No layoffs or service reductions for Fiscal Years 2020-2021 budget
October 5, 2019
City staff is recommending organizational readjustments and minimal tax and fee increases in the proposed balanced budget — with a $50,000 proposed surplus — for next year, the first part of a two-year budget proposal.
The proposed 2020 budget — which includes the total expense for all funds, including the library fund — is approximately $317 million, a decrease of about $1.9 million from last year’s budget. The city also projected a 2021 budget of roughly $299 million.
The city proposed a two-year budget in accordance with City Council’s 2019-2020 goals, which include stabilizing long-term city finances. The council will only adopt ordinances and levies for 2020. Using the 2021 projected budget as a policy guide, the council will make adjustments before formally adopting the 2021 budget in the fall of 2020.
“We’re proposing no layoffs and no service reductions,” interim city manager Erika Storlie told reporters Thursday. “We pretty much have taken the increase that was approved for the sales tax and built that into the baseline budget.”
The 2020 budget proposal factors in a $1.5 million expected increase in general fund revenue through the home rule sales tax increase. Approved by City Council Sept. 23, the decision will raise the home rule sales tax from 1 percent to 1.25 percent, bringing the total sales tax to 10.25 percent, which is on par with Chicago, Skokie and other neighboring areas. The new home rule sales tax will go into effect Jan. 1.
The proposed general fund budget consists of comparable revenues and expenses — both approximately $117 million, with a net surplus of $53,779. Restructuring of various city departments aims to balance the 2020 budget.
One of the “biggest” adjustments with the proposed budget is that all of the city’s social services would shift from the general fund to the human services fund to “provide for a holistic approach and improve coordination between the various services being provided,” according to city documents.
This includes the Youth and Young Adult division and the city’s senior services, said Kimberly Richardson, the deputy city manager.
The city proposes a new $3.3 million property tax levy be created to support these services, resulting in a $2.55 million decrease in the corporate levy for the general fund. The reorganization expresses the city’s commitment to its most vulnerable residents, Storlie said.
“Social services are a priority and should remain a priority,” Storlie said. “Now we’re giving it its own dedicated funding source.”
The reorganization also plans to add three full-time positions to the Health and Human Services Department, out of which the social services will operate.
In compliance with a November 2018 efficiency report on the Evanston Police Department, conducted by Hillard Heintze, a risk management firm, the 2020 budget proposes that the city hold three positions vacant, a decrease from four positions in years past. If successful, the city plans to eliminate those vacant positions in the 2021 budget, Storlie said. Reorganizing in the EPD problem solving team returned a few officers to patrol, covering for the vacant positions, she said.
In anticipation of the Robert Crown Community Center’s opening, expected for January, city staff expects a neutral effect on the general fund due to an anticipated $900,000 increase in both revenues and expenses from the center. New expenses include 4.5 full-time equivalent positions and transferring $175,000 to the Crown Center Maintenance Fund.
Taxes and fees
The proposed budget keeps tax and fee increases to a minimum, Storlie said.
Staff suggests increasing the amusement tax from 4 to 5 percent, generating an estimated additional $75,000 in revenue, as well as implementing a 5 percent self-storage user fee, mirroring a fee implemented in Skokie this summer. The fee is estimated to yield $50,000 in revenue.
The city also expects to receive approximately $1 million in new revenue from the motor fuel tax increase of 19 cents per gallon, a part of the Illinois state budget for Fiscal Year 2020.
Most Evanston homeowners can expect to see a decrease in their property taxes, even if the property value remained the same after reassessment. However, commercial businesses could see a significant increase in their property taxes, said Hitesh Desai, the city’s chief financial officer. Small business storefronts are caught somewhere in the middle.
“We picked out one small storefront on Central Street,” Desai said. “We ran the numbers, and it came out as, they might see a reduction or no increase in property tax.”
Rectifying these property tax increases with commercial buildings is “going to be a challenge,” Storlie said.
The projected budget for the 2021 general fund has a deficit of $2.1 million — a deficit largely attributed to contracts settled with four unions in Evanston in 2019. These contracts are settled through 2022, which is “very good,” Storlie said.
Also factoring into the deficit is the expiration of the Good Neighbor Fund agreement with Northwestern, though the city intends to discuss renewing the University’s financial commitment to the community in future years.
Though it is not currently written into the budget for either year, it’s “entirely possible” that reparations funding could be added to the 2021 budget, Storlie said, depending on how quickly the subcommittee comes to a decision on reparations.
“Council hasn’t directed us to provide a funding source for that yet,” Storlie said. “It’s very early in the process, so we don’t have an idea of scope or magnitude yet.”
The city is also looking to install a self-service permitting software that would allow residents applying for various permits to go through the process digitally, rather than having to physically come into the city’s permit office.
The software — which is scheduled to be implemented by the middle of 2021 — would allow community members to apply for permits “24/7” Storlie said.
“Our hours, I don’t think, are the most friendly because they close during lunch and then they close, I think, at 4,” she said. “It’s going to really make people’s lives so much easier.”
City Council will do a full review of the proposed budget at its Oct. 14 meeting. There will be a special City Council meeting Oct. 26, which will include a public hearing on the FY 2020-2021 proposed budget.