The newly seated City Council is facing not only the likelihood of below-projected revenues in the present budget but also the certainty of a continued structural deficit in next year’s budget, Assistant City Manager Martin Lyons told a group of about 20 members of the Central Street Neighbors Association (CSNA) last week.
He said he would “give an overview of the fix we are in and what [ideas] the City is kicking around.”
Revenues from the real-estate transfer taxes are about $1 million below projections, as an example, Mr. Lyons said. Further, the structural deficit will continue as long as the state approves benefits to firefighters and police officers but leaves it to municipalities to foot the bill, he said.
Mr. Lyons said City staff members will present a quarterly report on the present budget to the City Council later this month.
The “budget season” for the budget approved in February of this year began last July, he said. (The City’s fiscal year is March 1 – Feb. 28.) He declined to speculate what action, if any, Council members would take but did mention that City staff members have been considering several options.
First, while there are several vacant positions at the City, he said it is likely that not all of them will be filled. Second, City staff may recommend “managed competition,” under which the City compares the cost of outsourcing a service with providing it with City staff. “If the City department can’t meet the [cost], then it can be outsourced,” Mr. Lyons said.
Council members have long been caught between keeping taxes low and continuing to provide services demanded or needed or prized by residents. Last year the budget was balanced using some creative, or at least non-standard, measures, Mr. Lyons said.
These included using available money in the Economic Development fund and deferring for six months the issuance of bonds for capital improvement.
“Next year, things will be even harder,” he said. Citizens may find themselves faced with both a property tax increase and a hike in the water rate. At present the City’s portion of the property tax bill is about 20 percent.
Jeff Smith, president of CSNA, said he had convened the meeting to provide an overview of the budget and the process.
“A lot of folks in Evanston don’t understand what’s going on with the whole budget process, and they weigh in with a chorus of ‘No, no, no’ near the end.” The process often ends up in what Mr. Smith termed a “doomsday scenario” with City Council saying, ‘Give us more money or we’ll shoot this puppy.’”
The audience questioned the form of the budget and the value (costs and benefits) of two City programs. Mr. Lyons said it is nearly impossible to see in any budget document the full cost of any one service or function, because people often work in departments or on projects different from their own.
For example, he said, he works in the City Manager’s office but also works on the budgets for the police department, so his time could also show up (but not be double-counted) as a police-department cost.
The pie charts, graphs and explanations in the budget itself, he said, give the best possible explanations of those costs and allocations.
In addition, he said in answer to a question, the City is “still working on” assessing the costs to the City and the public benefits of City programs that mandate the use of local workers or organizations, such as the local employment program (LEP) and the minority-/women-owned/Evanston-based-enterprise (M/W/EBE) policy.
The City is asking for “give-backs,” Mr. Lyons said, both from its employees and from vendors. In the recent labor negotiations some union workers received one-year rather than three-year contracts, and the increases were “lower than the average,” he said. “We’re saying [to vendors], ‘We’ve been customers for a long time. Can you help us?’”
Mark Sloane, another CSNA member, said he would like to see the Mayor appoint a blue-ribbon budget committee. “The committee would meet weekly for three months and look at a zero-base budget. This would help City Council to prioritize expenditures or look at ways to get revenue.”