DeKalb Spent $1.81 Million on Reduction in Force

After receiving and posting (thanks to the Attorney General) information pertaining to the Voluntary Separation Program (VSP), I then asked the City of DeKalb to produce the figures to account for the $1.1 million they borrowed to spend on the Reduction in Force (RIF), including the VSP.

The reply? “There is no public record that contains category totals.”

Here is what I did get.

• Regular Compensation, Separation Incentives, Vacation Time, Comp Time, and similar/related payroll costs totaled $1.72M;
• Unemployment Compensation costs have totaled $97K to date.

The RIF/VSP, then, has totaled $1,817,000.

You will recall that DeKalb restructured its debt in order to free up $1.1 million to pay for the RIF. This is what they said at the time:

V. Financial Impact
As was discussed during FY 2011 budget workshops, there is a need to restructure our existing debt to help balance our General Fund. Specifically, the FY 2011 budget assumes a restructuring will take place whereby our otherwise scheduled debt payment of $1.4 million for FY11 is reduced and instead will be $300,000. The $1.1 million difference will be used to fund our reduction-in-force costs resulting from the elimination of 34 positions from the payroll.

Did city staff know the plan would cost more than $1.1 million? Did the city council? No other estimate was ever made public.

The difference is more than $700,000, and puts the per person cost of the RIF/VSP up to $53,400.

Bonus quote from the city’s July 8 Freedom of Information Act (FOIA) response letter:

City Controller/Treasurer Ted Kozinski asked that [City Clerk/FOIA Officer Steve Kapitan] note: “In order to help clarify this FOIA to the public, it may be helpful to again mention that the City did not go out and borrow $1.1M in new debt to finance the RIF/VSP.”

Correct. The city refinanced its debt for the purpose so the residents will be providing interest on a payout approaching $2 million, for which they are unable to get a full accounting.