
City of Vermilion Finance Report
At the March 10th Vermilion City Council Finance Committee meeting, Finance Director Amy Hendricks presented an overview of the city’s financial status, including key budget adjustments and updates on insurance costs impacting city operations.
Budget Adjustments for 2025
The first reading of the appropriation updates for 2025 was introduced, reflecting ongoing adjustments made on a monthly basis to ensure financial transparency. Among the notable changes:

- General Fund: An increase of $30,000, including a $10,000 allocation for ice breaking, necessitated by a higher-than-expected invoice. The remaining amount accounts for higher property, fleet, and liability insurance costs.
- Street Fund (Fund 201): A significant increase of $122,000 due to recent weather conditions leading to payroll expenses exceeding last year’s total within just the first few months of 2025.
- Fire Operating Fund (Fund 206): A $4,000 increase to cover additional insurance expenses.
- Vehicle Registration Fees (Fund 203): A net budget decrease of $376,000 following project completions and the release of retainers for finalized work.
Hendricks emphasized the importance of tracking these figures closely to maintain fiscal responsibility throughout the year.
Audit Progress and Financial Health
The city’s external auditors have been on-site twice so far and are expected to continue their evaluations, including visiting various city departments to verify inventory and operational procedures. Hendricks acknowledged the cooperation of city staff in assisting with the audit process.
Insurance Cost Increases
A major topic of concern was the city’s property, fleet, and liability insurance renewal for 2025, which saw a 14% increase, bringing the total cost to approximately $391,000. Hendricks attributed this rise to multiple factors, including industry-wide rate hikes due to increased claims from natural disasters and cyber threats, as well as an increase in the city’s budget from the previous year.
Hendricks explained that part of this increase is due to Vermilion’s 2024 budget being $4.1 million higher than in 2023. Insurance companies factor in an organization’s total budget when assessing risk, which contributed to the premium adjustment. “Insurance rates are influenced by industry standards that assess total budget figures as part of risk evaluation,” Hendricks explained. “Because our 2024 budget was $4.1 million higher than 2023, that played a role in the premium calculation.”
Despite the cost increase, the finance director noted that the city’s insurance agent, Fitzgibbons and Arnold, has kept their commission fee unchanged, preventing further expenses.
Addressing Negative Cash Balances
Hendricks also clarified that some city funds might show negative cash balances early in the year due to delayed tax settlements from the county. These balances, she reassured, are not indicative of financial distress but rather a timing issue, with expected revenues yet to be received.
Looking Ahead
The finance director concluded her report by summarizing the budget planning process and highlighting projected revenue versus expenditures for major funds. As the year progresses, city officials will continue monitoring budget performance, ensuring funds are allocated effectively for necessary projects and expenses.
Council members engaged in a brief discussion regarding the insurance premium increase, seeking clarification on how budget growth influences liability assessments. While some expressed concern over the rising costs, they acknowledged that the industry-wide trend of increasing insurance rates is largely unavoidable.

With the first reading of the budget updates complete, further discussions and adjustments are expected in the coming months as city officials navigate the financial landscape of 2025.