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Updated Oct. 20. Late Friday afternoon, Oct. 14, City Manager Wally Bobkiewicz presented his tentative budget for fiscal year 2012 to the City Council and posted it on the City’s website. As proposed, the $218 million budget is balanced by, among other things, reducing staff levels, adjusting employee contributions to health insurance and increasing the City’s portion of the property tax by 3 percent for the General Fund, and by 4.9 percent for the police and firefighter pensions and debt service. See sidebar for details. The City’s portion is about 20 percent of the total property tax bill.

Revenues

The City proposes to increase revenues for its general fund by about $3.4 million, with, among other revenues, $1.2 million from the proposed property tax hike and $235,000 from the “library property tax increase.” (See sidebar.) Other proposed revenue enhancements are increasing parking fines by $5, increasing false alarm fees (which are on a per-use scale), increasing the fees for one-day liquor licenses and reconfiguring recreation program fees to establish “youth,” “adult” and “senior” fees. (See below for City’s complete list of proposed revenue enhancements.)

The City is also planning to increase property taxes by about $2 million to go toward police and firefighter pensions and debt service.

Expense Reductions

The budget proposes reductions in expenditures in the amount of about $2.4 million.

The tentative budget proposes the elimination of 13 full-time City positions and the creation of two new ones, resulting in a net reduction of 11 full-time-equivalent employees.

Other savings would come from the restructuring of health-insurance benefits for employees and adjusting the contributions they would have to make.

The City also proposes to reduce its subsidy of the Evanston Community Media Center and to eliminate four Forestry positions and outsource the removal of large-diameter trees. According to the City Manager’s transmission letter with the budget, these and other personnel reductions would amount to about $915,000.

Most City staff will have a 2 percent cost-of-living increase, but this amount could be revised, as, according to Mr. Bobkiewicz’s letter, “A majority of City staff are members of four bargaining units …, contracts for three of which end on Dec. 31, and the City will be negotiating new contracts this fall.” Non-union personnel will have merit/step increases reinstated.

Two New Aspects of
City Government

In his tenure as City Manager, Mr. Bobkiewicz has done some reconfiguring of City government, creating and eliminating staff positions, consolidating and transferring duties and personnel. This year he proposes creating a new division, the Youth Services Division, within the Parks Recreation and Community Services Department, and a new fund, the Solid Waste Fund.

The Youth Services Division, he says, will “focus on effective outreach and engagement of the City’s youth and young adults. Among the many responsibilities of this division will be to staff the Mayor’s Youth Task Force and the Youth Council. This division will also oversee the Summer Youth Employment Program, the Safe Summer Program and the newly developed Career Mentoring Program, which will pursue job training and apprenticeship opportunities for young adults.”

The Solid Waste Fund was created in light of the continual City subsidies of yard waste and recycling pickups. The City Manager’s letter notes that changes were made last year to the refuse, yard-waste and recycling pickups to “limit costs in two main areas regarding fleet and workers compensation/liability costs.” Since charges to residents for these services do not cover the City’s cost of providing them – projections for fiscal year 2012 show a subsidy of roughly $2 million – these services will be tracked through this fund, he said.

Firefighter and Police Pension Contributions

Each year the City’s actuary determines the amount the City should contribute to the firefighers and police pension funds. According to the City Manager’s letter, “Our current projections, based on the joint recommendation of the City Treasurer, Police Pension Board, and Fire Pension Board is $14,923,144: $8,521,751 to the police pension fund and $6,401,393 to the firefighters pension fund.

As of March 1 of this year, the total unfunded liability in these two pension funds was estimated by the actuary at $176 million.

Current Year’s Performance

City staff encountered one less obstacle this year in fashioning the budget: Income and expenses for the current year have for the most part tracked the budget. According to the City Manager’s letter, the General Fund, the City’s main operating budget, should end the year with about $940,000 surplus, owing to “holding the line on expenses.”

Income and Sales tax revenues are both performing above budgeted levels, as are real estate transfer taxes, City official say.Since he did not find the need to use the City Manager’s contingency fund, Mr. Bobkiewicz said the City Manager’s office expenses are about $300,000 below the projections for the present fiscal year. The Administrative Services department is also below budget by $200,000, because of reduction in unemployment costs.

Two revenue streams are likely to help with cash-flow: Tax bills from the County, while not expected to be sent on time, are not likely to be as late as they were last year, thus shortening the time between collection by the County and remittance to municipalities. Locally, the City can expect the bulk of the revenue from vehicle stickers before the end of this fiscal year, as the stickers are already on sale and the deadline to display them is early January.

Next Steps

City Council is scheduled to discuss the proposed budget at Special City Council meetings at 9 a.m. on Oct. 15 and Oct. 29 in Council Chambers of the Civic Center, 2100 Ridge Ave. There will be a public hearing at 7 p.m. on Nov. 14 and the Council may adopt the budget on Nov. 28, both in Council Chambers.

City Manager Wally Bobkiewicz has proposed to increase revenues by $3.4 million:

• General Fund property tax increase: $1,230,000

• Library property tax increase: $235,000

• Administrative adjudication fee adjustments: $23,000

• Increased collection rates of money owed the City: $320,000

• License plate recognition system revenues: $100,000

• $5 increase parking fines: $530,000

• Contract out crossing guards – higher PEO [parking enforcement] collections: $50,000

• False alarm fee increase: $20,000

• Recreation program fee adjustments: $300,000

• Township revenue – job training and mentoring: $50,000

• New: Moving van permit fee: $50,000

• Increase in one-day liquor license: $2,850

Library Property Tax Increase

The Library Board established its own budget for fiscal year 2012, which it plans to approve in mid-October. Since the Library is moving toward the funding model of the State Library Act, the Board has said it can create its own budget and does not need City Council approval for the levy. The City has not agreed to the Library’s assertions but has said it will work with the Library Board in moving toward the library-fund model. The City Manager’s budget seems to sway both ways: On the one hand, it indicates that additional funds will be levied through the property tax specifically for the Library, but on the other hand, the entire budget must be approved by City Council.

Getting to the Bottom Line on the City’s  Proposed Property Tax Hike: 7.9 %

 After the Oct. 15 City Council meeting some residents raised a question about the amount of the proposed  increase in the City’s portion of the property tax. The full amount of the proposed property tax increase to cover all City funds, they said, is closer to 8 percent than only the 3 percent increase proposed for the General Fund.

The City’s budget documents refer to a 3 percent increase in the property tax levy to be used for the General Fund and in other spots refer to a 4.91 percent increase for debt service and police and firefighters pension fund contributions. The budget documents do not show the combined total of the proposed tax increase.

By email, the RoundTable asked Mr. Bobkiewicz and Mr. Lyons several questions about what the proposed total increase in property taxes for fiscal year 2012 is.

After a series of emails, Mr. Lyons said the proposed increase in the City’s portion of the property tax in the City Manager’s tentative budget is in fact 7.9 percent: “4.91% for Debt Service and Pensions,  plus 3.0% for General Fund equals 7.91%. Based on the most recent actual levy data from previous years, the City makes up 19.6% of the total tax bill, making this 7.91% increase on the City portion an estimated 1.55% increase to the total tax bill.”

City Council has the ultimate authority over the budget. By law City Council must pass a balanced budget before Jan. 1, 2012, the beginning of the next fiscal year.