Councilors appear ready to place order on 'menu' of service fees and program fees to balance 2025 budget

Members of the Evanston City Council on Monday signaled strong agreement or interest in squeezing more revenue from city services and programs in a number of ways to balance their 2025 budget of $342 million, rather than relying on reserves.

But some expressed reservations about moving forward with bigger things — including the city’s first property tax increase in four years and a major bond sale to help pay for capital projects — without a better plan to justify using the money.

Otherwise, people might think “we’re cheating them,” said Councilman Bobby Burns (Ward 5), who spoke at the council’s special budget meeting on Monday.

“When did we go to the public and say what things should be subsidized, what should we all pay for, and what are the things that, no, if there is an increase, increase in programming costs, increase in salaries, we Are you okay with adjusting the costs?’

City staff proposed a “menu” of alternative revenue and expenditure ideas to take the pressure off using city reserves to close this year’s deficit, which was set at $12.5 million.

Screenshot of “Menu” presented to the city council. Credit: Bob Seidenberg

Although currently a hefty $52 million, the reserves, also known as the city’s “rainy day fund” against emergency expenses, could be all but wiped out by 2027, now that the city is no longer able to bounce back fall on federal COVID funds.

Council members could have built up the fund over the past two years, using $43.1 million from those COVID relief funds to fill gaps they would otherwise have had to pay for from their budgets.

Nearly $12 million in one-time permitting costs from Northwestern’s stadium project would allow the city to balance its budget if it were to move in that direction as well.

A survey of all nine council members on the options found that there was a ‘strong’ or ‘likely’ agreement on twelve proposed program fees and charges, totaling roughly $1.58 million, for group entity personnel designated as Tier 1.

There was less overall agreement and more neutral support for an additional three items totaling $850,000, called Level 2.

Credit card fees, baggage tax in game

The changes that received the strongest support from the council in Tier 1 included credit card fees (an estimated $500,000 savings) on city wheel tax payments and Parks & Recreation programs that the city is now absorbing.

Other major items that received strong support included an increase in residential rental program fees required of building owners (generating $227,000 in revenue), and an increase in community development permit fees ($500,000).

Other costs

Other revenue generators include filing fees ($20,000); a field house rental program ($10,000); compensation for police overtime at community events, a growing expense for the city ($50,000); and enforcement of late fees for house rules taxes and wheel taxes.

Items in the Tier 2 category include revising and increasing the Parks and Recreation program and rental rates (estimated savings of $500,000); a charge in the city council’s arbitration process, in which the city hears citizen appeals over violations of parking, building and other ordinances (expected to generate $150,000 in new revenue); and an increase in the tax on plastic bags ($200,000 savings).

Otherwise ‘hard landing coming’: Nieuwsma

During the discussion, several council members spoke in favor of moving forward with the options.

Councilman Jonathan Nieuwsma (4th Ward) said he was fully prepared to move forward with the 12 Tier 1 items “as long as they are reasonably easy to implement.” He also endorsed the new Tier 2 Administrative Procedure charge.

Nieuwsma, who faces no opposition in the city’s upcoming once-in-four-year election in April, said he was also willing to consider a Tier 3 item, an increase in the city’s property taxes, which staff said would be $1 million would yield. of income.

“The last time we increased our levy was four years ago, in 2020,” he noted, “and what cost one dollar in 2020 now costs about $1.22. We haven’t kept up with inflation in terms of our levy and that’s good for us: we’re drawing on a pretty significant fund balance that came primarily from ARPA (Federal American Relief Plan Act Funds).

“But if we don’t do something soon — I look at the projected fund balance for the next few years — we’re in for a very, very hard landing in 2027 when our fund balance will drop almost to zero. And I think it would be very appropriate to take some actions now that will move us toward a softer landing.”

Councilwoman Eleanor Revelle (Ward 7), who is not running for re-election in 2025, also spoke in support of the Tier 1 items.

Adopting a budget as currently proposed “is quite simple,” she said, “but we have some very important things coming up soon… So we are already thinking about the need to spend more money even after we have approved the budget. ”

A plan is needed to tackle ‘rising costs’: Burns

Burns expressed concern that the city, whether in terms of inflation or salary, has not determined how to fund these things.

“Again, all these things are great, but when we do those things, we just say, ‘Oh, well, we’ll try to figure out how to pay for it.’ And if we can’t figure out how to pay them, we know we can always fall back on property taxes,” he said.

“And that’s the model that not only this city has used, but most cities. And what concerns me… I don’t know if we have a budget plan, like a budget increase or a budget. “I don’t know that we have a plan to just address the rising costs of running this government.”

Councilor Devon Reid (Ward 8) asked council members to “think differently” and look at issues related to the city’s goals, such as the plastic bag tax.

Devon Reid during the council meeting.

“We can implement a bag tax of an additional 10 cents… a tax that is completely avoidable (by bringing your own bag), which will be borne not only by the residents of Evanston, but also by people shopping in Evanston, from Wilmette, from Chicago.

“So there are other options if you want to solve the problem, which is the structural deficit,” he said. “You can do it by making housing more expensive, or you can do it by raising fully affordable, essentially luxury taxes and fees based on things that impact our local economy and our environment,” he said.

Costs of an administrative ruling

“Are we going to add hidden fees, like we’re a credit card company, or are we a vulture adding hidden fees to cover the cost of administrative adjudication when you get a ticket?” he asked. “So should people who are found innocent or not liable – should those people have to pay the compensation? And if not, why not just increase the cost of the ticket to cover the costs of the hearing?”

“Make it clear in advance what the costs are, what it will cost if you park in the wrong place,” he suggested.

Reid also asked about the status of a proposal he made last year during budget deliberations in which he called on council members to consider imposing a fee on large non-taxpaying entities, such as Northwestern University and the hospitals, that now receive fire services at no cost . “And I’m curious to see where those discussions have gone,” he said during the meeting. Revenues would be substantial, he said, “easily $600,000, $700,000.”

City Manager Luke Stowe responded: “We’ve had some conversations with Northwestern. Those conversations are ongoing on that front.” He didn’t work it out.

Also a large bond issue to consider

Some council members also expressed reservations about another item on Monday’s agenda: staff’s request to spend a general obligation bond of nearly $22 million to support a host of projects by 2025, ranging from alley improvements to stairs related to the city’s old buildings and parks.

The bond would be supported by an increase in property taxes, estimated at $48 for a home valued at $400,000, to pay for annual debt payments, staff estimated.

Councilor Clare Kelly (Ward 1) argued that the city’s Finance and Budget Committee should be given a chance to consider the issue before the council takes a position on the issue at its next meeting.

“Should we add 1.5 now?” she asked, “Because if we do that, we make it much harder to find a way to balance our budget.”

City Engineer Lara Biggs noted that the city has been able to draw on other services that fund transportation issues and water system improvements.

City Engineer Lara Biggs talks about the reasons for a big bond sale. Credit: Bob Seidenberg

But “there are almost no facilities available,” she said. “And so when we look at our two areas of our capital program that are the most chronically underfunded, our only choices to finance them at this point are to issue debt.”

Ideally, the city hopes to find an alternative method to finance parks and facility projects in the future.

Burns said the issue highlighted his reference that the city needs a long-term financial budget.

“You know, it’s nice to say that in an abstract sense (the necessity of the band), but what are the real consequences of that? What might not be funded next year if we cut it in half?”

Council members will hold a follow-up budget discussion and the introduction of tax levies, including bond issuance, at their regular meeting next Monday.

The members of Finance and Budget will meet the next day.

The intention is that Council members will not decide on the budget until November 25, so that all recommendations from Finance and Budget can be included in their final document, Mayor Daniel Biss noted.

He said he is also very concerned about the long-term financial issues that have arisen.

“I am also very curious to hear what the Finance and Budget Committee has to say about their view on the sustainable financing of these matters in the long term,” he said.