City Manager Wally Bobkiewicz has unveiled his proposed 2019 budget, balanced with reductions in programs and personnel and increases in fees. There is no increase in the portion of the property tax that arises from the City of Evanston, said Mr. Bobkiewicz.
Mr. Bobkiewicz said the decision not to increase property taxes was his own, not City Council’s. The Council does, however, have final say in all budget decisions. The Evanston Public Library, which has its own line item for its own budget, is seeking a 1.9% increase in its levy. The City receives about 20% of the total property tax bill.
Excluding interfund transfers, which is necessary to avoid double-counting, the City’s total budget including capital expenses for 2019 is $264.8 million, down 2.8% from the amount budgeted for 2018. The timing of major capital expenses can account for significant differences between years.
Also excluding interfund transfers, the City is budgeting expenses in its General Fund for 2019 in the amount of $77.0 million, compared to $75.3 million in 2018, a 2.3% increase. The General Fund is the City’s main operating fund.
The City is projecting a $7.3 million shortfall in the General Fund. The baseline deficit – that is, the projected increase over the 2018 budget for the same services – is $4.8 million. Added to that are $1 million in debt service for the bonds to pay for the new Robert Crown Center and $1.5 million to build up the reserves, making a $7.3 million projected shortfall in the operating budget for 2019.
To balance the operating fund, the City Manager has proposed a combination of additional revenues – $3.3 million – and reduced expenses – $4.3 million.
Overall Look at a Grim Year
Nearly every aspect of an Evanstonian’s quality of life will be diminished. Funding for the City’s Mental Health Board, Youth and Young Adult Services, victim services, cultural arts and public health education will be curtailed or eliminated. Residents who wish to drive or park in Evanston will likely have to pay more, possibly making Evanston’s business districts less attractive. Residents who use Uber or Lyft to get around and those who rent their homes on a short-term basis may find they are paying higher fees.
Public safety is not immune from proposed cuts in next year’s budget. The City Manager is proposing to close Fire Station 4, 1817 Washington St., just east of Dodge Avenue. It is the smallest of Evanston’s fire stations but the main one serving the southwest area of the City. One currently employed firefighter/paramedic would be laid off, and none of the eight vacant positions in the Fire Department would be filled. In the Police Department, the proposal is to eliminate five police officer and one police commander positions, all of them currently vacant.
In all, the City Manager proposes a staff reduction of 38.5 positions, of which 17.5 are currently filled. Among the full-time positions proposed to be eliminated are victim advocates, the budget and finance manager, the cultural arts coordinator, the public health educator, an administrative assistant in the City Manager’s office, the legal analyst/liquor license manager, a facility coordinator and an accountant. Three facilities supervisory positions, all part-time and one vacant, would also be eliminated.
Full-time positions the City Manager proposes to add are a budget coordinator, a paralegal, a mechanic; two part-time positions proposed are a customer-service representative and a payroll clerk.
A proposed 11% increase in the City’s water rate would be offset by a 7% decrease in the sewer rate, resulting in “zero impact” on a customer’s water bill, Mr. Bobkiewicz said.
Contributions to the police and the firefighters pension funds would total about $21 million: $9.3 million to the firefighters’ pension fund and $12.8 million to the police pension fund. Although these are significant numbers, they are dwarfed by the amount of underfunding – a total of $217 million.
Even these numbers may not be an accurate reflection of the current and future pension debt, said Jim Young, who served on the Mayoral-appointed Police & Fire Pension Committee in2008. The assumed rate of return on investment, demographics and the federal monetary policy are headwinds.
Each year the City’s actuary arrives at an assumed return on investment. The City’s assumption is 6.25%. Many financial experts recommend a much lower assumption rate – typically around 5%, Mr. Young said.
Using a lower assumption increases the amount of the unfunded liability, because it projects a smaller – though, to some, more realistic – return on investment, Mr. Young said. The City – and all municipalities – should expect more people to retire in the next few years, he said, and people are living longer than the mortality tables reflect. And, Mr. Young said, “Investment returns will likely be lower in the next 10+ years, as the Fed continues to tighten monetary policy and interest rates head higher.”
For all those reasons – and to avoid kicking the can to subsequent generations, Mr. Young said at the Oct. 8 City Council meeting, “Please fund both pensions at the rate recommended by the actuary to help provide a more secure outlook for our police and firefighters, those who are retired and currently working, and for our children.”
A Million Bucks But No Magic Bullet
There is a chance that in 2019 the City will not have to foot the bill for million-dollar debt service on the bonds for the new Robert Crown Center.
At the Oct. 8 City Council meeting, Pete Giangreco, a Board member of Friends of Robert Crown, said the Friends would donate $1 million of the funds raised so far to the City to pay the debt service of $1 million on the Crown bonds.
Mr. Bobkiewicz told the RoundTable the City is working with its bond counsel “just to make sure there are no hurdles from a bond perspective.”
While this gift, were it to be accepted, might grant some wiggle room to the proposed cuts and hikes, it would be a one-time revenue, decreasing the projected shortfall by $1 million. The projected gap between operating expenses and revenues would still be about $6.4 million, Mr. Bobkiewicz said.
Mr. Bobkiewicz has invited community participation in the budget process, but only for balancing the General Fund. Aldermen will have to balance all the City’s funds, fees, taxes and personnel to come up with a budget that, as many of them have said, reflects the City’s values.
Already there is passionate reaction to some of the proposals in the budget, particularly splitting the Youth and Young Adult Division , closing Fire Station 4, cutting Mental Health Board funding and victim services and pulling City operations from the Gibbs-Morrison Cultural Center.
Mr. Bobkiewicz has met with Council members individually to or in small groups to discuss his proposed budget and will formally present the budget to the City Council at its Oct. 22 meeting, which begins at 7 p.m.
A public hearing on the budget is scheduled for 9 a.m. on Oct. 27. In the meantime, community members are invited to visit cityofevanston.org/budget for a link to a new online tool, “Balancing Act,” which will allow them to submit their own version of a balanced budget and provide comments. Using this tool, residents start with the initial baseline deficit budget and adjust major revenues or expenses until they reach a balanced budget.
Increased Fees and Fines
• Transportation network tax (e.g., Uber and Lyft): increasing tax on rides originating from or ending in Evanston by $.25 – from $.20 to $.45
• Wheel (vehicle) tax: increasing the fee by $10, from $75 to $85 for a car
• Parking: increasing the meter rates – from $1 to $2 per hour in regular lots; from $.25 to $.50 per hour in commuter lots
• Parking: increasing the expired-meter fine from $20 to $25
• Parking: eliminating free Sunday parking at meters (but not in garages)
• Parking: increasing residential parking permit fees from $15 to $30 per year.
City staff members have not calculated all of the increased revenue from these proposed changes. Doubling the parking meter rates is projected to bring in $2 million in additional revenue; increases in the expired-ticket fines, about $90,000; and eliminating the free Sunday parking at meters, about $300,000.
Although the City projects it will receive $80,000 in additional revenue from increasing the cost of permits for vacation rentals, that amount is not final. Community Development staff are developing a plan to collect fees from all vacation rentals here, including Airbnbs.
Cuts and Savings
• Closing Fire Station 4, laying off one firefighter/paramedic and holding open seven already vacant positions: $1.3 million
• Decreasing Mental Health Board funding: $250,000
• Eliminating Vital Records Program: $146,000
• Eliminating Storefront Modernization Program: $75,000
• Eliminating unreimbursed overtime for police during Northwestern University home football games and Dillo Day festivities: $19,000
• Reorganizing Parks, Recreation and Community Services Department: $164,000
• Eliminating Cultural Arts funding and administration: $175,000.
How to Weigh In
Residents can provide their input on the 2019 Proposed Budget through any of the following channels:
Mail: City Manager’s Office, 2100 Ridge Ave., Evanston, IL 60201
Facebook: facebook.com/cityofevanston.Twitter: twitter.com/cityofevanston.