The Evanston City Council convened on September 8, 2025, to discuss the midyear financial plan update, presented by Hitesh and Clayton Black. The meeting aimed to provide an overview of the city's financial status as of June 2025, focusing on the general fund and various revenue streams.

The presentation began with a review of the general fund, noting that revenues were at 54% of the budget, largely due to unbudgeted permit revenue from Northwestern University's construction projects. This unexpected revenue helped the city avoid a projected net deficit of $3 million, resulting instead in a net surplus. The fund balance stood at a healthy $52 million, although it was emphasized that this figure was significantly influenced by one-time revenues, which could mask underlying financial challenges.

Key revenue sources were highlighted, with property taxes experiencing delays in billing, now expected by October 1. Sales taxes showed a modest increase of 1.8%, while income taxes rose by 7.5% compared to the previous year. However, some revenues, such as the personal property replacement tax, were down by 31%, indicating fluctuations in the economy's impact on city finances.

The discussion also touched on the city's structural deficit, exacerbated by increased expenses from collective bargaining agreements and pension funding requirements, totaling nearly $30 million without corresponding revenue increases. The property tax freeze at 2020 levels was noted as a significant factor contributing to the financial strain.

Looking ahead, the 2026 budget will need to address new expenses, including rent and vehicle purchases, as well as the anticipated decrease in permit revenues due to a lack of major projects. The city plans to implement zero-based budgeting as part of the upcoming budget process.

In conclusion, while the city is currently in a relatively stable financial position, the reliance on one-time revenues and the looming structural deficit present challenges that will need to be addressed in future budgets. The council will continue to monitor these financial trends as they prepare for the 2026 fiscal year.