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Evanston officials painted a grim financial picture at the April 27 City Council meeting, including the possibility of widespread employee furloughs and layoffs to bring in line a shortfall that could climb as high as $20 million because of the impact of the Coronavirus.
But one possible option – a delay in a program to tap cannabis revenues to fund reparations towards citizens for past racial injustices – brought the night’s strongest reaction, with some aldermen calling out City officials for including it on their list of cost-saving options.
In their presentation, officials ran through a number of scenarios to address a shortfall initially projected at $10.6 million – which Interim City Manager Erika Storlie stressed was a preliminary figure.
“That’s the floor, not the ceiling – that’s as low as it’s going to be,” she told aldermen at the meeting, which was aired remotely because of social distancing concerns.
That figure could climb into the $15 to $20 million range by year’s end if the recovery is slow or delayed, and the City continues to lose important revenue from parking, hotels, sales, liquor and athletic taxes and other revenue sources impacted greatest because of Covid-19.
If the stay-at-home order extends further into summer or local economic activity does not recover, the City will face major cash shortages, officials warned.
Some of the options City officials say they are considering include unpaid holidays, furlough days, delays in annual vacation- and sick-day payouts, reduction in hours and further staff layoffs because of the gravity of the situation.
If every staff member were to take 10 unpaid work days through the end of the year, that would save the City $2.3 million, officials said in their report.
Another piece of the puzzle is likely to be pay reductions in the 1% to 3% range for employees in the $100,000-plus range, Ms. Storlie said.
Several aldermen sharply criticized staff for including a delay in funding a Reparations Fund until Jan. 1, 2021, among a group of other budget options to consider.
Officials said that the City won’t be receiving the cannabis revenues until July.
“But in order to preserve liquidity,” some discussions would be warranted into “delaying the funding into next year,” said City Budget Coordinator Kate Lewis-Lakin in her report.
The City has garnered national attention for the Reparations program, with actor Danny Glover among those appearing at a town meeting last year in support of a program that would tap cannabis sales revenue to support reparations in Evanston.
A Reparation Fund was proposed for City Council consideration in 2020, with distribution from the fund for programs to begin in early 2021.
“We have worked as a community to move forward with that goal,” said Alderman Robin Rue Simmons, 5th Ward, reacting to the staff’s proposal. “We’ve had subcommittee meetings; we’ve had significant community engagement. There is a plan and a path forward with a recommendation coming in June to have an introduction for the first remedy to repair damages, and consensus has happened in the black community. So the trauma of COVID-19 and its disparity in the infection(s), the financial trauma that is further devastating the black community that is still in recovery from the 2008 recession, highlight the need for us to prioritize this work and move it forward,” she argued.
“I understand that that cannabis sales have continued to go forward,” she said, “so there is no reason why we should delay this program, and I’m disappointed that it’s even up as a discussion.”
Ald. Ann Rainey, 8th Ward, a member of the Reparations Subcommittee with Ald. Simmons, said she could not understand how this [the option] made it to the staff report without the subcommittee’s being notified.
“This is wrong – this is not money you’ve ever seen before,” she told officials. “How disrespectful to put this up here, and notify the community that this [delay] is probably going to happen. This cannot happen … It’s shameful “ she said. “Now you’ve embarrassed us, embarrassed us because we have to intervene.”
Mayor Stephen Hagerty spoke in support of staff’s role in the process.
“The City Manager’s job is to put forward solutions to a big problem that we all have here, which is at a minimum a $10 million deficit,” he pointed out, speaking above the aldermen voices continuing to heap criticism. “Personally, I think it’s much larger.”
He spoke against the idea “that we are going to sit here and attack the City Manager because she has put this out there for us to discuss.”
Alderman Peter Braithwaite, 2nd Ward, requested the proposal be removed from the City’s budget options.
“I realize this wasn’t something we were voting in this evening, but just out of respect for the work the staff and all the individuals who hold us this very dear,” the proposal should be withdrawn, he said.
Ms. Storlie said she certainly “didn’t intend any disrespect,” and said she would never had brought up the issue “unless this (COVID-19) was a catastrophic effect to our budget. I will say that again: We are in a very bad place. Very bad places lend themselves to us having to look at absolutely every option and put it on the table,” she said.
Speaking later at the meeting, Ald. Rainey, addressing her remarks to Ms. Storlie, said that the tone of her remarks was influenced by the notion “that someone was going to tread on the reparations money, because we have made so many promises to the community.”
“Perhaps we can meet and figure something out,” she suggested.