While there are still loose ends to tie up, preliminary data indicates the city of Naperville’s finances in the past fiscal year exceeded expectations on both sides of the financial ledger, based on a report given at a Tuesday, March 4, city council meeting.
Finance Director Raymond Munch gave the council a glimpse into the final numbers from last year’s municipal budget, which remains preliminary.
“There will continue to be minor changes to the numbers presented as the city continues to pay outstanding 2024 invoices and finalizes year-end accounting entries in preparation for the annual financial audit,” Munch said.
Munch also gave the council a glimpse into how this year’s financials are shaping up and briefly discussed planning for the 2026 fiscal year budget.
‘Favorable economic conditions’ in 2024 for Naperville
In a memo written up prior to the presentation at the council meeting, Munch said broader economic forces had a positive impact on Naperville’s municipal budget from the past year.
“In 2024, the city benefited from generally favorable economic conditions,” Munch wrote in the memo. “Strength in the state and local economies supported general operating revenues that met or exceeded expectations in most cases.”
While the overall financial picture was positive, Munch said pandemic-related realities had impacted the budget, from both a revenue and expenditure standpoint.
“As staff expected, the sharp revenue growth rate of the pandemic years, partly fueled by inflation and changing consumer behaviors, began to slow down,” Munch said. “Historically high inflation subsided throughout the year and ended 2024 below 3% nationally.”
As for municipal expenses, Munch said, “In some areas, including utility equipment and capital construction projects, ongoing supply constraints and resource competition continued to drive higher prices. Those challenges remained manageable, and the city’s overall financial outcomes were positive.”
A look into the specific numbers
While the overall fiscal picture in 2024 was good for the city, Munch and other municipal officials shed light on some specific areas of the municipal budget that over-performed and under-performed as the final figures come into sharper focus.
Stated shared revenue — a bucket that includes sales tax, income tax and state motor fuel tax — continued a positive trajectory from 2023 figures. Income tax revenue, for instance, was 6.3% higher in the unofficial 2024 numbers, compared to 2023. The $25.4 million in revenue derived from that source also was higher than the $25.1 million earmarked in the original draft of the 2024 budget.
Some categorical areas jumped by double-digit figures in yearly comparisons. The $1.2 million collected in commuter parking, for instance, was a 68.8% increase from 2023, though Munch noted that figure “is coming from a significant area of weakness,” due to the falloff from the pandemic in prior years.
Most of the city’s 2024 expenses also rose in yearly comparisons as inflationary forces remained in play. This was especially true in the area of healthcare claims.
Medical claims, for instance, rose 11.3% from 2023. The preliminary $14.2 million cost to the city also came in higher than the $12.4 million that was earmarked in the preliminary 2024 budget.
The present and future of Naperville’s finances
Building permit revenue has been one area of particular strength within the Naperville’s municipal budget — a reflection of the ongoing development projects taking place across the community.
According to the preliminary 2024 figures, the city’s building permit revenue rose 56%. Additionally, the $2.2 million nearly doubled the $1.3 million that was placed in the preliminary 2024 draft of the budget.
Bill Novack, director of the city’s transportation, engineering and development department, said he anticipates the positive trajectory continuing throughout the current fiscal year.
“We’ve been seeing our numbers go up each year,” Novack said. “We know there are lots out there being platted. I see it continuing into 2025.”
Discussions on addressing one of the lingering concerns for the 2026 municipal budget will begin taking place next month. The 1% grocery sales tax will be ending at the end of this calendar year, per state law, which could impact the amount of revenue the city is able to collect.
“We’re getting close to discussing how we might address that issue,” Munch said.
Munch said the city’s Financial Advisory Board will begin digging into the issue in April with possible recommendations to the city council this summer as budget planning gets underway for 2026.
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