Peoria approves development code reforms, freezes $8 million capital spending amid pension crisis
PEORIA, ARIZONA — September 8, 2020

Peoria approves development code reforms, freezes $8 million capital spending amid pension crisis

September 2020 Peoria city council meeting featured multiple code simplification efforts, significant debate over unfunded pension crisis and potential fire/police protection property tax referendum, and capital spending freeze to conserve cash during COVID-19 pandemic.

Peoria Council Advances Development Deregulation, Confronts $320M Pension Crisis and Pandemic Cash Crisis in Contentious September 8 Meeting

On September 8, 2020, the Peoria city council advanced multiple regulatory and fee simplifications designed to lower barriers to development and business expansion, unanimously approved amendments to the chronic nuisance ordinance as part of a fair housing settlement, and engaged in prolonged, sometimes acrimonious debate over whether to place a fire and police protection property tax increase on the February 2021 ballot. The meeting also produced a 9–2 vote to freeze capital expenditures through the end of 2020 to conserve cash during the COVID-19 pandemic—though that motion was not without controversy regarding lack of specificity.

The meeting was conducted with plexiglass barriers, remote staff participation, temperature screening, and a limited in-person audience of 15 members of the public and one media representative, in compliance with Governor Pritzker's pandemic gathering restrictions.

Key Speeches

"We are recommending that all variances go to the zoning board of appeals...we're suggesting that two items that are currently in the unified development code are removed entirely...the critical traffic management area and traffic impact analysis...neither of these have been used for at least 20 years." — Director Black, Development Services

"I think it's something that is not well recognized and you I believe should be commended for making doing business in peoria illinois easier and not more difficult...i think we should ultimately become maybe the first city anywhere...a city that does not find people for doing good things." — John Kelly, At Large

On the pension crisis:

"Nearly 85 percent of the city's property tax levy today is going to cover pension costs...by 2023 one out of every nine dollars that you collect in the general fund will be going to cover public safety pension costs over and above the property tax levies." — City Manager (presenting financial analysis)

"We must not keep doing the same things these same things don't work now we need to embark on a program of real growth it's the only way out of this stuff springfield's not going to help us." — John Kelly, opposing property tax increase approach

"Whether people wanna right now it's everybody's got their own opinion...the opportunity to actually provide our constituents to tell us if that's what they want is that how they want us to get there and if the answer is yes then we know and if the answer is no then we do have to do something different." — Mayor Jim Ardis, defending referendum proposal

Timeline

Unified Development Code Amendments (Item 20-226, First Reading)

Building Permit Fee Restructuring (Item 20-227, First Reading)

Hope Fair Housing Settlement—Chronic Nuisance Ordinance Amendments (Item 20-228, First Reading)

Fire and Police Protection Tax Discussion (Item 20-231, Discussion Only)

This item consumed approximately 90 minutes of council time and revealed profound division over fiscal strategy and the appropriate balance between growth-oriented deregulation and revenue increases to address structural deficits.

Manager's Presentation:

The City Manager presented slides documenting:

  1. Workforce decline: City workforce declined from approximately 900 employees in 2002 to 605 expected in 2021—a 32% reduction. Police down 19%, fire down 23%, public works down 39%, city hall/support services down 45%, emergency communications down 27%, community development down 71%. If those 287 eliminated positions were refilled at average wage and benefit levels, the city would need $37 million more annually.

  2. Property tax revenue trends: From 2008 to 2019, property tax collections remained relatively flat (18.5–19 million dollars annually) despite policy decisions to keep the levy rate constant. Pension contributions consumed 85% of property tax levy by 2019, with zero property tax dollars flowing to general fund operations. Only $3.3 million in property tax—dedicated to roads via 2015 council decision—supported discretionary spending.

  3. Pension liability and contribution growth: Police and fire combined unfunded liabilities total $320+ million. Employer contributions grew from $10.2 million (2010) to $21.8 million (2019) to projected $24.6 million (2020). By 2023, general fund transfers to cover pension costs will reach $10.6 million—one of every nine dollars in general fund revenue. Illinois law requires 90% funding of pension obligations by 2040; the state sets benefit levels and employee contribution rates; local government controls only employer contribution levels.

  4. Referendum option: Under Illinois law, council can establish police and fire property tax levies up to 7.5 cents per $100 assessed value without voter approval (each penny generates approximately $200,000). Both levies have ceilings of 60 cents per $100. Any increase above 7.5 cents requires referendum. Deadline for ballot placement in February 2021 is December 7, 2020. Council could place either binding or advisory referendum.

Council Discussion:

John Kelly (strongly opposed to tax increase):

Noted that property tax collections in 2019 were only 1% higher than 2009, despite intervening years and inflation. Argued that "we must not keep doing the same things...we need to embark on a program of real growth." Cautioned that asking voters to approve tax increase endorses "an already failed system" and that council was elected to lead, not outsource decisions. Referenced his 25 years in investment business and pension consulting: "25 years ago...everybody was screaming and yelling about how this is untenable but we don't do anything about it." Warned of census decline and business departure if tax burden increases further. Stated: "if we ask the public if they want to raise their taxes and they say yes all they're doing is endorsing an already failed system."

Dr. Rita Ali:

Expressed concern that referendum approach is "doa—dead on arrival." Worried that isolating police and fire in a referendum sends wrong message to those employees: "if they vote no...are the people telling them that they don't support them?" Agreed with John Kelly that "we can't tax our way out of this problem" but expressed concern that referendum "puts them on the ballot" and "sends the wrong message to our public safety employees." Called for "band-aid" interim solutions and longer-term structural approaches.

Councilmember Jensen:

Angry that referendum discussion did not occur earlier. Noted that council decommissioned two fire engines and cut 22 firefighters months ago without this discussion being brought forward: "This should have been brought to the table months ago, five months ago. So I'm very angry that we're getting this now." Questioned whether advisory referendum might be more appropriate and asked City Manager whether sunset clause could be attached if Springfield provides pension reform.

Timothy Riggenbach:

Argued that referendum would be "the ultimate town hall meeting" and resolve debate by putting decision directly to voters: "it would actually allow the people who pay these obligations the chance to weigh in on it." Noted that emails received by council members may not be representative of actual constituent base—council members might recognize same names repeated, and people might be from outside district or county. Expressed frustration with state's creation of "this mess" but acknowledged need to address local consequences. Called referendum a "road show" that clarifies voter preferences rather than relying on council members' assumed knowledge of constituent opinion.

Councilmember Graham:

Defended administration's inability to propose referendum in spring, when pandemic impact was unknown. Noted that council had opportunity to propose property tax increase at any point during budget discussions and chose not to do so: "any time you want to bring up a property tax increase you could have done that and i didn't hear it." Described painful series of reductions (closure of fire houses, police and fire cuts) made over two decades and expressed concern that further cuts would devastate older, north-of-Ward-Drive neighborhoods disproportionately. Stated: "each of us really believes inside that we have too many fire houses...i've talked to some of you and you believe that we could do just fine having cut 44 firefighter positions...unprecedented and a while back even entertaining the idea that she would cut 27 police officers." Proposed manager explore alternative scenario involving potential increased bonded debt (discussed under unfinished business). Said referendum should not be this budget cycle.

Councilmember Moore:

Expressed strong interest in hearing constituent opinion through referendum. Criticized decommissioning of Engine 4, which receives most fire calls in city, citing Fire Chief's own data: "engine 4 receives the most incidents of fire calls in our entire city." Stated: "if you're asking if i'm interested in hearing from the citizens of peoria absolutely i hear from them every day." Referenced employee furloughs, unpaid days off, and general service cuts that have left "almost literally nothing left to cut." Called for referendum to let voters decide whether to support public safety funding.

Zachary Oyler (Zachary Oyler):

Stated: "I don't believe that the tax increase is a solution to any of our issues...i have communicated multiple times during budget discussions that we are on a financial death spiral." Acknowledged that solutions are binary—"cut cut or raise raise...and we're not fixing anything long term." Agreed voters should have opportunity to weigh in, though personally opposed to increase. Emphasized that any referendum should be "a number that's worthwhile for the discussion and it needs to be a number that impacts this gap" to avoid repeat ballot measures year after year.

Denis Cyr (Denis Cyr):

Expressed concern about cumulative tax burden. Over past 40 months as council member, no constituent asked for fee or tax increase. Cited recent property tax increases, pension fees, stormwater utility fees, fuel taxes, and sales tax increases. Warned of expected 2021 state-level pressure from proposed flat income tax and pension tax. Asked: "I don't know what we're trying to accomplish...I don't know if we're just trying to close our city hall or people just tell them to move out of the city of peoria." Suggested consolidation of fees/taxes into single measure to reduce constituent confusion.

Mayor Ardis (in closing remarks):

Acknowledged that city is "in the state of illinois" and faces structural barriers to growth and employer attraction. Reminded council that balanced budget at start of 2020 was gutted by unexpected pandemic impact. Stated: "we're not raising taxes...we're asking them" to express preference. Defended against criticism that referendum should have come earlier: "we didn't know what was coming." Said every alternative proposal welcomed but none substantively offered. Warned that budget discussions will resume in one month and council will "be right back where we just left" without concrete alternatives. Emphasized: "we're depleting our reserves every day...we have to do something...it's not just pie in the sky it's not just like let's let's have some fundraisers it's real it's very real."

Council Direction:

After extended discussion, Timothy Riggenbach moved to direct City Manager to "put a little more meat on the bones" and return in 30 days with additional analysis. Motion passed unanimously. Council asked manager to research how other municipalities nationwide (via National League of Cities and Better Cities networks) and Illinois (via Illinois Municipal League) have addressed similar structural pension and revenue challenges.

Capital Expenditure Freeze Motion (Item 20-125, Unfinished Business)

Original Motion and Amendment:

Zachary Oyler moved to freeze all capital expenditures for 110 days (through end of 2020), with exceptions for: (1) stormwater utility projects with dedicated funding source, (2) roadway design work, and (3) work required to meet grant funding contractual obligations. Motion seconded by Councilmember Riggenbach. Motion intended to conserve approximately $8 million in cash reserves by delaying equipment purchases and facility-related work (not eliminating projects, only deferring to 2021).

Council Debate:

Dr. Rita Ali asked impact on city operations; City Manager stated 110-day freeze would affect equipment purchases and facility work but allow continued design work on major road projects (Western Avenue, Main Street, Glenn Avenue, Sheridan, etc.) and state-funded projects already in pipeline.

Councilmember Graham objected to lack of itemized list showing exactly which projects would be frozen. Stated: "i'm going to vote no until i see an itemized list of exactly what is going to be impacted." City Manager acknowledged that detailed breakdown was not prepared in time for vote.

John Kelly asked for approximate dollar amount; City Manager stated approximately $8 million of roughly $15.4 million total capital budget would be frozen temporarily.

Councilmember Moore requested specific list, noting similarity to two weeks prior: "two weeks ago i asked for a list tonight what i got was a recrafted motion that admittedly i liked better...two weeks ago i asked for a list had i gotten that tonight i'd be prepared to vote on this motion." Expressed concern about unintended consequences and wanted to know specifically which copier purchases, facility work, etc. would be deferred.

Timothy Riggenbach articulated rationale: "I think what this really comes down to...is you know...covid test result cases continue to rise...and some areas are skyrocketing...and i think that we are on the verge of potentially getting kicked back a phase...and then we will end up in an even more difficult financial position." Emphasized cash-flow management in face of unknown second-wave severity.

Councilmember Montalango asked clarification on whether motion was about cash flow (preserving reserves pending clearer pandemic outlook) versus actual budget reduction. City Manager clarified: motion would prevent reserve depletion by approximately half of remaining reserves.

Vote: Motion passed 9–2. No: Councilmembers Graham and Moore.

Alternate Proposal—Increased Bonded Debt:

Councilmember Graham, in separate discussion, proposed exploring increase in working capital credit line from approved $10 million to $15–20 million. Such borrowing, he argued, could defer need for property tax increase and provide time for economic recovery without relying on general fund cuts. City Manager noted that borrowing over $10 million would require repayment source (estimated $1.5–2 million annual payment, equivalent to roughly 10-cent property tax increase if unfunded). Borrowing could provide near-term relief through 2022–2023 but would not address structural gap projected for 2023 ($10.6 million pension transfer requirement). Mayor Ardis and John Kelly suggested deferring this discussion to allow manager and council to explore details over coming weeks. No formal motion or vote taken.

Controversial Context: Renaissance Park Community Garden Destruction

Although not formally on the consent or regular agenda, the September 8 meeting included extensive public comment (approximately 20 written submissions read by Clerk, plus two in-person speakers) regarding destruction of the Renaissance Park community garden on West Main Street in the West Bluff/District 2.

The garden had been used as both a community vegetable garden and, increasingly in recent months, as a gathering site for homeless individuals experiencing substance use, public urination, and defecation. Councilmember Graham (District 2) supported its removal (the property owner subsequently demolished it to make way for gas station expansion). Community advocates and homeless services organizations criticized the removal, arguing it eliminated one of limited food and gathering resources in a food desert without advance notice to volunteer organizers (Renaissance Park Community Association, JOLT, Lula, Peoria Proud) or alternatives for vulnerable populations.

Public comment reflected deep division: supporters praised removal of an "eyesore" and nuisance; opponents characterized it as criminalization of homelessness and removal of a crucial resource in an under-resourced neighborhood.

Mayor Ardis did not respond substantively to the garden comments during the meeting.

Project Details

Unified Development Code Amendments (Item 20-226)

Building Permit Fee Restructuring (Item 20-227)

Hope Fair Housing Settlement—Chronic Nuisance Ordinance (Item 20-228)

Declaration of Local State of Emergency (Item 20-229)

Special Use Denial—Massage Parlor at 4241 North Boulevard (Item 20-230)

Bodywork Establishments Ordinance (Item 20-198)

Vote Breakdown

Unified Development Code Amendments (Item 20-226, First Reading)

Building Permit Fee Restructuring (Item 20-227, First Reading)

Hope Fair Housing Settlement Ordinance (Item 20-228, First Reading)

Declaration of Local State of Emergency (Item 20-229)

Capital Expenditure Freeze (Item 20-125)

Fire and Police Protection Tax Discussion (Item 20-231)

Massage Parlor Special Use Deferral (Item 20-230)

Minutes and Expenditures

Outcome & Next Steps

Development Code and Fee Reforms:

Unified Development Code amendments and building permit fee restructuring both passed first reading unanimously and will proceed to second reading after Director Black consults neighborhood groups on duplex provision in R4 districts. Items are expected to return within 2–4 weeks. These represent continuation of multi-year deregulation initiative designed to reduce development costs and regulatory complexity.

Fire and Police Protection Tax:

City Manager directed to return in 30 days (early October 2020) with additional information on: (1) how peer municipalities nationwide and in Illinois have addressed structural pension/revenue imbalances; (2) potential structure and dollar amounts for advisory versus binding referendum; (3) timeline and process for February 2021 ballot placement (deadline December 7, 2020). Mayor Ardis urged manager not to delay; council indicated willingness to revisit and refine proposal, but no commitment to place item on ballot at this time. This item will dominate October budget and council discussions.

Capital Expenditure Freeze:

Motion passed 9–2 to freeze approximately $8 million in capital expenditures (equipment purchases, facility work) through end of 2020, excluding stormwater, design work, and grant-required obligations. Freeze intended to preserve approximately half of remaining general fund reserves pending clearer pandemic outlook. Councilmembers Graham and Moore voted no, citing lack of itemized detail on affected projects. Manager stated detail list could be provided but would require staff time; freeze rationale is cash-flow conservation, not elimination, so projects will resume in 2021. Alternative proposal by Councilmember Graham to increase bonded debt capacity to $15–20 million (vs. approved $10 million) was discussed but deferred for further research and discussion.

Renaissance Park Community Garden:

Item not formally voted on, but two in-person speakers and approximately 20 written public comments addressed destruction of community garden on West Main Street. Mayor and council offered no formal response or action. Garden's removal and its impact on homeless services remains controversial within District 2 and among homeless advocacy organizations.

Other Deferrals:

Bodywork establishments ordinance (Item 20-198) deferred two weeks to allow stakeholder review of revised proposal. Massage parlor special use (Item 20-230) deferred two weeks per applicant request.

Controversies & Context

Unfunded Pension Crisis:

The core structural challenge facing Peoria—and all Illinois municipalities—is the unfunded liability in police and fire pension systems. The state of Illinois sets benefit levels and employee contribution rates; municipalities control only employer contribution levels. By 2040, 90% funding is required. Current unfunded liability: police $172 million, fire $156 million. Employer contributions grew 214% from 2010 ($10.2M) to 2020 ($24.6M) and will reach $34+ million by 2023 if fully funded according to actuarial requirement. By 2023, general fund transfers for pension costs alone will consume 11% of all general fund revenue—forcing cuts to police, fire, public works, and community development.

Illinois Municipal League has advocated statewide for pension reform (benefit adjustments, consolidation) but minimal legislative progress has occurred. All council members acknowledged state's responsibility; none expressed confidence in state-level solution emerging in time to avoid local consequences.

Tax Increase vs. Growth-Oriented Deregulation:

Profound disagreement existed on council regarding fiscal strategy. John Kelly and others argued that further tax increases will accelerate resident and business departure, cite declining property tax base (down 1% over decade despite inflation), and call for growth-oriented development and business expansion. Proponents of referendum approach (Timothy Riggenbach, Moore, Oiler, Euler) argued that voters should decide between tax increase and service cuts, and that referendum provides democratic legitimacy absent from council members' individual constituent communications. Mayor Ardis positioned referendum as "asking" not "telling" residents to accept tax increase.

Timing and Process Criticism:

Councilmember Jensen expressed anger that fire and police pension crisis was not brought to council for revenue discussion in April/May 2020, when pandemic impact first became apparent, rather than in September after decommissioning two fire engines and cutting 22 firefighters. Mayor Ardis countered that pandemic impact was unknowable in April and that any council member could have proposed property tax increase at any time during budget discussions. Debate reflected tension between those favoring proactive financial planning and those viewing September timing as reactionary.

COVID-19 Pandemic Fiscal Backdrop:

All decisions made in context of unprecedented pandemic-driven revenue decline and uncertainty. City had begun 2020 with balanced budget and positive economic indicators; by March, hospitality and sales tax revenues collapsed. Council has been meeting nearly weekly since April for budget crisis management. Reopening phases, potential resurgence, and vaccine availability remain entirely uncertain, making multi-year planning highly speculative.

Cumulative Tax Burden on Residents:

Denis Cyr cited cumulative effect of prior-year increases: property tax increase, pension fee, stormwater utility fee, fuel tax increase, sales tax increase. Warned of expected 2021 state-level pressure from potential flat income tax and pension tax. Questioned compounding burden on residents and feasibility of further increases.

Democratic Process and Constituent Input:

Councilmembers split on whether referendum constitutes appropriate democratic process or unwelcome abdication of council leadership. Timothy Riggenbach argued referendum is "ultimate town hall meeting" and clarifies voter preference better than email campaigns. John Kelly argued council elected to lead and should not outsource decision-making. All agreed strong constituent emails received, but questioned representativeness and organized nature of communications.

Duration

Other Notable Items

Hunger Action Month & CWCT 60th Anniversary Recognition:

Proclamations recognizing September 2020 as Hunger Action Month (Midwest Food Bank and Peoria Area Food Bank, both Feeding America members, distributed 800,000+ meals year-to-date; 40,000+ county residents rely on food bank network). CWCT (Community Workshop Training Center) recognized for 60 years serving adults with disabilities; currently serves 450 individuals with 110 staff; placed 60 consumers in community jobs last year; 175 working on Caterpillar contracts generating $1M+ annual payroll.

Census Event Announcement:

Councilmember Moore reminded constituents of Saturday census event at Martin Luther King Jr. Park (11 a.m.–2 p.m.), hosted by Tri-County Regional Planning, Peoria County Clerk, and State Representative Jahan Gordon Booth. Event will include food, volunteers recruiting census takers, and registration assistance. Census results determine federal funding allocation for next 10 years and state legislative apportionment.

Health Department COVID-19 Update:

Mayor Ardis reported morning briefing with County Health Department Director Monica Hendrickson, County Board Chairman, and County Administrator. Region 2 positivity rate approximately 8% and "not tracking in the right direction." Two other state regions already required to move back reopening timelines. Recommendations: avoid large private gatherings, avoid overcrowded bars (identified as transmission vector, especially college student off-campus parties), stay home if sick, increase testing (sites at Glen Oak Clinic on Wisconsin and Civic Center), get flu vaccine. Health department not reporting widespread restaurant over-capacity issues but bars identified as problem. Mayor appealed: "we can't take that step back...our businesses just can't support it...we do not want to go back."

Hospitality Industry Tax Relief Request:

Timothy Riggenbach (Denis Cyr) raised question about real estate tax relief for hospitality industry given extreme pandemic impact. Noted that similar relief granted in June (two-month deferral). Asked whether amnesty on late charges or additional deferral possible for September property tax deadline (September 9). City Manager offered to contact County Treasurer regarding any anticipated amnesty program; no formal commitment made.

Vendor Reduction Request Follow-up:

Councilmember Jensen requested update on staff effort to ask vendors for voluntary cost reductions during pandemic. City Manager indicated list of vendors was included in council budget packet as report-back item #11 but Jensen stated she did not receive it. Agreed to circle back at next meeting.

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