Large construction projects headline Yorkville’s $26 million proposed budget

A public hearing was held for Yorkville’s $26 million fiscal year 2026 budget proposal on March 25. The proposal, which includes a five-year budget projection, is slated for approval by the end of April.

The budget contains no proposed changes in any taxes or fees or any alterations in infrastructure fees. However, water bills are expected to increase 20% annually for several years to help pay for the $100 million Lake Michigan water project construction. The city will first receive Lake Michigan drinking water in 2028.

“Even with a record number of capital projects and expenditures, the city’s five-year financial outlook is very strong,” City Administrator Bart Olson said. “We’re paving more than 11 miles in roads, and we’re doing almost $6 million in water main replacement for the Lake Michigan project and funding the first part of the project. We’re expanding water and sewer with funding from data center developers, and we’re starting construction on our $30 million Public Works and Parks maintenance facility.”

Olson said the five-year budget outlook has improved from last year’s due to another year of better than expected general fund and aggregate city budget fund balance. The results are strengthened by the signifiant increase in capital projects and city-purchases.

“The biggest external threat to the city’s financial stability is a broader national economic downturn,” Olson said. “Mass federal layoffs are occurring, federal programs are being cut or frozen, tariffs are being broadly applied to many countries, and the stock market has shed its post-election gains.”

Olson said the city’s five-year financial projection could change if any of the external threats result in a recession, a significant reduction in consumer spending, a housing market downturn or a pullback in AI and tech investment.

Specific city projects, like the planned special census, that would have generated more than $1 million annually for the city and helped the city achieve home-rule status, have been held up by federal hiring freezes.

The city is also keeping a close-eye on any State of Illinois actions regarding potential upcoming reductions or proposed cuts in the Local Government Distributive Fund that could impact some of Yorkville’s larger revenue streams. So far, Gov. JB Pritzker’s administration has not proposed any cuts.

“Despite those threats, the city’s budget is still strong and includes cost controls through management actions, conservative revenue projections, including deferring all revenue estimates on Costco and data centers, and a healthy fund balance,” Olson said.

Large capital projects within the proposed budget include the $1.6 million Road to Better Roads program and the $4 million subdivision paving program. The city is also spending $740k on a water meter replacement program and $450k on sidewalk replacements.

Olson said the general fund for fiscal year 2026, which includes most of the city’s operational expenditures like police services, building inspections, and street department maintenance is proposed to break even without a surplus or deficit.

The aggregate fund, which is all funds combined, is shown to be a $45 million deficit, with the city taking out loans for construction on the Lake Michigan water supply project and the Public Works and Parks maintenance facility. The city will incur the expenditures in fiscal year 2026.