Evanston committee begins drafting citywide debt-management plan, weighs scope and limits

The Evanston Finance & Budget Committee opened a discussion on a draft debt-management plan, reviewing the city—s outstanding obligations and options for a single policy that would cover tax-supported and enterprise debt.

Committee Chair Raikes said staff had prepared tables showing the city—s outstanding general obligation (G.O.) principal and payoff schedules and that members had asked at the November meeting for a debt plan. Clayton (staff) summarized the materials, noting a roughly $10,000,000 annual drop-off in unabated debt and a current self-imposed tax-supported debt limit of $155,000,000. Clayton said, "Our debt limit is $155,000,000—2 between these 2, the unabated government debt and the unabated library debt we're sitting right around 133,000,000 at the start of the year. So we're about 21,000,000 below that self imposed debt limit." (staff member Clayton)

Council member Kelly pushed to view all city debt together rather than separating abated (enterprise) debt from tax-supported debt, saying, "I kind of don't like I mean, as a policy, I would prefer that our total debt is in is included that we don't separate it out by abated versus not abated." Kelly argued that whether costs are paid by property tax or by fees, "we all pay for it either way," and that the policy framing should reflect total obligations. Several other members and staff cautioned that enterprise funds (water, sewer, parking, TIF) are managed differently and large water projects are typically paid by rates and wholesale customers.

Staff noted the draft memo focused initially on G.O. bond debt and used the 2023 audit as a baseline for a combined abated/unabated table that showed about $185,000,000 outstanding when enterprise debt is included. Clayton explained the difference between the tables: one uses January 1 balances that include bonds issued last year; an earlier table excluded last year—s bond issuance.

Committee members discussed peer comparisons and adjustments needed to make them comparable, including pension liabilities. One member urged adding a column for net police and fire pension liability to give a fuller view. Staff agreed pension liabilities are volatile and distinct from capital debt, but acknowledged the committee wanted those metrics included as the plan is drafted.

Members asked for the policy mechanics: whether the $155,000,000 cap (a resolution passed in roughly 2018—19) should remain a fixed dollar amount or become a percentage tied to revenue (for example, a percent of general fund revenues). Clayton said staff would assemble sample policies from peer communities, and the committee proposed each member review a handful of examples and bring suggestions to the next meeting.

The committee directed staff to: collect comparable municipal debt-policy language and rating-agency metrics the committee might use, add pension-liability metrics alongside G.O. debt, and return with a draft framework for review. No formal vote or policy change occurred at this meeting.

Ending: Members also linked the debt-plan discussion to reserve and capital planning work later on the agenda and requested a coordinated approach, including a 10-year capital forecast to inform levy and debt decisions.