EAST PEORIA — Budget cuts didn't cut it.

The East Peoria City Council now appears ready to support at least a new garbage collection fee to help plug a $500,000 budget deficit, fund a modest capital spending program and help rebuild a nearly depleted general reserve fund.

And, the five-person council might also support a sales tax increase to help protect the city from the current financial storm that has been gathering for years.

"This day was years in the making," said Commissioner John Kahl, who has been sharply critical of past council decisions he says put the city in its current budget hole. So far, he has not publicly supported any enhanced revenue stream. "If you thought it (wasn't coming), you're crazy."

Last week the council heard city department heads describe proposed 2018-19 operating budgets they said could not be cut any further and still maintain staffing and service levels. That bare bones budget fell between $500,000 and $700,000 short of balance.

On Tuesday, the council began to seriously consider implementing a $15 a month solid waste fee, a service residents currently pay for out of their property taxes. Commissioner Gary Densberger, who has opposed sales and property tax rate increases and a separate garbage collection fee in the past, said Tuesday he is ready to consider a collection fee, but only if residents receive added value for the service.

A $15 fee monthly, per household fee, would raise about $1.5 million to assist with the 2018-19 budget shortcomings, and about $2.6 million a year after that. The city will examine whether it's feasible to include in the service yard waste pickup, eliminating the city's burning ordinance, and enhanced curbside recycling.

City Administrator Jeff Eder said Tuesday he was not certain that $15 a month would cover the additional expenses of solid waste collection. A feasibility report on the enhanced services is expected in two weeks.

The council might also reconsider an increased sales tax in combination with the solid waste fee. A quarter-cent increase would raise $775,000 for the 2018-19 budget year and about  $1.3 million each full year after that. A half-cent increase would raise about $2.6 million annually. The council rejected a sales tax increase last October that only had the support of Commissioners Tim Jeffers and Dan Decker.

Densberger said he would support a half-cent sales tax increase only if $500,000 of the money raised went into the city's general reserve fund, an amount capped when 120 days of operating reserves was accrued, and another $200,000 a year into a public building fund for the update and construction of city buildings. Similarly, he would support a smaller, quarter-cent sales tax increase if $250,000 was allocated for the general fund.

"That's my current thinking," Densberger said. "That would be a starting point to the conversation."

For the first time in years, the council appeared to be building a consensus to finally confront its fiscal woes.

"That was a good discussion," Mayor Dave Mingus said before asking for a motion to adjourn. ""It finally feels like we're getting somewhere."

Scott Hilyard can be reached at 686-3244 or by email at shilyard@pjstar.com. Follow @scotthilyard on Twitter.

This story was updated on Jan. 31, to correct Commissioner Gary Densberger's position on a proposed sales tax increase.