The City of DeKalb released its FY2014 Comprehensive Annual Financial Report last month, and as usual there’s plenty to digest. A large part of this report draws data from supplemental reports found in the back of the CAFR, some of which track the past 10 fiscal years and are therefore useful for understanding the lingering effects of the Great Recession on the local economy.

First up, I’ve prepared a chart of taxable sales. Retail sales taxes make up more than 40% of DeKalb’s operating budget — no other single revenue category comes close — so sales and the taxes they generate are important indicators of economic health.

The advantage of looking at the sales themselves instead of the tax revenues is that you don’t have to account for sales tax hikes, abatement deals and other “noise” in the data.

dyerware.com


Of course there’s a lot of overlap between state and local sales, but showing them both underscores the trend, which is this: Taxable sales have stabilized since 2009, but they’ve more or less stabilized at 2005 levels.

And it’s not just retail sales that have stagnated. DeKalb’s share of the state income tax is climbing, but so far has only made it back to 2008 levels. Utility tax revenue totals for FY2014 were less than FY2012’s.

Water sales were down by 5.2%. If you think about the combo of utilities and water falling, it seems likely that it can’t all be about plugging leaks and conservation. DeKalb’s likely still losing population.

City government, however, is bucking that trend. Read the rest of this entry

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.

Another Jail Referendum? Really?

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?

The agenda for last night’s joint meeting between DeKalb city council members and the city’s Finance (sic) Advisory Committee included a list of 14 communities besides DeKalb and their “comparable economic data.”

The argument seems to be that DeKalb taxpayers can afford to pay more in property taxes than the “bargain” they are currently getting relative to residents of other towns.

The comps had DeKalb’s median family income as $61,806. I laughed.

Don’t get me wrong — DeKalb’s median family income really is $61,806.

But you only come up with that figure if you leave more than half of DeKalb’s households out of the calculation. Read the rest of this entry

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

Another Anniversary

As City Barbs turns nine today, I want to express my pleasure and gratitude to you who have let me know in so many ways that the blog has value to you.

I am as excited as ever to begin another year. There’s the fresh smell of grassroots growing in the air and it makes sense to me that City Barbs continues to operate in service of perspectives and ideas that differ from those of the local political-media establishment.

Do you come here often? If so, you’ve noticed less frequent postings over the past several months. Schedules come into play, of course, but much of the change reflects a shift to posting more on Facebook. A lot of interesting public documents have come to light since the College Town Partners leak and I can’t resist the Facebook photo album format for displaying pages side-by-side with descriptions of their context. Hope you will check out the group if you haven’t already.

Lastly, here’s a plug for some o’ that grassroots freshness. You are invited to attend FOCUS DeKalb’s latest meeting — Part Deux to the town hall that drew almost 100 individuals. Find the deets here: Town Hall Meeting Tonight.

The latest in the College Town Partners saga is that NIU has apparently changed its Freedom of Information Act (FOIA) policy. It now favors heavy redaction.

The following is NIU’s response this week to a FOIA request made by Misty Haji-Sheikh of the north Fifth Ward group called Preserve Our Neighborhoods.

Click on the Twitter image for the full-sized view.

Only two bits of meaningful information are left: the subject matter and the recipient of the email. The city would have us believe that its newbie city manager wasn’t really involved in College Town Partners, but now one could reasonably assume Gaura has swum in the thick of things since early in her tenure — or perhaps even before that.

Let’s look at some more. Read the rest of this entry

Were you confused that DeKalb city clerk Liz Peerboom seemed to have resigned from office last Friday, but now the city is still awaiting her resignation? Me too. Fortunately I’ve been diving into the Illinois Municipal Code as time has allowed. The answer is that the resignation is not official unless it’s signed and notarized. Email doesn’t count.

Another reason for spending time with the Muni Code is to figure out what comes next in the matter of selecting a new city clerk. This is harder than it looks because sometimes one section of the Code seems to contradict another. However, after some research I feel confident the following assertion is wrong:

Once city staff receives Peerboom’s resignation, [Mayor] Rey will appoint someone to fill the remaining two years and eight months of her term.

Nope nope nope. Read the rest of this entry

Corn Fest Financials through 2012

ear of corn
DeKalb Corn Fest’s Form 990 for 2012 is available, so we can check out Corn Fest’s final year at the airport.

There was a major drop in expenses over 2011.

Good thing, too. The revenue for 2012 is the lowest in that column, which is particularly shocking in view of Corn Fest’s takeover of the beer garden. It’s another indicator of poor attendance and probably reflects a significant loss of vendors as well.

YearRevenuesExpensesGain/LossGrants
Given
2004129,016153,600-24,584None
2005174,734140,83933,895None
2006183,392163,69819,69425,200
2007167,509156,17411,3353,000
2008160,999178,519-17,5204,000
2009183,662184,376-1,014300
2010155,804171,748-15,944None
2011133,058151,358-18,300None
2012124,786123,760
1,026None

Time will tell whether Corn Fest saved itself from a death spiral by moving back downtown.

Meanwhile, I believe we’ve amply demonstrated that the real reason for the return from the airport was failure.