The City of East Peoria is unique in that it provides its residents with all essential services, including full-time police and fire protection, emergency medical services, solid waste and recycling, water and wastewater, street maintenance, building inspections and code enforcement, and planning and development. Most communities our size contract with third-party companies or agencies to provide some, if not most, of these essential services. The city also owns and operates EastSide Centre and owns and contracts with a third-party company to manage EastPort Marina. 

The funding of these essential services is not as one might think. In Illinois, municipal general funds are typically comprised of revenue from various sources, including local taxes, fees, fines, interest income, and state-shared funding. These funds are used to support a wide range of local government services, including administrative and operational costs of the local government, such as salaries, office supplies, information technology, vehicle maintenance, and utilities. Municipalities may use general funds to finance capital projects, such as building new infrastructure or upgrading existing facilities. General funds may also be used to make payments on outstanding debt obligations, such as bonds issued for infrastructure or development projects, or to finance new equipment.

The days of property taxes being the primary source of revenue for the city to cover the costs of the essential services that it provides have long set sail. The biggest misconception that most East Peoria homeowners has is that their property taxes cover the costs of these essential services. The City of East Peoria Corporate represents on average 13% of an East Peoria homeowner’s overall property tax bill. The city has held its portion of property taxes basically at rate equivalent for nearly three decades. That would not be possible today had the city not invested in redeveloping the downtown area and generating additional sales tax revenue to cover the ever-rising costs of a vast majority of the essential services that it provides. The property tax revenue collected by the city is primarily used to cover the costs of the city’s public pension obligations, audit services, and workers compensation, unemployment, and liability insurance. 

In Illinois, municipal enterprise funds are used to account for the operations of city-run utilities or services that are intended to be self-supporting through user fees and charges. These funds must be self-sustaining, meaning the revenue generated from user fees should cover the expenses of the operation. The City of East Peoria currently has three enterprise funds; Water and Sewer, EastSide Centre, and EastPort Marina. The enterprise funds pay for the expenses of operating that service, including personnel costs, maintenance, and capital improvements. 

East Peoria is home to eleven hotels, with another currently under construction. While this may be abnormal for a community our size, the hotels here continue to flourish and generate hotel/motel tax revenue for the city. There are restrictions as to how a municipality may use these funds. The city primarily uses this revenue to pay for the expenses of gateway signage, Festival of Lights events, and other tourism related expenses.

East Peoria is also home to the Par-A-Dice riverboat casino. The riverboat casino generates gaming revenue, which is shared 50/50 with the City of Peoria on a monthly basis. There are restrictions as to how municipalities may use these funds. Revenues received from the Par-A-Dice have proven critical for the City of East Peoria to be able to make several capital improvements throughout the community over the years that continue to improve the quality of life for our residents without raising property taxes to do so. 

In Illinois, Motor Fuel Tax (MFT) is a tax collected by the state that is based on the consumption (purchase) of motor fuel. Municipalities receive a very small share of these revenues on an annual basis for road construction and maintenance. The City of East Peoria utilizes MFT revenues to help fund critical transportation infrastructure, such as the maintenance of our residential streets. 

My goal in writing this article is to give our residents a better understanding of the essential services that the city provides and a glimpse as to how each of these services is funded. It is imperative for us to keep our local economy strong by supporting all members of our diverse business community here in East Peoria.

Always grateful,
John.