DeKalb’s expenses are outpacing revenues:
The city will spend at least $30 million from its general fund, a 5.4 percent increase from this fiscal year. The city’s general fund pays for city personnel, equipment, and contractual services.
The city is projecting $31.1 million in revenue for fiscal 2014, a 4.2 percent increase from this fiscal year. In fiscal 2014, the city is paying $750,000 more on police and fire pensions out of their general fund.
Today I want to look closely at the revenue increases.
In dollars, the 4.2% expected net increase equals $1.08 million, which will cover the pension contribution hikes plus a bit more. However, so little of it comes from natural growth that you won’t need to pull out the tarot cards to see a shaky future. Read the rest of this entry
There is going to be a special meeting tonight at 6 p.m. to talk over amendments to the draft budget. Then, during the regular meeting beginning 7 p.m. there will be a public hearing on the proposed budget.
Two of the proposed amendments are sizeable, and would set off lots of juggling. (PDF p. 7). There is also the possibility of creating deficits for the year that were not originally anticipated.
There is way too much being thrown into the air here to be absorbed in such a short amount of time.
I don’t know about you, but one of the ways I show respect for the process is by studying the plan before I comment on it publicly.
Do council members hold a similar respect for reasoned public input? If so, they will reschedule the hearing.
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| Tagged as: budget
, city council
Here’s a transcript of a bit of commentary by Larry Kujovich from the dynamic duo Executive Partners and Crowe Horwath, the consultants who met with City of DeKalb officials April 13 to talk strategic financial planning.
You’ve gotta look into the future. . .Does your 5-year plan list what you need, or what is available in terms of resources. And at the end of the day, it doesn’t say what you need. If you’ve got to fund all your capital requirements, all your replacement funds, AND fully fund your pension plans, you’ve got a hole that is HUGE. You need to know what that hole is, even if you can’t solve it right now. Because you’re making short-term decisions, and maybe — we talked earlier about the half-million savings, or the million dollars, how can we use it? — you may need that to do just what you’re doing today, three years from now. And if you don’t have that visibility, you’re gonna get yourself in a box where you spend it now and you don’t have it in three years. Now again, this is my private sector experience; if we didn’t do this THERE, we’d be bankrupt.
Mr. Kujovich also recommended a culture change, in which the focus shifts from the requirements of the organization to an outcomes-based model that asks how best to deliver what the citizenry needs. In other words, he’s asking the bureaucracy to act like less of a bureaucracy.
Watch the full video here. The operations portion begins roughly an hour in, following the discussion of revenue opportunities.
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| Tagged as: budget
In a recent post about the latest Executive Partners, Inc. (EPI) involvement with the City of DeKalb as its financial consultant, I expressed anxiety about a proposal to privatize the city’s water.
Turns out, that’s not the EPI proposal for the Water Division, and I’m sorry to have led you astray.
It’s a PILOT (not pilot) program. PILOT stands for “payment in lieu of taxes,” and is sometimes spelled PILT as well.
Among EPI’s tasks this round is identification of potential new revenue sources. One of its suggestions is to add up the assets of the Water Division, calculate what Water would be paying in taxes if it were a private company, and then charge us the amount of the calculation.
A preliminary assessment shows net assets and potential annual in-lieu tax payments to be $26 million and $186,000, respectively.
Again, sorry for the error.
City of DeKalb employees and the group Ellwood Historic Neighborhood have hatched a new plan just in time to take up a line item in the FY2014 budget: Buy up multi-family homes in the north 5th Ward, convert them to single-family and resell each property at a loss. In fact:
“We have worked with a local realtor and contractor to identify a willing seller of a multiunit house in the neighborhood,” said David Castro, a member of the Ellwood House Neighborhood Group, a group of residents who have worked with the city in the past to restore the area.
Council has put this plan on hold. Good for you, council members! Personally, I would, too. I agree with Ald. Jacobson that DeKalb should not get into the business of property speculation. First and foremost because it is so, so bad at it (see: empty lots downtown). Read the rest of this entry
The City of DeKalb got rid of 30+ employees at the beginning of FY2011 in order to balance its budget. There followed a year of quiet, but now we’re in the midst of a hiring spree.
|YoY Comparison of|
Full time Equivalent
Here is what it has done to personnel expenses.
And here’s what the FY2014 budget narrative (PDF p. 29) says about the increases:
Total Personnel Services reflect an increase of 4.5% percent over FY2013. Most of this increase is attributable to a 15% percent increase in pension costs. Wages reflect increases based on collective bargaining agreements. Our insurance consultant informed us in March that the City’s health insurance premium will increase by 4.5% percent[.]
The latest pension cost increase is distressing, but in terms of dollars it is neither the only source nor the primary source of rising personnel costs, which make up some 83% of the General Fund budget.
So we’re looking at these expenditures going up $2.4 million over a two-year period. However, personnel expenses as a whole are expected to rise only about $1 million. In my opinion, this has given council and others a false sense of security that our revenues are naturally growing to cover the ongoing, rising expenses — so let’s try to tug the curtain away. Read the rest of this entry
The DeKalb Area Rental Association (DARA) has sent city council members a letter and with general budget recommendations for FY2014.
EPI, of course, refers to Executive Partners, Inc., their latest report to the city and the April workshop we talked about yesterday.
Jump for more. Read the rest of this entry
*Post corrected May 21*
Executive Partners, Inc. (EPI) was hired four years ago to help put the City of DeKalb on a more sustainable path financially.
The fix didn’t take, so they’re back. EPI met with city officials at an April 13 special meeting.
Mr. Nuehring stated he will discuss opportunities for revenues. He noted that there are approximately 375 fines and fees and enforcement can be a challenge. He added that a full review of all may be necessary. The question was asked of staff yesterday, he said, if fines and fees are viewed as revenue or used for public safety and compliance. Staff stated they are meant for public safety and compliance. Mayor Povlsen agreed.
DeKalb’s personnel expenses are going up $1 million in FY2014, but most of its core revenues are slipping. Property taxes are still flat, city sales tax has been reduced more than $100,000 in the past year and the utility tax revenue estimate for FY2013 is $320,000 less than the year before. Are we really supposed to believe the timings of the new rental housing registration program, towing/impounding regulations and steep increases in fines are coincidental and not responses to continuing revenue shrinkage? Read the rest of this entry
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| Tagged as: budget
The DeKalb Chamber of Commerce wants a new annual allocation from the city.
The DeKalb Chamber of Commerce is requesting $45,000 from the city to create an event coordinator position to take over the events that Re:New DeKalb has run for years…Re:New DeKalb will undergo a fundamental shift later this year, said Frank Roberts, the president of the organization’s executive board. He said the organization will broaden its focus to include economic development in the entire city, public safety, and creating a marketing brand for DeKalb.
First of all, that’s some serious mission creep they’ve got there. Secondly, the Chamber already gets $50,0000 per year from DeKalb’s Economic Development Fund for marketing and tourism.
Speaking of the Econ Fund:
The money would come from the city’s economic development fund, which is funded by the city’s hotel/motel tax. Biernacki said the city expects to see a boost in this fund with the new Hampton Inn and Suites being built at the corner of South Annie Glidden Road and Taylor Street.
No, I’m thinking the money probably wouldn’t come from that fund. Reason(s): the Econ Fund always a) gets a transfusion from the General Fund, and/or b) runs in the red. Read the rest of this entry