Peoria Council Authorizes Operational Cuts Up to $10M

May 12, 2020

After weeks of deliberation, the Peoria City Council is authorizing the city manager to draft operational cuts of up to $10 million to balance this year's city budget.

That means potentially cutting up to 99 city jobs, including three fire engine companies and 33 police positions.

Budget slide presented by City Manager Patrick Urich to the Peoria City Council on Tuesday predicting an imminent city financial crisis if "quick action" isn't taken.
Credit City of Peoria

Urich again presented a grim budget picture to the council on Tuesday, as he has at the last several meetings. The city faces a shortfall of up to $50 million this year as city revenues plummet due to the COVID-19 pandemic.

The city manager predicted the city would "go broke" by the end of the year without quick action.

"We need to kind of calibrate our budget and spending here over the next 18 months as we move through 2020 and into 2021, so that we can progress through this crisis and get back on the path towards recovery," Urich said.

Second District councilman Chuck Grayeb said the council should wait to see if federal stimulus funds or other assistance is coming in to soften the blow before acting.

"The people in our cities expect our federal lawmakers to do right by us, expect our state lawmakers to do right by us, and we expect our councilmembers not to turn Peoria into a Hooverville, and to wait, to exercise restraint until we get more information," Grayeb said.

At-large Councilman John Kelly said this is the worst-case scenario that can be scaled back if conditions improve in the form of a federal stimulus or other assistance.

"I'm somewhat optimistic that we're going to get some pieces of good news as well as all this bad news," Kelly said. "However, I think we've got to be responsible at this point. Plan for the worst, and hope for the best."

At-large Councilwoman Rita Ali said the cuts proposed by Third District Councilman Tim Riggenbach were too severe.

"I'm willing to go some ways, but ten million is too deep," she said. "It impacts not just our staff, but our services, our community. And I don't believe that we're ready. That we have to be there at this point."

Out of 40 banks the city approached to open short-term lines of credit, only two responded positively. PNC Bank and Regions Bank each offered $20 million in credit for two years. It's unclear what the additional fees and interest may cost, but city financial director Jim Scroggins said Peoria would likely need to issue working cash bonds to pay off the debts. 

The measure passed 7 to 4, with members Beth Jensen, Jim Montelongo, Chuck Grayeb and Rita Ali dissenting.

But they aren't yet set in stone. City manager Patrick Urich will draft a plan based off the new authorization for the council to weigh in two weeks.

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