Pekin establishes utility tax as it faces multimillion dollar deficit for FY2025

The Pekin City Council approved the city’s Fiscal Year 2025 budget during Monday’s meeting … and projected expenses are expected to exceed revenue by just over $11.8 million, a prospect that did not seem to please Pekin Mayor Mary Burress.

“I took the stance that I did not want to raise fees or taxes,” she stated. “I was comfortable making those statements assuming that Pekin, despite having normal problems, had their house in order. Since taking office however, it has come to light by our administration that there are very deep and widespread malpractice, and years of neglecting to make hard choices have put us in this predicament.”

The action passed 4-3, with Council members Rick Hilst, Dave Nutter and Lloyd Orrick casting the contrary votes.

The Council unanimously voted to approve the city’s Americans with Disabilities Act (ADA) Transition Plan. The plan addresses the City’s requirement to perform a self-evaluation and maintain a transition plan for compliance for existing pedestrian facilities in municipal public rights of way, identifies the city official responsible for the plan’s maintenance and a grievance procedure, and recommends a schedule to achieve ADA compliance.

“In 2018, a class-action lawsuit was filed claiming that the City failed to maintain accessible pedestrian rights-of-way,” said Pekin City Engineer Josie Esker. “The lawsuit was certified as a hybrid class action lawsuit on April 19, 2021. The City entered into a consent decree … to settle all claims asserted in the class action lawsuit. The Transition Plan is required by the consent decree, which was filed … on November 1, 2022. Per the Consent Decree, the City must approve a transition plan with 18 months of the file date, which means that the transition plan must be approved by May 1.”

To help offset the cost of the ADA Transition Plan, the Council passed an ordinance establishing a utility tax on natural gas, electricity, and water. According to Pekin City Manager John Dossey, the city faces significant future expenses from a Combined Sewer Overflow project and the ADA Transition Plan. Both projects are mandated for the city and will result in new expenses the city currently does not have funding for.

“The spending required for the ADA transition plan will be tens of millions of dollars over the next several years as major roadwork is required to address physical problems with sidewalks and crossings, along with improvements to City buildings to ensure ADA compliance in public areas,” he said. “Options to pay for this new, mandated spending are increasing existing taxes, establishing new taxes or fees, and cutting spending.”

Dossey added that most medium to large municipalities in the area; including Peoria, Galesburg, and Bloomington; have already implemented utility taxes.

The measure passed in a contentious 4-3 vote, with Hilst, Nutter and Orrick in opposing the ordinance.

“The utility tax is going to impact every business in the city,” Orrick said. “It’s going to increase their costs to do business, which means price raises when our residents are being eaten alive by inflation.”

In other business:

- The Council approved an amendment to the Pekin City Code regarding garbage collection fees and an amendment to the Code regarding sewer charges. Beginning May 1, garbage collection fees will increase from $20 to $25. Monthly user fees for wastewater and sewage collection will increase from $4.41 to $4.90. Hilst, Orrick and Nutter opposed the garbage collection increase, which passed 4-3. With Hilst and Nutter opposing, the wastewater and sewage collection fee increase passed 5-2.

- A resolution to approve a Memorandum of Understanding with Alto Pekin, LLC for grant application passed 7-0. Alto wishes to build a new barge terminal at their property at 1301 Front Street that would have the capabilities of transferring commodities between truck, rail, and barge.

- A resolution approving a Cost of Living Adjustment (COLA) for non-union employees passed 5-2, with Hilst and Nutter dissenting. The action authorizes a 3% COLA increase in the Fiscal Year 2025 budget.

- The Council unanimously approved the annual renewal of an enterprise license agreement for Geographic Information System software with Environmental Systems Research Institute.

This article originally appeared on Pekin Daily Times: Pekin passes new utility tax as it faces multimillion dollar deficit