Zero-based budgeting “asks managers to build a budget from the ground up, starting from zero,” according to the Government Finance Officers Association.
During Finance & Budget Committee discussions last year, councilmember Bobby Burns (5th Ward), suggested the city try that approach.
The method is certainly “not something that we should do on a regular basis,” Burns said more recently at the committee’s February meeting, “but considering where we are right now financially as a city … I feel like this is appropriate time to pilot it to see if we’re able to operate more effectively and realize some cost-savings, and then decide whether or not we want to expand it beyond the Public Works Department.”
The city is grappling with what has been termed a structural budget deficit with expenditures outpacing revenues. Officials estimated the deficit at $10 million before the 2025 budget, and used one-time revenues such as the building permits on Northwestern University’s stadium rebuild to reach balance. Officials have estimated the city will be facing a similar shortfall this coming budget season.
Return to committee or not?
In discussion Monday, Clare Kelly (1st), and like Burns a member of the Finance and Budget committee, was the only councilmember to vote against the contract.
She argued that her understanding was that staff’s recommendation of the consultants go back to the committee for that group’s evaluation before going to the council for a final vote.
Councilmember Matt Rodgers (8th) seconded her motion that the item be returned to the committee.
“I guess my question is when we issue an RFP does it go through a committee process or does it come to the council on any other matter. If there’s a process in place, then the process ought to be honored in all situations,” he said.
Burns, also a member of the committee, said he thought the direction was clear the last time the issue was before the group. “My understanding was that the next step for this was City Council, because ultimately we have the ability to appropriate funds.
“If we’re comfortable moving forward with the cost,” he said, “I don’t see what value the Finance and Budget team can offer at this time.”
Councilmember Jonathan Nieuwsma (4th) also said he didn’t see what value councilmembers would be adding by referring this back to the Finance and Budget for another discussion.
Expertise closer to home
Kelly said, though, that it would seem to make sense to bring the issue before the committee.
“I am concerned that we’re hiring a firm from Ohio to come in and do zero-based budgeting in Evanston when we have the University of Chicago with municipal finance [expertise] and all kinds of other local organizations that know the area,” she said.
She asked Hitesh Desai, the city’s Chief Financial Officer and treasurer, whether the city had reached out to that university.
Desai said wasn’t the case, that the city had reached out to firms based on city officials experience doing other assessments of departments.
The city sent Requests for Proposals to 13 vendors, with experience in the particular finance area, with Raftelis and Baker Tilley from Chicago the only respondents, Desai reported. Baker Tilley’s fee was for $95,000 while Raftelis’ fee ranged from $99,030 to $118, 868.
Public Works picked as city’s ‘biggest’ operation
The five city staff team that reviewed the proposals found Raftelis’ the strongest, noting that the project team for that firm had extensive experience in various aspects of Public Works, including asset management, utilities and capital planning/engineering.
In discussion, Burns questioned whether the University of Chicago would have responded to the RFP, and said if the city wanted to take a different route on the issue it should have been discussed earlier at the committee.
“So this doesn’t feel like the right time to be asserting this,” he said.
During discussion at the Finance & Budget Committee, Burns had argued that the Public Works Department was the right choice for the city’s first such study rather than Parks & Recreation or Community Development, which had been suggested by staff.
“It’s probably our biggest operation … we’ve got vehicles, we’ve got contracts for buying a bunch of materials,” he said. “They [Public Works] also do all the actual kind of work for our Parks and Rec Department and so for a lot of different reasons it just feels like it makes sense to start with the Public Works Department.”
In Raftelis’ cover letter, Jonathan Ingram, the firm’s vice president of local government organizational assessment, said the firm plans to take a practical results-oriented approach.
“Our team’s proven methodology will help the City develop a zero-based budgeting model that aligns the Public Works operations, staffing and resources with Evanston’s community priorities,” he wrote. “We will deliver clear, implementable recommendations that support both immediate budget development for FY (Fiscal Year) 2026 and long-term transformation.”
The firm’s past credits include a review in 2021 of the Public Works Department as well as the facilities and park maintenance functions in the city of Edina, Minnesota (population 53,348 in 2023), the firm’s proposal noted.
In that case, the firm reviewed documents and data, conducted numerous staff interviews and onsite visits, and compared the city with best practices in similar organizations, the proposal noted. “The resulting report provided recommendations and implementation plan to further solidify the reorganizations, clarify roles, and enhance service delivery.”
