The Peoria City Council talked at length Tuesday about the grim options available for plugging the $31 million budget hole created by COVID-19 and its accompanying economic turmoil. One key recommendation includes delaying $26.7 million dollars worth of planned capital projects across the city slated for this year. Councilman John Kelly suggested that will end up costing the city more money in the long run."We're not really saving any money by suspending these projects. They still have to be done. If we're short of money today, we need to cut today's expenses," he said.
Councilman Chuck Grayeb said it's premature to consider slashing the capital improvements when it's unclear what additional help may be on the way from the state and federal governments and a rebounding economy after the stay-at-home order is lifted. "One of the options that we've been given tonight to stabilize our city and prevent devastating cuts was that we would seek a loan from anywhere from $30 to $40 million," he said. "And certainly, it seems to me that would be extremely judicious in view of the fact we're waiting to see what kind of moneys we'll have coming into our city."Grayeb said as the city council had no problems loaning out $8 million for the Pere Marquette renovations a decade ago, there shouldn't be qualms now about short-term borrowing. Councilman Denis Cyr suggested using the Gateway Building or the city parking decks as collateral to obtain loans. The council voted 7 to 4 to allow City Manager Patrick Urich to draft a capital project delay proposal for a vote at a future meeting. The council will meet weekly for at least the next few weeks as they sort out the city's future financial picture.
Other options on the table include restructuring the city's existing debt, seeking out loans using city assets as collateral, and laying off potentially dozens of city employees.
Councilwoman Rita Ali said the city workforce is already lean. She suggested temporarily furloughing employees rather than laying them off to allow them to take advantage of the enhanced unemployment benefits currently available, but still have the ability to return to work later. She said this would also help maintain basic public services over the long run. But city councilman Zach Oyler said that's unrealistic."At the end of the day, there are going to be staff reductions. And we're not doing our people any favors by pushing those out while they could be taking advantage of those 600 dollars now," he said, noting those enhanced benefits may not be available later if the city delays layoffs. City manager Patrick Urich said he hasn't yet given the city employee unions a 30-day notice of impending layoffs, but will do so soon. But Urich said the city doesn't have much leeway with layoffs. A 20 percent workforce reduction would be the equivalent of laying off every city employee not in the police or fire departments, he said. He projects a workforce reduction of up to 70 percent would be needed to plug the budget hole with cuts alone.
City Councilman Tim Riggenbach quipped he'd like to see the newspaper headline for Tuesday's budget discussion to be "The City Had A Balanced Budget...Two Months Ago" as an encapsulation how much things have changed in such a short period of time.
"We passed the budget for 2020 unanimously last fall, as you recall," Riggenbach said. "It was balanced. And as recently as our last meeting, we were still anticipating the IHSA tournament, and the new hotel opening downtown. So many of these things are beyond the pale when you try to wrap your arms around the impact."
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