By Jeff Helfrich, Managing Editor
ROCHELLE — At its meeting Monday, the Rochelle City Council heard a presentation by City Manager Jeff Fiegenschuh regarding the potential future implementation of a tax increase due to the state's one percent grocery tax being set to expire in January 2026.
This past year, the state legislature decided to let the grocery tax expire. State law now allows for a local tax to be implemented up to one percent. The city received $310,000 from the grocery tax in 2022, $317,000 from it in 2023 and $359,000 from it in 2024. The revenue stream will end when the state tax does. That money has been used in the past for general fund expenditures including employee salaries, legal fees, infrastructure improvements, training, vehicle purchases and community projects.
In his presentation, Fiegenschuh detailed the potential pathway of instituting a .25 percent increase in non-home rule sales tax to replace the lost grocery tax funds.
Other paths would include instituting a full one percent grocery tax and continuing with previous operations, or allowing the state tax to lapse and making targeted cuts to the general fund and potentially increasing transfers from its landfill fund.
“My recommendation is to adopt a .25 percent non-home rule sales tax,” Fiegenschuh said. “The funds would be utilized for public works capital projects and staffing. We estimate it would approximately raise about $500,000 in additional funds per year with the .25 percent increase. Half of that additional money would go to the general fund and half would go towards capital improvement projects.”
If approved by the council, the .25 percent tax would go into effect Jan. 1, 2026 and its first collection would be March 2026, when the last grocery tax collection would take place.
“I know nobody wants to raise taxes,” Fiegenschuh said. “But we were put in a position where these dollars were taken away from us through no fault of our own and we have an organization to continue to run. We’re in good shape financially but I think that extra .25 percent will help offset any losses.”
Non-home rule sales tax does not apply to as many items as the grocery tax does. It does not apply to groceries, prescription drugs or large items like vehicles, Fiegenschuh said.
RMU
The council unanimously approved a resolution ratifying emergency expenditures for Rochelle Municipal Utilities electrical pole repairs stemming from a March 14 wind storm that hit the area, knocking out power to nearly 6,000 of RMU’s 7,500 total customers.
The total expense for RMU from the windstorm was $516,236.38. The repairs took place over four days with crews from RMU and contractor Michels Power, and mutual aid help from municipal line crews from Batavia and St. Charles. Costs to repair the system included labor, lodging, food, matting, and materials.
The city previously inquired with its insurance provider about submitting a claim for the storm damage expenses, but opted to pay the $516,236 out of pocket as an emergency expenditure utilizing the cash it keeps on hand in case of storms. The city chose that route due to an insurance claim’s potential impact on insurance rates or its ability to get insured in the future.
“It’s less than two percent of our cash on hand,” RMU Superintendent of Electric Operations Blake Toliver said. “While it’s an unplanned expenditure, it’s kind of a part of running a utility in events like this. I can’t say anything but good things about our crews and the contractors we had here that worked to pull everything back together.”
Path
The council unanimously awarded a $219,815.50 bid to Martin and Company Excavating for its Steward Road multi-use path project.
The project will consist of a newly-constructed path from Caron Court to the existing multi-use path at the Ritchie Road/Steward Road intersection. Tree and landscaping removal and replacement, along with new culverts under the path and grading and shaping of ditches will be part of the project as well.
The Martin and Company Excavating bid was the lowest after Bruns Construction withdrew its $196,509.20 bid. The city received five total bids. The Martin bid was approximately two percent higher than the engineer’s estimate of cost.
The city manager and city engineer were given approval to negotiate further change order work not to exceed $16,000 for the project, which is expected to be substantially completed by September 2025.
GREDCO
The council unanimously approved a resolution amending and extending an agreement with the Greater Rochelle Economic Development Corporation (GREDCO) through May 2027. GREDCO works with the city and the Lee County Industrial Development Association (LCIDA) to foster economic growth.
Under the agreement, GREDCO will receive five percent of the annual revenues generated by City of Rochelle Railroad (CIR). There will be no minimum payment requirement and no cap on the total amount received. GREDCO may not use CIR funds to purchase or acquire property that is intended to be subsequently acquired by the city. All funds received by GREDCO must be used exclusively for the continued development of the CIR and for other economic development initiatives that benefit the city and its residents.
Fiber
The council unanimously approved a resolution authorizing revised fiber optic internet speeds for the fiber service the city offers its RMU customers. The city is looking to increase the speeds available to customers to allow it to be more competitive. For existing customers under contract, the change will “basically double” their existing bandwidth for the same price if they sign a new agreement. New customers will also be able to sign up for the new rates as well. The change comes without a cost to the city.
Proclamations
Mayor John Bearrows read and presented four proclamations during the meeting, including for Arbor Day (April 25), Motorcycle Awareness Month in May, National Day of Prayer (May 1) and Municipal Clerks Week (May 4- 10).
