As the nation’s economy rolls into another month of decline, City staff members are preparing a stripped-down, bite-the-bullet budget, one that may have something to disappoint nearly everyone: reduced capital spending, increases in water rates and, without further cuts or additional or increased fees, the possibility of a double-digit increase in the City’s portion of the property tax – about 20 percent of the overall bill.

Conservation has its price, and Evanstonians are about to learn the cost of their water conservation efforts. Water consumption has so decreased over the past three years that the City is unable to meet its annual operating and maintenance expenses.

At a special City Council meeting on Nov. 17, Water Department superintendent David Stoneback and John Mastracchio of the consulting firm Malcolm Pirnie presented an overview of expenses and revenues in the City’s water and sewer funds. “We forecast a 4 percent increase in operating and maintenance costs in the water and sewer fund, as well as an increase in the debt service,” he said. He added, “The water rate increase is for Evanstonians only, not for customers in the Northwest Water System.”

Capital Improvement Programs

The capital improvement package for the upcoming fiscal year, which has been reduced by about $4.2 million since September, includes some scaled-down projects and postpones or phases in others.

The City plans to continue its implementation of the initial phases of the Lakefront Master Plan, including the bike/pedestrian path and the Clark Street Beach restroom facility. Douglas Gaynor, director of operations for the City, said the Human Services Committee will discuss plans for the Robert Crown Center in early January. That amount allows about $2.7 million for repairs to the Civic Center roof, according to figures from Finance Director Martin Lyons.

Other capital improvements approved for the upcoming fiscal year include street resurfacing, alley paving, renovations to Foster Field, improvements to the Fleetwood-Jourdain Community Center and a feasibility study for a CTA Yellow Line stop in south Evanston.

The City generally approves a rolling five-year CIP plan, with one year added as a current year ends. The proposed budget in its final form will detail the CIP package for fiscal year 2009-10.

More Budget Gloom

Even with a proposed 5 percent increase in the City’s portion of the property tax, there is still a $2.8 million shortfall in the tentative budget for the upcoming fiscal year, said Mr. Lyons. He says he is “hopeful” that, with additional trimming by City staff, the shortfall can be somewhat reduced.

One way to do that is to draw down the reserves of some City funds to a point where a comfortable amount would remain for emergencies – “if a tornado hit the downtown area and the City could get no sales tax revenues from businesses,” he said, as an example. He added that he is “reluctant” to do that.

If the reserves are not tapped and no additional programs or services are cut, the $2.8 million would likely come from revenues from increases in taxes and fees and from property tax revenues. With a 1 percent property tax increase representing about $350,000 (Mr. Lyon’s figures), the $2.8 million shortfall could translate into about an additional 8 percent increase in the City’s portion of the property tax.

By law, the City Council must receive a balanced tentative budget by Jan. 1. The City must approve a balanced budget before the next fiscal year, which begins March 1, 2009.

The City has scheduled the following budget meetings for early next year:

Jan. 10 and 24: Budget workshops at the Civic Center

Feb. 2: Public hearing on the budget

Feb. 4: Optional budget workshop

Feb. 9: Budget as an item on Council agenda for approval.