The COVID-19 pandemic punched a hole in the City’s revenue – a comment heard nearly everywhere across the State and the country. Interim City Manager Erika Storlie at 3 p.m. today unveiled a $300 million tentative FY’21 budget for the City of Evanston. It proposes a 5.9% hike in the City’s portion of the property tax – which is about 20% of the entire property tax bill – and a combination of layoffs, position eliminations, and fee hikes to balance the budget and make up for the expected $8 million decrease in revenues next year.
The City’s property tax levy represents a combination of the levies of the Library, General Assistance and the City itself. For 2021, the proposed increase in the General Assistance levy is .4%; the City’s proposed increase is 5.5%; and the Library Board has proposed no increase.
In a press briefing earlier this week, Ms. Storlie, City Chief Financial Officer Hitesh Desai and City Budget Manager Kate Lewis-Lakin offered an overview of the FY ’21 budget and a written summary of the budget, embargoed until 3 p.m. today. Since the City officials did not provide the budget document itself, this story will be updated with more specific information as City administrators and City Council members make adjustments.
By law, the City must pass a balanced budget by the end of this fiscal year, Dec. 31, but City officials have set a November date for final budget approval.
Finishing FY 2020
The City projects it will end this year with a deficit. The City’s fiscal year coincides with the calendar year.
A hiring freeze on all vacant positions begun in March of this year, in combination with layoffs and furlough days have reduced the projected $12 million loss in the General Fund, the City’s main operating fund, to about $2 million by the end of the year.
The deficit will be covered by taking money from reserves, leaving about $13.6, or 12% of expenses. The City’s policy is to maintain in reserves amounting to 16.6% of expenses, or about $19 million. A $1 million contribution to reserves is contemplated in the FY ’21 budget, which would bring the total fund balance to $14.6 million, or 13% of expenses.
The Parking Fund will likely finish the year with a deficit of $1.7 million, having seen a $4.5 million loss of revenue this year; the City anticipates a small recovery in parking revenues in 2021. The Water Fund balance, however, was relatively stable this year, with the mid-year infusion of $500,000 from water sales to Lincolnwood.
Anticipated Revenues for FY ’21
Projections for nearly all anticipated tax revenues for FY ’21 are lower than those in this year’s budget. The City’s budget summary lists the following projections, which, taken together, show an overall decrease of 14% or $8 million from the revenues budgeted in the current year.
- State Income Tax Revenues, $6.6 million (decrease of $1 million, or 13%)
- Sales Tax (basic), $9.8 million (decrease of $500,000, or 5%)
- Home Rule Sales Tax, $7.3 million (decrease of $550,000, or 7%)
- Municipal Hotel Tax, $1.3 million (decrease of $1,190,000, or 50%) NOT 50
- Athletic Contest Tax, $500,000 (decrease of $660,000, or 57%)
- Real Estate Transfer Tax, $3 million (decrease of $800,000, or 21%)
- Parking Tax $2.6 million (decrease of $600,000, or 19%)
- Parking Tickets, $3.2 million (decrease of $600,000, or 16%)
- Recreation Program Fees, $5.7 million (decrease of $904,125, or 14%)
- Transportation Network Tax (such as Uber and Lyft), $510,000 (decrease of $170,000, or 25%)
- Motor Fuel Tax, $1 million (decrease of $300,000 or 23%)
- Liquor Tax, $2.9 million (decrease of $250,000, or 8%)
- Amusement Tax, $200,000 (decrease of $230,000, or 53%)
- Telecommunications Tax, $1.6 million (decrease of $200,000, or 11%)
- Wheel Tax, $2.9 million (decrease of $100,000, or 3%)
Two proposed revenue increases that immediately affect Evanston residents are the nearly 6% hike in the City’s portion of the property tax and the mid-year increase in solid waste fees.
The property tax hike will bring in about $500,000, according to the City, and the proposed increases in solid waste fees will add $75,000 in revenues.
The City proposes to increase in July the monthly residential fee to empty the 65-gallon cart from $9.14 to $10.15. For the 95-gallon cart, the proposed increase per month is to $22.91 from $20.64. Rates for condominiums would increase to $9.82 per unit from $8.85 per unit. For apartments, the increase is from $1.85 to $2.52 per unit. There may also be a $10 increase in the yard-waste collection fees, from $25 to $35.
Capital Improvements
The 2021 Capital Improvements Plan includes $6,645,000 in projects funded by new general obligation bonds. The City also plans to issue bonds for $1 million in Parking Fund bonds, $3 million in Water Fund bonds, $480,000 in Library Fund bonds, $350,000 in bonds for equipment replacement, and $1.3 million in bonds to be supported by the Chicago-Main TIF District.
Certain Fund Expenditures
Pensions: Contributions to the Police and Firefighters pension funds reflect the amounts recommended by the City’s actuary, Ms. Storlie said. In the past few years, the City has made contributions greater than the actuary recommended in order to chip away at the amount owing in these two funds.
The recommended contribution to the Police Pension fund in FY ’21 is $11.1 million, a 0.4% increase over last year’s amount. The recommended contribution to the Firefighters pension fund in FY ’21 is $9.3 million a 0.7% increase over last year’s amount.
Debt Service: The debt service, which takes into account bonds issued to cover the cost of the new Robert Crown Center, is about $14 million, a 2.6% increase over last year.
Human Services Fund: The Human Services Fund supports all of the City’s social service-type functions, the Amita Health contract and Mental Health Board allocations. One new program and additional support for seniors increased projected expenditures in the fund by $250,000. In FY ’21, the City will pilot an Emergency Response Alternatives Program at a cost of $200,000. The additional support for seniors is budgeted at $50,000.
Staff Proposals to Balance the FY’21 Budget
The budget summary presented at the press briefing outlined several measures City staff members have taken or proposed to take to address a baseline deficit of $4.5 million in the General Fund.
Among these are eliminating 15 positions, saving $1.2 million; holding vacant 26 full-time-equivalent positions, saving $2.3 million; deferring or eliminating wage increases, asking employees to contribute more to their health-care coverage, and adding furlough days, saving about $600,000.
Negotiations with the firefighters union have concluded, with the firefighters union agreeing to a zero-percent wage increase in 2021 in exchange for other concessions. Talks with the police unions have broken off, because neither side would yield on the proposed zero-percent salary increase. For a story on these negotiations, click here.
There will be a 2.5% wage increase for AFSCME employees in January, after their accepting 10 furlough days in the current year. Non-union employees, who were also subject to furlough days in 2020, are budgeted to receive a 1.5% increase on July 1, 2021. No additional furlough days are planned in the 2021 proposed budget.
Two full-time positions, a Property Maintenance Inspector and an Equity Consultant, have been added. The City also proposes new expenses of $350,000 in temporary personnel, contractual services, or overtime, which are aimed at mitigating the impact on these vacancies on City operations, according to the budget summary.
The City proposes to use $100,000 of the Good Neighbor Fund contributed by Northwestern University to fund the position of Equity Consultant.
Budget Schedule
The City lists the following meetings on its website, cityofevanston.org, with the caveat that the meeting times are approximate. All meetings will be held remotely via Zoom.
- Oct. 19, 6 p.m., Special City Council meeting: 2021 Budget Public Hearing
- Oct. 26, 6 p.m., Budget Discussion at City Council Meeting; Public Hearing – Truth in Taxation
- Nov. 9, 6 p.m., Budget Discussion at City Council Meeting; Introduction of 2021 Budget Ordinance and 2020 Tax Levies
- Nov. 16, 6 p.m., Special City Council meeting for budget discussion (if needed)
- Nov. 23, 6 p.m., 2020 Budget Ordinance and 2019 Tax Levy Adoption