The City of Pekin recently added a utility tax and increased some service fees as it looks to correct its shaky financial standing.
Despite making a campaign promise not to raise taxes or fees, Mayor Mary Burress voted in favor of the increases.
“I had to, because it was the right thing to do to get the city back in shape,” Burress said during a recent interview with WCBU.
The late-April council vote saw Burress join three members in voting to approve the 5% utility tax and the garbage collection fee increase, while she was also among the five votes in favor of raising wastewater and storm water collection fees.
Burress said she realizes her position change raised eyebrows.
“I have been criticized, and I know exactly what I did say. I did say we cannot raise taxes on fees, but I also didn't realize just how bad the city was,” she said.
The city's budget for the 2024-2025 fiscal year contains an $11.8 million deficit, with expenditures at $117 million. That includes $5 million worth of cuts that will see two staff positions left vacant, some road construction and street improvement projects delayed, and business assistance trimmed.
Burress said she regrets not getting a clearer picture of the city's bottom line before taking office.
“I didn't FOIA anything before to see where the finances really stood,” Burress said. "It was pretty bad, with not having audits done for three years (and) not really knowing where you did stand. They showed me a study that was done four years ago, and they were talking about raising (taxes and fees) then — and needed to desperately. They chose not to.”
Burress said she believes putting more taxes and fees on citizens normally isn't the right thing to do, but added it had to be done to get the city “back in shape.”
“The garbage and stuff, we could have taken it out to an outside source instead of in house. But we did some studying; it was going to (cost) even more,” Burress said. “So we chose to go ahead and keep it in (house) but we had to raise – it hadn't been raised for years and years.”
Interim finance director Bob Grogan has attributed some of Pekin's financial woes to structural issues in past budgets related to a mandated combined sewer overflow project and required upgrades to pedestrian walkways for Americans With Disabilities Act (ADA) compliance.
The utility tax is projected to raise about $4 million over the fiscal year. Under the new tax, the average utility bill is about $10 higher than before.
Burress said city leaders are elected to make hard decisions that sometimes aren't favorable, and she supported the increases to move the city forward.
“I'm not saying that that's the easiest thing to swallow, but it is something that the city had to do to get us back on track,” she said. “I really wish that I would have had hands-on with the finances before I did some of the campaigning. But unfortunately, I didn't.”
Burress said Pekin is in the process of catching up on its annual audits after falling four years behind. She says the 2020 and 2021 audits have been submitted, and 2022 will be completed by the end of this year.
The mayor said it's too soon to say what steps the city might take to make up for an estimated $1.8 million in lost revenue when the state's 1% grocery tax ends in 2026.
“That's a good question. We really haven't dug into that yet,” Burress said. “We are trying to see – with these new taxes and fees that are coming in, with the new buildings coming (and) being improved … We are giving TIF incentives away, which are having more people interested in the city. There's new businesses coming downtown.
“We've got to kind of see where the revenue is going. Give us another 6-8 months, we should be able to tell what kind of revenue is going to be flowing in. Hopefully that won't hurt us – it's going to hurt us, but hopefully we'll be able to come up with a way to maybe come up with that revenue.”
Burress credits the work of economic development director Josh Wray for his efforts toward bringing new businesses to Pekin, and she says an increase in new home construction and a just-approved 34-unit duplex development will bring in more revenue “the right way.”
“It is going to bring in more property tax, so that that's going to help put us back on track,” she said. “I feel that the city was just in the stalemate for far too long, and we are growing. We are moving forward.
“That's all I hear on the street: what a great job that we are doing, and we're moving in the right direction.”
Burress said major road reconstruction projects on Court and Derby streets are nearly complete.
“Those are two major throughways through the city, and those should be done by this fall,” she said.
