When the pandemic struck in March, Peoria council and budget officials leaned on the side of fiscal precaution, stalling any new hires and adopting a “baseline” budget for fiscal year 2021 that largely reverted to the ongoing spending levels of fiscal year 2020.
Since the spring, officials say reviews of the city’s economic activity have improved, with a reasonable recovery in critical areas, especially the city’s sales tax revenue.
Finance and Budget Deputy Director Barry Houg said since July, the city’s sales tax revenue each month has averaged 11% higher than the same month during the previous year.
He said this is an important revenue for the city as it makes up one-third of the general fund revenues and is helping to offset areas where revenues are not as strong, such as recreation, events and rentals.
“While these sales tax revenue numbers are encouraging and, in fact, are outperforming what we have experienced even in ‘good times,’ current conditions are anything but normal. Until the pandemic is brought under control, there is always the risk of further restrictions that could hurt revenues. As such, we intend to be very conservative in our approach to the fiscal year 2022 budget, especially when it comes to adding new ongoing expenditures.”
With that approach in mind, the Peoria City Council recently approved a mid-year budget amendment for $590,000 to restore certain budgetary requests suspended from the fiscal year 2021 budget following the coronavirus outbreak.
While officials with Peoria’s management and budget division say they remain cautious on the city’s long-term financial forecast, they have determined there is enough ongoing funding and ample reserves to remove some restrictions previously put on the budget due to the COVID-19 pandemic.
Lifted restrictions will include removing the city’s hiring freeze and applying funds for certain programs.
Mr. Houg said the city also is keeping a close watch on development-related revenue, which are tracking close to last year and have not slowed during the pandemic. This revenue stream comes from construction sales tax and fees charged by the development and engineering department. The fees are from residential and commercial activity within the city and include permit, inspection and plan check fees.
“As always, the city is monitoring the state-shared revenues,” Mr. Houg said. “This includes state-shared sales tax, which is performing similar to local sales tax. It also includes state-shared income tax, which is expected to be negatively affected by the pandemic at some level, however there is a two-year lag in receiving this revenue.”
Several city departments want to restore certain supplemental requests that were removed from the fiscal year 2021 budget. Most of these requests are either one-time in nature or will use existing base budgets to offset increased ongoing costs. Below is a summary of these requests by department.
The Development and Engineering Department is requesting a contract Development Technician I position. Development activity has not tailed off during the pandemic, and this front-line position ensures that service levels can be sustained. The one-time cost of this request is $40,000.
The Peoria Fire-Medical Department is requesting a contract Administrative Assistant II position for the EMS Division. This position provides administrative support for the AMR Ambulance contract and the community paramedicine program, tracks and orders disposable supplies for EMS and ambulance operations, and tracks required certifications for EMS providers, among many other functions. The one-time cost of this request is $65,000.
The Peoria Police Department is requesting funds to continue its traffic and crime prevention programs. The funding provides additional overtime staffing hours to create focused patrols in identified crime areas and target traffic concerns in specific areas. The one-time cost of this request is $70,000.
The Finance and Budget Department is requesting funding to move forward with needed updates to its outdated budgeting application. This project also offers the ability to automate the production of the city’s comprehensive annual financial report and budget documents. The project needs to begin as soon as possible to have a chance at being ready for the FY 2023 budget process. The one-time cost of this request is $350,000, with any ongoing costs absorbed within the city’s base budget.
The Leadership and Management Department is requesting funding to move forward with a citizen relationship management system. The system will allow the city to centralize opening service tickets, coordinating assignments, disseminating information to departments, and tracking each request to completion. The one-time cost of this request is $65,000. The ongoing cost of $40,000 will be absorbed within the city’s base budget.
Philip Haldiman can be reached at email@example.com, or on Twitter @philiphaldiman.