Evanston’s budget officials say the city’s general fund — flush with cash now — faces sharply higher costs in future years that threaten to wipe out any surplus.
At a City Council Finance and Budget Committee meeting Tuesday night, alders — some of whom recently had been almost giddy at the prospect of being able to spend more money on favorite programs — got the bad news from CFO Hitesh Desai and Budget Manager Clayton Black.
While the city’s general fund revenue is expected to exceed expenditures by $7 million this year — personnel costs are expected to increase sharply next year.
The city is negotiating new contracts for all unionized city workers and received a consultant’s compensation report this week that concluded a sizable number of employees are underpaid and that the city needs to add at least 15 new workers to fill key vacancies.
The budget team projects that the city could fall below its established general fund reserve level by 2025.
That projection is based on expenses growing by 3% per year while revenues except property taxes increase by 2%. Council members have expressed a desire to not increase property tax levies.
Desai noted that many nearby communities set aside substantially higher general fund reserves than the two months of general fund spending required by Evanston’s current policy.
Committee Chair David Livingston said it’s good that the actual reserves are high now — but the city should adopt a higher reserve target.
“Those negative numbers” projected for future years “cannot happen,” Livingston said, adding that the city needs to come up solutions to “make sure we don’t walk into a structural deficit.”
He also suggested that the committee’s next meeting, on Oct. 11, should focus on pension costs and those proposed staffing additions.
That meeting will also occur just one day after city staff is scheduled to release its proposed 2023 city budget.