Peoria continues to spend money – and there are some
good reasons for that.
Policy priorities.
In adjusting to the economic downturn, the top
priority for city officials has been maintaining core services for the
public.
"We will spend money where needed to continue those
core services," says City Manager Carl Swenson. "The expansion of the
Municipal Court is an example. That project has been planned and
needed for several years, and is moving as scheduled because of the
growing demand in that area."
On the other hand, Swenson notes, the planned
renovation of City Hall is on hold while officials determine what the
city can and cannot afford. "All told, it looks like about $80 million
in capital projects must be delayed," he says, noting that the details
will be worked out with the City Council in the coming months.
Targeted funding.
In many cases, money being spent came with strings
attached. It can be used only for certain purposes, or must be
returned if not spent.
Take the new mural on the 83rd Avenue side of Bikers
Edge in Oldtown. The city’s "Percent for the Arts" fund, created from
money set aside from capital projects, paid for the $31,500 project.
Money from that fund can be used only for designated art projects.
Another example is the $1.6 million Osuna Park
renovation. It was financed with general-obligation bonds, which can
be used only to pay for capital projects and required authorization
from Peoria voters.
One-time vs. ongoing.
Another important distinction in budgeting is whether
revenues and spending are on the table for just the fiscal year in
question, or whether they must be factored in for years beyond.
One-time revenue is money that might not be available
in subsequent years – money that comes from things like construction
sales tax, development user fees or unexpected savings from the
previous budget year. One-time funds are used for single purchases,
such as building projects or pieces of equipment.
Any time the city plans to build a facility, which may
be paid for from one-time revenue, it also must plan for all of the
other ongoing expenses that come with it.
Once the expansion of the Municipal Court is complete,
for example, the city must hire additional staff and account for
annual operation and maintenance costs.
"We don’t use one-time funds for things like employee
salaries and benefits because we can’t rely on it to be there
consistently," Swenson says. "This policy is probably most responsible
for Peoria’s relatively good financial position compared with other
Valley cities, which were funding staff with unpredictable revenue
sources that have completely evaporated."
An eye on the future.
The city will continue to trim spending wherever
possible to bring it in line with revenues, but spending in certain
areas – for the reasons discussed above – is important to provide for
services and position the city for success when the economy begins to
recover.