Evanston Library Board trustees moved forward Oct. 19 to back a 3.9% property tax increase estimate for their fiscal year 2023 budget – the first increase sought by the body after three years of going with flat budgets.
Along with the action, trustees backed a new fund balance policy exceeding that of the city’s, solidifying their financial base in case of unexpected expenses.
Trustees set as their goal maintaining reserves of no less than four months (33.3%) and no more than six months (50%) of anticipated operating expenses for the budget year.
The two public school districts take up about 70%, and the city about 20% of the property tax bill.
‘Doing more with less’
Interim Executive Library Director Heather Norborg laid out the library’s rationale for the proposals in a presentation at a special City Council meeting on the budget Oct. 17. The library tax levy accounts for about 3% percent of the total Evanston property tax bill, she said.
Putting the library’s revenue streams in context with other area libraries, Norborg said the Evanston Public Library receives about half the property tax per resident that neighboring libraries receive, with dedicated staff “doing more with less.’’
For the 2023 budget, the library board has budgeted slightly more than $7.5 million in tax revenue after living with no increases the past three years, she said.
“The library board carefully considered many options when preparing the 2023 budget,” she told council members. “We looked at the impact if we kept the tax levy flat again for the fourth year in a row. We considered how much we would have to increase the tax levy to cover the total estimated increase in personnel costs next year. That would have been about 10%.”
Going with the 3.9%, she said, the library budget can cover “the inflationary costs of service contracts and supplies while keeping our current levels of programming resources, services and outreach.”
Even so, library officials anticipate ending the year with a deficit and having to use the library operating fund balance to make up the difference, she said. That fund stands at slightly more than $3.5 million, which is about half the library’s property tax levy for 2022, she said.
“Having a healthy fund balance is proving especially important this year,” she told council members, “because, as you know, Cook County is delayed in issuing the second half of our property tax levy.
“Because of the library board’s careful stewardship of its resources and the growth to our fund balance, we have enough cash on hand to weather this delay and we do not need to incur any additional debt to maintain library operations while waiting for the second half of our tax levy this year.”
Library trustees adopted a library fund model in 2010, responding to years of underfunding under the auspices of the city.
Norborg noted that a section of the Local Library Act instructs the library board to prepare and submit to the city a statement of financial requirements of the library for the ensuing fiscal year and the amount of money that trustees believe will be necessary to levy for library purposes.
At the Oct. 17 meeting, some council members asked for further clarification from city Corporation Counsel Nicholas Cummings on what authority council members have over increases.
Cummings said the Library Board of Trustees has authority to impose a levy as long as it does not exceed 5% of the value of the taxable property in the city.
In such a case, Evanston residents would have to vote to adopt the increase but he added that would not be the case with the increased levy amount the library is seeking.
Council Member Jonathan Nieuwsma (4th Ward) asked library officials to speak about their fund balance policy, noting that “it’s significantly higher than the city’s past practice, which is targeted for two months.”
He asked whether the library has had the fund balance policy in place for a long time. Norborg said the board has been intentionally building the fund balance in recent years. She said that “given that we don’t have a wide variety of revenues, with property taxes accounting for 88%, library trustees sought to keep a healthy reserve balance for contingencies.”
Expanding on that point at the Oct. 19 library board meeting, Trustee Benjamin Schapiro noted that “most people think the city runs just on tax dollars, whereas they have at least 30 different forms of independent funding besides tax dollars.”
Several years ago the library did away with overdue fines.
“So we have two: We have the state, and we have what people give us besides tax dollars,” he said, and they [the city] have a myriad of fees that sustain them throughout the year.”
At the Oct. 19 meeting, library board members voted unanimously to move forward with the 3.9% tax levy increase.
Officials did not provide a figure on the impact of the increase. But in a similar increase that the library proposed last year but later dropped, it was estimated that the owners of a $400,000 home would see their taxes for the library go from roughly $296 to $329.
Council members have set Nov. 22 as the earliest possible date for their adoption of the full city budget, including the library’s tax request.