The Peoria City Council has approved a revised $265 million budget for 2023.
That accounts for 9.3% in additional expenditures and 11.7% in revenue increases from the previously adopted 2023 spending plan. The additional spending largely stem from capital costs for the second year of the city's federally-mandated Combined Sewer Overflow project, and the hiring of 21 new employees at public works and the fire department. The fire department hires are funded through a federal grant.
Additional money was generated by increases in the local share of state income and personal property replacement tax revenues. The American Rescue Plan Act, other federal grants, and congressional spending also account for a significant chunk of change.
In a letter to the Peoria City Council, city manager Patrick Urich and finance director Kyle Cratty deem the revised budget to be a balanced one.
The budget passed 5-3 at a special meeting Tuesday, with councilmembers John Kelly, Zach Oyler, and Denis Cyr voting no. At-large councilmember Sid Ruckriegel abstained from voting, citing a conflict of interest.
"I'm rather frustrated that here we are. swimming in money, relatively speaking. And we seem to have to spend all, which puts us in a very difficult position when some of this money dries up," said Kelly.
He said some of the new revenues should be returned to taxpayers to spur new growth in the city. He also expressed concerns about the city's unfunded public safety pension obligations.
Urich said police pension costs increase 8.1% to $15.7 million next year. Fire pension costs increase 17.8% to $15.6 million. Those payments are fully funded in the revised 2023 budget.
Third District councilmember Tim Riggenbach said the revised budget is contributing "some significant dollars" to pensions.
"To say that we're spending this recklessly, I think, would be a unfair characterization," said Riggenbach. "I think there's been a lot of due diligence done through this. And the end product is something that our citizens can be pleased with."
The city's 2023 budget book said increased city contributions to pensions will be needed over the next five years to meet obligations and address investment shortfalls.
In 2021, the city spent on pensions about 21% of every dollar it collects in the general fund. By 2027, that's projected to balloon to 36.6%. But the unanticipated state revenues this year will allow the city several more years of fiscal stability, per Urich and Cratty.
"It's good that we're able to do some additional things that we haven't been able to do in the past," said Peoria Mayor Rita Ali on the budget. "But at the same time, I think that we've attempted to be responsible stewards of the people's money."
