The City of Evanston will need to set aside an extra $1.67 million in each of the next three years to bring its general fund reserves in line with City Council policy.
That policy calls for having two months worth of spending in the reserve fund to cover potential delays in receiving revenue or other unanticipated events.
Currently the reserves, City Manager Wally Bobkiewicz says, are $5 million short of the nearly $19 million target.
The need to refill the reserves is an additional squeeze on spending — beyond what the manager has previously estimated would be a $3 million general fund budget shortfall for next year.
In a presentation to aldermen for tonight’s City Council meeting, Bobkiewicz and Treasurer Hitesh Desai say that $3 million deficit is actually a little smaller than previously projected. It’s now estimated at $2.9 million.
General fund expenses are expected to rise by $1.6 million next year — assuming wages go up by the average increase over the past 10 years and health insurance costs rise five percent.
The expense side of the ledger is helped by better than anticipated investment income last year from the Illinois Municipal Retirement Fund, which is expected to cut the city’s required payment for next year by $787,863.
But revenue from taxes is expected to fall by $1.9 million, as a result largely of big drops in sales and utility tax revenue and the scheduled closure of the Washington National tax increment financing district.
For this year the general fund is budgeted to run a $600,000 surplus on more than $114 million in expenditures.