Look at that nice, wide gap between General Fund revenues and expenditures during FY2011 and FY2012.
(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
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City of DeKalb released its Comprehensive Annual Financial Report (CAFR) for fiscal year 2015, which ended June 30.
I’m sure city staff will also release the Popular Annual Financial Report (PAFR) as they did last year. It’s a dumbed-down version of the CAFR that nobody asked them to compile, but they get some sort of warm-fuzzy award for it, so it’s all good.
Let’s update some charts. First, the hiring news:
The hiring spree is still on.
The General Fund budget for personnel expenses this year is $26.9 million, a rise of 2% over last year and a net increase of $500,000 in this budget category. There are a couple reasons why the increase was “only” 2%. The primary reason is that a chunk representing another 2% was sent over to the Water Fund for Water to pay. They’ve also succeeded in reducing health care costs (something I’d like to compliment them on sometime, if only they’d stop annoying me for a minute with the Bozo no-nos).
But wages and pension costs are both increasing well above inflationary levels. I anticipate they will have to come up with $500,000-$700,000 more for this budget category next year.
In other words, despite the rosy picture staff will paint next month in an effort to persuade the city council to hire a human resources director, the council should no way, no how approve any more hires and, in fact, should let attrition do its work for awhile. Read the rest of this entry
David Patzelt of Shodeen Group, LLC, sent a nice thank-you letter to the DeKalb city manager for attending a meeting between Shodeen principals and city officials in the matter of Shodeen’s latest project proposal. The letter was included in the agenda packet for Wednesday’s meeting of the Planning and Zoning Commission. It outlines Shodeen’s arguments against the city’s insistence on its providing retail space on the ground-floor level of the apartment complex plan.
As you know we are a commercial and retail Developer, Builder, Owner and Management Company. Like staff, we too wish that the market in DeKalb was strong enough to support commercial/retail in the lower level of the proposed residential building. As we discussed with you, City staffs position on this being a requirement is unwarranted and unfounded. Even if the City will subsidize the rent as well as commit to a guarantee of rent payments, we do not recommend the addition of retail space at this point in time. Staff continues to be unwilling to accept this without any basis other than a “want.” Empty retail space should not be a “want.”
(The underlined words appear that way in the original.)
No, it’s not a matter of acceptance, nor just a “want.” It’s an actual requirement for the downtown business district. Staff can’t change it. Only city council can.
But an even larger policy change would be the use of rent subsidies and guarantees to get the project built the way the city wants.
We knew we’d have a tussle over TIF funding for redevelopment on this site. Has the city placed other subsidies on the table for consideration?
I’ve begun a Facebook discussion thread here.
Former DeKalb Alderman Pam Verbic wrote current Mayor Rey a detailed letter regarding the upcoming property tax levy vote. Find it here. I hope you will read the whole thing.
Each of Ms. Verbic’s points is well taken and stands on its own. I don’t intend to rehash the letter. But her #4 relates closely to views I’ve shared for two-years-plus about the hiring spree and its impacts on city budgets, and it furthermore reminds me to look at the morality of the situation as well as the practical.
4. Since I was a council member in 2011, I know what it means to have to lay off employees to contain costs. At that time, the number of employees were reduced by 29 from 231 to 202. No positions were eliminated in police or fire. There would be no immediate savings due to the costs of separation, so savings were to be realized on a long-term basis. This did not happen because later councils approved adding new employees, including several higher paid management positions. Last year’s staff memo concerning the tax levy reported that the number of employees had then increased back to 224.
The layoffs followed several years in which the city took a number of measures to try to regain control of its finances. City officials talked layoffs as early as the latter half of 2007, which prompted early retirements. They froze hiring. They forced expense cuts. They raised taxes and fees. They delayed purchases of big-ticket items like vehicles. If I remember correctly, they even froze pay for a year.
These actions were not enough, and an across-the-board pay cut was rejected, so layoffs became the last resort to achieve a reset of compensation to match the new revenue reality. But it needed time to work, and DeKalb only waited one year before starting the hiring spree.
We often focus on the tax burden in a town that sees little prosperity, and of course that is vitally important to consider. However, job loss involves pain, and the recent lack of restraint in hiring has all but rendered meaningless the sacrifice of city workers for what was supposed to be the greater good.
It’s shameful. But in my opinion, it’s an error that could still be reversed.
One argument in favor of hiking property taxes in City of DeKalb is that the city has reduced general operations (General Fund/GF) budgeted expenditures by $800,000 from last fiscal year to this one, which ostensibly shows that DeKalb has already cut expenditures to the bone.
The fact is, DeKalb has a runaway spending problem, budgeting $2.3 million more for personnel this fiscal year than in FY2014.
Read through to see how this was done. Read the rest of this entry
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As the city ponders a property tax hike of 37% as well as water rate and fee “adjustments,” you may wonder how DeKalb has got itself mired in financial straits.
It’s actually nothing new. DeKalb’s budget issues are — and have been since at least 2005 — the result of snatching nearly every penny of revenue growth and putting them into more staff and higher salaries, to the detriment of other areas such as street maintenance.
Worse yet, DeKalb has to come up with, at minimum, a half-million new dollars in revenue each budget cycle just to stay abreast of annual personnel cost increases. It’s rendered the financial gurus unable to look ahead more than 12 months at a time because they continually need to chase the next rabbit for the proverbial hat.
Want proof? The stated Number One strategic priority of the City of DeKalb is “Infrastructure,” yet capital improvements are precisely the area that’s been starved in the current budget. That’s pretty messed up.
And a proposed 37% hike in property taxes bespeaks the latest shortage of bunnies for the hat trick. Read the rest of this entry
***Update*** 6/25/2015: I finally got a response to my letter telling council and top management staff about accessibility issues with the newly-launched city website. Someone had handed off the letter to DeKalb’s management analyst, Lauren Stott (one of the staff members who withheld estimates for a simple accessibility fix vs. a complete redesign, despite direct requests for this information from council members). Here’s what she said:
Thanks for your email. The City has worked with CivicPlus to ensure website accessibility is provided for all users. Web-based accessibility checkers such as wave.webaim.org and Powermapper.com access a website’s html code, but aren’t as effective in assessing content customized with CSS (Cascading Style Sheets). The City of DeKalb’s website, in its state of being fully customized, heavily utilizes the CSS design language along with html. Therefore, the Web-based accessibility checkers register items on the site as errors, when in fact they just represent a departure from the typical html language the accessibility tools are designed and equipped to assess. In its contract with the City of DeKalb, the website developer has agreed to follow not only Section 508 of the Rehabilitation Act but also Web Content Accessibility Guidelines 2.0. The portion of the agreement that outlines those specific requirements is included below.
1. While the contract might call for complying with WCAG, that is certainly not what happened. The “Accessibility” page on the website says the site conforms to Section 508 of the Rehabilitation Act, period. Another “tell” is the color contrast problem. Section 508 only mentions contrast in that it requires that applications not interfere with user settings. WCAG 2.0 requires a contrast ratio between text and foreground be set within a certain range. Many pages do not meet this requirement, such as the “Job Opportunities” page that, according to the WAVE checker, contains 27 contrast errors between background and link text.
2. Since Mac McIntyre introduced us to the WAVE accessibility tool, Mac sent Stott’s explanation to WAVE. Here’s what their representative had to say:
WAVE evaluates page accessibility after CSS has been applied and account for CSS in identifying potential accessibility issues. The developer’s explanation is not accurate. Each of the errors identified by WAVE indicate an actual end user accessibility issue.
I told Lauren Stott I didn’t wish to discuss this anymore with a person whose word I can’t take at face value. Then I invited city council members to send Stott’s explanation to accessibility checker websites for themselves.
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Original Post Read the rest of this entry
On the February 9 DeKalb city council meeting agenda was this action item:
2. Resolution 2015-011 Waiving Competitive Bidding and Authorizing the Execution of a Website Design Agreement with CivicPlus in an Amount not to Exceed $56,189 in Year One.
Staff said they didn’t have time to put out Requests for Proposals (RFPs). They claimed they’d been taken totally by surprise by Department of Justice findings that the city’s website was not compliant with Americans with Disabilities Act standards and needed to act this instant to meet a tight deadline in June.*
Did the city council pass the resolution? I honestly don’t know. The discussion took one hour, twenty-six minutes and there were several votes taken, including one that I described in my notes as “original motion, DEAD, 9:07.” I could be wrong. At any rate, council still continued to talk and vote until an expenditure up to but not exceeding something around $51,000 was passed 5-3.
There’s another potential issue besides the possible zombie motion, too. Waiving bidding on a public improvement (as opposed to routine procurement) of $20,000 or more generally requires a 2/3 majority to pass. So do some budget amendments, and the CivicPlus deal definitely did blow the website budget of $20,000. I’m not sure what the exception was that allowed for a simple majority vote in this case.
Lest you think I’ve totally lost it, let me tell you I’m not the only one. Staff have not been able to get the minutes right for this meeting and the culprit is the CivicPlus discussion. Right now we’re awaiting the second revision. Read the rest of this entry
The city council voted Monday on a measure to waive the customary bidding process and award a contract to out-of-towners for a new custom website. Staff insisted only CivicPlus could make DeKalb’s official website comply with Americans with Disabilities Act (ADA) rules within a 4-month deadline negotiated with the U.S. Department of Justice.
Some city employees, including the city manager, have worked with CivicPlus previously and elsewhere.
Some city residents have questions about this deal and Bessie Chronopoulos offered a list of hers in a letter to the editor. Read the rest of this entry
**Update** 1/26. Related: “Sales tax coffers could get boost with new law”. Discusses the Marketplace Fairness Act and its impact (if it ever passes the U.S. House) on state revenues.
**Update** 1 p.m. Related: “Now comes the Internet Sales Consultants”. It provides more food for thought on this scheme, as well as a description of an omission that sounds like a possible violation of the Open Meetings Act.
DeKalb’s city council is considering a new kind of retail revenue source. You should know about it because your tax money is involved.
City leaders are trying to lure Internet retailers with an 85 percent sales-tax rebate.
The first step in the coaxing process came Monday when aldermen unanimously approved an agreement with a shell company called Great Lakes Economic Development LLC.
The company was created by Tom McPeak, a partner with Atlanta-based Barnwell Consulting, who said he has an undisclosed client interested in setting up shop in DeKalb.
McPeak is an acquaintance of Roger Hopkins. Hopkins used to head the DeKalb County Economic Development Corporation, and after that contracted with the city to provide economic development services for a time. And it looks like he’s done us a solid in facilitating an introduction.
Let’s take a closer look at the potential in this gift. Read the rest of this entry