You may recall that Security Properties, a real estate investment and development company in Seattle, fought hard for much of last year to get approval for zoning changes for DeKalb’s University Village apartment complex. Security wanted to buy and rehabilitate UV, but first had to meet its government lenders’ conditions, and those requirements included action by our city council.

The company actually arrived in DeKalb much earlier, and one of its tactics in 2014 was to approach Bill Nicklas, at the time a Northern Illinois University VP, to ask him to send a letter of support to City of DeKalb. Some of this conversation played out over email. Here’s a highlight:

Given DeKalb’s code requirements regarding legal nonconforming uses, our permanent lender (HUD) and allocating agency directing low income housing tax credits and trust funds to the project (Illinois Housing Development Authority) are not willing to consider applications for funding with zoning as-is. As a result, we will be making an application to DeKalb for a Planned Development that would allow the site to exist in its’ [sic] current state as a conforming use.

Given your background with the city, I thought it would be worthwhile to get your thoughts on this process and how we can best navigate the proposal to a successful ending. Also, we would very much appreciate a letter from you supporting the transaction that we can include with our submission. I’m happy to forward a draft support letter if that is helpful.

So, a private developer is asking for help from a unit of state government in greasing the wheels on a deal with local government. Think about that. Read the rest of this entry

Local EAV and TIF Performance

DeKalb County has placed online a variety of property tax information at DeKalbCounty.org. Among the reports are breakdowns of Equalized Assessment Value (EAV) by type of zoning, which include farm, residential, commercial, industrial, and railroad properties.

In City of DeKalb, the two top property tax-producing categories are residential and commercial. You can see below that residential and commercial losses in EAV have driven an overall steady decline since the Great Recession, until last year when commercial property saw a slight rebound (residential again lost a little value).

dyerware.com


I also checked EAV in the tax increment financing (TIF) districts, because there is no more important sign of success for a TIF district than increased EAV.

dyerware.com


TIF EAV has fallen worse than DeKalb’s overall, and (though not explicitly shown in the chart) has gone from a share of 15% of total city EAV to 11% during the time period we’re looking at. Considering that both TIFs are set to expire in the next couple years, this poor performance should prompt us to question seriously DeKalb’s judgment in selecting redevelopment projects.

People have been asking me why their city property taxes went up sharply this year. While much of it has to do with your assessment, of course, here’s the rest of the story.

20112012201320142015
Corporate
148,410000824,107
Bonds/Int00491,075488,125490,025
IMRF668,325320,328251,024251,028251,035
Fire Pen1,837,5362,078,0612,056,9832,177,8362,177,856
Police Pen1,097,5011,379,2341,472,1751,636,8851,636,914
FICA445,118467,025490,275204,791204,818
Totals4,196,8904,244,6484,761,5324,758,6655,584,755

Until recently, City of DeKalb levied property taxes for pensions and FICA only. I went back as far as 2006, and the only years when the city levied for any other purposes are shown in the table, because collection of property taxes for bonded debt and for general corporate purposes is either new for DeKalb or a revived practice following long hiatus. Read the rest of this entry

The DeKalb County Health Department is trying to persuade our county board to place a referendum on the November election ballot to begin levying a property tax specifically for health services.

If this referendum does appear on the ballot, the most pressing questions for voters must include evaluation of needs, and of DeKalb County’s stewardship of our money.

Turns out, I have an example related to the latter for you to consider. Let me introduce you to Cindy and Ed. Read the rest of this entry

You’ll recall that Ron Walters was a consultant hired by NIU President Doug Baker to help plan and launch his Bold Futures initiative. Walters acted like an independent contractor and got paid like one (e.g., getting reimbursed for his commute to/from work) but Baker had actually hired him as an NIU “affiliate” employee. This is one reason why the Illinois Auditor General is investigating NIU.

The latest that citizen watchdogs can bring to light is an email from Walters to a friend in July 2013. The weird punctuation and misspelling are his.

I was well received, although Doug has already gotten some flack for hiring his buddy right off the bat to come in under some lucrative consulting contract that wasn’t put out for bid. Has been warned that -this is Illinois politics – and it will come out under someone’s freedom of information act request within a few weeks. That hasn’t stopped him from bringing me in and cutting me lose, but he does have to be a bit cautious. So I’ve brought your name up and think it could happen a little further down the road, but he doesn’t have an appetite for bringing on another at this early point.

Walters also commented that the whole of NIU’s operations had to be “turned upside down and rebuilt.”

While you absorb this, I’ll head to the City Barbs Facebook Group to post the full email.

***Update***: Here’s a shortcut to the email, and one to the group posting.

DeKalb used to have in-house legal counsel, but now has contracts with individuals and firms to supply legal services.

One of the legal service providers is Dean Frieders of Frieders Law, LLC, who supposedly works for DeKalb three days per week.* Frieders is required by his contract with the city to supply all of his own staff for the $208,000 per year that we pay him. If any employee of City of DeKalb were to work for Frieders in any capacity, it would constitute a violation of that city contract.

Trouble is, DeKalb still employs a full-time legal assistant, and it looks like she works for Frieders. I say this because her actual job description requires her to assist legal counsel as well as the city manager. Read the rest of this entry

More Gift Card Info

A couple of weeks ago, I submitted a Freedom of Information Act request regarding DeKalb’s practice of buying gift cards for employees, the latest round of which occurred in December 2015 when City of DeKalb spent $5,400 on “employee holiday gift cards” for some 230 city employees.

Among other things, the FOIA request asked for the following: “Records that indicate the cards were properly counted as compensation and that federal and state withholding occurred.” The response was as follows:

No responsive records have been identified. The City determined that in previous years, the cards were not included within taxable amounts. The City has worked to ensure strict compliance in prospective years by eliminating these gift cards from proposed budgets; there is no proposed expenditure in the draft FY16.5 budget that would include gift cards of this
nature. That change in practice was made after an internal review of this matter by the City earlier this year.

Read here for the IRS rules specific to de minimus fringe benefits when the employer is a government. Cash and cash equivalents — yeah, this means gift cards, too — cannot be excluded from income and are always taxable, regardless of amount.

Oops. That’s almost $16,000 in untaxed compensation since 2013, guys.

Also, since the city included in its response no memos or other records of the elimination of gift cards for employees, we are free to assume that the “internal review” and decision to terminate the practice of giving gift cards occurred when administrators received my FOIA request dated April 21.

See the original FOIA request and response here.

FACT: Sometime last month, DeKalb Mayor John Rey approached Phil Young, who is the president of the DeKalb Park District, about the possibility of consolidating the two units of government. As you may already know, local government consolidation is a hot topic at the state level and a project of our lieutenant governor, Evelyn Sanguinetti, which evidently has inspired His Honor.

FACT: DeKalb Park District would rather not be absorbed by City of DeKalb. Read the rest of this entry

***Update 5:45 p.m.*** The Facebook discussion on this post is here.

I’m going to ask you to set aside for a few moments everything you’ve heard about why Steve Kapitan resigned as DeKalb city clerk in 2012. Instead, I’d like for you to entertain the possibility that he was a casualty of a DeKalb city government intent on exchanging its elected city clerk for an appointed clerk for quite some time. Read the rest of this entry

It has come to my attention that clarification is needed on the post about the General Fund “special events” account named 8306.

If you contact City of DeKalb and they tell you that 8306 is for events such as helping with the expenses of July 4th festivities at Hopkins Park, that is 100% correct.

However, it is also correct to say that funds coded to expense account 8306 pay for employee events (parties and picnics) and special compensation (gift cards). The February 2016 expenditures report(p. 9), for example, included payouts for an employee potluck and a spree on gift cards for employees that’s becoming infamous. Read the rest of this entry