Peoria City Manager Patrick Urich says the city is in a pretty good financial position as preparations begin for annual city council budget discussions.
Urich said state and local sales taxes make up the city's largest revenue streams.
“Since the state made the change to apply those sales taxes to online purchases, we've seen a slight uptick in those sales tax revenues, which has been very welcomed for the city to have that additional revenue coming in,” Urich said.
He said income and personal-property-replacement taxes (PPRT) make up the next level of revenues, with 5% of income tax collected in Peoria returned to the city.
“Those dollars have been very strong,” he said. "Coming out of COVID, we saw a significant increase in PPRT as well as income tax, which has really afforded us to set aside some of those revenues for future pension payments for our police and fire public safety pensions."
“But those revenues really peaked in in 2022 — between sales tax, income tax, personal property replacement tax, and our motor fuel taxes – that really peaked at about $110 million for those just those revenue streams. Then it started to come back down, which we've anticipated in our budget. But it's still a lot higher than it was pre-pandemic, so we're in a good spot there from a revenue standpoint.”
Another bright spot for the city’s revenues comes in a boost in property values.
“We're anticipating a pretty sizable increase in our assessed valuation. Valuation notices have gone out to all the property owners in the city with higher (assessments) than I think many people will expect,” Urich said. “So, we're anticipating right now, with what we've heard from the county supervisor of assessments, that the assessed value might grow in the city by 7% in in 2024.
“So looking ahead, that's going to be certainly a policy discussion for the council. If they leave the rate the same, the overall levy for property taxes is going to go up by 7%, so that's going to be a discussion point for them to have as well.”
On the opposite side of the ledger, Urich said staffing accounts for a majority of the city’s expenses.
“It's really the cost of the salaries and benefits for all of our employees; we have over 675 employees [and] that there is more than 60% of our budget,” he said. “Then when you add in the cost of capital – and our capital budget is going to be pushing $60 million this year again — that's a significant amount of money that we're putting towards capital.”
Urich said the city also is carrying about $20 million in debt to pay down, and operational costs to keep the city going make up most of the remaining expenses.
Strategic planning update
Urich said the hope is to have Peoria’s five-year strategic plan finalized and adopted by mid-October.
He said staff met four times over the past two weeks to work on honing the document, and a four-hour work session with city council members helped craft the mission and vision statements.
Urich said one of the six primary focus areas in the strategic plan is encouraging business development to grow the city’s tax base and prosperity.
“We talk about sometimes in our budget that we have to either cut expenses or raise revenues,” he said. "But one other part of that equation is: how do we lift up the community by having more growth and more economic activity in the community? So that's very important to the city council."
The plan’s other focus areas include downtown development, public safety and infrastructure.
“Then the last two areas are: focusing on trying to improve the quality of life of the city – whether that's focusing on housing, addressing homelessness, or just the overall quality of life of the city,” he said. “And then fundamentally across everything, how are we using and embracing diversity, equity inclusion and driving that throughout the organization?”
Urich said the goal is to use the strategic plan as a lens for the upcoming budget discussions.
The city is holding two virtual community forums to review a draft of the strategic plan on Sept. 28. Attendees will have the opportunity to review the plan and provide feedback. The first one-hour forum is scheduled for noon, and the second is scheduled for 5:30 p.m.Registration is also available at www.peoria2023.org.
