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8.
9.
CITY OF
WEST CHICAGO
WHERE HISTORY & PROGRESS MEET
FINANCE COMMITTEE
MONDAY, JUNE 2, 2025
6:00 P.M. — CITY COUNCIL CHAMBERS
AGENDA
. Call to Order, Roll Call, and Establishment of a Quorum
Selection of a Chair and Vice-Chair
. Approval of Minutes
A. Finance Committee Meeting Minutes of March 3, 2025
B. Finance Committee Executive Session Minutes of March 3, 2025
Public Participation / Presentations
. Items for Consent
Items for Discussion
A. Elimination of the State Grocery Tax
Unfinished Business
New Business
Reports from Staff
10. Executive Session (if needed)
11. Adjournment
475 Main Street T 630.293.2200
West Chicago, Illinois F 630.293.3028
60185 westchicago,org
Daniel Bovey
Tia Messino
INTERIM

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DRAFT MINUTES-
Pending Approval
CITY OF WEST CHICAGO - 475 Main Street
FINANCE COMMITTEE MINUTES
Regular Meeting
March 3, 2025
. Call to Order, Roll Call and Establishment of a Quorum
Alderman Dimas called the meeting to order at 6:00 p.m. on March 3, 2025. Roll call
found Daniel M. Beebe, Christine Dettmann, Sandy Dimas, Jayme Sheahan, Rebecca
Stout and Chris Swiatek present. Alderman Joseph Morano was absent. Alderman
Dimas announced a quorum.
Staff in attendance: City Administrator Michael Guttman, Assistant City Administrator
Tia Messino and Finance Director Nikki Giles.
. Finance Committee Meeting Minutes of December 2, 2024.
Alderman Swiatek made a motion, seconded by Alderman Stout, to approve the
minutes of December 2, 2024. Voting Aye: Alderman Beebe, Dettmann, Dimas,
Swiatek, Stout and Sheahan. Voting Nay: 0. Absent: Alderman Morano. Motion
carried.
. Public Participation / Presentations. None
. Items for Consent
A. Resolution No. 25-R-0019 — VEBA — Group 2
B. Resolution No. 25-R-0020 — ERI Program
C. Resolution No. 25-R-0021 — Amortization Schedule
D. Resolution No. 25-R-0022 — Authorizing Mayor to Sign Engagement Letter with
Auditors for Fiscal Years 2025, 2026, and 2027
Alderman Swiatek moved and Alderman Stout seconded a motion to approve the
Consent Agenda. Voting Aye: Alderman Sheahan, Dimas, Dettmann, Beebe,
Swiatek and Stout. Voting Nay: 0. Absent: Alderman Morano. Motion carried.
. Items for Discussion. None
. Unfinished Business. None
. New Business. None
. Reports from Staff. None
. Executive Session (if needed).
A. Land Acquisition — 5 ILCS 120/2 (C) (5) (6)

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B. Litigation — 5 ILCS 120/2 (C) (11)
C. Personnel Matters — 5 ILCS 120/2 (C) (1)
D. Review of Official Record
City Administrator Guttman informed there is a need for an Executive Session
regarding Personnel Matters — 5 ILCS 120/2 (C) (1). City Administrator Guttman
informed there is no final action required so the Committee is welcome to adjourn into
Executive Session.
10. Adjournment.
At 6:03p.m., Alderman Dettmann made a motion, seconded by Alderman Sheahan,
to adjourn the meeting into Executive Session. Voting Aye: Alderman Dettmann,
Dimas, Beebe, Sheahan, Stout and Swiatek. Voting Nay: 0. Absent: Alderman
Morano. Motion carried.
Respectfully submitted,
Josie Avilez

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CiTyY OF
WEST CHICAGO
WHERE HISTORY & PROGRESS MEET
TO: Finance Committee Members
FROM: Nikki Giles, Finance Director
DATE: June 2, 2025
RE: State Grocery Tax Elimination
Background and Financial Impact:
On August 5, 2024, Governor Pritzker signed into law Public Act 103-0781, codified as 65 ILCS
5/8-11-24, which eliminated the statewide 1% tax on groceries, effective January 1, 2026. While
the law eliminated the Statewide tax, it granted both home rule and non-home rule municipalities
the authority to implement a local 1% grocery tax by Ordinance. The projected annual financial
loss of General Fund revenue to the City of West Chicago from the repeal of this tax is
$425,000.00.
Revenue Options for Discussion
Implement a Local Grocery Tax
The City may implement a 1% municipal grocery retailers’ and service occupation tax
(“municipal grocery tax”), which would apply to gross receipts on the sale of groceries at retail
and the sales of service that include the transfer of groceries as an incident to the sale of service.
The State has defined groceries as “food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages, food consisting of or infused with
adult use cannabis, soft drinks, candy and food that has been prepared for immediate
consumption)”. The State of Illinois will administer the municipal grocery tax for all
municipalities that have adopted one. Should the City Council wish to implement this tax, a copy
of the Ordinance enacting a 1% municipal grocery retailers’ and service occupation tax would
need to be filed with the Illinois Department of Revenue prior to October 1, 2025, to ensure an
effective date of January 1, 2026. The anticipated revenue would be approximately $425,000.00.
As of May 15, 2025, 187 municipalities have chosen to implement a local grocery sales tax,
including the following DuPage County communities: Batavia, Carol Stream, Downers Grove,
Elk Grove Village, Glen Ellyn, Schaumburg, Westmont, and Wheaton. Communities that have
declined to implement a local grocery sales tax include Naperville and Crystal Lake, which
either opted to increase, or recently had already increased, their Home Rule Sales Tax rate
instead. Bartlett and Streamwood have also declined at this time, citing sufficient revenue
streams from other sources.
475 Main Street T 630.293.2200 Daniel Bovey
West Chicago, Illinois F 630.293.3028 ;
60185 hi Tia Messino
westchicago.org INTERIM CITY ADMINISTRATOR

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Home Rule Sales Tax Increase
The City’s current Home Rule Sales Tax rate is 1.50%, with all proceeds deposited into the
Capital Projects Fund. The rate was last increased from 1.0% in 2023 to fund the principal and
interest associated with the upcoming bond issuance for industrial roadway improvements. Home
Rule Sales Tax is applicable to the same general merchandise items subject to sales tax. It does
not apply to most groceries, prescription medicine and other non-taxable medical items, vehicles,
and titled property. Should the City Council wish to increase the City’s Home Rule Sales Tax
rate, a copy of the Ordinance increasing the rate would need to be filed with the Illinois
Department of Revenue prior to October 1, 2025, to ensure the effective date of January 1, 2026.
The Home Rule Sales Tax may only be adjusted in %% increments. The anticipated revenue
from a one-quarter percent increase in the home rule sales tax rate would be approximately $1.2
million. If this option is chosen, the City Council could then decide what to do with the monies
received in excess of the $425,000, adjusted annually for COLA etc. or adjust other revenue
sources downward, or some combination of these two options.
Expenditure Reduction Options for Discussion
The State’s elimination of its Grocery Tax presents a long-term structural budgeting challenge
for local governments. Because the resulting revenue gap is ongoing, short-term fixes such as
one-time transfers or cuts are not sustainable solutions. The Finance Committee has previously
advised staff to avoid relying on temporary measures when addressing recurring financial
shortfalls.
That said, there are a few annual expenditure eliminations/reductions that may want to be
considered, as follows:
e There is an anticipated decrease in salary and payroll-related expenses attributable to the
Early Retirement Incentive Program (ERI) that will partially offset the loss in revenue. A
conservative estimate of General Fund savings from the ERI Program is projected at
$75,000.00, but the figure will not be known until the end of the year window once the
participating employees have made their decision(s).
e Reducing or eliminating the City’s Railroad Days contribution could result in annual
savings up to $50,000.00.
e Reducing or eliminating the City’s Railroad Days contribution for fireworks could result
in annual savings up to $40,000.00.
e Portions of revenues currently earmarked for the Capital Projects Fund could be
redirected to the General Fund, which would result in fewer capital projects being
undertaken in any given year. Currently, the City receives approximately $5.5 million in
home rule sales tax and $745,000.00 in natural gas use tax annually.
e Currently $195,000 is budgeted in the Capital Projects Fund for street striping and
475 Main Street T 630.293.2200 Daniel Bovey
West Chicago, Illinois F 630.293.3028 . ;
60185 hi Tia Messino
westchicago.org INTERIM CITY ADMINISTRATOR

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sidewalk, curb, and gutter replacement. These programs meet the qualifications to be
considered Motor Fuel Tax Fund (MFT) eligible expenses. Transferring these expenses to
the MFT Fund would then allow for General Fund expenses to be transferred to the
Capital Projects Fund, such as the Facade Program expenses ($125,000.00). However,
the MFT Fund has a projected fund balance that is already earmarked for projects
scheduled over the next five years. Transferring additional expenses to this fund would
accelerate the drawdown of that balance and should therefore be considered cautiously to
avoid future funding shortfalls.
Final Thought
When considering your direction to staff, please also keep in mind that we need to consider the
totality of the financial picture and not make this decision in a vacuum. Legislative developments
at the state level continue to create uncertainty and potential strain on municipal budgets. For
example, Senate Bill 1937 currently under consideration—would roll back Tier 2 pension
reforms for Downstate Police Pension and IMRF participants. Should legislation like this pass, it
will have a monumental impact on local government budgets across the State, including West
Chicago. While staff would need time to fully quantify the impact, it is expected to place
substantial pressure on future budgets.
Year after year, unfunded mandates such as this one threaten the financially sound planning and
budgeting that the West Chicago City Council and staff have worked diligently to uphold. These
actions leave us in a constant mode of scrambling defensively to find stability in the face of
external challenges. Given these uncertainties, one possible approach would be for the Finance
Committee to recommend the adoption of a 1% local grocery tax with a sunset clause ending
December 31, 2027. This option offers the following advantages:
(1) It allows the Ordinance to be timely filed with the State of Illinois.
(2) It allows the City Council to work through two Budget cycles to determine funding
priorities, something that cannot realistically be done prior to when this Ordinance would
need to be filed for 2026.
(3) It allows us to fully calculate the financial impact of the ERI Program.
(4) It allows us to monitor what is ultimately done with the Tier 2 rollback and other
legislation that could have negative financial implications to the City.
(5) It requires the City Council to revisit the issue prior to December 31, 2027.
I look forward to discussing the matter on Monday.
475 Main Street T 630.293.2200 Daniel Bovey
West Chicago, Illinois F 630.293.3028
60185 hi Tia Messino
westchicago.org, INTERIM CITY ADMINISTRATOR

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Senate Bill 1937, House Amendment 1
NWMC Summary and Analysis
On May 27, State Rep. Jay Hoffman introduced an amendment to Senate Bill 1937. The bill would
substantially enhance Tier 2 Police, Fire and the Illinois Municipal Retirement Fund (IMRF) pensions.
Additionally, the bill makes similar changes to the statewide pension systems. The enhancements
follow those introduced last year (HB _5909/SB 3988). The following is an outline of the bill’s
components relating to municipalities and the NWMC staff analysis:
Pensionable Salary Cap (Sec. 1-163)
e Applies to Articles 3 through 17 (starting on page 43).
e Beginning January 1, 2027, ties pensionable salary cap to Social Security wage base.
e lf an employee was making over the current pensionable salary cap, they do not have to
retroactively make additional contributions.
Final Average Salary / Final Rate of Earnings
e IMRF (page 117) “final rate of earning” changes to the highest 6 out of last 10 years. Tier 2 is
currently highest 8 out last 10 years.
Increase in Pension (Cost of Living Adjustment - COLA)
e Police (page 184) and Fire (page 189) and IMRF (204): Changes the Tier 2 COLA from lesser of
3% or ¥2 the CPI-U increase to 3% on the originally granted pension.
e The COLA remains uncompounded.
e Police (page 570) and Fire (page 578) COLA increases for Tier 2 would be begin the year
following retirement (current Tier 2 starts the COLA at age 60, which is 5 years after the
current retirement age of 55).
Retirement Age and Service Eligibility
e Fire (page 233): Deletes the penalty (1% for each month under 55) for retirement between 50
and 55. There is no minimum retirement age if a firefighter is entitled to the maximum
pension. After Jan. 1, 2027, firefighters can retire at age 52 with 20 years of service (page 572).
e Changes the age of eligible employment for firefighters from 21 to 18 (pages 240, 260).
e IMRF retirement age (page 454) changed to 65 with 20 years of service and 62 if entitled to
maximum pension.
e Police (page 565): After Jan. 1, 2027, police officer may retire at age 52 with 20 years of
service. Maintains 1% per month penalty.
Reciprocity
e Makes Article 3 and 4 pensions (pages 224-225) part of the Retirement Systems Reciprocal
Act.
De Facto Firefighter (page 229)
e Defines “de facto firefighter” as someone who spends a majority of the working time
controlling and extinguishing fires, preparing for such work or waiting to respond to calls for
such work.

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Senate Bill 1937, House Amendment 1
NWMC Summary and Analysis
Reamortization
e Moves back the statutory funding date from 2040 to 2055 for Police (page 367) and Fire (page
371) pensions.
e Funding target remains at 90% of the total actuarial liabilities.
e Actuarial cost method changed from projected unit credit to entry age normal.
Pension Board Composition
e Police pension board (page 378) and fire pension board (page 388) gains a municipal
representative and IML Chief Executive Officer listed as permanent member (rather than “one
member recommended by the IML who shall be appointed by the Governor”).
e Changes voting requirements (6 instead of 5 trustees).
Police Chief Pension (page 606)
e Deletes provision from 2019 that prohibited a police chief from choosing to participate in
IMRF.
e Municipalities no longer required to establish defined contribution plans for certain police
officers.
Coordination of Benefits with Workers’ Compensation (page 617)
e Under Article 3, there shall be no reduction in the pension survivor benefit in coordination
with workers’ compensation.
Deferred Retirement Option Plan
e Police (page 642)
o DROPelection no later than July 1, 2031
o DROP shall be available no later than July 1, 2026
o DROP period may not exceed 5 years.
o Language appears to minimize investment risk to funds (still not zero).