Daily file photo by Colin Boyle
City Council unanimously approved an amendment to increase the fiscal year 2020 budget by just over $14 million, a move that reflects COVID-19 revenue losses, incoming federal grants and areas of unforeseen spending and saving.
In FY 2020, city spending came in about $38 million under the original budget estimate, according to Hitesh Desai, the city’s chief financial officer and treasurer. However, the $14 million increase only reflects the individual programs in which the city came in over budget.
As a preemptive reaction to intense COVID-19 revenue losses, City Manager Erika Storlie said the city tried to reduce expenditures by limiting the creation of new internal positions and allowing some city offices to remain vacant. These changes saved the city $6.8 million in 2020.
“We had to be extremely conservative in our spending,” Storlie said. “We did all those things in order to make sure that we would end the year in the best way possible.”
Last year, the general fund faced $11.6 million in COVID-19 related revenue losses, Desai said. The cancellation of large citywide events led to greater revenue losses in areas including hotel taxes and parking tickets.
Throughout fiscal year 2021, Storlie said the city expects COVID-19 complications to continue to deflate city revenue streams. However, a combination of state income taxes, COVID-19 relief grants and tax and building permits offset revenue losses — putting the city $5.3 million over budget.
Seven city funds exceeded their planned allotments from the initial FY 2020 budget, including the Crown Construction Fund, which tracks expenses related to the Robert Crown Community Center. In 2020, the city spent more than $813,000 of the previously projected spending amount on Robert Crown construction.
Evanston resident Mike Vasilko criticized the city’s allocation of extra budget funds to Robert Crown. Vasilko is just one of many residents who have expressed concerns about the high costs of the center for several years.
“The city… tends to pay back or expand some of the funds from the previous year. They’re doing that again this year, to the tune of millions of dollars, part of which is going to the Robert Crown construction fund,” Vasilko said. “Seems like we’ve had that go on for time and time again.”
City budget coordinator Kate Lewis-Lakin said the extra funding was due to planned project expenses being due earlier than planned and not to an actual increase in the long-term cost of the project. The city saw similar over-spending in the Howard-Ridge Tax Increment Financing district and Evanston’s Neighborhood Improvement fund.
Evanston’s fire and police department pension plans also came in over budget, with greater use from residents than the city had predicted.
“It’s a forecasting issue,” Lewis-Lakin said.
Looking forward, the city will benefit from a federal stimulus package under the American Rescue Plan Act, which is expected to bring $45.8 million into the Evanston budget between the 2021 and 2022 fiscal years, to be spent by December 2024.
Evanston is also set to receive $1.3 million in federal HOME Investment Partnerships Program funding, which will be put directly towards addressing housing insecurity around the city.
The city is still waiting for federal guidelines on how the grants — which are intended to offset the local economic and public health impacts of the pandemic — can be allocated. However, Storlie said the city’s intention is to prioritize the general, parking and water funds, as well as fill existing vacancies on City Council.
“(We have) a small window of time with which to spend a very large amount of money,” Storlie said.
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— City projects a $5 to 7 million loss in revenue for 2021 budget
— City makes significant budget cuts to reduce COVID-19-driven deficit