Archive for the ‘ City Watch ’ Category

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 no memos or other records of the elimination of gift cards for employees, we are free to assume that the “internal review” and elimination of 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

We know from our recent examination of the doctrine of incompatible offices that compromising the loyalty of an elected officer is prohibited. A person holding elected office cannot hold any other role — as employee, appointee, or a second elected office — that could reasonably be expected to conflict, or even appear to conflict, with the first elected office. A person occupying elected office has one loyalty, and that’s to the electorate. Nobody else is the elected person’s boss.

In DeKalb government, this is true of city council members and the city clerk. Both are elected positions and nobody should buy the story that any of these elected officers are also employees of the municipality, for to do so invites perversion of the original intent of an elected office.

As we saw in the post about incompatible offices, however, DeKalb holds itself to no such standard, but instead chooses to create confusion by pretending that the city clerk’s position comprises a dual role, that of officer and employee at the same time.

Moreover, some of the offenses committed against the doctrine of incompatible offices are way worse than the confusion sown verbally by city staff. For reasons we will examine at a later date, the corporate authority (city council) of DeKalb has in recent years approved ordinances in line with an appointed clerk instead of an elected one. In a very real way, the corporate authority has usurped the statutory powers placed with the elected city clerk and vested them in the city manager. Read the rest of this entry

Account 8306, Special Events

City of DeKalb has an account in its General Fund called “Special Events,” 8306 in the budget. I always thought special events were public events, such as the open house that was held for visitors to tour the new police station. Then I came across an expenditure of $5,400 for Target gift cards for employees that was coded to this expense account, which prompted me to look more closely. It appears to be an account that pays for employee parties and gifts.

Here are the amounts budgeted over the past few years from this account:

2012: $ 7,000
2013: $12,000
2014: $15,000
2015: $19,750
2016: $22,850

Even if all of the expenses are legit — and I’m not sure they are — the more-than-tripling of what’s budgeted into this account needs to be explained. I also note that the extravagance in this area comes on top of similarly large increases we’ve observed for membership dues/subscriptions and professional development expenses over the past 2-3 years.

But back to the question of legitimacy. Let’s consult the Illinois Constitution.

ARTICLE VIII

FINANCE

SECTION 1. GENERAL PROVISIONS
(a) Public funds, property or credit shall be used only for public purposes.

Are private parties and gifts for city employees a public purpose? I think not.

DeKalb isn’t particularly good at observing boundaries. One example is that DeKalb’s contracted attorney is allowed to sit with the city council during planning sessions as an assistant in setting strategic priorities. In other words, a contractor gets to step out of his assigned role to provide unfettered input into public policy that the public itself never gets to enjoy.

But while the attorney’s extra privileges are plenty objectionable from an ethics standpoint, the most egregious errors in failing to maintain separation of roles have arguably come about in DeKalb’s dealings with the city clerk’s office beginning in 2012, when clerk Steve Kapitan was forced to resign. Here’s what city staff said about it at the time (my emphases):

[City manager Mark] Biernacki explained that because of Kapitan’s unique situation as both an elected official and city employee, certain confidentiality rights are in place.

The city, as the former employer of Mr. Kapitan, has certain obligations to keep his personal records confidential,” said city attorney Dean Frieders…

City of DeKalb again combined the roles of city employee and city clerk when Diane Wright was appointed in Kapitan’s place later that year, yet also kept her administrative job with the city (again, my emphasis):

With recent changes in City Hall staffing, a proposal has been developed to provide more efficient use of City personnel to perform administrative functions for the City, by utilizing the currently serving Acting City Clerk in a dual role as City Clerk and Executive Secretary.

These moves are problematic specifically because citizens of DeKalb have voted twice in the past 10 years to retain their municipal clerk as an elected position. While certainly “unique” and possibly even “efficient,” these elected official-city employee hybrids are not allowed under Illinois law. Elected officers are intended to serve only one master, and that’s the electorate. Read the rest of this entry

Yes, “is.” Emails obtained by Michael and Misty Haji-Sheikh of Preserve Our Neighborhoods show that even though collaborators ultimately rejected formal incorporation of College Town Partners in May 2014, the intention remained to suck sweet, sweet tax dollars out of City of DeKalb via Tax Increment Financing (not even getting into NIU and use of the NIU Foundation, though we definitely should at some point). There is no reason to believe the schemes were dropped, especially now that the mastermind has wormed his way onto the NIU Board of Trustees.

Yes, “schemes.” How else to describe the dreams of a local banker (and longtime Sanitary District trustee, by the way) to transform a college-adjacent neighborhood and get DeKalb to pay for the project. He apparently is so persuasive that the other officials involved, including our mayor and city manager, went along with him for months though their status absolutely precluded participation as partners in a private entity intent on spending public money over which they exert control. It was a gargantuan conflict of interest; we should find ourselves shaken by the apparent ignorance or disregard of their duties to the public while they spent oodles of staff time and other resources to bring them to the brink of a formal agreement without council’s prior authorization.

Indeed, we’ve not heard a peep of public discourse that hasn’t been tied to citizens’ dogged pursuit of information.

Click here to read the email indicating that College Town Partners might have been buried, but not outright killed. If the Shodeen people ever get their hotel and apartments approved, look for CTP to dig up the undead baby, give it a costume change and present it as the inevitable and desirable retail counterpart to Shodeen’s residential development.

Related post: Tim Struthers Gave DeKalb’s Mayor Talking Points When the College Town Partners Story Broke

I knew the General Assembly was debating the bill last year, but missed the August passage of Public Act 099-0402, which amends an important provision of the Illinois Open Meetings Act (OMA).

(5 ILCS 120/3.5)
Sec. 3.5. Public Access Counselor; opinions.
(a) A person who believes that a violation of this Act by a public body has occurred may file a request for review with the Public Access Counselor established in the Office of the Attorney General not later than 60 days after the alleged violation. If facts concerning the violation are not discovered within the 60-day period, but are discovered at a later date,
not exceeding 2 years after the alleged violation, by a person utilizing reasonable diligence, the request for review may be made within 60 days of the discovery of the alleged violation.

(Emphasis in original, to mark the amended language.)

Discovering an OMA violation beyond the old 60-day deadline was a teeth-gnasher, and happened more often than you’d think. This amendment should make a real difference.

One Step Closer to the Edge

Look at that nice, wide gap between General Fund revenues and expenditures during FY2011 and FY2012.

dyerware.com



(All figures are actual as reported in annual city budgets, except FY2015 numbers are the end-of-year budget estimates and FY2016 are, of course, the projected amounts.)

What the gap represented was a huge reset of the operations (General Fund) budget that was accomplished by actively reducing the city’s workforce by some 20% on top of a couple years of attrition.

Mind you, we’d gone a couple rounds of tax and fee hikes by then, but it didn’t matter; city staff calculated at the time that if the reduction in force didn’t happen, we would be $5 million in the hole by the end of FY2011.

What the reset did was to fix the structural budget issue of personnel costs outpacing revenues during the Great Recession and the “flatlined” revenue period following (that DeKalb, by the way, still hasn’t quite overcome). A nice side effect was meeting capital needs. Following the reduction in force, there was enough money to put into the fleet, a new police station, and needed expansion/repairs of the fire stations.

But now, the gap is closing and, once again, money for capital needs has disappeared. And since most of the rise in expenses reflects increases in wages and pension contributions, it’s clear the reset has been squandered by the hiring spree that came after. Read the rest of this entry