Aurora facing preliminary $14 million deficit as it begins putting together proposed 2027 budget, officials say

Aurora is beginning to put together its proposed 2027 city budget, which faces a preliminary projected deficit of $14.3 million in its general fund, city officials said.

That projected deficit is subject to change and does not take into account delayed sales tax revenue and possible additional gaming revenue that’s expected later this fall, said Aurora Chief Financial Officer Stacey Peterson at a finance committee meeting July 30.

By September, the city will have received two more months of sales tax revenue and will then have a more complete picture of this year’s budget as it formulates its plan for 2027, Peterson said.

Aurora Mayor John Laesch said the city’s budget is still unhealthy, and the city is not out of the woods yet after what he called a budget crisis last year that led to funding cuts. City officials said the deficit stood at $29.7 million at the beginning of the 2026 budget process.

Officials said they plan to keep city expenditures tight again in 2027.

“In 2027, there will be an ongoing effort to structurally balance the budget and rightsize operations to adjust for changing revenue streams,” Laesch said.

What’s more, Peterson said she is concerned the city could reach a potential budget gap of $28.5 million by 2031 due to increasing costs for salaries and other expenses.

In the next few months, city officials and staff plan to figure out the proposed expenditures for 2027, including department budgets, staffing costs, capital projects and more.

Peterson said these proposed budgets, along with adjustments for employee and retiree health insurance and ongoing negotiations between two labor unions, could impact the city’s finances for 2027.

Peterson said the city aims to eventually have a small surplus in the general fund if revenues come in as anticipated and if city departments spend responsibly.

“We know that we’re not going to be going on a shopping spree but we’re going to be maintaining, continuing to tighten the belt until things get better,” said Alderman Daniel Barreiro, 1st Ward, at the committee meeting.

Among cost concerns, Laesch said, is funding to maintain two parking garages the city is set to inherit in 2027, along with funding for ongoing capital projects.

Laesch also said there were some unexpected costs this year for some city divisions such as Street Maintenance due to multiple rounds of severe storms that hit Aurora.

On top of that, he said the Development Services Department sustained higher than expected costs due to inspections for the new Hollywood casino, previously approved data centers that were being built, the DAC Development and the expansion at RiverEdge Park.

But the Development Services Department is easier to fund, he said, because that department generates revenue from charging fees for services such as building permits and inspections.

Although the police and fire departments sustained funding cuts last year, Aurora Fire Department officials said last Friday call response times improved this year. The cuts last year that included eliminating some positions prompted some concern about the quality of those services.

Fire department officials attributed improved response times to the opening of two fire stations in March — Fire Station 13 at 1701 Bilter Road and the relocated Fire Station 9 at 500 N. Eola Road.

“We expect that trend to continue once construction on Station 4 is completed,” said interim Aurora Fire Chief Kevin Nickel.

All city departments saw some funding cuts in the approved budget last year, which included the elimination of around 140 city positions. Some of those positions were not filled after people left for other jobs or retired.

Officials said the funding cuts last year were due to structural issues with past years’ budgets. For years, Aurora had spent more than it brought in, and money was moved from long-term needs to cover operational costs, according to Aurora Director of Fiscal Integrity and Operations Management Brian Caputo.

The city made efforts last year to replenish long-term funds and plans to continue doing so this year, Laesch said.

Last year, the city had to borrow close to $120 million to pay for the construction of three fire stations, the RiverEdge Park renovations, the new public works facility, the expansion of Farnsworth Avenue and Bilter Road related to the casino development and other ongoing projects.

The city also made an effort to pay off two lines of credit last year that had remained as liabilities, according to Peterson.

Some city officials remain optimistic the city could receive additional revenue from the newly-opened Hollywood Casino and through a special census that began in late July.

The city’s 2025 audit released in late July anticipated the new casino “will have a positive impact on gaming, sales, hotel and food and beverage taxes in the city.”

The city also launched its long-awaited special census, aiming to correct a perceived undercount in 2020 that officials have said cost Aurora roughly $4.3 million annually in federal and state funding.

Residents living within the boundaries of the special census areas can follow the mailed instructions and submit census responses online until Aug. 24. After that, the U.S. Census Bureau plans to send field workers to gather responses from the households that didn’t respond to the online census, according to city officials.

Peterson will give the city council finance committee an update in September on sales tax revenue, and revenue associated with the new Hollywood Casino resort. Staff will present the overall proposed budget to the city council by Oct. 15.

awright@chicagotribune.com