Archive for October, 2011

Holy crikey sheesh.

The Illinois Sports Facilities Authority, the government agency that built and owns The Cell, paid $3.2 million for construction of the restaurant plus just about everything inside the place, from walk-in refrigerators to bar stools, the Tribune and WGN-TV found in a joint investigation.

Another $3.7 million from the agency went for infrastructure upgrades for water and sewers at the Gate 5 plaza that made the restaurant possible.

A 2010 agreement between the Sox, who selected Gibsons Restaurant Group to run the business, and the agency shows that at the project’s completion, the team was exempt from owing the agency any money. That arrangement contrasts with the management agreement for operating the stadium, which stipulates the team pay rent and make payments based on attendance.

The Illinois Sports Facilities Authority agreed with White Sox owner Jerry Reinsdorf that the agency should not share in any restaurant profits.

The restaurant is built on public land.

Former governor Jim Thompson chaired ISFA at the time and played a role in the deal.

Also:

“The Sox pay the state $2.50 for every ticket from 1.2 to 2 million, yet the team also gets back $5 million a year for stadium repairs and maintenance. In addition, the state buys 300,000 tickets if attendance drops below 1.5 after the year 2001, so in actuality, Reinsdorf got public funds to build his stadium and subsidies to guarantee its profitability.”

That’s right. The state – meaning taxpayers – buys tickets if Sox attendance falls too low.

Occupy Cellular Field. If you don’t, you pay anyway.

Once again I am pulling from DeKalb’s Debt Management Policy. This time it’s a limit on debt service expenditures as a percentage of General Fund expenditures.

3. Ratio of Annual Debt Service to General Fund Expenditures
The formula for this computation is annual debt service expenditures divided by General Fund expenditures (excluding certain interfund transfers). The City shall not exceed 10% of General Fund expenditures for annual debt service.

And it does not. DeKalb’s percentage of GF debt service runs no more than 5% of total GF annual expenditures (range is roughly $1.4 to $4.4 million) and often less.

However, there are more budgets than just the General Fund budget, and a lot more long-term debt than just bonded debt. TIF debt service typically runs $2 to $3 million annually. We also have capital leases, an Illinois Environmental Protection Agency loan, compensated absences liabilities, Other Post Employment Benefits (OPEB) liabilities, pension liabilities, money Due to Other Governments (school district) and are still paying on the 2003 Early Retirement Incentive termination benefits.

So I would say that ol’ Number 3 is of some value, but incomplete.

Previous debt policy posts:

City of DeKalb’s Self-Imposed Bonded Debt Limit

DeKalb’s Limit on Per Capita Debt

I recently asked a City of DeKalb employee in the Finance Division how accrued payroll was accounted for in the budget and was told it is reflected in regular payroll line items (e.g., 8101, 8102). I was in despair that there apparently wasn’t a “clean” number reflecting just the separation payouts. Then I accidentally discovered there is: it’s in General Fund Support.

There used to be a description of GF Support regular pay as “employee payouts on separation” but you have to go back to the FY2009 and earlier budgets to see it. More recent budgets bumped out the descriptions to make room for historical line item comparisons (which I love. Did the Financial Advisory Committee recommend that?).

Anyway, going back to the Voluntary Separation Program (VSP), for which you will remember I’ve been spectacularly incapable of prying information even with the Crowbar of FOIA, I calculated the FY2011 VSP payouts for sick leave, comp time, etc. at $820,000. How did I do?

Fiscal
Year
Budgeted
Separation
Payouts
Actual
Separation
Payouts
2008100,000417,291
2009175,000146,462
2010175,000504,757
2011979,000917,590 (estimate)

If the estimate holds true, I was less than $100,000 off the mark.

Interesting Search Terms

Here are a few of the search terms people have used recently that led them to the citybarbs blog. Thought you might enjoy.

“hunted houses”

“universal rest group dekalb”

“i lost minutes for a meeting”

“1971, that was a bad year for libraries”

“pig poop is black”

People also wanted to see firefighters saving cats, find out which non-home ruled municipality uses hotel tax to pay police salaries (so do I, now) and seek mybigblackbuddy.com.

Each month, visitors also still come to read about Henry Ford’s soybean suit and the loss of Milan Krpan.

dollar signAs implied yesterday, I’ve got my hands on the City of DeKalb’s Debt Management Policy. The City Clerk is looking into getting this document posted at the city’s website, but meantime you can get a copy of it from him or from me. It’s a 12-page PDF.

In continuing our look at DeKalb’s limitations on debt, here is the second.

2. Gross Bonded Debt Per Capita
The formula for this computation is Gross Bonded Debt divided by the current population as determined by the most recent U.S. Census. The City shall not exceed $1,200 for Gross Bonded Debt per capita.

We know from our examinations of the Comprehensive Annual Financial Reports (CAFRs) that in FY2010, City of DeKalb per capita debt was reported as $564.31, and that the figure was probably low because DeKalb’s population estimates have been running too high in the past few.

It is rather startling to find out that the city thinks doubling the per capita debt burden is fine. Is DeKalb using our more prosperous neighbors as benchmarks?

Speaking of doubling per capita debt, may I point out once again that per capita overlapping debt (which is the debt of other units of government paid by DeKalb taxpayers) doubled from FY2007 to FY2010. My readings suggest debt management best practices also call for a prescribed limit on total per capita debt for the sake of the financial health of the citizens.

Sure, DeKalb has limited power over other governmental bodies but remember, we’re merely “striving” and taking these “factors” into account when issuing debt, not following actual rules. Some consideration of the total debt burden would not be an unreasonable demand.

In “A Look at City of DeKalb Debt,” we calculated whether the debt carried by the City of DeKalb currently exceeds the legal debt limit imposed upon non-Home Rule communities. It does not. Also, in 2010 DeKalb passed a debt management policy that actually sets a stricter limit on gross bonded debt than the state would.

Credit Implications
When issuing new debt, the City should strive not to exceed credit industry benchmarks where applicable. Therefore, the following factors should be considered in developing debt issuance plans:

1. Ratio of Gross Bonded Debt to Full Market Value of Taxable Property
The formula for this computation is Gross Bonded Debt, which is the total outstanding debt, divided by the current Full Market Value of Taxable Property as determined by the Township Assessors. The City shall not exceed 2% of Gross Bonded Debt per Full Market Value of Taxable Property.

Yes, it is too bad that the city will merely “strive” and considers the limits as “factors to be considered” instead of actual, you know, limits. Still, let’s look it over.

In tax year 2010, the City of DeKalb’s total EAV was $643,916,597. To get the full market value, you divide this number by .3333, which gives us $1,931,942,985. Gross bonded debt for the fiscal year 2010 was $25,920,000, so doing the above computation yields 1.3%. So far it looks pretty good. In fact, the 2% limit would be $38.6 million.

However — you knew there was one, didn’t you? — the City of DeKalb’s EAV dropped by $35.5 million since then, and we’re getting ready to spend $12 million on a police station. I do not know how the debt restructuring fits into this picture yet, but it seems possible we’ll be butting up against the to-be-strived-for limit pretty soon.

I kinda figured they would do this (my emphasis).

II. Background:
In May, 2010, community members, financial institutions and city officials participated in an informational meeting to discuss the progress of the 2003 North 5th Ward Neighborhood Plan. The meeting was facilitated by the Center for Governmental Studies on behalf of the City. The meeting had four main purposes:

1. Update the community on the progress of the original plan that City Council adopted in 2003.

2. Determine if uncompleted tasks were still relevant and important.

3. Identify boundaries of the 5th Ward North, the Historic District and the TIF District; and

4. Identify current issues facing the neighborhood today and actions needed to address them.

Since the first meeting in May, 2010 when original recommendations were made, the City, and most importantly the residents, have worked together for positive changes. Throughout the process the City and residents have used multiple contact methods to ensure that residents, neighbors, landlords and community members had an opportunity for input. There have been several public meetings held to discuss implementation strategies and in July, 2010 a neighborhood association/watch was formed to help address resident issues. The results of these efforts are illustrated in the attached Ellwood Historical Neighborhood Implementation Strategies document.

I’ve looked over all the documents available from the City of DeKalb having to do with the North 5th Ward Neighborhood aka Ellwood Historic District, and made a report previously.

The City of DeKalb cannot honestly claim that the EHD meetings were public meetings. Public meetings include public notices and meeting minutes that the city council receives and files. Neither of these things has happened.

It is my opinion that, as soon as city officials started spending money on EHD and attending its meetings, it should have begun following the Open Meetings Act. However, EHD is not officially a city committee. It falls into a gray area so I didn’t say anything before.

I’ve done some reading, though. In OMA case law you can find examples of such de facto government committees being made to follow OMA because the government unit dedicates resources to them and they function as committees. Clearly, this is true of EHD. The city has sent out mailings, hired NIU as a facilitator and given the group an allowance of $100,000 of TIF money. A lawsuit would probably be a winner.

Meanwhile, I’ll not allow them to lie about the meetings being public and I hope you won’t, either.

There’s been a lot of talk about how ComEd and Ameren are spreading a lot of cash among state legislative leaders in hopes of an override of the governor’s veto of the Smart Grid legislation. Here’s a look at 2011 contributions from energy and utility companies to our legislators, State Rep. Bob Pritchard and State Sen. Christine Johnson.

Citizens for Pritchard
Ameren, $600, 8/2
Illinois River Energy, LLC, $1000, 8/9
MidAmerica Energy Company, $600, 7/25
Nicor, $500, 8/9
Ameren, $500, 5/9
ComEd PAC, $250, 6/1
NextEra Energy Resources, $500, 1/14

Citizens for Johnson
Ameren Illinois, $750, 4/11
Ameren Illinois, $1000, 5/2
ComEd PAC, $500, 6/7

Sen. Johnson voted against the legislation and has said she’ll probably vote against the override, too. Rep. Pritchard supports the legislation.

Here are some property tax numbers expressed as dollars per $100 of assessed valuation. The DeKalb County averages come from this state site, the city’s from my own tax bills.

Tax
Year
Average
Tax Rate,
DeKalb
County
Aggregate
Tax Rate,
City of
DeKalb
20008.04
20018.08
20028.13
20038.02
20048.078.40
20057.878.22
20067.808.12
20077.667.98
20087.888.42
20097.988.59
20109.20

Other 2009 Property Tax Rate Averages
Statewide — 6.43
Cook County — 5.89
Collar Counties — 6.47
Rest of State — 7.71

Highest: Alexander County — 11.38
Lowest: DuPage County — 5.58

[Added 10/19] Aggregate Property Tax Rate, 2009, City of Sycamore — 7.78

Behold my latest puzzle:

Fiscal
Year
FTEsAccrued
Payroll
Liability
Compensated
Absences
Payable
Comp
Time
Paid
Out
2004245.37437,0243,635,441
2005250.12622,4393,926,592
2006253.87606,4534,171,622
2007260.57799,2624,418,472319,000
2008262.07995,1804,172,541383,000
2009249.27869,2564,867,981304,000
2010240.761,055,1724,647,907374,000
Read the rest of this entry