Evanston’s General Fund balance is projected to decrease to nearly zero by 2027 if the property tax levy is not increased, Budget Manager Clayton Black said at Tuesday’s Finance and Budget Committee meeting.

Evanston’s property taxes, which have remained mostly unchanged since fiscal year 2020, will contribute about $9.4 million to city operations in 2025, keeping the city’s portion of revenues from property taxes constant, according to the city’s proposed budget this year.

“A majority of the City Council told us that, as long as we have the reserves we have, there’s a hesitancy to raise property taxes, so we did not include that in our proposed budget,” Black said.

The city was able to keep the property tax levy flat due to one-time permit revenue from Northwestern for the Rebuild Ryan Field project and from staff vacancy savings, Black added.

The city projects $128.4 million in General Fund revenue, excluding operating transfers, and an ending fund balance of $39.7 million by the end of 2025, which is a decrease from between $45.0 million and $52.3 million in 2024, Black said in his budget overview presentation. The decrease is due in part to stagnating revenue from sales taxes, he said.

To prevent the decrease in General Fund revenues, city staff prepared a list of 38 alternate ideas which could be implemented beginning in 2026 to increase fund balances and address the $23 million deficit between revenues and expenses in the proposed budget, Ald. Devon Reid (8th) said.

Ideas include a $1 million increase to the property tax levy, increasing the Wheel Tax and parking meter rates, implementing a tax on delivery fleet companies using city streets or issuing more street cleaning tickets.

The difference between revenues and expenses on the budget is due to reserve funds not appearing as revenues on the budget, Black said.

“I really encourage members of this committee and Council to take seriously the charge of looking at some of these new revenue sources, particularly those that will bring revenue that’s more equitable and that also spreads the cost out,” Reid said.

However, several rates will change for Evanston residents if the 2025 proposed budget is adopted: Water rates will increase by 23.3%, solid waste rates will increase by 7.5%, and sewer rates will decrease by 13.5%.

To meet its public safety pension fund obligations for 2025, the city will need to lean heavily on reserves from previous years of tax levies, Black said. The city plans to contribute $29.6 million to police and fire pensions in 2025, up from $25.6 million in 2024, according to the proposed budget.

Finance and Budget Committee member David Livingston said the city should have raised the property tax levy this year to avoid the future projections.

“​​A snapshot in time looks fine,” Livingston said. “Two years from now, we’re below our target level. Three years, we’re almost at no reserve. So we need to acknowledge that there’s going to have to be incremental revenues over the next couple of years to maintain the pension funding that we want.”

Reid said the city should not rely on raising property taxes to increase revenue. Instead, he proposed implementing more user fees to cover the cost of city services, such as fees imposed on greenhouse gas emitters.

Decreasing the number of trash collection points or establishing more centralized locations could also help avoid raising property taxes, Reid said. He added that the city’s trash collection services currently cost about $7 million per year.

The 2025 proposed budget will likely be adopted by City Council at its Nov. 25 meeting, Black said, following public discussion at City Council and ward meetings.

“I’d like to be optimistic, but it’s up to nine councilmembers to make decisions,” Black said. “We’re sitting in a nice fund balance going into next year’s budget, so that’s a really good thing.”

Clarification: This story has been updated to better reflect the nature of Ald. Devon Reid’s (8th) proposal to modify the city’s trash collection services.

Email: [email protected]

X: @IsaiahStei27

Related Stories:

— Evanston proposed 2025 budget down $9.3 million from 2024

— City Council approves $435 million budget for 2024, keeps property tax rate unchanged

— The Daily Explains: What’s in Evanston’s proposed 2024 budget?