Archive for the ‘ Payment Due? ’ Category

Overtime comprised most of DeKalb PD’s excessive spending over budgeted amounts for FY2014, but another major culprit was spending in the “Commodities” category that came to roughly twice as much as the $260,000 budgeted.

Commodities were clearly under-budgeted in 7 of 10 accounts in that category and in a couple cases downright unrealistically. For example, actual costs for gas, oil and antifreeze for that department came in a bit over $117,000 for FY2013, yet PD budgeted only $95,000 for the same item the following year.

What’s going on? My guess is that the decision to return expenses from off-budget accounts back into the department’s budget accounts was an unexpected development.

Fortunately, spending for general government was lower than budgeted and this partially offset the excessive spending on public safety, leaving the city at a mere $347,773 over its General Fund budget for the year.

Resources:

City of DeKalb FY2015 Budget

Comprehensive Annual Financial Report for Fiscal Year 2014

Auditor’s Letter to Management (see p. 6 of the PDF)

City of DeKalb’s Downloads Page (Look under the Finance heading for annual budgets and CAFRs)

Airport Operating Deficits

The Comprehensive Annual Financial Report (CAFR) for FY2014 is out. So far the document is only accessible as part of the December 8 council meeting agenda, but at some point will probably appear on the city’s downloads page under the Finance title.

Let’s stick a toe in by first visiting the DeKalb Taylor Municipal Airport (DTMA) annual operating deficits:

FY2006: $467,332
FY2007: $720,557
FY2008: $645,131
FY2009: $778,324
FY2010: $524,272
FY2011: $681,713
FY2012: $413,576
FY2013: $491,217
FY2014: $491,997

The city has to make up for the deficits using tax money that would otherwise go to general operations.

Thoughts:

DTMA took on fuel sales a couple years ago, and all of its hangar space is rented out (PDF p. 143). I do not know whether the city has recently compared rental rates with other airports, but if not that might be a good next step to ensure that taxpayers aren’t subsidizing operations any more than they have to.

Déjà vu. DeKalb County Board is considering placing a proposed sales tax increase on the ballot next spring, for…an improved jail.

“What I plan to do is on the county board meeting on Dec. 17 is to review where we’re at with the jail expansion and some options for where we might go, one of those options being whether we go for referendum,” [County Administrator Gary] Hanson said.

Never mind that they’ve told us ad nauseam about how the tipping fees from the landfill expansion will pay for the jail expansion.

What changed?

[The landfill tipping] fees are estimated to total about $2.2 million a year, with about $1.9 million being available for the jail expansion project.

But that also is what the county would lose if Sycamore’s sales tax agreements with two airline fuel-purchasing companies collapses under a legal challenge from the Regional Transportation Authority, which is arguing that the companies don’t actually buy the fuel in Sycamore.

Boo-effin’ hoo.

When the airlines set up shop in Sycamore about 10 years ago, it doubled the county’s annual sales tax take from $2 million to $4 million.

Did you hear all the discussion back then about how to use the extra $2 million? Me neither. The jail expansion project was apparently not important enough to get a piece of the windfall.

And windfall it most certainly is: So much money was coming from just two companies, and they made it clear during the referendum discussion of 2006 that they would leave for cheaper pastures if the county tried to apply any sales tax increases to them. They have no loyalty to DeKalb County.

Nevertheless, instead of setting aside a stream that — clearly — could disappear at a moment’s notice, the county quietly absorbed the extra revenue into operations faster than a Bounty® brand towel.

Do we really want to reward this kind of shortsightedness?

DeKalb city staff have come up with a proposal to raise the city’s property tax levy by 10%. Daily Chronicle reports that the council gave initial approval on Monday.

Here’s how the city is presenting the recommendation:

City staff want to move away from the current practice of using the general fund to pay for pension obligations property tax revenues don’t cover. Finance Director Cathy Haley explained property taxes currently fully fund police and fire pension obligations and 97 percent of Social Security and Medicare costs. But only 26 percent of the city’s costs for the Illinois Municipal Retirement Fund comes from property taxes, leaving the general fund to cover more than $720,000.

A 10 percent increase would bring in an additional $495,000, fully fund Social Security and phase in fully funding IMRF obligations through property taxes, Haley said.

Council will furthermore consider the recommended hike in a joint meeting with the Financial Advisory Committee tonight.

The most important thing to understand is that the discussion is not just about setting the levy for the upcoming tax year, but about committing to a significant policy change in how the city chooses to fund its pensions — possibly for years to come. Read the rest of this entry

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.