The uncertain economy continues to batter the country, with budgetary consequences for local governments. Although passionate discussion is expected on budget deliberations here in the coming weeks, Evanston residents are showing no sign of the polarity and dysfunction exhibited in Congress over the summer.

During the past two weeks, residents had in-person opportunities to let City officials hear their feelings about how the City should accumulate and spend its money in 2012. The City’s fiscal year 2011 was only 10 months – beginning March 1, as has been traditional for the past several years. However, in order to have the fiscal year and the calendar year coincide, this fiscal year will end on Dec. 31, necessitating the City Council’s approval of a balanced budget by that time. Thus the City’s budget process, which ended only six or seven months ago, is again in full swing.

Projected Shortfalls

At present the City is projecting about a $2 million shortfall in the General Fund, the City’s main operating fund. The City says contractual hikes in salaries and benefits, coupled with flat revenue expectations, account for a large part of the shortfall.

Other City funds – the parking and water funds among them – are called enterprise funds because they generate income through fees and fines. Shortfalls in these funds may result in increases in rates charged through these funds. In addition, the firefighters and police officers pension funds – which are significantly underfunded – require annual contributions calculated by an actuary.

Operating expenses are funded for the most part by property taxes. Enterprise fund money generally comes from fees and fines. While the City has increased water and sewer rates, parking fees and fines over the past several years, it has increased the property tax rate in the past three years only to make the required pension-fund contributions.

In addition to the projected $2.1 million shortfall, City Manager Wally Bobkiewicz said he is requesting that $2 million be transferred from operations to capital. That is, he would like to see $2 million in capital projects be funded essentially through “cash” or “pay-as-you-go” rather than by issuing general obligation bonds, which has been the traditional way of funding capital expenses here.

Thus the City will have to either pare $4.1 million from operating expenses, increase revenues by that amount or find a combination of revenue increases and expense reductions that will address. To do so while causing discomfort to the smallest number of taxpayers, the City is seeking residents’ input.

Since May the City has sponsored “Engage Evanston,” with public meetings, online and paper surveys (including one in the Sept. 14 issue of the RoundTable). After this input has been compiled, the Council members will begin their deliberations early next month.

Because this is not the first or the second or even the third year of austerity for the City, cuts in programs and services are ever nearer the bone.

To cushion the impact of the ultimately balanced budget, the City has undergone a process of self-scrutiny, evaluating the costs, benefits and effectives of the 90-some services/programs it provides and then compiling 40 proposals to increase revenues or reduce expenditures.

In addition, City staff are seeking to eliminate duplicated services and to work with not-for-profits either to have them take over some services now provided by the City as well, to contribute some money to the City even if they are tax-exempt, or to otherwise collaborate financially with the City.

Residents who attended either the Sept. 17 or Sept. 22 City-sponsored budget meetings offered their opinions on the budget, as did those who attended various ward meetings in the past few weeks.

Concerns About Jobs and Health Services

Retaining jobs, particularly for Evanston residents, and maintaining health services were two of the main concerns at the Sept. 17 budget meeting.

Mr. Bobkiewicz said the City has determined that outsourcing would not be cost-effective. He also said the City would pursue “in-sourcing” – that is, allowing other municipalities to hire City crews – with nearby communities.

“We have talked with Skokie and Lincolnwood,” he said, “but they are not as far ahead [in service delivery] as we are.” He said, though, “We can do alleys [for recycling and refuse pickups],” something that many private contractors cannot easily do.

One resident who operates a not-for-profit suggested that the City consider allowing not-for-profits to in-source City services, such as refuse and recycling. Mr. Bobkiewicz said that would be considered.

Regarding health services, the response was not so sanguine: Few communities such as Evanston have health departments. City officials had hoped Evanston would be a site for a federally qualified health center (FQHC), and local state and county representatives had been working with the City and with Erie Family Health Centers to that end. St. Francis and Evanston hospitals pledged “significant” support, Mr. Bobkiewicz said at the Sept. 17 budget meeting.

At the Sept. 19 City Council meeting, Evonda Thomas, the City’s director of Health and Human Services, said the City’s application, one of 800, had been denied. Only 67 were granted, she said, two in Illinois and both downstate. The rules changed after the application deadline, she said, and awards were granted only to proposals to serve “special populations” (such as immigrants, rural populations or public housing).

“We will not rescind our application,” said Ms. Thomas, but will keep it active for next year’s award cycle. The partnership with Erie is absolutely the right choice, she said. As of yesterday morning, Sept. 27, Ms. Thomas said she had not heard whether the City’s application had been accepted but then denied or rejected.

Tax Increases

The City’s portion of the property tax bill is about 20 percent. Mr. Bobkiewicz said the City has not increased property taxes in the last three years, except to contribute to the firefighters and police officers pension funds. The amounts of these contributions are recommended annually by the City’s actuary. At present the City owes an aggregate of about $200 million to these two funds, which by state law must be funded fully by 2033. City Treasurer Martin Lyons said about $15 million would be contributed to the pension this year.

A 1 percent increase in the City’s portion of the property tax would result in about $400,000, Mr. Bobkiewicz said.

Alderman Peter Braithwaite, who invited Mr. Bobkiewicz to discuss the budget at a recent Second Ward meeting, said he appreciated residents’ coming out to voice their concerns. “I was able to hear their concerns about outsourcing and protecting Evanston jobs, so I can take this to the City Council,” he said.

Budget Talking Points

Tidbits About the FY2012 Budget

Money – $2.1 shortfall anticipated; $2 million additional sought for capital expenditures

Taxes – The City’s portion of the property tax bill is about 20 percent. A 1 percent increase in the City’s portion of the property tax nets about $400,000.

Not This Year – City staff have made 40 revenue-generating or cost-saving proposals, which City Council members may consider for the 2012 budget. Some of these have already been rejected: Selling alcohol in City parks; re-purposing the Chandler-Newberger Center; amd outsourcing City services

FY2011 Budget Stable

City Treasurer Martin Lyons told the some 30 persons at the Sept. 17 citizen-input meeting and the dozen at the Sept. 22 meeting that the 2011 budget is roughly on track. The 2011 fiscal year was only 10 months, to allow the City to have subsequent fiscal years coincide with calendar years. Thus the half-year mark was July, at which time most expenditures and revenues were on track with projections, he said.

Reverberations from cuts in grants at the state and federal levels are felt, for example, in the decreased (federal) Community Development Block Grant funding, said Mr. Lyons.

Revenues from the State remitted to municipalities are still somewhat delayed, Mr. Lyons said, but not so greatly as last year. Property tax bills, issued by the County, will be issued earlier than they were last year, Mr. Lyons said, but still later than normal. While that may be good news for residents, the delay can pose some cash-flow problems for municipalities.

‘Things We Like About Evanston’

The Sept. 17 budget began with everyone present, including City officials, naming something they love about Evanston.

Among those things prized by residents who attended the meeting were the community itself, the trees, the diversity, its walkability, the lakefront, the commitment to compassion and social justice, health facilities, mental health services, police department, the professionalism of City departments, the quality of life, the “”majesty and natural beauty”” and the residents’ “”innovative commitment.”” Fire Chief Greg Klaiber said, “”It’s a wonderful place to raise a family.”” City Manager Wally Bobkiewicz said, “”There is never a dull moment here.””

Mr. Bobkiewicz says he plans to present the tentative budget to City Council on Oct. 7. Budget materials are available on the City’s website, cityofevanston.org.