowner Tax Due

$
$

$
$

8,979,039
582,871,034
1.5405%
151,230
2,330

City of DeKalb With Meta Data Center

$
$

8,979,039
1,422,263,872
0.6313%
151,230
955

The same proportional impacts are telegraphed across all local taxing body levies. As
developments such as Kraft Heinz, Goodyear (Project Midwest), and Pilot reach occupancy,
the City’s industrial and commercial EAV totals will spike again beyond the annual increase
that comes from the Township equalization factor.
As shown in Table 2 (Page 4), the City Manager has proposed no increase in the City’s
2026 property tax levies. To meet the City’s interest in its state pension debt, either the levies
need to annually increase by about 7% or some combination of levy increase and contribution
from other General Fund revenues needs to make up the difference. In 2025, the City’s levy
funding increased by 7.64%, which reduced the transfer from the City’s reserve but resulted
in an out-of-pocket increase in taxes that property owners paid to the City, after a reduction in
City taxes paid in 2024. In the three-legged formula for calculating tax rates that are applied
against local property values to establish the taxes due, the telling factor was the final Citywide EAV (estimated in October 2025 to be a little higher) and the high equalization factor
(9.51%) that raised every DeKalb property’s value in 2025.

The following charts show the calculations behind the recommendation to hold the line on the
City’s levy in 2026 until new industrial values hit the City’s overall EAV:

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 9 of 24

Option A
Option B
Goal: 2025 Rate or lower Flat Taxes; 2025 rate or lower
Method:
Adjust Levy
No Levy increase/Lower Rate
Tax Year
2021
2022
2023
2024
2025
2026
2026
City Levy
$6,845,317 $7,119,130 $7,723,448 $8,341,563
$8,979,179
$9,607,722
$8,979,179
City EAV
$694,171,673 $794,561,930 $952,383,378 $1,339,235,605 $1,422,263,872 $1,536,044,982
$1,536,044,982
City Rate
0.98612
0.89598
0.81096
0.62286
0.63133
0.62548
0.58456
Aggregate Rate
11.06394
10.11155
9.41278
7.96687
7.89880
?
?
City Rate as % of Aggregate Rate
8.91%
8.86%
8.62%
7.82%
7.99%
?
?

City Tax Rate

$273,813

Levy Year

Base EAV

2019
2020
2021
2022
2023
2024
2025

$97,906
$101,343
$105,488
$107,197
$114,293
$125,185
$143,575

Equalization
Factor
1.0351
1.0409
1.0162
1.0662
1.0953
1.1469
1.0951

2026 Option A

$157,229

1.0800

2026 Option B

$157,229

1.0800

$604,318

$618,115

$637,616

$628,543
8% Equalization Factor
7% levy increase

$0
8% Equalization Factor
No levy increase

City of DeKalb
New EAV

Homestead

Final EAV

DeKalb Rate

DeKalb Tax

$101,343
$105,488
$107,197
$114,293
$125,185
$143,575
$157,229

($6,000)
($6,000)
($6,000)
($6,000)
($6,000)
($6,000)
($6,000)

$95,343
$99,488
$101,197
$108,293
$119,185
$136,575
$151,229

1.07040
1.06868
0.98612
0.89599
0.81096
0.62286
0.63133

$1,020.55
$1,063.21
$997.92
$970.29
$966.54
$850.67
$954.75

$169,807
($6,000)
$163,807
Option A - 8% EF 7% levy Increase
$169,807
($6,000)
$163,807
Option B - 8% EF No levy increase

0.62548

$1,024.59

0.58456

$957.56

Taking a very conservative position, in the tables above the City EAV calculation for 2026
increases principally by the Township equalization factors, rather than new construction value.
The recommended City levy option is Option B.
b) State Sales Tax and Home Rule Sales Tax. Both categories of sales taxes were again strong
in 2025 according to the June audit. It is expected that in 2027 the City’s 1% sales tax will
increase by about $291,350 over the projected year-end 2026 total of $8,532,386 (3.4%). The
home rule tax total ($10,959,382) is expected to be about $272 per capita.
c) Municipal Utility Tax. This category includes electric (ComEd), and natural gas (Nicor) tax
receipts. The tax is based on kilowatt hours (electric) and therms (gas). The 2027 increase
over 2026 is expected to be about $237,702 (5%).
Municipal Utility Tax
4,754,039
2,463,149

2,723,375

3,601,545

4,050,136

4,991,741
4,754,039

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 10 of 24

d) State Income Tax. This tax is allocated on a per capita basis by the State of Illinois. The
population number used since 2022 is 40,290. The projected income is about $186.72 per
capita, drawing from Illinois Municipal League (IML) estimates and recent trends. Municipal
distributions are made from the Illinois Treasurer’s Local Government Distributive Fund
(LGDF). From the 1990s to 2011, municipalities received about 10% of the total annual fund
proceeds. Since that time, the state legislature has consistently dipped into that 10% to
balance the state budget. Currently, municipal governments annually split 6.47% of the LGDF
revenues on a per capita basis. In 2026, the Pritzker budget proposal included a further
reduction to an overall 6.47% of the annual state proceeds, eliminating any natural growth in
locally distributed LGDF proceeds, but the legislature did not support the recission in the face
of stiff municipal and IML resistance.
B. General Fund Expenditure Assumptions

FY2027 PROPOSED GENERAL FUND EXPENDITURES

DEBT SERVICE
1%

EQUIPMENT
0%

CONTRACTUAL
SERVICES
8%

COMMODITIES
2%

TRANSFER TO DEBT
SERVICE
4%

CAPITAL TRANSFERS
5%

TOTAL
GENERAL
FUND
EXPENSES
$60,850,564

PERSONNEL
80%

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 11 of 24

a) Personnel. In recent years, approximately 80% of all General Fund expenditures – including
transfers out and debt service – relate to the City’s personnel salaries, wages, and benefits
(including insurance and pensions).

The total full-time equivalents for the City’s operating departments, including the Water
Department, are shown in the following tables:
Table 5

City Manager's Office
Human Resources Department
Finance Department
Information Technology Department
Police Department
Fire Department
Public Works Department*
Water Operations Department
Community Development Dept
Total
Full-Time Equivalents (FTE)

2024
FT
PT
5
0
3
1
6
0
3
1
95
8
73
0
28
17
11
1
7
0
231
28
245

2025
FT
PT
4
0
4
1
6
0
3
1
98
7
76
0
29
15
11
1
7
0
238
25
250

2026
FT
PT
5
0
4
0
6
0
4
1
98
6
83
0
30
14
11
1
7
0
248
22
259

2025
75
71

2026
75
78

*Public Works Includes Administration, Support, Streets, Transit, Airport, and Engineering

2027
FT
PT
5
0
4
0
6
0
4
1
99
6
86
0
32
14
11
1
7
0
254
22
265

Table 6
Police (FT Sworn)
Fire (Union FF/P & Officers)

2024
73
68

2027
75
81

For decades, the Water Division has been incorporated with the Street Division under one
operating department – the Public Works Department. Practically speaking, this has been
reasonable and useful because the two have shared the same operational compound on
Market Street since the 1980s, and because Street and Water employees regularly share
equipment and collaborate on labor-intensive projects throughout the year. However, for
budgeting purposes, the operational interchangeability has led to the blending of funds and
expenses including the Water enterprise funds. The proposed FY2027 Budget will separate
water revenues and general revenues in the following manner:

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 12 of 24
 100% of the Public Works Director’s salary and benefits will be paid from the General Fund;
 100% of the new Public Works maintenance position will be paid from the General Fund.

The Water Fund will continue to “purchase” some of the time of employee positions that
regularly contribute services to the Water Department. This will include hours from such
diverse City occupations as Human Resources employees involved in hiring and promotional
processes and all the various City benefit packages (including health insurance); Finance
employees who serve paying Water customers and account for Water revenues; some hours
from various employee classifications in the street and engineering realms; and limited hours
from management classifications regularly involved in planning Water system projects,

prospecting for state or federal construction grants, collaborating on budgets, etc.
Public Works will include engineering services going forward and will fill a
longstanding vacancy in the fourth quarter of 2027.

Three of the proposed new hires in 2027 are firefighters to complete the hiring presently
underway to bring the new Fire Station 4 to a full complement (4 FF/PM and I Lt.). Since
opening, the station has operated as a “jump company” of three rather than five to ease the
fiscal transition. A federal “SAFER” (Staffing for Adequate Fire and Emergency Response)
grant will provide $767,307 in FY2027 to offset Fire Department hiring and training costs.
With respect to wages and salaries, by contract AFSCME Local 813 employees will receive a
3% increase in 2027. Additionally, DeKalb IAFF Local 1236 members will receive a 2.5%
increase in 2027. The City administration and Fraternal Order of Police (FOP) Lodge 115 have
opened negotiations for a successor collective bargaining agreement to replace the present
contract which expires on December 31, 2026, but the final wage agreement will not be known
for a number of weeks. Union employees will also receive wage adjustments as they progress
through a number of annual wage steps on the anniversary of their appointment or promotion.
Health Insurance. Since 2008 the City has been a member of the Intergovernmental
Personnel Benefits Cooperative (IPBC), which is a pooled arrangement with other Illinois
communities for the provision of health insurance. The IPBC provides economies of scale to
over 180 member bodies in terms of the reduction of administrative costs. The City’s
relationship with the IPBC also allows the City to budget for known monthly payments rather
than the riskier approach of annually setting aside larger sums for the payment of direct health
claims as a self-insured entity.
Risk pooling protects against extreme swings in annual insurance costs but does not
altogether protect an entity from its own “experience” of claims. Upward adjustments are even
higher if the customer work groups experience a higher-than-average volume of claims,
particularly when such claims involve hospital care or specialist treatment.
The City of DeKalb takes a collaborative approach to its plan coverages. When unusual
increases are in the offing, all labor groups including management participate in discussions
about available options that might lower premium costs, 20% of which are paid by the
individual active employee. Such discussions were opened in early July with the City facing a
25.4% increase for its PPO plan and a 20.6% increase for its HMO plan (a high-deductible
plan is also available), the largest annual increase in over 10 years.
A new prescription plan that does not change the essential plans currently offered to City
employees will reduce costs by about 2.5%. If substantially higher health costs continue
beyond FY2027, plan adjustments with the consensus of the City’s employee groups will be
needed to reduce any PPO and HMO increases. Such adjustments are bargainable according

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 13 of 24

to the City’s collective bargaining agreements. Based on preliminary discussions this year,
greater attention to high deduction options may also follow.

ANNUAL HEALTH INSURANCE
PREMIUM EXPENSE
$10,000,000
$5,000,000
$0

2024 ACTIVITY

2025 ACTIVITY

RETIREE HEALTH INSURANCE

2026 AMENDED 2026 PROJECTED 2027 REQUESTED
BUDGET
ACTVIITY
BUDGET

EMPLOYEE HEALTH INSURANCE

b) General Obligation Debt. In 2027, the City’s Ground Emergency Medical Transportation
(GEMT) Fund will resume its reimbursement of the General Fund for a portion of the overall
debt associated with Fire Station 4.
Fiscal
Year

GO Bonds: Series 2023 and other General Fund Debt
General Fund
Assumed Assumed Assumed Total Debt
Debt Service* Principal
Rate
Yield
Interest
Service

2023

$1,851,919

2024

$1,862,841

2025

$1,861,121

$195,000

5.00%

2026

$1,863,782

$205,000

5.00%

2027

$1,865,256

$215,000

5.00%

4.05%

$185,125

$400,125

$2,265,381

2028

$1,458,244

$225,000

5.00%

4.00%

$174,125

$399,125

$1,857,369

2029

$1,457,211

$235,000

5.00%

4.01%

$162,625

$397,625

$1,854,836

2030

$1,458,000

$245,000

5.00%

4.07%

$150,625

$395,625

$1,853,625

2031

$260,000

5.00%

4.12%

$138,000

$398,000

$398,000

2032

$275,000

5.00%

4.16%

$124,625

$399,625

$399,625

2033

$290,000

5.00%

4.21%

$110,500

$400,500

$400,500

2034

$300,000

5.00%

4.35%

$95,750

$395,750

$395,750

2035

$320,000

5.00%

4.35%

$80,250

$400,250

$400,250

1-Jan

Aggregate
Debt Service

1/1 & 7/1
$1,851,919
$135,656

$135,656

$1,998,497

4.14%

$205,625

$400,625

$2,261,746

4.09%

$195,625

$400,625

$2,264,407

2036

$335,000

5.00%

4.59%

$63,875

$398,875

$398,875

2037

$350,000

5.00%

4.59%

$46,750

$396,750

$396,750

2038

$370,000

5.00%

4.75%

$28,750

$398,750

$398,750

2039

$390,000

5.00%

4.75%

$9,750

$399,750

$399,750

Total

$13,678,374 $4,210,000

*Includes Series 2010C, 2012A, 2019, and 2020

$1,907,656 $6,117,656 $19,796,030

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 14 of 24

c) General Fund Summary. In the draft 2027 Budget, “natural” revenues balance “natural”
operating expenses:

Starting Fund Balance
Revenues
Property Taxes
Sales & Use Taxes
Gross Receipts Taxes
Intergovernmental
ARPA Grant
SAFER Grant
All Other (Inc. Income Tax)
Licenses & Permits
Service Charges
Fines
Other Income
General Fund Operating Revenue
Transfer from GEMT Fund
Transfer from Transportation Fund
Transfer from SSA #3 Fund
Transfer from SSA #4 Fund
Transfer from SSA #6 Fund
Transfer from SSA #14 Fund
Transfer from CDBG Fund
Transfer from Water Fund
Transfer from Refuse Fund
Transfer from Health Ins Fund
Operating Revenues
Expenses
Personnel
Commodities
Contractual Services
Equipment
Debt Service *
General Fund Operating Expenditures

Amended Budget
2026

Projected Projected Budget Projected Budget Projected Budget
2026
2027
2028
2029

$

34,803,657 $

34,803,657 $

34,162,448 $

32,073,065 $

30,051,704

8,979,039
23,214,907
5,400,353

8,979,179
23,192,899
5,400,353

8,979,178
24,367,811
5,670,371

9,607,720
25,379,988
6,069,710

10,280,261
26,437,099
6,500,997

767,307
8,768,691
706,100
4,866,445
502,297
1,375,605
54,580,744
111,910
500
500
500
500
77,297
279,500
155,072

767,307
8,623,617
826,900
4,379,686
459,203
1,824,025
54,453,169
111,910
500
500
500
500
77,297
279,500
155,072

358,076
9,371,461
957,900
4,591,008
475,834
1,838,791
58,650,488
1,000,000
117,575
500
500
500
500
77,297
279,500
162,923

9,650,055
957,900
4,674,345
483,660
1,843,969
60,828,286
750,000
120,515
500
500
500
500
77,297
279,500
166,996

55,206,523

55,078,947

767,307
9,216,981
1,124,700
4,342,669
468,161
1,828,681
56,765,859
1,000,000
227,577
500
500
500
500
77,297
279,500
158,949
250,000
58,761,181

60,289,782

62,224,593

45,070,246
1,155,125
4,877,697
184,450
508,538
51,796,056

44,832,067
1,180,663
4,674,775
150,270
498,538
51,336,313

48,831,474
1,134,682
5,052,157
161,450
498,420
55,678,183

51,450,420
1,219,250
5,069,825
174,047
498,042
58,411,584

54,385,431
1,243,633
5,159,198
177,512
502,335
61,468,109

2,333,842
1,850,000
200,000
55,720,156
(641,209)
34,162,448 $

2,265,381

1,857,369

1,854,836

57,943,564
817,617
34,980,065 $

60,268,953
20,829
32,093,894 $

63,322,945
(1,098,352)
28,953,352

120,000
500,000
275,000
87,000
1,250,000
575,000
100,000
2,907,000
(2,089,383)
60,850,564
32,073,065
52.71%

200,000

200,000

92,190
1,250,000
500,000
2,042,190
(2,021,361)
62,311,143
30,051,704
48.23%

94,955
1,250,000
500,000
2,044,955
(3,143,307)
65,367,900
26,908,397
41.16%

Transfer to Motor Fuel Tax Fund
Transfer to Debt Service Fund
2,333,842
Transfer to Capital Projects Fund
1,850,000
Transfers to Capital Equipment Fund
200,000
Operating Expenses
56,179,898
Operating Net Change
(973,375)
Preliminary Fund Balance
$
33,830,284 $
Capital Transfers to Fund 400/Fund 420
BS&A ERP Software Upgrade (Fund 400)
Building Upgrades (City Hall/Fire) (Fund 400)
IT (City Server Infrastructure Upgrade) (Fund 400)
Police Software (Peregrine CAD) (Fund 400)
Street Maintenance (Fund 400)
Vehicles (PD & PW) (Fund 420)
Police CAD Upgrade (Fund 420)

Subtotal:
Total Net Change--General Fund Balance
Total General Fund Expenditures w/Capital
Final Projected Fund Balance
Final Fund Balance as % FY27 GF Expenditures

33,830,284
60.22%

34,162,448
61.31%

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 15 of 24

However, in FY2027, the General Fund is unbalanced by $2,089,383 needed to partially cover
a short list of 2027 capital expenses.
As seen in the table above, the City is increasingly using its reserve funds – which are
already obligated for unfunded pensions – for capital expenses that have no other
recurring sources of funding. Specifically, included in the FY2027 “Transfers Out” are reserve
funds to beef up either the Capital Projects Fund (Fund 400) or Capital Equipment Replacement
Fund (Fund 420) for the following capital items:
Capital Project

Street Maintenance
BS&A ERP Software Upgrade
Vehicles--Police
Vehicles and Equipment—Public Works
Police Software (Peregrine/CAD/License & Maintenance)
IT (City Server Infrastructure Upgrade)
Building Maintenance/Upgrades (City Hall/Fire Station 1)

Total:

Estimate
$1,250,000
$120,000
$200,000
$375,000
$187,000
$275,000
$500,000
$2,907,000

WATER FUND OVERVIEW
The City’s water system is comprised of three funds: Water Operations, Water Construction and
Water Capital. While budgets are prepared for each of the three funds in the City’s accounting
system, for financial statement presentation the three funds are presented as one major
proprietary “Water Fund”.

Water Fund
Water Operations

Water Construction

Water Capital

(600)

(610)

(620)

A. FUND 600 WATER OPERATIONS
The Water Operations Fund provides for the supply, treatment, storage, and distribution of the
City's potable water system, which pumps over 1.15 billion gallons of water annually to DeKalb
residents. The City’s Public Water System is a modern, state-of-the-art water supply that serves
a population of over 40,000 permanent residents plus non-resident students at Northern Illinois
University. Water provided to the residents of DeKalb comes from six deep wells drawing water
from deep sandstone aquifers, and three shallow wells that draw water from sand and gravel
aquifers. Groundwater is treated at one of five ion-exchange/iron removal water treatment plants.
The treatment process produces a high-quality water supply by reducing the amount of hardness
and iron in the water.
Before leaving the treatment plant, groundwater is treated with chlorine and phosphate to ensure
the safety of the water supply within our distribution system. In addition, fluoride is added to the
water to promote the development of strong teeth.
After treatment, the water enters the distribution system for use or is stored in one of the City’s
four elevated water towers. The four towers have the ability to store a total of 5.75 million gallons.

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 16 of 24

The elevated towers also maintain system pressures for fire protection. Water Department staff
maintain over 184 miles of water main making up the City’s water distribution system. Included
in this system are over 2,500 hydrants, 3,000 valves, and 11,000 service lines and water-metered
accounts. Ensuring all these assets are adequately maintained is critical to a safe, uninterrupted
water supply to our community and the ability to always provide fire protection.

Lead Service Line Replacement Project
In 2021, the State of Illinois passed a law requiring cities to remove all lead and galvanized water
service lines. Since then, the City of DeKalb has been working to meet this requirement. By mid2024, the City had replaced 85 lead service lines using federal American Rescue Plan Act (ARPA)
funds. Additional field investigations by City staff confirmed there were over 300 more lead and
galvanized lines that still needed to be replaced.
To fund this work, the Illinois Environmental Protection Agency (IEPA) awarded DeKalb $3.1
million in “loan forgiveness” funds. This means the City will not need to repay the funds. In
addition, about $439,000 in ARPA funds were used for replacements as additional services were
identified during the project, bringing the total spent on this replacement project to approximately
$3.5 million. Work began in 2024 and continued through 2026. Due to state permitting approvals
and contractor retainage, the IEPA loan is expected to be closed out in 2027.
Overall, 361 lead and galvanized service lines that required replacement were replaced during
phase 1 (2025) and phase 2 (2026). This includes pipe replacement, yard restoration, and
engineering costs. This was a very successful project, and it provided a tremendous benefit to the
participating residents and owners.

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 17 of 24

WATER FUND REVENUE SUMMARY

Water Sales Rev
96.42%

Water Service
Charges
1.56%
Miscellaneous
Revenue
0.20%
Water Impact
Fees
0.40%
Investment
Interest
1.42%

The primary source of funding for the Water Operations Fund is water sales, accounting for over
96% of the total revenue. The Water Department experienced an increase in water sales revenue
of approximately 2.7% in 2025 over the prior year. Although revenue increased 2.7% in 2025
compared to 2024, billed usage decreased by approximately 0.6% in 2025 from 2024. It is
anticipated that billed units will decrease slightly again in 2026. In 2027, water use is expected to
increase slightly over the coming years because of new developments in the DeKalb planning
area.

ANNUAL WATER SALES REVENUE
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$-

FY21

FY22

FY23

FY24

FY25

FY26

FY27
BUDGET

The chart below depicts the number of gallons billed to DeKalb residents annually over
the past 5 years.
(Note: 2026 water sales and gallons billed are projected based on sales-to-date)

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 18 of 24

Annual Gallons Billed
1,100,000,000
1,080,000,000
1,060,000,000
1,040,000,000
1,020,000,000
1,000,000,000
980,000,000
960,000,000

2021

2022

2023

2024

2025

2026

Debt Service: The City has retired its bonded water debt but still makes loan payments to the
IEPA through the Water Fund, as well as payments on a capital loan and several capital leases.
Illinois Environmental Protection Agency Loan #L17-4045: From 2012 through 2014, the City
received $271,891 in loan proceeds for the replacement of water mains on Hollister Drive. The
debt service is based on a 20-year amortization schedule with interest at 2.295%. Semi-annual
principal and interest payments are due April 26th and October 26th. The outstanding principal
balance as of December 31, 2026, is $103,282.
Loan Debt Service to Maturity
Fiscal Year
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
Total

IEPA Loan #L17-4045
Principal
Interest
16,247
2,278
16,622
1,903
17,005
1,519
17,398
1,126
17,800
725
18,210
314

$103,282

$7,865

IEPA Loan #L17-5473
Principal
Interest
33,436
8,410
34,054
7,792
34,683
7,162
35,324
6,521
35,977
5,868
36,642
5,203
37,320
4,526
38,009
3,836
38,712
3,133
39,428
2,418
40,156
1,689
40,899
947
20,732
191
$465,371
$57,695

Total
60,371
60,371
60,369
60,369
60,370
60,369
41,846
41,845
41,845
41,846
41,845
41,846
20,923
$634,213

Illinois Environmental Protection Agency Loan #L17-5473: In 2019, the City received
$693,150 in loan proceeds for the replacement of approximately 4,100 feet of water main and
services on Joanne Lane, Golfview Place, and Ilehamwood Drive. The debt service is based on
a 20-year amortization schedule with interest at 1.84%. Semi-annual principal and interest
payments are due June 30 and December 30. The outstanding principal balance as of December
31, 2026, is $465,371.
Capital Leases: Over the period 2020-2021, the City took delivery of three Chevy Silverado
replacement trucks at a gross cost of $128,420 as part of the City’s overall capital lease plan. One

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 19 of 24

vehicle was delivered in 2020 and two more in 2021, all with a 5-year lease schedule and variable
buy-out options at the end of the term. The Water Department purchased the trucks in 2026.
FUND 610 – WATER NEW CONSTRUCTION FUND
The Water New Construction Fund accounts for revenues and expenditures associated with new
development and expansion of the City’s water system. Revenue is primarily generated through
water impact fees and investment interest.
For FY2027, revenues are budgeted at $105,000, consisting of $75,000 in water impact fees and
$30,000 in investment income. This represents a $50,000 decrease from the $155,000 projected
for FY2026, primarily reflecting lower anticipated water impact fee collections. The FY2027
projection remains above the $58,209 collected in FY2025.
Projected FY2027 expenditures total $50,000 consisting of $25,000 for permanent improvements.
This represents a significant decrease from the $250,000 projected in FY2026. With revenues
exceeding expenditures by $55,000, the Fund’s ending fund balance is projected to increase from
$753,896 to $808,896 at the end of FY2027.

WATER NEW CONSTRUCTION FUND
REVENUES & EXPENSES
$400,000
$300,000
$200,000
$100,000
$2024 ACTIVITY

2025 ACTIVITY 2026 AMENDED
BUDGET

TOTAL REVENUES

2026
PROJECTED

2027
REQUESTED

TOTAL EXPENDITURES

FUND 620 – WATER CAPITAL FUND
The capital portion of the Water Fund was split into its own fund in FY2016.5. The City Council
supported the creation of the Water Capital Fund to track and finance water-related expenses
pertaining to fleet and equipment and upgrades of existing water infrastructure such as water
mains, wells, treatment plants and water towers.
To provide a funding source to finance the capital improvements, the Council approved a water
rate increase of 4.5% each year over a five-year period (2016-2020) with the stipulation that 2/3
of each year’s rate increase (or 3% of the 4.5% annual increase), would be directed into the Water
Capital Fund (Fund 620). The remaining 1.5% would be directed into the Water Operations Fund
(Fund 600). It should be noted that the rate increase in 2016 was only 2.2% and not 4.5%, so only
1.47% of this rate increase was directed into the Water Capital Fund. Subsequent rate increases
since 2020 have been tied to the CPI and have followed the guidance noted above with two-thirds
of the revenue directed to Fund 620 and one third to Fund 600. Since 2025, this split in water
rate increases has resulted in over $6.6 million in water sales revenue for the Water Capital Fund.
Additional revenue for the Water Capital Fund has been through IEPA grants, Loans, and Water
Fund Transfers.

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 20 of 24

Over $8.5 million in water capital improvements were included in the FY2026 Amended Budget,
with the expectation of a $1.6 million reimbursement from IEPA.
FY2026 Projects
Chicago West Business Center Transmission Watermain

Total Costs
$5,330,000

Routine Meter Replacements and New Water Meter Purchases
Phase II Lead Service Line Replacements (IEPA Forgiveness Loan*) approximately
175 services were replaced in 2026
SCADA Upgrade
W001 SUV
Well 11 Maintenance and Repair
Emergency Generator – Lincoln Hwy WTP

$119,000
$1,831,000

TOTAL

$8,506,000

$660,000
$39,000
$177,000
$350,000

*Most of the IEPA’s grant of $3.1 million for lead service replacements will be spent in 2025 & 2026, with the remainder allocated in FY2027.

Almost $2.2 million in water capital improvements are included in the FY2027 Budget, with the
expectation that $100,000 in lead service replacements will be reimbursed by the IEPA.
Unforeseen, future service replacements will be funded using Water Capital Funds moving
forward.
Proposed FY2027 Projects
Well 12 Transmission Main Lining

Estimated Costs
$390,000

W009 Replacement

$ 53,500

Routine Meter Replacements and New Water Meter Purchases

$210,000

Well 15 Rehabilitation

$125,000

Lead service Line Replacements
Water System Improvements: Softener Media Exchange 7th St & Corporate Dr,
Iron Filter Media Lincoln Hwy
Watermain Replacement Design Engineering Services

$315,000
$865,000

TOTAL

$2,197,500

$239,000

Since the creation of the Water Capital Fund in 2016, over 20 million dollars of water capital
improvements have been completed. Example projects have included water main replacement,
well maintenance, tower painting, vehicle equipment replacements, water meters and lead service
line replacements. Roughly $2.2 million of water capital improvements are identified in FY2027.
The City’s Water Operating and Capital Funds have successfully kept pace with industrial
development over the past five years while also addressing the repair and replacement of aging
underground infrastructure. Nevertheless, in October 2023, the City Council authorized water
system modeling (Resolution 2023-098), which was completed in April 2025. The consultant study
by Baxter & Woodman considered the realistic prospect of new industrial development on
approximately 2,100 acres south of I-88 and east of IL Route 23, as well as 405 acres north of I88 and east of Peace Road within the next 5 to 10 years.
To support this growth, more substantial investment in sanitary sewer construction as well as road
widening and improvements will be provided by private parties. For the City’s part, the Council
approved a $510,000 contract with Baxter & Woodman on November 25, 2024, for the design,
permitting and bidding services related to a new 16-inch transmission main that would run south
on Illinois Route 23 from the Meta property to Keslinger Road, then eastward along Keslinger
Road on the north side to Afton Road, then north to the terminus of the main extension that runs
eastward along Gurler Road. This new 4-mile loop will supplement the older water loop

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 21 of 24

constructed in 2019-2020 that currently serves Ferrara, Amazon, Kraft Heinz and Meta but also
provides important water supply and fire flow for the Gurler Road corridor east and west of the
Illinois Route 23 right-of-way.

In 2026, construction plans were completed for the Keslinger watermain extension and bids were
obtained for the completion of the project. On April 27, 2026, the City Council awarded the bid to
Elliott & Wood for the installation of the Chicago West Business Center Transmission Water Main
(Resolution 2026-049). The expected cost to complete is not to exceed $5,328,750 and will be
funded using funds in the Water Capital Fund reserve balance. Construction began in July 2026
and is anticipated to be completed by the end of 2026.
Additionally, the Baxter & Woodman Water System Study predicted that the City’s existing wells
can comfortably meet projected demand through 2030. However, supply deficiencies may arise
by 2035. To address this challenge, the City’s Water System Plan also includes construction of a
new shallow well – Well #18 – designed with a minimum capacity of 1,000 gallons per minute
(gpm), an increase of 1.44 million gallons per day (MGD). The Lincoln Highway Water Treatment
Plant was originally designed with sufficient capacity to handle this added demand and is already
connected to the raw water transmission main that Well 18 will supply. With this well, it is assumed
that the potential supply deficit by 2035 will be erased. A test well was drilled in 2026; however,
it did not hit the desired aquifer, and a new location is being pursued.
CAPITAL FUND OVERVIEW
A. Motor Fuel Tax Fund (Fund 210).
The City’s annual budget has 31 funds that accounted for a budget of $158 million in expenditures
in 2026. The City’s capital funds are high in the pecking order of City funds and are at least vaguely
known to many residents and businesses because of the broadly recognized physical impacts.
The City receives a per capita allocation of Illinois Motor Fuel Tax (MFT) revenues on a monthly
basis from a state tax on gasoline purchases. These funds can only be used for certain costs
related to street maintenance and improvement projects as set forth by the State of Illinois. The
annual MFT allotment to the City in FY2027 is projected to be flat at $1,800,000. According to the

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 22 of 24

IML, gas prices which are presently lingering around $4.30 per gallon across Illinois have not
significantly depressed the number of gallons pumped, which is the basis for the MFT calculation.
About $725,000 of the FY2027 state MFT allocation will be used to defray the City’s electrical
charges for streetlights ($425,000, an increase of 27.6%) and road salt purchases ($300,000, an
increase of 15.8%). An additional allocation for street supplies and commodities ($140,000, an
increase of 5%) can be considered part of the annual street maintenance work.
The recurring state MFT funds available for street maintenance in Fund 210 remain at
$1,000,000.
B. Capital Projects Fund (Fund 400).
The local MFT rate of 9.5 cents per gallon is split between road expenditures (7 cents), airport
expenditures (1.5 cents), and vehicle replacement (1 cent). Proceeds from the local tax on motor
fuel can be used for any public capital improvement. In FY2027, no increase is projected in the
2026 local MFT revenue estimate of $940,000.
Aside from the Fund 400 allocation for street and alley maintenance in FY2027 ($2,000,000), the
fund will also support the non-TIF architectural improvement program started in 2023 ($50,000),
and the annual Barb City Manor allocation ($50,000). The “natural” or recurring street and alley
maintenance budget from local MFT revenues in FY2026 is $750,000. In FY2027, Fund 400 will
support the following capital expenses:
 Street Maintenance: $2,000,000 (includes GF transfer of $1,250,000)
 BS&A ERP Software Upgrade: $120,000
 Police Software (Peregrine): $87,000

 Misc. City Building Upgrades: $100,000

 Fire Station 1 female bathroom: $400,000

 IT (City Server Infrastructure Upgrade): $275,000

The total of all recurring state MFT monies (Fund 210) and local MFT monies (Fund 400)
dedicated toward street maintenance in FY2026 is $1,750,000 – lower than the level of
street maintenance expenditures in FY2022. The draft FY2027 Capital Budget includes an
additional transfer from the General Fund reserve of $1,250,000 to build a 2027 street
maintenance budget of $3 million, as in FY2026.
Recent annual expenditures for annual street maintenance are shown in Table 10 below:
Table 10
Street and Alley Maintenance Spending 2020-2026
2020

2021

2022

2023

2024

2025

2026*

Total

Fund 210

$ 199,108 $ 1,061,510 $ 1,000,000 $ 2,645,248 $

Fund 400

$ 793,617 $

Gen Fund

$

Total

$ 992,725 $ 1,383,082 $ 2,297,747 $ 2,655,248 $ 3,161,647 $ 4,500,000 $ 3,000,000 $ 17,990,449

-

$

321,572 $ 1,297,747 $
-

$

-

$

793,852 $ 1,500,000 $ 1,000,000 $ 8,199,718

10,000 $ 1,417,795 $ 1,000,000 $
-

$

750,000 $ 5,590,731

950,000 $ 2,000,000 $ 1,250,000 $ 4,200,000

*Budget Only

The revenue sources for Capital Projects Fund are depicted in the graph that follows:

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 23 of 24

Capital Projects Fund Revenue Sources
FY2027
Local MFT
29.22%

Local Grants
0.31%
Transfer from
General Fund
69.38%
Investment
Interest
1.09%

C. Capital Equipment Replacement Fund (Fund 420).
The City’s GEMT Fund (Fund 130) has supported Fire Department vehicle and equipment needs
for several years and will continue to do so. The Police and Public Works departments rely upon
the one cent per gallon local fuel tax, which will raise an estimated $130,000 in 2027. Another
source of annual revenue in Fund 420 are lease payments from telecommunication companies
with antennae on the City’s water towers (“Rental Income”) and sales of surplus property (such
as old vehicles put out of service or land sales). In FY2023, payments from the DeKalb County
E-911 board totaling several hundred thousand dollars were shifted under new auditing rules to
the General Fund because of their personnel content, reducing the recurrent funding sources. A
new dedicated funding source – cannabis tax payments – began accruing in FY2024 and is
projected to accrue about $225,000 in FY2027.
In FY2027, with the help of a General Fund transfer of $675,000 (an increase of $475,000 over
FY2026), the following vehicle and equipment expenses are planned:
 Police: $300,000

 $200,000 for four squad replacements
 $100,000 for CAD upgrade

 Public Works: $375,000

 $262,000 for upfitting of two chassis purchased in 2026
 $75,000 for one wayside train horn replacement
 $38,000 for replacement of the AC units for the street department offices and restrooms

The principal Fund 420 revenues are portrayed in the following graph:

City Council & Finance Advisory Committee Meeting Agenda
October 19, 2026
Page 24 of 24

Capital Equipment Replacement Fund Revenue
Sources FY2027
Sales & Use Taxes
27%
Transfer from
General Fund
51%
Rental Income
17%

Other Income
5%

***********************************************************************
Remaining FY2027 Budget Preparation Schedule
 Thursday, October 15: Publication of an agenda for Special Joint City Council and FAC meeting

on October 19.

 Monday, October 19: Special Joint City Council and FAC meeting to review proposed, detailed

FY2027 Budget highlights, including annual levy assumptions, 6:00 p.m. to 8:30 p.m.

 Monday, October 26: Council consideration of property tax levy options.
 Monday, November 9: Presentation of a Council resolution establishing a Truth in Taxation

Hearing for November 23.

 Monday, November 16 and Wednesday, November 18 (if needed): Back-to-back special Council

meetings in joint session with the FAC to go over the proposed FY2027 budget document. The
General Fund departments, Capital Funds, Enterprise Funds, and Special Funds will be the
focus.

 Monday, November 23: Truth in Taxation Hearing and FY2027 Budget Hearing. First reading on

Proposed FY2027 City Budget.

 Monday, December 14: Second reading on Proposed FY2027 City Budget.
 Monday, December 28: Last day to file the approved FY2027 Annual Budget and Property Tax

Levy with the DeKalb County Clerk.

F. ADJOURNMENT

MINUTES
CITY OF DEKALB
FINANCE ADVISORY COMMITTEE
OCTOBER 20, 2025
The Finance Advisory Committee (FAC) of the City of DeKalb convened on October 20, 2025, at
the DeKalb Public Library, 309 Oak Street in DeKalb, Illinois.
A. CALL TO ORDER AND ROLL CALL
FAC Chair Lynn Neeley called the meeting to order at 6:00 p.m. In addition to Chair Neeley, the
following members of the FAC were present: Linda Babcock, Paul Callighan, Brian Olinger, and
Greg Perkins.
Others in attendance included Bill Nicklas, City Manager; Bob Redel, Assistant City Manager;
Mayor Cohen Barnes, Susan Hauman, Director of Financial Services; Michelle Anderson, Human
Resources Director; Meagan Challand, Senior Accountant; and Ruth Scott, Recording Secretary.
B. APPROVAL OF THE AGENDA
MOTION: Mr. Callighan moved to approve the agenda; seconded by Ms. Babcock.
VOTE: Motion carried by a majority voice vote of the FAC members present. Ayes: Babcock,
Callighan, Neeley, Ohlinger, Perkins. Nays: None. The motion was declared passed.
C. APPROVAL OF MINUTES
Chair Neeley read the following minutes by title only:
1. Minutes of the Finance Advisory Committee Meeting of October 21, 2024.
2. Minutes of the Joint City Council and Finance Advisory Committee Meeting of November 18,
2024.
3. Minutes of the Joint City Council and Finance Advisory Committee Meeting of August 18, 2025.
MOTION: Mr. Perkins moved to approve the minutes; seconded by Mr. Callighan.
VOTE: Motion carried by a majority voice vote of the FAC members present. Ayes: Babcock,
Callighan, Neeley, Ohlinger, Perkins. Nays: None. The motion was declared passed.
D. PUBLIC PARTICIPATION
There was none.
E. OLD BUSINESS
There was none.
F. NEW BUSINESS
1. Consideration of Proposed FY2026 Budget Parameters.
City Manager Bill Nicklas began by noting a minor correction and highlighting the narrative
summary and spreadsheets for the General Fund, Water Fund, and major capital funds, along with
documents detailing revenues, expenditures, reserve transfers, and property tax levy history.
Highlights of his opening comments included:
 Roughly 75% of General Fund revenue comes from property taxes, sales and use taxes, utility

taxes, investment interest, and grants, including a SAFER grant for Fire Station 4 staffing.

 All property tax revenue is directed to fire and police pensions, with levy trends, rising EAV, and

an ongoing shortfall since 2016 requiring continued reserve support.

Finance Advisory Committee Minutes
October 20, 2025
Page 2 of 3
 Industrial growth has boosted EAV and helped reduce the City’s tax rate by nearly 50% since

2018.

 A recommendation to maintain last year’s levy rate of approximately 0.622 to avoid deeper

reserve use or reliance on uncertain future EAV growth.

 Strong municipal utility tax revenue, modest state income tax growth, and ongoing recruitment

for a senior analyst to support capital project tracking.

 Planned General Fund transfers for debt service, street maintenance, facility repairs, and police

investigative equipment.

 A projected FY2026 General Fund balance of approximately 60% of annual expenditures.
 A proposed one-time $250,000 reserve allocation to support the City’s 250th anniversary through

a lasting capital investment rather than a single event.

Chair Neeley asked whether the City had considered exploring drone or aerial light displays as an
alternative to traditional fireworks, noting they may be less disruptive. City Manager Nicklas said
the City could look into the option. Chair Neeley added that such displays might even be reusable.
Mr. Callighan asked whether utility tax projections for META accounted for the possibility that its
energy use could double. City Manager Nicklas said the estimates are not exact, but META is
expected to be fully energized by FY2026, strengthening utility tax revenue in FY2027. He added
that early usage projections were higher than anticipated, prompting the City to adjust its estimates
upward, with further development likely to increase revenue.
City Manager Nicklas updated the committee on the Kraft Heinz project, noting that concrete work
is nearly finished, steel installation will follow curing, and major construction will continue into late
FY2026 and FY2027. The facility is expected to be operational in early to mid-2027.
City Manager Nicklas then reviewed the City’s three main capital funds – the Motor Fuel Tax Fund,
the Capital Projects Fund, and the Capital Equipment Replacement Fund – explaining their roles
in supporting roughly $3 million in street maintenance for FY2026. He also highlighted planned
equipment purchases and replacements across departments.
Mr. Perkins asked how far the continued $3 million annual investment will improve overall street
conditions. City Manager Nicklas said recent spending has reduced failing streets from about 45
percent to 15 to 20 percent, and a new pavement condition index and five-year plan will provide
clearer projections when bids are presented in March. Alternate bid options, including alley work,
may also be considered.
City Manager Nicklas then reported that unfunded police and fire pension liabilities are projected
to decline by about $1 million in 2025 due to stronger investment performance, higher
contributions, and savings from statewide fund consolidation. He added that the State may extend
the full-funding deadline to 2050, easing annual required increases.
He also summarized major Water Fund initiatives, including replacing aging mains, constructing a
new southside transmission loop, and drilling a shallow well to expand capacity before demand
reaches projected limits around 2035. EPA review is underway, and a test well will be drilled this
fall.
Ms. Babcock noted rising health insurance costs. Human Resources Director Anderson said
increases stem from higher premiums and new police and fire hires.
Ms. Babcock also raised concerns about overtime for police and fire. City Manager Nicklas said
overtime should decline as staffing stabilizes, though current levels reflect high call volumes and
necessary coverage.
Ms. Babcock then pointed out an increase in Public Works overtime. City Manager Nicklas clarified
that the rise appears in budget projections, not actual spending, which he expects to be lower.

Finance Advisory Committee Minutes
October 20, 2025
Page 3 of 3

Mr. Callighan asked about airport improvements. City Manager Nicklas said that while the airport
fund is financially stable, it cannot support major capital work. The City is exploring private
investment in T-hangars and a commercial building and completing smaller required upgrades like
fencing and new snow-removal equipment.
Mayor Barnes emphasized that the property tax rate will remain flat this year. With property values
up nearly 10%, homeowners will pay more despite the unchanged rate. He said this is necessary
given rising costs and highlighted past financial responsibility, ongoing development efforts, and
the need for state action on pensions.
Finally, City Manager Nicklas reviewed revenue projections, noting that EAV increased by about
$100 million but not enough to maintain last year’s revenue without adjustments. He recommended
holding the tax rate steady while avoiding deeper reliance on reserves. The FAC agreed and
supported advancing that recommendation to the City Council.

G. ADJOURNMENT
MOTION: Mr. Callighan moved to adjourn the meeting; seconded by Mr. Ohlinger.
VOTE: Motion carried by a majority voice vote of the FAC members present. Ayes: Babcock,
Callighan, Neeley, Ohlinger, Perkins. Nays: None. The motion was declared passed and the
meeting adjourned at 7:18 p.m.
Respectfully submitted,
______________________________
Ruth A. Scott, Recording Secretary
Minutes approved by the FAC on (pending).
To view the agenda packet for the October 20, 2025, FAC meeting, click here.
To view the video recording for the October 20, 2025, FAC meeting, click here.

SPECIAL JOINT MEETING OF THE
CITY COUNCIL AND FINANCE ADVISORY COMMITTEE
NOVEMBER 17, 2025
The City of DeKalb City Council and Finance Advisory Committee convened for a Special
meeting on November 17, 2025, called pursuant to Chapter 2 "City Council", Section 2.05
"Special Meetings", of the Municipal Code of the City of DeKalb, Illinois. The meeting was held
in the Yusunas Meeting Room at the DeKalb Public Library, 309 Oak Street, DeKalb, Illinois.
A. CALL TO ORDER
Mayor Barnes called the meeting to order at 6:00 p.m.
B. ROLL CALL
1. City Council
City Clerk Brad Hoey called the roll, and the following members of the City Council were
present. First Ward Alderman Carolyn Zasada, Third Ward Alderman Tracy Smith, Fourth
Ward Alderman Justin Carlson, Fifth Ward Alderman Andre Powell, Sixth Ward Alderman Mike
Verbic, and Mayor Cohen Barnes. Second Ward Alderman Barb Larson and Seventh Ward
Alderman John Walker were absent.
2. Finance Advisory Committee (FAC)
City Clerk Hoey called the roll, and the following members of the FAC were present: Linda
Babcock, Paul Callighan, Lynn Neeley, and Brian Ohlinger. Greg Perkins was absent.
Mayor Barnes noted that Alderman Walker and Mr. Perkins had informed him in advance of
their absences.
Others in attendance included City Manager Bill Nicklas, Assistant City Manager Bob Redel,
Director of Financial Services Susan Hauman, Human Resources Director Michelle Anderson,
Public Works Director Andy Raih, Deputy Police Chief Jason Leverton, Senior Accountant
Meagan Challand, Planning Director Dan Olson, City Engineer John Laskowski, IT Director
Jeremy Alexander, Communications & Engagement Manager Scott Zak, and Recording
Secretary Ruth Scott.
C. APPROVAL OF THE AGENDA
MOTION: Alderman Smith moved to approve the agenda; seconded by Alderman Carlson.
VOTE: Motion carried by a 6-0-2 roll call vote of the City Council. Aye: Zasada, Smith, Carlson,
Powell, Verbic, Barnes. Nay: None. Absent: Larson, Walker. Mayor Barnes declared the
motion passed.
D. PUBLIC PARTICIPATION
Chad Glover, Executive Director of Opportunity DeKalb, thanked the Council for its past
support of the Breakthrough Business Academy and emphasized the importance of continued
funding.
Mayor Barnes asked City Manager Nicklas to revisit the topic during the budget discussion.
E. CONSIDERATION OF THE PROPOSED FY2026 BUDGET.
Mayor Barnes read the item by title only.
MOTION: Alderman Verbic moved to bring the item to the floor for discussion; seconded by
Alderman Powell.

Minutes of the Special Joint Meeting of the City Council and Finance Advisory Committee
November 17, 2025
Page 2 of 5

Prior to his overview, City Manager Nicklas said the proposed FY2026 budget document is
the result of many public meetings and a lot of staff effort. He noted the presence of some
omissions and errors in the document and thanked those who pointed them out.
City Manager Nicklas began the FY2026 budget presentation with an overview of the General
Fund, highlighting its strength and planned uses, supported by a spreadsheet of 2026
activities.
 $1.4 million for street maintenance
 $540,000 for equipment and vehicles
 Nearly $1.9 million for extra police and fire pension payments
 $2.3 million for bond debt service

In total, $6.16 million is planned to be used from the General Fund reserve.
City Manager Nicklas explained that the current level of General Fund reserve spending isn’t
sustainable long-term but is needed to meet obligations and maintain services. He noted that
pension costs are now spread across departments, making them less visible, and pointed out
that DeKalb does not levy taxes for debt service, unlike some other communities.
City Manager Nicklas then reviewed the City’s support for social service agencies, including
$300,000 in Human Services Funding grants and $400,000 in federal CDBG funds. He
referenced the funding request from Mr. Glover earlier in the meeting and asked the Council
for direction on including it in the FY2026 budget. He also noted that $50,000 remains in the
Emergency Assistance Fund and could be repurposed if needed.
Addressing Mr. Glover, Mayor Barnes recalled that two years ago the City contributed
$125,000 to Opportunity DeKalb to support the Breakthrough Community Business Academy.
The result of that investment, as he understands it, is the development of Breakthrough
DeKalb – an entrepreneurship program that stemmed from that original funding.
Mr. Glover explained that the City’s $125,000 helped start the Breakthrough Community
Business Academy, a 12-week entrepreneurship program. It has since grown into
Breakthrough Business, which includes the Academy, two years of business support, and
efforts to improve access to capital, especially for low- to moderate-income entrepreneurs.
The long-term goal is to support business growth and property redevelopment, following
successful models from other communities.
Mayor Barnes expressed willingness to contribute again. However, he stressed the need for
broader regional support, encouraging other communities and organizations to help fund the
program since it benefits the entire county.
Mayor Barnes also explained that this specific request is not included in the proposed budget
document, noting it was shared by email as a separate, one-time request.
Alderman Zasada suggested viewing the funding request in the broader context of the City’s
overall support for nonprofits, expressing interest in seeing a list of all current contributions to
such organizations to better understand how this request fits within the larger funding picture.
At this point in the meeting, FAC Chair Neeley and Mayor Barnes briefly discussed the funding
request, with Chair Neeley noting the FAC had not received any prior information. Mayor
Barnes clarified that the request had previously been brought before the Council by Mr. Glover,
who also provided supporting documentation via email.

Minutes of the Special Joint Meeting of the City Council and Finance Advisory Committee
November 17, 2025
Page 3 of 5

City Manager Nicklas directed the Council to page 151 of the proposed budget, highlighting a
$300,000 allocation for Human Services Funding under Contractual Services. He clarified that
this amount does not include the Opportunity DeKalb request. Instead, he pointed to a
separate $20,000 line item in the Community Development budget, which could be used to
support the request for one year without affecting human services funds. He added that this
amount had been set aside in anticipation of emerging needs.
Mayor Barnes confirmed support for including $20,000 for Opportunity DeKalb in the budget,
with $50,000 reserved for 2026 emergencies, subject to Council approval.
Alderman Verbic added that the City should consider supporting administrative costs based
on the number of DeKalb residents served.
City Manager Nicklas confirmed that updates will be made to the budget narrative and
spreadsheets. The revised budget will be distributed Thursday ahead of the November 24
hearing.
Mayor Barnes apologized to the FAC for the off-agenda discussion and confirmed the City’s
commitment to providing $20,000 to Opportunity DeKalb.
Alderman Verbic thanked City Manager Nicklas, saying the information provided was very
helpful.
Mayor Barnes also praised City Manager Nicklas for producing a clear, outstanding budget
and thanked him for his efforts.
City Manager Nicklas responded that it's the City's duty to make the budget understandable
and accessible, especially at the local level. He added that residents can find full details on
the City’s website.
City Manager Nicklas continued with the overview of the proposed FY2026 budget, covering
key funds and initiatives.
Special Revenue Funds
 GEMT Fund. Reimburses the City for ambulance service gaps, recovering most costs.
 Transportation Fund. A major $22 million federally funded bus facility will be built in 2026 to

support operations. Elburn route ridership has grown significantly.

 Motor Fuel Tax (MFT) Fund. $3.15 million will support street maintenance, funded by MFT,

Fund 400, and General Fund reserves.

Special Service Areas (SSAs). These funds maintain common areas in subdivisions where
HOAs no longer function, funded by a small extra tax on residents. Two larger SSAs were
highlighted:
 Market Square: Driving aisles to be resurfaced.
 Ridgebrook: Continued exterior improvements; funding reduced due to a healthy balance.

Tax Increment Financing (TIF) Funds
 TIF 3: Covers the downtown business district.
 TIF 4: Newest district. Some of the funds will be used for environmental studies on the

Protano site for which the City is seeking IEPA grants for full cleanup and redevelopment.

Minutes of the Special Joint Meeting of the City Council and Finance Advisory Committee
November 17, 2025
Page 4 of 5

Debt Service. The City has managed debt responsibly. The main current obligation is Fire
Station 4 ($400K/year). By 2030, it will be the only remaining bond, easing pressure on the
General Fund.
Enterprise Funds
 Water Fund: A recent study evaluated system capacity in light of new developments. More

updates are expected soon.

 Refuse & Recycling Fund: Operates with near break-even flow; a small surplus is projected.
 Airport Fund: Running a surplus for the third year. Upgrades include fencing, paving, and

snow removal equipment, supported by federal funding. Public Works Director Raih and
Airport Manager Ben Trompeter were recognized for their leadership and dedication to
ongoing improvements at the airport.

Internal Service Funds
 Workers’ Compensation & Liability Fund
 Health Insurance Fund. Well-managed with strong reserves.

Human Resources Director Anderson and her team were recognized for their work.
Pension Funds. Police and Fire Pension funds have been discussed in detail over the past
several months. It was noted that some figures require minor corrections. City Manager
Nicklas thanked FAC member Paul Callighan for identifying an error in the Fund Balance
Summary chart on page 21 of the proposed budget document and confirmed that an updated
version will be provided.
DeKalb Public Library. Though independent, the library is included in the City’s corporate
services. The City assists with finances, and their latest budget (including tax levy) is on page
268 of the proposed budget document.
Policies & Performance Measures. The City continues to earn the GFOA Distinguished
Budget Presentation Award due to its focus on metrics and accountability. Performance
measures begin on page 305 of the proposed budget document. Director of Financial Services
Haumann and her staff were recognized for their contributions.
Alderman Zasada expressed strong appreciation for the Performance Measures section and
commended City Manager Nicklas and his staff for consistently producing excellent budgets
over the years.
Alderman Smith thanked City Manager Nicklas for road and alley improvements. He also
asked for an update on progress with equipment needs, noting it's been one of his longstanding concerns.
City Manager Nicklas said they’re making headway on equipment and vehicles, especially for
departments like Streets. Fire is doing pretty well. He noted that costs are still a big issue –
one dump truck can cost a quarter million dollars, and prices keep going up. Some of that is
due to changes in the companies making these specialized vehicles, which are now often
owned by investors, not people with hands-on experience. That’s driving prices higher. So,
while progress has been made, rising costs in the last year or two have slowed things down
again.
Alderman Smith agreed, saying the City had been in a slump but has done a great job steadily
improving its equipment situation.

Minutes of the Special Joint Meeting of the City Council and Finance Advisory Committee
November 17, 2025
Page 5 of 5

Mayor Barnes acknowledged public complaints about road conditions but said he’s noticed
real improvement, especially compared to five to seven years ago. He praised the Council for
continuing to invest in roads and said those efforts are starting to make a visible impact. He
also expressed support for alley improvements, noting that some are in especially rough
shape.
Alderman Verbic asked for more details about the $250,000 budgeted for the 250th anniversary
of the United States in 2026. He wondered if there are plans to partner with other agencies to
share costs.
City Manager Nicklas said there are no firm plans yet for the $250,000 set aside for the event.
Discussions are ongoing, and the full amount may not be spent. No other agencies have
offered funding so far, and any spending decisions will come back to the Council for approval.
Mayor Barnes once again praised City Manager Nicklas and his team for their excellent work
on the budget and narrative.
F. ADJOURNMENT
MOTION – City Council: Alderman Carlson moved to adjourn the meeting; seconded by
Alderman Verbic.
VOTE: Motion carried by a 6-0-2 voice vote. Aye: Zasada, Smith, Carlson, Powell, Verbic,
Barnes. Nay: None. Absent: Larson, Walker. Mayor Barnes declared the motion passed.
MOTION - FAC: Ms. Babcock moved to adjourn the meeting; seconded by Mr. Ohlinger.
VOTE: Motion carried by a 4-0-1 voice vote. Aye: Babcock, Callighan, Neeley, Ohlinger. Nay:
None. Absent: Perkins.
The meeting was adjourned at 7:01 p.m.
Respectfully submitted,
_____________________________
Ruth A. Scott, Recording Secretary
Minutes approved by the City Council on November 24, 2025.
Minutes approved by the FAC on (pending).
Click here to view the agenda packet for the Joint City Council and FAC meeting of November
17, 2025.
Click here to view the video recording for the Joint City Council and FAC meeting of November
17, 2025.

MINUTES
CITY OF DEKALB
SPECIAL JOINT MEETING OF THE CITY COUNCIL & FINANCE ADVISORY COMMITTEE
AUGUST 17, 2026
The City of DeKalb City Council and Finance Advisory Committee convened for a Special meeting on
August 17, 2026, at the DeKalb Public Library, 309 Oak Street, DeKalb, Illinois.
A. CALL TO ORDER
Mayor Barnes called the meeting to order at 7:00 p.m.
1. City Council Roll Call.
City Clerk Brad Hoey conducted the roll call for the City Council. In addition to Mayor Barnes, the
following City Council members were present: Barb Larson, 2nd Ward Alderman; Tracy Smith, 3rd Ward
Alderman; Justin Carlson, 4th Ward Alderman; Andre Powell, 5th Ward Alderman; Mike Verbic, 6th Ward
Alderman; and John Walker, 7th Ward Alderman. Carolyn Zasada, 1st Ward Alderman, was absent.
Mayor Barnes noted that Alderman Zasada had notified him in advance that she would be unable to
attend the meeting.
2. Finance Advisory Committee Roll Call.
City Clerk Hoey conducted the roll call for the Finance Advisory Committee, and the following members
were present: Linda Babcock, Paul Callighan, Lynn Neeley, and Greg Perkins. Brian Ohlinger was
absent.
Others in attendance included Bill Nicklas, City Manager; David Byrd, Police Chief; Luke Howieson,
Fire Chief; Andy Raih, Public Works Director; Michelle Anderson, Human Resource Director; Matt
Anderson, Water Resources Director; Susan Hauman; Director of Financial Services; John Petragallo,
Building Services Director; Jeremy Alexander, IT Director; Meagan Challand, Senior Accountant; Shelly
Figgins, Senior Budget Analyst; and Ruth Scott, Recording Secretary.
B. APPROVAL OF THE AGENDA
MOTION: Alderman Smith moved to approve the agenda; seconded by Alderman Larson.
VOTE: Motion carried by a roll call vote of 7-0-1. Ayes: Larson, Smith, Carlson, Powell, Verbic, Walker,
Barnes. Nays: None. Absent: Zasada. Mayor Barnes declared the motion passed.
C. PUBLIC PARTICIPATION
There was none.
D. CONSIDERATIONS
1. Consideration of Key Assumptions for the Fiscal Year 2027 City Budget.
City Manager Nicklas thanked the City Council and Finance Advisory Committee (FAC) for adjusting
their schedules to allow for the 7:00 p.m. meeting start time, and recognized City staff for their work in
preparing the annual budget.
City Manager Nicklas provided opening comments on the proposed budget, outlining assumptions for
the general fund, reserves, and major capital funds. He reviewed the planned process for evaluating
revenues, expenditures, and capital projects, noting that staff will incorporate Council and FAC input
before the follow-up meeting with the FAC in mid-October. A final detailed budget review with both
bodies is scheduled for mid-November. He also suggested holding a strategic planning session next
spring to develop a five-year operating and capital plan to guide long-term decision-making.
City Manager Nicklas explained that several major revenue sources – particularly state-shared
revenues – are subject to reporting delays, so current projections rely on data through early spring and
historical trends. He reviewed general fund revenue assumptions, noting roughly 75% of general fund
revenue comes from major sources such as property taxes, sales taxes, utility taxes, state income tax,
investment interest, and grants.
Nicklas stated that while operating revenues and expenditures are balanced, significant capital needs
– including street maintenance, vehicle replacements, and technology upgrades – will require use of

Minutes of the Joint City Council & Finance Advisory Committee Meeting
August 17, 2026
Page 2 of 4

the general fund reserve. Pension costs are also expected to increase due to additional staffing, with
an anticipated shortfall of just under $2.5 million to be covered by reserves if the levy rates remain flat.
He highlighted the substantial impact of META’s assessed valuation on keeping property tax rates
stable, and reviewed future growth expected from developments such as Kraft Heinz, Goodyear, Project
Midwest, and Pilot. Nicklas recommended using “Option C” for the levy, which maintains a steady tax
rate and avoids increasing residents’ out-of-pocket costs (reference page 8 of the agenda packet).
There was brief discussion between Mayor Barnes and City Manager Nicklas regarding the proposed
levy. The Mayor confirmed that the county’s Supervisor of Assessments is projecting a 7% increase in
property values. Under the City Manager’s recommended approach – maintaining the same levy
amount – this increase in value would lower the City’s tax rate, resulting in no additional dollar cost to
taxpayers. Nicklas noted that while this keeps bills flat for residents, it reduces the revenue available
for police and fire pension obligations, creating a gap that must be covered by reserves. He also stated
that the estimate is conservative because it does not include any new construction value that will likely
be added.
City Manager Nicklas asked Building Services Director Petragallo for the number of new single-family
homes built so far this year, and Director Petragallo reported 10. Nicklas noted that this added value
will improve the overall equalized assessed valuation (EAV) and help offset the conservative levy
estimate. He then transitioned the discussion to income tax and state sales tax projections.
Alderman Larson asked whether the projected downward trend in the general fund reserve accounted
for new development coming online, such as Kraft Heinz. City Manager Nicklas confirmed that even
with anticipated growth, the reserve is still expected to decline, though additional valuation may soften
the rate of decrease.
City Manager Nicklas reviewed remaining general fund revenue assumptions. He noted projected
increases of approximately 3.4% for state and home-rule sales taxes, and about 5% for municipal utility
taxes, with further growth expected as new businesses come online. He also discussed state income
tax distributions, explaining the long-standing reduction from the original 10% share established
decades ago to the current 6.47%. He credited advocacy efforts for preventing deeper cuts but
emphasized that future increases are unlikely given the State’s budget constraints. Nicklas concluded
by stating these assumptions form the basis of the general fund revenue outlook.
FAC Member Callighan asked whether the Illinois Municipal League (IML) might pursue pension reform
under new leadership. City Manager Nicklas responded that the outgoing director had been a strong
advocate, and the IML, along with other statewide partners, continues to work with legislators and
pension boards on potential solutions. He noted that meaningful reform will require compromise and
likely several years of effort. Nicklas added that DeKalb is in a stronger fiscal position than many
municipalities, but pension funding pressures remain significant due to the state’s amortization schedule
and overall budget challenges.
Mayor Barnes noted that the IML continues to list the police and fire pension crisis as a top legislative
priority each year, but efforts have not yet resulted in state action. He shared recent conversations with
the Governor expressing concerns that the current mandate of 90% funding by 2040 is unsustainable
and could lead to municipal insolvency across Illinois if reforms are not made. Barnes emphasized that
widespread advocacy is occurring, but legislative movement has not yet taken place.
City Manager Nicklas reviewed general fund expenditures, noting that approximately 80% of costs are
tied to personnel, including salaries, benefits, insurance, and pensions. He outlined recent staffing
increases in police and fire driven by service needs and stated that Public Works will add a maintenance
position later in FY2027, pending revenue trends. He reported significant increases in health insurance
premiums for both PPO and HMO plans and noted that the City’s general obligation debt will decrease
substantially over the next three fiscal years, improving long‑term budget flexibility. He summarized
FY2027 capital needs funded through the general fund reserve, including financial software
replacement, City Hall improvements, Fire Station 1 facility upgrades, IT and police software updates,
street maintenance, vehicle replacements, and equipment for Police and Public Works. The projected
reserve impact is approximately $2.1 million.
Alderman Verbic asked whether the City remained short‑staffed given roughly $2 million in overtime
across departments. Nicklas stated staffing levels are adequate, and overtime is typical in 24/7
operations due to minimum staffing requirements, leave coverage, and public safety demands. He
noted overtime should stabilize once Fire Station 4 is fully staffed.

Minutes of the Joint City Council & Finance Advisory Committee Meeting
August 17, 2026
Page 3 of 4

Alderman Smith acknowledged the need for upgraded fire facilities due to increasing numbers of female
firefighters. Nicklas agreed, explaining that current facilities are insufficient, and improvements are
required to ensure equitable access and meet legal standards.
Smith also asked whether transit personnel costs are reimbursed. Nicklas confirmed that transit
positions are funded through the transit fund, supported by federal sources, resulting in strong federal
financial support for the City’s transit operations.
City Manager Nicklas provided an overview of the capital funds, explaining that Motor Fuel Tax (MFT)
revenue remains flat at about $1.8 million due to reduced fuel consumption despite higher gas prices.
The City receives approximately $1 million annually from State MFT for street maintenance,
supplemented by $750,000 from the local MFT fund, which is generated by the City’s 9.5-cent local gas
tax. These funds support road repairs as well as airport needs and vehicle replacements. Additional
general fund support will be used for capital projects, including software upgrades, building
improvements, and facility upgrades, contributing to a total of roughly $3 million in planned street
maintenance.
Nicklas noted that the upcoming street condition index, expected later this year, will guide future
prioritization of road improvements. Council members discussed the impact of new development on
MFT revenues. Mayor Barnes commended staff for securing the future Pilot truck stop, stating it will
substantially increase fuel tax revenue from non-residents. Alderman Carlson noted that communities
like Rochelle benefit from multiple truck stops, and DeKalb will see similar gains as industrial growth
continues.
Mayor Barnes remarked that the FY2027 budget shows a natural operating surplus of roughly $781,000,
but planned capital transfers of $2.9 million from reserves result in a negative balance for the year – a
strategic choice similar to the school district’s planned deficit approach. He emphasized that using
reserves allows the City to maintain funding for roadwork and critical upgrades without increasing the
tax levy.
Nicklas reaffirmed that the recommended levy holds the total amount constant from the prior year,
clarifying that the proposal does not eliminate the levy but avoids any increase. He emphasized that the
general fund reserve consists of taxpayer resources held in trust and should be used when
circumstances warrant. Mayor Barnes agreed, noting that the City’s strong reserve position enables
DeKalb to shield residents from higher tax burdens even as property values and pension obligations
rise. He further suggested that other taxing bodies might adopt similar strategies to help residents
manage increasing overall tax pressures.
Alderman Walker asked how the school district could report a deficit given major south-side
development and increasing revenues, questioning why their financial position appears strong while the
City faces pressure from pension costs. City Manager Nicklas explained that assessed valuation
fluctuates annually based on equalization factors and new development, creating variability (“flutter”)
across all taxing bodies. He noted that large projects like META provide substantial, stable valuation
that benefits every district.
Mayor Barnes added that the school district’s deficit is intentional, as they are using reserves –
previously around $70 million – to fund projects. He emphasized that the district receives roughly $19
million annually from META and has also partnered with the City to reduce the tax rate.
Alderman Verbic spoke about the long-term “slope” of declining reserves and urged early discussions
about modest reductions in expenses (e.g., 1% or 0.5% annually) to avoid future layoffs, citing prior
experience on the school board where delayed action led to larger cuts. City Manager Nicklas
responded that departments already limit non-personnel budget increases to under 0.5% per year and
regularly examine staffing and service levels, starting each budget cycle by identifying needed
reductions before aligning spending with revenues.
Alderman Carlson shared concerns that residents in the Fourth Ward have not seen recent street or
infrastructure improvements despite generating significant revenues, and said frustration is increasing.
Alderman Larson agreed and said this underscores the need for a five-year plan to ensure continued
progress in streets, vehicles, and staffing so future councils do not fall behind again.
FAC Chair Neely raised street conditions as a major concern, noting many are at failure level and
suggesting a possible increase in home-rule sales tax dedicated to streets. She emphasized such an
increase would not affect essential goods and would generate about $1.5 million annually for street

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August 17, 2026
Page 4 of 4

improvements. Mayor Barnes stated he is not comfortable raising sales tax and prefers growing revenue
through economic development. City Manager Nicklas said the idea could be fully evaluated during a
spring strategic planning session, once the City receives the updated street condition index.
Alderman Smith said residents frequently cite road conditions and speeding as top concerns, and a
long-term strategy is needed once data is available. He also noted DeKalb is ahead of state
requirements in replacing lead service lines, with strong IEPA and federal funding support – an area
where the general fund should not be used.
Mayor Barnes asked for confirmation of overall levy direction, stating the proposal is to hold taxpayers
harmless by keeping the levy flat despite rising home values. There appeared to be majority support
for using reserves to offset higher expenses rather than increasing the levy.
Alderman Larson requested clearer public communication explaining assessments, levy impacts, and
COVID-era spending freezes. Alderman Walker and Alderman Larson praised staff for providing clear
financial information and consistent operational support. The City Manager agreed to improve publicfacing explanations and highlighted how recent industrial development has expanded the tax base and
strengthened long-term financial stability.
E. ADJOURNMENT
MOTION – Finance Advisory Committee: FAC Member Callighan moved to adjourn the meeting;
seconded by FAC Member Babcock.
VOTE: Motion carried by a 4-01 roll call vote. Ayes: Babcock, Callighan, Neeley, Perkins. Nays:
None. Absent: Ohlinger. The motion was declared passed.
MOTION – City Council: Alderman Larson moved to adjourn the meeting; seconded by Alderman
Verbic.
VOTE: Motion carried by a 7-0-1 roll call vote. Ayes: Larson, Smith, Carlson, Powell, Verbic, Walker,
Barnes. Nays: None. Absent: Zasada. Mayor Barnes declared the motion passed and adjourned the
meeting at 8:38 a.m.
Respectfully submitted,
_____________________________
Ruth A. Scott, Recording Secretary
Minutes approved by the City Council on August 24, 2026.
Minutes approved by the Finance Advisory Committee (pending).
To view the agenda packet for the August 17, 2026, Special Joint Meeting of the City Council and
Finance Advisory Committee, click here.
To view the video recording of the August 17, 2026, Special Joint Meeting of the City Council and
Finance Advisory Committee, click here.