DeKalb’s Pension Picture Updated

Author: yinn

May 16

I’ve added FY2012 numbers to the set of charts you’ll find in DeKalb’s Pension Funding Progress. They come from the latest Comprehensive Annual Financial Report (CAFR).

dyerware.com


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DeKalb’s Budgetary Reserves Do Not Mean What You Think They Mean

Author: yinn

Dec 27

The City of DeKalb has been re-growing its post-recession General Fund reserve since FY2011, when a large reduction in force coupled with windfall revenues helped the city regain its financial footing. But are annual budget surpluses an indicator we’ve set out upon the right financial path? The latest Comprehensive Annual Financial Report (CAFR) is now available, so let’s see if we can spot the trends.

dyerware.com



The years represented in the above chart are the fiscal years, each of which runs July 1 through June 30.

The reserve looks pretty good now, but I believe it has given city leaders the wrong idea. Read the rest of this entry

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DeKalb’s IMRF Contributions and Their Budget Impacts

Author: yinn

Dec 5

Putting together DeKalb’s pension picture has been like a forestry hide-and-seek. Facts are the trees and while facts have been examined, there’s often an underlying feeling that the ecosystem has not yet been adequately described. So I keep going back in.

One “specimen” whose significance I failed to fully appreciate earlier is the shortfall between what is collected in city property taxes and the annual required contributions to the three pension funds. Unlike the State of Illinois, DeKalb faithfully makes yearly contributions; and if the property taxes don’t cover them, the city must free up additional revenues from the General Fund.

So far, such shortages appear to have fallen exclusively on IMRF and below is a piece of that picture.

Fiscal
Year		Required
Annual IMRF
Contribution		Amount
Levied
for IMRF
Contribution		Shortage
200154,083350,012N/A
2002370,094192,002178,092
200360,914383,786N/A
2004572,051538,62133,430
2005766,714687,94078,774
2006995,369704,053291,318
20071,072,905795,624277,281
20081,106,440615,952490,488
2009985,603277,142708,461
20101,054,391479,245575,146
20111,214,941668,365546,576

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DeKalb’s Pension Funding Progress

Author: yinn

Jul 4

The Comprehensive Annual Financial Report (CAFR) includes a table called “Schedule of Funding Progress” for each pension fund that the city is responsible for. An actuary determines the fund assets and liability, and from these are calculated the percentage that the fund is funded as well as the unfunded liability in dollars. I’ve pulled numbers from three or so CAFRs to bring you 12 years’ worth* of these calculations in graphic form.

dyerware.com



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Dixon Redux from Yet Another DeKalb Point of View

Author: yinn

May 14

The appearance of “Dixon Embezzlement Serves as ‘Case Study’ on Oversight Practices” over the weekend gives me another shot at commenting on this story (now that I am out of the hospital, hopefully for a good long time). Thanks, Rockford Register Star!

First, let’s take care of the error in the story. Read the rest of this entry

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The FY2011 Central Area TIF Report

Author: yinn

Apr 13

…can be found here (It’s a 64-page PDF so give it a minute to load).

As an incorrigible repeat offender I could not stop myself from submitting a Freedom of Information Act (FOIA) request to obtain the following information:

1. The breakdown of the transfers so we can tell how much is going to the General Fund and how much is going to Debt Service. As you can see below, they used to break it down:

Fiscal
Year		Transfer
to General Fund
(9001)		Transfer
to Debt Service
(9225)		Other Transfers
(9006, 9036)		Total
Transfers
2008350,0001,725,831N/A2,075,831
2009527,4912,078,532362,0722,968,095
2010852,4848,172,302N/A9,024,786
2011???3,673,448

I tried to look it up using the city budgets, but the numbers there do not add up to the sum stated in the TIF report. It might be important. Especially nowadays with EAV falling and with half of the property and sales tax increments being paid out to all the overlapping local governments as surplus, we need to keep an eye that the city can still cover its debt service payments as well. Combining the transfers as they did for FY2011, so that you can no longer tell where they went at a glance, is a step backward in transparency anyhow.

2. The reason why Joint Review Board annual meeting minutes are not routinely submitted.

3. The reason why DeKalb’s CEO doesn’t do the required CEO compliance certification.

Bonus table: Central Area TIF state and local sales tax increments:

Fiscal YearState Sales Tax IncrementLocal Sales Tax Increment
2006735,942593,306
2007835,524670,764
2008827,732748,827
2009850,855794,955
2010760,785716,802
2011841,716558,986

The sales tax increments pretty much mirror what has happened in DeKalb overall: taxable sales plunged by tens of millions in 2008-9 and have not yet climbed back to pre-crisis levels.

Sales and use taxes also make up 40% of the revenues in DeKalb’s General Fund budget. DeKalb is hoping to collect $12 million in sales and use taxes during the current fiscal year, 2012, which ends June 30.

Additional sources: City of DeKalb’s FY2012 Adopted Budget (PDF pp. 120-124) and FY2011 Comprehensive Annual Financial Report (PDF pp. 211-214).

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DeKalb’s Pension Cost Acceleration

Author: yinn

Mar 15

dyerware.com


Annual pension costs (APCs) are what the city contributes to the pension funds each year.

APCs were increasing about 10% annually earlier this century, but now they are jumping 20% a year. Or to put it another way, we’re now adding to the police and fire pension funds at a rate of $1 million every two years.

The reasons for this acceleration are that 1) we’ve added 17 retirees during this period, 2) newer retirees are more expensive than the old, 3) retirees get pension raises every year, and 4) retirees don’t die like they used to. Read the rest of this entry

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New Per Capita Debt Numbers

Author: yinn

Feb 14

[Update 8:30 a.m.: Table headers edited for clarity.]

You’ve seen most of this table before. I’ve updated it with FY2011 data from the new Comprehensive Annual Financial Report (CAFR).

Fiscal YearPer Capita
Gross Bonded
Debt, City of
DeKalb Debt
Only		Per Capita
Gross Bonded
Debt,
Overlapping Units
of Government		Total Per
Capita Gross
Bonded Debt
Owed by City
of DeKalb
Residents
2004467.10608.751075.85
2005519.82623.711143.53
2006505.96617.671123.63
2007470.28697.111167.39
2008578.461004.141582.60
2009521.54889.791411.33
2010564.311428.291992.60
2011517.361575.592092.95

Most of the overlapping increase came from DeKalb Community Unit School District 428.

Mind you, these figures reflect only gross bonded debt. The total per capita city debt burden for DeKalb residents, for example, was $929.28 as of June 30, 2011.

Gross bonded debt gets special attention because repayment is guaranteed by property taxes. If a governmental unit does not have enough money to make the payments, property taxes get raised as required to meet them.

DeKalb is unusual, Read the rest of this entry

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Growth of OPEB Participation

Author: yinn

Feb 13

Among its 2009 financial recommendations to the City of DeKalb, Executive Partners, Inc. warned that the costs of DeKalb’s retiree health and life insurance plan, known as Other Post Employment Benefits (OPEB), would continue to outpace contributions “to infinity.” EPI recommended the city jettison the program ASAP.

In confronting the continued growth of what was already at the time an unfunded liability of nearly $30 million, the city council discussed the options in joint meetings with its financial advisory committee. One of the things that came out in these discussions was that the city is making contributions for all its retirees, not just those with whom it had a contractual obligation to do so. Even retirees from the DeKalb Public Library can participate.

I had gotten the impression during those discussions that DeKalb had included all retirees in the OPEB for generations.

Fiscal YearNo. of Beneficiaries
of Police/Fire Pension		No. of Beneficiaries
of OPEB
20047259
20057461
20067365
20078082
200883110
200984116
201087115
201189122

I was wrong.

Sources:

May 2009 EPI Report and Comprehensive Annual Financial Reports from the City of DeKalb Downloads page

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Public Safety Costs & DeKalb’s Financial Health

Author: yinn

Jan 25

In last Thursday’s post I shared some preliminary observations about the latest contract between the City of DeKalb and the firefighters’ union.

Since then I’ve gotten a little feedback on it behind the scenes. The gist of the response is this: What’s the deal? Does yinn have something against well-compensated public employees?

The short answer is that I believe city employees and especially public safety employees deserve every penny we can afford.

The larger deal is that since late 2007 — despite hiring freezes, layoffs, reorganizations and attrition — the City of DeKalb has essentially been reacting continually to financial crises and deficits and in early 2010, city officials said that something drastic had to happen in order to avoid being $5 million in the hole by the end of FY2011.

Then DeKalb ended up with a $6.3 million audited surplus for FY2011.

The question is, does this surplus reflect real recovery and growth? Or will we, in the midst of hiring and giving generous raises a couple years out, be forced yet again to lay off and reorganize due to personnel costs outpacing revenues? Read the rest of this entry

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