Evanston will balance its budget this year with one-time revenue sources, leaving it nearly $1.5 million in the hole as it starts to pull together a budget for next year.
City Finance Director Martin Lyons told aldermen Monday that the process of building the next budget will start almost as soon as this year’s budget is adopted later this month.
Lyons, who on Jan. 24 reported a bundle of budget changes that closed the deficit for this year while eliminating a planned 4.9 percent property tax increase, said that, after further adjustments, the general fund budget now shows a surplus of less than $300,000 on projected spending of $89.7 million.
When other funds are included, the city overall will spend close to $200 million during the fiscal year that starts March 1.
The latest adjustments include a 10-cent increase in the cigarette tax to raise $80,000 and having Evanston Township pick up an additional $100,000 of funding for mental health projects.
It also involves a tentative agreement by Northwestern University to pay $100,000 toward the cost of repairing the city’s storage dome for road salt, as a substitute for a 2-percent increase in the athletic tax aldermen had proposed.
The university buys salt from the city for use on campus, and the salt is stored at the dome, which has a leaky roof.
During the public hearing on the budget Monday, some speakers praised the elimination of the property tax increase while others called for still deeper cuts in response to the nationwide recession.
Gerald Gordon of 1228 Lake St., a frequent critic of the council’s spending practices, said, "This is the first time I’ve seen a budget presented that requires no tax increase. I congratulate all of you on this accomplishment and strongly urge its approval."
But Christopher Hart of 2028 Isabella St., a candidate for 6th Ward alderman, said it’s time "to redefine our economic reality" which he said should involve deferring capital expenses and ensuring that city workers "share in the sacrifices."
Another 6th Ward aldermanic candidate, Mark Sloane of 2512 Hartzell St., suggested that health insurance costs for city workers are higher than what he’s seen in private industry and deserve to be reexamined.
Lyons, who joined the city last August, said that in preparing next year’s budget the city will need to undertake "a detailed operational review" to find "solutions to our continual deficit situation" that would include examining the level of services provided and the way services are delivered.
He also said that, assuming the aldermen want to continue their no layoffs pledge to employees, the city will need to consider a furlough system for all staff as a way to reduce costs.
One-time revenue sources in the 2009-10 proposed budget include a $500,000 transfer from the city’s debt service reserves, a $300,000 transfer from the economic development fund to the general fund and treating half of the income received from sale of a parcel of city-owned land as revenue to the general fund.
Alderman Melissa Wynne, 3rd Ward, said using the one-time revenues to balance the budget "is contrary to the budget policy" the City Council has followed for several years. But, she said, "I recognize that this is a unique year."
Lyons says the budget shows the city ending the new fiscal year with general fund reserves of about 15 percent, although the reserve level will be lower than that at some points during the year. The council’s budget policy requires maintaining a minimum general fund reserve level of at least 8.3 percent.
The aldermen are scheduled to adopt this year’s budget later this month.