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On Oct. 29 City Manager Wally Bobkiewicz and Chief Financial Officer Marty Lyons formally presented the $248 million budget for fiscal year 2013 to the City Council.
Both seemed pleased with the proposed revenues and expenditures, including the recommended contributions to the police and firefighters pension funds, the deferral of a water-rate hike until July of next year, and the combination of fee and program adjustments that allowed them not to recommend an increase in the City’s portion of the property tax for next year.
Revenues and Expenditures
“This is a budget,” said Mr. Bobkiewicz, “that represents stability … that represents a City on the move.” Evidence of the feeling that the City is moving forward can be seen in projected revenues from fees and taxes (other than property taxes): athletic contest tax, liquor tax, real estate transfer tax, cable franchise fees and boot-release fees.
Based on projections from the State of Illinois Budget Office, the natural gas utility tax is projected to drop by about 11.4 percent – from $1.58 million to $1.4 million – and sales taxes by $54,000.
Fees for some recreation program will increase and residents can expect a 3 percent increase in their water/sewer bills in July, 2013.
Even with these projected revenues, there is a shortfall of $941,000 in the General Fund, the City’s main operating fund. Council members may address the shortfall, among other items, at the budget meeting on Nov. 10.
Most City staff will receive a 2 percent cost-of-living increase. Mr. Bobkiewicz said he felt the wages offered by the City are “fair” but acknowledged that they are somewhat lower than in other communities in Illinois.
The budget does propose the elimination of about five full-time-equivalent (FTE) positions. A reduction of 7.8 FTE positions and the addition of 2.5 FTEs result in a net reduction of 5.27 FTE. All but three of the positions to be eliminated are vacant. However, a crisis-intervention coordinator is proposed for the Health Department and four part-time positions are proposed for the Levy Center.
Pensions and Debt
Even before the tentative budget had been compiled, there was disagreement among Council members about the amount of the annual contributions to the firefighters and police officers pension funds. The amounts recommended by the City’s actuary – $7,560,000 and $9,486,769, respectively seemed too little to some Council members, because the amounts were smaller than last year’s contributions, even though they were greater by $3.85 million than the State-required contributions.
At the Oct. 29 meeting, Mr. Bobkiewicz said he felt the pension contributions were a “Goldilocks problem,” with some feeling the amount was too small, and others, too large. He proposed adding another $500,000 – $250,000 to each fund, saying that the budget could still be balanced without a property tax increase. He said contributing that amount would send a “clear message” that the City is committed to funding the pensions “within our constraints.”
In the area of capital improvements, the City is weaning itself from the issuance of debt to cover all capital costs onto a pay-as-you-go plan for certain maintenance and repair projects. About $6 million in capital improvement projects is slated for 2013, said Mr. Lyons. The projects are prioritized by, among other things, whether they are continued or held over from last year, whether federal or state money is involved and whether they are needed immediately.
Next Up: Opportunities and Challenges
Mr. Bobkiewicz said he feels the City has opportunities to grow in the areas of job creation, community services, the visual and performing arts, innovation, partnerships and sales of water. While it is important for Evanston to have new retail and new restaurants, he said, creating jobs is critical. There has to be a “balance of shopping, eating, living and having good-paying jobs,” he said.
The City of Evanston is in “serious negotiations” for the sale of water with 11 municipalities in northern and western Cook County, Mr. Bobkiewicz said. Each community that is allowed to use Lake Michigan water has an allotment from the lake; Evanston would bid for the right to pump that water to those communities. The project would entail “hundreds of millions of dollars in capital costs” to construct the system to “bring the water all the way to the western edge of Cook County,” Mr. Bobkiewicz said, “but the upside for Evanston is tremendous.”
The State of Illinois, Mr. Bobkiewicz warned the Council, should not be regarded as a significant source of income for Evanston. He said that sometime within the next two years, “We’re going to wake up one morning and find out we’ve lost millions of dollars in State funding.”• No increase in the City’s portion of the property tax
• 3 percent water rate hike in July
• 2 percent COLA for most City employees
• Net reduction of 5.27 FTEs
• $6 million in capital projects