'Rapid' economic recovery fueling strong budget numbers for Naperville

Citing a recovery from the financial ramifications of the COVID-19 pandemic, Naperville budget officials are projecting revenues to far exceed spending for 2021.

Budget Manager Ray Munch told city council members the favorable news was based on preliminary numbers from the year-end audit. He said revenues across the city's three main funds - maintenance and operating; capital and debt service; and special funds - were expected to reach nearly $475 million while expenditures will be at about $442 million, creating a projected surplus in those funds of roughly $33.4 million.

"Rapid economic recovery fueled very strong revenue performance in 2021, and our spending was aligned with budget projections across most every category," Munch said. "When you combine these two factors, the result is continued improvement in the city's overall financial position."

Munch said the city experienced nearly across-the-board revenue increases last year. Money from state-shared sales and income tax increased by more than 20% compared to 2020 numbers. Home-rule sales tax revenue increased by 24% to $15.8 million, and food and beverage tax revenue increased by 39% to $5.3 million.

While hotel and motel tax money increased from 2020, the amounts still haven't recovered from pre-pandemic levels and were down by 50% compared to 2019. The most significant increase in tax revenue came from real estate transfers, which saw a 74% increase to $7.4 million.

Spending was at or below budget in most categories, including capital expenses. The $50 million spent on construction was about 60% below the budgeted amount due to project deferrals and preferable bids for 2022.

The Washington Street bridge and the North Aurora Road underpass projects were among the capital expenses delayed and budgeted for 2022.

"We also benefitted in several projects on some very favorable bid pricing last year," Munch said. "The annual street maintenance program was one that came in significantly under budget based on good pricing."