Zombie TIF and Other Notes from Last Night

DeKalb’s city council met again with DeKalb’s financial consultants, EPI/Crowe, to consider the latter’s latest report and recommendations.

The most important information to pass on to you is that the consultants told the council, at least twice AND in so many words, that the city will enter another financial crisis within five years if it doesn’t drastically change its operating model.

Yes, this concern has been a recurring topic at City Barbs since at least the time of the analysis of the Reduction in Force of 2010. Maybe they’ll listen now that they’ve paid someone to tell them these things. We’ll see.

Key to change, said the consultants, is strategy. Laying off people when you get into financial trouble is not strategic, it’s tactical. Strategic means planning for fulfilling needs 3-5 years out. Tactical is doing whatever it takes to get through the next year. One way is sustainable, the other a grubby little bandage giving temporary relief.

Bottom line, in my words alone: Getting rid of 30-plus employees is a desperate act borne of failure to recognize changing realities, and those responsible should not be allowed to pretend they are financial geniuses.

OK, let’s move on to the zombie I promised. As reported here in late May, TIF Fund voluntary transfers into the General Fund for administrative operations are now approaching $1 million a year. TIF (Tax Increment Financing) districts are established to generate capital for infrastructure projects to fight blight, encourage private development and improve neighborhoods. TIFs are temporary and therefore this GF revenue is temporary and therefore the talk has been about a plan to start weaning ourselves off the money. Until now. “Reestablishing TIF 1” (AKA Central Area TIF) has suddenly taken first place on the list of “revenue opportunities” (see PDF p. 106). Get that? It is now being suggested that DeKalb might reanimate this TIF district after it expires in 2020, in order to keep its revenues flowing for general operating expenses.

Sheesh.

More random observations and opinions:

I was glad to hear new 4th Ward alderman Robert Snow say that we should only initiate a Water Division PILOT program if a cost analysis shows we actually need to do it.

Some of the recommendations in the report were apparently redacted. (See PDF pp. 108 and 110.) This is inappropriate for a public record unless an exemption to the Freedom of Information Act is claimed.

The health insurance cost containment recommendations deserve a post of their own. Stay tuned.

One tax the consultants think DeKalb definitely should not raise is the city’s sales tax, because it’s already the highest of the communities they compared.

I think the recommended initiation of a stormwater levy is a good idea, living in the soggy boggy as we do. It would guarantee a stable, earmarked stream for needed infrastructure projects. HOWEVER, it also would be fair for us to ask that city staff first determine the average amount taken from the General Fund for stormwater projects — say, for the past five years — and reduce another tax by a like amount (see item just above this one).

Let’s stop here for now. More later.