Council trims proposed pension levy increase, amends FY2026 budget amid debate over reserves and PPRT
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Summary
Council introduced the FY2026 budget and debated a proposed property tax increase that included a $3 million public‑safety pension levy. After extensive discussion about reserve levels and PPRT receipts, the council amended the levy lines for police and fire, and also adopted a $25,000 sustainability increase.
Evanston’s City Council spent a large portion of its Nov. 10 meeting on the FY2026 budget and the 2025 tax levy, focusing on how to meet rising public‑safety pension obligations.
City finance staff said the proposed FY2026 budget would remain near $340 million, and that the package as presented uses a mix of general revenues, reserves and a property‑tax levy increase to address a structural deficit and accelerating pension costs. As part of that plan, staff showed a path toward full funding of public‑safety pensions by 2040 and explained that Personal Property Replacement Tax (PPRT) receipts and reserves have been scoped into the contribution strategy. Finance staff reported an expected PPRT of approximately $1.8 million for the coming year and called out a roughly $9.6 million annual contribution to public‑safety pensions in the FY2026 plan.
Council member Kelly proposed an amendment to remove the $3 million targeted increase for public‑safety pensions from the property‑tax line and to rely more on unrestricted reserves and PPRT, consistent with a prior council pension‑funding resolution (45‑R‑23). After debate about the availability of reserves and timing of PPRT receipts, the council approved Kelly’s amendment (which reduced the police and fire levy lines by $1.5 million each) by a 5–4 vote. Council members in favor said the change honored the council’s earlier funding policy and could avoid an immediate levy increase for homeowners; members opposed said reserves are dwindling and an ongoing levy is needed to stabilize contributions.
Separately, Council member Nussbaum moved and the council approved a $25,000 increase in the sustainability fund appropriation (amendment to Ordinance 56‑O‑25), with funding taken from reserves. That amendment passed 7–2 and was folded into the introduced FY2026 ordinance.
Several council members urged staff to provide clearer year‑end excess‑reserve estimates and more transparent PPRT accounting. Council asked staff and the finance committee to return with precise figures showing unrestricted reserves across funds and to propose procedural rules on automatically allocating PPRT receipts—an administrative resolution that staff said could be developed and returned to the council.
What’s next: The budget (Ordinance 56‑O‑25) and the tax levy (Ordinance 57‑O‑25) were introduced as amended and scheduled for final action on the Nov. 24 council agenda. Council also agreed to further committee work on PPRT allocation and reserves.