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Elgin’s proposed city budget last week spelt out conservative spending, a modest surplus and careful use of reserves amid rising costs.
Interim City Manager Isaac Turner and Human Resources Director Pam Sanders, also serving as acting finance director, presented the $16.7 million plan to City Council at its July 15 meeting.
The document outlines revenue and expenditure projections for the current cycle and plans for the 2025–26 fiscal year, beginning Oct. 1.
BUDGET BASICS
City officials estimate that Elgin will have collected $16.79 million by the end of the current fiscal year, with $16.17 million in expenses — a projected $619,743 surplus. Next year’s forecast projects $16.74 million in revenue and $15.78 million in expenses, leaving a base surplus of $955,468.
However, once budget adjustments are factored in, the surplus narrows considerably, Turner said.
“Bottom line, the amounts that would go into fund balance, or reserves, was $372,000 in 24–25 if projections hold and then $122,000 for the next fiscal year,” he said.
Turner said staff had identified four capital projects that weren’t correctly paid for using project-specific funds and were able to return $814,000 to this year’s general fund. Along with $200,000 from last year’s unencumbered funds, the current reserves initially totaled $1.47 million.
Of that, city staff allocated $1.1 million toward the 2025–26 contingency fund to help alleviate pressure from rising costs — primarily a large increase in EMS expenses.
RESHAPING PRIORITIES
EMS costs jump dramatically in the proposed budget, from $111,600 this year to $1.29 million next year.
“We knew we were going to take a big hit on the EMS in the second year,” Turner said. “So we reserved some of the money from the fund balance … to cushion that $1.3 million.”
A cost-of-living adjustment valued at $285,663 is scheduled to begin in January 2026, and health insurance premiums are expected to rise by 8%, adding about $59,177 to the city’s costs, budget records show. A $50,000 compensation study was also included this year to help inform future salary adjustments.
Turner said a multi-year plan may be needed to help Elgin align salaries with the market.
CAUTIOUS SPENDING
Turner urged council members to remain conservative in their expectations for available funds, emphasizing that the city’s unassigned reserves — while helpful for stabilizing the budget now — should not be assumed as available until later in the fiscal year.
He said the reserve total shown in the budget includes some funding that cannot yet be allocated with confidence. Once actual revenues and expenditures stabilize, and with updated financial oversight in place, the city can revisit how to distribute surplus amounts.
“When the decisions are made to divide up that pool of money, you will undoubtedly end up with a bit more fund balance for both the general fund as well as the utility fund,” Turner said. “But we’re having to pretend as though that doesn’t really exist right now.”
Turner added that leaving those decisions for midyear — when a new city manager and finance director are expected to be in place — would give the city’s incoming leadership the opportunity to shape the financial strategy moving forward.
“They’re the ones that are going to have to live with it,” he said.
DEFERRALS AND TRANSPARENCY
Council members also received a “workbook” with summaries of departmental requests not currently funded in the budget. These include proposed additions across operations, capital needs and personnel.
According to Sanders, each request includes backup documentation justifying the proposal for when midyear funding discussions resume.
“At that point, you’ll be able to look at where you’re at budget-wise, what you want to put into fund balance and what you want to allocate to new projects based on city goals,” Turner said.
During public comment, resident Brenda Pena urged city leaders to improve financial transparency and provide clearer explanations of spending practices.
“I just think we need to monitor that closely, to where if people have concerns, it’s transparent and they can find it regularly,” she said, calling for greater oversight of city vehicle and gas card usage.
The proposed and final budget documents are available on the city’s website, and printed copies were delivered to the Elgin Public Library. Additional budget meetings and hearings will take place in the coming weeks.
