Peoria council receives March finance report and in-depth report-backs on HRA, TIFs, pensions and state revenues

Peoria City Council on Tuesday received and filed the month-ended March 31, 2025 unaudited financial report and a set of requested report-backs that detailed how hotel-restaurant-amusement (HRA) revenues flow to the Peoria Civic Center, how the city’s TIF and capital funds may be used, recent changes to local share formulas and the city’s pension funding strategy.

Finance Director Kyle Cratty told the council that overall revenues through March were 8.9% below budgeted estimates largely because grant reimbursements that boosted prior-year totals were not present in 2025. Cratty said state and home-rule sales taxes have been relatively strong and are expected to start showing in April receipts. “We are seeing relatively strong state sales tax as well as home rule sales tax as well as income tax receipts,” he said, adding the city expected an additional roughly $5 million a month to enter the general fund beginning in April under normal accrual patterns.

Counsel and staff reviewed several report-back topics in detail. Corporation Counsel Hayes summarized the TIF arrangement for the University and War Memorial property and noted that a TIF agreement had committed 75% of the increment to reimburse earlier site-improvement costs; she said the initial estimate of those costs was about $980,000 and that modest repayments have been made since the agreement was executed. The staff memo on HRA funds showed the existing arrangement with the Peoria Civic Center Board includes a $1.2 million floor contribution to the civic center; staff noted remaining debt service related to prior civic-center financing will taper beginning in 2027 and finish in 2028.

On pensions, staff reported that the city has been making actuarially requested contributions since 2022. The actuarially requested police-and-fire contribution for next year was presented at roughly $36.1 million compared with the state‑minimum calculation of about $33.7 million — a difference of approximately $2.4 million. Staff explained that the actuarial approach “slopes” contributions to reduce steep back‑loaded increases in future years, and that reverting to the state minimum would increase long‑term pension costs.

Staff also briefed council on state shared-revenue changes. The local government distribution fund (LGDF) share the city receives has varied historically; the staff memo said Peoria’s current LGDF allocation is roughly 6.47% of the relevant state pool and that returning to a historical 10% share would have increased budgeted LGDF receipts from roughly $19.8 million to about $30.6 million in the city’s estimate.

Council members asked detailed questions about investable cash, fund restrictions, and whether specific revenue sources could be redirected into capital or riverfront projects. Staff said many funds are restricted by statute or grant terms, and that dedicating a new revenue stream to capital would be a council policy decision. On interest earnings, staff said the city credited earnings based on each fund’s cash on hand and that interest revenue had risen in recent years; staff noted 2024 interest income was about $9 million.

Council voted unanimously to receive and file both the monthly financial report and the report-backs. Staff will incorporate the information as council and staff proceed into the budget process and consider policy choices on TIF use, civic-center payments, and pension funding.