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On Oct. 11, City Manager Wally Bobkiewicz presented his proposed budget to the City Council and to the City. The proposed budget pegs expenditures, adjusted for interfund transfers, at $220.5 million, an increase of 0.3 percent from the current year. The surplus in the proposed fiscal year 2014 budget is projected at $230,000.

Revenues

The overall increase to the City’s portion of the property tax levy will be 1.66 percent, Mr. Bobkiewicz said in his transmission letter to the Council. The City’s portion of the property tax bill is about 21 percent.

Fee Increases: The proposed budget contains the following increases in fees, among others: 

• Water rates: 10 percent increase

• Recycling fees: $2 month increase, from $7.95 to $9.95 for the smaller, 65-gallon carts: and $4/month increase, from $14.95 to $18.95, for the 95-gallon carts

• Yard-waste collections: 100 percent increase, from $25 to $50/year

• Yard-waste stickers: from $1.50 to $3.00

Other Tax Revenues: Two sources of revenue from the State of Illinois are projected to increase from last year: Sales tax revenues from the State are projected at $9.6 million, an increase of about 4 percent over last year; and the portion of state income tax revenues remitted to the City is projected at $7 million, an increase of about 2 percent over last year.

Locally, the home-rule sales tax revenue is expected to increase by about 4 percent, from $5.8 million in last year’s budget to $6.1 million this year.  Revenues from real estate transfers are budgeted at $2.8 million, a 32 percent increase over fiscal year 2013.

Miscellaneous Revenues: Excluding the wheel tax – formerly vehicle stickers but now just a tax paid – revenues from licenses, permits and fees, such as building permits and liquor licenses, are projected at nearly $8 million, a 16 percent increase over last year.

Fines from parking ticket violations are projected to remain about the same as last year, at $4.3 million.

Grant money from the state government and the federal government is projected to decrease by about 13 percent.

Selling water to new customers – that is, securing contracts from other suburbs to pump their allocations of Lake Michigan water – could be a source of additional income in future years. According to Mr. Bobkiewicz’s budget memo, “Evanston is working to execute water supply contracts with potential new customers, which will continue throughout the 2014 year.”

Expenditures

The General Fund – the City’s main operating fund – accounts for salaries, benefits and other personnel costs.  Most City personnel would receive a 2 percent salary increase; the budget anticipates 11.95 new full-time-equivalent positions: a cultural arts manger, three police officers, two health department workers and 6.75 new staff in the Library. City staff is requesting the addition of a full-time safety specialist in the Insurance Fund and 0.5 FTE part-time Clerk in the Water Fund.

Mr. Bobkiewicz noted that the total staffing for the next fiscal year is 801.42 full-time equivalents, compared to 884 in 2006-07.

Pension Contributions: The City’s actuary, Tepfer Consulting Group, has recommended that the City contribute $6,239,481 to the Firefighters’ Pension Fund, and $8,358,924 to the Police Pension Fund, amounts which Mr. Bobkiewicz used in his proposed budget.

Those amounts represent a reduction of about $137,000 from last year’s contributions to those pension funds – $35,000 less to the police pension fund and $102,000 less to the firefighters pension fund, but they were approved earlier this year by Timothy Schoolmaster of the Police Pension Board and Deron Daugherty of the Fire Pension Board.

Debt: Both bond-rating companies, Moody’s and Fitch Investor Service, downgraded the City’s  municipal bond rating last year – both from Aaa to Aa1. Mr. Bobkiewicz said, “Pension debt and the revised calculations of this debt by Moody’s are the primary reasons for this rating change.

Despite City efforts to successfully increase funded ratios over the past four years in both the Police and Fire Pension Funds, the change in analytical parameters by Moody’s required the rating agency to change the City’s bond rating. The City continues to look at methods to reduce general obligation (G.O.) debt that places any further burden on the property taxpayers in Evanston.”

Over the past two years, the City has made a conscious effort to curb debt-service costs by paying for small capital improvement projects – up to about $2 million – from the general fund (the operating budget) rather than issuing debt.

In addition, the City plans to refinance $30 million in general obligation bonds on Dec. 1, which, according to the City, “should result in interest/principal savings of between $2.0 and $3.5 million over the next 10 years. Further, the City says that a majority of the debt obligations from sewer work done in the 1990s should end in 2015.

On the other hand, the City plans to issue $2 million in general obligation bonds in 2014 for sewer rehab and repairs. To address infrastructure needs and maintenance, the City will “continue to balance new debt issued with the amount of debt being retired each year, containing the total debt burden to Evanston taxpayers,” according to Mr. Bobkiewicz’s budget documents.

CIP Budget is $39 Million

Brandon Dieter of administrative services for the City presented an overview of the City’s proposed capital budget for FY 2014 to Council members at the Oct. 21 meeting. 

The $39.8 million in proposed projects includes repairs and maintenance for City-owned buildings, street repairs and resurfacing, lighting upgrades, sidewalk repairs and traffic-signal upgrades.

Two projects somewhat in the pipeline are the rehab of the lagoon at Dawes Park and replacement of the fountains at Fountain Square. A gift from the Arrington family jumpstarted the lagoon reconstruction, and the City also received a grant from the state to complete the nearly $1 million project.

While nothing has been done officially to improve Fountain Square, the City apparently has plans to rehab at least the fountains, and the budget proposes $300,000 for a study in fiscal year 2014 and a $3 million renovation the following year.

The City plans to issue $8.3 million in general obligation bonds for capital projects next year. TIF funds and grants will cover much of the other CIP costs, said Mr. Dieter.

Discussion

At the Oct. 21 City Council meeting, Louis Gergits, financial division manager, presented an update of the present fiscal year’s budget and an overview. He said the City should end up with a surplus of about $1.9 million this year. The proposed budget contains suggestions of how to spend that money and other one-time revenues.

The City typically balances its funds that operate its budget with transfers among the different funds. The General Fund is the main operating fund. Other funds, such as the water and sewer, the solid waste and the parking funds, are called “enterprise” funds and are meant to be self-sustaining.

Because the solid waste fund does not generate sufficient money from solid waste, yard waste and other fees, it has generally received money from the General Fund.

This year, Mr. Gergits said, staff proposed limiting the transfer amount from the General Fund and increasing the solid waste collection, yard-waste cart and yard-waste sticker fees. Those proposed increases met with opposition.

“These [solid-waste and yard-waste fees] are the most regressive kinds of fees you can impose,” said Alderman Ann Rainey, 8th Ward. “I just think we can’t do this. It’s unconscionable,” she added.

Alderman Coleen Burrus, 9th Ward, said, “My concern is that we have a surplus and instead of paying off our debts we decide to spend it on something else and [then] increase fees.”

“We do not need a mobile city hall [vehicle],” said Ald. Rainey, referring to a proposed $150,000 expenditure. “When did we ever talk about a mobile city hall vehicle?” She said there are plenty of places City staff can appear – such as the community centers and summer/fall farmers’ markets – to answer questions and give information. “Whose idea was this?”

“That would be your City Manager/Interim Township Supervisor’s, ma’am,” replied City Manager Wally Bobkiewicz.

No action on the budget was taken at the Oct. 21 meeting. City Council must approve a balanced budget by the end of the present fiscal year, Dec. 31, 2013.

A capital projects tour for Council members is scheduled for 9 a.m. on Oct. 26. The truth-in-taxation hearing and the public hearing on the proposed FY2014 budget are scheduled to begin at 7 p.m. on Nov. 11, and Council may adopt the budget on Nov. 18.

Last year, the first year the Library Fund appeared as a discrete budget item, the Library trustees and administrators decided not to an ask for an increase in expenses for the current fiscal year.

This year, however, the budget approved by the trustees calls for a $1.6 million increase – from $4,253,214 to $ 5,901,517 – spread across the Library Fund and two newly created funds: Of that amount, $748,178 will go to the Library Debt Service Fund to cover the debt service to bonds on Library-owned facilities; and $150,000 will go to the Library Capital Fund, to maintain and upgrade facilities. The remainder of the increased levy, $750,125, will go to the Library Fund itself, to offset increased costs associated with staff and longer hours at the Library North and South Branch (CAMS), as well as providing more resources for Library activities at community centers.

The additional money will help the Library continue to “extend services beyond the walls of the Library,” said Library Director Karen Danczak Lyons. She said the Library works with EPL Friends to provide places across the community where residents may pick up a book for free. “The most exciting thing for me is to see partners come forward and help us do what we do best.” She presented the Library’s budget at the Oct. 21 City Council meeting.

Compared to its “peer libraries,” the Evanston Public Library spends per person up to 55 percent of what its peers spend – about $79 per person per year. Skokie spends $206 per year; Arlington Heights, $172, and Oak Park, $152. On a per capita basis, the Evanston Public Library’s tax levy, at $67, is also smaller: Skokie’s is $195; Arlington Heights’ is $176, and Oak Park’s $129.

“We want to get families to have good Library Services in West Evanston … One of the things I think about a lot is barriers to services. A person in a wheelchair or pushing a baby stroller can’t reasonably go more than a mile for Library services,” Ms. Lyons said.

Although the majority of the funding for the Library will come from property tax revenues, Library administrators say they have reviewed “our fines and fee structures and sought grant and non-property tax revenue sources.” The budget contains only one new full-time position, that of a development director. “We need a development director to help us move forward and expand without constantly turning to the property-tax payers,” Ms. Lyons told the RoundTable. “All other staffing increases are to part-time hours at the North Branch and CAMS “to bring sensibility to those hours.”

Among the strategies for Fiscal Year 2014, the Library lists adding to collections; expanding partnerships with schools, community organizations and recreation centers to deliver Library services throughout the community; expanding the summer reading program; marketing the expansion of classes and training/consultation opportunities for job-seekers and the business community;  and expanding “print, in-person, and virtual readers’ advisory services to children, teens and adults throughout Evanston in order to foster a love of reading and learning.”