Proposed city budget would raise property tax 7.9%, hike water rate 17.5%

Evanston city staff’s proposed budget for 2024 includes substantial increases to the city’s property tax levy and retail water rate to create more than $5.4 million in new revenue.

City Manager Luke Stowe released the budget proposal Friday, formally beginning the public portion of the city’s budget season. The full proposal will be presented to the City Council at a special meeting on Oct. 16, and numerous other meetings and town halls on the topic of the budget are scheduled over the next two months.

The ordinance for the water rate increase will be introduced to the City Council on Monday, Oct. 9, and the full proposed budget will be presented to the city’s Finance and Budget Committee on Tuesday, Oct. 10.

Property tax hike to pay for higher wages

The budget proposal seeks a net increase of roughly $4.4 million to the city’s property tax levy, equal to a 7.9% increase from the 2023 adopted budget. This would be the first property tax hike approved by the current City Council, elected in spring 2021, as no increases were used in the 2022 or 2023 budgets.

According to city staff, all of the net increase will go toward paying for wage increases for city employees, approved by City Council over the course of 2023. Around $3.7 million would go to the city’s General Fund to cover “approximately 30% of all union and non-union wage increases” for regular city staff. The remaining $678,192 is requested by the Library Board to similarly offset an 11% wage increase at the Evanston Public Library.

“All four of the city’s collective bargaining contracts were approved in 2023 at higher than budgeted levels, more closely mirroring inflation rates from early 2021,” Stowe wrote in the proposed budget’s transmittal letter. “While the budget contains revenue estimates in line with recent trends to cover a portion of these wage increases, additional measures are recommended to sustain these wage increases into future years.”

To pay for much of the remaining wage increases, as well as new staff positions and higher contributions to public safety pension funds, staff members are also proposing drawing $10.35 million from the General Fund’s reserves. The General Fund is the city’s largest fund, accounting for nearly a third of the total budget, and is projected to finish 2023 with a reserve balance of about $52.3 million.

According to the budget proposal document, the city and library collect 20% of property taxes paid on Evanston properties. The lion’s share is collected by Evanston/Skokie School District 65 (41%) and Evanston Township High School District 202 (25%), while the remaining 13% is split between Cook County and other local taxing districts. 

District 65 and District 202 both increased their property tax levies by at least 5% in their 2024 budgets, and Cook County’s proposed budget includes no tax increases.

Water rate hike for expanded pipe replacement

City staff are also proposing a 17.5% increase to local water rates to pay for expanded replacement of the city’s aging water mains and lead service lines.

For most single-family homes, this would raise the minimum bimonthly charge (covering the first 500 cubic feet of water) from $11.88 to $13.96, and raise the subsequent use charge from $3.33 to $3.91 per 100 cubic feet of water. The increases would not be applied to residents enrolled in the affordable water/sewer rate, and would take effect on Jan. 1, 2024.

According to the draft ordinance and memo from Water Production Bureau Chief Darrell King, the average Evanston household would pay slightly less than $70 more each year in combined water and sewer charges. The hike would generate just over $1 million in new revenue for the Water Fund in 2024, equal to a 10.7% increase over 2023, according to the 2024 proposed budget.

City staff say the revenue would help cover the rising cost of replacing two key parts of the city’s water infrastructure: local water mains, many of which are reaching the end of their useful lifespan, and more than 11,000 local lead service lines, all of which the city must replace by 2047 under a new state law.

To continue paying for the work over the coming years, King presented a draft bond and rate hike schedule to the City Council on Sept. 18 that proposes issuing new bonds annually and balancing them with double-digit increases to the water rate through 2029. According to King, this would raise the average household’s annual water/sewer bill from around $769.20 in 2023 to $1,293.30 in 2029, equal to a 68% increase.

The ordinance for the 2024 rate increase will be heard by the city’s Administration and Public Works Committee and by the full City Council at their meetings Monday evening.

Documents and details on the city’s 2024 proposed budget can be viewed on the city’s budget webpage. Check the RoundTable website for more on the city’s 2024 budget in the coming weeks.