Preliminary estimates show the COVID-19 pandemic punching a $10.6 million hole in this year's Evanston's city budget. That's equivalent to nearly 9% of the city's entire general fund budget.
Interim City Manager Erika Storlie says the projected loss of revenue "is pretty catastrophic."
And the current projections assume life in Evanston will return to something approaching normal at least by some point this summer -- because they assume only a 20 percent reduction in revenue from the athletic ticket tax -- revenue that's generated mostly from Northwestern University's fall football games.
Here are the biggest projected revenue gaps:
- Nearly $3 million in sales tax revenue, or about a 17% shortfall.
- $1.6 million in recreation program fees, a 25% reduction.
- Nearly $1.2 million in hotel tax revenue, slashed by just over 50%.
- Nearly $1.1 million in liquor tax revenue, a 34% drop off.
- Over $1.1 million in state income tax funds, a 15 percent cutback.
- Over $900,000 in parking ticket revenue, a 25% reduction.
- $640,000 in parking tax income, a 20% loss.
Unanticipated spending to respond to the pandemic -- now estimated to total $840,000 -- is expected to be 75% reimbursed from Federal Emergency Management Agency grants.
But so far the only other federal aid to municipalities slammed by the consequences of the novel coronavirus outbreak has been limited to cities with a population of over 500,000 -- which means that among Illinois cities only Chicago will benefit. It's unclear whether a proposed additional round of federal spending to deal with the crisis will include money for towns the size of Evanston.
Storlie says she's imposed a hiring freeze on all non-essential positions and a spending freeze on all non-essential purchases.
She's also asking the city's four union bargaining units to collaborate on some kind of proposal that they might put forward to help alleviate the budget shortfall and minimize any need to resort to layoffs.
Storlies says that so far, up to the end of the current pay period, the city has been paying everybody -- including crossing guards and seasonal staff.
But communities across the country are starting to shift gears and resort to furloughs or layoffs and Evanston may need to look to that "in the very near term," Storlie says.
She says she doesn't plan to start talking about eliminating positions until the budget process this fall, but that some reduction in staff may be coming if all else fails.
She said that at Monday's City Council meeting aldermen will be asked to discuss what capital projects might be postponed or scaled back.
"We'll probably try to cut those at least in half," she said, adding that ones that will get federal or state matching funds are the most likely to move forward, but "any discretionary ones we'll want to scale back or postpone."
She said she's also looking for innovative ideas to try to save money, but "without knowing at this point how long this is going to last, it's hard to say how deep the budget will have to be cut."
In an email to city staff Thursday she also offered an incentive to city workers who may be considering retiring soon, saying that if they decide to retire before April 30, the city would pay their health insurance costs for five months beyond that.
The $10.6 million projected shortfall represents by far the largest mid-year budget adjustment Evanston has had to make in recent years.
It's even larger than the $9.5 million spending cut that was built into the 2010-11 fiscal year budget in the wake of the housing market collapse more than a decade ago or the $7.5 million projected gap that had to be closed in adopting the 2019 budget.