At the Oct. 27 and 29 City Council meeting, residents again voiced their objections to several of the cuts in the proposed City of Evanston budget for 2019. For the first time in this budget season – which City Manager hopes will end before the end of November – City officials spoke of the possibility of a property tax increase.
The City’s portion of the property tax bill is about 17%. A 1% increase in the City’s portion of the property tax would bring in about $400,000 of revenue, said Chief Financial Officer Hitesh Desai.
The Evanston Public Library, which prepares its own budget, is seeking a 1.9% increase over last year’s levy. Its levy is a separate item on the property tax bill.
The proposed City budget for fiscal year 2019 is $264.8 million, down 2.8% from the amount budgeted for 2018. This number excludes interfund transfers, which the City adds into the budget but which allow for double-counting of expenses.
Several funds comprise the budget. The General Fund is the City’s main fund for operations. Certain other funds – the Water, Sewer and Parking funds, for example – are intended to be self-sufficient, that is, generate enough revenues to meet their expenses.
The baseline 2019 deficit in the General Fund – that is, the projected increase in expenses over the 2018 budget for the same services – is $4.8 million. Added to that are $1 million in debt service for the bonds to pay for the new Robert Crown Center and $1.5 million to build up the reserves, making a $7.3 million projected shortfall in the operating budget for 2019. Senior Management Analyst Kate Lewis Lakin said the City’s goal for reserves is to reach 16.6% by 2021.
Not only are expenses projected to increase for the 2019 fiscal year, some revenues are projected to decrease.
The City projects receiving $1.7 million less in 2019 than in 2018 from building permits. Among other projected decreases in revenues are sales taxes (state and home rule) by $400,000, natural gas and electricity utility taxes by $375,000, telecommunications taxes and cable franchise fees by $400,000 and recreation program fees by $315,000.
Although revenues are projected to decrease, the equalized assessed valuation of property in the City of Evanston will increase by about $64 million when the Washington National tax-increment financing (TIF) district expires at the end of 2019. The City will receive about an additional $1 million when the TIF district closes.
To balance the General Fund, City Manager Wally Bobkiewicz has proposed a combination of possible additional revenues – $3.2 million – and possible expense reductions – $4.3 million. (See related stories in this issue and in the Oct. 18 issue of the RoundTable and online at evanstonroundtable.com on the impact of closing a fire station, the dismantling of the Health Department and the reassignment of the Youth and Young Adult Services Program Manager.)
For the past few weeks, both the City Manager and the Council itself have said there is no plan to increase the City’s portion of the property tax. At the Oct. 27 and 29 City Council meetings, however, an increase in the property tax arose several times in light of the dire budget outlook and the insistent demand for programs and services.
Among the modifications suggested by Council members were increasing the monthly parking fee, charging a service fee to Northwestern University for fire service calls, deferring a part of the contribution to reserves until later in the year, licensing bed-and-breakfasts, reducing maintenance at the Merrick Rose Garden and restructuring City employees’ use of vehicles.
Other suggestions were imposing an employee tax on non-residents who work for the City, allowing video gaming in certain locations and selling more City property. Mr. Bobkiewicz said Evanston was one of the first municipalities in Illinois to ban video gaming, so Council would have to revisit that ordinance. He also questioned whether, as a taxing body, the City could tax its own employees. He also said there would not be time in this budget season to consider which assets – a parking garage or a community center for example – might be offered for sale. The sale of the parking lot adjacent to the Main Library is still in the works, so revenue from that is not contemplated in the 2019 budget, he said.
Mr. Bobkiewicz floated the idea of implementing a “public safety tax” as a separate line item on the property tax bill and said he would consult with Cook County about whether that could be done this budget season. If this were done, it would be a way to levy money for the City’s Fire and Police departments, while giving the appearance that the City’s portion of the property tax bill would not increase.
Council members requested that staff prepare budget memos analyzing the possible effect of each, and directed the City Manager to come to the Nov. 5 Council meeting with a revised proposed budget.
City Council members have the final authority on the budget. The Mayor has the right to vote on City matters in only a few instances, and approval of the budget is one of them. By State law, the City must pass a balanced budget by the beginning of the next fiscal year, which for Evanston is Jan. 1, 2019.
Mr. Bobkiewicz’s budget schedule anticipates a final vote on the budget before the end of November.