Recovering from the economic uncertainty of the COVID-19 pandemic, Peoria has brought forth a proposed budget for the new fiscal year reflecting “robust economic growth,” officials said.
This includes favorable sales tax revenue and federal fiscal stimulus revenue allowing for growth and financial flexibility, said City Manager Jeff Tyne.
The fiscal year 2023 proposed budget totals $783 million, which represents a 12.7% increase, or about a $40 million increase from last year’s budget.
Fiscal year 2023 will begin on July 1.
Capital projects and personnel costs, such as new staff, are primarily responsible for this increase, with the $286.5 million capital budget for fiscal year 2023 representing an 18.4% increase over the fiscal year 2022 plan, largely driven by new projects, construction costs and inflation.
Peoria City Council will consider the proposal May 17.
Tyne said the budget addresses pent-up demand.
“We know that during the last couple years, during the COVID era, it was a good time to take a pause to learn a little bit about how this economic situation was going to impact us,” he said. “In addition, we were sequestered, so there has been some pent-up demand, because the city continues and the community continues to grow and mature and evolve and have different issues as a result.”
On May 17, council will also consider the proposed Capital Improvement Program, a $1.1 billion plan to support various projects through fiscal year 2032.
The fiscal year 2023 capital budget of about $285 million reflects the first year of the plan, which includes $95 million for projects carried over from fiscal year 2022.
The city is recovering from the pandemic with big gains in sales tax revenues.
It will end the current fiscal year 4.2% higher than the prior year, and overall General Fund revenues will be up 5.6%.
Peter Christensen, deputy finance director for budget and revenue, said the city continues to see strong revenue growth — through February, sales tax growth is up 13% over last February, and state sales tax grew by 28% year-over-year.
“Those are big numbers,” he said. “While we haven’t reset our forecast to reflect those extraordinarily high numbers of revenue and growth, we have bumped those up a little bit and that has added some capacity to our General Fund. But the revenue growth right now is not sustainable. It is well above the Arizona or national economy. We know that’s mostly one-time [funds] and we are treating it as such in our forecasts and the way we budget.”
Christensen said the volatility of sales tax revenues and other examples gives the city reasons to be cautious:
• Recreation fees are recovering but are still down compared to pre-pandemic levels;
• The drought on the Colorado River continues to deepen, leading to higher water purchasing costs and significant infrastructure expenses, affecting the city’s Water Enterprise Fund;
• With the pandemic winding down, there is reason to believe federal stimulus will be limited going forward;
• On the expenditure side, inflation is a key worry. The Consumer Price Index was 7.5% higher in December 2021 than the prior year, the highest since 1982;
• Inflation coupled with labor shortages heightens the pressure to keep pace with the salaries and benefits offered by other cities and private businesses in the Valley. To this end, the fiscal year 2023 budget includes funding for merit and cost of living increases for employees, as well as adjustments to the salary ranges of non-represented employees to keep their compensation competitive with other Valley cities.
In January, City Council approved 36 new staff in a midyear budget adjustment. These new staff included 15 fire-medical positions, 15 police positions, three development and engineering positions, two water services positions and one finance position.
Because of this, the new budget will include only 24 new full time employees, including six in public works and four in water services, bringing the total city workforce to 1,350.95 FTEs.
Capital Improvement Program
The $286.5 million capital budget for fiscal year 2023 is increasing by 18.4% over the prior year while the $1.1 billion 10-year CIP is increasing by 29.8%.
The 10-year capital plan is fiscally balanced, meaning the capital and operating costs of each project have an identified funding source based on reliable revenues, officials say.
Documents state the CIP addresses projects that are needed — or will be needed — across a broad spectrum of areas, including drainage, economic development, operational facilities, parks, public safety, streets and traffic control, as well as water and wastewater systems.
Some current projects underway included in the new budget are the extension of reclaimed water to Paloma Park, regional drainage improvements at 67th and Pinnacle Peak Road, as well as expansions of the Beardsley and Jomax water plants.
The CIP also continues investments in Paloma Community Park phase 2, trail system improvements, a fire station in northern Peoria, a planned replacement of the aging fleet building, and further expansion of reclaimed water infrastructure, according to the program.
New projects included in the 10-year CIP are $7 million for Peoria Sports Complex auxiliary field and parking improvements, $8.4 million for Stadium Trail phase 3, $8 million for an expansion to the Pinnacle Peak Public Safety Campus, $34 million for a tactical range and evidence facility, $54.5 million for a roadway project at Lake Pleasant Parkway and Loop 303/SR 74, and $57.2 million for a wellfield/booster pump station at Lake Pleasant Parkway and the CAP canal, the plan states.
Philip Haldiman can be reached at phaldiman@iniusa.org, or on Twitter @philiphaldiman.
Meet Philip Haldiman is an award-winning journalist who most recently took first place for investigative reporting in 2023 from Arizona Newspapers Association. He joined Independent Newsmedia, Inc., USA, in 2015, covering Sun City West his first year. Since 2016, he has covered the city of Peoria. Prior to coming to INI, he was a reporter with The Arizona Republic for seven years, covering numerous cities throughout the Valley. Before that, he was a freelance writer.
Community: Haldiman spearheads the Peoria Independent Hometown Heroes Awards program, honoring local individuals and businesses that give back to the community. He has hosted local candidate forums over the years and is a member of the Society of Professional Journalists. Haldiman also served as a member of the Journalism Program Community Advisory Board at Glendale Community College. Outside journalism, Haldiman served as a member of the city of Peoria Complete Count Committee for the Census, 2019-2020. Lastly, he has served as a member of his HOA governing board since 2021.
Education: Arizona State University with a BA in Journalism and Mass Communications and a BA in Theater.
Random Fact: Haldiman is a fourth-generation Arizonan as well as wrote and produced an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.
Hobbies: He enjoys hiking Arizona’s mountainous landscapes and is currently working on a play for the stage.
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