Peoria approves Dutch Bros drive-thru with unrestricted University Street access, 11-1 vote

Everyone, please take your seats. We're going to get started with our meeting. Good evening everyone. It is 6 o'clock p.m. on Tuesday, May 27th, 2025. I'd like to welcome everyone to the meeting of the Peoria City Council and bring our meeting to order. I'd also like to welcome everyone in our city council audience as well as our listening audience at WCBU. Welcome also to our audience watching on cable channel 22. Madame Clerk, council mics are open. Please call the role. Mayor Ali, present.

Council member Allen. Council member Carmona here. Council member Seir here. Council member Gordon Young present. Council member Jackson here. Council member Kelly here. Council member Oiler here. Council member Rianbach here. Council member Velpula present. And council member Vesa here. You have a quorum present. Madame 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 to the flag of the United States of America and to the stands. One nation under God, indivisible, with liberty and justice for all. Oops. Madame clerk, we are at the approval of the minutes. Council member Rianbach. Thank you, Madame Mayor. I move to approve the minutes from the special joint city council meeting of May 6, 2025 and the May 13, 2025 meeting as printed.

Seconded by council member Jackson. Any questions or comments. Please cast your ballots. Motion passes unanimously. Madame Clerk, we are at the consent agenda. 25-127 is a communication from the city manager and finance director controller with a request to approve existing liability insurance coverages, cyber liability coverage, crime coverage, and service fee with the city's existing broker of record, Arthur J. Gallagher Risk Management Services in an amount not to exceed $868,892.

25-128 is a communication with a request to approve a a professional services agreement with Cloudpoint Geospatial, Inc. in an amount not to exceed $57,600. 25-129 is a communication with a request for the following. A, adopt an ordinance authorizing the amendments to the Intergovernmental Agreement for participation in the Illinois Public Works Mutual Aid Network. And B, approve an intergovernmental agreement with Illinois Public Works Mutual Aid Network providing for membership.

25-130 is a communication with request for the following. A approve a highway authority agreement between the city of Poria and VRG properties company for the property known as 3907 North Sheridan Road, Poria, Illinois. And B, adopt an ordinance pertaining to schedule A of chapter 31 of the code of the city of Poria prohibiting the use of groundwater as a potable water supply by the installation or use of potable water supply wells or by any other method.

25-131 is a communication with request for the following. A approve a highway authority agreement for the city of Poria for the property known as 3560 Southwest Adam Street, Poria, Illinois. And B, adopt an ordinance pertaining to schedule A of chapter 31 of the code of the city of Poria prohibiting the use of groundwater as a potable water supply by the installation or use of potable water supply wells or by any other method.

25-132 is a communication with request concur with recommendation from the planning and zoning commission and staff to adopt an ordinance approving a special use in a class I3 general industrial district for the manufacturing of goods from composting organic material natural gas reclamation for the property located at 2322 South Dar Street Poria Illinois 25-133 is a communication with request to adopt an ordinance ordinance granting a variance from certain provisions of the flood damage prevention and control ordinance for the greater Poria sanitary district at 2322 South Dar Street.

25-134 is a reappoint by Mayor Ali to the police pension fund board of trustees with request to concur of Katherine Hardy. 25-135 is an appointment by Mayor Ali to the Poria Public Library Board of Trustees with a request to concur of Scott Driscoll. And 25-136 is is an appointment by Mayor Ali to the Poria Urban Forestry Advisory Board with a request to concur of Elsie Hayes. And that concludes our consent agenda. Is there any item to remove from consent?

Can I get a motion to approve the consent agenda? Moved by council member Seir, seconded by council member Gordon Young. Please cast your ballots. Motion passes unanimously. Madame clerk, we are on to regular business.

25-137 is a communication from the city manager and director of community development with a request to adopt an ordinance replacing the existing special use ordinance 15077 with a special use in a class C2 largescale commercial district and a class C1 general commercial district for a shopping center for the property located at 3624 and 3622 North University Street and 1205 West Florence Avenue Poria Illinois. Mr. Manager. Uh, thank you, Madam Mayor.

I'm actually going to turn it over to our assistant community development director, Leah Allison, who will walk through this item. Thank you, Mr. Manager, Council, Madame Mayor. So, the proposal before you tonight is the um located at the corner of Warm Drive and University Street. Very um visible corner, popular corner. Start with a little bit of background. The whole development site is about four and a half acres. It's previously used for auto sales.

It's been vacant or or unused for about 10 years. And the buildings that were there have been raised. The property, the site has been leveled and graded, priming it for a new use, a new development. So the request before you today is for development on one and a half acres of that four and a half total located at the corner right at the corner of University and War Memorial. The proposed use includes two potential drivethrough only restaurant sites independent of each other.

The um first primary uh user is for a drive-thru of about 986 square feet in size. Um what we've heard through uh the petitioners may be a Dutch Brothers copy. The second site on that one and a half acres is not yet identified as a user, but could be another drive-thru restaurant facility. Um this whole area 4 and a half acres is part of the university war memorial tiff that was established in 2021. Okay. Staff has reviewed the site the development. Um we do have some concerns with access.

Currently access is available through two existing drive approaches. one on University and the second access is off of Florence Avenue. Okay. There's no direct access from War Memorial Drive. The uh staff recommendation with access on Florence is left in right out only. Uh that's really to ensure that traffic is directed to the intersection of Florence and University which is a lighted intersection at full access lighted intersection control there.

The staff recommendation for the second point of access which is University Street is again restricted to right in right out only. Staff has concerns about congestion, traffic safety for those southbound vehicles on university trying to enter and exit the site. And so the staff recommendation does include a limited or or um controlled access of right in right out primarily for safety of traffic.

Um I'm going to highlight three conditions that are are included with this recommendation which I should back up. We are recommending approval but we do have some concerns as I mentioned for that access. And then three conditions just to bring to your attention reiterating that the um entrance again from to and from university right in right out access to and from Florence left in right out.

And then thirdly, staff uh is asking for a traffic impact study just to really ensure that vehicle access to and from this site is safe, controlled in a in an appropriate manner. That's staff summary. Can I answer any questions for you? Um the petitioner is present as well, but happy to answer questions. Director Allison, when would how long would the study take and when would it begin?

Um, you know, that is really probably we would welcome it as soon as possible and it would be a study that we would ask the petitioner to be involved with to produce those those, you know, definitive traffic data that would help make sure that this is safe, accessible property. Can you estimate how long the study might take? I think it does take a few months. Okay. Yeah. And it may, you know, just for that level, it may take a few months. Okay.

And does this motion as is um it includes those special conditions? Correct. Okay. Council member Carmona. Uh thank you, Madam Mayor. Uh well, first I want to thank the staff for all their diligent work and um throughout this whole process. Uh I know a lot goes into it. Um and I do understand why these recommendations are being made. Um I was um wondering though, Madame Mayor, uh if I can, uh give the developer the privilege to say a few words on the floor. Yes. Before we proceed. Sure.

Thank you. Name is Todd Rafisen. I'm with the RSC Group out of Rockford, Illinois. We are a third generation family-owned business. Uh celebrating the 58th year in business. Um I've asked to be adopted, but I'm not a member of the family. I'm simply an employee for the company. But I can tell you they're a great company and a great family to work for.

Historically, we've developed 300 Walgreens, 100 CVS's, over 100 QSRS, quick service restaurants, which is what we would refer this to, or this as, if you will. Um, it's interesting. I came across Dutch Bros Coffee. We do a lot of Starbucks, too. We're delivering to Starbucks in Muhammad, Illinois right now. Kind of on a coffee kick to be honest with you. It's very popular, high growth. I was visiting my kids who live in Vancouver, Washington, and they said, "Dad, this is about four years ago.

They said, "Dad, we're going to go get a Dutch." And I'm like, "What are you talking about?" And I said, "We're going to go get a Dutch Bros." I'm like, "Okay." You know, what in Rome do as the Romans do? So, I went to my first Dutch Bros in Vancouver. Uh, it's 963 square foot as a developer for the last 25 years. I'm like, "Well, this looks pretty cool." And I had a double drive-thru stacked 18 cars, which is how this one is designed.

Um, I can tell you the coffee is really good and the cold drinks are really good. Uh, I can also tell you I was thoroughly impressed with how they managed their drive-thru. Uh, we've all seen a Chick-fil-A. We've all seen a Pertillos. We do Partillos as well. And they can cause a lot of traffic issues and a lot of problems. Dutch does it differently. Dutch has orders, but you do not place your order at the order board.

They have live people, two of them, sitting out in the drive-through lane with iPads. It's extremely orderly. It's extremely efficient. and their historic records. They have a,021 stores in the United States right now. Their goal is to grow to 2,000 by 2029. We are in the process of doing 24 different locations across the United States. Uh they are extremely efficient, extremely smooth. About one vehicle every four to five minutes exits the drive-thru.

We currently have one that's going to be the first one in downstate Illinois going into Urbana at the corner of Green and Lincoln. Uh if anybody knows Champagne Orurbana, it rivals the traffic at University and War Memorial. Um and we don't anticipate any traffic issues there. We use AI currently for traffic analysis before we go to city council, before we take a look at a site so we know what we're facing. We use Perplexity, we use Chat GBT and we use Grock.

Uh all three of those traffic studies I provided those at the previous meeting basically predict that 90 to 96% of the traffic that is visiting that Dutch Bros will already be utilizing University and War Memorial which means it's it's it's experienced traffic and that's a benefit because people with a McDonald's there and otherwise they find the most efficient way in and they find the most efficient way out. uh consumers are very good at that.

Uh they predict relative to the business historical model of Dutch Bros uh minimal if any impact on the traffic flow at that intersection. So we feel very comfortable. We are not against the staff's recommendation for a traffic study. They cost between 7500 and $10,000 and take four to six weeks. So that's why we use AI to to make sure that we budget that in the process.

The other thing I'd like to really stress and we do like I said anywhere between 30 to 60 QSRS a year depending upon the economy. Dutch Bros is a tremendous asset to the community. They're not just another drive-thru. Their employees are involved. They're very philanthropic. They bring tremendous energy and a commitment to the marketplace. They will be an asset to the city of Peoria. not just in the product that they provide but in how they do business.

Uh they truly are members of the community and I cannot differentiate enough relative to that doing this for 25 years. Not all of them are but Dutch Bros is. The access that we request is critical uh to approval. We have initial approvals through real estate committee uh confirming uh the access and the results of the city meeting tonight. And unless there's questions, that's all I have to say. Thank you, sir. All right. Thank you. Thank you. Thank you, Madam Mayor.

I would like to just uh quickly speak to the experience I've had with Dutch Brothers. Uh as many of you know, I'm from Colorado and uh I was I came from a town, small town called Windsor. Uh but this town Windsor had a main uh corridor running right through it. Uh it was also it was called Main Street, but it was also known as Highway 392.

Uh Dutch Brothers came in and proposed to put a development right off of that busy intersection where thou tens of thousands of um cars and semis go through there a day. It's very busy. And so the community had similar um uh you know they had similar issues or problems with uh letting this pass uh be- because of the potential for uh more traffic and congestion. Uh I will tell you though uh it was very surprising how um how efficient this company is and um it's almost like it's not even there.

And on top of that uh it's right on the edge of a neighborhood. It's surrounded by houses. Uh they're very friendly and so I'm a really big advocate for this project to be passed. Um I do like I said understand uh where staff is coming from. Uh University and War Memorial is a very busy intersection. Um the thing that I don't want to happen is that uh if Dutch Bros walks away from this um then I think it's say because we restrict their access on university uh and off to university.

I think it's safe to say that um the lot will probably remain vacant for years to come and it will negatively impact the um ability for a developer to do anything there. On top of that, uh there are um citizens who will be impacted by as well uh because there are owners who own that land and um their property will become a lot less viable and valuable if we um impose this onto um this new development.

And so, uh, with that said, I'd like to make a motion to approve item 27-13 sorry 25-137 uh, replacing the existing special use ordinance with a class 2 and class 1 for the property at 3624 and 3622 North University and 1205 West Florence without the suggested North University restricted entrance entrance modifications. So would that be without all one through 11?

No, I would say uh number one and number three because the Florence neighborhood um and understandably would like to keep traffic out of their neighborhood. So the left turn in and the right turnout only is uh very logical for that neighborhood. Um, so I would say just striking number one and uh number three especially to expedite the process of getting this um in place. Okay. And the owner did say he he did not object to the traffic study. Oh, he did not object to the traffic study.

That's that's what I heard. Was that correct? Okay, we'll strike number one then. Okay. So, is there a second? Seconded by Council Member uh Gordon Young. And Council Member Gordon Young, you had a comment, I think. Well, I did, but it sort of got answered. I was confused in terms of um the owner uh agreeing to the impact study. Not confused, but I was going to ask about that. Um, but I do want to say that I drove around.

Uh, people probably thought I was losing it, but I drove around just to see what that area would feel like from every possible access. Um, from Mebrook, um, northbound, southbound, all those different areas. And uh initially I was a little bit concerned until I actually drove it and thought about how we are accustomed to slowing down for people who are turning onto Florence or going into Walgreens or going into McDonald's.

Um and for some of us who have been in the area because I live a block north of it um long enough remember when it was a car dealership as well. Um and so I do understand the point that you're making, Council Member Carmona. Um, and so that is why I second that that motion. Thank you, Madam Mayor. You're welcome, Council Member Seir. Thank you, Madam Mayor. Is Miss Allison, did she leave the the room? She's still Yes. Director Allison. No, it's okay. If she's gone, it's okay. I'm sure uh Mr.

Urick can answer the question. Uh, is she there in the back? Oh, I'm sorry. Okay. I'm sorry. I didn't see you there. What is the uh any if any financial commitment from the city for this development? Um, none other than it's in the tiff. Okay. Thank you very much. Yeah. Welcome, Council Member Reagan Bach. Yes. Um, thank you, Madame Mayor. I just want a little clarification on that number three though.

Um, Councilman Carmona, because the way it's the condition is that prior to the issuance of permits. So, oh, will that delay the the project um detrimentally? That would be my question, I guess, for the developer director or director Allison. Sure. Um, yes. The way it's written, it would expect the impact study to be delivered to us before permits are issued.

Could I also add as as director Dulan pointed out if you're as a suggestion yes eliminating the first condition with the restricted access at university there may not be a need for the traffic impact study since we were really concerned about access at university. If you're going to eliminate restricted access, meaning that it'll be open for right and left in and out both ways, you may not feel there's there may no longer be need for an impact study. Just a suggestion for your discussion. Okay.

So, that could go back to your first Sorry. I think the second came from Councilwoman uh Gordon Young. You still have the floor, Councilman. So, If we strike number one, the need for number three is gone. So he may he may go back and and strike both again. All right. That I think that for clarity sake that would be a a good good um recommendation. That's I just wanted to clarify that. Thank you. Thank you. And to everybody around the horseshoe, as you know, I'm new to this.

So, thank you for guiding me through this. But yes, um I would like to uh do I need to repeat the whole thing? Okay. Very good. Okay. So, your motion, Can you restate your motion then? Right. Yes. Okay.

So, I'd like to make a motion to approve item 25-137 replacing the existing uh special use ordinance with a class C2 and class C1 for the property at 3624 and 3622 North University and 1205 West Florence without the suggested North University restricted entrance modifications of number one and number three on the uh conditions and waiverss. That's seconded by council council member uh Gordon Gordon Young. Question director Allison. What if we find problems?

What if we find down the road that there is major congestion? that there is a problem that we didn't adopt right in and right out only then then how do we address it? Well, that may be something our public works department could review the the design of the street on University or maybe we can initiate a conversation with the developers of the property to try and you know remedy if there are some some significant issues with access. Okay. Might we at that time pursue a study a traffic study?

Is that a possibility? It could be. I don't want to speak for public works, but I'm sure that they would probably want to review through their means, you know, traffic flow and counts and and safety. Mr. Manager, if there we go. If if at a later date um it necessitates a traffic study, it would be on the city's nickel. We'd have to do that.

I mean, it's at this point, you know, you're, you know, if you're requiring it of the developer to do the traffic study now to determine whether or not left in and left out is safe, that now is the time to do that. If you don't want to do that, then and you want to say we're going to allow full access, then we're going to come back later if it's not safe and say we're going to do it traffic study in order to show you that it's not safe. So, it would be on the city's nickel at that point. Okay.

We have a motion on the floor and a second. Any more comments or questions? Mayor Lee. Mayor Lee. Corporation Council Hayes. Thank you. Is it a point of clarification to Councilman Sears's question about the financial commitments that the city's made to this development?

When the development was cleared, leveled, and the access road that's present now was stubbed in, the developer asked for and received a tax increment financing agreement from the city that indicated that the 75% of the increment from those properties in the tiff would uh go towards uh resolving the debts from that or the cost of those improvements. which was originally about $980,000.

And there's been little progress, not much, but a little progress on that um $10,000 a year or so since um the property transaction took place a couple years ago. So, there's still a considerable amount of commitment by the city to reimburse those original um site improvement costs that all of that property will benefit from going forward. Okay? I want to make that clear. And the other thing is by granting access now, that's a valuable right.

If we attempt to reduce it because of a traffic study in the future, I would assume that the property owners would say that's a taking and they would be due some compensation. So, if you allow the access now and want to restrict it later, keep in mind that that's a possibility that property owners might assert that we're damaging their property and we need to pay them to restrict access. Thank you, your honor. You're welcome, Council Member Kelly. Thank you, Madam Mayor.

Question to corporation, Mr. Corporation Council. Um, are you saying that the entire uh TIFF increment will first go to reimburse the city for site prep and only after that is satisfied will other benefits of the tiff uh acrew some benefits of the tiff acrew to the uh uh property. The agreement is that 75% of the annual tax increment financed revenues generated would go towards this reimbursement. The other 25% would remain in the tiff and available at the city's discretion.

That would be the division of the first dollars in until that $980ome dollars 80ome,000 is satisfied. So it's not all of the increment. It's 75% of it though. Keep in mind that if it fully develops that that'll be resolved fairly soon. Um you know not immediately but as these um developments occur. Um property values will rise considerably on that property as will the the tax increment and so we think that that debt would be serviced faster. It's hard to know. Yes.

Without knowing what all the different uses would be, what's what might be the the time required to satisfy that. Thank you. Thank you, uh, Mr. Corporation Council. And thank you, Madam Mayor. I just wanted some clarity on that issue so we all know what's what's up. Sure. Okay. I'm compelled to vote no on the modification only because I think it this is it's a safety issue not to have the right in and right out on university only.

Um that's one of our one of the busiest intersections that we have in the city and I don't want to delay the project at all. I'd love to see a a a traffic study as well, traffic impact study as well. And maybe it will come to that down the road, but it looks like if it if it gets approved with the modification, then the city is responsible for fully responsible for the cost. Is that correct? Did I interpret that correctly, Mr. Manager?

If it comes later, then it's it's just the city's responsibility and it's not a shared responsibility. So, I'm concerned about the uh the safety at not not restricting the access to university for right in and right out only. Uh other than that, I'm excited about the the development uh the Dutch Brothers um business in the city of Peoria. I I welcome that. But again, I think safety is is not my number one concern and not having a study early on.

Anything that you need to add, uh, Director Allison? No. And unless you have questions on Okay, thank you. We have a motion. Okay. D, uh, excuse me, Councilwoman Gordon Young, just have a question regarding the, uh, the cost of the study. Um, is it possible to incorporate if the study was needed in the future where we will split the cost? I don't know who to ask that question to. Maybe that's for you, corporation council.

Um, well, it a little tough to make that arrangement at 6:30 in the evening at a city council meeting with a developer who I'm sure is eager to get the project underway. Um, so I it's certainly something the city could discuss. I I would indicate that there's some limited tiff increment available to the city that could be utilized for that.

So, you know, the 25% that does come to the city, I don't know that that would cover the full cost at this time, but there is there are some assets in that tiff right now, but we could utilize the tiff to do that. Uh, the developer hasn't asked, as far as I know, for any, you know, development assistance or anything. So, uh, there's a number of ways that we could look at our retail entity as generating increment that we could make use of for these types of expenses.

So, um, but, um, I don't have the ability to get that agreement right now. No, I'm just asking if it's possible. Yes. Uh, I think it's possible, but there's, uh, nothing that would control the developer at this point. Thank you. Thank you, Madam Mayor. You're welcome, Council Member Rick Rianbach. Thank you again, Madame Mayor.

Now that I'm the senior member of the council, it's my privilege to sit back and say, "Well, I remember remember about five years ago when Club Car Wash was coming in to Glennon University. Remember the horror stories we heard about the mess that was going to create?" I do. One of the things that we ended up doing was allowing left turns out of there. We made them put in a second a lane, a dedicated left turn lane, which is already in this plan.

But I think it's it's important to note that drivers are often times smarter than we give them credit for. And if I'm trying to make a left turn and I sit there for an inordinate amount of time, the next time I go there, I'm going to make a right and flip down more memorial and down Sherid do do whatever I need to do. I I think sometimes we suffer that what what what's that expression? Paralysis by analysis. And um I I think this is a thoughtout proposal.

I I think the studies that the developer has done have some credibility that we need to respect and um with the second district councilman supporting this, I I'm going to remain committed and support this as well as as amended. Okay. Thank you. You're welcome. We have a motion on the floor and a second. Please cast your ballots. Motion passes with one nay ali. Thank you.

Madame Clerk, 25-138 is a communication from the city manager and corporation council with a request to approve the site application for a class A tavern liquor license with on-site consumption and retail sale of alcohol for SNA Hospitality LLC doing business as Love Shack at 800 Southwest Adams Sweet 106 with a recommendation from the liquor commission to approve. Mr. Manager. Um, thank you, Madame Mayor. I'd like to turn the floor over to our corporation council to walk through this one.

Council Hayes. Thank you, your honor. Um, Mr. Council may recall this item was previously site approved. Uh, the same exact premises are part of this request as it relates to the site approval. Um there was a a split at the liquor commission, but it was three to two to approve. Um so the lensure issues that have been in the press and were part of the discussion at the at the liquor commission really are part of the licensing process under our ordinances rather than the site approval.

Um with regard to the site approval, is this a physical location that would support the amenity of the requested uses? The answer to that question is yes, it is. Um, and I think that that's consistent with staff's analysis as well as uh the recommendations on both occasions of the uh liquor commission. Thank you. Okay. Any questions for corporation council? Um, I'm going to turn to you, Councilwoman Jackson. Thank you, Madame Mayor.

Um, well, I um have had an opportunity to uh eat at the uh Pop-Up Chicken. I've uh been there a few times, and I must say the ambiance is uh beautiful, the food is delicious, and it's in the heart of the warehouse district. So, uh I will support this application. Thank you, Madame Mayor. You're welcome. Is there a second? Is there a second by uh Councilwoman Gordon Young? Any other discussion? Please cast your ballots. Motion passes unanimously.

Madame clerk, 25-139 is a communication from the city manager and finance director controller with a request to receive and file the month ended March 31, 2025 unudited financial report. Mr. Manager. Uh thank you, Madame Mayor. Um this is our monthly financial report. I'm going to turn it over to our finance director, Kyle Kra. Thank you, Mr. Manager. Um, in your packet is the month-ended March uh, financial report. Few of the highlights.

Um, overall revenues are down 8.9% compared to the estimated budget. Um, and 6% down versus 2020 versus 2024. Um, looking at that, I know that can obviously be a little alarming on face value. Um what we obviously are seeing in 2025 in comparison to 2024, especially under state sources, um is we just don't have as many grant dollars as we had in previous years. So some of that what you're seeing is just not having grant reimbursements in those numbers.

Um overall um we're actually seeing um relatively strong uh state sales tax as well as home rule sales tax as well as income tax receipts that you see on the pages further back. Um we have seen actually close to a 20% increase in both of those sources. Um that the state made some changes in terms of the distribution of uh out of state sales tax as well as a new sales tax on certain rental certain rental equipment.

Um and so we're still trying to figure out exactly how much we're up compared to the loss that we have in use tax. Um, but we're still seeing relatively strong numbers and those will start to show in next month's report. On the expense side, we're down 4.8% compared to the expected budget and 6.8% compared compared to the 2024 uh year-to- date actuals.

Um, one other item I'll just draw attention for council is if you go to page um seven of the report um getting into kind of the cash flow position. Um, so we are seeing cash flow start to go a little bit down. We anticipated that in some of the the budget the last few years. Um, we've had some relatively high cash flows that we've been spending down for capital projects and those kind of things. So, at this point, it's not an alarming change.

It is just slightly down like we anticipated during the budget process. Um and then secondarily um if you go to page eight um we are still trying to in a interest rate environment that we're starting to see declines in interest rates as the Federal Reserve continues to pull back interest rates. Um we're attempting to lock in um some long-term interest rates.

So, if you look at the report, for example, um we have a two-year Treasury bill that technically right now is making less than what liquid cash is, but our anticipation is probably at least um half a percent to 75 basis point cut this year from the Federal Reserve depending on really where the economy is. Um, and so we're trying to bake in some of those uh returns now. Um, so that when these mature, we're we're above that liquid cash rate.

So I didn't want council to necessarily have concerns about that change, but that's really kind of the strategy we're we're undertaking with this. Um, and with that, I'm available if there's any questions from council. Thank you, Director Katty. Council member Seir. Thank you, Madame Mayor. Director Katty, thank you for being here. Um, I have a bunch of uh questions and I decided to narrow down to maybe just two or three for sake of time here. First one would be our cash.

Um, you just briefly talked a little bit about our our investment. Uh, do you have any investment policy? Do you design invest in investment policy? Was that directed by the state of Illinois? So the city itself has an investment policy that is co-written by uh the finance department as well as the treasur's office. Um that document really mirrors state statute in terms of the limitations that we have and what we can invest in.

So as you can imagine what that the really the primary focus of our investment policy is one is to maintain principle. So we want to be in the least risky type investments that there is. Um and then after that, you know, really we're looking at things like CDs, US treasuries, agency bonds, those things that traditionally are considered safe investments. Um and that's really the limitations we have that are set by state statute. Do you have any time limitation on CDs example?

The limitation, uh from a practice standpoint, um I traditionally don't go out beyond two years. Um, I think the interest rate market is a little too risky at that point. However, the time horizon um has changed recently. I think it's close to a fiveyear time horizon that we can invest in now. I I just we don't necessarily practice that in our investment policy. On your excuse me, page 10 talks about our beginning fund balance.

We're about 199 million dollars and our investable cash were around one um that was 166 million. Where's the discrepancy? So in in some of it it's really just a timing issue of things like deposits and transits and and those kind of things. Um but also in for example the stormwater fund some of those assets are non-lquid. So those because it is a uh enterprise fund some of the value you see is associated with non-lquid assets.

So that's really what the discrepancy between uh what really is the 186 and the 166. Last question. I really need some to be reassured because I'm keeping an eye on the the general fund or emergency fund and I know you are too. Uh, I mean, we're going down, you know, $13 million in a month. And I understand this is March, the end of March. Can you walk us through a little bit and and reassure us a little bit what will happen in April and May to our hopefully emergency fund? Yeah.

So, you know, one of the two of the largest revenue sources that we get into the general fund is our home rule as well as our state sales tax. Um because of kind of our ac cruel rules um we don't actually see any of those dollars in the general fund until April. Um right now we're trending at that number being close to 5 million. So there'll be around an additional $5 million going in the general fund each month for the rest of the year. Um so you will start to see that number turn around.

Um, and we had anticipated in this last year's budget being close to 40 million for our overall fund balance and I still anticipate that's where we'll end. Thank you, Director Katty. Thank you, Madam Mayor. Good questions. Thank you, Council Member Rianbach. Thank you, Madame Mayor. Thank you, Director Katty, for your consistency in giving us these updates. We appreciate it.

Um, this is kind of a hypothetical, so I don't expect an answer tonight, but I would I am curious with the state of Illinois and the general assembly um debating whether or not to expand sales tax to services. Um, what kind of impact has IML or anybody um got any numbers together yet on that? How will that um drip into the municipalities? Mr. Manager? Well, Councilman, I'm I'm not sure that the expansion of sales taxes to services is going to roll down to localities.

I think that this is being discussed as a way to um pay for the RTA, the CTA, Metra, and PACE in the Chicago area. So, well, I have a feeling that was going to be the answer. We'll have to wait and see when the dust settles on that legislation. And where do you know off the top of your head where that bill is in the Well, they're they're they're debating it. They're still alive, right? It is they're still working through that.

It's it's it will probably end up as part of the the overall budget as it gets wrapped up by the state here in the next few days. Thank you very much. The entire state will pay. The entire state will pay. Just make sure that's clear to everybody. Thank you, Madam Mayor. You're welcome. Can I get a motion to receive and file? A move by council member Velpula, seconded by council member Oiler. Please cast your ballots. Thank you, Director Kate. Motion passes unanimously. Okay, madame clerk.

25-140 is a communication from the city manager and finance director controller with a request to receive and file report backs requested by council member Seir and Mayor Ali on May 13, 2025. Mr. Manager. Well, as you can tell, Director Krowy didn't move. He's gonna I'm just going to turn it right over to him again to walk through the report backs. Director Oh, Councilman Seir. Thank you, Madam Mayor. If I could ask permission from you, could we as we go through these questions?

There's I believe seven of them. Can we can we be able to ask question after each one of them individually instead of waiting until the end? Yes. Thank you. So, you don't have to wait till the end. Yeah. So, I'll just go through them individually and then just open it up for questions. Sounds good. Thank you, Madam Mayor. You're welcome. So the first report back was really a question about what our HR funds can be used for.

Um so currently the city has an agreement with the Poria Civic Center uh board that um in essence there is a cascade of funds as as called in the agreement that of those hotel restaurant amusement tax dollars there are components that stay with the city. There are components that go to some of our tourism activities and at the end of that cascade currently the remaining dollars go to the civic center for their operations.

And so um there's a chart in here that somewhat lays to does the best of my ability lays out what that cascade looks like um based off of the budgeted numbers that we have um for for this this year. Um the agreement also calls for there to be a $1.2 2 million floor on the contribution that's made to the civic center. Since that was instituted, I believe back in 2022. Um the number has always been above that floor. So, traditionally, they've gotten more than 1.2 million.

But if we did have a year where our receipts were below this number and it was below the 1.2 million, the city would still have to make the contribution of that 1.2. Um, and so those are how that ag that's how that agreement is laid out right now. So the restrictions on that spending is based off of that agreement. Um, that would be if council wanted to change that, a conversation of council to look at.

Um, uh, knowing that one of the largest chunks of the use of funds is the existing debt for the civic center, which we do start to see roll off beginning in 2027 and then fully in 2028. Um, more than likely that will be a conversation from with council in the near future. Um, and with that I'm available if there's any questions on that specific one. Councilman Seir, thank you madam mayor. Director Kate, very impressive results here. Thank you very much for your work on these uh report backs.

Very impressive. I want to concentrate on the $7.3 million just for a couple two or three questions. your answer. One of them um is the u the bulk of this amount which I'm guessing you and I had many conversations before it's about $6.2 million. Is that correct? Goes to the debt that will go off the books in 2028. Is that correct? Yeah. So we peak I believe next year around 7 and a half. We trickle down to about six then it's about 4 million and then it's off the books. So refresh our memory.

Uh the commitment we made to the civic center uh that the u investment for um upgrades um was $20 million. Correct. Um and I know for the first few years with Mr. Manager, we had many conversation about that. We're only paying interest right now on that $20 million loan. Correct. What will be the nut in 2028 when we make start making full payment on the $20 million bond that we issue? Yeah.

Let me just clarify too that what I meant when it's off the books, that is really the original debt for the expansion that was done in '05. There still is that remaining debt that was issued back in 2022. That principle and interest payment is fluctuates a little bit, but really for that remaining 17 years is around 1.8 million. I'm sorry. 1.8 million a year. 1.8 would be the total payment for uh 17 years. Correct. Uh last question.

So uh that's gives us if we believe no if we do $7.3 million minus the 1.8 8 I mean we're looking know $5 million or so five five a.5 million that money specifically that money two years from now I mean I there's another report about know the accounts that are are locked in that we cannot move money uh where can we is there any other ways or are we at liberty to however this council wants to spend that money five let's say it's $5.5 million can we spend that money however this council wants to wants to do Uh yes, assuming that the agreement is changed.

Right now, how the agreement stands is that remaining dollars would go to the civic center for their capital and operations. An additional 5.5 million. Correct. Okay. Thank you very much, Madam Mayor. You're welcome. Council member Rigenbach. Thank you, Madam Mayor. I think it's important to keep in mind as we talk about the HA tax and specifically our contribution to the civic center is that the civic center authority has no bonding authority. They have no ability to raise taxes.

We are I I I think oftenimes the discussion gets a little skewed that we talk about the civic center as if it's some outside entity that we have nothing to do with. We are the civic center. that is the Poria city of Poria civic center and for us to um think otherwise is very shortsighted I think and I I I think it's extremely important that um these subsidies are are recognized for what they are and that's an investment into the future of that building.

Remember two weeks ago we talked about the 20,000 people that were in downtown Peoria for different events. That doesn't happen without the civic center and and there's there's no decision obviously here tonight, but I just think we need that I don't like that word subsidy.

I think that's civic center investment would be a better word because the reason that the $20 million in bonds needed to be issued was because there weren't because the the the HA tax continually gets diluted and it cascades into other things. I I I totally think the tourism reserve board, the um Poria visitors be th those are all things that contribute to making the civic center thrive. But let's not forget without that building next door to us. None of this happens.

So I just want us to keep that in mind as as we move forward and the budget process unfolds. Thank you, Madam Mayor. You're welcome. director, you can move on to the question number two. Um, which was about taxdeductible revenue options that council would have to implement um, if council chose to. Um, really looking around at the the types of deductions that are allowed by uh, the IRS really fall into property taxes, personal property taxes, and income taxes.

Um in terms of what we have the statutory authority to do anything with um unfortunately the answer is the only option we have is property taxes. We do not have the ability to levy a local income tax. We do not have the ability uh to level a personal property tax like the um some states for example will charge you the value of your vehicle to re to renew your vehicle. that is taxdeductible for you, but that is not something that we have in in our toolbox um as an option.

Um the only other caveat I wanted to put at that and obviously there are ongoing discussions about the salt deduction at the federal level. Um there was some changes in in the existing bill that's now moved off to the Senate. Um right now in current law that that cap is still $10,000. So, you only get to claim the first 10,000 of your uh property taxes.

So, I just wanted to have that kind of in the back of council's mind that if for some reason that got changed or did not substantially change in this current bill that's going through the legislature. Um even for some folks, they'd be capped out at that 10,000 even if we had a taxdeductible option. Um and so with that, I'm available if there's any questions on that item specifically. Council member Seir. Thank you, Madame Mayor.

Uh, again, as I discussed with Madame Mayor earlier before the meeting, to me, this these report backs are really designed for open up discussions, not to scare people, especially the people from the civic center. I mean, it's I think it's important that we educate. When I'm out on the campaign, a lot of us were on a campaign trail the last few months. I mean, there's total lack of education for some of our constituent. That's that's the goal of these reports back.

I want my people, our people to understand the budget, how their tax dollars are being spent or invested, whatever word you want to pick. So it's not this is the goal of this report back is not to scare people from the civic center. Okay? Without the civic center, there's no downtown poria. There's no vibrancy downtown. So we all understand that. So it's not my goal is not to scare anybody.

I just want to have discussion when we have few months from now when we have a budget start the budget discussion that people know where the money goes and how know how all the the money's is the broke up know where all how all these accounts are at. That's the goal tonight for me just to make sure understand that. So, we're not going to do a class on taxes tonight, but uh since you talk about the salt tax, can you tell us who uses the salt tax usually in Peor Illinois?

So, in terms of who is eligible for that deduction is obviously homeowners. And so, um for the most part, depending on your tax status, you may not even fully use that deduction because you still may be below a standard deduction. Um but for some communities um especially in the Chicago area that reduction was a relatively a big loss um for their tax deductibility of their property taxes. And so it really depends on the individual tax status for that homeowner.

So most people in Peoria uh would be really on the standard deduction, right? Which would be $30,000 for married couple and $50,000 for a single. I would say on average that's where most people have landed on this. Yeah. Enough about taxes. No more question, Madam Mayor. Okay, please proceed. All right, I'll move on to number three.

So, this question was about if we took away the grant dollars that the city has received since 21 to today, what is really the growth in our budget um over that time period? And so what is doing this analysis I looked at the general fund um primarily because as we get into the next report back that's really the only fund that we have other than our capital fund that doesn't have some restriction on use. And so in those cases um it's really dollars in dollars out for for grant type things.

So it wasn't going to change the analysis really at all. Um and so really what this shows is that between 2021 and the 2025 budget um our revenues in totality are up 2.94%. On the expense side um we are up 5.6%. Between 2021 and 2025 and I want to be very clear that's not an annual increase that is our total increase. So, you know, to put that in context, during some of that time period, we saw inflation rates of five, six, 7%.

And so, what this actually shows is that staff have been able to keep expenses around a 1% increase um in the general fund um over that five-year period. And that even includes where we've seen increases in our police and fire pension obligations. And so I actually think staff have done a really good job of containing costs while still providing services um when you strip out those grant dollars. Um and I have I'm available for any questions. Council member Seir. Thank you, Madam Mayor.

Director Kate, I I agree 100% with what you just said. U just got a couple questions on that page. Tell us about 2021 versus 2022 on the revenue. What happened to the uh 113 $113 million? It's grown to $135 million. Yep. So, that was primarily driven by that was the largest growth year that we've seen in personal property replacement tax. So, how the city usually allocates those dollars is we will budget for their use for pension obligations.

Then any rema and then the library and then any remaining dollars that are left go into the general fund. um we had close to $18 million that in 2022 that was unallocated that went into the general fund. And so, you know, in some ways we're dealing with that now as we start to see continued pullbacks because that number and that formula was incorrect. Um but that's why you saw that larger spike in 2022. Thank you. What has been the uh inflation rate those last five years?

like it's been anywhere from, you know, two to 3% the last year or so, but really we've seen five six% a good chunk of this time period. So, our expenses went up on the average about 5.6%. So, I believe this body has done a great job the last five years anyway with our expenses and that's credit to our uh Mr. Manager, Mr. Urek for his recommendation on the budget. Um last point I want to make I mean the difference between the revenues and the expense is about 3.6% on the negative side.

So I just want my again my colleague to understand that 3.6% it's not a big percentage but on $125 million which is our budget for the general fund uh that's $4.5 million. And we all know now some of us were not there but a lot of us were there a few years ago when we had to know we're short a couple million dollars and and and we're struggle to to uh find some solution to that. So uh I encourage all of us and then Mr.

Katt he's done an exceptional job to really give us uh uh warning and make sure that we're uh careful with our spending. So um that's all all the question I have for this page. Thank you. But moving on to question number four, which was what uh what funds does the city have and are there any restrictions with those dollars? And so this report back shows that really the main funds that the city uses, we have 27 funds. Um a good chunk of those are things like TIFF funds.

Um but the really the the main thing the main takeaway is the general fund is the only fund that there is not restrictions in terms of use of those dollars that are in the general fund. Those are the dollars that we have for general purposes. Um most of the funds there is restricted use. For example, a tiff fund they have to be used for tiff related expenses in that in that boundary and so those are restricted dollars. Um we do have a c we do have two funds that are um partially restricted.

That's not necessarily I would say a governmental accounting standards official definition. Um but the capital fund for example um we do receive some revenues that are directly required i.e. some of our gambling uh revenues that have to be used for capital expenditures. So some of those dollars have to be used for that purpose. um in the OPED fund.

I call that out specifically because that is intended for us um to use uh towards our long-term liabilities for um uh p for kind of post-employment benefits for our employees. Um but that we do use that from time to time um as a loan source for so for example when the council approved the early retirement incentive back in 2021 instead of paying the 7.25 25% um from IMRF. The city decided instead to make a loan from the OPED fund to pay that and instead charge ourselves 3%.

So we saved almost four and a half% interest on those dollars by immediately putting it into IMRF and not doing it as a as a um upfront payment to IMRF that way. So really those dollars are intended for that purpose, but we do have that ability to to do like a loan like that. So, just wanted to kind of call those specifically out, but really the main takeaway is the general fund is our only really unrestricted fund that we have. Does this include all of our TIFFs? Is everything in there?

So, it has all of them so far that have increment. So, the two most the two most recently established TIFFs um do not have increment yet. So, we've not opened the fund yet. They'll be open for the next budget cycle. Okay. And those are distillery and what else? Uh, Galina Road. Galina. Okay. Thank you, Council Member Se. Thank you, Madam Mayor. Just a couple question on this one. Interest rate that we charge ourselves, where does it go? So, those dollars go back into the OPED fund.

So, for that specific loan, um, we're repaying the OPED fund via our IMRF dollars. Um, and it goes into that fund, which helps us handle some of that that growing liability that we have. Uh question for maybe Mr. Manager. Um the capital fund. Okay. How do we grow that account? I'm sorry, Councilman. I didn't Which fund? The capital fund. The capital fund. Yes. Well, I mean, you need a dedicated funding stream in order to be able to do that.

Um in years past, we've utilized uh telephone um uh the utility tax from the from telephones as a dedicated funding stream. uh going in. We use, as uh director Kra said, we use gambling receipts um from the U river boat that goes in and we utilize that for that. Um that's a policy decision that the council can make as we start the budget to say we want to generally it would have to come out of the general fund.

You'd have to take a revenue stream out of the general fund and say we're going to put this in and dedicate it for capital improvements. Thank you, Mr. Kate. uh $166 million getting four or five percent interest on their money. Where does that money go? So it gets allocated to the fund based off of how much cash on hand they have. So their fund balance. Um so for example, you know, a good amount of that IFC goes to the general fund with the reserves at 40 million.

Um so really it goes based off the percentage of the overall amount of cash we have for each fund is the credit they get for the interest we earn. Could we credit those amounts to capital fund example? Uh we can and that is a pol that would be a policy change. Um the only caveat I would put with that is we do have for example our state motor fuel tax fund that is required by state statute that we have to give that fund the earnings on our dollars.

We do run into some of those with like grant dollars as well. um it'd be a little bit in the weeds of having to figure that out, but there's nothing that restricts us from from necessarily doing that. And what was that revenue uh total revenue last year 2024 for interest only? It was 9 million $9 million that we did not have eight years ago. And that's a new source that's definitely a new source of revenue the last few years. Correct. Yeah.

The one caveat I would put put with that is because a substantial amount of that has gone towards the general fund, kind of like with the other sources of revenue, it would be a draw out of the general fund. So, we would have to potentially figure out a different revenue source to fund some of our operations. Thank you, Madam Mayor. You're welcome. Could the city create a a separate fund to raise money for riverfront development or would that need to be done through some other type of entity?

Usually mechanically speaking, it's better if it's an outside entity because of the tax deductibility of gifts that are given for something like that. Also, usually those organizations are more used to fundraising than government entities, but technically someone can give a gift to the city that is still taxdeductible. It's it is still taxed deductible. It's just different than a a 501c3. Um, usually it's I have to write a letter saying it's taxdeductible and that meets the criteria. Okay.

Thank you, Council Member Se. Sorry, Madam Mayor. I forgot one last question on this page. Um the uh there's uh on page 10 of your report that we just finished, there's 28 different accounts. There's 21 or 27 on this one. Uh can you tell us talk to us about the the one account that has disappeared? You're going to make me find the needle in the haststack now. It's a poria core. It is poria core. Yeah.

And that's just tell us about the money in left in that account and what will happen to that account please. So the remaining amount of funds uh to the best of our ability is being obviously used to continue that program. Um there still is some of the the Edward settlement funds that we'll still have to to work through. Um but that will be a council discussion really more in that July into the budget time frame of what happens with Poria Core um after this cohort. Thank you Madame Mayor.

You're welcome. Uh moving on to question number five is what qualifies as a tiff expense? Um so generally speaking um tiff expenses are limited to redevelopment costs, public improvements and job training things within the boundaries of that tiff. So it it has to be specifically for properties in that tiff. Um the one caveat I will always put on that is that is subject to the terms of our redevelopment plans.

Um so for example as we were doing some of the research for Poria um all of our tiff plans except the stadium tiff um allow for job training related activities. I think obviously that's because that that tiff is specifically for the stadium. So, it didn't make sense in that case, but um really if if we have a more strict requirement in our redevelopment plan that trumps what the state statute is and what was in this report back really is that state statutory amounts.

Council member Seir, thank you, Madam Mayor. Just one question. Maybe city manager also. Um I was uh scared a little bit I guess when I read the uh we can use this money for private development and for land acquisition. Can you give us scenario? Do we uh charge ourselves interest on that money when we use that money and um do we have to pay it back? I mean talk to us a little bit about if we use some of these tiff money for land acquisition or private development.

Uh well, generally speaking, that's been where a developer is eligible to be reimbursed from the property taxes that they pay on the development and the investment that they make. A tiff eligible expense under the tiff act is land acquisition. So, a good example of that, and I'm just going to point to it as I'm thinking of it, is uh Chick Apartments and Chick laws. That property was acquired by the developer. that developer is building a brand new apartment complex on that.

He's going to be reimbursed new construction, he's not eligible for reimbursement on that. The cost of the land acquisition underneath it, that underlying expense and the cost of the renovation on the chick condos on the flats, that's eligible for reimbursement under the tiff act. So, we'll go to great lengths when we create a redevelopment agreement that outlines what the developer is getting reimbursed for as part of the project.

And generally most of the tiff reimbursement projects that we come back with it's about 20% 25% some maybe even 30% is the amount of uh the tiff reimbursement that's coming back to them as as a total project cost. They're they're out getting their private financing. They're out doing that work. That's where that comes into play in in terms of that reimbursement for land acquisition. So it's talking about it in terms of a private development and looking at it from that perspective. Thank you.

Thank you, Madam Mayor. You're welcome. All right. Moving on to number six. The difference between the actuarily requested contribution and the state minimum uh contribution. Um so starting I believe in 2022, the state the the city began making our uh police and fire contributions at the actuarally requested amount. Um so the example uh in your packet looks at what the requested amounts versus the state minimum is going to be for next year.

And so as you can see um that difference in terms of uh the actual request is going to be about 36.1 million versus the state minimum request which is 33.7 million. So that difference is 2.4 a little bit over closer to 2.5 million. Um really the difference is the actuarily requested contribution um is based off of trying to uh more than anything else slope on a lower level your increases in your contributions. The state minimum um will absolutely start to will show you a very steep curve.

And so what will happen is if we were to revert back to the state minimum amount, we're going to pay for it on the back end. So we're going to pay more in 2035 through because there are 10 years that there was no interest earned on that on those dollars that the plan could have had. And so that was really a lot of the change of of why we made that change knowing that, you know, as we've talked to council a number of times.

Right now that slope looks at about an $80 million contribution in 2040 with nothing else changed. And so this is really trying to put more dollars into the pension plans that can earn a higher rate of return than the dollars can make sitting in our account because they're not they they have more options for investments than we do. um and cutting off the top of that mountain a little bit so we don't have such a a steep ramp up in our contribution requirements.

That's that's really the difference. Like the actuaries also look a little bit more detailed at our historical numbers. Really the state minimum just looks at here's your rate of return, here's your assets and does an analysis. The actuaries get a little bit more in depth with our specific performance. Council member Seir. Thank you, Madam Mayor. So, this is not the right place to have this uh this uh discussion tonight.

But I just want my colleague to understand that I'm not I'm not saying that we shouldn't know stop or or cut our payment to the pension. That's not what I'm saying at all. But what I'm saying is about five, six, seven, eight years from now, we whoever's in this these seats around the horseshoe, we'll have to make a big decision, which is the city manager talked to us about that before and director Kra just said eventually we'll have to cut the top the mountain off and issue some bonds.

So depend on what your values are and what you your beliefs are. I mean to me that's the only plan. If the if our elected official in Springfield don't come to our help through our aid, we'll have to do something the next seven or eight years. Okay? And that might be just a bond paying know so we can have a level payment for many years to come. If you believe that if we ever had all I want to put on table again is if we're ever short $2.5 million, guess where we can find it? Right there.

If you believe eventually we'll have to bond the pension forever the payment would be, that's that's the only reason that's there. Okay. I mean, and it's and we're not going to have a discussion about that tonight, but it's all comes down to our personal preferences and our value and and how we feel about that. So, that's that's why that's there. Thank you very much for this information. Thank you, Madam Mayor. Welcome, Council Member Rigbot. Thank you, Madam Mayor.

This is one of those um discussion points that I think makes everybody's eyes glaze over. And I appreciate Councilman Seir bringing this up now because this is something that's going to be a real discussion point as we we move forward. Do we make the minimum required payment on our credit card in our households or do we pay as much as we feel we can afford? And that that oversimplifies it.

and director Katty did a great job explaining the difference between the minimum and actuarially requested amounts and um this will be a big discussion point moving forward and I think um Councilman Seir is this this is good for us to have this in the front of our minds as as we um process this because this is this is serious these numbers just for those of you that are are listening We're talking about an actuarily requested pension payment of $36 million this year.

That these numbers are mindboggling. And my biases as will unfold as the discussions go forward will be for my kids and and future grandkids. I want to pay down as much of this now as we can and um we'll we'll go tooth and nail probably about that um in the future, but I just think this is some mindboggling numbers that we have to start wrapping our arms around. Thank you, Madam Mayor. You're welcome. Council member Kelly. Thank you, Madam Mayor. U and uh Council Member Rigbach.

I I hope I'm not the source of eye glazing, but I might be. Uh, but u, Director Katty, um, please correct me if I have the wrong impression on paying ahead on pensions. If we pay ahead a dollar today, the effect of that is going to be greater than a dollar. Ultimately, it will involve what that extra dollar earned in the meantime before it was actually uh due or if we're if we do this on a regular basis. Do I have that do I have that correct? Correct.

Because there is the assumed interest rate that is earned on those dollars. Now, can that actual performance fluctuate year to year? Of course. It's like it's like anything in when you're involving the stock market or bond market. Yeah. Um but really these are long-term investments and so on average they are earning close to their act to their actual assumed interest rate. Yes.

I Okay, thank you very much for that because I think that needs to be known uh around the horseshoe, but certainly by the public to say we we're we are we have had the flexibility, financial flexibility to pay up more than the minimum. And that's going to give a Uh that's a very good financial move to make because that money that new money that was not required is going to be earning. It isn't just that flat amount that we're going to save.

We're going to save that flat amount plus uh uh the earnings. So I I just wanted to make sure I I I don't know if that was eye glazing or not. uh uh Councilman Ringbach, but u I I think that needs to be understood. Thank Thank you, uh, Director Katty, and thank you, Madam Mayor. You're welcome, Council Member Seir. Thank you, Madam Mayor. Um, just want to make sure Director Katty just made a great point, and I want to make sure my colleague, Mr. Kelly, understand.

So when we make an extra $2,500 25 $2.5 million a year extra payment if there's a guarantee that 10 years or by 2040 we will have more money there. As with investing there's never a guarantee you Thank you very much. No I just want to make sure but two my colleagues says you know we pay let's pay more so we have more money at the end.

Well, it should be that like that, but it's not because we have an investing uh uh board that have some guidelines and some years we lost money and some years we made money. So, I just want to make sure not because we pay more money means that our hole will be smaller down the road. It won't there's just no guarantee about that. I just want to make sure my colleagues and our constituent understand that. Thank you, Madam Mayor. Welcome, Council Member Kelly.

Uh, I would like to thank Councilman Seir uh for that and I I would like to put out a clarion call to our legislators uh that the police and fire pension fund investment program uh in Springfield or the rules of the game would match those of IMRF. IMRF is a is a terrific uh terrifically wellinvested pension plan. Police and fire pension funds are way back on that. And since that money is being aggregated now, etc.

We we need to get more on board with what current long-term uh pension investment looks like. U Thank you, Madam Mayor. Welcome, Mr. Manager. So, the the state did change it. It used to be that each of the pension funds were individually managed. We still have local pension boards. They make duty disability determinations for the members that are of the of each of the um police or fire that are injured in the line of duty.

But um they do a little bit of investing decision just in terms of how much cash they have on hand. But most of the investment decisions are now made by statewide pension boards and that money has been aggregated. It's in a segregated account just like we have with IMRF. Um and then they make those investment decisions. The police pension board rents space from us right across the street. Yeah. So, you know, that's the statewide pension board and their offices are here in Poria.

Uh they did expand when they when they did created that they expanded that to include more of the investment authority like IMRF has and it's proven that it's actually increased the amount of investment returns for the pension funds and lowered the administrative overhead. So, that's that's been a positive with doing that.

One of the challenges that we haven't really talked about here tonight for us that we need to think about um when we go out and borrow money we have to get raided by the rating agencies and one of the consistent negative comments that they have about Peoria is the fact we don't have a plan for addressing pensions in terms of funding because our fund we're we are paying uh as we have moved to pay the the required actuarily require required contribution.

Some would argue that is the the minimum requirement we should be making and not not the the requirement that we're paying at the statutory minimum. And and what they've said is we're paying out more in pensions than we're even putting in uh even with the investments that are being made by the pension boards. So that's what they're going to look at and say you need to catch up and be able to actually start putting money away, which is still another four or five million from where we are today.

So So and that's over and above the the uh actuarily required contribution level. So and and that affects us with our cost of capital if they continue to downgrade our credit rating uh in terms of our borrowing costs in the future as well. So over the last few years we have especially with you know pandemic or ARPA funding we have put in more. So hasn't I mean what effect impact has that had? Well I this year as we will probably come talk to you as we look at the budget.

This is a year where we would traditionally come back and say we're going to we're going to look at at doing some borrowing.

uh we'll have another credit rating that review with with S&P or or Moody's and you know we'll have that report but we can share the last reports that we got so you can see they're very positive about our ability to raise money they're very positive about our management controls and and our ability to to manage the finances of the organization they just they they really um hit us when it comes to you know the our plan for paying for pensions in the long term. Okay. Yeah.

I would say the the only um at least in my tenure with the city, the the only change we've seen in our rating is we went from uh negative outlook to a stable outlook. Um and that was primarily driven by the increase in our reserve levels in the general fund.

Um the sticking point for the rating agencies of moving up to a double A rating which is really where I think we would start to see some substantial savings in how we issue is really about the pension issue and they will continue to say it's about the pension issue even with reserve levels in the 40-ish percent range. Okay. Thank you. Last one is the this was requested by Mayor Ali. So this is the history of the allocation changes for LGDF.

So LGDF or the local government distributive fund is uh the designated portion of state income taxes the city receives on a per capita basis. Um historically that number had hovered around 10% of all state income taxes. Um beginning um in 2011 the state reduced that number down to 6% and then hovered it back up to around 8% in 2015 back down towards six again. And currently we sit at 6.47%. It's a fun number, I know.

Um, but this is an item that the Illinois Municipal League annually negotiates heavily with the legislature. We've seen we're talking percent to.20% increases in the distribution amounts annually. That's the number that they're really arguing about. Um, but obviously as you can also see in the report back, we are budgeted to receive $19,795,200 based off the IML estimate at the 6.47%.

If the number was returned to 10% that has historically had been, we'd be talking about receiving a little bit over $30.6 million. Um, so that is a substantial amount of dollars that the city used to get and no longer gets. And so, um, it really is, uh, what we deal with when we are looking strictly to the state for some of those shared revenue dollars, um, is unfortunately we can end up in situations where dollars are pulled back like this.

Yeah, this is a real sore spot for cities throughout the state. And I don't know who was here in 2011. Were you here in 2011 when that dropped? I mean, that's so steep. You were you city manager at that time, Mr. Manager? Yes. Yes. Do you remember the the cut? Yeah, we do. We in 2011 and and going into that budget year in 2012, we made some significant headcount reductions because of that.

This is why cities feel like they're being robbed that we're not getting our our full LDL, excuse me, LD LGDF uh of 10%. And constantly IML is fighting 24/7 to try to increase it, you know, at least to 8% back to 8% and try to, you know, work our way up. But I encourage you to get involved with IML, Councilman, Council Member Seir. Thank you, Madam Mayor. Last question. Can you explain to us the call back, please? Yeah. Yeah.

So, going back to the discussion on uh PPRT, so personal property replacement tax, um there's no other way to say it, but the state had the formula wrong in terms of their allocation of corporate income tax receipts to municipalities. They overallocated for a two-year period. Um and what they have been doing is obviously is they also have corrected the formula. They've also been clawing back some of the amounts that we were due um coming into state budget year 2026 here this year.

We're still not sure that they're done. There's been discussions that they're done with the clawback. So, we could see um at least some bounce back in that number. Um but it seems like this is admittedly a constantly moving target from the state in terms of what that formula looks like. What was that amount last year? Understanding the exact amount of what they're climbing back isn't necessarily easy, but the reduction that we saw in terms of receipts was in the neighborhood of 5 million.

Thank you, Madam Mayor. Welcome. Yeah. Yeah. You're welcome. Thank you, Director Katty. Lots of good work. Madame clerk. Oh, I believe we need to receive and file. Might need to Do we need to receive and file? Yes, we do. We need a motion to receive and file. Moved by Council Member Seir, seconded by Council Member Carmona to receive and file. Please cast your ballots. Motion passes unanimously. Thank you, Madam Clerk. We're on to unfinished business.

25-65 is a communication from the city manager and director of community development with a request to concur with a recommendation from the planning and zoning commission and staff to adopt an ordinance approving a special use in a class R1 single family residential district for a short-term rental for the property located at 223 West ateer Drive, Poria, Illinois. Mr. manager. Uh, thank you, Madam Mayor. This item has been um on the agenda a couple times. It's been deferred.

Uh, Leah Allison, our assistant community development director, is here to answer any questions. Maybe turn it over to the district council. Council member Seir, thank you, Madame Mayor. Um, thank you, uh, Miss Allison, for all your help. Uh, been a lot of research, a lot of work for this. And uh a special a special use is required to meet specific standards as stated in our unified development code related to safety and comfort.

This short-term rental will have a negative impact on the safety, comfort, and overall use and enjoyment of other property in the surrounding neighborhood. I move to deny this request. Is there a second? Seconded by council members Kelly. Uh discussion. Council member Gordon Young. Thank you, Madame Mayor. Um I was cur I looked for the information and maybe I just overlooked it. Um regarding the distance between the homes on each side of it.

Um this is actually an area that I drive through uh at least regularly enough um because I think it's absolutely beautiful. It was just a place I go pe uh clear my mind. Um but I've never pulled into a driveway in this area and today I did and I was really concerned with the proximity between the I guess on the driveway side that fence and I saw like a a playground area swing set and look really close. Do you have the like the the um distance between the homes? I I apologize.

I do not have that dimension. Okay. And I apologize for not asking in advance. I try to do that, but I just like right before coming to council, I let me pull in the driveway. And I saw that and it was pretty concerning to me. Um, and because of that and other factors as well because I think this is a a neighborhood that um, it would take away. I don't think a traffic would be an issue because I'm one of those people that drive through it and I don't live there um, with the park going down.

So, I agree with um, I I won't be able to support this Airbnb in this location. Thank you. Thank you, Madam Mayor. You're welcome. Councilman Kelly, did you have a request here? Uh, thank you, Madam Mayor. I don't believe it's necessary. Okay. Thank you. All right. You're welcome. We have a motion on the floor in a second. Please cast your ballots. Motion passes unanimously. Madame Clerk, we're at new business. Is there any new business?

Council member Kelly, don't want to hold everybody up here, but thank you, Madam Mayor. Um, uh, Mr. Corporation Council or perhaps Mr. Manager, either of the two. Um, I'm interested in, uh, with this last item, this home is on a septic system. Um, those of us who aren't on septic, which is almost everybody in the city, um, speaking for myself, I don't know much about septic systems. And if I'm going to rent an Airbnb someplace, um, and it has septic, I'm not I'm not sure I know what to do.

uh or how how to affect that. I would consider with information restricting uh short-term rentals in the city of Poria to only those properties that are on a sewer, but I'm not sure I know precisely what I'm asking. And I wonder if uh we could get a report back on that so that we might consider that question. Sure. I think we'd be happy to to put together a report back on that item. Thank you. Thank you, Madam Mayor. You're welcome, Council Member Rigenbach. Thank you, Madam Mayor.

Um, first of all, I think those discussion items Councilman Seir brought up might be a prelude to the consequence of having three financial advisors sitting around this horseshoe. So, stay tuned. We've just begun. Um, but I would like to ask for a policy session for the third week in June, June 17th to address our ongoing um issue with the unsheltered population. The motel project will be winding down and um I think it's important for us to have some next steps in place.

Perhaps we could get the Dream Center, um, Phoenix, um, some of the Kate Green from the continuum to come and give us an update on on where things stand more globally as far as where and then give us an opportunity to give staff some direction for the future. So, yes, that's a great idea and we've had some discussions about that. Mr. Manager, can you speak to this? Yes, we'd we'd be happy to to look at at trying to get the gateway building to to do this.

We'd if if I could indulge in and ask if we could also um include in a policy session that night some discussion on the cso projects and where we are and kind of give st our council an update on that. I think it would be very help very helpful if we could have that conversation that evening as well. Okay. Are we agreeable? Any objections? This would be we we have a meeting on June the 10th.

So, we would insert this meeting that following week, which would be the 17th at the Gateway building, maybe dinner. Sure. Include dinner. We can include dinner. And uh first we'd start with the unhoused population and then go to Cso. Okay, we all good? No objections? All right. Thank you, Councilman Reagan. I did you have something else? Yeah, thank you.

Um, I spoke with the police chief earlier today and I just wanted to um make a formal request for a report back on the residential police officer program. Um, there's a lot of um things happening within the department and he said he'd be happy to do that. So, thank you, Chief. But I did want to make that official that um we'll be getting a report back on on that. And then I just wanted to call out public works for their work on Fulton Plaza a couple years ago.

I was having lunch out there with one of my daughters and it was just kind of um depressing and walking by there today at the Adam Street site, at least I know there's still work going on here on Jefferson, but the Adam Street site, it's beautiful. The plants um are coming back. They've got a couple years growth in it. So, shout out to public works for their work on that. And finally, um I'm sure we've all got um people reaching out to us regarding energy aggregation. And Mr.

Manager, thank you for getting that email out. And um I don't know if you want to offer any highlevel bullet points on that now or um No, I' I' I'd be happy to and thank you. you know, since 2012, we had a referendum that uh created the the Poria Municipal Aggregation Program. And so, we've purchased energy along with the county and along with a number of other municipalities from throughout uh central Illinois.

Um and we've we've utilized that buying power to uh basically try and buy energy at a lower rate than than what Amaran has been charging. Um and um you know we've been doing that and and what we did three years ago with this last contract was we included a capacity adder in that.

So in essence we were buying at a fixed rate which was about 9.8 8 cents and then we had our capacity fluctuates with the change in electricity capacity and there's an entity called MISO which buys or regulates the grid within central uh the central part of the United States and part of Canada and within that this past au April they had an auction uh and the summer months came back uh at $666 a uh megawatt uh per day. Now, that's compared to $30 that it's been previously in the past.

So, it's significantly higher. So, that kicked our costs up um for what our our costs are going to be in the summer months. Uh really going to start after the July readings for the residents that are that are in the city's program. Uh for Amaran residents, it's going to start June 1st. They're going to start to see that their numbers are going up uh and their costs are going up. theirs is going up almost a 50% jump just in the cost of electricity.

Um so we're going to see that that it's going to be um about a 13 to$15 increase in cost of where from where they're currently at is is what that increase is going to be for our residents that are in our program now. So everyone got letters from Homefield Energy was who who we buy through uh until the end of December. That's when our pro or through December when that program ends. uh and then we'll we'll be working on another contract at that point in time.

Uh there's an opportunity for residents to opt out and so our rate is going to be about 12.9 cents um per kilowatt hour. Um the cost for Amaran is at 12.2 cents. So it's going to be roughly cheaper um roughly about $40 I think is in calculating that cheaper over the next five months to be on on Amron than being on the city's program. Individuals can opt out if they want to. There's a card that they get in the mail from Homefield. You can just make that that decision on your own.

Uh if you're out, you have to stay out for a year, though. So, um you know, there's no guarantee uh with where Amaran's having to purchase electricity where their rates are going to be. Uh again, we're looking at at a couple of different options in discussions with the buying group uh to try and look at how we might be able to change that and modify that going forward. Um but uh so, everyone should have received a a letter from Homefield. It has a card in there.

You can fill that out and send that in if you want to opt out. If you don't, you don't have to do anything. You just stay with the program and do it as it is. Thank you very much. I got my letter yesterday, but solar is looking better and better every day. You're still I'm That's all I had. Thank you very much. You're welcome. Council member Kelly, new business. Thank you, Madam Mayor. Just a comment.

Um this uh letter that I got also about the aggregation continued to bother me as these letters have bothered me. We've had a lot of people out there for decades now talking about getting rid of all that old terrible those old terrible power plants. And we got a new deal here and it's going to be great. And costs for electricity have skyrocketed under this. And poor people and poor people in Peoria are not exempt from this.

And based on ideology that has not produced, it has not kept its promise. But by golly, it's an ideology. These everyone has suffered. about the poor who have a whole lot less financial flexibility than middle class or the upper class. They've really percentage- wise they've really borne the brunt of this and I I I I think it's terrible. Now we've got the feds pushing this. We've got the state pushing this. You mentioned solar. Solar is looking better all the time. Guess what?

Guess who pays for that? Taxpayers with the subsidies. Otherwise, no one would have it except a sign out in the middle of nowhere that you know that uh needs power. I just we keep going down this road. We We can't do anything about it. I I agree. We're not We're not in charge. But all of the wonderful, wonderful promises that we've had when we when the air was very clean, those power plants that we were shut down, they won award after award after award of how clean they were.

But it didn't matter. Facts don't matter. Only ideology does. And so everyone gets harmed here, but the poor get harmed the most, but they're just we have to sacrifice them for the ideology. End of saloquy. Thank you, Madame Mayor. Okay. You're welcome. Mr. Manager, just back to the policy session on the 17th. What time are we looking at starting? Uh 5:00 PM if we could and we'll jump right in. We'll do the first half of the policy session and then break and then come back for the second half.

Okay. Five o'clock versus six o'clock then. Yes ma'am. Okay. Good. Thank you madame clerk. We are at citizens opportunity to address the city council. We have not received any cards. Cards. Okay. So we would be at executive session. Okay.

I would like to invite a motion to adjourn and to convene in close session immediately following the adjournment of the city council meeting pursuant to the open meetings act 5CS 122C5 to discuss the purchase of real property for the use of the public body including discussing whether a particular parcel should be acquired pursuant to the open meetings act 5CS122C11 to discuss pending litigation and pursuant to the open meetings act ILCS120 2C21 for approval by the body of close session minutes.

Can I get a motion, please? Moved by Council Member Gordon Young, seconded by Council Member Carmona. Please cast your ballots. Motion passes unanimous. Thank you for your service.