City staff told Evanston’s Finance and Budget Committee Tuesday night that current projections show the city running a $20 million general fund deficit by 2025.

After two years of budget surpluses driven largely by receiving $43 million in federal American Rescue Plan Act grants, the punchbowl is being taken away.

The city has also benefited from sharp spending cutbacks at the start of the pandemic recommended by then City Manager Erika Storlie.

The City Council, which granted major pay hikes this year to keep unionized city workers on the job and approved a variety of expensive new programs, now is faced with projected deficits of nearly $9 million for this year, more than $16 million for 2024 and $20 million in 2025.

Given the size of the surplus built up during the pandemic years, the forecast suggests the city could get through 2024 by just drawing down the surplus and still end that year with more than the two months of reserves that Council policy calls for the city to maintain in the general fund.

The General Fund Forecast presented at the Finance and Budget Committee meeting Tuesday night.

But continuing that pattern for 2025 would see the city ending that year with only one month’s worth of reserves.

“That can’t be where we land,” Committee Chair David Livingston said, “We’re going to have to do better than that.”

Some use of the current fund balance surplus, or excess reserves, is possible, Livingston added, “but we can’t use all of the windfall in revenue from the last couple of years.”

The city has been living in a high inflation rate environment, and “all our expenses are subject to that,” Livingston said, adding that it may be time to consider an increase in the city’s property tax levy.

The committee also discussed, but reached no conclusion about whether to issue bonds this year to fund capital improvement projects.

Breaking with a long tradition of annual bond issuance for CIP projects, the city chose not to issue bonds last year, given its substantial budget surplus, and might be able to avoid issuing them again this year, if it chose to again spend surplus funds for the scheduled capital projects.

Leslie McMillan.

Committee member Leslie McMillan suggested that, given the relatively high current interest rates on long-term bonds, that it also could make sense to fund the projects, at least temporarily, with short-term borrowing using the city’s bank line of credit, in hopes long term rates will decline in the near future.

The city’s chief financial officer, Hitesh Desai, said the current rate on 20 year bonds is running about 4.2% while borrowing from the bank variable interest rate line of credit would currently cost about 5.5%.

Desai added that with Cook County second installment property tax bills expected to be delivered four months late again this year, the city could need to tap the line of credit to cover that delay in revenue.

The committee is scheduled to meet again in two weeks, and Livingston said he hoped it would come to consensus about the bond debt question at that time.

Bill Smith is the editor and publisher of Evanston Now.

Join the Conversation


  1. Once again, the “wish I may, wish I might have the dream I dream tonight” contingent of our City Council is pursuing policies that will drive Evanston to financial ruin. This is the most anti-business, pro subsidy council I have ever witnessed in Evanston – but then we have chased off all of the professional city planners and instead rely on social workers, well meaning but not inclined to economic development, to guide our town.

  2. OMG. And we have 14 to 22 year olds, homeless people, non Evanston residents etc voting on how to spend our money! 14 to 22 years don’t have a mortgage, pay Evanston property taxes etc…………of course come to think about it neither do the other groups mentioned. Saturday night live. We have a skit for you

    1. Let’s spend more city/taxpayer money to help private businesses move a few blocks (the downtown bookstore), and spiff up their restaurant interior (a certain BBQ place). The wallet always opens for friends of alderpersons, and then … gee, surprise! … we have money problems.

  3. Can we apply the $3M of participatory spending toward the forecasted deficit? I’ll put my vote on that.

    1. Could not agree more with Adam’s post.

      Why isn’t paying down the deficit an option on that huge, slick, no doubt pricey “participatory budget” mailing?

      Evanston doesn’t have the money. Why are we spending it?

      Taxes will continue to go up. People will continue to leave: landlords will pass it on to their tenants who will go, house & condo residents have or will eventually find it too expensive & will find cheaper places to live. Businesses have & will continue to close. Exactly who will be left to pay the city’s bills then?!

      As an afterthought, as an educator myself, I’m very much pro-education BUT allowing HS students & college students (most of whom don’t live here) to vote on the PB is sheer insanity.

  4. Got to love how the only two potential solutions offered involve raising taxes or playing shell games with debt.

    The thought of actually cutting expenses or eliminating positions never crosses their minds.

  5. “…it may be time to consider an increase in the city’s property tax levy.”
    Here we go. From this point forward, we need to be fiscally conservative and not waste money or spend money on unsustainable social programs. Please let’s be prudent and consider the future of this city.

  6. Nice to know a broke city throwing away 3 million on participatory budget and millions more on reparations while city crumbles.

  7. Why do I have hard time believing that a $20 million deficit is going to slow down Devon Reid’s plan to throw 7 figures at Connections so that we can import more homeless people to live at the public trough.

  8. Quickly now, time for another pandemic!

    Think of all the new American Rescue money that we can spend irresponsibly!
    Lots more money that we can use to mask our fiscal incompetence! SO AWESOME!

    We can have more mobile dental vans! More reparations! More four star animal shelters! More DEI workers! More publicly funded elections! More administrative money for our council members! More, more and more FREE stuff for everybody!

    Wake up Evanston leaders. Taxes are rising and deficits are soaring. Our streets and buildings are crumbling, and we are out of money. Crime is rising and the police are understaffed (we never recovered from the defunding). The addicts and drunks populate our public spaces, but Betty Bogg and Connections laugh all the way to the bank. Business vacancies soar while sale tax revenues crater. Evanston is so very anti-business.

    Do you hear that sound from far off in the distance? That is the sound made by the locomotive of fiscal inevitability. Is the mayor listening? Is the city manager? Is the CFO? Are any of the nine aldermen awake?

    It’s long past time for someone to end this madness. Long past time for accountability.
    It’s not too late though. All we need are a few leaders. But perhaps that is asking too much.

  9. “City Faces $20MM Deficit”

    We don’t know how to close the gap

    “Mayor calls for participatory budget”

    Where should we spend our $3MM surplus?

    Evanston Now reads like the front page of The Onion

  10. MF McAuley nailed it! …” City Council is pursuing policies that will drive Evanston to financial ruin. This is the most anti-business, pro subsidy council I have ever witnessed in Evanston – but then we have chased off all of the professional city planners and instead rely on social workers, well meaning but not inclined to economic development, to guide our town.”

    We have a mayor who leads only for the special interests or entrenched status quo (while feathering his nest for higher office – God help us!)… A City Council who defers to City Staff who mostly do not reside in Evanston and we don’t have a Taxpayer Advocate or Independent Inspector General… What could go wrong?

    Respectfully, Brian G. Becharas

    1. Brian, our present ruling claque does not seem to realize that Evanston badly needs to attract the “added value” that only profit – earning businesses can supply…

      Being in the “social work” field (“workforce development” specifically), and a former Connections for the Homeless employee, I can state that an outfit like Connections is a “taker”, as they bring no “added value” to our community. Instead, they brazenly suck up resources, viewing productive taxpayers and businesses as a “revenue source” for their bloated and expensive “programs”… they receive ever – more millions, but are still frantically “crying poor”…

      As an example, when Mr. Halim was seeking the permit to re-purpose of his King Home property into a much – needed hotel, he got pushback from ill – informed people in our city government. Yet across the street sits the Margarita Inn homeless shelter, which has been merrily operating *totally* without any zoning or other oversight for the past 3 1/2 years…

      It’s the same with the hare – brained “Participatory Budgeting scheme, hiring expensive consultants for every big and tiny thing, picayune anti – business rules, etcetera…

      Gregory Morrow – Evanston 4th Ward resident

  11. How about creating more affordable housing in a city that can’t afford it? Does that sound like a plan?

    1. Hi Kelly,

      You and I may disagree on the NU stadium, but I believe it is your right to sight your views on social media without being disparaged. We have an honest difference of opinion.

      I am working hard on the Finance and Budget Committee to help ensure Evanston’s fiscal health. I am proud of the fact that we made the unanimous proposal to vote in fully funding the pension. We also need to take a look at the way we spend money-ensuring that our public assets are well maintained and that staff is held accountable for how they spend public monies.

      I know you do a great deal for the Evanston community and care about its future, as well.

  12. The city does have spending, planning, and budgeting problems and Budget and Finance Committee is helping get a clearer financial picture. We overspend for necessary and unnecessary projects, which ends up costing the taxpayers $10s of millions of dollars a year. We start on projects before designs are complete, and then end up with high-cost change orders. We hire consultants to oversee projects like Fountain Square and they fail to do the job. We need 1-3-5-10 year financial plans in all departments and we need follow or adjust the plans. We spend way to much on consultants and embark on unnecessary and overpriced projects. The stadium project is not the answer, planning and financial discipline will help. The budget and finance committee is doing a great job of helping get the full picture and reducing the pension debt by funding 100%. Our city is paying 14 million dollars a year in interest on the pension debt because a decision was made years ago that we could tfund well under the 100% and build up debt. Skokie paid down their pension debt with bonds when interest rates were low will save millions of dollars. I encourage everyone to attend or watch on zoom the Finance and Budget committee meetings. Information and transparency are key.

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