Evanston Faces $20M Discrepancy in Motor Fuel Tax Fund After Years of
State Warnings
[October 13, 2026]
By Grace Hauck and
Illinois Answers Project
Evanston, Ill. — Evanston officials have improperly distributed millions
of dollars in road contracts for more than a decade, skirting an
Illinois law that requires municipalities to seek authorization from the
state and advertise in a weekly bulletin, records show. Now the city
could be on the hook to pay back that money to its motor fuel tax fund.
Emails, memos and other internal documents show the Illinois Department
of Transportation (IDOT) has repeatedly identified deficiencies and
recommended Evanston take corrective actions to resolve “noncompliant
activity” and “unauthorized” expenditures, according to public records
reviewed by the Illinois Answers Project.
And, while the city has approved use of motor fuel tax funds for dozens
of projects since mid-2020, only a handful have been advertised in
IDOT’s weekly bulletin, according to documents reviewed by Illinois
Answers. A street resurfacing project approved earlier this year draws
on over $1.4 million of the city’s motor fuel tax funds, but wasn’t
advertised in the bulletin.
“I’m concerned, deeply concerned that we have not been getting the kind
of pricing we should get for our contracts,” said Ald. Clare Kelly (1st
Ward). “I’m also concerned about who we’re hiring.”
Kelly began drawing attention to the issue earlier this year, when she
identified a $20-million discrepancy between the balances IDOT and
Evanston reported for the city’s motor fuel tax fund. She started asking
the city and IDOT about the discrepancy, and IDOT initiated another
review. The city is now scrambling to reimburse the money, and has
reclassified older expenditures to cover the gap, emails reveal.
Kelly plans to propose an ordinance in committee on Monday that would
compel the city to follow state law and broaden the umbrella of projects
required to be advertised in IDOT’s bulletin.
In a statement, IDOT said the department regularly conducts reviews of
motor fuel tax expenses for compliance purposes, calling it a “routine
procedure” to make sure IDOT policies are being followed.
“If we find any issues, we typically work with the local agency to find
solutions, which can range from completing additional paperwork and
receiving approvals from their governing boards to reimbursing funds if
they were found to have been used for ineligible expenditures,” IDOT
said. “We are currently going through that process with Evanston and
anticipate our work with them will be done soon.”
The city said in a statement that Evanston remains committed to
complying with all applicable laws, regulations and policies governing
the use of MFT funds.
“For several projects, the City followed applicable state law regarding
bid advertising, and IDOT has accepted the City’s approach as meeting
the applicable bid selection requirements. However, IDOT recommends that
the City advertise projects on its website for bidding in the future,”
the city said.
The city said it will “continue to work with IDOT to ensure it maintains
and submits required documentation and follows IDOT’s recommendations in
future projects,” adding that it will bring updated information for the
city council to review later this month.
‘An exceedingly large discrepancy’
The Motor Fuel Tax (MFT), currently $0.483 per gallon of gasoline,
supports state and local transportation projects. So far this fiscal
year, which began on July 1, the state has collected nearly $800 million
through the MFT.
Revenues deposited into the MFT Fund are transferred into state
construction funds and various funds for counties, townships and
municipalities. IDOT distributes funds to municipalities according to
population size. Evanston, with a population of about 78,000, typically
receives $300,000 monthly. Municipalities can use the funds for a range
of projects, such as to construct and maintain roads, street lights,
storm sewers and sidewalks.
State law requires municipalities to obtain authorization from IDOT to
spend motor fuel tax funds and to advertise projects in IDOT’s weekly
bulletin. “Each advertisement must appear in the bulletin not less than
11 days before the date on which bids are to be received. This enables
the advertisement to appear in at least two issues of the bulletin,” an
IDOT manual states.
Kelly described the MFT fund as “very restrictive” because
municipalities can only spend the money after IDOT has authorized an
expenditure. IDOT then counts money it has authorized as money spent by
the municipality.
“In principle, this is a really great mechanism that IDOT has for
taxpayers because it’s checks and balances and ensures that we’re
proceeding with competitive bidding, as well as getting third-party eyes
to look at our projects and our contracts to make sure we’re not
overpaying,” Kelly said.
The issue first came to Kelly’s attention late last year when she wanted
to use MFT funds for a bike path. At the time, IDOT listed a balance of
nearly $22 million in Evanston’s MFT fund. But the city’s balance listed
just $2.5 million.
“There can always be some little bit of a degree of discrepancy
depending on the dates when things get approved or not,” Kelly said.
“But that was an exceedingly large discrepancy.”
Evanston resident Mary Rosinski, a real estate broker and community
activist, has also publicly raised concerns about the city’s use of MFT
funds. During the July meeting of the Finance and Budget Committee,
Rosinski said she’d started looking into contracts dating back over a
decade that “don’t follow a clear track.”
“We have a problem with our paperwork or our reconciliation of that
fund,” she said.
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Ald. Clare Kelly (1st Ward) has raised concerns about Evanston’s use
of motor fuel tax funds. She is pictured in downtown Evanston, Ill.,
on Oct. 8, 2026. Credit: Grace Hauck
Emails, memos show trail of ‘noncompliant activity’
IDOT has been raising concerns about Evanston’s use of MFT funds for
years, according to public records obtained by Illinois Answers.
In 2019, an IDOT document technician reviewed Evanston’s MFT fund
expenditures made between 2012 and 2017. During that process, she
emailed the city seeking more information about expenditures. “I am
unable to identify $4,377,564.46 debited from the MFT Account,” she
wrote.
Months later, the technician emailed again, asking the city to “advise
where all MFT funds were.” She wrote that the city had provided
“incomplete” information for the review, and she “could not tie
transfers out to invoices paid” because there was “no vendor or invoice
information provided.” She wrote that “this will not be acceptable or
allowed” going forward.
IDOT completed that “cleanup review” and allowed a “one time lump sum
authorization” for more than $9 million “to clear deficiencies” in
September of 2019. The technician concluded that “forms were not
properly submitted or there were ineligible MFT expenditures,” the
agency later clarified.
A memo IDOT sent to the city said officials had been advised of missing
forms and proper procedures, and an IDOT letter to the city clerk urged
the city to address “deficit balances” and “resolve the Unauthorized MFT
Expenditures.” In an email, the technician said that the city must
follow all MFT procedures or “will need to reimburse any MFT funds not
accounted for properly.”
In 2023, IDOT audited Evanston again, this time looking at expenditures
made in 2020. The auditor issued two findings in an email to Evanston
Mayor Daniel Biss: More than $1.6 million was not deposited into a
dedicated MFT bank account, and the city failed to properly document
invoices. “The City of Evanston should also adjust its internal control
process to prevent the reoccurrence of the noncompliant activity,” the
auditor wrote in an email to the city.
The problems have continued.
In March 2026, an IDOT documentation technician emailed the city, saying
the city hadn’t advertised numerous contracts with IDOT and had not
submitted required expenditure statements. “I don’t believe Evanston is
following proper MFT procedures for general maintenance,” she wrote.
She emailed the city again in April. “The city does not appear to be
advertising general maintenance contracts or material contracts of
$25,000.00 or more with Local Roads,” she wrote. “This is a problem and
technically these expenditures should be reimbursed.”
In her email, the technician said IDOT wouldn’t consider another lump
sum payment. In addition to the expenditures that weren’t advertised in
IDOT’s bulletin, she was unable to identify section numbers for over
$5.7 million in other expenditures, according to the email.
In May, the technician emailed the city requesting additional
information on transfers out of the MFT account and directed the city to
pause transfers. “Between resolutions not received and contracts not
advertised with Local Roads, the city may owe the Motor Fuel Tax account
millions,” she wrote. She added that “deficiencies” through 2024 were
over $14 million. “The city must adjust its internal procedures
immediately.”
IDOT sent Evanston another documentation review, which covered 2018
through 2024, in June. The report again identified “deficiencies” and
directed the city to address deficit balances and resolve unauthorized
expenditures. “This report should be presented to the Mayor and City
Council at the first regular meeting after receipt of this letter and
filed as a permanent record,” IDOT said in a letter.
But the city council did not receive that review, Kelly said. “We’ve
never gotten it, and that concerns me,” she said.
The technician also followed up with an email to the city. “Invoices for
advertising contracts were charged to MFT. We are not allowing these
expenditures,” she wrote. “All construction contracts must be advertised
with IDOT. If the city wants to also advertise in newspapers that should
be paid for from another fund.” She urged the city to ensure all
projects for 2026 follow procedures.
Ordinance to be introduced in City Council
Kelly said she believes the city council needs to step in. She plans to
introduce an ordinance in the Administration and Public Works Committee
at Monday evening’s meeting that would require all city roadway projects
that are competitively bid to be advertised through IDOT’s bulletin. The
ordinance broadens the existing requirement by including projects that
aren’t MFT-funded.
Kelly believes the ordinance would increase contractor competition,
ensure the best value for taxpayers and provide local accountability for
compliance with the existing state requirements for MFT-funded projects.
“I felt we needed an ordinance that would stipulate, that would mandate
from council that they have to follow the law,” she said.
This story was made possible by a grant from The Richard
H. Driehaus Foundation to the Illinois Answers Project.
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