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By making some strategic interfund transfers, reducing the estimated increase in employee salaries, postponing a bond issue, using one-time revenues from the sale of City property and revising some projections, Finance Director Martin Lyons presented City Council with a way to balance the upcoming City budget without increasing property taxes. Further proposals were made on Feb. 2 after the public hearing on the budget, and Council members expect to discuss the budget again at the Feb. 9 City Council meeting. The proposal, which addresses a $3.6 million shortfall in the proposed fiscal year 2009-10 budget, uses “all our resources – a combination of revenues, expenses and assets [from the sale of City property] – to balance this budget,” he said. It entails no increase in the City’s portion of the property tax, no employee layoffs and a minimal disruption in City services, he said. Among the proposals were a 2 percent reduction in projected wage increases, a transfer of reserves of $500,000 from the debt service fund and $300,000 from the economic development fund, the use of one-half of the proceeds of the sale of City-owned property on Chicago Avenue, deferring a capital-improvement bond issue until the fall, transferring about $200,000 from the Evanston Township Town Fund, and asking the two School Districts to share the costs of crossing guards, school-liaison officers and one program for high school students, all of which are now borne solely by the City. The budget does propose a hike in the sewer rate but would defer a water-rate increase for a year, Mr. Lyons said. Alderman Ann Rainey, 8th Ward, said she would not support a sewer-rate increase. Alderman Edmund Moran, 6th Ward, said the sewer-rate hike was part of a debt contracted in 1992, when some of the bonds were issued. “It’s our civic obligation to pay these bonds,” he said. Ald. Rainey said she understood that. Alderman Elizabeth Tisdahl, 7th Ward, asked that the City hire an outside lawyer to see if the City’s water-sale contract with Skokie could be renegotiated at a higher rate, negating the need for an increase in the sewer rate for Evanston residents. Ald. Moran asked how much the City would save by having a one-day furlough for all non-essential personnel. Interim City Manager Rolanda Russell said the savings would be about $175,000. Alderman Ann Rainey said she would take a one-day furlough for each day of furlough for City employees. “Granted,” she said, “that’s only about $11.” Other Council members said they would do the same. Aldermen did not discuss the City’s new proposal. By law the City must approve a balanced budget by March 1, the beginning of the new fiscal year. TIF Revenues The Downtown II tax-increment financing (TIF) district, which will expire this year, will provide a source of new revenues for both School Districts as well as the City. Mr. Lyons said District 202 should receive an additional about $2.6 million and District 65 $3.8 million in property taxes per year when the TIF expires. “The original equalized assessed valuation (EAV) of that TIF was about $2 million; in 2007 it was $130 million,” he added. Wage Expenses At the Jan. 10 budget workshop, Mayor Lorraine Morton asked to hear from City employees about what they would be willing to contribute to the City in exchange for the City’s promise (already given in writing) that no one would be laid off this year. “We are all in this boat; and we will sink together or we will survive together, and that’s why it’s moral to have City employees tell us how they can help,” Mayor Morton said. Rather than a personal response, however, the City Council heard union representatives – from AFSCME, the firefighter’s union and the teamsters union (police) – say that they were in or shortly would be in negotiations with the City and would “bargain in good faith.” The City’s wage expenses for the upcoming year will be dependent upon the outcome of those negotiations. Joellen Daley, director of human resources for the City, said many of the negotiations will take place this month. “The silence is significant,” said the Mayor.

Public Hearing/Council Discussion

On Feb. 2, Mr. Lyons presented several new proposals: The Township has agreed to absorb $300,000 in expenses for social services, an increase of $100,000 over the City’s initial request. Funding for social services (through the City’s Mental Health Board) would remain at $885,000, Mr. Lyons said. In addition, Mr. Lyons said Northwestern University officials have “”tentatively agreed”” to contribute $100,000 toward the construction of the City’s new salt dome if the City does not increase the athletic tax. (The proposal was to increase that tax by 2 percent, adding $100,000 to the City’s revenues.) The cigarette tax could be increased by as much as 10 cents per pack, adding about $80,000 of revenues, Mr. Lyons said. “”If everything comes out as budgeted,”” Mr. Lyons said, at the end of the upcoming fiscal year we would increase our reserves by about $294,000.”” He said the reserves would be at about $14 million or 15 percent of the general fund; the minimum required under City policy is 8.3 percent, he added.