Pace of city spending ‘simply unsustainable,’ one resident warns

Third Ward resident Michael Prendergast said he was impressed by officials’ presentation on their proposed 2027 city budget during a joint meeting of the Third and Fifth wards Tuesday night at the Robert Crown Community Center Tuesday night. But while a “nice presentation, I think it’s packaged in such a way … that it’s avoiding a serious structural problem,” Prendergast told officials present, including City Manager Luke Stowe. “The Evanston city budget has gone up by 43% in the last six years, compared to an inflation rate of only 30,” he said, “so our city is spending substantially more than inflation would justify.” Past councils “kept tax rates stable during that time, and they’ve made up the difference by borrowing from that General Fund,” he maintained. But even if the tax and fee increases the city manager is seeking go through, “we’re still going to have a big hole,” he continued. “It’s still going to require more and more revenue, and that’s going to come out of your property tax primarily. So what are we structurally going to do to change the trajectory of the city’s spending, so that we have a sustainable level of increase?” Prendergast was one of about a dozen people who turned out for Tuesday’s meeting — the last before the budget goes back to the City Council for possible adoption at its Monday, Nov. 23 meeting. Most people in attendance Tuesday spoke against the proposed package of tax increases and fee hikes, with some urging officials to revisit past decisions — including the move of city offices from the former Civic Center at 2100 Ridge Ave. to 909 Davis St. — instead of extracting more revenue through tax increases. “We’re spending all this money on parks/rec, this building [Robert Crown] and all of the city buildings we have to compensate,” said Tina Paden, a longtime resident and property owner. “They don’t make enough money to support themselves. Close them down. There is no reason. Over at the Prieto Center [430 Asbury Ave.], you can go by there any time of day, there’s barely anybody over there.” As for the city’s close to 900 employees, “what are the people doing? List all the jobs and list what they do,” she asked Stowe and his budget team. “How many hours do they do their jobs? I can tell you a whole bunch of people to cut today.” Another speaker, Ray Friedman, noted he first started coming to council meetings a decade ago. He said his concern isn’t fixed on spending. “We have expenses,” Friedman said. “My problem is what we’re spending money on.” He noted that the city’s former offices on Ridge have been sitting empty for four years now. “We own that property,” he said, “and yet we’re paying $2.5 million to have our city hall at an office building that the person just bought, and he’s making money off of us.” Prendergast, a newcomer to city budget proceedings, stressed that “I’m not saying we have to wipe everything out across the board, but the headcount in the city [of total employees] is now up to 900, the highest it’s ever been. It’s up 10% the last five years. The population is down 2%. These are, structurally, simply unsustainable. What is the five- or 10-year plan to get us to a sustainable rate of city expenditure?” Stowe responded that he agreed the problem is structural. For that reason, officials put together the package of tax and fee increases, “which is likely to turn out lower than we originally proposed,” he noted. He also pointed out that recommended staff reductions now stand around 10 positions, three more than initially suggested. Ultimately the council’s call , Stowe says On top of that, the city is making an additional $10 million contribution to police and fire pensions, in line with the city’s historic decision to place their funding on a 100% track by 2040, ”which I think is the right thing to do,” Stowe said. “It’s going to pay off big time over the long term, but obviously in the immediate short term, that’s a $10 million deficit.” Prendergast said he was not arguing with that viewpoint. “There are many things we need to spend money on,” he said. “I get that, but you just can’t keep coming back to taxpayers for ever increasing chunks. You just can’t. There has got to be a major structural change to get us to a sustainable rate of growth.” Stowe replied he understood that. “It’s up to the City Council ultimately to determine, do we want to continue these programs and services that we offer, right? Do we want to reduce them? Do we want to eliminate some of them? And I think that will correlate to staffing levels.” Hitesh Desai, the city’s treasurer and chief financial officer, also pointed to public safety pension funding as a factor in where the city currently stands. “Am I against the 100% funding? Absolutely not,” Desai said. “We need that 100% funding. We are not going by the state mandated 90% by 2040. … We are far ahead of the curve. But if you look at Evanston history, whenever there was an increase in pension funds, it was always levied [with a property tax increase]. If you look at the last five years, we tried to keep it a little bit flat or maybe just a minor increase.” And that significant extra money comes from the General Fund, he stressed. “This is the fourth year [of $10 million additional spending a year]. So think about that: $40 million is gone which would have been otherwise in reserve,” Desai said. City officials didn’t take any action at the meeting, which included the councilmembers for the Third and Fifth wards, Shawn Iles and Bobby Burns, respectively. ‘ A big chunk of change ‘ Burns even suggested that outside-the-box ideas such as Paden’s might be what’s needed to break the current jam among councilmembers about what to do with the budget. “If your plan is we don’t need to be in the community center business anymore, to me, that’s a legitimate proposal,” Burns said. “If that’s how you feel, put it on the table so we can discuss transparently in front of all of you.” He stressed he was not saying “we should cut those things.” But “what is your proposal to fundamentally rethink and restructure the way we operate the city?” he asked. “I think some people want to be sensitive to the employees that work for the City of Evanston,” Burns acknowledged. “But at some point, somebody has to put a proposal on the table.” Iles said he had spoken to Prendergast before the meeting. “You know, he’s right,” Iles said. “We have some tough decisions to make.” He added that Desai was also correct to note that $10 million a year going to the pension fund is “a serious thing that we all agree needs to be done, but it’s a big chunk of change. It is the right sort of fiscal thing to do for our long-term health, right? But short-term, it makes our lives a lot harder.” Related Stories