Evanston’s City Council Monday adopted a budget that’s on track to slash the city’s rainy day fund by more than $11.4 million.
Pumped up by one-time money from the federal American Rescue Plan Act, the spending plan provides a Christmas tree of benefits that is likely to be difficult to reproduce a year from now, given forecasts of a recession in 2023.
In a last-minute move Monday night the Council voted to add an additional $2 million in 2023 spending to the city’s reparations fund, transferring the money from the real estate transfer tax fund. (That’s on top of a $1 million RETT to reparations transfer approved earlier.)
Also approved earlier in the council’s budget review — an extra $4.5 million contribution to public safety pension funds, while eliminating a planned 4% increase in the city’s property tax.
The extra $2 million in reparations funding was presented as a one-time move, but the additional pension spending will have to be repeated each year for the next 17 years to meet the stated goal of fully funding public safety pensions.
Also included in a chart presented by Chief Financial Officer Hitesh Desai was a projected $1.5 million boost in funding for wage increases as a result of contract negotiations now underway — that on top of $3.2 million already budgeted for projected 4.5% wage hikes.
All in all it will reduce the city’s general fund balance from a projected $45.5 million at the start of 2023 to $34.1 million at year end.
In percentage terms, it drops reserves from 37% of general fund spending to 26%.
That’s still higher than the city’s minimum policy level for reserves of 16.67% — or two months of general fund spending — one of the skimpiest reserve levels among area communities.
But it sets a spending trajectory that means the Council is likely to face much more painful budget decisions a year from now.
With the extra $2 million in reparations spending, the final budget approved by the Council Monday night totals just over $397 million.