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Pension panel wants zero-based budgeting

Blue ribbon committee members Thursday suggested Evanston needs to cut spending and charge non-profits for more city services as it tries to find the funds to pay off its public safety pension obligations.

On the spending front, panel members said the city should switch to zero-based budgeting from the incremental budget process used now.

At least in theory, zero-based budgeting leads to a closer examination of the relative merit of each spending item, eliminates waste and obsolete operations and identifies opportunities for outsourcing.

But it can be extremely time consuming and requires that all managers involved accurately follow uniform standards in evaluating programs.

In an incremental budget process, whatever was spent last year tends to be accepted as a given for next year’s spending, and only new initiatives have to be justified.

Blue Ribbon Committee Chair Mark Metz said the city "needs to look at all its programs and decide whether we can afford them."

Committee member Peter Morris recommended a priority list he said had been used by former Chicago Mayor Richard J. Daley: "Police, fire, plow the streets, pick up the garbage and fill the potholes."

But Metz, who also sits on the city’s Parks and Recreation board, quickly added, "and parks," nicely illustrating the difficulty of getting people with different interests to agree on a single set of priorities.

Committee member Gerald Gordon said aldermen now decide what they want, and "if they don’t have enough money, they just hit up the taxpayers for it."

Morris said, "Taxes should be the last option to consider."

He suggested the city should cut back on the grants it makes to charities in the community, although he conceded that in some cases the charities do work that the city would otherwise have to do itself.

Several committee members suggested that non-profits should be required to pay fees for certain city services — notably fire protection. (Non profits are already charged for city water and sewer services, building permits and some other fees.)

Fire department employees at the meeting suggested that a large percentage of ambulance and fire calls go to Northwestern University and to several non-profit retirement communities.

Metz said, "I’m not grinding an ax against any of these non-profits, they’re a big part of the character of Evanston, but we can’t afford it any more, we can’t afford to provide these services for free."

He suggested that if Northwestern didn’t want to pay a fee for city fire services, it could set up its own fire department.

Latest estimates say the city has a $145-million unfunded liability to its fire and police pension funds.

Committee members plan to review a third draft of their report to the City Council when they meet again at 6:30 p.m. on Wednesday, Aug. 27.

More about zero-based budgeting

Zero-based budgeting (Wikipedia)

The pros and cons of zero-based budgeting (Mackinac Center)

Viewpoint: Why zero-based budgeting had zero effect in Oklahoma (Buckeye Institute)

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