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On Feb. 9, the City Council took a step toward easing the economic burden on Evanston taxpayers. More than two weeks ahead of the legal deadline of March 1, aldermen unanimously approved the 2009-10 budget of $234 million, which requires no increase in the City’s portion of the property tax. The uneasy economy is reflected in this budget – patched together with what City officials say they hope will be one-time measures, such as using part of the proceeds of the sale of a City-owned parcel of land and making transfers from reserves in other funds. One initiative, though, may continue in succeeding years: Deferring the sale of bonds for capital projects until the fall will save the City about $200,000 this year but still allow capital projects to move forward as planned, said Finance Director Martin Lyons. He said the City could continue issuing bonds later in the year to capture a favorable credit market. A hike in the sewer rate that was expected and discussed for the upcoming year was killed, and an increase in the water rate deferred until probably next year. Mayor Lorraine Morton praised the City staff for their hard work in avoiding a tax increase. “It would have been unconscionable to raise taxes when people don’t have anything,” she said. Black, Purple and Red Ink The City did not find many new revenues for the upcoming year, but it may increase certain existing fees in order to keep out of the red. For next year the rooming house fee will be increased by $10 per unit, from $26 to $36. Northwestern University, which has long said it would make no cash contributions to the City, appeared to have reversed itself. Ms. Russell said the University has promised to pay the City $100,000 in the upcoming year, which can be used for any purpose. Previously, there was consideration that the Northwestern contribution be earmarked to offset construction costs for the City’s proposed new salt dome. A proposal to have the two School Districts share with the City the cost of school crossing guards and police officers in certain schools has not been finalized. Ms. Russell said the School Districts were still considering the proposal, and she expects to have an answer from then “within the next month or so.” Labor Cost – 2.5 Percent Increase Several months ago the City said it would not lay off any personnel in the coming fiscal year. The promise was given, said City Manager Rolanda Russell, because employees have been asked to perform additional work or different functions to continue the delivery of City services. Health insurance costs for employees are projected to rise by about 11 percent in the next fiscal year. However, salary expenses in the upcoming budget are projected to increase by only about 2.5 percent. Three of the four bargaining units are in contract negotiations with the City at present. Alderman Steve Bernstein, 4th Ward, asked Human Resources Director Joellen Daley whether the 2.5 percent increase would constrain negotiations. Ms. Daley said she had expected to take the 2.5 percent increase to the negotiating table. Pensions The total unfunded liability in the police and firefighters pension funds, calculated annually in March, was estimated to be about $145 million as of March 1, 2008. That estimate does not include any investment losses incurred by the funds since then. At present, State law mandates that those pension funds be fully funded by 2033. For the upcoming year, the City will pay $7.3 million into the firefighters’ pension fund and $9.2 million into the police pension fund. These amounts, calculated by the City’s actuary and termed actuarially required contributions (ARCs), “include the normal costs to cover current liabilities as well as an amount to offset the underfunded liability, assuming a certain amount of performance for our investments,” Mr. Lyons said. He added that few investments are performing well in this market. Council Discussion “Nine ayes, no nays – Lord, have mercy,” said Mayor Morton, who had lobbied the Council persistently for months – as well as in years past – not to increase property taxes. She thanked Ms. Russell and Mr. Lyons for finding “new ways, new avenues to benefit the citizens of Evanston.” More cautiously, Ald. Bernstein asked Mr. Lyons, “How confident are you for next year’s budget?” “It will be very tight,” Mr. Lyons said, “I would like to see [the Council receive] quarterly reviews about revenues and [have staff] make quarterly adjustments after the revenue reports.” “We’ve already started research on furloughs [for City staff] and other revenue-generating measures” Ms. Russell said.