PEORIA, Ill. (WMBD) — Fall in Peoria means cooler temperatures, falling leaves and the members of the Peoria City Council get to sit through hours of budget presentations. 

On Tuesday, those around the Horseshoe got their first look at the proposed 2024 budget and what city staff thinks the budget will look like in 2025. 

City Hall expects to spend just less than $322 million in 2024, a 5.4% increase from 2023.

Tuesday’s meeting was the beginning of the process that will culminate on Nov. 14 when the council will likely approve the final budget. It could change from now until then.

That includes federal and state money from the COVID relief funds, grants to improve the city’s stormwater system, neighborhoods and its capital improvement projects on roads within the city. In total, there’ll be about $100 million spent on those capital projects of which $30 million will come from money the city has saved over the years. 

Next year’s budget also includes about $21.6 million in debt service payments for past borrowing by the city.

To offset that, the city brought in $291 million in revenue which doesn’t include the grants and the federal COVID money and doesn’t include the $30 million it used from its savings account.

It’s a planned reduction of the city’s reserves, said Kyle Cratty, the city’s finance director. The city was able to accumulate roughly $57 million in its general fund reserves. That’s 42% of the total general fund and well above the city’s policy of keeping 25% in reserve. The drawdown, Cratty said, was planned to keep city coffers close to that 25%.

Some of the grants the city will spend this year include:

  • $3.5 million in federal and state grants to rebuild Wisconsin Boulevard from McClure Avenue to Nebraska Avenue.
  • $4.7 million in state dollars for work on the MacArthur Highway corridor.
  • $5 million for Fire Station 16 which will include a second substation and a community center.

Newly elected At-Large Councilman Mike Vespa said the budget numbers are pretty much what he had expected.

“I don’t have a lot to compare it to but the bottom line is that we do have costs going up, which isn’t shocking,” he said. “We have added positions, and we are also going to try to focus on tackling the police and fire pensions which are going to be a larger and larger piece of the picture in future years.”

To that end, City Manager Patrick Urich said this year’s budget fully funds the city’s obligations to the police and fire pension funds; items which have been an albatross around the city’s neck as the costs for those two items keeps increasing.

5th District Council Member Denis Cyr mentioned his concern about the spending increase in the budget during Tuesday’s council meeting.

“We started two years ago with a budget of about $220 million, we went to $260 million and now we are looking at $321 million, an increase of $100 million in two years,” said Cyr.

He continued, “For a small city like Peoria, to me, it’s just incredible.”

Peoria will write a check for roughly $30 million this year to cover its pension obligations. That’s about 22% of the general fund which covers the day-to-day operations of the city. By 2029, that number will rise to nearly $40 million, or roughly 31% of the general fund.

Strong revenue growth in 2023 will drop in 2024 as the economy normalizes. Property value are still high so Peoria will still get more bang for its buck when it comes to property taxes without raising rates.

Also in the 2024 budget are dollars for 13 positions that include a grant coordinator for public works, nine maintenance positions for stormwater improvements and a building inspector for the city’s Community Development department.

A few years ago, the city began adopting a two-year budget plan with the idea the second year, in this case 2025, would be more of a projection but would allow lawmakers to get a sense of where things were trending.

As such, numbers for 2025 show a decrease in overall spending as the last $10 million of federal COVID money is completely spent and other grants fall off the books.