Peoria staff present $1.17 billion FY2026 budget; council timeline set for May tentative adoption
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Summary
City staff told the Peoria City Council at a study session that the FY2026 proposed budget totals $1.17 billion, with a $550 million capital program and a $478.2 million operating plan. Staff outlined a May tentative adoption schedule and said council review and fee adjustments will follow before final adoption in June.
City staff presented a proposed $1.17 billion fiscal 2026 budget to the Peoria City Council at a study session, saying they expect to bring a tentative budget to the council for adoption in May and finalize taxes and utility rates in June.
The proposed total for FY2026 is $1,170,000,000; staff said $550,200,000 (about 47%) is the capital program and $478,200,000 (about 41%) is the operating budget. Debt service and contingency make up the remaining amounts, and the capital program carries over a large share of previously authorized projects.
Why it matters: staff said the schedule is intended to meet state deadlines and allow the city to complete tentative adoption at the May 6 council meeting, hold required public hearings on utility rates and truth-in-taxation, and adopt property taxes in June so the fiscal year can start July 1.
Staff framed the budget as balanced and consistent with council-adopted financial principles. "This budget complies with our council adopted principles of sound financial management in every way," said Peter (staff member) during the overview. Peter told the council the capital budget is driving the year-over-year increase and that the city will pursue bond sales later this year for certain utility projects.
Key numbers and drivers - Proposed FY2026 total: $1,170,000,000 (staff-proposed) - Capital program: $550,200,000 (47% of total; about 27% higher than last year) — staff said the large carryover reflects a construction-heavy year already in progress - Operating budget: $478,200,000 (41% of total; about 4.2% growth over prior year) — most operating growth is staff compensation - Contingency: staff said they increased contingency by about $35,360,000 to preserve flexibility for economic development outcomes and other unanticipated needs
Staff identified personnel costs as the largest operating pressure. Peter and other managers said about $15,000,000 of the operating increase is for compensation adjustments tied to negotiated MOUs, merit/cola steps and new positions; total operating growth is roughly $20,000,000. Health insurance premiums were called out as a driver (a 2.8% premium increase was mentioned for employees and the city). Staff also noted inflationary pressure on supplies, electricity, fuel and equipment, and the potential for vendor tariff pass-throughs on capital purchases.
Supplemental requests and staffing Staff summarized supplemental requests included in the proposed budget: $25,000,000 in one-time requests (about $14.5 million from the general fund and $10.5 million from other funds), $13,500,000 in ongoing requests (about $7.0 million general fund; $6.4 million other funds), and 38 net new FTEs (32 general fund, 6 other funds). Staff estimated the full-year cost of those new positions at about $5,700,000.
Process and next steps City staff recommended council members use the current study session and the weeks before May 6 to identify adds/deletes. Staff said they will track requested changes individually with council members and bring consolidated modifications for tentative adoption. Following tentative adoption the city will hold required public hearings on rates and taxes and adopt a final budget in June.
Ending Staff framed the document as a proposed and iterative plan: "This is our proposed budget. It's by no means perfect, and ... we'll be seeking both your collective feedback and your individual feedback," said Mr. Darwin (staff member). Council members will receive the formal tentative adoption and fee-change items for action in upcoming meetings.
