Aldermen tinkered with City Manager Roger Crum’s proposed 2004-05 budget for the first time at Saturday’s Evanston City Council budget workshop, eliminating a suggested use of $500,000 of the city’s savings and adding more than $100,000 for two new city positions.
The City Council also asked for more information about the effects a natural-gas tax hike would have on businesses and large residential developments.
Ald. Gene Feldman (9th) proposed a budget amendment that would estimate $500,000 more in revenue from real-estate transfer taxes, which are required fees for all real-estate transactions in Evanston. Feldman said the city’s projected $3 million in revenue from the taxes was too conservative and that budgeting $3.5 million would be a safe way to avoid using reserves.
“I think that’s a reasonable judgment at this time,” he said.
Patrick Casey, the city’s director of management and budget, said unless there was a significant economic downturn, he did not expect a dip in revenues from the real-estate taxes.
Ald. Arthur Newman (1st) suggested the $500,000 in reserves instead be transferred to the insurance fund, which could be used to prepare for the potential $20 million in legal liability the city may face. Evanston has eight large lawsuits on its slate, several of which could resolved by the end of the year.
“It’s the one thing that’s the elephant in the room right now that I don’t see addressed,” said Ald. Edmund Moran (6th). “The general revenue fund could be dwarfed by judgments that could go through this year.”
The city currently has $9 million set aside for litigation expenses, much of which comes from bonds taken out over the past few years.
Newman suggested adding another property inspector to the city staff to monitor the area west of Northwestern’s campus. Aldermen discussed adding this position at a November meeting of the City-University Task Force, after residents complained landlords were not properly monitoring properties mostly occupied by students.
Crum also suggested hiring a new lawyer who would specialize in preservation and zoning laws. After numerous historic and preservation entanglements — including the NU-Evanston lawsuit over the Northeast Evanston Historic District — Crum said this staff position could help stave off future legal problems.
Both positions would equal $135,800 in additional expenses for the city. To make up for the loss in the general fund, aldermen suggested a transfer of money from two other accounts — the economic development and tax increment financing (TIF) district funds.
TIF money can be used for improvements or increased policing within each of the city’s five special development districts.
The council also discussed one other source of revenue for the city’s general fund budget, a gas-tax hike for non-residential users, but did not propose any changes for this portion of the revenues.
Under the proposed tax hike, businesses and condominiums who purchase their gas from companies other than Nicor Inc. — the city’s official provider — would be charged at a rate closer to those who use Nicor. The tax would also affect tax-exempt institutions such as NU, who could possibly pay up to $200,000 in extra taxes to the city, officials said.
But Ald. Steven Bernstein (4th) said he didn’t have enough information about who would be affected by the tax hike.
“I’m not saying I oppose this,” he said, “I’m saying I want to understand who I’m socking with this $600,000 (in increased taxes).”
Feldman, however, said the proposal would lessen the strain on homeowners who traditionally bear most of the tax burden.
“Here is an example of a case where not-for-profits would contribute in a way that does not break their back,” he said. “I think it’s going to come, for the most part, from the people we want it to come from.”
The council is scheduled to vote on the budget at its Feb. 23 meeting, with a deadline of March 1, the beginning of the fiscal year.
