The annual financial trends report for the Town of Normal shows a largely positive picture. The town says most of its leading indicators are healthy, though there are a couple things to watch.
The town has had two gangbuster years of growth in overall property values. Assessed value grew by a couple hundred million dollars last year alone.
City Manager Pam Reece said a significant chunk of that is from expansions to the Rivian auto plant, although the housing shortage Rivian growth helped cause also has contributed to a huge run-up in residential assessments.
"It's a good story and a not-so-good story when you look at both sides of the equation. The more we can move some of that burden to commercial-industrial-manufacturing, the better impact it has on residential," Reece said on WGLT's Sound Ideas.
Half of last year’s boost is from residential growth, largely from home renovations and increased assessments. But $58 million comes from new industrial growth largely attributed to expansions of the Rivian plant. The rest is commercial sector development or renovation.
In the last 10 years, industrial property value has moved from less than 2% of total assessed value to nearly 12% of the town total.
Financial trend indicators
Among the things to watch is that sales tax receipts last year were a little less than expected. So far, Reece said this year that category of revenue looks good.
"Our sales tax are performing pretty well, right on where we feel comfortable with our budget," she said.
She said local sales tax last year rose, but state shared receipts were not as healthy, perhaps because residents put off purchases of large goods like cars and appliances the state taxes, but the municipality does not.
Town debt continues to ebb. Reece called it a “really good story.”
"In nine years, we've paid off $30 million of our debt. It shows that we're doing what we're saying we're going to do. We're being strategic and thoughtful on when we issue debt and how we pay it off. In 2016, we were at about $94 million in debt overall. And come fiscal year end 2025 so spring of 2025 we're down to $64 million," said Reece.
The town's chief financial officer, Andrew Huhn said Monday town debt will rise at some point. He said there are some things on the horizon, though Reece said those are not yet certain enough to identify.
“We're going to lay out our capital investment plan, and as we prioritize projects, one of the formulas of a capital project is, how do we pay for it? We've been talking with council for the last few years, in particular, about the cost of our assets, what it takes to invest in our capital assets ... that comes a discussion with council on setting aside a revenue stream to make sure we make our debt service obligations,” she said.
The trends report indicate there is some caution about the town’s ability to keep targeted fund balances during the out years of the projection. Present estimates are there will be adequate reserves in various funds through the five-year period.
“But we also know the cost of doing business goes up, and that we will want to invest in some capital needs," said Reece. "We do have parks and facilities and things like that that we want to continue to improve and invest in. We've adopted some redevelopment agreements that are going to require some financial investment in the future.”
Reece said the cautious projection is an attempt to “plant a seed with the council” members will remember when they see the budget for the next fiscal year.
There is some uncertainty in the economy, a soft labor market, uncertainty over tariffs, interest rates, though the Fed just cut the prime rate a quarter point. Reece said staff tries to account for external factors during budget planning.
“Particularly on the general operations side. The cost of utilities … we're paying increased electric utility rates, like many people are being burdened with. The water department, we pay $750,000 to nearly $1 million a year just for electricity alone. When those rates go up, it is costly to all our water customers."
She said the signals from the broader economy now do not telegraph any particular need to tighten belts or not in the next budget year.
