Monday, October 6, 2025 | View in browser
City Manager Releases 2026 Proposed Budget
 EVANSTON, IL - City Manager Luke Stowe has released the City’s FY 2026 Proposed Budget, which prioritizes and supports housing affordability, climate action and resiliency, economic development, finance and organizational performance, public health and safety, and parks and infrastructure.
The proposed Fiscal Year 2026 Budget includes spending of $342,083,097. This amount represents a one percent increase from the 2025 Adopted Budget, primarily due to continued capital project needs and required increases to employee salaries and pension contributions.
After five consecutive years of holding the City’s portion of the property tax levy flat, the FY 2026 Proposed Budget includes a $6.5 million increase in property tax to support key community priorities. This adjustment will fund recently expanded human services programming, increased contributions to public safety pensions, and enhanced investment in City parks and infrastructure. The Consumer Price Index (CPI) has increased approximately 25 percent since the city last increased the property tax levy.
“This budget, and the proposed property tax levy increase, reflects our commitment to long-term financial sustainability,” said City Manager Luke Stowe. “By responsibly aligning revenues, meeting our pension obligations, managing operating costs, and investing in infrastructure and services, we’re positioning Evanston to meet today’s needs while protecting our fiscal health for the future.”
The 2026 Proposed Budget will initially be presented by City staff at the City Council Meeting on Monday, October 13, and again at the Finance & Budget Committee Meeting on Tuesday, October 14. City staff will also present the budget at several upcoming joint ward meetings and town halls as staff gather community feedback.
Budget Highlights
The FY 2026 Proposed Budget includes several strategic investments and community-focused initiatives:
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Expansion of the C.A.R.E. Team: In 2024, the City launched its Crisis Alternative Response Evanston (C.A.R.E.). Building on the program’s early success, the budget includes funding to expand the CARE team, enabling additional coverage.
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Community Benefits Agreement (CBA) with Northwestern University: In fall 2023, the City Council approved a new CBA with Northwestern University, resulting in more than $3 million in annual contributions from the university for sustainability, affordable housing, and general City operations.
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Grants: The City has been successful at applying for and receiving various infrastructure grants. Additionally, the City successfully applied for HUD’s Pro Housing Grant Program.
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Frozen Water Rates: Over the past few years, the City has increased water rates to keep pace with the replacement of lead service lines and water lines. While an increase was initially proposed, it is deferred for a year while using the City's Water fund reserves.
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Creation of Parks and Recreation Fund: The budget establishes a new, dedicated Parks and Recreation Fund. This structural change enhances transparency and enables more precise tracking of departmental performance relative to peer communities.
Property Taxes and Other Revenues
The City’s FY 2026 Proposed Budget is funded through a combination of taxes and fees paid by residents, businesses, shoppers, and visitors. The combined budget for the General Fund and Parks and Recreation Fund reflects $155 million in revenues and operating transfers, and $164 million in expenditures and operating transfers.
Operating expenses have increased by $2.8 million. However, after excluding rent payments for the City Hall and the tri-annual tree inoculation program ($700,000), other operating costs have been reduced by two percent, demonstrating the City’s continued commitment to cost management and operational efficiency.
To avoid property tax increases over the past several years, the City has relied on reserves built up from one-time permit revenues, federal stimulus funding, and inflation-driven growth in other revenue sources. While the overall property tax levy has remained flat for five consecutive years, the FY 2026 budget includes a 12.9 percent increase to the City and Library’s portion of the net levy. This adjustment begins to address structural deficits driven by employee salaries, benefits, and public safety pension obligations.
It’s important to note that the City and Library’s portion of the property tax represents just 19 percent of the total tax bill, with approximately 67 percent allocated to local school districts. As a result, the proposed increase translates to only a 2.4 percent rise in the total property tax bill.
Major revenue sources, including Sales Taxes, Income Taxes, and Hotel Taxes, have reached record highs due to inflation, and the FY 2026 budget assumes these revenues will remain at elevated levels. Over the past two years, the City has also benefited from $19 million in permit fees tied to Northwestern University’s Ryan Field, Kellogg Educational Center, and Donald P. Jacobs Center construction projects. However, recent federal funding reductions to Northwestern have slowed campus development, which in turn impacts future permit revenue projections.
Public Safety Pensions
One of the most significant expense increases in the FY 2026 Proposed Budget is the City’s required contribution to public safety pensions. In July 2023, the City Council adopted a new pension policy, which put the City on a path toward 100 percent funding of public safety pensions by 2040. Per the policy's details, this will be covered through a combination of property taxes, General Fund reserves, and other funding sources.
In 2026, the annual contribution will increase to $30.3 million. To meet this obligation, the pension property tax levy is proposed to increase by $3 million, with the remaining $7.3 million covered by General Fund reserves and other funding sources. While the City has available reserves to cover a significant portion of this contribution in 2026, careful consideration is needed to identify long-term, financially sustainable funding options for the future.
Capital Improvement Plan
The City's 2026 Proposed Budget includes a $90.5 million Capital Improvement Plan. The proposed capital spending amounts for Council consideration are as follows:
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$31.9 million for street resurfacing, corridor improvements, sewer rehabilitation, water main, and lead service lines replacement.
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$11.7 million for City facility repairs and upgrades.
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$17.1 million for park rehabilitation and improvements at Fountain Square, James Park, the Public Canoe Launch, Cartwright Park, Fitzsimons Park, the Dog Beach, and other community parks.
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$9.3 million for other transportation projects, including alley, crosswalk, traffic signal, and street light improvements.
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$7 million for an electrical system reliability project at the Evanston Water Plant, primarily funded by the communities that purchase water from Evanston.
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Funding for sustainability-focused projects, including city and public charging infrastructure, and solar infrastructure
Proposed Sanitation Rates
The FY 2026 Proposed Budget includes targeted adjustments to solid waste fees, reflecting the actual cost of service delivery. Rates for yard waste and special/bulk pickups are proposed to increase to $7 per month and $1.11 per property, respectively. These changes ensure continued service at current levels and align with the City’s operational costs. Rates for residential, apartment, and condo refuse will remain unchanged.
About the Budget
The annual budget conveys the City’s priorities and assigns funding to make them a reality. Most importantly, it is a policy document that sets the City's financial course. It represents the culmination of months of effort by City staff and elected officials to balance available resources with the actual and desired services required by Evanston residents, businesses, and visitors. The online 2026 Proposed Budget document can be found at cityofevanston.org/budget.
Staff will present the 2026 Proposed Budget at the City Council Meeting on Monday, October 13, and at the Finance & Budget Committee Meeting on Tuesday, October 14. Community members are also invited to participate in a public hearing on the budget on Monday, October 27. All meetings will be held in a hybrid virtual/in-person format.
City staff will present the proposed budget at various ward meetings in late October and early November. The full calendar will be posted on cityofevanston.org/budget.
Residents are encouraged to provide their input on the 2026 Proposed Budget through any of the following channels:
View the City's Budget One-Pager. For more information, visit cityofevanston.org/budget or call/text 847-448-4311. For convenience, residents may simply dial 3-1-1 in Evanston.
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Media Contacts:
Cynthia Vargas
cvargas@cityofevanston.org
Phone: 847-877-7223
Jessie Mayo
jmayo@cityofevanston.org
Phone: 847-448-8041
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