Tag Archives: budget

City Council, City of Peoria

City Manager looking for ways to save, make money

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“With the City of Peoria facing another difficult budgeting process, no area of the budget can be ignored for potential savings,” City Manager Patrick Urich explains in an item from Tuesday’s agenda. “In line with Council’s direction to examine all costs, the Administration is seeking authorization to approach City service providers with a request to reduce current and future contract amounts in exchange for an additional year of guaranteed contract length.”

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“City service providers” would include everything “from the City’s $5.1 million contract with Peoria Disposal Company for residential refuse collection to $1,600 contract with AAA Certified Security for document shredding.” But they wouldn’t revisit every contract as per this news source about Bitcoins and kryptocurrency. “If authorization is granted,” the council communication continues, “the City Manager and the Finance Director will work with each Department Head to determine which contracts might be potential targets for an extension in exchange for a discount, check out save money.”

Consideration will be given in the following areas:

  1. Is the City happy with the service offered by the vendor?
  2. Is there an option other than this particular vendor? Many software agreements held by the City (i.e. Microsoft) have no realistic alternative.
  3. Might the City save more money by holding a competitive bid rather than extending an existing vendor?

Urich hopes the City can save $300,000 or more in 2012 as a result of this process.

Also on Tuesday’s agenda is a proposed new fee for “facilities in the City right-of-way.” In particular, the communication mentions fiber-optic conduit as one of the things they’d like to charge a fee for allowing in the public right-of-way, starting at $1.90 per lineal foot.

That will be great, if they actually enforce it. Funny, they eliminated very similar fees just a few years ago, after years of non-enforcement.

City Council, City of Peoria

More cuts on the agenda for tonight’s council meeting

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Property values didn’t rise as much as the City of Peoria hoped they would, and that means less property tax revenue will be collected — $826,000 less, to be precise. To make up for this additional shortfall, more cuts are being made to the budget. The cuts primarily impact the police, fire, and public works departments, as usual.

Public Works is cutting $451,340 dollars they were going to use to purchase new vehicles. According to the Journal Star, that would have paid for three new trucks “used for snow plowing, removal of storm debris, hauling asphalt, etc.” David Barber says his department can manage without the new vehicles.

The police department will be giving up $90,000 in overtime. The fire department will be reducing their overtime budget by $45,072 and their clothing allowance by $26,815. Staffing is down in both departments, but especially in the police department, which took a big hit during last year’s budget crisis. Fewer cops means heavier reliance on overtime from the remaining officers to ensure everything is covered adequately. Now they’re cutting overtime, too.

And looming on the horizon is a predicted $10 million budget deficit for next year that will have to be filled with even more cuts and higher taxes/fees. Citizens will end up paying more for less service . . . again. I wonder if that’s at all related to the decline in sales and property tax receipts?

City Council, City of Peoria

Council faces grim budget realities

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The Peoria City Council had their annual retreat Wednesday night at the Peoria NEXT Innovation Center on West Main street. All the council members, the Mayor, and City department heads attended the retreat.

I was unable to attend the entire retreat, but did get there for roughly half of it. Based on materials distributed at the meeting, revenues are down again, and they’re expecting another ten to eleven million dollar deficit. They also appear to be anticipating a possible decline in population. One of the slides labeled “Key Expense Drivers” stated, “5,000 Loss in Population equals Approximately $500,000/yr of per Capita Income — 1 person = $100/capita.”

The Journal Star reports that revenues are down for a few reasons: (1) “reduction in property tax revenues because of a slump in the city’s equalized assessed valuation” caused by “assessment devaluations of commercial properties throughout the city,” (2) “January’s sales tax figures dropped by 10 percent from their November and December numbers,” indicating a troubling trend, and (3) “state income tax revenues are down from a year ago.” Nothing but bad news from the finance director.

By the end of the meeting, the following “next steps” were established, which are nearly identical to last year’s budget process:

  1. City Manager: Sit down with the professionals and come back with a budget that shows the cuts that can be made.
  2. Look at all forms of revenue growth — everything is on the table.
  3. Department heads to sit with staff and consider additional budget modifications.
  4. Challenge to the staff to consider new, alternative, and creative forms of service delivery to reduce costs/enhance revenues.

Translation: Expect higher taxes and/or fees, the possible invention of new fees, and more cuts in services. The Mayor especially made it clear that he believes the budget hole cannot be filled by cutting alone — new revenue will have to be generated.

City Council, City of Peoria

Even the Journal Star gets it

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From today’s Journal Star editorial:

You don’t need hindsight to appreciate that the locals are starting to get fed up with the city’s economic development practices, which include doling out substantial subsidies at the same time cops are being fired. In fact budgets say volumes about a community’s priorities. In fact the city’s debt service on its TIF districts has increased at double the rate of inflation during this decade, with potentially more to come through a hotel development Downtown. In fact City Hall’s history is rather checkered in picking subsidized winners and losers. In fact the council had ample forewarning that the MidTown Plaza TIF – which included the now-closed Cub Foods and a $450,000 bill for next year – was a dud; their own consultant told them so.

That’s just a taste — you really should read the whole editorial. Companion article: Main Street merchants struggle while waiting for action on revitalization plans.

It’s all about priorities. The city council didn’t bat an eye at raising taxes downtown to give a $39.5 million grant to a local developer to build a downtown hotel. But there are big cuts to police, road improvements, code enforcement, and snow removal, just to name a few things. In other words, risky economic development schemes that benefit a few people are a higher priority than basic services that benefit all. That’s not right, and it needs to change.

It seems everyone gets that except the Peoria City Council.

City of Peoria, Peoria Police

Police Benevolent: Why haven’t they agreed to wage concessions?

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After the Tuesday night City Council meeting, I caught up with Troy Skaggs, president of the Peoria Police Benevolent, and asked him why the police union had not agreed to any wage concessions. He said there were basically three reasons.

He told me that the union met Monday night, and that City Manager Scott Moore gave a presentation. During that presentation, Moore said this wasn’t going to be a one-year concession. It was likely that the city would be back next year asking for concessions again. And probably the year after that. This was the first time the city had come out and said these requests for concessions would be ongoing and not a one-time deal. That’s the first reason the union was uneasy with agreeing to wage concessions.

Secondly, Skaggs pointed out that the police department is already down 16 positions. Seven positions are vacancies from the beginning of the year that they simply haven’t filled, and an additional nine positions are officers who took advantage of the Voluntary Separation Initiative (VSI) recently offered by the city. They’re not going to fill any of those positions, yet the council wants to cut the department by an additional 17 positions. At the same time, according to Skaggs, the fire department is “back-filling” ten positions, eight of which were vacated due to VSI. So the police union doesn’t see the equity in these two situations.

Finally, the city wouldn’t guarantee that they wouldn’t lay off more officers anyway, even if the union did agree to wage concessions. That really made the union uncomfortable, since they could give up wage increases and lose a bunch of additional officers anyway, meaning they’d be doing more work for no additional pay. Before I talked to Skaggs, I had asked Mayor Ardis about negotiations with the police union, and while he directed me to talk to the union president, he did mention that the police department had wanted some guarantees but the city didn’t feel comfortable with the offer having strings attached.

My take: I can understand, on the one hand, the city not wanting its hands tied in case the forecasted (or actual) deficit gets worse. On the other hand, it doesn’t seem unreasonable to me for the police union to expect some sort of commitment from the city in return for wage concessions.

Bottom line, though, we need police protection. We can’t balance the budget at the expense of public safety. If we “punish” the police union for not taking wage concessions by laying off more police officers, we’re only hurting ourselves.

The council needs to face the music and raise revenue somehow. They simply can’t balance the budget by reducing expenses because the cuts are too deep. Even the City Manager recognizes this — he identified 22 positions that have been cut so far that he’d like to see restored because they’re critical for the city. Those positions include restoring six police officers and several support personnel in the police department.

The real mystery is why the council is so reticent to raise taxes for public safety when they’re so quick to raise taxes for private development schemes like the proposed downtown Marriott hotel deal. Nobody wants higher taxes, but if we’re going to be paying higher taxes anyway, the proceeds should go toward the highest public benefit. As it stands now, we’re paying higher taxes and getting less police protection in return.

Not only is that bad public policy on its face, it only exacerbates the city’s predicament because it drives residents and business out of Peoria. Nobody wants to live where it’s unsafe — whether perceived or actual — and nobody is going to want to shop and dine in Peoria when they can get the same goods and services at a much cheaper tax rate just over the river, or in Peoria Heights, or in any of the other surrounding communities. The city is cutting its own throat.

City of Peoria, Peoria Mayor

Mayor Ardis asks for feedback on budget

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I received this yesterday but haven’t had a chance to post it until today:

September 15, 2009

As many of you know, the City Council has been wrestling with our 2010 budget for several months now. We have been working to balance the City’s budget like you have to balance yours……. Identifying needs vs. wants and being more efficient with the income you have available. During this challenging economic situation, the process has not been easy.

To this point, the City Council has already trimmed over $8.5 million dollars from next years budget. If sales tax revenue continues to come in below our expectations, it may be necessary to trim another $4 to $5 million to balance our budget. We’ve made significant reductions in our operating budget next year and identified over 40 positions that will not be filled throughout all city departments, including police and fire. In the coming weeks, we may find it necessary to lay off 20-30 more employees. This all equates to a drastic cut in service to our constituent taxpayers.

During this process we have focused on being open and transparent. With this in mind I’d like to solicit your input as we move towards making final decisions on next years budget. This will not be a scientific poll by any stretch, but an opportunity to provide me with your thoughts on a few budget related questions. I will share your responses with the rest of the City Council and the City Manager.

These are tough times but I am confident the City Council will make the right decisions to get us through this with the least amount of additional cost to you. And we hope to get this done with the least amount of job losses possible. Thank you for taking the time to respond. Feel free to pass this on to other concerned citizens.

Please click here to take this short, 3-question survey

Jim Ardis

City of Peoria

Debt service: $18,738,827

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I went to a recent budget open house for the City of Peoria, and this graph caught my attention:

2009-Total-City-Budget

Our budget deficit is approximately $10 million. Our debt service (the amount we pay on principal and interest per year) is nearly $19 million. That debt service includes money borrowed for the recent Civic Center expansion, the Peoria Public Library renovation/expansion, acquisition/infrastructure work done in TIF districts, and some other infrastructure projects.

The money to pay for this debt comes from various sources. The Hotel, Restaurant, and Amusement (HRA) tax pays for the Civic Center expansion. A portion of our property taxes is specifically designated for the library’s recent capital projects. And debt incurred in TIF districts is covered by the new taxes produced by the TIF (the “tax increment”) — with one notable exception: MidTown Plaza.

MidTown, home of the now-shuttered Cub Foods, has never paid for itself. While there has been some incremental increase, it’s not enough to cover its own debt service. Money from the general fund makes up the difference. Staff is quick to point out that they recommended against that TIF, but the council voted for it anyway.

As if that weren’t enough, the council has committed to taking on more debt: $39.5 million for a Marriott Hotel to be built across the street from the Civic Center, to be paid for with the tax increment within the newly-created Hospitality Improvement Zone (HIZ) TIF plus a 1% sales tax increase within the TIF. The city hasn’t had to sell the bonds yet because the hotel developer has been unable to get supplemental financing through bank loans.

Think about this debt and the taxes that pay for it when the council is haggling over closing its structural budget deficit. They have no problem raising or maintaining taxes for non-necessities and developer welfare — even in the leanest of times, as the hotel deal shows — but feign frugality when it comes to paying for basic city services. They cut police and code enforcement personnel, reduce road maintenance, and institute other cost-saving measures ostensibly to keep taxes “low.” In reality, the city is acting no differently than a person who balances his household budget by cutting his grocery purchases while maintaining (or even increasing) his cigarette consumption.

City Council, City of Peoria

Council brainstorms money-saving ideas

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The August 11 Peoria City Council meeting promises to be a long, long meeting. The council spent an hour and a half Tuesday night brainstorming ideas for plugging the projected $10 million budget deficit. City staff will take those ideas and run the numbers on them (and in some cases, check the legality of them), then bring them back on August 11 for a policy session where council members will discuss them in detail.

Here is the list of ideas as compiled by the Journal Star:

New tax and fee ideas

  • 2 percent tax on package liquor
  • “Carry out” tax on restaurants, retail establishments, distributors or other businesses that generate wrappers, bottles and other products that turn into litter
  • “Bed tax” on not-for-profit entities such as Bradley University and local hospitals
  • Business license fee
  • Additional tax to use city parking decks
  • Arrest fee
  • Fire service protection districts
  • 5 percent water utility tax
  • Storm water utility tax
  • Fee assessed on pet owners
  • 2 cent per gallon motor fuel tax
  • Eliminating $6 a month garbage tax and rolling it into the property tax

These were in addition to the suggestions made by staff in this report, which includes wage freezes, voluntary separation, revenue adjustments (cutting funding to ArtsPartners, the public library, and other organizations), and revenue increases (e.g., eliminating free land waste pickup).

Councilman Gary Sandberg also suggested that, if the council is going to consider cutting funding to the library, they should also consider cutting funding to the Peoria Civic Center by the same percentage. He also asked staff to bring back a report on how much downtown parking decks would need to charge to break even (i.e., eliminate parking subsidies).

He also hinted at a more radical suggestion: eliminate the city’s police department and turn that function over to the Peoria County Sheriff’s Office. Sandberg points out that county law enforcement officers’ salaries are one-third less than Peoria police officers’. After the meeting, he added that we could put half the savings in salaries toward plugging the budget deficit, and use the other half of the savings to hire more police officers. In effect, we could help plug the deficit and increase police protection at the same time.

I asked Police Chief Steve Settingsgaard what he thought about Sandberg’s proposal. He said that it wasn’t an apples-to-apples comparison to compare city officers to county officers. Instead, when comparing salaries, the council should compare city officers in Peoria to city officers in other similar-sized cities. He said that there are differences between city and county law enforcement, but didn’t elaborate on what those differences are.

City of Peoria

More public budget meetings this week

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There are a couple more opportunities to talk to city officials about your take on the budget deficit. Your voice can be heard at these upcoming meetings:

  • July 15, 2009
    4:00 – 6:00 p.m.
    Pleasant Valley Middle School
    3314 W. Richwoods Boulevard
    Bill Spears (Fourth District) and Gary Sandberg (At-Large)
  • July 16, 2009
    4:00 – 6:00 p.m.
    Peoria Central High School
    1615 N. North Street
    Barbara Van Auken (Second District) and Ryan Spain (At-Large)
City of Peoria

Want to help set Peoria’s budget priorities?

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There are several opportunities for you to meet with Peoria City Council members and staff to discuss your ideas for the 2010 budget. Two of those opportunities are this week:

  • Monday, July 6, 2009
    4:00 – 6:00 p.m.
    Woodruff High School, Common Area
    1800 NE Perry Avenue
    Timothy Riggenbach (Third District) and Jim Montelongo (At-Large)
  • Thursday, July 9, 2009
    4:00 – 6:00 p.m.
    Neighborhood House
    1020 S. Matthew Street
    Clyde Gulley (First District) and George Jacob (At-Large)

There will be five opportunities altogether.