City Council members appear closer to placing an expiration date on Sunday parking enforcement, a measure they adopted last year to address the $7 million shortfall in the 2019 budget.

In a freewheeling discussion on the budget at the Nov. 11 City Council Meeting aldermen also gave strong indications that they might

• adhere to last year’s increase of the parking meter charges to $2 per hour;

• eliminate the tax on self-storage units;

• monitor registration for home-based businesses rather than mandate it

• consider how to assess charges against owners of vacant and abandoned property

• look to expand the amusement tax to cover certain not-for-profit theater performances; and

• allocate revenues from the sales of recreational cannabis to a fund for reparations. 

At the suggestion of one alderman, City staff will research the viability of allowing video gaming here on a limited basis.

Each time aldermen appeared to have reached a consensus about eliminating or reducing a tax or fee, Mayor Stephen Hagerty reminded them that they needed to find a way to plug the revenue gap they would create.

None of these agreements is binding on the City or the community. They indicate only the direction the Council members may take when they vote on the budget, likely on Nov. 25.

Overview of the FY20 Budget

The proposed budget for next year is balanced with a 10.9% increase in the combined levies for the City, the Evanston Public Library and General Assistance. The City’s portion of the property tax comprises about 20% of the overall property tax bill. The two school districts take up about 68% of the tax bill.

New sources of revenue for the coming year are sales taxes. A quarter-percent increase in the home-rule sales tax is projected to generate $1.5 million in new revenue; a 3% tax on the sales of recreational cannabis could bring in $250,000; and a .5% increase in the hotel tax from 7.5% to 8% would yield $125,000 to $150,000 in revenue.

“We’re doing drugs; let’s take a look at gambling.”

The City also hopes to recoup expenses from Northwestern University for the work of Public Works employees during athletic and other events at the University. City Chief Financial Officer Hitesh Desai said the City does not receive reimbursement for Public Works employees’ time during home football games. “Typically, two Traffic Operations crew members will work 10-11 hours each, assisting with signage, barricades, and traffic control before and after the game. The average cost per game for these employees is $1,000.”

The City does receive reimbursement for police officers who work a Northwestern game and would like to add a fee of $50 to $200 to cover associated administrative costs.

City officials said a 5.4% increase in the water rate will be offset by a 4.46% decrease in the sewer rate, and thus will not affect residents.

Never on Sunday?

Alderman Ann Rainey, 8th Ward, said she would like to eliminate Sunday parking fees. “It has been really controversial,” she said, adding, “It would mean $265,000-$300,000 less in revenues.”

A straw poll of the Council members showed that they agreed with her.                                                                                                                        

Interim City Manager Erika Storlie said, “We should talk about it in conjunction with the $2-per-hour rate in meter parking, established in last year’s budget. It’s much more difficult for people to have a Sunday parking fee than for them to pay an additional fee of $2 per hour. If we eliminate the increase we eliminate $1.5 million to $1.9 million in revenue.”

Alderman Judy Fiske, 1st Ward, said, “I’m OK with a trade-off of no Sunday fees and a $2-per-hour rate.”                                                        

Alderman Eleanor Revelle, 7th Ward, asked if the $1.50-per-hour rate could be kept for Central Street businesses, which, she said, are reporting loss of business and are vulnerable to the free parking in Wilmette, just minutes away.

There used to be a difference in the parking rates between downtown and the smaller, outer business districts, Ald. Fiske said, but the downtown merchants felt they were at a disadvantage and pressed for uniform rates. Ald. Revelle pointed out that downtown patrons have the option to park at lower rates in City-owned garages. It appears that the uniform $2-per-hour parking meter rate will stand.

Off the Table

New this year, a proposed 5% user fee on self-storage units would have generated about $50,000 in income. Alderman Robin Rue Simmons said she was reluctant to impose the fee on users of storage units, because often those who use them are people who have been evicted or are homeless. By agreement, aldermen pulled the measure from consideration in the upcoming budget.

Mr. Desai said City staff had also decided not to expand the amusement tax to include health-club memberships or classes offered at such clubs.

“No” to Vacancies

The City issues fines to the owners of vacant properties for such violations as overgrown weeds and broken windows, and it also takes steps to protect neighboring properties from the blight of an abandoned building.

Ike Ogbo, the City’s Director of Health and Human Services, said the City receives a grant of $75,000 to do such things as board up windows and put fences around certain abandoned properties.

Community Development Director Johanna Leonard said the City proposes to increase fines and fees on owners of vacant properties in Evanston. The current registration fee for vacant properties, $400 per year, would be increased to $2,500 per year. Fines for violating the building ordinance would be $250 for the first violation, $750 for the second and $1,000 for the third.

The City estimates there are 60 to 70 vacant buildings – boarded up, unsecured, dangerous structures that have not been occupied for three years.

“How are we going to collect?” asked Mayor Hagerty. “These are people who have neglected their property. There’s what we charge people and what we get paid. The question is whether this is just an exercise in futility – given a sense that these are people who have neglected their property and who aren’t here, and we’re trying to incentivize them to fix things by penalizing them.”

Vice Patrol: Video Gaming

“At some point we should talk about video games. Surrounding communities have video games, and I would like us to determine the kind of revenue we could generate from modest video-gaming in Evanston,” said Ald. Rainey. “We’re doing drugs; let’s take a look at gambling.”

Mr. Desai suggested the City could begin with five to 10 sites. Niles receives about $300,000 annually in revenue from video games, he said, with about 25 sites. He said the City might receive about $100,000 in licensing revenue, and there would be other tax revenue.

“Limit it to seven machines per location, said Ald. Rainey.

Would Not-for-Profits Be Amused?

“I have a question about amusement tax revenue,” said Ald. Revelle. She asked how much revenue the City would receive from the commercial events at the athletic fields and arena.

“Are revenues guaranteed?” asked Mayor Hagerty.

Corporation Counsel Michelle Masoncup said the amusement tax would apply to the for-profit events that Council approved for Northwestern, because the sponsors of such events will be for-profit.

Alderman Cicely Fleming asked whether the City would be able to impose the amusement tax on Northlight Theatre when it comes to Evanston, since it is a not-for-profit entity.

Ald. Rainey added, “I would like to know if it is or is not viable to tax not-for-profit theaters.”

“Yes, we can do it,” said Ms. Masoncup. She suggested assessing a tax on not-for-profit theaters by the number of seats in the theater rather than by how much revenue they generate.

“Based on the vote tonight [to let NU hold for-profit events] do you could have an estimate of what that would generate?” asked Mayor Hagerty.

“Nothing is built into the budget,” said Ms. Storlie. By email, in response to questions from the RoundTable, Ms. Storlie said City staff “conservatively estimates $300,000” in revenues from Northwestern’s events at Ryan Field and Welsh-Ryan Arena.

“This is based on assumptions of 10 events (five athletic and five non-athletic) at 100% ticket sales at $50 per person (applying Amusement Tax for half and Athletic Contest Tax for half).

“This also does not account for an increase in other taxes, such as liquor, hotel, parking or sales. It is strictly just amusement / athletic tax,” Ms. Storlie’s email said.

Funding for Reparations

Ald. Simmons again brought up her request that sales tax revenues from the sale of recreational cannabis be earmarked for a Reparations Fund that Council would create. She said she would like to amass $10 million in the fund within 10 years. As yet, she said, no programs have been created and no potential beneficiaries of the fund have been identified. “We are working with experts and our staff and our City Council to come up with three initiatives that, as stated, we are all in support of. We are looking at things that will make a measurable difference,” she said.

Ald. Rainey said, “We have been working really hard on this. We want to get the cannabis tax. We are working on the program, working on the demographics.

Mayor Hagerty said the projected revenue in 2020 from the sales tax on recreational cannabis is $250,000. He said Council could cap the amount of cannabis-sales-tax revenue at $250.

Ald. Simmons said the amount should not be limited to $250,000.

Ms. Storlie said, “My understanding is that we put cannabis tax revenues into a reparations fund – up to $1 million.

Mayor Hagerty said, “We’re going to set aside the first $10 million into a reparations fund; the rest will go to the General Fund.” No other Council members commented on the proposal, and no vote was taken.

Council members will continue discussion of the upcoming budget at their Nov. 18 meeting and will likely approve the budget on Nov. 25.