As fall approaches and most folks’ thoughts turn toward football or the holidays, your Peoria City Council will begin working in earnest on the 2012 budget. In fact, by the time you read this in early October, we should be well underway. It is sometimes difficult to write these columns so far in advance of your reading them, because things can change rather quickly. As informed businesspeople read this magazine, I would like to share some of the challenges our community faces, and how we will tackle them.
On the heels of two straight years of budget deficits that reached into eight figures, Peoria is again looking at a multi-million dollar deficit. In the spring, our new city manager, Patrick Urich, gave the council an early preview of the 2012 budget, and the outlook was grim: a $9.6 million projected deficit. About a third of this deficit was the result of the community’s economic struggles. The remaining $6 million was structural—the simple reality that growth in the City’s expenses outpaces growth in revenues, even in the best of times. Simply put, our costs to provide the rising healthcare benefits and salaries of our workforce are not keeping pace with the revenues needed to pay for them. The difference has been growing exponentially for years.
Over the rest of the spring and into the summer, we actually received some good news. Tax receipts had rebounded to levels higher than predicted, which allowed our Finance Department to revise projected revenues for next year. Combined with a federal “Assistance to Firefighters” grant and other changes, the projected deficit for 2012 shrunk to $8.2 million. More importantly, under the leadership of the City’s Labor-Management Health Care Committee, changes to our healthcare plan will yield a projected $2.7 million in savings next year.
As good as this news has been, we still face a $5.5 million deficit. Over the past two years, the City has shed nearly 100 jobs and radically changed service levels. In my State of the City address in January, I said that the 2012 workforce will be smaller than in 2011, and it will be. The challenge is now greater than simply doing more with less—the council has challenged the manager to restructure City government.
This is more than just a new organizational chart; it is a fundamental change to the way we deliver services. In some areas, we may look to outside organizations with whom we can contract to provide service. This could be other governmental units, like Peoria County, or even the private sector. For those services that remain with the City, changes will have to be made. Systems need to be overhauled, technology has to be improved, and most importantly, we need to empower our employees to be decision-makers. Together, these steps will allow the City to strip away some of the burdens of bureaucracy, which is the only way a smaller workforce will be able to successfully perform their duties.
The shape of the restructuring is still forming and as always, we hope you learn as much as you can about the process and make your feelings known to your council members. At the end of the day, your local government is doing what successful private business does: focus on your core services, provide those services efficiently and effectively, and provide good value to the customer.
The citizens of Peoria pay 11 cents of every property-tax dollar for City operations. In return, we provide high-quality police and fire protection and a solid Public Works department, as well as a strong performance from our other departments. You will see a continued refinement in what we determine are “core” services so we can bring our budget in line with what we can afford to provide. In close partnership with the city manager and his team, my goal is to bring the new, streamlined workforce to taxpayers within existing revenue streams.
When we vote on the 2012 budget in November, it will be a balanced budget. There will be pain, but the council is focused on making tough decisions, as we have over the last several challenging budget deliberations. I think you will be impressed with the reorganization model that the city manager presents to the council for consideration. iBi