Evanston is projected to exceed its 2001 budget by $3.7 million, city officials told aldermen Wednesday at a special city council meeting.
City Manager Roger Crum said Evanston’s revenues will be about $1.2 million less than projected and that its expenses are on pace to exceed the budget by $2.5 million.
Finance Director Bill Stafford said the slowing economy and the Sept. 11 terrorist attacks contributed to Evanston netting almost $1 million less in sales tax revenues than expected.
Evanston plans its budget assuming a 3 percent to 5 percent growth in sales tax revenues, but sales have been flat and officials no longer expect growth.
“We had a budget problem to begin with, but September 11 really exacerbated the problem,” Stafford said.
Officials expect the state sales tax to generate $400,000 less than budgeted. The home rule sales tax, a 2 percent tax the city receives on all sales, is expected to generate $550,000 less than predicted.
Stafford also said that a cooler summer contributed to a $500,000 loss of revenue that the electrical utility tax would have generated. And cellular phone wars and discounting have decreased revenues for telecommunications taxes by $400,000.
Legal fees also have contributed to the city’s budget woes, officials said. Three pending lawsuits, including Northwestern’s current lawsuit against Evanston, pushed the projected legal expenses more than $1.8 million over the anticipated amount.
City lawyer Herb Hill said the city already has spent more than $309,900 on the NU lawsuit and expects to spend $237,000 more during the remaining fiscal year, which ends on Feb. 27.
The city had budgeted only $125,000 for litigation expenses.
Evanston also expects to exceed its budget on overtime expenses, spent mostly on police, public works and fire workers, by $750,000.
Crum said the overtime expenses were due to high turnover and an unusual amount of injuries in the fire department.
Ald. Ann Rainey (8th) offered one partial solution to Evanston’s budget problems when she said NU should pay for the estimated $40,000 to $50,000 the city spends for extra police officers during football games.
“This would be the perfect time for the university to step up and offer to make payments for the football games,” she said.
Crum said the city will cut back on nonessential overtime and temporary employees. The immediate hiring freeze will save about $500,000, he said.
Crum said the cuts will cause only slight differences in Evanston public operations.
“Across the city, there will be a slightly lower level of service in a somewhat random pattern,” he said.
The city also will transfer $1.2 million of legal expenses to the water and sewer funds. But even with the transfer and personal expense cutbacks, the city still will fall $2 million short of expectations.
Ald. Arthur Newman (1st) said Evanston also needs to anticipate the end of the building boom in downtown Evanston and at NU.
“The building permit golden goose is going to go away,” Newman said.
Because of Evanston’s $5 million reserve, Stafford said the city does not face a cash flow crisis, but that it might next year.
In other action, the council also discussed the Enterprise Resource Planning system, which will replace the 18-year-old database now in place.
The new system will integrate multiple databases into one system that will reduce paperwork and increase citizens’ access to city data.
“We think the structure we have now is good and we want to build on top of that,” Stafford said. “We want a way for citizens to interact better with the city.”
The planning team will award the system contract to one of two vendors, JS Edwards or Oracle. Stafford will announce the final recommendation and the cost of the system Monday.
The Daily’s Rani Gupta contributed to this report.
