Thank you very much.

Good evening, everyone.

Good evening.

It is six o'clock PM on Tuesday, September 30th, 2025, the last day of the month, ladies and gentlemen.

I'd like to call the meeting of the Peoria City Council to order and also welcome everyone here in our city council audience as well as our listening audience on Cable Channel Twenty Two and on YouTube.

Madam Clerk, the council mics are open.

Please call the roll.

Mayor Ali.

Present.

Council Member Allen.

Present.

Councilmember Carmona.

Here.

Councilmember Sear.

Here.

Council Member Gordon Young.

Present.

Council Member Jackson.

Councilmember Kelly.

Here.

Councilmember Euler.

Here.

Councilmember Riggenbach.

Here.

Councilmember Velpula.

And Councilmember Vespa.

Here.

You have a quorum present, Madam Mayor.

Thank you, Madam Clerk.

Everyone, please join me and stand for a moment of silent prayer or silent reflection, followed by the Pledge of Allegiance.

Councilmember Gordon Young.

I move to approve item two five-two seven five.

Seconded by Council Member Trustee Allen.

Any discussion or questions?

Trustee Sear.

Thank you, Ma'am Mayor.

Just one question.

I'm not sure who I'm supposed to ask a question to.

What is the goal to your knowledge, or who's our who's our early liaison?

It may be oh I'm sorry.

approve item two five dash two seven five seconded by council member uh trustee allen any discussion or questions trustee sear just kind of a uh thank you ma'am mayor just one question and I'm not sure who I'm supposed to ask the question to um what is the goal to your knowledge or who's our who's our liaison in the town it may be oh I'm sorry the question may is either to our liaison or to our township supervisor um I don't know if you know that I mean we're decreasing by five percent right this year uh what is the goal I mean there's obviously we want to you know spend the uh the reserve do you know what the goal her goal is as far as for how much reserve she wants to have on the books as much as I love to answer that question why don't we ask her she's here oh I mean I'm sorry I didn't see you over there sorry did you hear my question I did um what is your goal for the reserve down the road well to the the goal of the reserves is simply to get a balanced budget um from my understanding just several years back prior to me coming in there was a historical reduction in funding on the the reserve on the tax levy um typically government um entities or taxing bodies do not do a significant reduction based on what the um the actual uh budget is the yearly budget is however I understand that there were some circumstances as to why that decision was came about um what I have been doing over the last several years or in the last four years since I've been in is just watching where we are so far um our reserves have come down they're not coming down at a drastic rate and I do not think that it would be in our best interest to see a drastic fall in the reserve simply because our current budget our annual budget is about 2.3 million um and our incoming funds from the levy is significantly lower than that so we kind of have to watch those numbers very carefully to make sure that we do not end up to where we have to do um a truth in taxation and there are other things that may come about if we don't find that balance so we're just watching the monitoring the numbers very closely but would you like to see six months reserve 12 month reserve a year I mean what what would you like to see?

I do not think that six months is realistic.

If we were to get our reserves down to six months we have to think about how long it would take us to get our levy to where our actual budget is or our actual annual budget is today and with our annual budget being 2.3 million that is that in the case in the event that none of our costs increase um that increase that's operational increase we already know that you know with am just daily day to day operations those costs are increasing um I did do the numbers on that if we were to um do increases of three percent just to meet our levy where our annual budget is today it would take if we increase it by three percent it will take close to 20 years if we were to increase it 5% it's going to take roughly about 12 to 13 years.

So my question would be for the board if that is the route to go to get it down to that six month minimum what are we going to do during that time frame if there is no uh solution that is set in place then that is probably the it will be detrimental to get it down to six months six months is the absolute bare minimum to keep operations running and it's just not realistic with what we have going on currently at the township.

Thank you thank you ma'am mayor you're welcome uh excuse me the motion is to approve the proposed estimated tax levy of one point four one nine five four oh with an estimated tax rate not to exceed zero point zero seven four three one five for the town of the city of Peoria please cash your ballots motion passes unanimously madam clerk we are at the city portion of the agenda 25-276 is a communication from the city manager incorporation council with request to approve the site application for a class H temporary outdoor liquor license for an event held by Peoria's real steel Inc for its warehouse district blocktoberfest fundraiser on the block of Oak Street between Adam Street and Jefferson Avenue on October 4th 2025 from 9 a.m to 9 p.m.

So those uh the Fourth of July fundraiser is one that's been very popular and hugely successful that council doesn't see anymore because our ordinance provides that once council's approved it in a couple of years, then staff can do so administratively.

So these uh this is a a growth of that type of an event um that's being hosted in the a slightly different part of the warehouse district adjacent to uh dozer stadium.

Um and uh I think the organizers hope that it'll be a continuing event going forward to celebrate that part of the warehouse district as well as raise funds for a not-for-profit.

We'd uh ask for approval of the event.

Um, and if they renew it next year and it's approved, then after that it'll be an administrative approval.

Thank you, Your Honor.

Thank you, Council.

And I will point out I didn't mention earlier that this is a special meeting of the Peoria City Council, not a regular meeting.

And this particular item is time sensitive.

It would have normally been on a regular meeting agenda, but because the event is scheduled for October the fourth, um, it was time sensitive and and placed on this agenda.

Um can I get a motion to approve?

Move by council member Kelly, second it by councilmember Allen.

Any discussion?

Please cash your ballots.

Motion passes unanimously.

Madam Clerk.

25-277 is a communication from the city manager and finance director comptroller with a request to approve the estimate of taxes to be levied in the amount of 34,418,810 at a rate of 1.3483 pursuant to 35 ILCS 200 slash 18-60.

Mr.

Manager.

Uh thank you, Madam Mayor.

I'm going to turn the floor over to our finance director uh to explain our requested levy amount.

Thank you, Mr.

Manager.

Um, in front of the council tonight is our is our levy estimate.

Um, I always like to remind council that um accepting the levy estimate is not a is not a binding approval of the levy.

This is really just to have this on the table for consideration.

Um the levy itself, uh as the the title shows, um, has an overall uh levy subject to truth and taxation at 34 million four hundred and eighteen thousand eight hundred and ten dollars at the rate of one point three four eight three.

Um I think the key components of that is um this the levy estimate in front of you maintains that that rate for the truth and taxation component.

And let me just take a step back real quick to kind of explain the difference.

Um really our aggregate levy is around 39 million dollars.

Um for both the city portion as well as the library portion, um, we have debt that automatically is levyed um at the time that the bonds are issued.

Um, and so that is an amount above and beyond and is already set.

Um so that's the 39 million dollar amount.

The amount that's subject to the truth and taxation is really those operational levies.

So for the city, it's gonna be um, you know, really are for us, it's mostly the pension plan for the library, it's gonna be committed their operational funds.

Um, but the the I think the key in this conversation is um as we have in the past in bringing this to council, we are maintaining the rate as to what the final rate was once the county levied the taxes for the 2025 fiscal year.

Um, the one thing I will point out is when we had gone through this process last year, we had assumed um around a 7.2 percent increase in overall EAV.

The final number was closer to 8.2.

Um, so we actually saw our rate drop slightly um from an original estimate of 1.3511.

Um, and so we are not recommending taking it back and trying to recap to capture what we did not capture last year.

We're simply asking to maintain that truth and taxation rate at the current rate.

Um, in terms of overall impact, the the overall dollar amount of levy increase is 6.56%.

Um that is equal to what our estimate is from the county at this point of what overall property values are going to grow next year.

Um, so that's where that comes from.

Um the aggregate levy, though, however, I think just wanted to kind of make it clear to council.

We actually will see a slight decrease in our rate next year if this was to be approved.

Um, because the city's portion we always maintain at $2 million.

Um we're not capturing any growth on that two million dollars.

Also from the library side of it, they're getting close to their bonds being paid off, and so we're starting to see reduced payments at the end of this.

Thank you.

Councilmember Kelly.

Thank you, Madam Mayor.

Believe it or not, uh Director Craddy, I I believe that I followed you.

However, I hit hit us or hit me with that two million dollars.

Again, I I didn't understand what that was for or what so the two million dollars that we uh the council has authorized us to issue for roads.

So there's two million dollars on our tax levy.

Um that is for road improvements that is um in essence tied to our existing debt.

Um, and so that's really that two million dollar amount that we have levied for uh uh multiple years, close to 10 years at this point.

Um, and we've just always maintained it at that two million dollar number.

We've not raised it based off of any inflationary factors or overall growth.

We've maintained it at the two million.

But that is included in the rate.

It is included in the rate, correct.

Okay.

Yes.

Yeah, I thought it would be, but I I mean, I guess we have other carve-outs as well in the in what we collect.

So but uh thank you.

That makes it clear to me.

Thank you, madam mayor.

You're welcome.

Mr.

Manager, did you have a clarification?

Well, I I think just some history on that.

Um when back in 2015, we were really looking at how we can put more money towards roads.

And one of the the points was with bonds, we have we we usually have an alternate revenue source that we're paying for our bonds with.

So sales taxes or other taxes, sewer rates, stormwater utility fee, whatever we've pledged for the for the bonds.

And in this instance, uh we made the or the policy decision was made in 2015 to say let's not use those revenues but move that money into our road fund and then levy property taxes to cover the cost because every bond that we issue has a property tax backstop to it that we can levy property taxes for.

So that's where that the history of that came from.

Okay.

Thank you.

Thank you.

Councilmember Allen?

Uh thank you, Madam Mayor, and thank you, Director Craddy, for breaking this down.

I know that this can be confusing when constituents are doing their best to keep up and they see that our tax rate the last several years has actually gone down, but when they see that the equalized assess value has gone up, and then when they receive their property tax bills, they're like, why are my property taxes a little higher?

So can you maybe explain a little bit more about why if we do approach it this way, their property tax bill may go up and also all the other public taxing bodies will be having these same conversations when it comes to their equalized assessed values as well.

Yeah, absolutely.

You know, uh really I think you know when we look at assessed value growth, um, that can be from a number of factors.

That can be from new businesses or new homes being built in Peoria.

It's also based off and I think why people can see at times an increase in their taxes, but it also may not equate to the number that we're talking on paper, is because it's really subject to the overall valuation of your home.

And so if your home gets gets um revalued, you're going to see an increase.

And so it's always like those things, and it's always difficult to necessarily sit there and pinpoint this is what it's going to mean for an individual household because it's really based off of how those the homes are assessed.

Yeah, absolutely.

And I'm very empathetic to everyone's household budget.

And um if constituents are following along in page 50 of our our budget book, it does a good job of giving us a historical context from 2021 to 2026 of what the uh equalized assessed value percentages have been, and then the the tax rates, and so you can see the the fluctuation there.

And then you also reference in the narrative though that it looks like um towards 20 was it was it 2027.

You see possibly this returning that we won't have this increase uh assessed values.

I think everyone continues to be a little surprised that the housing market continues to go up at the values that it has.

Um, you know, long term, usually the housing market we're seeing more in the neighborhood of following the rate of inflation.

Um so as the inflation continues to moderate, um, while it never fully goes back to what it was before, my anticipation as inflation types tends to moderate that we should start to see some of these value growths also start to get a little bit smaller.

Thank you, Director Craddy.

Thank you, Madam Mayor.

Welcome.

Thanks for that explanation.

Councilmember Seer.

Thank you, Madam Mayor.

Uh Director Craddy, thank you for being here tonight.

I'm sure it's gonna be a long four or five or six weeks.

Um I just want to make sure I understand uh about this.

First of all, EAV.

What is the uh last 12 months?

What's been the uh CPI level?

So the the estimate is around 2.9 percent for the last 12 months.

Okay, so explain to me how uh would our property values go up 6.6 percent when the CPI it's at 2.9 percent.

Are they there's any correlation between the two?

So there can at times be a direct correlation.

Um, and I will admit I'm obviously obviously not someone that does an assessment process for a living, so I'm doing it based off of my you know my best understanding of the process.

Um what this really comes down to is that um the values of of properties when they're being purchased is higher than the rate of inflation.

And so when these properties are being reassessed, which is very common when you buy a home, that the property will be reassessed based off of your purchase price.

We're seeing purchase prices of homes growing at a faster rate than of inflation.

I I hope that kind of makes kind of sense.

Well, yes, I mean I understand all about supply and demand.

Uh tell us a little bit about our uh tax bill that we all receive, and we have to pay twice a year.

So if this $2 million is part of the tax bill, like you're saying, is this a taxable event for or deduction for our our uh constituent then?

It is.

So that two million dollars because it's part of the tax bill, real estate taxability, it's deductible.

Correct.

And whatever their entire tax bill up, I think it's to 40,000 now with the new salt deduction.

So as long as they don't have a tax bill over 40,000, it's tax deductible.

Okay.

Um I think that's all I have.

Thank you, Madam Mayor.

You're welcome.

Councilmember Kelly.

Uh thank you, Madam Mayor.

Um there is one thing to remember about what we see as our EIV.

Our EAV is a lagging number.

Um, and as inflation goes up, if we just follow inflation, if we exactly meet the inflation rate, our EAV will not be rising that quickly.

Uh let's assume no new buildings, no, you know, everything stays the same from year to year.

We recently had a pretty high rate of inflation.

And this year, it has come down significantly.

We're going to see that in subsequent years.

Uh we don't we don't see it right now.

I think it's perhaps worthwhile to note that over the last 10 years, 15 years, the EAV in Peoria, Illinois has not kept up with inflation.

We've actually lost ground in our EAV, uh, which is uh very uh that's very worrying.

Everything looks really great right now because you know uh our EAV uh you know is is going up.

But we are a little bit behind the eight ball as far as at least keeping up with the rate of inflation, much less uh with some real growth in the city.

So thank you, Madam Mayor.

Thank you, Councilman.

Councilmember Ringbach.

Thank you, Madam Mayor.

I would move for approval of item 25-277.

Can I get a second second to buy council member Kelly?

Any other questions, comments?

Councilmember Seer?

Thank you, Madam Mayor.

I knew I I had one more question.

I couldn't remember it and just came back to me.

The $2 million is it included in your report about how much uh bond uh your department wants to issue this year.

Because I got I see two numbers.

One one is 10-6 and one is eight, seven or eight, nine.

So no, the well, it is included in terms of what the overall amount required to pay our previously issued bonds.

So what we are using is our taxing ability on existing bonds.

It's not tied to the bond issuance that we're doing that is planned for this year in this budget.

Thank you.

Thank you, Madam Mayor.

You're welcome.

Councilmember Vespa.

Thank you, Madam Mayor.

Um, I I'm not an economist by trade, but um wouldn't EAV be kind of a leading indicator because you know, the Fed releases money to the banks, and then the banks typically loan first via mortgage to you know home buyers, and then home buyers, of course, pay uh you know, buy the house, pay the mortgage back to the banks, but that that money then kind of you know trickles down to the consumer goods, which then make up the consumer price index.

Um so I I I kind of think that it's more of a leading indicator if the EAV is going up.

And I also I also expect a lot of rate cuts, I as I think most economists do uh in the next year, and that's going to make it cheaper and easier for people to borrow money.

Makes money cheaper.

Um so I think I I don't know, I I just foresee the housing market full steam ahead, but maybe I'm wrong.

Yeah, I I think home sales, homings home starts, which we'll get into a little bit with the presentation when we look at kind of real estate transfer taxes, is a leading indicator of more than likely how the county and the assessor's office is gonna view the assessment process.

So it is kind of like because of how taxes are done in Illinois.

The EAV is a lagging indicator of the previous year's growth, where kind of the housing starts and housing market, so it's it's it's kind of one and the same.

So I I I see really there's both sides of that that piece of that argument, but I agree.

I look at housing starts and home sales as a pretty good indicator of the health of the economy.

Okay, that response makes sense.

I appreciate it.

Thank you, Madam Mayor.

Thank you.

Is the EAV a leading or lagging indicator?

Let's ask Chat GPT.

We have a motion on the floor.

Okay, Councilmember Seer.

Thank you, ma'am mayor.

Sorry about just a couple more questions.

One is really, I'm not sure it has anything to do with the budget, but it's for our our uh manager, city manager.

Uh Patrick, do you think one day?

Okay, we're talking about EAV tonight.

Everybody should know that we penalize our taxpayers when they renovate their house.

Tell us what they're doing, uh, and then eventually, because there's always a three-year lag, correct, and the asset of value or house.

I mean, like I said, I mean, this is not a great setting for conversation about that, but you what's your forecast?

And do you ever see a time where we won't penalize uh the what our taxpayers the state does provide for uh uh an exemption for improvements that you make on your house?

There's a there is I think it's about six thousand dollars that can be added on as an exemption when you're when you're making improvements.

So it's a small number, but it is a number nonetheless that will mitigate some of that impact of the improvements that you make to your home.

Um I think that's certainly a policy question to engage our legislative delegation in and talking to them about what kind of incentives can you create to encourage the reinvestment in properties and and looking at not penalizing property owners for the investments that they make in their homes.

Thank you, sir.

Thank you, madam mayor.

Welcome.

Okay, please cash your ballots.

Motion passes unanimously.

Madam Clerk.

25-278 is a communication from the city manager and finance director comptroller with a request to hold a discussion on the 2026-2027 biannual budget.

Mr.

Manager uh thank you, Madam Mayor.

Uh tonight obviously kicks off the discussions that we'll hold uh here over the next uh several weeks pertaining to the budget, and um we have as we normally do have put together a presentation, and I'm gonna turn the floor over to our uh finance director Kyle Craddy to walk through the presentation, and then we'll be able to answer questions that council hopefully has.

And I'm going to turn the floor over to our finance director, Kyle Craddy, to walk through the presentation, and then we'll be able to answer questions that council hopefully has.

Thank you, Mr.

Manager.

Just uh as the manager said, we're here to talk about the 2026-27 2027 biennial budget.

Um, you know, I think just a kind of a reminder for the council is we undertake every two years a biennial budget.

Um, so we really look at really that impact financially speaking of the the budget for the next two years.

Obviously, also in your book, I've provided kind of a five-year review of what the impact of this budget is long term.

Um, but just I think for you know legal standpoint, really the budget that you end up approving is for next year.

Um, and then we will bring you back a revised budget next year based off of how things are going and everything and so forth.

Um, I think anytime you start talking about budget, um, it's always important to go back and remind ourselves that the strategic plan that the council has laid out is is really the intended document to drive the decision making that the staff is making and the recommendations that we're making to you in terms of our budget requests, because that really is the bedrock of what we are trying to do here, and it's the direction that council has given the staff in terms of proceeding in terms of service delivery.

And so I'm gonna spend a few slides here kind of going over how we as staff are um handling the strategic plan, how we are addressing that and the challenges the council has put out as part of the strategic plan, um, and really some of that budget alignment.

Um, there is a section in your budget that's that specifically looks at all of the different goals for the departments this year.

Um, and I'll get into here in a slide or so how that really ties back to some organizational-wide goals that the staff worked through this over the last year.

Um the the first thing I'll I'll just kind of you know go over with this is you know, really just kind of that reminder of our vision and mission.

Um so Peoria's mission is to provide excellent services, protection, and infrastructure that fosters a high quality of life, uh, as well as having a mission that Peoria is a thriving all-American city, rich in history and natural beauty with an abundance of opportunities for everyone.

Um, and really the pillars of all of this is those strategic priorities.

And so for those strategic priorities is a reminder, we have quality of life, infrastructure, downtown development, community safety, business growth and prosperity, and embrace diversity, equity, and inclusion.

Um, and so as I kind of get into the work the staff did, I just really want to take the time to thank the staff for their efforts in going through this.

I know this was a little bit of a different process than we have gone through in the past.

Um, and really trying to look at this as an organization in terms of what our goals need to be and how we want to address these.

I also just want to give a little bit of a shout out to the assistant city manager Kimberly Richardson, because she's really the one that wrangled all of us and led us down this this path.

And so I just want to make sure that she's acknowledged for the work that she put into this with the staff to get to where we are with these.

Um, and so as I kind of said, you know, we went through a process um of asking the departments to have goals that align with their budget.

And so when you look through their budget and you look through those goals, there's a direct alignment to the spending requests that you have in front of you.

The challenge we really went through this year, though, is if you remember from the strategic plan, we had a section on each of these strategic priorities that said what are our challenges?

What are the challenges we face to actually meet um our performance metrics and what we want to get to?

And so those were the bedrock of what staff used to review to come up with what we've now done, which is an organizational goal per strategic priority that all staff are working towards.

All departments are working towards to try to meet that stopgap goal or that organization organizational-wide goal that will help us complete the strategic priority, the overall strategic priority of the council.

I know that was probably a little bit in the weeds, but we went through a relatively expensive process to get there.

Um I just want to have this slide up here in terms of um the department goals, and you'll see that we have pretty much equal alignment um in the different strategic priorities.

The one I will call out and why there is an asterisk next is that zero, because I don't want the takeaway from this to be this that the staff is not focusing on downtown development.

Downtown development is intertwined in a lot of the other goals in terms of quality of life, infrastructure, business growth, and prosperity that will address a lot of the things that we're doing downtown, but it may not necessarily be just downtown specific.

And so as you look at the goals, I think you will see that there is some of that alignment.

But I didn't want the takeaway to be that we're not focusing on downtown.

We are absolutely focusing on downtown and how we make it a destination for people to come down here.

And so from a direct alignment standpoint, this is how we had to show it, but I don't I just don't want that message to be out there that we're not looking at it from that standpoint.

Um I want to touch a little bit on the organizational wide goals that the staff have can have completed that help kind of address some of those challenges.

And so we kind of took on one per area so that we can start taking bite-sized chunks out of the strategic plan.

Um and so for quality of life, the goal we have is by quarter four of 2026.

We will develop a service modernization strategy that evaluates the city's use of technology to meet the community service delivery expectations and adheres to the city's fund balance policy.

And so we're what we're really trying to do here is we understand more and more people expect technology, they expect service delivery to be done effectively.

Um, but we also have to do that within the means that we have.

Um, and so staff over the next year will be kind of looking at how we do service delivery and and try to modernize it with the technology options we have so that we can try to keep costs as low as we possibly can.

Um, in terms of infrastructure, um, we have complete 90% of the fiscal year 26 implementation ready capital as well as routine maintenance projects within 5% budget variance by the end of the year.

Um so we're really putting a number and saying the strategic the capital plan that you have in front of you that the goal is to have 90% of that completed by year end.

Um and that's something we'll continue to track and report back to council on as we work through it.

Um in terms of downtown development, implement a comprehensive placemaking initiative for the central business district to make it a destination that increases foot traffic by 10% by December 2026.

So, really the impetus behind this is we we want to get more people downtown.

We want to make it a place that they want to come to.

Um, and we're gonna measure that by looking at how many more how many more people are downtown over the coming year.

Uh in terms of community safety, um, I will say this is one that we wrestled with pretty heavily because I feel like a lot of times we sit up here and we we talk about those emergency interventions or calls, right?

And while that's a number, um, really what we focused on is how can we implement interdepartmental prevention strategies as well as operational strategies and increasing awareness of the public so that we can see actually a decrease in our emergency interventions.

We would rather uh deal with an issue before it becomes an emergency intervention.

And uh the fire department has been doing uh this for a while, and we're kind of taking that model and wanting to expand it out into the rest of the organization.

Um, in terms of business growth and prosperity, um we will identify streamline and increase ease of use for business related activities so we can reduce average turnaround times by 5% by the end of 2027.

Uh, your question might be why not by the end of 2026.

Um, and I will be honest with you and say that is because I don't actually I don't have a metric to tell the exact turnaround time.

So we need 2026 to measure how long it's taking us to go through the process as we work through this and then use 27 as our our improvement measurement.

So we will start these in earnest in 26, and we've been doing some things in 25 to try to address this already, but that's why that one is more of a 27 because we don't have a benchmark right now to measure ourselves against.

And in terms of a brace diversity, equity, and inclusion, um, but by December 2026, we will implement a comprehensive public engagement framework to support increasing public awareness of city services and activities as measured by program-specific outcomes and increasing participation in city meetings, events, and online platforms by 25% within 18 months of implementation.

So we're really trying to make sure that we're reaching everyone and we're getting them engaged with what the city is doing and making sure that they're aware of of what's out there.

Um that's really what you know the staff use for the creation of their goals that you see in kind of the front pages of the of the budget book, as well as the financial requests that you have in front of you.

So I just want to want to go through that because um, you know, I think for me it's always looking at our strategic plan really drives our spending decisions.

It really drives how we're moving forward.

And so I always kind of want to start this conversation, not just by jumping into the dollars and cents, but looking really at the work we've been doing on the strategic plan.

Yes, Director Crady, I just wanted to comment on the goals before you move on.

Of course, seeing that zero at downtown development was a disappointment to see zero at downtown development, knowing that we are working aggressively to improve downtown development as one of our six strategic priorities.

So I have a thought on how we might address that rather than putting a zero that we could potentially list downtown development as a duplicated goal.

If we have you know several projects related to infrastructure, several projects related to public safety, quality of life, business growth, um that that zero turns into an eight or a ten with an asterisk, you know, showing where the duplication is rather than a zero.

Yeah, and I'm more than happy to kind of do that exercise and bring it back as a report back next week, just so you know we have it on the record of what where that alignment is, um we could talk about it next week.

Okay, I appreciate that.

Thank you.

Any other questions on before I move into that, any other questions on the strategic planning component of this discussion?

Councilmember Kelly, thank you, Madam Mayor.

Um I don't know that if this will change anything or not, but to me, uh goal for downtown development of having more foot traffic is um kind of a downstream item, seems to me.

I like coming to festivals downtown.

I like you know, but to me, if we want to measure downtown development, we should be looking at downtown employment, revitalizing our yeah, revitalizing our our business climate.

You can get get more foot traffic with festivals or something, but in the meantime, the buildings are empty and they're falling down, and that's a little exaggeration, but or a big exaggeration, but anyway, it seems like uh uh to me a better measure would be downtown employment that leads to everything else.

Um I had another note here, but I don't know what it means.

Thank you.

Thank you, madam mayor.

Did you have a comment uh assistant city manager Richardson?

I do, and and I want to um thank um our finance director, thank you, uh Mr.

Crowdy for his presentation.

But I do want to bring this up to the council.

We're gonna come back back to you all with an update on our strategic plan as a comprehensive of where we've been and where we're going.

And and I want to be clear, organizational-wide goal is not the same as the activity and the tactic.

And so what you're seeing are smart goals that we wanted to tie to the actual um budget, and because of the exercises that we've done, we've done a lot of activities in the downtown, and so you're gonna see that reflected in our report back and on the website when we launch it.

So to your point, Mayor, you will see activity in the downtown.

It's just that they weren't tied to a smart goal for 2026 budget, but it is tied to the strategic plan.

And I just want to make sure that that alignment is understood that this is being represented as these are the budget tied back to the items that we're gonna be talking about as you all deliberate over the 2026-2027 budget, but as it comes to the whole strategic plan, there's a lot of activity, but because they're not tied dollar to dollar to the budget, you don't see that reflected today.

But you will get that report back when we come to you all at the end of the budget period when we present the strategic plan report.

Okay, but aren't there budget activities or goals that are tied to downtown specifically?

Yes, and those goals are already existing, and so because we really haven't fully completed those goals, they're still ongoing.

And so we've already come to the council.

We've already adopted those goals, and so they're not new goals that the council will need to readopt.

Okay.

It's because they're not completed.

Correct.

They're in progress.

Yes, ma'am.

Understood.

Yes.

Thank you.

Thank you.

Councilmember Gordon Yet.

Thank you, Madam Mayor.

I just have um two items.

One's a question, one's a comment.

Um Director Crady, I also had um a question that I wrote down regarding the foot traffic.

Um, not necessarily a concern about the business um specific, but wanting to know, I want to know like how do you plan to measure the additional or increased foot traffic.

So uh I would say uh so that is actually currently being measured through economic development.

We use different tools to measure that uh right now.

We have a program that we've been using for two years now that allow us in point in time to see where people are coming to, where people are going, and it's really based off of data from your cell phone.

Uh, as people carry around those devices, they also track where those individuals are coming to and from and how long they're staying in locations.

And so as we continue to refine uh the designated areas that we can uh that we monitor for foot traffic where we want to see uh ongoing activity, this is how we are able to partner with our community organizations as they identify locations for their activities, because we know that's where the the foot traffic is taking us.

So you're gonna be seeing coming up some other activities that are happening that are not funded through the city, but through our partnerships and using that data has been very helpful.

Thank you.

I I actually sat in on um a session at the Elna Municipal League, and they talked about um how that's a valuable tool in terms of understanding where people are going and um where to continue to build or where we need to build.

So thank you for that information.

The other um is a comment.

I wrote um a lot of stars next to this one, and it was the um let me just say it specifically embrace diversity, equity, and inclusion.

And I like how um it is to increase participation.

Often people are saying they didn't know about an event or um they don't have access, um, you know, for whatever reason they don't have the technology.

So I am very, very pleased to see that um there's this inclusion process.

Not that it wasn't there, but there is definitely um an opportunity to increase that.

Um well done.

Thank you.

Thank you, Madam Mayor.

You're welcome.

Councilmember Kelly.

Um thank you, madam mayor.

I finally figured out what I couldn't figure out before.

Um on the business growth and prosperity item.

I'm sorry, but I don't really understand what that is.

Um identify and streamline and in key increase ease of use.

You use of what uh it's really about ease of use with our processes.

So coming in, getting a license, processes, getting a getting a permit, getting a license, getting um any of those things that a business owner needs to be able to operate their business in Peoria.

We're looking to streamline that process to make it easier for them to get that process done.

Thank you.

And that perhaps answers my second question about average turnaround times.

Yeah.

Um that's inside City Hall or inside the correct scope of City Hall.

Correct.

Uh as people thank you very much.

Thank you, Madam Mayor.

You're welcome.

Carry on, uh, Director Crady.

Okay, we'll move on to uh all the dollars and cents that go into to the budget now.

Um kind of want to start off with a little bit of discussion of a little bit on the national economics.

Um for those that do follow real GDP increase 3.8% in quarter 225.

Um but we also had a uh decrease of 0.6% in Q125.

And so really we're averaging um closer to that 3% real GDP um year during the year so far.

We'll have to see where third quarter lands.

Um really that increase uh this last quarter was driven by consumer spending um as well as a decrease in imports just because of how the formula works for GDP as increased as imports drop, we actually will see an increase in GDP.

Um and so that's really what that quarter 225 increase was related to.

Um as councilman Vest also pointed out, the Federal Reserve continues to cut rates towards their kind of goal of around 2.75 percent.

Um but there was a signal a little bit, and I believe in the the last Fed minutes that they're they may be looking at a slower uh a cut now, a cut process now than they had originally anticipated.

We've already seen um fewer cuts than most people anticipated this year because most people are believing there will not be another rate cut this in 2025.

And that could be signaling a little bit from the Fed I think from really from their minutes a little bit of concern over long-term inflation and a little bit of a concern on really some of the employment numbers that they've had over the last few months is where some of their concern is and just wanting to make sure that they get more data before they make additional rate cuts.

The inflation trending is lower however and is projected to be between 2.3 and 3.2 by 2026.

There's a lot of factors that go into that and we'll have to see where that kind of lies at the end of the year.

I think really from an economic standpoint and in looking at the the city's budget overall you know we have to look at these macro signals to kind of give us an indication of where we think the the the budget's gonna go and I can say you ask a hundred economists right now you're probably going to get a 50-50 split on what they think the the market's going to do in terms of either tariffs are going to have some cooling effects or we're gonna push through it.

And so there isn't really a clear indication at this point of the the direction of the economy and so from the budget standpoint for this coming year we really have put forward a budget that builds off of some of the revenue growth that we've had this year but keeps it in moderation because a little bit of that uncertainty as we talked about leading indicators right we have some leading indicators that are telling us to have some caution in terms of jobs numbers there was a weaker consumer sentiment number that came out yesterday I believe it's it's too early in the process to know that for sure I just wanted to have that as kind of like an over a thousand or thirty thousand foot view of our thought process with this budget is we don't have an indication of weakness yet but we also want to keep it relatively moderate because there is that 5050 possibility of some of some concerns on the economy long term in terms of uh unemployment uh the national unemployment is at 4.2 percent uh the state unemployment is at 4.8 percent um and the Peoria unemployment which traditionally is a little bit higher than the state and the national is at 5.5 percent um it is down from 6.1 percent a year ago um just to the point that I was discussing though I I will point to the end of that chart you will see that both the national the state as well as Peoria's unemployment rate are starting to go point in the upward direction once again is that a uh is that an indication of further weakness was it a few months we'll have to have more data as time goes on but we are seeing a little bit of an uptick in the unemployment rate nationally as well as the state and locally in terms of the 2026 2027 budget summary um from a revenue standpoint we have revenues at 298 million dollars for 2026 that's down 1.4 percent um what is really keeping us seeing strong revenue growth is really our local taxes so our local home rule taxes our HRA taxes all those locally generated taxes um because we have some lagging state revenues it's not something that you haven't heard from me before um PPRT has been a weakness for us and the state income tax is not growing necessarily or the state sales tax is not necessarily growing at the same rate as the home rule sales tax some of that hat is related to the decline in use tax that we've seen with some of the the the tax law changes in the state of Illinois so that's a little bit lagging as well income taxes continue to be strong but we also have a lower amount of known state grants next year compared to this previous year.

So the st really it's the local sources that are keeping us in in terms of looking at a relatively positive revenue growth.

In terms of operations the overall operational expenditures for next year is 216 million that does not take into account capital as well as debt so we'll have that in a future slide and that's up 7.7% and that's heavily driven by higher benefit costs and pension costs.

Um we're actually recommending to make a contribution higher than that, and I'll get into that later in the presentation.

Um, but that is a component.

The other component is um we are having a very, very difficult year with health insurance this year.

Um we are in a situation, I guess just kind of high level overview of this.

We are self-insured, so we go out, we buy stop loss and premiums to cover ourselves over 225,000 on any individual loss.

Our overall use is up, as well as our large claimants who are either at half stop loss or full stop loss has gone up.

Um we're currently on a trajectory to have claims that exceed $4 million more than they were last year.

Luckily, about $2 million of that is being covered through our stop loss carrier because these are individuals who've broken through that ceiling of stop loss.

Um, but what that ultimately means is we need to make additional contributions to our health care fund, which is a separate fund outside of our general fund to make sure that we have enough resources to frankly cover the shortfall that we have this year, plus what we anticipate will still be probably a relatively difficult year next year in terms of the health industry, health insurance and health costs are not getting cheaper, um, and I do not anticipate them getting cheaper anytime in the near future.

Um, and so we are just having to make a larger contribution to that in this year's budget, so that's really one of the large cost growth.

I want to say it's in the neighborhood of about a three and a half million dollar additional transfer this year from the general fund to make up the funding gap that we have for health insurance.

Um, in terms of capital, we have it at 48.9 million.

That's down 36.7 percent.

The one caveat I will put with that is there are a number of things that we have moved out of capital into operational items, things like ongoing CSO monitoring, things that really don't meet the criteria for being a capital expenditure, they now show up in contractual expenses instead of being capital.

You I think you loop those back in.

We're probably closer to this to the $55 million number.

Um, but just kind of wanted to have that context.

But we are down from last year.

Um, it includes the engineering work for CSO year five.

Umfortunately, we are in an environment that we have less anticipated capital grant funds at both the state and federal level.

Um, but we also do have continue to have our road and drainage projects within the CIP.

In terms of debt, um we are at we have debt payments next year of 21.5 million dollars.

That's down 2.1%.

Um, and that is inclusive of the debt payment if council approves issuing additional debt for the capital projects that we have in place.

Um, we still would see a 2.1% reduction, even with that uh additional uh uh debt issuance this this coming year.

Just a quick question.

Um Director Craddy, you said you moved some of the capital costs to another area, maybe about six million or so.

Correct.

Where did where did you move that?

So it's still within the individual funds that they were.

So if it was sewer related, it's still sitting in the sewer fund.

If it was um stormwater related, it still is in stormwater.

It's just instead of being classified as a capital expenditure, it's now listed as a contractual expense.

And when I get into kind of the presentation component, when we look at some of that high level, you're gonna see the contractual expense number is up what would probably seem like an amount larger than it should be.

Okay, that's the reason is because we move those around because at the end of the day, from an accounting standpoint, I can't capitalize those on our financials.

And so those really don't meet our requirements under our fixed asset policy to be considered capital, so we need to move them to operations.

Okay, thank you.

Looking at the 2025 highlights, um, and I will say I think that we have a number of highlights in terms of where we are anticipating ending 2025.

Um currently, from an overall standpoint, and this includes all of our funds, revenues are ahead of budget by 16.9 million or 5.9%.

Uh I once again will point to our stronger local sources as well as some of our smaller sources.

Um, we continue to have strong interest income growth, fines and forfeitures, as well as HRA taxes.

All those areas are still performing really strong and helping us with that overall number.

Um, that is the overall amount.

Um, just I know we talk a lot of times in terms of the general fund.

The general fund, we are anticipating revenues being up 7.7 million dollars compared to the 25 adopted budget.

That is heavily driven by those local sources.

During the the last budget session, the state opened up the ability for us to receive directly sales taxes on out of state purchases as well as sales taxes on certain tangible leased goods, things like medical equipment, those type of things.

That has increased our anticipated sales tax close to five million dollars.

Some of that is also we've had very, very strong car sales this year as well.

We'll see how that kind of changes if or if it changes with kind of the tariff discussion.

But we've seen really strong revenue growth in that area.

And so that's really what's driving that general fund revenue growth.

Expenses are on track to be above budget due to capital timing.

You know, when we put out a capital budget, sometimes those are multi-year projects.

It's not always easy to say this is exactly when we're going to spend those funds.

And so, you know, we always track them, we maintain them as obligations, and so we just have more capital projects being completed, which is a good thing, which means we spent more than we anticipated.

Um, in terms of the general fund, um, our expenses are anticipated to be up 1.6 million dollars.

Um, that is primarily due to the fact that personal property replacement tax, unfortunately, was weaker than we had anticipated during the budget last year.

Um, we anticipated having around 11 million dollars in revenue, and we're gonna probably get close to 9.4 million.

Because we use that revenue source to fund our pensions, our kind of our pension obligations, um, we have to make those payments.

Um, and so we're gonna have to transfer an additional 1.6 million dollars to our police and fire pension fund to be able to make our entire contribution, and that's gonna come out of the general fund because that's just really our source to be able to do that.

So that's why our anticipated expenditures are up compared to they were where they were.

It's not because of overspending on contractual or people, it really comes down to that that public safety pension component that we need to make sure we make those payments.

Um, in terms of use of fund balance, um we had anticipated um using $13.1 million dollars in fund balance across all of our funds last year.

Um the estimate that I have is we'll use a little over $9 million.

Um, so that really means we're retaining about additional $4 million in fund balance across all of our funds to be able to use for future for future needs.

Um in terms of what it is in the general fund, um, we had budgeted last year to have about a $2.1 million dollar loss or use of fund balance last year.

Um we are looking at having close to a $3.9 million dollar surplus this year.

Um, so that has really a net impact of six million dollars on the general fund.

And so we had anticipated ending this this coming fiscal year around 49 million dollars and an overall fund balance.

We're gonna be closer to that 55, 56 million dollar number, um, which as we get into the presentation really just means that we more than likely have an additional year before we'll get to that fund balance threshold that we're of 25 percent that we'll have to have some more difficult conversations.

But overall 25's picture is looking strong and uh we're happy with with we're kind of 25 is gonna land.

Um, just a few of the highlights of uh kind of where we're seeing that.

So kind of going back to our initial conversation, real estate transfer taxes are up 15.2 percent.

So, what that means is that there's a number of homes and properties in the in the city that are selling.

Um, and so we're getting a larger component of those those taxes.

Uh, home rural sales taxes, I said is up 14.9 percent is where we're estimating it to be, really driven by some of those tax changes at the state level.

Um, hotel taxes up almost 5%.

Um, that's heavily driven by the activity of both the civic center as well as out by the Louisville Slugger complex.

We're seeing a number of we're seeing a lot of hotel room nights, which is helping the bottom line and is also helping the contribution we're making to the civic center.

Um, restaurant taxes up about one and a half percent, um, not as strong as hotel, but what it means is people are still going out to eat and are still spending money in the restaurants in town.

Sewer and stormwater is up five percent.

Um, one of the things that's so that is always hard to kind of quantify as we get into the budget process is what are we gonna potentially collect on unpaid bills?

And I will say that we have the staff is both the finance department and legal department as well as community development, have done a really good job this year looking at how we can be more aggressive with our collection process.

Um, and so we actually have revenues of about 5% higher than what would we had budgeted because we're collecting on uh past due amounts.

Licenses and permits is down about 3.2%.

Um, this is really tied to things like utility permits.

So someone does a tap on fee, someone does something like that in this arena.

Um, that's really the driver.

I will admit that this is one of those revenues that jumps around hundreds of thousands of dollars every year, really depending on development, what's going on, different projects.

Um, so that's really where we're seeing that decrease.

Um, you know, I think for context, when we're talking about some of these large numbers, what that really means is 250,000.

It's not millions of dollars.

We're we're just lagging about 250,000 on that revenue area.

Uh, state sales tax is up 8.9%.

Um, as I said, it's it's lagging a little bit behind home rule sales tax because of that change in use tax, um, but it's still strong.

Income taxes are up 2.6%, so that's based off of our share we get of overall uh income taxes collected by the state of Illinois, uh, distributed on a per capita basis.

And then lastly, we're anticipating corporate income or as we call it, personal property replacement tax to be down 14.3% this year.

Um, and it's just one of those areas that has been difficult over the last few years as the state has tried to recapture overpayments that were made in both 22 and 23.

Um the good news is we anticipate that this fiscal year from the state is the last year of that recapture.

We anticipate it.

We will not always know until the final kind of where we're at with that.

Um, but we are anticipating some growth in that revenue source next year.

Um that was 2025.

Um now I'm gonna talk a little bit about 2025 compared to 2026.

Um we have real estate transfer tax down six percent.

That is really heavily driven by these numbers, or some of the largest numbers that we've seen in terms of the revenue we receive from real estate transfer tax.

And so continuing to budget at that level didn't seem prudent when this can really change on whims that we can't control.

So we just want to be a little bit more conservative on this number and be closer, a little bit closer to our average the last four years.

Um, and that's really where that six percent decrease came in.

Um, home rule sales tax.

This kind of getting back to the discussion a little bit earlier.

We have some minimal growth, but not substantial growth, so we have that up 0.3%.

Um hotel tax, we have down five percent.

This is a little bit of a difficult one for us to really decide to really work through this year.

Um we have a recommendation of it being down five percent is with the closure of the civic center, we anticipate that there will be some reduction of hotel room nights downtown for at least the period of time that the venue is closed.

Um, and so we felt it was reasonable based off that time period of the year to put in a 5% reduction in overall room nights.

If we don't, great, but we just want to be prudent and be prepared that that could happen.

Um, we're still anticipating uh you know that 1.5% growth in restaurant taxes.

Um, you know, we're still in line with that.

Stormwater is down five and sewer is down five point two percent.

Once again, that really goes back to I can't budget necessarily for collections I don't know are coming, so this really reverts us back to what is going to be our build amount we're going to collect on for both for 2026.

So that number will probably end up higher, but what that number will be exactly, I I can't necessarily say at this point.

Licenses and permits were up 1.3%, just kind of normal cost growth is you know, we see some development.

Um, state sales taxes is down 0.2%.

We're that's really kind of that final wind down of really some of that use tax.

Use tax is anticipated to be down again next year with some of those changes.

So, really that's where that number is.

Um income tax is anticipated to be up about 0.4%.

Um, and then personal property replacement tax, and these are numbers based off of the current estimates from IML, um, looking at about a 10.6% increase, and that really isn't driven by growth per se in corporate income taxes, it's more driven by not having the recapture of the previous overpayments, is really what that's tied to.

It's more driven by not having the recapture of the previous overpayments, is really what that's tied to.

And so that is anticipated in the budget to have about a 10.6% increase.

The only other area I wanted to kind of just bring up to council because I know it's a question that comes up every year.

It's actually in the budget document.

But this is the first time that we can really discuss in terms of how much sales tax we're getting from our cannabis dispensaries because we hit the threshold to be able to have enough to disclose the overall revenue.

And we are budgeting based off of uh how we have been performing that we will get about a million dollars in cannabis revenue next year from sales from sales of cannabis.

So that shows up as its own individual line now, and we'll report it as such going forward.

If at any point we lose a dispenser and we drop down to four again, I will not be able to do it anymore.

Um but the confidentiality requirements of our of our um data sharing with the with the state requires there to be four operators before I can disclose that publicly.

So just wanted to have that out there.

I know it's a question that comes up most years during the budget.

Um that is the amount that we're getting directly for sales of cannabis.

This is a really hard thing to read, and I apologize for that.

So I will just get to the few areas that I've highlighted.

Um, you know, the the key areas obviously your property tax.

Um we have that in it based off the current levy estimate with the around a 6.2 percent overall increase for for next year.

Um the other larger number is the insurance charges.

So this is going to be things like transfers, contributions from employees, stop loss reimbursement payments.

We have almost up 10% year over year, and that really is going again back to that health care trend we're seeing, our known factors, um, and really where the market is that we're gonna have it's counted as revenue because the health care fund is a separate fund from the general fund, so it receives revenue from other funds, but that's why that number is up 9.3% is really where we're seeing the the cost curve on health insurance.

Um, from an overall standpoint from local sources, um, we have revenues up 1.7 percent or a little bit over 3 million dollars for 2026.

Um, you know, just a couple highlights, and we went over it, so I'll go over it quickly.

We have the assessed value growth of about 6.56% with a slightly lower rate than the rate that we have this year.

I think the other big piece that you know staff is coming to the council to recommend this year is council will probably remember that we have not taken the CPI increase for stormwater fees since 2021.

2021 was the last year that we did take the CPI increase that's already in the ordinance that's supposed to happen every year.

Because of where we are from a fund balance standpoint, we are around 20% fund balance in the stormwater fund, as well as uh current future obligations and needs to for maintenance needs.

Um we're recommending to council to take the CPI increase for next year.

That would be around 2.9 percent.

Um, what I kind of want to just kind of go over with council real quick is what in essence did we not charge the community over the last four years when we didn't take the CPI increase.

So CPI during that time period is around 19.2 percent.

Um for the average homeowner, the average stormwater bill is somewhere between 45 to 50 dollars a quarter.

Um all of that to say um, if we had taken all those increases, the homeowners over that four-year period would have paid between 100 to 115 more in totality than they have today.

So, obviously, our decision to do that did save the taxpayers money.

Um, but from a staff perspective, we are sitting here saying for the for the for the health of the stormwater utility fund and the things we have coming forward.

Um, we need to um do the CPI increase for next year.

If that is the direction council would go, I would just remind council there wouldn't be an item in front of you to approve because it's already in the ordinance.

For the council that have been around for the last few years, we've brought the ordinance to amend it when we did not do the CPI increase.

This is already in the ordinance, and so obviously we'd be looking for some council direction to make sure that that council is comfortable with taking that CPI increase as we work through this process.

I just didn't want it to kind of the belief that we would bring an ordinance to do the increase because it's already mandated by the ordinance.

So long winded way of saying that staff is recommending to take that increase for next year.

In terms of 2026 state, federal and other sources, kind of going back to that conversation again.

Really, again, heavily driven by a little, you know, a little decrease in state sales tax, but really it's that unknown grant environment.

And you know, I think that's something we're seeing across the board, whether it's state or federal, is that if we don't have grant paperwork in our hands already, the environment's just not as ripe as it's been the last few years for grant funding.

And so we just have a reduction.

We don't put on paper things that we don't know for sure at the time we're doing the budget.

So that's really where you're seeing some of that reduction is really on those uh those areas.

Federal is up a little bit, but that really is heavily driven by these were grants that had already been awarded, especially in the infrastructure space that are in progress, and we just anticipate those getting done.

Um that's kind of the overall revenues by by those individual types.

Um, in terms of expenses by category, um, the couple areas I wanted to touch on here is you know, overall operating expenditures are up 7.7%.

Um I want to kind of talk about really the the top three areas so the personnel, the employee benefits, and the contractual services.

Um, so from a personal service personnel services standpoint, we have an increase of 5.29%.

Um, yes, we have union agreements, other agreements that that mandate what our salary increases are, and that's probably more in the the neighborhood of a three to three and a quarter percent.

Um when we do the budget, we have to budget as if we have full full employment that we're fully staffed the entire time.

That's not necessarily how the year works out because people come and go.

Um, so really that increase of 5.29% is really more driven by that assumption of full of full staffing.

Um, and so it's not adding a ton of it's not adding a bunch of positions, it's not giving staff larger increases, it's really driven by that component.

Employee benefits we talked about is really health insurance driven, um, as well as driven by uh the increase in our pension contributions, and then lastly, the contractual services going back to the the comments earlier.

You know, we have a natural increase in some of our contractual services, but a little over six million dollars that increase is related to that kind of that transition from a capital expense to a contractual expense.

So you just kind of you have to look at the capital decrease in consideration with that increase in contractual to know that they they really kind of net out of each other, and so I just know those numbers can pop off as large increases when we're in kind of a revenue standpoint that's not a large growth, um, but that's really where some of those numbers lie.

Um really overall from a net expenditure standpoint, we're anticipating to be down about 3.6% year over year from an expense standpoint.

Um, in terms of staffing, um, back in 2025, if you'll remember, we we had 14 additions to staffing that was heavily driven in our stormwater utility area.

Um, that put our current full-time staffing at 706.

Uh, the budget in front of the council is requesting two additional positions, as well as uh the redevelopment of an existing position that council has approved before.

Um, so really it's not an it's not a head count change, however, it's a position change and a salary change.

So we will discuss that with council.

But really, we're looking at adding two individuals, bringing staffing to 708, which is up 0.2% year over year.

Um, the three positions that are requested as part of this budget.

Um, public works is looking to convert last year.

The council approved a stormwater manager position that was really looking at managing our stormwater pro management pro management process and operations process.

Um, the public works director is requesting to rework that position to make it an enterprise operations deputy director.

So, on top of overseeing stormwater, they also would oversee sewer as well as garbage.

Um, so it would be an expansion of the position.

The position would be split from a funding standpoint, one third, one third, and one third between the individual funds, and that's how it's presented in the budget.

So while not a head count change, it is a position rework.

So that is why we're we have it listed here.

In terms of ECC, the Director Blaney is looking to create a position for training and quality assurance supervisor.

So this is a position that currently their supervisors do a lot of the training, they do a lot of the oversight, but because of really unfortunately always being slightly understaffed because of turnover, a lot of those supervisors end up in the seat doing the work.

And so Brandon is looking to have a position that can do a lot of that onboarding, ongoing trading, as well as quality control on the calls that they have to do retraining if necessary, and really keep us in line with the national standards when it comes to our kind of emergency communication center.

And then lastly, as we talked about a little bit earlier on collections, the treasurer, Treasurer Montelango, is requesting an additional position funded out of stormwater for them to also be a part of the collection process, looking specifically at stormwater.

When we look at some of our uncollected amounts, really stormwater is an area that we have some of the most difficulty in, and obviously we have other tools, but this is looking at having a dedicated resource to work on collections, where I think even the corporation council and I would both admit we have people who work on it, but it's a component of their position.

This is the position that the treasurer is requesting to that this would be their responsibility is to go after the collection process with people who have not paid their bills.

Moving on to capital grants.

Really, the large capital grants this year are for the university and northmore intersection, so that's 3.92 million.

That was a federal tri-county regional planning funds grant for the reconstruction intersection.

The police have 625,000.

This is looking for the construction of a multi-purpose storage as well as moving their firing range to this facility.

Um as I will say, these are always the things that we know of at the time.

The budget is we are become aware of it.

Sometimes this moves as we get through the process.

Right now we have 2.4 million dollars anticipated to be spent for co-response as well as a vehicle task force next year based off of the allocations that we have.

From a federal standpoint, we also have CDBG and home funds.

So we have CDBG of around 2 million, home of 665 and ESG of 135.

These are in line with what they have been in the past.

It is an area that I know we're gonna have to continue to monitor on a federal level in terms of those dollars, but that we have those in the budget right now, assuming the federal component.

If for some reason that does not happen, obviously we'd have to come back and have a conversation with council.

Um, but we are we are treating these as if we will get the federal funds next year.

So we have $542,000 for the convention and visitors bureau.

We have $1.2 million for the Civic Center as a reminder for the council that $1.2 million, however, um is the floor of our contribution to them.

It really is based off of the overall collections for HRA taxes.

I believe this year it's gonna be closer to $2.1 million.

Um I anticipate it being slightly lower with the closure of the facility next year.

Um but the $1.2 million is the required floor per the agreement.

Um we have arts partners for $100,000, downtown development corporation for $100,000, Greater Peoria Economic Development Council for $75.

We have uh the Pure Air Kinette County Animal Control Services for 282,875.

Uh we have Springdale Cemetery at 250,000, and then emergency management for 42,000.

In terms of the 2026 community investment plan, um, as we talked about earlier, there's 48.9 million dollars in total capital improvements.

Of that, 62.7% of that goes towards rose sewer and sidewalk as well as traffic.

So we always say 62.7% of that directly impacts our citizens.

It's the things they're using every day.

Um the other 37.3% is for tools, technology, and facilities.

And so I kind of as we kind of talk through this.

How we budget for facility improvements.

So improvements, whether it be at City Hall, whether it be police substation, that is work that we do.

We budget in two-year intervals.

So 2026, we will budget for facility work.

We anticipate that work will be done over 26 and 27.

There will then be a request for additional facility work in 28.

And so this number, while it can seem like there's a large number that is not direct impact, I would also argue some of those are still direct impact to this constituents.

But this is one of our years where we are planning on facility work, unlike some years where you really the odd number of years where we don't do facility work.9 million dollars this year.

We have 62.7 million in 27, uh 75.9 in 28, 44.0 in 29, and 37.2 in 2030.

Um the increases in 27 and 28 are due to the storage work that we that has been discussed with council as part of the part of our CSO obligations in 27 and 28.

Obviously, there'll be more conversations with council as we go, but from a planning standpoint, those storage tanks are included in those areas.

It's why you'll see the sewage and drainage number those two years have jumped substantially.

Uh very quickly going through the major capital projects.

So we have 6.9 million dollars for the university and northmore intersection.

Um this is our every other year also for our large fire fleet replacement.

So these are actually an item that the fire chief has brought to you before.

Because of the lead time, we're about two years out from being able to procure vehicles.

Um so the chief brought this to the council back, I believe, in 24 for this approval.

So this is that $3 million for the that fleet replacement for their for their uh apparatus.

Um we have three million dollars for uh the new police building.

Uh we have $2.6 million dollars for the Addis Adams and Jefferson signal upgrades.

So this is kind of as we're getting closer to the end of this project.

This is the remaining funds that we have.

We have a little bit over $2.5 million for general fleet recapitalization.

So this is going to be vehicles for public works, community development, police, um outs, really outside of the fire area.

We have $2.2 million for Moss Avenue from Western to Sheridan, $2 million for Sheridan Road from Northmore to Giles.

Um we have $2 million for stormwater fleet.

So as we've expanded our operational components of the in-house work we're doing on the Stormwater utility, there's been a need for vehicles.

So that is the where that fleet recapitalization is.

We have 1.8 million dollars for the MacArthur Highway from Jefferson to the bridge.

We have 1.57 million for the Hickory Grove Road from Knoxville Avenue to Hickory to Hickory Woods.

Um we have 1.56 million for the rich root rich wood station to rehab.

We have 1.2 million dollars for combined sewer overflow reductions for years five through seven.

So these next three are really the the pre-engineering work as we look to what our obligations are under the CSO.

So for years eight and nine, we have one a little over a million, and then for years 12 through 14, we have 1 million.

Um we have 1 million dollars for demolition and clearance.

This was an area that we had previously been funding with American rescue plans, so we have figured out how to include this in the budget with that funding source going away.

We still have $1 million towards demolitions.

We have $150,000 towards uh facility improvements to all of the fire stations.

Um we have $75,000 for street light upgrade and signal replacement on Southwest Washington.

Um we have $675,000 for renovations here at City Hall.

We have $650,000 for parking deck improvements.

Um we have $500,000 for uh the fire training center that the fire chief is looking to be able to expand their ability to do training.

Um we have $500,000 for uh our pavement preservation program and another $500,000 for sidewalks and ADA ramp projects.

And so those are really the larger capital projects that are slated for 2026.

Um so we'll kind of move on to the next piece, which we look at debt.

Um so from a debt perspective, um, our overall debt payments.

So this is already issued debt that we have to make our bond payments on.

The overall payments decreasing $453,000 the next year.

So that's really where that payment is lower compared to 25%.

We are recommending as part of this budget to issue new debt in the total of $8.9 a little over $8.9 million for capital.

So the capital plan as it's laid out.

$3.5 million of that immediately comes off the top for debt obligations.

So as you start looking at the request for capital outside of you know our roads, sewers, everything else, whether it's our fleet, fire fleet, facility improvements.

We have to look at debt options, or we have to look at finding funds other places.

So this is a debt this is a debt request that we only bring every other year to the council.

At this point, we don't anticipate a request for 27.

So really this is a debt issuance that would fund these projects for both 26 and 27.

And how long will it take to in that debt?

So it would more than likely we will issue a 20-year bond.

20 years.

Yeah.

Okay.

Usually we tie it to the useful life of the assets.

Um and so the usually the average age on those is 20 years.

Okay.

In terms of fund balance, uh currently the prepared projected fund balance in the general fund at the end of 2026 will be 56.7 million dollars or 43% of operating expenses.

Um I think the good news when we look at the general fund for next year, um, we also have a general fund budget that's in balance.

Um we have a small surplus of around $17,000, but we do have a surplus for 2026.

Um to our anticipated growth in pension obligations, um, what we have been recommending to the council has been to assign that excess amount or the amount above fund balance policy of 25% towards future pension payments.

Um at the end of 2026, that amount that we'd be assigning to that purpose would be 23.7 million dollars.

Um use of fund balance, so this is all of the city's funds, we're anticipating to use three a little over three million dollars in fund balance.

That's heavily driven in really our capital project areas, so sewer, stormwater, capital, um, where a lot of times we build up a reserve level to go out and do projects.

Um, and so we're really over from an overall standpoint, we're looking to use about three million dollars in reserves next year.

Um I know these are slides and we're getting towards the end, these are slides you see me talk about a lot and kind of looking through the lens of what's coming down the pike for us still with or those risks that we have in terms of um our expenses going forward.

And so one of the areas I always like to look at is when we look at our overall general fund revenue.

What is really the percentage of that overall revenue that if all else being equal, we had to dedicate towards our public safety pensions.

We didn't have the associated levies for for it, we had to do it strictly out of the general fund.

How much of our general fund is it making up?

Um, and as you can see, we anticipate in 26 that our public safety pension contribution at 39.3 million, that would be around 30% of our general fund.

And why this matters is what we continue to see, and it's on it's actually in your budget book, and we have a multi-year review of this, is when we fund public safety pensions, we really fund it with three revenue sources.

We fund it with PPRT, we fund it with property taxes, and we fund it through general fund transfers.

What we have been seeing, obviously with where PPRT has been, we've been seeing that that's been reduced to a point it's more difficult to rely on that to offset some of our costs.

Even with the large growth that we've seen in an assessed values, the amount we're able to levy for our pension funds is also for the most part not covering the increases we're seeing in our payments.

And so we're having to do more and more money out of the general fund and form a form of a transfer to meet our obligations.

And so I just always think this is important to remember in the context of this conversation as we start to see the ramp up.

Because as we get closer to that 2040 number or that 2040 year of being 90% funded, it's going to get more expensive because we're not only are we paying normal cost, so the normal cost to pay the pensioneers, we also have to make up the existing unfunded liability.

The good news, and I did include it in your budget discussion, is this council's commitment over the last four years to fund the pensions based off of the actuary requested amount has smoothed the curve.

If you remember from previous years, we talked about a peak payment in 2040 of 81 million dollars.

The good news is that's down to 58 million.

I know that probably doesn't sound like the greatest news when we're when it's still 58 million dollars, but it is down substantially.

Um the one thing we are recommending is if you also remember in some of these conversations in the past, we had anticipated what a normal cost growth was going to be.

We anticipated our overall growth is going up an additional half million dollars.

So last year, the overall contribution went up two point uh 2.7 million dollars is what our contribution went up last year.

So based off that cost growth trend, we had assumed our contribution would go up about 3.2 million for this year.

Good news is it actually only went up 1.4.

Um, but we are recommending that council consider making an additional contribution to the plans to still contribute the $3.2 million to help us continue to shave off some of that peak at the end of the pension window to try to save us some money in the long term.

Because if we can put the money to use in the plans to create to earn interest, in theory, it should help us in the long run.

Um the one recommendation I think from a staff perspective we would make to council, if council was amenable to that request, is we would say we would request that we don't make that additional contribution until December of next year, wanting to make sure that the revenues come in as we anticipate, we're not going to put ourselves behind the eight ball from a financial perspective.

If for some reason we do end up in an economic pullback, um, and so we still would make that contribution, but wait to make it until December to make sure the revenues are there, and obviously we would report back to council when that was going to occur.

Um, when I looked at this, and you know, I've worked with the actuaries for both the pension plans, pension plans foster and foster and worked on creating kind of a tool to help, I think better inform me to be able to better inform the council on really what decision making around pensions does.

Um, and so when I put in the additional 1.8 million dollars, what that really meant is that it would save us 1.2 million dollars over the life of the plan.

Um while that may not seem like it's gangbusters amounts, um, every dollar does help us in this process to try to meet these obligations.

Um, and so to me, the three million dollars we actually would be able to save on our long-term liability is worth it for the million eight that we would contribute above and beyond the request.

So that is a request that count that the the staff does have, and obviously, we'll look for counts kind of council's direction on that.

It is included in the budget.

Um, but that is an area that we're looking at recommending to council this year.

Um, the only other area I I wanted to just kind of bring up, and it's also in your budget book because I know it comes up in conversations.

Um there's been a lot of discussion over the last couple years at the state level, looking at some reversion from the tier two benefits for public safety back to some form of tier one.

What exactly that looks like, it may not be a full reversion, it may be something different.

Um because of this, the kind of the pension and funding tool that we have now, what I can tell council is if we went back to a full tier one reversion, that would cost the city 90 million dollars between now and 2040.

You want to extend that out to the overall actuarial window, which goes out another 25 years, it's 362 million dollars.

So it is it is substantial amount of money.

Um it is just a really some information I wanted to equip council with as we have some of these conversations with our state legislature about we already have these challenges, we're moving in the right direction, but this would make it worse.

And so that's in the that's kind of in that information, but kind of wanted to highlight that is you know, we're gonna be getting in to start talking about next kind of we'll talk about the spring session again, and I'm sure there'll be bills on this.

And I just want to make sure we have the information to provide to everyone of what that cost is going to be.

So this is our overall sources and uses, so sources is your revenues, uses is your expenditures.

Um really long term what we have when I look at this in a way is we have we have relatively a structural deficit long term and how our how the our budget is set up.

Sometimes we get one-time revenues to help offset those.

Um, and we have been, and this council has been very diligent about being conservative with some of the one-time revenues we've got over the last few years, which has helped us to be able to do some of the things we're talking about.

Um, but long term, what you can see, right, is based off current growth patterns, you start to see the red number, which is your expenses exceeding your blue line, which is your revenues, and the spread gets wider and wider over time.

Because we do have a situation where in general our expenses growth is exceeding our revenue growth.

Something we're gonna have to have you know future conversations about as we kind of work to bridge that gap in the long term.

It's not a funding issue this year, it's not a problem, it's not really a problem for this year's budget, but really long term, this is what the trajectory is.

Um, you know, I think just a couple items I um would just address with what this model looks like is I as you look at like 27 and 28 compared to 26, you'll see a reduction in revenue.

I think it is wholly possible that sometime over the next few years, we probably will have a business cycle correction.

We've been in the same business cycle now since 2011.

Um we're due for some form of pullback.

I think everyone thought it was gonna happen a couple years ago.

Um, but the Fed unwind did a relatively good job of unwinding their balance sheet, and we avoided an inflationary recession.

So, from a conservative standpoint, I just want to make sure you know we're not overpromising in what this projection looks like.

The economy does well, that number is gonna pop up, and this that kind of will the difference between the two will get smaller.

But I just wanted to kind of share that that there was some about a three to four percent pullback in our overall revenue, which you know, really the last recession we had to look at is the 08 and 09 time frame, which was a relatively extreme recession.

That revenue pullback at that point was between eight and 10%.

So I kind of have that in the middle of it, kind of what that would look like.

Um, the other thing is when you look back at 29, um, as we complete all of the remaining debt that we have on the Peori Civic Center.

Um, back during COVID, there was a four million dollar loan that was provided to the civic center, and so we will be recouping that in 29 as their debt gets paid off.

So there's kind of a one-time influx of revenue that we won't have really in future years.

Um this outlook also assumes post that debt that the Cascade of Funds agreement with the Civic Center stays as it is.

That's what we have to work off of.

It's the agreement that we have.

Obviously, that will be a conversation with the council as we get closer to what that looks like.

Um, but that's also an area that some of that difference could could get smaller.

But we got to work off of obviously what we know and agreements we have in place right now.

But you know, just from the finance product, finance director's perspective, I always get a little nervous when I start looking at charts like this because I really know long term what that means.

Um, and it really is, I think to me, the reason why the budget presentation that you have in front of you is really modest in terms of the request from the staff because we're trying to be sensitive to not re trying to not reach what this might look like in 29 and 30.

Um, and so that's why we're still trying to be modest with what the budget request is.

Um, in terms of the general fund fund balance, really kind of the same picture.

Um 2029 is the year in which we would cross over that 25% amount.

Uh I think the good news for the council, um, if you remember these conversations, originally we had this pegged as 2028.

And so the strong performance really driven by the general fund this year has bought us another year um of being above fund balance policy.

But again, we're still on that path that with the decisions will have to be made in the long term.

And then just real quickly, um, this is the timeline um that we have laid out.

Um so tonight is a kind of our initial conversation.

Um, I know this was a lot of information to take in, and we'll open kind of the floor for a report back from council.

Uh next Tuesday, we have the public hearing on the budget.

Uh we plan on having continuing budget discussion on October the 14th as well as the 21st.

We also will have the truth and taxation hearing on the 14th as well.

I usually like to have those at a regular meeting, so that was we'll have it on the 14th.

Um the hope and the request from the staff is to finalize these discussions and any uh changes the council wants to make to the budget at the meeting on the 28th, um, and then to come back at the meeting on the fourth to adopt the budget, the levy and all the associated ordinances with it.

Um, but obviously this is a process that's driven by council, and so we will work through the process with all of you.

Um, and that's really what I have to kind of go through with the budget.

I know that was a lot to get through, um, but we're open for any questions or report backs from the council.

Thank you, Director Craddy, for that uh comprehensive overview.

Um I'm glad you brought up the Civic Center.

And because you know, we've had some discussions with them about their ongoing needs and the issues with the elevators and the escalators and from my understanding the escalators and the elevator or and or comes up to about a four million dollar need.

So it's interesting that you talk about recouping four million.

Uh, but currently staff doesn't have any recommendations in this proposed 25 26 27 budget for civic center.

Is that correct, Mr.

Manager?

Uh yes, ma'am, that is correct.

Okay.

So that'll be part of our discussions as we move forward.

Yes.

Thank you.

Any questions for uh director Craddy or the city manager Councilman Allen?

Uh thank you, madam mayor, and uh thank you, Director Craddy.

Um please get a bottle of water uh after that long-gated presentation, but very very thorough.

We really appreciate it.

My questions are a little all over the place, so I do apologize.

So I'm gonna do my best to go through my my chicken scratch here, but just wanted to make sure I'm understanding some of the things that you were you were saying.

Uh first I want to begin with our our debt snapshot.

And I know that um we have bonds set to come off the books in the future.

You said the civic center bonds are set to sunset in 2029.

Is that correct?

So the the payment itself have in 2028 and is and is fully paid off, other than the issuance the council did back in 22 um in 29, and the remaining amount is about 1.6 million dollars for that issuance.

And then so that 1.6 will come back to the city after that.

So we'll still have to do through the cascade of funds that will still be the number one priority is we'll have to continue to pay that for the next 16 years post.

Um the agreement that we currently have for the cascade of funds, however, um as it's currently set up.

Um once that debt payments roll off, um, the final the final group on that cascade is is the civic center itself.

So as that agreement is currently laid out, um the remit the funds that are no longer being spent for debt obligations would go to them for for their needs.

So if I'm understanding this correctly, we we won't see any savings there because it sounds like we'll continue to be paying what the 1.6.

I think what what staff's recommendation would be is that this would be a discussion the council we would want to have with the council long term of what that looks like based off of the needs of the civic center as well as the needs of the city.

Um just from a planning standpoint, I don't put it in the budget as that because there's not been that discuss that policy level discussion with the council yet.

Yeah, no, understandable.

And it sounds like 2029, uh we potentially have a perfect storm of you know, once the the pension obligation increases, we're gonna run into our fund balance possibly getting below that that 25% number as well, too.

So I know 2029 is a year we're gonna have to look out for.

Now we also have bonds set to sunset for the library.

Is that correct?

Yeah, those sunset in 2027, except for a very small portion that uh got reissued back during COVID, but that it really it's about 2.6 million dollars of their bond payments come off the books.

Okay.

Um you talked about we're now able to forecast cannabis projections because we have four dispensaries uh within the city of Peoria uh to a tune of about a million dollars uh within this budget.

Um are you able to share how much of a surplus that is based off of what we received the previous years?

Because I know we've only had we've had dispensaries around.

I mean, is it a is this now an extra $750,000 or a half a million, or are you not able to share that?

Um I can kind of what I can share is this year because we got that dispensary.

Um so we're sitting this year at about 950 is where I'm anticipating us being.

You said how much now?

950,000.

Um what you are seeing, and this is going based off of both really what the state is seeing and just the market conditions is cannibalization of the market as well as the overall market isn't growing overly fast.

So the cannabis sales tax that the state collects and they remit have been growing at a very large pace.

Um IML's projections is that number is closer to two percent for next year.

So as I think the kind of the dispensaries have grown throughout the state, there still is just a basic level demand for it that no matter really how many there are, this is what the demand is going to be.

Um and that that growth of that demand just is not growing overly fast in Illinois.

Yeah, and I'm sure there's some other competitive retail options as well.

Um into our pension obligation, I know you recommended that we should remain aggressive with our with our pension obligations, and I I agree with that as well, too, because we know that that is an ongoing issue.

The last two uh comments or questions that I have is you mentioned that the forecasted pavement preservation fund for this year is $500,000.

Is that down from last year?

I don't have that off top of my head, but we can get it, we can get that information for you.

Yeah.

And the reason why I say that the pavement preservation program, um, I I enjoy it.

I know that it's a way for us to repair roads, roads are very expensive, and I know a little bit more that about a chip seal or a slurry seal uh than I used to.

Um $500,000 for all five districts just sounds like not a lot of money.

And so just wanted to know if that was a decrease from last year, and if so, maybe we should look into that because uh those those uh projects are very important to repairing roads in our our district.

And then last but not least, um it's saying that revenues right now are looking at 298 versus 301 million dollars in expenses.

So to the average person that's listening right now, how is the city gonna balance its budget?

So we have in essence, you know, reserves, or is I think for the north for someone at home, it's gonna be their savings account, right?

We have we have reserve levels of around 130 million dollars.

Um a lot of that we will put towards kind of as councilman search has said before our rainy day fund.

Um that's really for you know some some form of catastrophic catastrophic event.

Um that's equating to you know, about right now 50 million dollars in the general fund.

The rest of the reserves that we have are dedicated for specific purposes.

And so if you look at uh really the kind of the areas that we're seeing most of the change or the the use of fund balance is gonna be in sewer, stormwater, and general capital.

Some of that occurs because really most of the work we do is on a cash basis.

And so for some of these projects, we have to build up enough reserves to be able to do the project.

So it's pretty common for us to run deficits in those funds as long as they're not getting to a point where they're putting us in a negative position from uh from a fund balance standpoint.

Awesome.

Well, no, thank you, Director Craddy again.

I appreciate the information, and I guess as a report back, if we could just get some context on the pavement preservation uh fund.

Again, I think that's a very crucial fund to repair those those non-major arteries in our in our road.

So I would love to see that fully funded if possible.

Thank you, Madam Mayor.

You're welcome.

Councilmember Gordon Young.

Thank you, Madam Mayor.

I um I followed you.

I I believe I did.

There was one area where I think I got stuck, and it was um trying to figure out what CPI was, which I believe is another word for possibly inflation.

Yes.

Consumer price index.

Yep.

Um can you speak to what that might look like in terms of the stormwater fees increasing?

Yeah, so uh right now the estimate for this year is is around 2.9 percent.

So an increase of price or an increase of really about 2.9 percent is the amount that we would be looking to do for to take from the stormwater utility.

Um from an average homeowner standpoint, um that's around a couple bucks, a quarter.

Um it's it's not necessarily it's not gonna be 50 bucks, 60 bucks for the average person, it's probably 10 to 15 dollars a year.

Thank you very much.

Thank you, madam mayor.

You're welcome.

Councilmember Reaganbach.

Thank you, madam mayor, and thank you, Director Craddy, for this incredible um presentation, and thank you to all the department heads who participated in this and um going through the strategic plan and and linking budget priorities to what we have said as our our plan, I think is one of the most helpful things that we we've seen come out of this process.

So I think um kudos to all of you sitting in the in the gallery tonight.

And I also think as we look at the good year that we've had in 2025, um, and the good couple years we've had that we need to recognize the employees, the rank and file employees that actually implement the strategies that we put forward.

We've had a nice influx with the ARPA funds, and it's been easy to make some of these budget decisions in the past few years, but I think our staff has worked harder than ever, and and I think they really deserve a lot of the credit for for putting this in the position that we are right now.

So um, please relay that um as appropriate to you do you department heads.

I think of all the takeaways, this really does look like a a good solid budget.

I'm sure we'll see some nuances as we dig a little deeper in the coming weeks.

But the one thing that I think um should be non-negotiable for us is our commitment to pay down that pension and and to use that excess funding, the funds that we have to cut that to me makes so much sense and is gonna pay dividends for us in the future.

So I really appreciate the focus on that and um encourage my colleagues to make that one of our sacred commitments as we as we move forward.

And looking at the fund balances and things, I think Councilman Sear um and I will kind of be smiling about thinking that the trash, the solid waste disposal um fund will actually be in the positive here in the next couple of years.

That's something that um I think we need to give the landfill committee a lot of credit for and the new landfill agreement and the hauling contract that we also approved.

So those kind of things don't happen happen by chance, those happen by planning and and being strategic and having a plan in keeping to it.

Um last comment, I guess, would be um supporting what Councilman Allen requested in a report back for the non-arterial road pavement preservation and also I think the ADA sidewalks and and sidewalks in general.

As our public works director uh likes to remind us, we do have a degradation curve in our um assets here, and that's not going away.

So if we could look at possibilities of, you know, I would say even doubling each of those to a million dollars.

I don't think that would be unreasonable.

The 500,000 doesn't do a lot of sidewalks as we all know.

So I'll I'll close for now, but um again, thank you for a comprehensive look tonight, and um great job in putting this together for us.

Thank you.

Thank you, Madam Mayor.

Well said Councilmember Sear.

Thank you, Madam Mayor.

Uh Director Craddy, thank you very much again for great presentation.

I came to this meeting tonight with about a hundred questions, and now I'm up to about 500.

So I'm not gonna ask all these questions, obviously, for because it will be here.

You're welcome.

I don't want to be here that long, but I I want to make a just a few maybe comments and ask you a few questions.

Number one, because it's important to understand, and and I'm sure you got the answers to this.

So that's why I'm asking the question.

Can you tell us how many changes that we make to the we made to the budget in 2024 or 2025?

I would say on average, in terms of budget amendments, we average probably 10 to 20.

It's very more heavily driven recently when we get grants, acceptance of grants.

If we have more grants accepted, it's closer to 20.

I would say we're closer to 10 if the grants are just not there.

So it would be fair to say maybe one or two per month.

Yeah.

Okay.

So would that be fair to say that when we agree on a budget, our budget is as good as the day we vote on it?

Would that be an accurate statement?

That is an accurate statement.

So to take your words, and I want to use a few of your words, and you use many times before tonight.

Okay, you talk about being cautious about safety, about bad times coming in in the future.

Uh some one word you did not use tonight, it kind of disappoints me a little bit is to Mr.

Allen's question, example.

You know, 29 298 to 301 is $3 million.

You did not say that we would we could make some cuts.

You did not say that, but that's one of our options, right?

I you know, I think from this perspective, this is the budget the staff has put together.

It it's always the prerogative of the council to make cuts to that.

If that's if council wants to get to a fully balanced budget, that is a discussion we can have.

Okay, thank you.

So I just want to make sure that people know that.

The other thing, I'm never happy with the answers about uh the civic center, uh, our debt, not the civic center, the debt load, okay, that we have.

And I was not really happy with your answer to Mr.

Allen.

So in uh 2028, when the Civic Center debt is paid off, okay, on this line somewhere in the book, three ring binder will show like two million dollars for another 15 years.

Is that correct?

Correct.

My understanding, please correct me if I'm wrong.

I know when we made the loan to the Civic Center, the reason we're able to do it is because we only pay an interest only up front.

Is that correct?

That's what the two million dollars is.

We're just paying in interest only.

That's how we're able to make the loan.

So in 2000, that's what's the first five years.

So in 2028, we'll have to pay interest and uh the uh the capital back, correct?

We had discussed that when we had looked at it originally.

I should say the principal, sorry, not capital, but principle and interest.

I believe we ended up pretty much straightlining the principal and interest payments.

It might fluctuate a couple thousand a year.

Um, but uh my memory of the debt structure on this is we're looking at pretty much what 1.6 million for both principal and interest.

That first payment that we had that year was interest only, which is very commonplace when you issue debt, that your first payment you make is interest only.

So is that correct, Mr.

Manager?

The first five years of interest only, and then we'll do principal and interest later.

I'm gonna have to look at what the repayment schedule was and get that back to you.

Is uh I just don't recall off the the top of my head what that was.

Another question would be on uh let's talk a little bit about new issues.

They when we're when we're uh uh doing some bondage uh bonding.

So eight point nine nine million dollars.

Who makes the rules of where we're gonna use capital money or stormwater or which account we're gonna who who makes the rules of uh where we're gonna invest that eight point nine million dollars.

So I think with the kind of the question you're asking is you know, why isn't some of this in stormwater or some of this in sewer or some of this in garbage?

Correct.

Um really the rules are based off of state statute, they're based off of governmental accounting practices that um they have to actually the work that's being done has to be towards the source of the revenue.

So for example, if it's sewer, it has to be work that's being done in our on our sewer infrastructure.

If it's stormwater, it needs to be done on our stormwater infrastructure and so on and so forth.

And so the 8.9 million is really looking at things that are as it is, we kind of look at them as general capital.

So they are things like vehicles, facility improvements, those kind of things that don't necessarily have a dedicated revenue source in another fund that we that we have to unfortunately lump under general capital.

And so that's what I was getting at a little bit with, you know, we we generate about seven million dollars a year through gambling receipts, um, through um some of our utility taxes and a few other ancillary revenues that are dedicated towards that capital fund.

Um but it's not necessarily enough to cover more than the debt we have, which is about 3.6 million, and a few items here and there.

So that's really where that deficit comes from of having to look at issuing debt for our general capital because they really don't fit anywhere else in those buckets.

So my understanding for these loans or these bonds is that they need to have they they're all 20-year bond, correct?

Correct.

So they need at least a lifespan of 20 years or a depreciation schedule of 20 years.

That is correct.

That's correct.

So that's very important.

Now there is a few.

So I'll probably have to revisit with you guys the next few days about that.

Um city own that we have that generates a revenue for us.

I mean, it's kind of a weird question, but it's important.

Would like uh uh parking deck be generate revenues for the city?

Yeah, we obviously have our parking decks.

Um what else would generate revenues to the are some of our sewer infrastructure would, some of our stormwater infrastructure would.

Um you could quantify as you know, a revenue generator for us.

Um I wouldn't necessarily sit here and say our roads, for example, are gonna be a revenue generator, that's just a general asset.

Um I can do a little bit more thought on that and get a little bit more detailed if you'd like a report back looking at it.

Um, because I don't want to act like this is my thoughts right now are holistic to to those assets.

The reason I'm asking Madam Mayor and Mr.

Manager is we I think we make the rules, right?

Some of these rules we made many years ago about the 20-year depreciate depreciation schedule and all that.

I'd love to my colleague to think about having the same rule.

If we have to issue bonds, which I'm not a big y'all, you all know that, and I let I don't like issuing debt.

But if we have to, maybe my colleague, my mayor can think about maybe we'll issue bond to only thing that have a 20-year minimum 20-year lifespan and something that generate revenues to pay those bonds.

Would that be maybe a good discussion to have, Mr.

Manager?

Or I mean I'd like to know how many, because then we can have bonds for let's say the parking deck, because I know we're gonna get some revenues back.

So if we have bonds for something that for a building, you know, for a building that doesn't obviously generate any revenue, uh maybe we could have that discussion if if this council is interested in to, but I was just thinking about that.

How can we, you know, if we're gonna bond something, that's how we gonna pay back, pay it back beside you know our our capital and capital funds.

So um I'm all over the place.

I'm trying to just maybe another comment or two.

You talk about all that stuff.

Uh so in the big picture, if I understand correctly, and please correct me.

So real estate taxes will go up this year, right?

A little bit.

Stormwater utility, your the staff is asking for the CPI increase this year, correct?

Correct.

Garbage.

So the CPI, tell me about the stormwater.

I mean, how much money we're talking about?

If we use a CPI, my understanding was our revenues would go up by $500,000 roughly.

Is that correct?

That's correct.

Garbage fees, a dollar.

How much money would we raise from the garbage fee?

Probably another three to four hundred thousand.

Okay, I'll I'll put three four thousand dollars.

Sewers are going up because of CSO.

How much are they going up roughly in the budget?

And my understanding is another half a million dollars.

That one gets a little trickier.

The CSO rate and the rehab rate, because we have the three individual rates with sewer, really is the CSO rate has been going up.

We've been decreasing the rehab rate, so really it's that three percent.

Um so I would say yeah, probably in the $300,000 range on the lateral fee.

Okay.

So between those three.

Um, well, not including the real estate taxes, but just a storm water gas garbage and sewer, we're looking at maybe an additional 1.2 million dollars.

Okay.

1.2 million dollars.

So what I'd like to see, Mr.

Manager, as we have discussion, more discussion next few weeks is now our constituent, we could beside I mean it's not a lot of money.

We have this, it's a dollar a month, whatever, but it's a million two total.

Then our constituent having higher water bills, drive higher energy bills, they'll have a higher real estate taxes bill.

I mean, I think it's just a bad time to have all these increases, especially like to Mr.

Allen's point, there's only a three million dollar difference between 3.1 and 29, I mean a 301 and 298.

If you add my million two, you got 4.2 million dollars.

I'd love to Mr.

Ringingbox Common to have a balanced budget where you're still gonna have to issue some bonds, but I know we can easily easily cut 4.2 million dollars in expenses from our from our budget and have a true a true balance uh budget, even with these sum bonds that we will still would have to issue some bonds, which I'm not excited about, but I'm I'm willing to compromise.

Why?

Because I'd like to be safe.

All the words that you use tonight, okay.

We don't know about the future.

Okay.

I'm not as positive as Mr.

Riggenbach.

I mean, I am so scared of our pension.

Okay.

I would like to pay the minimum in the pension, not the maximum.

Why?

Because our budget is only good for the day that we accept the budget to vote on it, and that budget will change at least a dozen times next year.

Hopefully, we'll get a lot of grants that are not in the budget right now, and that will increase our revenue.

I mean, we I mean how much grants we had last year, millions of dollars in grant.

So maybe we might get some more, and so we'll naturally increase our revenue from grant.

That way we're playing safe.

Okay.

I mean, to think that our governors is looking at canceling the tier two to tier one, that's gonna cost another 60 million dollars.

For me, I'm like, okay, I don't know about the future.

I mean, it's already impossible.

Okay, we're gonna have to issue tremendous amount of bonds down the road in in 2033, 34 or whatever, eight years from now, I know we'll have whoever is it sitting these chairs, we'll have to make a tremendous big decision about how much bonds we want to issue at that time to pay, don't to live up to our commitment.

So to me it's like why don't we just pay the minimum right now and use that 1.2 million dollars example just to cut all these raises that we want to give our constituent.

To me, that's a that's a fair argument, because I just don't know what our governor is going to do in the future.

I don't know what anybody's gonna do in the future, so why don't we play it safe?

So I want you, Mr.

Manager, Madam Mayor, and all my colleagues to just think about that.

You know, let's play it safe, you know, and hopefully we'll have a good year next year, and we'll get some more grants and we can get more more things to do.

I mean, that's that's the way I would prefer to think about it.

I mean it's great.

I mean, it's it we just don't know.

I don't know, and none of us know exactly what will happen until 2040.

Why don't we play it safe for our constituent?

And instead uh raising fees and taxes all the time, why don't we just take a little break?

Uh Madam Mayor gonna have four or five weeks of that's enough for me for tonight.

Sorry I took so long, but thank you.

Thank you, uh Councilman Sear, point well taken.

You know, one discussion that we have had off and on is a few years from now in the early 2030s is possibly bonding for to pay down our pension liability.

If we had a cap on 20 years, we probably wouldn't be able to to do that.

Um again, point well taken, and I think some perception is paying down pension debt now is plan it safe.

So it's gonna be a good discussion.

I look forward to it.

Councilmember Kelly.

Thank you, madam mayor.

And uh I I've said it to you privately, I I guess uh Director Craddy, but uh publicly I just want to commend you once again for a terrific budget book.

Very understandable.

Um it's just it's just really good.

It's it's I I don't know if I want to say it's easy to use, but it's yeah, I I I think a very good effort, and I and I appreciate it, and I think I think the council appreciates it too.

Have a few questions.

Uh number one in your presentation a little bit earlier, you um uh budgeted the right side or the uh result side at full employment okay.

Was your base from the year before, was that also full employment, or was that the real number?

So the budget, the budget that was approved was full employment.

The projected is based off of the actual performance.

So that that is going to include individuals not being in in the seats and turnover occurring.

So I would say if you're looking at in terms of reduction from budget for turnover reasons, we're probably in the three million dollars is what that turnover component was this year holistically for the city.

Okay.

Uh thank you for that.

Um getting this I I guess this is sort of budget related.

Getting to the civic center, um municipal corporations, churches, not for profits in general.

Uh just turn up their nose at the idea of reserving for depreciation.

Um we really got smacked a couple of years ago with the Civic Center.

There the amount of work that had to be done there was enormous.

Um and we helped them out somewhat.

It was uh but when you when you don't set money aside, this is what happens.

Um is there any stomach for reserving for depreciation and uh in an asset like the Civic Center?

So that when things happen, they they have the money.

Yeah.

This is something I even wrestle with with city assets.

Um other places that I have worked have and essence funded their depreciation into a reserve fund for future replacement.

Um it is an avenue I have not gone down here.

Um because I will be honest and say it's going to be a very large number.

Yes, um, I'm sure it is.

And it is an exercise I have contemplated, but just have not had the opportunity to really go down that path.

Um because usually that requires a commitment to fund out of the general fund or whatever funding source towards that reserve.

Um if that's something council would be interested in having an understanding of, of course, I'm more than happy to kind of review that and give an example of what that would look like.

Um I would just warn council it's it's gonna be a large number.

Yeah, I uh um I like to say sometimes that one of the rules on institutions of any sort is that they never have enough money.

They can always use more money.

Actually, families are the same way, households are the same way.

Being responsible for what your needs are uh is harder than spending every penny you got.

And so okay.

Um I'm a little disappointed as usual, because we have a um one percent deficit, three million dollar deficit for this year, and about a million dollars for twenty-seven.

And it seems to me that ideally we should have a balanced budget, but we never do.

And we're we're so close.

We're so close.

And yet, yeah, we always go over.

It's just uh maybe an editorial.

Um this is a minor thing.

If you look at page 61 of the budget book, general fund transfers for 2026 is 9.75 million dollars, and it's repeated down there in the in the text.

Go we go to the next page.

Um it's I'm I'm sorry.

I'm sorry.

The total is uh 394.

Okay.

Uh you go to the next page and it's 39.2.

It sounds like a small amount.

Uh you know, but that's that's a couple hundred thousand dollars.

Is that if I'm reading it right, is that uh am I right in my interpretation?

You are correct.

I will have to look and see where the calculation there there it should be the um the 39.2 because that is what's in the financials.

Let me do a report back on which bucket that's it won't take me all that long.

I'm more than happy to get that to council in terms of which which one of these buckets is more than likely overstated.

Okay, and you don't have to uh get too excited about it because I've got a source of funds for you.

Um but be well, I might as well get there because that'll be kind of fun.

Um page 198 and 199.

This has been a pet peeve of mine since I've been on the council.

Okay, city council, city council.

Our budget is 27 million dollars.

City council.

I'm uh I could I guess I could buy a new suit.

I mean this is crazy.

What is it we're paying for here?

How do how does the city council have debt service?

You know, uh City Council has uh for 26.

I mean, I I don't know why going through these numbers, they don't make any sense.

Um personnel expense of 339,000, benefits expense of five million dollars.

I I could really make some money by getting sick.

This would be great.

Actually, I don't I don't use our medical, but director craddy or or Mr.

Manager, why can't we get for city council what ought to be here?

Where does all this money go?

It doesn't go to the city council or or to buy us paper or paper clips.

I will admit I share in your frustration because I had fixed this.

Um the council budget really hovers around 450,000 is what it is, is the overall budget.

Um in our financial system, we had moved this into uh the culture and recreation area, which is it really functions as kind of an admin area for the general fund.

I have to go back and look at why this produced in this way here, because it shouldn't have.

Um so I will get that corrected as a report back to council, but the council budget really does kind of sit at around 450,000.

Yeah.

And I as I said alluded to before, if you need that extra 200,000 uh for the previous item.

Well, you can take it out of our budget.

We get we've got room.

As I said, those the health insurance is getting expensive.

Yeah.

Um, and also I as far as the report back, I'd like to know where this money actually goes.

This is real money in our real budget.

Where does it where does it go?

It sure doesn't go to the city council.

Is this a slush fund or something?

No.

This looks funny.

This is not a slush fund.

Okay.

It's simply a reporting issue.

It certainly is.

Okay.

All right.

Thank you for that.

Let's go back to page 103 and four.

Uh the uh OPEB.

Um we have uh on three 103, we've got revenues coming in.

Um a million two and uh a million four and et cetera.

Okay.

Um and then the uh lower graph on uh 104.

We only have one year where uh we're spending money as projected, that's a million dollars.

Okay, my my question is not I don't want to get into the weeds too much because I don't understand all these weeds, but if we don't spend this money, does it just roll over?

So there isn't a contribution the next year, as it seems like it indicates on on page uh 103.

So the OPEB fund, so the postemployment benefit fund, it was a fund that was created to offset future liabilities for retiree health is really uh post-employment benefits, which majority is health.

Yeah, um, and so the amount of revenue the the dollars we have in there are tied to um a calculation that we have to do every other year to look at what that obligation is.

Historically, um we've been getting to a point where we were able to fund it up to that liability.

The expense in 26 is going back to that conversation about how much our health insurance costs have increased is one of the areas we've seen the largest increase, as well as us having a difficulty recouping costs from is our retirees.

Um and so in reviewing our most previous OPEB report, um, we were in a position that we had assets in here or cash above our liability.

So what staff is recommending is using the fund as it's intended for and helping offset some of that cost increase for our benefits, specifically for those retirees, and looking at using the fund in the future for those purposes as long as we're meeting our liability requirements.

So that's why that's the only year that you have an expense.

It's a recommendation we're making um to use those funds as as we see that they're intended for post-employment benefits.

Actually, I I didn't.

Okay, so we so we have significant fund balances, correct.

I mean our our liability right now for the op for our OPOP, our OPEB liability on our books is around 36 million dollars.

Okay, so our retirees are retirees have a health plan, right?

Or they have Medicare or so they are eligible to stay on the city's plan.

Okay, um they in essence have to pay anywhere from ninety to ninety-five percent of the premium.

Okay.

Um in a lot of ways, yes, they are paying for their insurance, but because we are on a in a self-insured world in terms of how we live, our costs are still our cost.

And so what the actuaries do is they're looking at that, number one, and saying that we're not obviously able to meet because of how state statute is written, we're not able to meet or get enough in terms of of revenue from the retirees to cover that.

The other component is um we are not allowed to charge what they call age-adjusted premiums, and that is that is considered to be an implicit subsidy when it comes to OPEB.

So when the actuaries do their analysis, they're looking out 20, 30, 40 years, they're looking at me retiring and saying, what's really the cost of the city in the long term when I take insurance in the future, and so it's really like I know it's a little bit of like a difficult area to kind of um wrap everyone ever for everyone to wrap their head around exactly.

And so it's really like I know it's a little bit of like a difficult area to kind of wrap everyone ever for everyone to wrap their head around exactly.

But really it's about that future liability.

And we just want to be prudent with when we do use the money in the fund.

And I also would just say the revenues are also a little high because if you remember we loaned money from here to pay it down the last early retirement incentive that the city offered.

You mean borrowed money?

Correct.

Yeah.

So we are paying ourselves back for that.

So that's where some of that's where the large amount of the revenue is coming from.

It seems is this a uh maybe this is this a favorite place from which to borrow money outside of the budget where we figure we'll get paid back.

Correct.

Yeah, I thought it seemed that way.

All right.

Thank you.

Um question for either you or for the manager.

In our TIFF, our TIF in increments.

Are they increased by inflation?

So I you know, obviously when the assessors are their process, they go up based off of actual growth.

Um it's a little hard for us to articulate exactly where it's gonna land because it's not like a traditional levying process for us.

Um we get what we get based off the growth.

Um what I can say is this last year, um the growth was above CPI substantially.

Um of that was in the East Village TIFF.

Is the OSF Cancer Center is taxable?

So obviously that was a very large increase to the East Village Growth Sales TIFF value.

Um but I would say if you look around, you look at warehouse, you look at conservation.

We probably average close to six to seven percent in overall value growth last year.

Well, let me let me just put something forward on this.

We've got a TIF.

Um it's EAV goes up uh five percent.

Okay, and let's call that um uh half million dollars.

Okay.

But there's something that was built whose EAV is a hundred thousand dollars.

Okay.

So there's another four hundred thousand that spread across the entire TIFF where nothing happened.

Okay.

So it wasn't uh it wasn't something newly built.

Do we count that as increment?

Yes.

Is that okay?

Okay, I'll just editorialize that's really unfair to our other taxing bodies because nothing was built, but inflation happened, you know, and we get we get the full benefit of that, and we didn't earn it in my humble estimation.

Okay, thank you for that one.

Um that we did the city council, didn't we?

This is just uh question.

It's it's not an accusation.

Uh police and fire, we uh uh had a pretty good decrease in contractual obligations 16 percent lower uh for uh 25 and 26 percent or uh 17 percent project.

I'm sorry, this is page uh 223 uh 17 percent uh projected uh for 27.

I'm not complaining, but that those are pretty big chunks.

Is there uh an easy reason for that that you know of so with police um obviously during the budget process we do our best to go through all their grants and figure out timing and how things are gonna get spent?

Um obviously during the budget process, we do our best to go through all their grants and figure out timing and how things are going to get spent.

Um police department's done a great job over the last few years of getting grants.

Um we just anticipate slightly less grant money and a good chunk of what they're doing, whether it's the co-response model, that's a contractual relationship with Carl.

Um so we just have anticipated less spending through grants that are contractual.

Thank you.

That makes sense.

Thank you.

Even makes sense to me.

So in uh SSAs.

Um I reading this correctly that with an SSA, the city will borrow money, or will will perhaps borrow.

Borrow money, give the proceeds to the SSA outfit, we will pay municipal bond interest, they will pay municipal bond interest.

Okay.

So here's the here's this outfit.

This is a this is like the old revenue bonds before they made them taxable.

Um, number one, the taxpayers are funding this thing.

These people, these poor, poor developers aren't funding it themselves.

When we do an SSA, do we require that that shopping center outfit show us their books to say, are you just taking advantage of our taxpayers and our borrowing ability, and you're just gonna make more money?

Or are we saying, uh-oh, if if we don't do this, something bad's gonna happen.

What I can say to that is I I have not been here during any of those negotiations when it comes to any of our recent SSAs, so I can't speak to that.

Um what I will kind of speak to with it with the SSAs is we do structure those that yes, a lot of them have sales tax components or hotel tax components that are funding a component.

All else being equal, if those revenues do not produce, it is on the developer through a special property tax levy to pay for the debt.

So we are protecting our interest and owing and carrying that debt that the developer would have the developer has to be the backstop of that funding and not the city and the taxpayers for that bond, that bond obligation.

Yeah, I'm I'm most concerned about our citizens who are having to pay more, versus developers who may not need this, but hey, we're in the business, let's let's go to City Hall.

This way, we're gonna reduce our costs.

And I don't blame them.

If that's if that's the system, well, great, it's like free money, but I don't know that we should be doing that without a lot of due diligence.

Okay.

And that is all I have, Director Craddy.

Thank you very much.

Thank you, Madam Mayor.

Welcome.

There are no more questions.

Uh I do want to ask uh Director Craddy.

Since we're likely anticipating a federal government shutdown, will there be any financial impact to the city of Peoria?

You know, I think if we have grants that are sitting out there, it's gonna have an impact in getting repayments made, and that obviously depends on the length of how long that is closed.

Um I would say the while the shutdown itself will have some impacts, the continuing resolution and funding decisions will probably have more of an impact.

Um just because we already have seen the grant landscape change in terms of requirements and even cost share, it the environment is changing for governments, and so I think more what comes out of this of the stock of a shutdown will probably be more impactful than probably a short term shutdown.

And so I think more what comes out of this of the stock of a shutdown will probably be more impactful than probably a short-term shutdown.

Okay.

Thank you.

Council members there.

Thank you, Madam Mayor.

Just one more question.

I'm reading one of the slider here about collection effort to unpaid debt.

Do we have a where does it fit?

Do we have a line item for for account receivable?

So we do carry accounts receivable.

Um it if you know if it's it shows up in our audit every year.

There's always going to be a line for accounts receivable.

Um we have policies that look in terms of you know age of the receivable and the likelihood associated with that collection.

Doesn't mean we stop collection efforts, but from accounting standpoint, we have to have good faith estimates.

And so um that accounts receivable number that you're gonna see in the audit is probably lower than what we're attempting to collect.

It's just what we have to provide from a financial statement to our bondholders, the public, um, what is probable that we will collect.

So Mr.

Mailongo wants an extra person for to try to collect some of these funds.

Uh again, in the perfect world, I don't know if it's gonna happen that way, but if we would collect, I'm looking at for my budget 4.2 million dollars somewhere.

If somebody collect 4.2 million million dollars of debt, we could have a balanced budget, is that correct?

That that is you show that's the income, right?

I mean, what's the what's the the procedure?

How would you account for that?

Yeah, so it really gets kind of varied, and obviously corporation council is also very acutely aware of these conversations of um how we go after our debt obligations.

Obviously, if it's a traditional homeowner non-payment, we start sending collection notices.

Um at a certain point, we will send them the collections if they're not paying.

Um if the value of those get high enough, we start to consider leaning properties.

Um it it it does kind of change.

I think kind of from a context standpoint, if you look at stormwater, um, which is kind of the area that we have labeled here as an area we'd want to focus on with a position like this.

Um there's about $8 million in uncollected.

Um so they would have to have close to a 50% collection rate to get to your 4.2 million.

I don't know if that's necessarily a realistic number.

Um I would say obviously the them collecting enough to cover what we're paying plus some, maybe it's in the neighborhood of half a million dollars would make would probably logistically make more sense as a target versus half of it.

Okay.

And last question, I had a short discussion with Mr.

Manager before the meeting started.

Um let's talk about debt again.

Uh so we have 21 million dollars or so, right, of bond that we have to pay.

Uh let's talk about the CSO, because obviously our EAV, no, it's at 2.3, 2.4 billion dollars, correct?

And we're allowed to bond 10 percent of that amount of money, correct?

So down the road, some of us starting next year, we're gonna have 30, 40 million dollars of loan that we're gonna need.

So talk to us a little bit about that.

Where will we need where we will get the money and where does it show in our on our balance sheet?

So the the loans are EPA loans, so they're not part of our debt, so not part of our debt limit calculation.

Okay.

So that number one.

Number two, that's assuming that we're gonna continue to have the US or the Illinois EPA's revolving loan fund that we'll be able to tap for these projects.

So number three, if you look in the debt service schedules in the sewer fund in the back of the book, it shows the anticipated increase in the debt service to pay that back.

So what we had have always the plan that we've been operating under is that we're using sewer funds for the construction.

We're borrowing the money from the IEPA, but we're using the sewer funds to pay those loans back, and then operationalizing any of those expenses using the stormwater utility fund.

So thank you very much for this explanation.

So hopefully I won't be here, but in the future, 10, 15, 20 years down the road, do we have 100 percent certainty that we'll have to bond for our pension and bond for the CSO?

Well well I think that the I don't have 100% surety but you know I think that we'll have to continue to look at when the the time is right for us to to look at the projects that we're doing trying to minimize the the impact and cost of those projects over the long haul and and that ties back to the fact that we've got two major issues one a state unfunded mandate and pensions and one a federal unfunded mandate that are kind of coming to a peak at the same time in 2040.

So ideally we try and look at how we can stretch those out where we can um utilizing whatever financial tools are available to us.

Thank you sir thank you madam mayor thank you and Mr Manager Director Craddy thank you and your entire teams for putting this budget review together in the presentation tonight thank you very much we don't have a motion to receive and file I guess that was not necessary I I don't it's not on the agenda so when we change the rules the count the council rules this is a continued budget discussion that will go on until we wrap this up the night of the fourth hopefully okay Madam Clerk we're at citizens opportunity to address the city council and we have not received any cards.

Okay.

So then we're at executive session.

Okay.

I would like to invite a motion to adjourn and to convene in closed session immediately following the adjournment of the city council meeting pursuant to the open meetings act 5ILCS 122 C11 to discuss pending litigation or probable or imminent litigation and pursuant to open meetings act 5ILCS 122 C21 for approval by the body of closed session minutes moved by Councilman Euler seconded by Councilman Kelly please cat pass your cash your ballots councilman Carmona Councilmember Kalmona motion passed unanimously thank you for your service