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Judging by reactions at the Jan. 12 budget meeting, the proposed 15-percent increase in the City’s portion of the property tax apparently did not sit well with some members of City Council.
Junad Rizki held up the pink stuffed pig he has brought to Council budget meetings for several years and said, “The pig is back.”
City Manager Julia Carroll said she proposed the tax increase as a way to address the City’s shortfall in the firefighters and police pension funds – which could be as high as $140 million. “Nobody wants to put in a 15-percent tax increase, but we have a responsibility to put in what is actuarially required,” she said, adding, “I put this amount in the budget as a placeholder [to be paid directly through property taxes] until the Council finds another revenue stream to address it.”
At the outset of the meeting, Mayor Lorraine Morton said she wished to “compliment the City Manager on the specificity of the items in the budget. By doing that, you are open to suggestions from the public and the aldermen.”
During public comment, resident Junad Rizki said he felt the budget was too packed with tax increases and inefficient spending to be useful or palatable to taxpayers.
“The pig is back,” he said, holding up the pink stuffed pig he has brought to Council budget meetings for several years, “and he [the pig] is going to come back a lot this year. Structural problems have existed for years.”
Gerald Gordon said, “I do not know how you can consider the proposed budget without knowing how the present year is doing.”
“… Is downtown the heart of Evanston or are the communities? How do we distribute our resources?” — Jessica Clark of Mason Park Neighbors
Referring to the proposal to transfer $4 million from the General Fund to cover pension obligations for the present year, he asked, “Why are you not proposing more aggressive use of fund balances for the pension funds or for taxpayer relief? … The complacency and resignation displayed here last year was outstanding.”
Two groups requested additional funding. Sue Canter, chair of the City’s Mental Health Board, requested $15,000 in additional funds. Acknowledging the budget crisis, Ms. Canter said, “This would respresent only the second increase in the mental health board budget in 13 years. … Several of our clients are low-income and, with financial stress, are at the breaking point, so the need for our services has increased.” The Human Services Committee has recommended the increase.
“… The complacency and
resignation displayed here last year was outstanding.”
— Gerald Gordon
Jessica Clark of Mason Park Neighbors requested funding for after-school and summer programs for youth at the recently renovated Mason Park field house. She said she was “very discouraged by the decision of the City Manager not to fund the programs. … Consider our priorities: Are we fulfilling our responsibilities to the youth of our community? Is downtown the heart of Evanston or are the communities? How do we distribute our resources?”
The Pension Liability
Faced with an acute and far-reaching pension-funding liability and 15-percent increase in the City’s portion of the property tax as the only way, at present, to fund it, Council members appeared hard-pressed to come up with a palatable resolution.
“The rest of the budget the City Manager has handled O.K. It’s the pensions we cannot ask the citizens of Evanston to bear,” said Mayor Lorraine Morton. Saying that funding the pensions was an “unfunded mandate” of the State and noting that the State had increased the benefits at least three times since the process was instituted in the 1980s, Mayor Morton suggested asking the State of Illinois for help. She also said the end-date for fully funding the IMRF (Illinois Municipal Retirement Fund) fund – which manages the pensions for City workers except the sworn safety personnel – had been extended to 2044, while the pension funds for firefighters and police officers must be fully funded by 2033.
City officials say they have paid the actuarially determined amount into each of those funds for the past several years. When the finger-pointing started, at least one member of the police pension board, Timothy Schoolmaster, disputed that the City had made sufficient contributions. In fact, the City was sued in the 1990s for having failed to make sufficient contributions for several years. While the City conceded it had not made sufficient contributions however, the Appellate Court did not require the City to make up the shortfall.
On the other side, City officials highlight several things: The State legislature has three times increased pension benefits appropriating monies to fund them, instead passing the cost along to municipalities. The State allows only 55 percent of each pension fund to be invested in equities – a restriction that makes it difficult to receive a 7.5-percent return (the actuarially determined amount) on the funds. Finally, the investment return on the pension funds themselves may not have performed as expected. Although municipalities must contribute to the funds, only the pension boards have control over investments.
Alderman Lionel Jean-Baptiste, 2nd Ward, said, “The assumption is that citizens can sustain [the 15-percent increase in the City’s portion of the property tax]. … the reality is that we are a City that provides a lot of services, and I do not think the citizens can bear this increase and then have fines and [fees] go up.” Addressing Ms. Carroll he said, “I’m concerned that in your effort to do your duty that some things might be more important to you than to … continue to provide the type of services the City is used to.”
Other Issues Discussed
Alderman Delores Holmes, 5th Ward, questioned the efficiency – in terms of time spent and revenues received – of the City’s administrative adjudication process. “I’ve lost a lot of confidence in terms of what happens there – with the staff hours spent and with their showing up with overwhelming evidence and the landlords are still found not liable.”
Both Aldermen Cheryl Wollin, 1st Ward, and Anjana Hansen, 9th Ward, said they supported the proposed new fees to inspect and license rental units throughout the City. The budget projects a net of more than $400,000 in new revenues from the license and inspection fees, after offsetting the cost of hiring two new staff persons to conduct and document the inspections.
“There is no one here who doesn’t want everyone to have their pensions, but down the line, the costs rise and rise. … This will destroy us; this will destroy the City of Evanston.” — Mayor Lorraine Morton
Ald. Hansen asked for clarification on enforcement and sanctions of the proposed licensing and inspection program. Community Development Director James Wolinski said, “We’re not going to recommend suspension or revocation of the license on minor issues, only on properties that are detrimental to quality of life or to a neighborhood. … You don’t shut down a person’s livelihood lightly, [but] the beauty of a licensing program is being able to withhold a license.”
Mayor Morton, who appeared to become more distraught as the meeting progressed, said, “We are being pushed by two organizational structures. … The complete onus of funding rests on all of us who pay taxes, and we have absolutely no control over what happens to this. … There is no one here who doesn’t want everyone to have their pensions, but down the line, the costs rise and rise. … This will destroy us; this will destroy the City of Evanston.”
Other aldermen appeared to be more resigned to the situation. Alderman Elizabeth Tisdahl, 7th Ward, told the RoundTable, “More taxes and fewer services – that’s what we can promise the citizens of Evanston.”