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City anticipates $10 million budget deficit

From the City of Peoria’s “Issues Update”:

At the present time, with no changes, the City is projecting a potential budget deficit for 2010 of $10,046,499. This budget is based on re-forecasted revenues and expense increases based on historical patterns. Those increases include:

  • 4.75% wage increases for represented employees;
  • 3.5% wage increases for management-class employees;
  • 1.5% increase in supply costs;
  • 2.5% increase in contractual costs; and,
  • 10% increase in the cost of healthcare.

The potential budget deficit represents a significant, yet fully-realized, challenge as the process for addressing the gap begins. While anticipated improvements in the economy may lessen the impact, the reality is that the City has an underlying structural issue of the rate of expense increases outpacing the rate revenue increases.

Given the size of the deficit, the City is not waiting until the Fall to begin its budget process. A team of senior staff leaders, including the Police, Fire and Public Works Departments, has continued the year-round work of identifying potential solutions. That team will be joined by three members of the City Council, to be appointed by the Mayor, who will collaborate with staff to craft a joint Council-Administration plan. Initial direction from the full Council will be solicited at the June 9, 2009 regular meeting, and opportunities for public participation and input are being organized. The City Manager is also meeting with representatives of the City’s employee unions next week.

The budget issues are serious. However, recent experiences in addressing 2009 budget issues prove that a well-designed process, open communication, creativity and teamwork will produce a similar positive result.

Here’s the detailed report from Finance Director Jim Scroggins:
PDF Link Prelimnary 2010-2013 Budget

Mayor Ardis was quoted by the Journal Star as saying, “The first answer the council comes up with will not be to raise taxes. In light of what is going on at (District 150) and other taxing bodies coming out and raising taxes significantly, that’s not what we’re going to do. There will be some type of revenue enhancements and most likely service cuts while the economy stays like this. Everything will be on the table for discussion.”

Everything will be on the table? I doubt it. I’ll bet privatizing the city’s parking decks won’t be on the table. Nor will changing the redevelopment agreement with the museum group to put more of the Sears block back on the tax rolls. Nor will selling the Kellar Branch to Pioneer Railcorp, which would give the city three-quarters of a million dollars immediately. Nor is raising taxes to cover essential services being given serious consideration even though the mayor (and nearly every other city and county leader) supported raising taxes for the aforementioned non-essential museum.

I also find it interesting that the budget cuts this year are described in the Issues Update as a “positive result,” even though seal-coating of roads was cut by 50%, and code enforcement and police suffered cuts as well. The fire department is fearful that they’ll be the next department to be hit. While these departments are facing cuts, the Civic Center just completed a $55 million expansion, the city has committed to give $40 million to a private hotel developer, and the county has just committed $40 million to the proposed downtown museum.

Peoria has millions for bread and circuses, while basic services suffer.

24 comments to City anticipates $10 million budget deficit

  • New Voice

    Yes, but the museum will bring in how many millions [billions?] over the next few years?!? How much luckier can we get?

    I can’t wait to hear from any of the museum supporters on this one! $1 million dollars says not one museum supporter who comments on this blog regularly will have ANYTHING to say!

  • I will take that million in 10′s and 20′s

  • Mazr

    You guys just don’t get it.

    Who needs police protection or better roads when we have a world class museum on the way.

    And remember, “it’s better here”!

  • I would hope the first step would be a wage freeze for unionized and management employees. How can anybody justify a 3.5 to 4.75 raise in this economy?

  • peoriafan

    I’ll take the one million in small bills please.
    Anybody can see that the museum is not the problem here. It labor costs just like with 150.
    Health care and union wages are out of control.

  • Ahl: “How can anybody justify a 3.5 to 4.75 raise in this economy?”

    I got a raise. Lots of people got raises.

  • BeanCounter

    My employer wasn’t even projecting a loss and annual review raises were not given and the 401k match was suspended. I think stopping across the board raises in an entity projected to lose 10 million dollars is reasonable.

  • kcdad

    …what’s 4.75% on 40,000 compared to 3.5% on 100,000??? $1900 vs $35,000. I love it when politicians or management use percentages…. “we are taking a smaller raise!”

    Billy, do you work for the public? Don’t you think that a private business should be allowed to pay its employees whatever it wants, and that a public employer’s first responsibility is to the public? Automatic raises and COL increases may be “nice” for public sector employees, but that is not a right. Public employers MUST cut expenses when ever they can, where ever they can without reducing essential services… like museums and private hotels, monuments to former congressmen, mayors, etc…

  • Mahkno

    Inflation rate is around -0.7%… that’s NEGATIVE. There shouldn’t be any COLA.

  • kcdad

    Some like Veterans Benefits increase every year, whether you want them to or not… I started receiving $68 a month when I got out of the service, and am now receiving $128 or so… it goes up 2 or 3 dollars every year. (WHOOPPEE)

  • New Voice

    You people failed to read the fine print.

    “I can’t wait to hear from any of the museum supporters on this one! $1 million dollars says not one museum supporter who comments on this blog regularly will have ANYTHING [useful] to say!”

  • Popijw

    We’ve been told no increase in SSI for the next 2 years. So why give any of them a raise? If they decide to walk let them, remember lots of good people are out there looking for a job!

  • kcdad

    Popinjw: what? Do you really think just anyone can do those kinds of jobs? These aren’t business jobs.. these are GOVERNMENT jobs.

  • New Voice

    kcdad,

    Are you referring to Precinct Committeeman?

  • Paul Wilkinson

    It certainly is discouraging even for me. We don’t have money to fund police overtime and the police force is down a number of patrol officers..remember it’s patrole who man the streets. Results in my area has been an increase in gunshots…nearly nightly…busier drug houses/gang activity, etc. We have money for nice plants in front of the civic center and to fund legal expenses from inappropriate decisions. I understand the need to spray weeds in the streets, but not at the expense of police overtime. People are just going to have to pull weeds themselves, I’m afraid. If we cut code enforcement then there are additional problems in older areas. More people who have tried to hold on and make a difference, will move out…those with the resources to. I wish I had an answer to the deficit, except that non essential services will need to be cut. generous subsidies to development is something we cannot afford to do, which further feeds the cycle of long term problems. I would love to hear some actual, concrete, viable possiblities. The museum is done, the elections are done. we are stuck with what the people have voted upon. Needing ideas to make things work….the challenge is on…

  • NV you are moving the goal posts.

  • Frustrated

    I agree with Beancounter, wages freeze is in order for hourly workers and 10% decrease for salaried. Oh, that’s right, those types of cuts only apply to private employers.

  • 2nd District Homeowner

    After reading all of your posts it is apparent why the United States is in the position it is in. Hate, fear, and jealousy is running rampent on this website. GOVERNMENT employees should take a pay cut like the PRIVATE side…really what were the raises in government for the previous 10 years compared to the private side? Government employees enjoy the stableness of work and decent benefits, the good times for them are not as good as the good times for the private side but the bad times are not as bad, it is steady. Healthcare costs are the biggest factor in the rising costs but most people on this board do not want to talk about some form of National Healthcare that makes everyone pay instead of the system that is currently set up that allows everyone to recieve care but those with insurance are paying the majority of the costs. Would the healthcare costs for the City be so much if the Walmart’s and McDonald’s had to pay something for their employees? That would be considered socialism though right or would it just make sense for the good of the country and the middle class? I can see the comments back now. The middle class will never sustain the American Dream when people keep blaming the GOVERNMENT for thier problems, the problems the middle class come from greed and too many people thinking what can I get for myself today instead of what is beneficial for the middle class as a whole for a sustainable future for our children. I am curious to see some suggestions for solutions, ie. what services do you not want to see? (besides the museum or hotel those are concluded now we must move forward)

  • kcdad

    I agree with every thing you wrote except… of course government employees have to take pay cuts just like private employees… why not? I betcha we are thinking about two different kinds of government employees… you are thinking about the hard working guy cleaning hallways or toilets and I am thinking about the bureaucrat sitting in the IRS office (with one person in the waiting room) who is reading off the numbers of whose next… and when he finally calls the number of the only person in the room, he excuses himself for his guaranteed coffee break.

  • Frustrated

    2nd District – you might want to check some salary comps. For example, the City of Peoria was recently advertising a position for HR Dir. for $100,000. You would be hard pressed to find a private employer offering that level of salary for this type of job in the Peoria area. Most employees of private employers have been hit long ago in terms of benefits — defined benefit pensions plans are a thing of the past at private places of employment and large healthcare premiums and huge deductibles and co-pays are old news. The good time you refer to in the private sector may play out in the banking industry or Wall Street but they don’t play in Peoria.

  • Sud O. Nym

    Not to defend government salaries, Frustrated, but where would I find the comparables for local HR directors who are responsible for 800+ employees, a large health care and pension plan, and negotiating with several different employee unions? What does the head of Cat’s HR make? Or one of the hospitals? Or Bradley? Or ATS, Maui Jim, etc.? I’d be curious how Peoria stacks up.

  • SD

    Well we could start cutting back on the free healthcare and housing for illegal immigrants in the Peoria County area. But no way on earth is that going to happen. In fact they are considering in the big house to allow these people amnesty and then we are in for even more trouble. Also, these people are receiving social security benefits and the rest of us who are now on ss are going to face a dead end to benefits in about 2037 and we worked for it and paid into it all our lives. Oh, well, that’s the way the world goes around. The have’s have it and the have nots haven’t and the guys in the middle pay the piper.

  • New Voice

    Precinct Committeeman,

    I had to try.

    Yes, the museum is done. District 150 is rattling its [tax] saber again. Major sewer problems, hotels, police and fire protection, basic city services……… the list does go on.

    PEORIA IS IN DEBT!

    Simply saying the deed is “done” does not cut it! Everyone in Peoria knew the recession was in full swing. The number of local layoffs was growing at in incredible rate. Most of the people who voted against the museum did so because they believed it was not the right time to raise yet ANOTHER tax. The Citizens For Responsible Spending was not against the museum, they were for RESPONSIBLE SPENDING! This point was made time and time again, yet the ‘museum supporters’ kept ignoring the advice of anyone who spoke out against the proposed museum plan. Any and all IDEAS set forth by the people against the museum project were summarily ignored! The museum was presented as Peoria’s ‘saving grace!’ How many people in Peoria County were duped by the museum group and all of their bogus economic data?!?

    Now we have Precinct Committeeman, Paul Wilkinson and 2nd District Homeowner telling us it is time to move forward! Bull Sh_t! Peoria City Council, Peoria County Board, District 150, etc, all have terrible track records when it comes to ‘listening’ to the public. The museum supporters can now follow their agenda [what ever that is]. It is easy to say “what is done is done.” Can’t wait to see what Dist 150 will end up doing to get through these ‘trouble times.’

    Come on people! Let’s come together as a community!

    Calling Aaron Schock! Calling Aaron Schock! Maybe now that your career has taken off you can devote a little time to your Congressional District?!?

  • kcdad

    “Well we could start cutting back on the free healthcare and housing for illegal immigrants in the Peoria County area”
    “these people” “these people”

    I don’t want to sound too radical, but these people are people. They were brought to this country the same way your and my ancestors were (unless they were dragged over in chains) by a promise of a “better life”. So… shouldn’t we provide something of that better life to them and everyone else? After all, they are doing the jobs real “Americans” won’t do. Is your problem with illegal aliens getting health care and housing the fact that they are illegal or that you aren’t getting the same things? If it is their status, I suggest you read “The Good Samaritan” and if it is their getting something you aren’t, I suggest you read “The Laborers in the Vineyard”.