Facing a budget shortfall, Peoria Heights may raise taxes and cut personnel

The village of Peoria Heights may have to raise taxes or shrink its staff to address a budget shortfall that leaves local leaders with no easy decisions in confronting the problem.

Peoria Heights has not encountered a budget shortfall like this one in years.

But a significant increase in the village's fire department budget now has village leaders looking for ways to address a $777,000 shortfall.

Nothing has been voted on yet, but village officials have discussed raising sales taxes, property taxes, garbage collection fees and possibly shrinking the police department as means to address the problem.

The budget shortfall stems from a decision last summer — one which was widely supported by the community — to hire full-time firefighters and expand the volunteer fire department rather than sign a contract with the Peoria Fire Department.

That decision increased the village fire department budget from around $400,000 a year to about $1.45 million a year, according to the village.

Now, Peoria Heights has to find a way to pay for the increased fire costs.

Village Administrator Dustin Sutton said it is "no secret" what the highest increase in the budget was this year. The police budget went up 6.4%, streets and alleys increased 5.33%, administration went up 2.76% and the fire department more than tripled, Sutton said.

"This is a unique position for this administration because the last six years we've finished the budget year with a $800,000 to $1 million surplus each year," Sutton said. "I think we're kind of used to that so this is uncharted territory for this administration."

At a meeting on March 2, the Village Board met to discuss how the budget shortfall could be made up. Proposals included raising $265,000 by increasing the garbage collection fee Peoria Heights residents pay. Currently, residents and the village split the cost of garbage collection; under the new proposal, 100% of the cost would fall on residents.

The current fee for garbage collection in Peoria Heights is $10 per month for residents.

Mayor Mike Phelan said a garbage collection fee increase was almost "unanimously" supported by the village board at that meeting but noted that could always change before an official vote takes place.

Also proposed were increases to the sales tax, ranging from 0.25% to 0.50%, which could raise around $150,000 and $300,000, respectively. A property tax increase was also discussed but did not gain much traction among board members.

"Those are small amounts to what we're facing," Phelan said. "That in my opinion doesn't do it."

Sutton said the village needs to find a "steady stream of revenue" to offset the shortfall. He noted the costs of the fire department will be annual, not just an issue facing the village this year.

"This is just the beginning," Phelan said.

If those tax and fee increases were to pass, the village would still be left with a shortfall of around $147,000. Sutton said the next steps could be eliminating his own job or cutting from the police department, which is the village's highest funded department. Sutton is also the police chief.

"I don't think those options were very popular with the board," Sutton said. "I think they understand we already operate on a thin staff, we don't have a staff of 50 people (at Village Hall). We have a lot of employees wearing a lot of hats."

Village Board Member Matt Wigginton said the issue comes down to "personnel and where else do we cut?" He, too, pointed to the fire department budget as the cause of the shortfall.

"One of the concerns is that this is a structural deficit we're running in Peoria Heights, so a cut here and a cut there is not necessarily going to solve the problem," Wigginton said. "There needs to be some structural change here, and I worry we're just biding our time with some of these small cuts and small fee increases here and there. We're really going to need to make some serious changes."

Village Board member Sarah DeVore said the best path forward in addressing the budget is looking at the "immediate needs" of the fire department and keeping spending down "in areas where we can."

"We also need to take a look at our revenues coming in," DeVore said. "We are in a delicate situation right now with trying to maintain what we have, keeping our own fire department, improving our infrastructure, adding water filtration and making improvements within the village and not bankrupting us."

Wigginton said the questions facing the board right now could be "hanging over Peoria Heights for a long time."

However, Wigginton did say that the fire department budget may still not be as large as it needs to be to deliver the best public service to the village.

"As large as the fire department budget is, is it large enough?" Wigginton said. "We're not building in replacement of vehicles, engines, trucks, we don't have that built in and are we going to have enough fire fighters on the trucks to have enough fire fighters to fight fires comfortably and safely."

DeVore also said the fire department costs were a large part of the budget shortfall, but she believes the village would be in the same situation had they contracted with the Peoria Fire Department.

The village is facing other major expenses like water infrastructure improvements, and making the village more ADA compliant, which DeVore said are also contributors to the budget shortfall.

"Again, we have a lot of moving parts we are trying to manage and this will be a tough and delicate decision making process," DeVore said. "Not only for the betterment of the community today but also for the future."

This article originally appeared on Journal Star: Peoria Heights may raise taxes and cut personnel amid budget woes