Faced with the possibility of a nearly $800,000 operating budget deficit, the Peoria Heights Village Board committed to whittling that red ink at its three-hour strategy session of Feb. 24.
Before all was said and done, the $6.2 million proposed budget had been shaved to about $5.6 million, leaving a shortfall of approximately $147,000. The latter can be covered by reserves, or the Board can authorize additional reductions.
Meanwhile, not counted in this budget draft are the potential sales tax revenues from the new Beck’s Oil development and the Cookies marijuana dispensary on War Memorial Drive, which are likely to shrink if not erase the red ink in the near term.
In the long term, the Village has what is called “a structural deficit,” meaning that revenues will not be enough to keep up with projected spending unless some difficult decisions are made regarding taxes, the continued delivery of certain services, or both.
“We’re going to be in the same boat next year unless we have a steady stream of revenue,” said Village Administrator Dustin Sutton.
“We risk playing a game of whack-a-mole here,” added Trustee Matt Wigginton.
The Village still has plenty of time, as the 2024-25 fiscal year does not begin until May 1.
Village government has run surpluses for several consecutive years, but additional spending is expected to eat up all of that and potentially then some. A year ago, the Board adopted a $4.6 million budget. As it stands now, this budget is up about 22 percent from the current fiscal year.
The biggest jump in expenditures is in the Peoria Heights Fire Department, owing to the board’s decision late last year to hire a full-time fire chief and staff after decades of putting out fires with volunteers.
That fire department line item comes to about $1.45 million. A year ago, the Village was spending approximately $400,000 on fire protection.
The Village’s single biggest expenditure is on the police department, at almost $2.5 million. Most of those costs are in personnel, with the department employing 19 people. With spending on public safety taking up about 70 percent of the budget, other significant expenditures include streets and waste disposal.
There is a separate budget for the Village’s water system, which now shows a little more than $1.9 million in spending against approximately $1.7 million in revenues. About $400,000 of that spending is for lead line replacement, which the Village likely will not spend in its entirety.
While everything is on the table in terms of cuts, Village Administrator Dustin Sutton said that “when you look at personnel, you start with police. I’d hate to see that happen. Less cops on the street … you know what surrounds us.”
Trustees Sarah DeVore and Brandon Wisenburg offered several suggestions for budget reductions, among the most substantial being the removal of the Village subsidy for garbage pickup. That alone would save approximately $265,000, about a third of the shortfall.
“Garbage pickup is a service that every resident in every other town pays for,” said Wisenburg.
In addition, the Village can try to reduce the cost of volunteer firefighter stipends, skip the installation of Christmas decorations this year, and postpone some renovations to the fire department building. There also was some debate about the salary levels being established for new firefighter hires, currently proposed at a cost of $161,000 per employee between salary and benefits, comparable to what a police sergeant would earn.
“It is difficult to get qualified firefighters,” said Fire Chief Dan Decker, adding that those pay levels would make the Heights competitive with surrounding fire departments. There’s a safety concern with potentially inexperienced firefighters, as well. “The danger is not getting it right from the beginning,” he said.
Nonetheless, “I fear if we do everything all at once, we can’t afford it,” said Wisenburg. To the degree that grants can be obtained and fundraisers held to offset some of those costs, they should be pursued, trustees indicated.
For the most part, trustees seemed reluctant to raise taxes. “We have to remember that we already are heavily taxed on sales,” said Trustee Elizabeth Khazzam.
The Village also could attempt to raise revenue elsewhere, like adding gaming licenses, which bring in about $240,000 annually now. That did not meet with the warmest reception.
“We have kind of a Bedford Falls in the Village of Peoria Heights now,” said Wigginton, in reference to the movie It’s a Wonderful Life. “I always worry about us becoming Pottersville.”
“I don’t want to see (gambling) parlors up and down Prospect,” added DeVore.
Raising landlord registration fees also came up. Generally, there was a consensus that the administration should take a hard look at its entire fee structure.
Meanwhile, the Village also has capital needs, starting with the reconstruction of Prospect Road, said Community Development Director Wayne Aldrich. Some $500,000 has been set aside for Phase 1 of that project, which earlier received a $2 million federal grant.
Illinois Route 29 and Monroe Avenue also are in line for significant work as the Village begins to shift its focus to its waterfront and its residential neighborhoods, he said. A zoning code rewrite also is on the list. The Village’s landmark tower needs work, as well.
Of course, the most impactful decision hanging over the Village is what it wants to do with its deteriorating water system, which needs major reinvestment, said Aldrich. The waterworks also could be sold to the private sector.
“We have a failing infrastructure issue here,” noted Khazzam. “The water system is 110 years old.”
State and federal grants may pay the lion’s share of those projects but they often require a local match, said Aldrich. Given that, trustees should have a policy discussion as to whether they still want to pursue those grants, he said.
“Peoria Heights really doesn’t have a capital program,” said Aldrich, adding that many communities with which he’s familiar have set aside far more money for the likes of sidewalks and street maintenance, accompanied by long-range plans for those dollars of at least five years out.
Some capital needs, such as gateway signage, could be paid for out of restricted funds such as the Business Development District program, as opposed to the main budget, said Wigginton.
A hotel has long been a Village priority, but despite some interest from developers, they “couldn’t pencil the deal out” and the concept has “languished,” said Aldrich. Khazzam noted that there also is a need for more parking downtown.
One significant obstacle is that the land available for big projects like these is privately owned, and therefore not under the Village’s control, said Aldrich. Public ownership is “a great development tool,” he said. Setting aside money for purchases of property as it becomes available may be another discussion the Village Board may want to have, said Khazzam.
“Peoria Heights is a place people want to be,” said Aldrich “We want to be a player … and I think we are.”