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HomeMy WebLinkAbout02_07_05_smCITY COUNCIL February 7, 2005 ROLL CALL - PRESENT: Alderman Bernstein Alderman Newman Alderman Tisdahl Alderman Jean-Baptiste A Quorum was present. Alderman Wynne NOT PRESENT AT ROLL CALL:Alderman Rainey ABSENT:Aldermen Kent, Moran, and Feldman PRESIDING:Mayor Lorraine H. Morton A SPECIAL CITY COUNCIL meeting was held, Monday, February 7, 2005 for the purpose of conducting a public hearing on the 2005-06 proposed budget. The meeting was called to order by Mayor Morton in the Aldermanic Library at 6:20 p.m. Alderman Wynne moved that Council convene into Closed Session for the purpose of discussing matters related to litigation pursuant to 5 Illinois Compiled Statues 1202 (c) (11). Seconded by Alderman Tisdahl. (11) Litigation, when an action against, affecting or on behalf of the particular public body has been filed and is pending before a court or administrative tribunal, or when the public body finds that an action is probable or imminent, in which case the basis for the finding shall be recorded and entered into the minutes of the closed meetings. Roll call. Voting aye – Bernstein, Tisdahl, Newman, Jean-Baptiste, Wynne. Voting nay – none. Motion carried. (5-0). At 6:57 p.m. Alderman Rainey moved to reconvene into Open Session and recess. Seconded by Alderman Tisdahl. Motion carried. No nays. Mayor Morton reconvened the City Council at 7:14 p.m. for the Public Hearing in the City Council Chamber. Alderman Newman moved that each speaker have up to five minutes to address Council on the budget. Seconded by Alderman Bernstein. Motion carried. No nays. Public Comment Dan Kelch, 804 Davis St. (owner, Lulu’s), opposed the proposed 1% food tax and called it bad tax policy as it was when proposed in the past. The reasons are that the current budget is not in crisis as in the past. Some of the reasons for that is this Council has been fairly pro business and pro residential construction to expand the tax base. This has enabled restaurants and other retailers to grow and expand the sales tax, which helps the residential homeowners with increased tax revenues. He thought past bad policy was to look to businesses to support tax relief for homeowners, which has removed every single major for-profit employer the City had, hurting residents and the community. The community has needed to bring business back and create a revenue stream, which has been done through tax abatements, sales tax rebates, TIFs and different incentives to broaden the tax base again. To illustrate the burden on businesses, a business property owner already pays twice as much per assessed value than a homeowner. Businesses here pay three times as much in taxes as do businesses in Lake County. The 1800 Sherman building pays about $1 million a year in property taxes. That building in Lake County would generate $300 -350,000 in taxes. The food tax proposal is a similar bad tax policy and puts a burden on businesses for an unjustifiable reason. The proposal seeks to generate $700,000 in taxes on food and cut the liquor tax by 2%. If Council did not implement this proposal and leave taxes as they are, they would have taken $200,000 off the top and only need to generate $500,000. He showed the effect of the $500,000 on a business. He would have to raise $17,000 a year to pay for the 1% tax. If this was passed on through the real estate tax, the average homeowner, with an $8,000 tax bill, would have to pay another $1.70 a month as opposed to his $17,000 annually. It was a example of how onerous the tax can be on a small business. Over ten years they are asking a resident to come up with less than $200 and a business to come up with $170,000 or more. He said this is not an equitable tax. This proposal comes at an interesting time. A recently completed study on downtown Evanston shows that 90% of the clientele are based locally so this tax is not passed on to outsiders. The study showed that Evanston needs to draw more from the 2 February 7, 2005 North Shore area and one way to do that is to have good quality Type 1 independent restaurants. The study showed that revenue at Type 1 restaurants has fallen the past two years. The liquor tax has fallen also. At a time when they need to draw customers from outside, they face increased competition from the likes of Glenview. When The Glen opens a Wildfire on Lake, they can rest assured, Evanston is within the marketable draw for that business so this tax will make Evanston restaurants more uncompetitive with surrounding communities. He knew that Council has always worked to keep taxes equitable with surrounding communities and urged them to continue that. He stated more dialogue was needed and he would be back on Saturday. He said there are serious repercussions to imposing such a tax. Ken Pospiech, 514 Main St. (owner, The Lucky Platter), said 80% of customers walk to the restaurant, most are two- income families with 2.3 children so this proposed tax will affect Evanston residents and hurt their neighbors. Most of the people who come eat macaroni and cheese, which is sustenance, not fine dining. They have been in business 14 years. Porfirio Balderas, 1010 Church St. (owner, That Little Mexican Café), was not excited about raising taxes. Most of their customers and employees are from Evanston. He hoped they would look somewhere else for revenue. Gerald Adler, 2235 Wesley Ave., retired schoolteacher, suggested that education and politics recycle old ideas. He said that City Council should bite the bullet and talk honestly about the need for new revenue, which can come only from taxes. He referred to the income tax. As Justice Oliver Wendell Holmes said, “Taxes are the price we pay for civilization.” Despite the whiners who say that taxes destroy the wealth of our children – the pleas of those who want to end the estate tax – too many taxes fall on the poor who have less political clout. Most taxes today are not confiscatory and instead hit the poor the most. He asked Council to direct its Corporation Counsel to come back in 30 days to honestly tell residents what are the options as a Home Rule City. He suggested a couple of taxes and one was in the British Stamp Act of 1765. Today it would not be taxation without representation. The British taxed legal documents, dice, playing cards and diplomas (a revenue tax on Northwestern University). Since Evanston has lost its manufacturing base and is largely a service-oriented suburb, it should tax services such as barber shops, tanning parlors, nail shops, psychic parlors, etc. He urged them not be superstitious about the T-word. He wondered how many widows who have lost loved ones in Iraq who would have gladly paid taxes to avoid this war. There are worse things than taxes, death being one. Jonathan Perman, Evanston Chamber of Commerce, commended Doug Gaynor, Paul D’Agostino and staff for their comprehensive analysis of a public policy that they have not seen in years. The analysis uses sound science to create a recommendation. Science, not finances, should underlie this recommendation. The purpose of the tree report is not just to save one species but to manage an urban forest that has about 28,000 public trees. There are diseases and afflictions that can hit virtually any species here. They should not focus on one tree species they love, but the entire forest – that is the context in which public policy about trees should be made. The notion of injecting every elm in a city has been rejected by every community and those who study and are forestry experts in the nation. The point is made that injecting every elm tree might have a deleterious impact on a good number of trees they want to save. He hoped Council would consider staff findings as they debate this important public policy. He said cited several examples where communities implemented food/beverage taxes and those taxes began to climb. Arlington Heights implemented a 1% tax in 2001 which is up ¼% this year. In 2001 Rolling Meadows had a 1% food/beverage tax and today is 2%. They are fearful of opening up a Pandora ’s Box and in the future see more increases in an industry that has been burdened by taxes other industries do not face. He reported the Chamber has been active at the Cook County level at hearings on the County’s budget, where County Board President Stroger proposed a 2% food/beverage tax and a 1% hotel tax. If those taxes are passed and, Evanston added 1%, there would be an 11-3/4% tax on food. That will not help the restaurant community. The policy in general has been to try and keep the tax rate, whether on cigarettes, food or liquor, relatively even with or lower than nearby communities. Implementing the 1% food tax would put Evanston above Chicago’s tax 6 ½%. Robert LaPata, 2124 Wesley Ave., (owner, Koi Chinese & Sushi Restaurant) lifelong resident, opposed the 1% tax on food. His restaurant has been open one year and has had great success. He has been in business for 18 years. This is a huge undertaking and operating this type of business is difficult. They are independent operators. When they were looking where to locate a restaurant, they looked at other communities, but Evanston is home and where he wanted to be. There is a high liquor tax, high property taxes, but he put this aside because Evanston is a vibrant community and 3 February 7, 2005 a place that is wonderful to live and own a business. He has made an investment of almost $1 million in this business, which has a low profit margin. They work 60-70 hours a week to nurture their business as they would nurture a child to become successful. It was difficult to hear when people order a cocktail at the bar and comment how on how expensive it is and have to explain the liquor tax. With a possible food tax they would have to explain that as well. If they are not competitive with surrounding communities they will lose business. Most restaurants are owned independently. Most owners are raising families like him and employ people to raise their families. If they lose business, they are six-eight months away from losing their businesses. Somebody like himself who put up a personal investment, when they have a bad month, he reaches into his own pocket. If they have a series of bad months, they lose their business and everything that goes with it. The true impact of this tax needs to be considered. Junad Rizki, 2784 Sheridan Rd., exhibited a toy pink pig that represents a misuse of tax dollars. He said some on Council suggest that injecting all the elm trees is not cost effective. Staff suggests injecting one-third of the trees and the Chamber thinks this would be effective. It appeared to him that Council does not look at the big picture on the City’s budget. Currently the City spends $500,000 annually on elm trees, which is supposed to save them, but it appeared to him it was just cutting them down. If they had injected the elms in 2000, they could have saved over 400 trees and $1 million of taxpayer money, assuming a 98% rate of success. In the past five years, over $3.6 million was spent on elm trees and would have cost far less to inject them and have more elms today. If they use staff’s proposal and assume a 6% die-off rate, they will spend an additional million dollars and lose hundreds of trees over the next five years. He thought Council appeared to be clueless and asked the effect on the other trees and the Forestry Division. In next year budget he was interested that staff wants to plant more trees costing $97,000, when in prior years it cost almost $200,000 to plant several hundred trees. He sees numbers that affect the whole budget. The issue they talk about is how fast staff is cutting down trees. With the number of trees dying it looks like the City does not have the manpower to cut down these trees fast enough. All of this needs to be looked into. He asked Ms. Carroll for an audit of the Forestry Division budget. Without that analysis they cannot deal with the elm trees. It was true that other trees are at risk of dying here. The elms can be saved. If they lose the ash trees, more money will have to spent to replace them. Council needs to have an analysis done to look at a different scenario than is being presented. He has done an analysis and so has the TREE group and the conclusion is clear that it is cost effective to inject all the trees. Jane Grover, 2703 Prairie Ave., chair, Mental Health Board, thanked Council for past support of the Mental Health Board. The board and residents served by the funding take nothing for granted and appreciate every gesture and every dollar. The board appeared before the Human Services Committee in January to present a recommendation for purchased services. The committee approved the board’s recommendations for funding 27 programs, with 19 agencies doing work in Evanston. Last year the Mental Health Board’s funding supported services to almost 8,700 residents, 84% of which were low-income. Those programs give pre-schoolers a head start on learning; represent juvenile offenders with compassion and give them the tools to avoid another encounter with the police. Their programs ensure that Evanston’s senior citizens live safely and independently, teach teens mothers when to ask for help and that parenthood is compatible with obtaining a high school diploma. Those programs enable those residents with developmental disabilities to reach their full potential and identify and intervene with Evanston youth at risk. They provide essential services to residents with severe and persistent mental illness. They teach families how to argue without violence. Their programs reach out to Evanston’s homeless population. All of this will be accomplished with the Mental Health Board’s budget of $829,000. These are a few of the services these programs provide and a fraction of their good work. She thought that in Evanston they would agree that these are core services, essential to the health of the community. She thanked them for affirming that an important component of this community’s health is the health and well being of its citizens and that a critical measure of a community’s compassion is its commitment to those with the quietest voices and the greatest need. Dick Stillerman, 2330 Park Pl., said they are talking about real money for the 2005-06 budget year. A total operating budget of $175 million and $81 million for the General Fund. The increase from last year for the General Fund does not sound like much, about $3 million and a percentage increase of 3.8% but people are facing many fee and tax increases. The City’s property tax levy is increased 3.98%; the sewer rate goes up 5%; and imposition of a proposed 1% tax on food/beverages in restaurants to yield $700,000; plus a doubling of the cigarette tax to give $126,000. The budget message says this is an austere budget proposal. That is true – there are no major program increases, but neither are there any program reductions. He recognized that the bulk of the budget goes to pay for salaries and benefits. In the 2002-03 budget there were approximately 873 full-time equivalent City employees. The proposed budget calls for 887 full-time 4 February 7, 2005 equivalent employees, an increase of 14 employees. The work of hundreds of City employees who provide essential services to residents is valued. In some areas, such as the Fire Department, more employees may be needed, which now must provide service to more high-rise residential buildings downtown. That is a difficult task. In the many years that he has observed the budget process, City Council has never made a concerted effort to eliminate or substantially remove programs. The policy decision of no program cuts means that the budget will continue its upward spiral with taxes following the pace and residents of modest means will be unable to meet their bills and be squeezed out of the community. Certainly Council does not want the conflict that comes with program cuts, but the community needs that action to reverse this trend. Even President Bush is trying to come to grips with damaging deficits by proposing program cuts. They may disagree with what programs should be curtailed. Failing to do something will damage the economy and citizens. Evanston faces a miniature version of the national problem that is serious to residents. The solution to excess of expenditures over revenues is to increase taxes, yet in a few instances, the revenue estimates seemed overly conservative. In budget memo 5, the projected building permit revenue is $3.1 million, yet the proposal calls for only $2 million to be allocated to the General Fund and perhaps another $1 million for the elm tree program. He asked why not $3 million to the General Fund budget and reduce the tax increase. The same applied to the real estate transfer tax. As of November 30, 2004, the City took in almost $3.5 million in the transfer tax, so why are they reluctant to estimate $3.8 million or more? They heard talk about a real estate downturn last year but it has not happened. Mortgages are still at low rates. In addition, they know there are hundreds of new condominiums that will be sold and re-sold in the next year. He urged staff not to be conservative when the reality is more optimistic. He suggested that more optimistic projections on those two items alone could yield enough to reduce the property tax increase. He suggested there may be other areas where the projections could be changed. Council should not wait until next year to give taxpayers a break from the never ending increases in the cycle of taxes. He urged a closer look at this year’s budget. He said the City can use the tax dollars from the 1800 Sherman building that Northwestern bought and is trying to take off the tax rolls. The City has an opportunity to act and stop Northwestern from doing this. He urged Council to do that. Ann Foster, 2003 Lincoln St., long-term resident, said that Evanston continues to change but there are some things that constantly define Evanston. One is the presence of trees. Last summer her neighborhood went into action when two neighbors, Trisha and Eileen organized an inoculation program. All trees were adopted either by two neighbors who contributed up to $200 or by 10 neighbors who contributed $35 each. They did this as a community under the impression this was a stopgap measure until the City could take over the next round. This community spirit and loyalty has always defined Evanston for her. She saw it elsewhere in the two young women at the high school who raised awareness and money on behalf of the elms. Also the newer, more recent residents who have chosen to move to Evanston, in part, because of the trees and the longer-term residents, such as herself, who also love the trees and want to do something to keep them part of the community. She was grateful to the Parks/Forestry & Recreation Department for their detailed report of January 27. She respected their sense of responsibility to the Evanston taxpayers and to the whole urban forest. She was grateful to the City Council for thoughtfully deliberating on this issue. She was grateful to her neighbors who have been advocates for the trees. She did not think they were at odds with each other yet. She asked could they not work together. She suggested for the longer range, the establishment of a citizens advisory board regarding elms and other trees. She thought it might allow residents to participate and develop a solution rather than appearing in a mild state of panic to “show our support.” She asked might they consider a citywide celebration of Earth Day in April to raise awareness of the trees, the role of trees in people’s lives and what people’s role should be in the lives of trees. One component could be fund-raising since they all know that launching an enterprise can often cost more than maintenance. She did not know whether it would work. If her neighbors are any indication of Evanston neighbors as a whole, they care and want to do something. Like the trees, this is some of the best of what Evanston is. She observed that the most recent Nobel laureate for peace began by planting trees in Kenya to provide for the needs of the village communities there. Evanston, which has an established tree community, should take a page from her book and develop a responsible and sustainable program for the stewardship of the City’s trees and currently for the elm trees. Tom McSheehy, 131 Clyde Ave., taught environmental studies. He grew up in Oak Park on a street where most of the elm trees were cut down and the change and feeling in that neighborhood was profound. He would not want to be in Council members’ seats trying to balance the budget. He hoped they see a bigger picture. He noted that people don’t take into consideration the cost of how the environment is treated. He thought it came out in health care and people’s health through air pollution. He said that factories and other places don’t have to figure in this cost. Council’s job is daunting because they have to think into the future. It is easy to look at the economics of this but the value of trees is tough to pin 5 February 7, 2005 down. He asked how they could put a price on the beauty of trees, the value of trees to real estate, the value of air purification, shade that lowers the energy cost of homes and psychological value. He hoped these values also would be considered. He hoped they would support the TREE proposal looking at the spending of removing elms, which balances off inoculating all trees on the parkways. He stated they are either removing them or inoculating them. He hoped they would look at the big picture and get more creative with the budget. One of the things that drive inflation is energy cost. He stated that the reason the U.S. has spiraling inflation is because it is not an environmentally conscious society. Illinois is one of the few states that does not mandate environmental education for kids and that awareness would serve them well now. He urged they look at the energy use in this building and all school buildings. Look at grants for solar energy. The amount they could save in this budget by becoming environmentally aware of the resources that are used would save a lot of money, if not now, in ten years. Replacing trees is not easy. He asked that more federal money come back to the local level. He noted that Northbrook had inoculated 240 trees since 2003 and all are living. He encouraged Council to support the tree proposal to inoculate all parkway trees. Peter Mattox, 2531 Hastings Ave., said locally it was critical all take a more active role in protecting the environment. He noted the Parks/Forestry Division advocates a comprehensive approach to tree management and thought they would concur, however, this should not justify the current approach to tree management. Early identification of Dutch elm disease and removal has helped minimize tree loss over the last few decades. Still, there has been considerable tree loss at considerable cost. An alternative must be considered if they are to preserve the remaining public elms. This requires 100% fungicide injections of all public elm trees. The community has voiced support on many occasions. Numerous private citizens have banned together to donate money for injecting public elms. The economic benefits exceed the cost. He hoped they would consider the analysis prepared by TREE, which weighs alternatives. From a financial planning perspective, he asked what they would do with potential savings. He thanked Council for giving time to this issue. Virginia Mann, 3004 Normandy Pl., said part of the attraction of coming to Evanston was the elm trees. She grew up on the north side of Chicago where all the elm trees were cut down due to Dutch elm disease. Unlike Evanston, Chicago did not adopt a comprehensive pro-active approach to saving the elms. Evanston took the unprecedented step of putting together a sanitation program that was successful for many years in reducing the loss of elm trees. That is why the City still has 3,000 public elms, a fraction of what existed 20 years ago. They asked Council to move forward and take a step they could not do 20 years ago. Over those years, Evanston taxpayers have spent millions of dollars investing in elm trees. They will continue, but the choice is will they continue to spend to cut trees down or to inoculate to preserve them for the future. As TREE has pointed out many times, it is more cost effective to inject elm trees than to cut them down. She came to this project due to loss of trees in her neighborhood. She found out by accident that there was something she could do to prevent the elm trees from coming down. She did research and found that for the past 20 years there has been a fungicide that could be injected that is not harmful to the tree and has been successful. She noted the elm trees around the capital of Minnesota have been injected for the past 20 years and so have many other communities. There is no reason not to use this fungicide on all elm trees here. Elms contribute to the value of homes and are a valuable contributor to the overall ambiance of the community. It is healthy and safe to inject the trees which was not an option they had 20 years ago. As a fiscal conservative, she thought that injecting is the fiscally responsible thing to do and to save them not only for today but for future generations. She hoped they would consider injecting all the elm trees, because it is the ecologically, fiscally and morally right thing to do. Every study cited in the City’s report that injections should not be done was due to cost. None of the universities had a community that was spending more money to cut down the trees than it would have cost to inject them. This was the third or fourth time TREE has been before Council. It would be great if they could return to their lives and not have to go over the figures again and again. Don Zeigler, 1430 Elmwood Ave., vice chairman of the Evanston Community Health Advisory Board, member of the Evanston Substance Abuse Prevention Council and on staff of the American Medical Association, alcohol and drug abuse office; spoke as a private citizen and resident since 1979. He appreciated Council’s time and hard work on the budget; urged them to consider income-generating measures that would have positive public health outcomes also. While all enjoy the fine dining and hospitality districts, they have to admit that there are unintended consequences in communities with easy and wide access to alcohol. This includes under-age drinking and, a number of Evanston establishments have been cited for this; disturbances, littering, assaults, and DUI offenses. He lives only a block from the hospitality district and frequently has to clean up the lawn from debris left by people coming in the morning. Good public health policy to decrease alcohol-related problems includes restricting outlet density; not expanding the number 6 February 7, 2005 of liquor licenses; and shortening, not extending hours of service. These issues are not on Council’s agenda even though they will increase the demand for City services due to the social problems when more people drink more alcohol. The price of alcohol is on the agenda. Raising and not lowering the tax on liquor is sound public policy by having those who create the problems begin to pay their fair share of the costs. They are considering a tax on food. He asked them to reconsider that and instead just raise the alcohol tax. Research has demonstrated that increases in federal, state and local taxes on alcohol can reduce alcohol consumption, its harm and social problems. Evanston is a university community. Adults, youth and, even heavy adult drinkers, are price sensitive. A 10¢ increase on a six pack of beer would decrease drinking among young people as much as if they raised the drinking age by one year. Increasing the tax shows some decrease in sales, but makes up for that with higher revenues. Fewer social problems and more revenue equal a win-win for Evanston. He applauded their proposed increase in the tobacco tax. He strongly urged raising the tobacco tax beyond what they are considering. There is strong evidence that a 10% increase in the cost of cigarettes will decrease overall consumption by 3-5% and reduce the number of kids who smoke by 6-7%. Cook County raised its tobacco tax substantially several years ago, expecting to yield $74 million. The County raised almost twice that amount, $132 million, and funds go for public health programs. At a minimum, Evanston should double the 16% increase on cigarettes. He asked them to consider revenue-generating suggestions that also improve the health, economy and quality of life of Evanstonians. Leigh MacIsaac, 1123 Noyes St., is an average citizen who was tired of watching the City’s tree population contract Dutch elm disease and be cut down. Over the summer, after living here for four years was encouraged to build awareness of the issue. She came up with tying green ribbons on elm trees along Ridge from Howard to Isabella. The City Council meeting on September 1, 2004 was attended by 300 people who were concerned about the trees. The media was present and Council unanimously agreed to accept the proposal from the Forestry Division to inject all the elms over 10-inches in diameter. In the summer, the Forestry Division reported on what other communities do about injections, experts’ recommendations, costs, spreadsheets and university reports. Council had this information over the summer and agreed when there was a large crowd to save the elm trees. She felt they had a victory but was told it would not happen until it was in the budget. She did not understand how they could backpedal themselves out of saving the public elm trees when citizen support was there. She said the report from summer and the recent report are almost the same so she did not understand why only a third of the elms were recommended to be injected. She asked if anybody gave the universities a case study of Evanston’s situation, the number of trees and that a grassroots effort was underway. 80% of the elm trees are signature trees. She suggested inoculating only signature trees would create chaos and would be confusing to residents as to whether an elm was injected or not. When residents realize they will have to chip in for trees they will be upset. She said in public versus private trees, in the survey done in the summer, there is concern about private elms within the drip line of a public tree. Dutch elm disease can spread through roots, so she encouraged them not to hold up injections for all public elm trees, because if there has been sanitation and a private elm has been cut down within 30 days, the Dutch elm disease will not infect the public tree. Proper sanitation will solve the public/private issue. She suggested the current elm tree insurance program include inoculations. The City can get a good rate to inoculate the trees if it is offered as a citywide program that residents pay for. She said the simple math is it costs $3,000 to cut a tree down and $100 a year to inoculate a tree. Her calculation was that over a 30-year period it would cost less to inoculate trees than to cut them down. She said the TREE document had a lot of good information. If they adopt the signature program, which would inoculate a third of the elms, 135 elm trees would be cut down this summer. They will have 127 trees cut down in 2006 and 119 in 2007. The cost of that program is $1.4 million and 11% of the elms will be lost in three years. If all parkway trees are inoculated, they will spend $1.3 million and only 5% of those trees will be lost. Mimi Peterson, 748 Wesley Ave., is passionate about elm trees; said TREE has worked with the Forestry Division and City Council to begin an education program to help residents understand what Dutch elm disease is and how loss of elms can be prevented. As residents on an individual tree basis and per neighborhood, what they have been doing has not worked. Citizens have been injecting parkway trees because they want to preserve the value of their property and cooling. With the intense traffic here, loss of the trees is changing the character of the community. She said in the past four years, 20% of the elms have been lost. She stated the current City program does not prevent the spread of the disease. They have spent more money removing trees to prevent the spread, than if they spent the money to save them. It makes sense to spend less money and save the trees. It does not make sense to stay on the current path. She asked for consideration to study this. TREE has offered a lot of information. There has been discussion about the Ash Borer and the Long-Horned Beetle. They have no control over those pests and no prevention known. All they can do is remove the 7 February 7, 2005 tree. If that is done, which may happen, 15% of trees here are ash trees. Combined with the loss of 12% of elm trees, which will happen, they will lose 27% of the trees here. She said the Long Horned Beetle is under federal jurisdiction and the area where found was quarantined. She said it is fiscally responsible to save all elms and not responsible to save a third of them. The trees not inoculated will be at-risk and the disease will spread. She said it makes the most sense to inject all the public elms. Money should be spent in the most cost-effective way to yield the most value for the community. Miriam Davidson, 1428 Noyes St., reminded Council that this Dutch elm disease is an epidemic; Evanston has seen it before and is getting the second round. The first time it happened, the City simply cut down the trees. On her side of the street there are several elms with canopies and on the other side there are none. She thought that was true in other areas of the City. People say there used to be more tree canopy. Evanston has a beautiful canopy created by the elm trees; however, there aren’t a lot of other old growth trees. She noted the University of Illinois and University of Michigan have a lot of other tree species that are old and hardwoods. If they lose the elms they are losing a lot of majesty. Because this is an epidemic, she asked that Council stop it now and do more than touch a few trees. The trees that are not injected will be lost. If they keep it to the recommended girth, they won’t have trees in 10-12 years because the slightly smaller trees are needed to maintain the canopy and the old growth trees. By that time, they hope Dutch elm disease will be eradicated. She noted the paintings in the Council Chamber contain trees. Even the symbol of Evanston has trees in it. She hoped that citizens can piggyback on the City’s purchasing power for privately owned elm trees. She hoped they keep it simple and signature trees would have to be redefined. She hoped Council voted to inject all public elms. Mayor Morton declared the public hearing over at 8:30 p.m. Assistant City Manager Judith Aiello announced that City Manager Julia Carroll had budget recommendations to present at the next budget meeting on Saturday. Alderman Newman understood they were to have a discussion that evening; asked how much was budgeted for trees removal (sanitation program)? How many trees did they budget for and when they had a higher number of diseased trees, where did the money come from to deal with this? Parks/Forestry & Recreation Director Doug Gaynor explained that the numbers fluctuate year to year. If there is a lower incidence of the disease, staff does more pruning. He said the numbers thrown around were inaccurate and that staff does a variety of tasks. He will meet with the Finance and Budget directors to come up with numbers that more accurately reflect what was done. This year, when the incidence of Dutch elm disease was higher and more trees had to be cut down, staff delayed some pruning and shifted to the higher priority. They did not prune as many trees this year but can delay it and do it at other times of the year. There are tasks in the Forestry budget that go beyond just Dutch elm disease, tree and stump removal and planting. Alderman Newman asked if the estimates on the injection program did not include any savings for fewer trees being cut down. Correct. He was trying to get a sense of the numbers, In the Forestry budget are they projecting the number of tree removals. Yes. In looking at three prior years, what was the projected cost of removal? Parks & Forestry Superintendent Paul D’Agostino explained that it is not a cost per tree. They project how many trees they think they will lose. He cannot put a dollar figure on that, but shifts personnel between tasks to cover. Alderman Newman asked, if they removed 139 trees in 2002 and 230 in 2003 and did not hire any new people, how did they handle the extra task? Mr. D’Agostino pointed out that under parkway maintenance they projected 1,300 fewer trees were trimmed due to the higher number of removals. Alderman Newman understood that trees would not be trimmed as quickly, so the cycle was extended. He asked if that was discussed during the year. Mr. D’Agostino said they put actual figures into the budget, which meant there was less tree pruning and tree planting was delayed. There were other smaller tasks that were also postponed. Alderman Newman said if they were to inoculate all trees, would they still lose 100 trees? Yes. Alderman Newman said when they came up with the tree maintenance figures in the budget, how many trees were projected to be removed? Mr. D’Agostino did not project anywhere near what they had to remove. Alderman Newman was trying to find out the number projected for tree removal to understand potential savings if every tree was inoculated. Alderman Rainey pointed to page 336 Dutch elm disease control. Alderman Wynne said the cost to remove an elm tree is about $3,000, which includes $600 to plant another tree so the removal cost is about $2,400. She thought the number was in line with what she has heard from constituents who had elms removed under the elm insurance program. Alderman Wynne said over time, the City has lost on average about 150 elms a year. Alderman Newman was trying to get the projected number budgeted. Alderman Wynne said that last year they under budgeted due to a spike and had to borrow time from tree trimming to deal with 8 February 7, 2005 it. Alderman Wynne thought he was asking the actual cost and savings with each option. If they inoculate all the elms, they will have the highest cost in the first year then drops off. If injections are effective, they would remove fewer trees. Ms. Aiello said if they go back five years ago, the numbers were much lower. There was a spike this year and, rather than hire more people, personnel was shifted to get things done at a slower rate. In the 2005-06 budget, page 335, they have projected that 300 elms will be infected with Dutch elm disease with the current sanitation and pruning program. Alderman Newman was trying to get an idea of what planning was done in advance. Mr. Gaynor said they take 3-4%, which is based on prior averages. Historically, they lose about 150 trees. He directed them to page 335, they would find they projected 230 trees that will be taken out. Probably 70 trees will have cut outs. Alderman Newman asked, if they believe in inoculating all trees, why they were not able to factor in some savings, because they won’t be removing as many trees. Mr. Gaynor said the staff would transition. Hypothetically, a contractor would do 50% of the trees injected, and then staff would take over the responsibility and do injections. The time spent on tree removal will be replaced by the tree injection program. Mr. D’Agostino said as they transition over to tree injections, and lose fewer trees, he would propose using staff to catch up on pruning. That was why he had not factored in cost savings for the first three years. Mr. Gaynor recalled several years ago, a considerable amount was appropriated to reduce the number of years in the trimming cycle. It was estimated that all trees would be trimmed on a six-year cycle. This year they have slipped to seven years due to a higher priority, but will get back to the six-year cycle. Alderman Wynne asked what people are charged for private elm insurance. Mr. D’Agostino said it ranges from $30-$120 and depends upon tree size. Participation has stayed the same over the past five-six years -- 430 private elms are insured. Alderman Rainey asked how many notices or marketing pieces are sent out on the elm insurance program. Mr. Gaynor stated each year in Arts & Recreation magazine, Mr. D’Agostino focuses on Dutch elm disease, the elm tree insurance program, and care and maintenance of parkway trees. Alderman Rainey asked when the survey is done would private elm trees be counted? Mr. Gaynor said a proposal would be before the A&PW Committee next Monday evening to survey all parkway elms and park elms as well as ash trees. They believe it is important to have information on where ash trees are in the GIS system because they are optimistic that science will find a way to protect the ash trees. They will ask Council to award the contract on Monday and surveying would start ten days after that. Alderman Rainey said when this issue is resolved, an important piece is that they should not delay anything based on how to deal with private trees. She asked the complications in getting the City’s inoculation cost for private elm tree owners. Mr. Gaynor agreed that would be built into specifications for the City’s inoculations. Alderman Tisdahl confirmed that employees are shifted from pruning to tree removal with no outside hiring then shifted back to pruning, which was the reason there are no savings. Alderman Wynne said if over time, they remove many fewer elms than in the past, say 30 or 50 years, then the tree trimming cycle would drop to 5 years. She was trying to understand why there would not be more savings if one variable changed significantly. Mr. Gaynor stated that until last year they did not have a crisis and do not know whether this is an actual crisis. Tree advocates could consider the loss of 150 trees a crisis. He cannot tell what will happen in five years. They can predict the next two or three years and he assured her that if there is a decrease in the work load, they won’t dismiss people because they have to catch up on pruning and tree stump removal. Each year they review and propose a budget. If there is a savings, they would recommend moving to a different division. The worse case scenario would be to reduce staff by attrition. Alderman Wynne asked if all elms were inoculated, he was saying there would be no savings? Correct. Mr. Gaynor said they will spend $1.3 million that year and $10-15,000 the second or third year or split it up over three years at a cost of $300,000 per year. Injections will be provided to trees already injected that are on a different cycle as well as in the third year. Staff would do the injections in the fourth year and buy the product. They believe there would be a savings. In talking to the manufacturer of the fungicide they know there will be an increase in the cost of the chemical. Alderman Wynne said in looking at the next five years, using option 4, more elms would be lost than with Option 1. She said a memo from TREE says it is slightly less costly to go with Option 1 because the City would lose many fewer elms. Mr. Gaynor received the report and has not analyzed it. Alderman Wynne asked for an analysis of TREE’s report and agreed with comments from citizens about the definition of a signature tree, which is muddy. She suggested there could be warfare among neighbors who view their tree as a signature or not. She looked at her own experience, when a neighbor’s tree came down it made a difference in cooling her house. She saw that as 9 February 7, 2005 problematic. Mr. Gaynor said they were suggesting what a signature tree could be. An example could be 30-28-24 inches in diameter. Ms. Aiello clarified that the number of 230 trees removed assumes the current conditions continue, which caused the spike. If conditions return to what they were before the spike, they may go back to the average. Alderman Wynne asked for the number of elms lost for the past ten years. Mr. Gaynor clarified for Alderman Bernstein that the survey would only identify elms on the parkways and parks. Mr. Gaynor explained that during the summer, scouting is done to identify Dutch elm disease. Alderman Bernstein asked if that information brought back each year is catalogued? Mr. Gaynor said scouting identifies trees that are infected. They log in the infected tree. Forestry has a record of diseased trees. Alderman Bernstein said they have a GIS system so why can’t they identify location of all elm trees? He was concerned if they are not grinding out the stumps. When they inject the fungicide, it goes up to the top of the tree and none goes into the roots. It they don’t grind the stumps quickly enough, they lose time, and if the root structure is still alive under ground, they would lose those trees. Mr. Gaynor said when the tree is cut down or they girdle the tree, it will not transmit the disease. The disease stays in the root system and the only way it can spread is to root graft to a healthy tree. The dead tree is dead, and if the disease has gotten into the root system, the point of sanitation is to cut down trees before the disease goes into the root system. Alderman Bernstein recalled an elm tree was cut down, the stump continued to send up volunteers. Mr. D’Agostino explained that 90% of the time they cut the tree down before the disease has reached the roots. Roots and the stump are not a threat. Alderman Jean-Baptiste said to come to any conclusion as to policy direction, other than the need to use both sanitation and injection, they cannot understand the cost of injections without knowing the number of elms. He asked how long it will take to get that information. Mr. Gaynor stated the survey would be done in four to six weeks. Alderman Jean- Baptiste asked how staff got the number of all parkway and park elms. Mr. Gaynor said they have estimated 3,400 public elms and number of signature trees would be about 1/3 of that. They don’t know for sure until they get the survey. They will survey public parkway and park elms, plus private trees within the drip line of public elms that would threaten a public tree. They don’t know the number of private trees. If all the parkway trees and park trees were injected, but private trees within the drip line were not, there would be a certain percentage of infection. That is what all the research, fungicide manufacturers and communities with this program talk about. Alderman Newman noted that when tree trimming is not done there is a cost. A former city manager never told Council that tree trimming was being eliminated from the budget. One day they woke up and trees were falling on cars so that had to be fixed at huge cost and Council decided to go to a six year trimming cycle. Alderman Newman said with Option 1, at the end of the third year all trees are injected. Option 2 and Option 3 are phases. For now they are assuming there are no savings. If they go with Option 1, they have to come up with an extra $700,000 and figure out how to pay for it. Currently staff says they have $360,000 but staff does not show how to pay something like $640,000 which has to be done before February 28. They all have to work with assumptions on savings and they don’t have anything. Alderman Rainey asked about the information they would get from the survey? Mr. D’Agostino said the letter asked vendors to count trees, tree location, assess the tree condition and tree size. She said this information was critical. Several years ago she became an expert on tree preservation ordinances and brought one to the City. She had about five people supporting it. Even the Environment Board opposed it. In any tree preservation ordinance, the tree to be treated or removed is identified by size of trunk or height. She did not see why the signature tree is such a problem to identify. Healthy trees can be identified, but they cannot inoculate trees of less than 10-inch diameter. She did not hear much about the 10-inch trees and thought they would have to use the sanitation method for them. Ms. Aiello said in the transmittal letter in the budget, they outlined some options to fund injections of elms. Those can be distributed again. She said it was on page 15 in the budget. Mayor Morton asked if there was anything in the maintenance system that would cause them to have an epidemic of Dutch elm disease. Mr. D’Agostino did not think it was due to anything they were doing or not doing; was weather related and there are some new strains. Would an injection program handle the new strains? Yes. 10 February 7, 2005 Alderman Jean-Baptiste asked what the department recommended. Mr. Gaynor said the recommendation is to inject signature and stand-alone elms on parkways and in parks. Alderman Newman said the option is to increase the property tax to pay for the trees or increase the gasoline tax, before a decision is made on the food/beverage tax. Those were tough options. In response to Alderman Newman, Ms. Aiello said that was the third option for the revenue stream to be created for future years. For the first year, the plan was to appropriate $1.1 million from the fund balance or appropriate excess building permit fees, but an annual revenue stream of $350,000 must be created so in the fourth year they aren’t facing the need for another million dollars. This was not an inclusive list, but for Council consideration. Alderman Rainey said this was where reality therapy comes in. Option 1 is what they all want to do but until they have additional information and look at the numbers., the argument has been made that this is a wash. It does not cost to do Option 1 because it all evens out. That is not reality. The reality is it costs $1.2 million. She thought they have hours before them if they go with Option 1. She asked to see a map of where elm trees have been removed. The map will be provided. Alderman Rainey said there is a passion for saving the elm trees, but there is a segment of the community that say this is life and maybe they should move on and plant something that won’t die. Those people are not coming to City Hall but are talking to her and other aldermen. Where are trees that were lost? Mr. Gaynor said GIS did a report and asked what would happen if they focused on the hot spots which is where the elms are. Alderman Rainey found it interesting that they generate more revenue from pet licenses than from business licenses. She asked for information on business licenses. She noted that bicycle licenses show revenue to date of $5. How many residents have one? Mayor Morton asked if fines paid on Old Orchard Road could be paid here. Mr. Casey explained under adjudication they can only bring local ordinances. Traffic, misdemeanors and felonies are not handled by Administrative Adjudication and are mandated to go to the Circuit Court. Mayor Morton asked if police issue a fine to people who don’t operate their headlights. Mr. Casey said driving without lights on is a moving violation. On moving violations, the City gets a cut of the fee after the court takes their fee. Mayor Morton asked how the Dog Park is doing financially. Mr. Gaynor said it is popular. They issue permits for it at Robert Crown Park. Skokie maintains it and the City pays 50% of the cost. They will provide a report on the finances. Alderman Newman stated that the tree people coming forward was a good thing; many are concerned about the tree canopy. On the suggestion of the liquor tax, the packaged liquor tax is 6% and the closest community is Oak Park at 3%. Most suburbs don’t even have a liquor tax. Evanston is by far the highest. Arlington Heights is at 1%. Deerfield and Glenview don’t have one. He thought it was piling taxes on the business community. He asked Finance Director Bill Stafford why he was projecting those amounts on the building permit fees and the real estate transfer tax. Mr. Stafford said a concern discussed with Council in the past few years was that they don’t want to count on non-recurring revenues for operations. They want to be sure the operating budget matches the revenues they know will come in. One is revenue from building permits. The City has gotten an inordinate stream of permit revenue that is not sustainable in the future. Staff believes they will bring in $3.1 million in building permits, but don’t think that will continue. A historical straight line analysis shows revenue at around $2 million. As a result, they budgeted the $2 million, not the $3.1 million. Much of that is due to the Sherman Plaza development and others and don’t see that volume in the future. They don’t want to put the Council in a position where they inflate numbers one year and it comes back to haunt them the next year. They have had the same discussion on the real estate transfer tax. Alderman Rainey recalled when Council adopted a policy on one-time revenue and not spending it on operating expenditures. She saw this as a reflection of the success of the community and thought that revenue should go into the General Fund. She did not consider it a classic one-time revenue. Some years they get more, some less. Mr. Stafford agreed it would be a constant revenue but not at that rate. Alderman Rainey asked what about $1.2 million to inject the trees, would that be a constant expenditure? He agreed. That is a $300,000 annual option but needs upfront funding of $1.1 million. If Council chooses to do that, staff would support it. Alderman Jean-Baptiste asked, when they budget for $2 million in permits and get an additional million, why don’t they use that to lower the levy. Why not give back to the citizens? Mr. Stafford said if they lower the levy, then the following 11 February 7, 2005 year they will have to raise it that much more because they cannot sustain that rate. If it is lowered one year, the next year they will have to raise it up because they don’t have that revenue. It is a one-time fix. On one-time revenue, under budget policy, they don’t use one-time revenue to reduce recurring expense. Excess money at the end of the year is put in the fund balance. They don’t use the fund balance to reduce the property tax. Mr. Stafford explained that the last few years they have used the excess funds to achieve a 10% fund balance. If they have an extra million that should go into the capital improvement budget. Ms. Aiello said a few years ago, when fund balances were so low, that was the policy adopted by Council and it was wise to get the fund balances to the point where they had enough cash reserves. Council has indicated they want these to go to the Insurance Fund and to the Capital Fund. The Insurance Fund pays for ongoing liabilities and once they get to a reasonable level, they could fund more into the Capital Fund. Alderman Newman said that Mr. Stafford and Ms. Aiello gave excellent answers. He said that things have changed and once reserves were built up the City is in a better financial position. He said that staff had done a good job on this. Another factor is that they never know whether other taxes will perform the way they expected; noted that the CDBG budget will be cut by the federal government. Alderman Rainey noted President Bush announced he wanted to eliminate the CDBG program, which would cause a real deficit here. Alderman Rainey pointed out that once the reserves are up, making a one-time expenditure from a one-time revenue would be an acceptable practice. Mayor Morton said one speaker commented that the City always raises taxes, but never cut back and that should be considered before December 31. Alderman Rainey asked for an explanation of the impact of the cell phone tax. Is there money in reserve that was collected from the state? Mr. Stafford said they don’t have money in reserve. The Northwest Municipal Conference has estimated that amount to be around $400,000 and they are talking to the other side about settlements. The City’s exposure is about $37,000. The whole amount is $400,000. In theory, the City has to refund that. Mr. Stafford said the judge left open discussion among the parties. Mayor Morton announced there would be a budget meeting the next Saturday at 9:00 a.m. There being no further business to come before Council, Mayor Morton asked for a motion to adjourn. The Council so moved at 9:50 p.m. Mary P. Morris, City Clerk A videotape recording of this meeting has been made part of the permanent record and is available in the City Clerk's office.