ACTION REQUESTED:
Title
Communication from the City Manager and Finance Director/Comptroller with a Request for a POLICY SESSION to Discuss the 2019 CITY OF PEORIA BUDGET.
Body
BACKGROUND: In December 2017, the Peoria City Council adopted a biennial budget for 2018 and 2019. The adopted 2019 budget anticipated $206,335,814 in revenues and $198,124,113 in expenses. The 2019 General Fund budget included $93,546,708 in revenue and $93,479,261 in expenses.
Pension estimates from the Illinois Department of Insurance are anticipated to be $1,400,000 higher. The County Supervisor of Assessments has estimated a contraction in assessed values of 2.5%, reducing current collections at the same rate by $800,000. City staff are estimating a 2.0% decline in sales taxes, which is $900,000 less than this year. The Illinois Department of Revenue has lowered Personal Property Replacement Tax estimates 8.0%, a $500,000 decrease. Based upon other current revenue collections, City staff estimates another $400,000 decline in revenues. This totals $4,000,000 in higher expenses or lower revenues for 2019. In addition, the City will be required to pay the PAAG lawsuit in 2019. This could be anywhere from $1,700,000 to $2,200,000 by the time the Circuit Court Judge determines the interest rate.
|
|
Estimated Impact |
|
Public Safety Pension Increases |
($1,400,000) |
|
Assessed Valuation (down 2.5%) |
($800,000) |
|
Sales Taxes (down 2.0%) |
($900,000) |
|
Personal Property Replacement Taxes (down 8.0%) |
($500,000) |
|
Other Revenues |
($400,000) |
|
TOTAL DEFICIT |
($4,000,000) |
|
PAAG Lawsuit |
($2,000,000) |
City staff will take the time in the policy session to discuss:
1. An approach to increasing liquidity in the General Fund that doesn’t have an impact on operations;
2. The City fund balance policies and approaches to increase fund balance over the next 5 -10 years;
3. Meeting pension obligations;
4. Balancing the operating budget;
5. Planning for future capital needs; and
6. Efforts to grow the Peoria tax base.
FINANCIAL IMPACT: All of the policy session discussion will be focused on the financial impact. Decisions to raise revenues or reduce expenses have an impact upon the City and its employees and its taxpayers.
NEIGHBORHOOD CONCERNS: Spending decisions have an impact upon the neighborhoods and the ability of the City to deliver services.
IMPACT IF APPROVED: Feedback will be sought from Council in preparing a budget recommendation for the Council’s consideration.
IMPACT IF DENIED: N/A
ALTERNATIVES: Alternatives will be discussed.
EEO CERTIFICATION NUMBER:
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2017 - 2032 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Financially Sound City
2. Safe Peoria
3. Beautiful Peoria
4. Grow Peoria
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Keep taxes and fees competitive.
2. Grow employers and jobs.
3. Invest in our infrastructure and transportation.
4. Have an efficient government.
DEPARTMENT: City Manager's Office