Evanston officials sought resident feedback and residents did not disappoint in the first public conversation on the City’s 2021 budget, which is facing severe impacts because of COVID-19.
In the meeting Sept. 10, held over Zoom video conferencing because of social distancing constraints, officials first outlined some of the main issues the City will be facing in drawing up next year’s budget.
The biggest?
The substantially lower revenues the City will be receiving in a whole host of areas because of the impact of COVID-19.
Breaking down different revenue sources, Kate Lewis-Lakin, the City’s Budget Coordinator, said officials estimate the current projected revenue shortfall at $12 million in the City’s General Fund, “which is almost 10% of our revenue in that General Fund, so that’s a pretty significant hit,” she said.
Certain revenue sources were hit harder than others because of the shutdown — including sales tax revenue, which is roughly 20% under budget; income tax revenue, of which the City receives a proportion, (down 20%); the hotel tax revenue (down 70%), and the athletic contest tax revenue (down 80%), with Northwestern University’s cancelling its fall football season a major factor.
The City has responded by instituting 10 furlough days for City employees, laying off 12 employees and implementing a hiring freeze in March, with approximately 50 positions held vacant, Ms. Lewis-Lakin said in her presentation.
In 2021, “our expenses will increase,” she said. Personnel costs alone are projected to increase by $2.4 million from 2019 to 2020 because of health insurance, pension, and cost-of-living increases built into union contracts.
Ongoing COVID-19 costs are also expected to rise, with temporary personnel hired for contact tracing currently funded through a grant.
In all, staff now projects a $5 to $7 million revenue loss in the 2021 budget, as a result of COVID-19 impacts and the downturn in the community, she said.
Interim Deputy City Manager Kimberly Richardson, moderating the meeting, pointed out that “the budget is a planning document. So you’re planning for what you are expecting the trends to say. Because we know COVID-19 has happened, we are looking at our expenses and we’re reducing … [for a] lessening of the impact.”
Staff turned a portion of the virtual meeting to residents, setting aside 30-minute breakout sessions for them to talk about and offer ideas.
“We know that the pandemic has changed things,” Ms. Lewis-Lakin said to participants leading into the session. “What are you looking for the City to give to residents right now – what’s important for you to see that the City is prioritizing? Are there revenue sources we need to think about … that we aren’t pursuing right now? What’s an area you’d like to see the City spend more money on and, conversely, what’s an area you would like to see less spending on?”
In the conversation, participants spoke of the Library, Health Department, affordable housing and mental health services among the areas that should receive continued support.
“Social isolation is a real huge issue right now,” observed Nancy Flowers, at one time the City’s long-term care ombudsman. “We’re seeing spikes in mental health crises. So any outreach that we’re doing in that area seems important to continue.”
Another participant, Linda Del Bosque, added parks and recreation to that list, noting that “the City can provide a lot wraparound programs and services” with their return to school an uncertainty.
“This is going to be really critical to take care of the youths in the City,” she said.
On the revenue side, another participant, Erika Carter, raised the prospect of Northwestern University, which is exempt from paying property taxes under State charter, taking a bigger role financially.
Right now, she said, “costs disproportionately fall on Evanston residents because Northwestern property is not taxed.”
Ms. Del Bosque noted the University is dealing with its own financial struggles.
But she added hospitals and banks to the category of those that could step up to help during the pandemic.
“We have eight banks in Evanston. That’s a lot of property taxes we’re losing there,” she said.
Ms. Flowers showed interest in the idea. “A number of nonprofit entities in town pay a kind of user fee, if you will.”
Some of the retirement communities in town pay a fee to the City in lieu of taxes because they are non-profit, she said.
She said the question is an important one in light of what the City’s options are and with winter approaching, “which is going to be more difficult for the restaurants and a lot of the service sector that have been doing outside dining. And that’s [the colder weather] only going to make the problem worse.”
Ms. Del Bosque also maintained the City can save substantially, cutting back on the money going to group’s marketing the Special Service Areas, downtown and the Main-Dempster-Chicago Avenue area.
“We have to look at where our money is going,” she said.
In one of the other groups, the importance of affordable housing was stressed — “not just selling off property but making sure that we’re providing affordable housing,” one of the group leaders said.
The City has scheduled some more Community Budget Discussions to be held Sept. 16 (Covid-19 Budget impacts to be the topic) and Sept. 21 (Health & Human Services budgeting).
To participate, residents must register on the City’s budget page found on the city’s website, cityofevanston.org.
Staff is expecting to present a revised budget to the City Council in October. Council discussions and other public hearings on the 2021 budget are then to be held in October and November, with Monday, Nov. 21, 2020 the anticipated date of the adoption of a final budget document.