Archive for the ‘ Payment Due? ’ Category

The numbers are the amounts budgeted for streets combining two line items, Street Maintenance/Repairs (8632) and Street Construction/Reconstruction (8633). It does not include alleys or permanent street improvements (e.g., Taylor Street widening).

Keep in mind, what’s budgeted may not always reflect what’s spent, either.

Fiscal YearCapital
Projects
Motor FuelTIF 1TIF 2Totals
FY200775,000980,000417,60020,0001,492,600
FY2008115,0001,650,0003,390,00020,0005,175,000
FY200901,500,000350,000100,0001,950,000
FY201001,500,000450,000100,0002,050,000
FY2011360,0001,050,000450,000100,0001,960,000
FY2012378,0001,120,000950,000100,0002,548,000
FY2013300,0001,382,000530,00075,0002,287,000
FY2014150,000635,000500,000500,0001,785,000
FY2015300,000400,000500,000500,0001,700,000
Totals1,678,00010,217,0007,537,6001,515,00020,947,600

Observations:

  • The Motor Fuel Tax Fund is taking a dive.

  • Overall funding of street repairs and reconstruction has dropped significantly.

  • TIF 2 has only just recently become a major funder of street reconstruction.

  • Now I’ll explain what has happened in three parts.

    Part 1: The Motor Fuel Tax Fund used to hold both the state and local (home rule) motor fuel taxes, but the city was having trouble keeping up with other infrastructure needs and began placing the local portion into the Capital Projects Fund, where it has to compete with other projects besides road-related ones. (DeKalb has also dedicated some local motor fuel tax funds to the Public Safety Building Fund.)

    Part 2: The city doesn’t dare budget more for streets from the Motor Fuel Tax Fund because it doesn’t know how much is in it. Here’s the explanation from the FY2015 budget narrative:

    This fund has some outstanding obligations due to outstanding bills from past construction projects in the amount of approximately $1.0 million dollars. The City will also receive $198,673.00 from the Illinois Jobs Now Capital Bill. The balance in this fund is attributed to the outstanding obligations of projects that have not been closed out. These outstanding obligations amount to an estimated $1,888,455.73. Once the Illinois Department of Transportation completes the audit of this fund a greater understanding of the actual amount available will be determined.

    Part 3: TIF 2 can be used to catch up/make up for/cover up for the lack of funding to streets now that the fund has accumulated a $7 million nest egg for remodeling the city hall building.

    Related posts:

    So DeKalb Has a Streets Problem — Is TIF or a Sales Tax Hike the Answer?

    FAC Using the Faulty Street Repair Numbers Too

    Last night DeKalb’s Financial Advisory Committee began the work of figuring out how to pay for the claimed need of an additional $6.6 million per year for street repairs.

    Unfortunately, they are still using the same faulty numbers — faulty in the ways I explained here.

    If the FAC is working with bad numbers, so is the Chronicle. Here’s what they’re saying today:

    This year, the city will use $1 million in TIF funds to pay for street repairs, City Engineer John Laskowski said. TIF districts allow the city to divert property tax money into a special account that is used to rehabilitate blighted areas. Another $400,000 to be spent on street repairs will come from the local gas tax. The city dedicated another $100,000 to pay for sidewalks and alleys.

    The Central Area TIF district, which covers downtown DeKalb and Sycamore Road, will get $500,000 in street repairs this year. It expires in 2020. A second TIF district that covers a portion of the city between Lincoln Highway and Taylor Street is responsible for $500,000 and expires in 2018.

    Again, as pointed out in the earlier post, the Chronicle is not distinguishing between maintenance/repairs and road construction/re-construction; TIF 2, for example, doesn’t even have the line item for the maintenance portion (and, until last year, the city rarely budgeted for street reconstruction in that fund and never to the tune of half a mil). Also, there’s no mention of the state motor fuel taxes going to roads (Fund 10), just the local taxes.

    Now I’m going to show you what’s in the city budget for the current fiscal year (FY2015). The table comes from data found on pp. 144-155 of the PDF file.

    Fund (No.)Line Item 8629:
    Alleys
    Line Item 8632:
    Maint/Repair
    Line Item 8633:
    Reconstruction
    Totals
    Capital Projects (50)50,000300,0000350,000
    Motor Fuel Tax Fund (10)00400,000400,000
    TIF 1 (13)00500,000500,000
    TIF 2 (14)00500,000500,000
    Totals50,000300,0001,400,0001,750,000

    There’s also approximately $40,000 tucked into the Public Works budget for streets and alleys.

    At any rate, I don’t get it. If you’re talking strictly from a repair/maintenance standpoint there’s a mere $300,000 budgeted for it. If you’re including street reconstruction, you have to include the amount of the Motor Fuel Tax Fund as well.

    I’ve got another table for you, coming up sometime later today.

    In July 2013, the city council of DeKalb approved the DeKalb City Center plan, an update of the 2007 Downtown Revitalization Plan.

    One of the key components of the plan is:

    Leverage TIF to study the feasibility of and potentially promote the development of additional City Center traffic generators, such as a hotel/conference center, children’s museum, bowling alley, movie theater, or additional dining and entertainment options[.]

    Except that by the time the plan was approved, DeKalb had already begun leveraging TIF to study the feasibility of a downtown hotel and convention center.

    And had already begun negotiating with a developer.

    And was already talking about helping to close a “feasibility gap” with public funds.

    Why haven’t you heard about this? It’s because of the city manager’s spending authority. The city manager can authorize up to $20,000 in spending without going to the city council for approval. In the case of the hotel/convention center, the first study — dated January 2013 — cost $12,000. A supplement was completed this year for $7,500.

    How convenient.

    You can look at some of the documents, obtained through the Illinois Freedom of Information Act, at the City Barbs Blog Facebook Group.

    This week’s number: $33 million

    The city’s streets could need $33 million in repairs over the next five years, but a key funding source for the work will dry up by the end of the decade.

    That has city leaders considering options including increasing the sales tax to generate more revenue.

    Of the $1.5 million the city plans to spend on streets this year, $1 million comes from the city’s two tax increment financing districts. TIF districts allow the city to divert property tax money into a special account that is used to rehabilitate blighted areas.

    However, one of the city’s TIF districts expires in 2018, while the other will expire in 2020, meaning the only source of funding left will be the local gas tax.

    The above account is incorrect and incomplete. Let me count the ways. Read the rest of this entry

    From the Daily Chronicle today comes “DeKalb aldermen confront budgeting issues.”

    During their Monday discussion of the budget for the fiscal year that starts July 1, DeKalb aldermen were told the city will need to cut services or boost revenue in order to maintain operations in the coming years.

    Beginning July 1, alderman were told, the city should shift its structure and look at the way the general fund is used.

    “The main thing is the current structure of how everything is put together is not sustainable,” City Manager Anne Marie Gaura said. “Something has to change and that will require policy decisions in the coming months and coming years on how to address this long-term.”

    Gee, where have I heard this before? Read the rest of this entry

    From the Daily Chronicle’s weekend edition:

    The city of DeKalb is without a finance director after Laura Pisarcik resigned the same week city Manager Anne Marie Gaura announced financial consultants would review the city’s financial policies and procedures.

    Ordinarily I’d applaud the sight of heads rolling for the sake of accountability. This time I can’t. Here’s the problem: Though the Daily Chronicle published the news yesterday, Pisarcik resigned the first week of March. Her absence was discovered by accident last week, when somebody noticed her name had been removed from the city’s website and thought to ask about it. (Yeah, that was me.)

    A city department head has been gone for a month without a public announcement of the departure? I wonder why?

    Gaura acknowledged there is a separation agreement between the city and Pisarcik, but declined to disclose the details.

    Oh.

    Does Ms. Gaura think she can withhold these details indefinitely? I’ve already submitted a Freedom of Information Act request, and please note I’ve never been denied copies of any contract. And when it comes specifically to separation agreements, we have only to recall that the Chronicle had no problem obtaining agreements signed with former city clerk Steve Kapitan and former park district executive director Cindy Capek.

    There’s no doubt the separation agreement will come out. Also, Laura Pisarcik would have been missed at the next budget meeting, right? The city manager has blown, for no good reason, an opportunity to build trust with the community.

    City of DeKalb’s use of administrative tow fees brings up lots of questions, such as how many of these off-budget accounts the city has and whether their collective use rises to the title of “shadow budget.”

    I don’t have the answers to the above questions, but I do know that even off-budget transactions are included in the invoice payment listings, aka check register. And thanks to the new account coding, you can usually easily tell what type of account each purchase is charged to, should this be of interest to you. Read the rest of this entry

    The Daily Chronicle may have just published one of the most important investigative reports ever written about City of DeKalb finances.

    Since early 2013, the DeKalb Police Department has used around $300,000 of the $350,000 collected in administrative tow fees to buy a wide range of items outside of its regular budget.

    There are a lot of potential issues arising from this revelation, from whether the tow fee ordinance is fair to how much the equipping of the new police station might have gone over budget. The article seems to suggest that, right now, the city is mostly concerned about the administrative tow ordinance itself coming under attack. But to me, we’re taking our eyes off the prize if we stray too far from the simple fact that $300,000 in public spending was not publicly accounted for in 2013.

    I mean, doesn’t it make you wonder:

  • What other accounts holding fines and fees are used for “extras”?
  • How this might relate to the $3-million-plus “excess expenditures over budget” that the city’s auditors found noteworthy?

  • Why the city has begun changing the policy even while insisting there’s nothing wrong with the status quo?
  • That’s just for starters. So I’m going to keep my eyeballs on this for awhile, yes, yes indeedy.

    **Update, noonish: Just picked this up on Twitter: IL Rep. Tom Demmer (R-Dixon) is sponsoring legislation to help prevent thefts of local government funds. One of the key provisions includes auditors’ sharing copies of the management letters with the governing bodies of counties and municipalities.**

    Recently I became aware that each annual financial audit includes an auditor’s “letter to management” with comments and recommendations. As far as I know, such letters are not published (perhaps due to inclusion of deficiencies that some would find embarrassing) but a citizen can obtain them via Freedom of Information Act requests and I did.

    This piece of the FY2013 letter caught my attention:

     photo AuditorsLettersOverBudget_zps70d364e4.jpg

    “Excess of actual expenditures over budget” to the tune of $3.1 million is pretty major, especially for a town that supposedly is striving to meet a target to hold the equivalent of 25% of its General Fund balance in reserve.

    Why isn’t the overspending big news? When it comes to the General Fund, the city enjoyed revenues that exceeded projections for the year — enough to cover the excess spending and a bit more. I guess the philosophy is, if you don’t end up with an actual deficit in your GF, it doesn’t matter what you spend.

    Other funds, such as Equipment and Fleet, aren’t so easy to explain. For example, Equipment had excess expenditures of $512,680 according to the letter, yet total expenditures as shown in FY2013 estimates (which are part of the FY2014 budget) are only $259,310. Fleet has a similar story. Did someone OK last-minute spending sprees that didn’t make it into the FY2013 budget estimates? What should we make of this?

    First, let’s update our pension percentage-funded chart with the FY2013 numbers. These are from Comprehensive Annual Financial Reports (CAFRs).

    dyerware.com


    City of DeKalb is quick to tout its balanced budgets and its growing “reserves.” But if DeKalb is doing so well, why isn’t it making up the pension-funding ground it lost during the past two recessions? Read the rest of this entry