The City of Evanston appears to have six major options for closing its projected $8 million budget gap next year.

To simplify the mind-numbing budget detail from Monday’s special City Council meeting, here’s a top-level look at the ideas that each might conceivably each save $2 million — enough to plug a quarter of the budget gap.

Wage freeze

Contracts with three of the four city employee unions expire at the start of the new fiscal year. City Finance Director Marty Lyons said that if all employees agreed to accept a freeze on base wages and skip merit or step pay increases next year, that would save $2 million.

Furloughs

Ten furlough days for all staff would save the city $2 million, according to Lyons’ estimate.

Layoffs

The average full-time city employee costs about $80,000 in salary and fringe benefits. Laying off 25 of the city’s 840 full-time equivalent employees would save $2 million — although because of severance costs, the full savings might not be realized in the first year.

The aldermen didn’t discuss where possible layoffs might fall, but in the past the city has considered such options as closing the branch libraries, eliminating health department services that are also provided by Cook County and privatizing garbage collection.

City Manager Wally Bobkiewicz introduced a new term to the discussion Monday — “insourcing” — which he defined as collaborating with nearby communities to share services. He said he has had some talks with nearby towns, but had nothing specific to suggest yet.

Defer capital spending

The city has planned to make $40 million in capital improvements next year. Some of those projects will be funded by grants or service charges, but Lyons says that, to cover the rest, the city will need to issue about $15 million in general obligation bonds, which would require $1.2 million in annual payments for the next 20 years.

The city also spends nearly $2 million a year to buy new fleet vehicles, an expense it covers from current revenue rather than by issuing bonds.

Some combination of trimming spending on fleet vehicle purchases and capital projects funded by general obligation bonds might save $2 million.

But as aldermen including Melissa Wynne, 3rd Ward, pointed out Monday, deferring infrastructure work today can mean higher costs down the road.

Reduce general fund reserves

The city is already planning to reduce its general fund reserves from $14.3 million to $12.7 million to get through the current budget year. If it drew another $2 million from reserves next year, that would leave reserves of $10.7 million. The city’s budget policy requires it to maintain reserves of 8.3 percent of the general fund budget, or about $7.5 million. It is required to maintain at least a 5 percent reserve under agreements with its bondholders.

But cutting reserves in a time of declining revenues could lead to a more severe budget crunch down the road.

Raise taxes

Mayor Elizabeth Tisdahl asked during the budget meeting what a 3 percent increase in the property tax levy would generate in new revenue. Lyons said it would bring in about $1.2 million and would cost the owner of a home valued at $400,000 about an extra $40 a year in property taxes.

So, to generate $2 million in new revenue from property taxes would require a 5 percent increase in the tax rate.

The city could also raise other taxes — like the Real Estate Transfer Tax — or increase fees — such as the ones it charges for building permits.

But so far the idea of raising taxes and fees during a recession hasn’t seemed to be very popular among the alderman.

Bill Smith is the editor and publisher of Evanston Now.

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12 Comments

  1. name your poison
    I recommend the first three ideas. This is happening in the private sector across the country and should be no different for government. We can learn to live with a cutback in some city services until the economy begins to move forward.

    Wage freeze. Furloughs. Layoffs. Sounds like a good start to me.

    Any bets on which idea the Council will default to?

  2. Heartless
    Thanks, RacerX. Sounds like your feeling very complacent in your job and content to recommend job losses for others. Did it ever occur to you that those employees have families who rely on their incomes? Perhaps they own homes in Evanston which they may lose without jobs? I would certainly hope the City would look for less drastic ways to make cuts than laying off 25 people.

    I might also point out to the taxpayers of Evanston that furloughs and layoffs are not cost-free. Cutting staff time means cutting services. Unless of course the City wasn’t to pay more insurance and mental health care costs for an overworked employee base.

    1. heart is still beating, thank you…
      Not heartless at all. But if we look at government as a business model (which the Council has to do during budget planning) then unfortunately the human asset has to be included in the discussion.

      I would love to hear some of your solutions to the deficit issue.

      I am generally a idealist, but when governments act in a fiscally reckless manner I have to become a realist. Government should not exist to provide a workers paradise. It needs to exist to service the citizens that have spawned it. Agreed that this takes the human element to implement. But if the balance between services and workers becomes unsustainable or imbalanced towards one end, then something has to give.

      I worry about my private sector job just as I would suspect many others due. I don’t have the luxury of public funds supporting me and my family. No one like the thought of people losing their jobs. But sometimes you just have to face up to reality.

      Hopefully you will be as compassionate to me as you are towards city workers if I should lose my job in the near future.

      Or at least support my wife and kids.

      1. Some jobs just disappear
        Many residents are old enough to remember when trains switch from coal to oil, but union rules forced companies to keep a ‘firebox’ engineer on board anyway, as they also required a caboose steward for years after cabooses had been dropped. We called this ‘featherbedding.’
        At one time I’m sure some company made the finest buggy whips around, but their day passed and so did the company but probably long after the stockholders had been wiped out.
        As far as I know city government has not been this backward and I certainly hope there is no featherbedding—but wait.
        If the city is unwilling to make economic decisions instead of those based on a college freshman’s ideology then we are doomed. [Recall how NU pressed for the Research Park and the council only wanted to debate it being a nuclear free zone, until NU’s projections and arguments won out—you know how that turned out. If the council had spent more time on economics instead of freshman ideology we might have got a better—economical, jobs, city reputation—for the Park.]

        1. Who makes buggy whips at the City?

          I understand that some industries do change and jobs become obsolete. But which City jobs are you suggesting fall into the buggy whip category? The people who fight fires, protect our citizens, care for our children at community centers, inspect our buildings, trim our trees, repair our computer equipment?  There are an awful lot of services provided to the citizens of this community – I’m wondering which ones you’ve decided we no longer need.

          1. Buggywhips and waste
            There is plenty to be cut at the city – why do we need to inspect rental condo units? Looks like to me staff is looking for work. We should take a hard look at the building department and lay some of the employees off.

            As for police and fire fighters, giving them a 25% pay increase over the last three years is a rip off to the taxpayers, the council clearly lacks the ability to control things – allowing many of them to get promoted to higher grades.

            There clearly are some in police and fire department that are performing non- value added activities. Also I suspect we can privatize or make some of the function part-time at no real loss of service. Many other communities have done this.

      2. City employees work for their money
        RacerX you seem to think that the people employed by the City are on the public dole. No one is asking you to “support” people and their families with public funds. We’re asking you to pay for the services that those employees provide. They work just as hard as you do for their money. (Maybe even harder – because they’re not posting comments online during working hours.)

        In fact, I suggest that the employees of the City are costing you considerably less than those in the private sector that you continue to cite as a model. I suggest you compare the salaries of those who work in technology, for example, at the City with a comparable position in the private sector and see who makes more.

        I understand that we have to have cuts to balance the budget. Fine – have furloughs. But when you cut the hours of the employees, I hope that you remember to cut the hours of service available to the citizens. Why not close the library and the community centers on the weekends? Keep the beaches closed in the mornings? Only sell City stickers between 9-4? How many services are you willing to sacrifice with these “costly” employees?

        1. cut the hours of service available to the citizens
          “Why not close the library and the community centers on the weekends? Keep the beaches closed in the mornings? Only sell City stickers between 9-4? How many services are you willing to sacrifice with these “costly” employees?

          I like the idea of cutting our city budget, but I am afraid that the city’s budget cuts – and the cuts by thousands of other state and municipal governments – will cancel out the effect of the stimulus . Maybe now is not a good time for budget cuts. This would be a great time for construction work by the city, since we can probably get good deals in this market. Now is the time to fix the Purple Line and build a new Civic Center.

          Still, you have some good ideas above. The branch libraries are the obvious choice for cuts. Community centers? What are those for? Maybe they should be open on weekends, and closed on Tuesdays and Wednesdays…or have hours cut back. Keep the beaches closed in the mornings – good idea. City stickers – sell those online, and charge a $5 “inconvenience fee” for people who pick them up at the decrepit Civic Center.

          1. More taxes?
            Mr Who writes ” Now is the time to fix the Purple Line and build a new Civic Center.”

            Mr Who still believes the city should come up with $100 million dollars to rebuild the Civic Center.

            Who does he think will pay for this? Does Mr Who want his taxes raised? Does Mr Who think the stimulus funds are someone elses money? That is does Mr NPV think he is not paying income taxes?

            Mr Who what is your plan to fix the city budget?

        2. Budget—Public costs and property use
          Anonymous wrote:
          “In fact, I suggest that the employees of the City are costing you considerably less than those in the private sector that you continue to cite as a model. I suggest you compare the salaries of those who work in technology, for example, at the City with a comparable position in the private sector and see who makes more.”
          ===================
          Most analysis has shown that public employees cost more than private for the same job. Unions for public jobs backed by Davis-Bacon [which was suppose to set public at private but in fact made them more generous for public and harder for government to layoff or limit] and government promising benefits they cannot pay, have pushed up costs.
          =================
          Community centers were mentioned. I don’t oppose or begrudge seniors the Levy Center but I always thought it odd that if the city really thought it important that they moved it to where it is—much harder to get to esp. for a group that is less able/allowed to drive as they age. Yet there are several community centers for children to adults. Perhaps these centers and the library can take over for the Levy since there are more and should be more convenient.
          ========================
          Is the golf course paying fair property tax, rent for land taken out of public use, taxes ? I see people walk up and drive up to ‘holes’ and start playing—instead of starting at #1. Are they suppose to have a tag on their bags showing they have paid their fee ? Are there suppose to be spot inspections by golf personnel on the course to make sure fees are paid ? I’ve never seen that.

  3. Public Event Savings
    4th of July parade probably brings in revenue to the city but do:
    downtown art festival bring in sales taxes, more sales for downtown vendors, revenue from art sales to Evanston artists or going to out-of-town artists [I realize with this and other events that if we limit to Evanstonians, communities might exclude Evanstonians] or instead discourage people from coming downtown for crowds ?
    same for cultural and lake side art festivals
    bike race—any revenue increase or crowds scare people away

    As usual branch libraries have been ignored. Why south and north—aren’t west side and southwest in at least as great a need both because of public transportation and need for reading resources ? If southwest and west do ‘need’, why south and north ?

    Review business and building policy so potential business and builders want to come in, face reasonable taxes and not have council and zoning groups battle with them for years. Does the council and zoning groups have a death wish for the city ?

  4. Time to have hard negotiations with unions – end pensions
    It sounds to me the key to fiscal responsibility here is the renegotiation of union contracts.

    Can the city do away with the sweet pension pay these unions get?

    How about doing away with the unions altogether and let city officials purge staff and hire non-union employees. That way, it will be easier to consolidate overlapping positions and let go of the unproductive employees who are now protected behind the shield of unsustainable union agreements that make it nearly impossible to fire or layoff union employees, resulting in the gradual bloating of government staff and services.

    Just sayin.

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