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Evanston officials Monday night roughly doubled their estimate of how deep a budget hole the city may find itself in as a result of the COVID-19 pandemic.

From a previous estimate of $10.6 million, Interim City Manager Erika Storlie said it now appears the shortfall could reach as high as $20 million.

The city’s budget for this year forecast general fund spending of $117.2 million, so a $20 million shortfall would require reducing spending by 17 percent.

The increase in the projected shortfall, which had not been reflected in documents prepared for the meeting just a few days ago, appears to result largely from Gov. J.B. Pritzker’s decision last week to extend his stay-at-home order for another month and a lack of clarity about how soon normal economic activity may be able to resume in the city as the pandemic drags on.

Storlie and the city’s chief financial officer, Hitesh Desai, had developed a plan to reduce the budget gap by $6.4 million through a combination of a handful of layoffs, a hiring freeze, shaving non-payroll expenses by 5 percent and deferring some transfers from the general fund to other city accounts.

But that leaves a $4.2 million gap in what’s now seen as the best case scenario and a $13.6 million hole if the $20 million revenue shortfall actually happens.

Storlie says the city is in talks with its four employee unions about other possible cost savings — which could include unpaid holidays or furlough days and more layoffs.

If all city workers took 10 unpaid days off during the remainder of this year, it would save $2.3 million, Storlie said.

The city started the year with 810 budgeted full-time-equivalent employee positions, up by 16 from 2019.

At a ballpark total compensation average of $100,000 per employee, it would require laying off 136 workers, or about 17 percent of the city’s workforce, to close a $13.6 million budget gap.

A presentation about how to address the expected budget shortfall stressed using an “equity-based model” that would prioritize health and safety needs for all residents and try to determine what current services could be put on hold while focusing on the impact any changes would have on vulnerable communities.

Aldermen Monday night approved taking out a line of credit from Byline Bank to help with cash flow issues during the year. Proposed last week with a $7.5 million cap, it was increased at the meeting to $15 million as a result of the new projections of a potentially more severe budget shortfall.

Bill Smith is the editor and publisher of Evanston Now.

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3 Comments

  1. Serious question: is the city

    Serious question: is the city in line for federal relief, and if so, would those funds be considered to essentially subsidize our various initiative, understanding how we are potentially prioritizing our spend?

    1. Federal relief

      Hi Concerned,

      The city expects to get 75% federal reimbursement on its out-of-pocket costs for its emergency response to the pandemic through a FEMA program.

      That would be about $600K of an anticipated total of $800K in direct COVID-19 response costs.

      So you can see that it is only of rather modest benefit, given the overall scope of the anticipated budget shortfall.

      Broader federal aid to municipalities related to the pandemic so far has been limited to funding for cities with a population of 500K or more.

      There are efforts in Congress to add aid for smaller cities, like Evanston, to a future COVID aid bill — but so far nothing has come of that.

      — Bill

  2. Budget shortfall

    The Evanston population is essentially flat over the last 40 years.

    How many City of Evanston employees did Evanston have in 1980?

    What services are being duplicated between Cook County, the State of Illinois and the Feds?

    It is time for adult decisions–including the D65 and D202.  There is a world of hurt going on right now.  Shared sacrifice is essential..  

    Marijuana revenue needs to go to the general fund.  Unfilled positions need to stay unfilled.  Shrinking staff via attrition across the board is a good place to start.  That would reduce staff by 4% per year.  Those earning over $120,000 should be willing to take a 15% temporary pay cut until revenue has been stabilized–smaller pay cuts between $100,000 and $120,000.  There will be no retroactive repayment of the pay cut–just their prior compensation level reinstated.

    Health benefit costs need to be reined in by 20% via competitive bidding or plan/contribution adjustments that reduce taxpayer costs by 20%.

    If we really believe in community, this is a start.  I’m sure greater minds will offer even better suggestions.  It is time for leaders to show courage.  

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