I’ve had a preliminary look at DeKalb’s FY17 budget.
The proposed operations (General Fund) budget, which begins in January, has $2.8 million in additional spending for personnel alone when compared to the FY16 budget that ended June 30. (I am ignoring the current six-month “FY16.5” budget at this time.) Biggest jumps:
$743,000 more in regular wages
$485,000 more for health insurance
$1,712,600 more for police and fire pensions
Total operations spending from the General Fund (GF) is projected to be up $3.3 million as compared to revenues, which are expected to increase by only $2.5 million.
How are they bridging the gap? I’ve spotted three ways so far: Read the rest of this entry
Filed under: City Watch
| Tagged as: budget
Once upon a time, City of Sycamore and City of DeKalb had duly elected, full-time city clerks. Sycamore still has one. DeKalb’s, however, was destroyed in 2013. Low compensation and transfer of powers to the city manager’s office have deprived us of elected clerks and clerk candidates ever since.
Whatever the city thought it was doing when it allowed this state of affairs, the reality is that DeKalb residents may soon be facing their third election in which zero candidates for clerk appear on the ballot. Read the rest of this entry
City of DeKalb’s three-year-plus hiring spree and pensions are not the only budget-busters we have to face. The wage growth for part-timers hired within the past three years, obtained via Freedom of Information Act requests, is another area that appears out of control:
|Latest Hourly |
|Comm Dev |
This is a sample of eight part-time “Chapter 3” workers (not including crossing guards, and interns known to me) who came on board in 2013 or later and are still working for the city. I noted in the first column how many people each row applies to, where more than one person shares the same wage growth and approximate hire date.
DeKalb probably has about 50 part-time employees in total.
We used to have a council-approved “step” pay plan wherein “Chapter 3” employees, whose wages are not governed by negotiated labor contracts, would receive a raise of 16.75% following their rookie year of service. That plan was eliminated one year ago, but the numbers are still insane.
People have been asking me why their city property taxes went up sharply this year. While much of it has to do with your assessment, of course, here’s the rest of the story.
Until recently, City of DeKalb levied property taxes for pensions and FICA only. I went back as far as 2006, and the only years when the city levied for any other purposes are shown in the table, because collection of property taxes for bonded debt and for general corporate purposes is either new for DeKalb or a revived practice following long hiatus. Read the rest of this entry
DeKalb used to have in-house legal counsel, but now has contracts with individuals and firms to supply legal services.
One of the legal service providers is Dean Frieders of Frieders Law, LLC, who supposedly works for DeKalb three days per week.* Frieders is required by his contract with the city to supply all of his own staff for the $208,000 per year that we pay him. If any employee of City of DeKalb were to work for Frieders in any capacity, it would constitute a violation of that city contract.
Trouble is, DeKalb still employs a full-time legal assistant, and it looks like she works for Frieders. I say this because her actual job description requires her to assist legal counsel as well as the city manager. Read the rest of this entry
A couple of weeks ago, I submitted a Freedom of Information Act request regarding DeKalb’s practice of buying gift cards for employees, the latest round of which occurred in December 2015 when City of DeKalb spent $5,400 on “employee holiday gift cards” for some 230 city employees.
Among other things, the FOIA request asked for the following: “Records that indicate the cards were properly counted as compensation and that federal and state withholding occurred.” The response was as follows:
No responsive records have been identified. The City determined that in previous years, the cards were not included within taxable amounts. The City has worked to ensure strict compliance in prospective years by eliminating these gift cards from proposed budgets; there is no proposed expenditure in the draft FY16.5 budget that would include gift cards of this
nature. That change in practice was made after an internal review of this matter by the City earlier this year.
Read here for the IRS rules specific to de minimus fringe benefits when the employer is a government. Cash and cash equivalents — yeah, this means gift cards, too — cannot be excluded from income and are always taxable, regardless of amount.
Oops. That’s almost $16,000 in untaxed compensation since 2013, guys.
Also, since the city included in its response no memos or other records of the elimination of gift cards for employees, we are free to assume that the “internal review” and decision to terminate the practice of giving gift cards occurred when administrators received my FOIA request dated April 21.
See the original FOIA request and response here.
It has come to my attention that clarification is needed on the post about the General Fund “special events” account named 8306.
If you contact City of DeKalb and they tell you that 8306 is for events such as helping with the expenses of July 4th festivities at Hopkins Park, that is 100% correct.
However, it is also correct to say that funds coded to expense account 8306 pay for employee events (parties and picnics) and special compensation (gift cards). The February 2016 expenditures report(p. 9), for example, included payouts for an employee potluck and a spree on gift cards for employees that’s becoming infamous. Read the rest of this entry
City of DeKalb has an account in its General Fund called “Special Events,” 8306 in the budget. I always thought special events were public events, such as the open house that was held for visitors to tour the new police station. Then I came across an expenditure of $5,400 for Target gift cards for employees that was coded to this expense account, which prompted me to look more closely. It appears to be an account that pays for employee parties and gifts.
Here are the amounts budgeted over the past few years from this account:
2012: $ 7,000
Even if all of the expenses are legit — and I’m not sure they are — the more-than-tripling of what’s budgeted into this account needs to be explained. I also note that the extravagance in this area comes on top of similarly large increases we’ve observed for membership dues/subscriptions and professional development expenses over the past 2-3 years.
But back to the question of legitimacy. Let’s consult the Illinois Constitution.
SECTION 1. GENERAL PROVISIONS
(a) Public funds, property or credit shall be used only for public purposes.
Are private parties and gifts for city employees a public purpose? I think not.
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
Filed under: City Watch
, Payment Due?
| Tagged as: budget
During the Committee of the Whole meeting Monday, city staff will present a report showing all of the estimated annual savings they’ve achieved for the FY16 budget and beyond.
Some of these cuts — in health care plans, comp time policy, and efficiency through technology in particular — do appear to be real.
Bravo, City of DeKalb!
Now explain this: Read the rest of this entry
Filed under: City Watch
| Tagged as: budget