Community Budget Workshop

1. Community Budget Workshop City Council Chambers 7:00 p.m. - September 14, 2010 www.cityofevanston.org/budget

2. Today’s Outcomes Overview • Facts About Our City • The City’s Budget Process • Municipal Revenues and Expenditures and Other Funds • Review of FY10-11 Budget and Citizen Recommendations • City’s Current Budget Challenges • Questions/Thoughts/Discussion

3. Facts About Our City Organizational Structure • The City of Evanston, Illinois is a full service municipal government located in Cook County, IL • It is a home rule unit, as defined in the 1970 Illinois Constitution, which means that we have certain powers to tax and enact local ordinances • Council / Manager form of government adopted in 1957 • Organized to provide for the health, safety and welfare of Evanston residents.

4. Facts About Our City Evanston Municipal Facts

5. Facts About Our City Evanston Municipal Facts

6. Facts About Our City Evanston Municipal Facts

7. Facts About Our City Evanston Municipal Facts

8. Facts About Our City • City of Evanston • School District 65 • School District 202 (ETHS) • Community College 535 (Oakton) There are many units of government that service and tax Evanston Residents: • Cook County • Evanston Township • Cook County Forest Preserve • Water Reclamation District • Mosquito Abatement District

9. Budget Overview A Budget Is… • A legal document that serves as a government’s financial operating plan; • A financial and policy document for how the City provides services to residents; • A tool for communicating how tax money is spent; • Includes operating and capital costs and is categorized by fund; • Allows citizens an opportunity to be heard by their elected officials.

10. Budget Overview Fund Based Budgets: • General Fund: Supports general City operations (i.e. Police, Fire, Library, General Administration, Community and Economic Development, Health, Parks, Recreation and Community Services) • Enterprise Fund: Used for services which charge a fee-handled like a business (i.e. Water, Sewer, Solid Waste and Parking Funds) • Capital Improvement Fund:Separates major infrastructure and facilities expenses from operating expenses • Special Revenue Fund:Created to monitor a specific activity (i.e. Economic Development Fund)

11. Budget Overview Fund Based Budgets (Cont’d): • Debt Service Fund:Monitors all G.O. Debt supported by property taxes • Internal Service Funds:Created to centralize city operations (i.e. Insurance and Fleet Funds) • Trust Funds:(i.e. Police and Fire Pension Funds)

12. Budget Overview • The current budget policy requires a fund reserve of 8.3% for the General Fund and 10% for Enterprise Funds. • One-time money should only be spent on one-time expenditures. Notes

13. Budget Process The Budget Process Budget Office receives requests from Departments (July) Requests revised to match revenue projections (Aug.-Sept.) Budget presented to Council in October Several budget discussions held by Council (Oct.-Nov.) Public Hearing is held in November Council budget discussions continue (Citizen Comment Welcome) Budget Adopted (anticipated November 22)

14. Budget How Big is Evanston’s Budget? • The City’s total operating budget is $224,438,941 • The City’s General Fund Budget is $86,578,760

15. Budget City Other Funds Include: • Parking • Water • Sewer • Motor Fuel Tax • Fleet Service • Emergency Telephone • CIP • Garage Funds (Sherman, Maple, Church) • Downtown II TIF • Howard / Ridge TIF • Howard / Hartrey TIF • CDBG • Special Assessment

16. Municipal Revenue Where do we get our Money?(Sources)

17. Municipal Revenue Revenues by Type: • Property Taxes • Other Taxes • Licenses Permits and Fees • Fines and Forfeitures • Charges for Services • Revenues from State and Federal Government • Transfers from Other Funds

18. Municipal Revenue FY 2010-11 Budget

19. Municipal Revenue FY 2010-11 Adopted

20. Property Tax Revenue Property Tax Bill Based on 2008 Tax Rates

21. Property Tax Revenue City % Share of the Property Tax History

22. Property Tax Revenue How We Compare with Other Communities - 2008 Property Tax Levy Tax Levy=Municipality+ Park District + Library Fund

23. Other Tax Revenue • Sales Tax (Basic) -1% on all purchases ($8,914,000) • Sales Tax (Home Rule) - 1% on selected purchases ($5,520,000) • State Income Tax - ($5,717,000) • Real Estate Transfer Tax - ($1,600,000) • Athletic Tax - 11% on athletic events ($650,000) • Liquor Tax - 6% on purchases ($2,050,000) • Cigarette Tax - $.60 per pack ($485,000) • Telecommunications Tax - ($3,230,000) • Parking Tax - ($1,785,000) • Utility Taxes - ($5,254,000) Other Taxes (Some Examples)

24. Other Tax Revenue FY 10-11 Adopted General Fund Revenue

25. General Fund Revenue Real Estate Transfer Tax Revenue:

26. General Fund Revenue License, Permits, & Fees (Some Examples) • Vehicle Licenses - $75 per vehicle ($2,700,000) • Business Licenses - ($171,000) • BuildingPermits - ($2,200,000) • Liquor Licenses - ($370,500)

27. General Fund Revenue Building Permit Revenue • An economically sensitive revenue that depends heavily on development

28. General Fund Revenue Fines and Forfeitures (Some Examples): • Parking Tickets - $3.5 million annually • Boot Release Fee - $68,000 annually • False Alarm Fines - $165,000 annually • Library Fines and Fees - $195,000 annually

29. Municipal Revenue Parking Ticket Fines

30. General Fund Revenue Charges for Services (Some Examples): • Ambulance Fees - $985,000 • Recreation Programs - $4,940,000 • Refuse Charge - $2,442,400 • Alarm Registration Fee – $150,000

31. General Fund Revenue Charges for Services • Ambulance Fees • Recreation Programs • Refuse Charges • Alarm Registration Fees

32. General Fund Revenue State and Federal Grants Used for the General Fund Operating Budget • Community Development Block Grant (CDBG) Reimbursement for some personnel costs - $856,000 • Health Department (various grants) - $613,700 • Other Grants - $171,800

33. Other Fund Revenue Transfers from Other Funds / Cover the Cost of Administration • Parking Fund • Emergency Telephone System • Motor Fuel Tax Fund • CDBG Fund • HOME Fund • Maple Garage Fund • TIF Funds • Water Fund • Fleet Service Fund • Economic Development Fund • Sewer Fund • Capital Improvement Fund • Housing Fund

34. Municipal Expenses Where do we spend our money? (Uses)

35. Municipal Expenses General Fund • Personnel Costs - approximately 75% of budget • Services & Supplies - approximately 21% of budget • Capital Outlay - 1.4% of budget • Insurance & Other Transfers - 2% of budget • Community Sponsored Organizations – 1% of budget

36. Expenses by Type

37. Expenses by Department

38. Other Funds

39. Other Funds – Internal Service Insurance Fund • City is self insured with stop loss coverage beginning at $2,000,000. • City is beginning to build up adequate insurance reserves to pay out future liability and workers’ compensation claims and to stabilize the health insurance fund – IPBC and allocations to departmental budgets. • The following Funds contribute funding for Insurance: General, Parking, Water, Sewer, E911, CDBG, Economic Development. • Insurance Fund’s primary purpose is to set aside funding for all types of claims against City.

40. Other Funds – Internal Service Fleet Services Fund • Fund is used to account for purchases of new vehicles and equipment as well as major maintenance on vehicles & equipment. • Funded by other City Funds that require vehicles/equipment such as General, Parking, Water, Sewer. • City will establish reserves in the upcoming year by returning unspent funds to the Fleet Services Fund. • City has been keeping many vehicles and equipment longer than recommended useful life, causing increased maintenance needs. • A comprehensive Fleet Study will occur in the upcoming year.

41. Other Funds - Fiduciary Police Pension & Firefighters’ Pension • Illinois law mandates Police and Firefighters’ pension and disability benefits. • Under current law, both Police and Firefighters’ pension funds must be fully funded no later than 2033. Currently, Police and Firefighters’ pension are funded at 42.9% and 41.2% per most recent actuarial valuation reports. • Both the City and active sworn officers and firefighters contribute to the pensions. Officer/firefighter contribution rates are per State statute and are 9.91% for Police and 9.455% for Fire.

42. Other Funds - Enterprise Parking Fund • This Fund includes revenues and expenses for all City pay parking lots, as well as the Church, Maple, and Sherman Avenue Garages. • Setting parking rates is truly a balancing act. A great deal of analysis and professional judgment is needed to determine best parking rates to continue to attract potential customers to downtown while still charging enough to make the Fund self-sufficient for operating and debt expenses. • Without the subsidy provided from City TIF Funds, this Fund would not be self sufficient on an annual operating basis.

43. Other Funds - Enterprise Water & Sewer Funds • Water funds account for all revenue and expenses related to pumping, filtration, distribution, meters, and other water distribution expenses, including capital equipment. • Sewer funds account for all expenses related to the removal but not the “cleaning” of used water. Evanston residents are separately charged by the Water Reclamation District. • The City sells its water to Evanston residents as well as Skokie and the Northwest Water Commission. • Only Evanston residents pay the Sewer Fee. • Sewer capital projects are often funded by low or zero interest IEPA loans. • Water/Sewer rate discussion will occur this fall.

44. Other Funds - Designated • Motor Fuel Tax Fund • Operating budget varies each year based on State of IL estimated per capita distributions. • Emergency Telephone • Funded through wireless and landline E911 surcharges paid by users. • Economic Development • While legally not mandated to be a separate Fund – it is done so as it is funded primarily by City hotel and amusement taxes.

45. Review of FY10-11 Budget Citizen Recommendations • Top Recommendations: • Personnel cost reductions – 27 votes • Solid Waste cost reductions – 18 votes • Close Township Office and move to Civic Center – 15 votes • Sell water to other communities – 11 votes • Close Branch Libraries – 10 votes • Review Parking operation and fees – 8 votes • Close one Fire Station – 7 votes • Fine Arts development on lakefront – 5 votes • Increase employee contributions to benefits – 4 votes • 10% cut in Management across the board – 4 votes • Refinance current debt – 4 votes • Encourage business/commercial development – 4 votes • How did we do?

47. Review of FY10-11 Budget Citizen Recommendations • Solid Waste cost reductions – 18 votes • Refuse contract out to bid – award expected on 9/27/10 with anticipated savings of $560,000 – in-source recycling pickup – outsource solid waste pickup – savings projected @ - Solid Waste is now an enterprise fund, where revenues will be set to cover costs. • Close Township Office and move to Civic Center – 15 votes • No action taken to date. • Sell water to other communities – 11 votes • Opportunities are currently being pursued. • Close Branch Libraries – 10 votes • Branches were funded in the current budget for six months. Local citizens group raised funds for additional six months so branches will remain open. City Council and Library Board are working on a long term solution to Library funding.

48. Review of FY10-11 Budget Citizen Recommendations • Review Parking operation and fees – 8 votes • Parking Committee is reviewing operations, parking incentives and fee generation – new software is being considered to enhance collections. • Close one Fire Station – 7 votes • Recommendation not being pursued at this time. • Fine Arts development on lakefront – 5 votes • Lakefront Master Plan is being funded and implemented – • A waterfront arts venue is not envisioned in the plan. • Increase employee contributions to benefits – 4 votes • The majority of all employees are paying 10% more for health • insurance benefits in the current year.

49. Review of FY10-11 Budget Citizen Recommendations • 10% cut in Management across the board – 4 votes • Many middle management positions were cut during the budget • process, such as GIS Manager and Revenue Manager. City • Manager, Assistant City Manager and Department Directors were • given a 5% pay cut. • Refinance current debt – 4 votes • Debt was refinanced in the upcoming year. • Encourage business/commercial development – 4 votes • The City continues to work with Downtown Evanston to keep the • downtown area vibrant. TIFs are being reviewed to ensure all • strategies are being employed to enhance development and • business opportunities in other areas of the City.

50. Current Year Budget Challenges General Fund revenues are flat today and are not projected to increase in the upcoming year. Developing a ten month transitional budget. Establishing reoccurring revenue sources to provide ongoing funding for Capital needs and other funds, such as Insurance and Fleet. To minimize service reductions for the remainder of the 2009-10 fiscal year and come in on budget. Possible delay of property tax receipts. Possible reduction of income tax proceeds.