City Council approved a renewed contract with city employees represented by the American Federation of State, County and Municipal Employees at its Monday night meeting. 

The contract will increase the wages of the 341 members of the Evanston City Employees Union Local 1891 by 20% over the next four years. Members will see an 11% increase next year, and a 3% increase each of the following three years. With agreements already in place for the city’s police and fire unions, this is the last union contract the city will approve this year.

Councilmembers approved the contract unanimously. Many noted the contract as an important step in fairly compensating city workers amid a larger discussion of fair employee treatment in the city.

“I think our city workers have long needed a raise, especially since the inflationary pressures caused primarily by the pandemic,” said Ald. Devon Reid (8th).“I think this is extremely important, and I am really proud of this council for agreeing to this… it’s much deserved and much needed.”

The contract also allows for a one-time $1,250 bonus for union members, given out 30 days after ratification. It also establishes Juneteenth, which commemorates the end of slavery in the United States, as an official city holiday, giving all city employees a day off.

The increase in wages could, however, put new pressures on the 2024 budget, officials noted in a financial update presentation later in the evening. In the presentation, Chief Financial Officer Hitesh Desai and Budget Manager Clayton Black gave a financial update on the first half of 2023. As of June, the city had generated 52% of fiscal year 2023’s expected revenue, but had reached 54% of its budgeted expenditures. 

With most city taxes and revenue sources trending upwards, Desai and Black estimated the city will generate $10 to $13 million more than the initial projection of $117 million in General Fund revenues. This excess will likely offset a $10 million budget deficit, which Black said could allow the city to move toward net zero budgets in the future.The General Fund balance is expected to sit at about $50 million by the end of the year.

“It’s a really good financial position that we’re going to find ourselves in at the end of this year, with a strong fund balance,” Black said.

Yet alarm bells were ringing for some councilmembers as they look to begin discussion of the 2024 budget in the coming weeks. Black noted that due to inflationary trends, revenues are expected to peak this year. And, new contractual wage increases could add more than $10 million in expenditures next year, the presentation noted.

Some of the year’s main excess expenditures came from filling several openings in the police and fire departments, which Mayor Daniel Biss said was expected. 

However, he said the council may need to make some “tough decisions” on “expansion of headcount” in the coming year’s budget.

“For all the good news in here, there’s really sobering stuff as well,” Biss said. “I would say that as I contemplate what kind of budget I can support, we’re going to need to be cautious.”

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