Peoria staff present $1.17 billion FY2026 proposed budget with focus on capital projects and stability
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Summary
City staff presented a proposed FY2026 budget totaling $1.17 billion, driven by a larger capital program and modest operating growth. Staff said the plan preserves the city’s financial principles, raises contingency levels for economic development, and begins a public process for final adoption in May and June.
City staff on the dais presented a proposed fiscal year 2026 budget totaling $1,170,000,000, an 18% increase over FY2025, driven largely by a larger capital program, the city said.
The proposed budget would fund a $550,200,000 capital program (about 47% of the total) and an operating budget of $478,200,000, up 4.2% over the prior year, staff said. Debt service and contingency account for the remainder; staff reported a contingency increase of about $35,360,000 to cover economic development uncertainties.
The finance overview put the capital carryover and an expanded list of construction projects at the center of the increase: carried-over capital and a construction-heavy FY2026 are expected to raise capital spending by roughly 27% over last year. “This budget complies with our council adopted principles of sound financial management in every way,” staff member Peter said during the presentation.
Why it matters: staff framed the proposal as a balanced spending plan that aims to preserve the city’s financial metrics while beginning multi-year investments — principally infrastructure and growth-related capital — that will shape Peoria’s service delivery and development patterns in the coming years.
Key details - Total proposed budget: $1,170,000,000 (FY2026). Current FY2025 budget cited: $995,000,000. (18% increase.) - Capital program: $550,200,000 (47% of total); capital carryover accounts for a large share of the total. - Operating budget: $478,200,000 (41% of total); operating growth ~4.2%, with most growth in personnel and benefits. - Contingency: increased by $35,360,000 to provide flexibility for anticipated economic development costs. - Debt: ongoing general obligation and revenue bond plans were noted; about 44% of capital program expected to be financed through debt mechanisms, with remaining funding from PAYGO and outside sources.
Process and schedule Staff outlined a schedule that keeps council on a standard adoption timeline: tentative budget adoption is targeted for the council meeting on May 6, followed by public hearings on utility rates, truth in taxation and the final budget. Property taxes and final levy adoption are expected in June, ahead of the July 1 start of the fiscal year. Staff also noted a built-in opportunity for council members to propose “adds” and “deletes” offline with staff before final adoption.
Budget priorities and pressures Staff said inflation (labor, electricity, fuel, materials) and escalating capital costs — and vendor warnings about possible tariffs — have been factored into the proposal. Employee compensation, including negotiated increases with labor groups and a mid-single- to low-double-digit influence from benefits and health insurance, accounts for a substantial share of operating increases. Staff also described identification of $738,000 in ongoing general fund savings and ongoing monthly internal reviews to find additional efficiencies.
What’s next and unanswered questions Council will have through May to propose adjustments; staff said modifications will be evaluated for fiscal impact and fit within the city’s adopted financial principles. The presentation did not include final council votes; staff emphasized the plan remains a proposed/tentative budget pending the formal actions that follow the public hearings.
Ending: Staff closed by stressing the package is proposed, not final, and invited council to submit planned modifications before the tentative adoption step. The council scheduled additional budget sessions if needed to complete the process.
