New Annual Financial Report is Out

City of DeKalb released its Comprehensive Annual Financial Report (CAFR) for fiscal year 2015, which ended June 30.

I’m sure city staff will also release the Popular Annual Financial Report (PAFR) as they did last year. It’s a dumbed-down version of the CAFR that nobody asked them to compile, but they get some sort of warm-fuzzy award for it, so it’s all good.

Let’s update some charts. First, the hiring news:

[easychart type=”line” width=”420″ title=”Full Time Equivalent Employees by Fiscal Year” groupnames=”FTEs” valuenames=”01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15″ group1values=”224, 231, 240, 237, 250, 254, 261, 262, 249, 241, 211, 209, 217, 225, 234″ minaxis=”208″]

The hiring spree is still on.

The General Fund budget for personnel expenses this year is $26.9 million, a rise of 2% over last year and a net increase of $500,000 in this budget category. There are a couple reasons why the increase was “only” 2%. The primary reason is that a chunk representing another 2% was sent over to the Water Fund for Water to pay. They’ve also succeeded in reducing health care costs (something I’d like to compliment them on sometime, if only they’d stop annoying me for a minute with the Bozo no-nos).

But wages and pension costs are both increasing well above inflationary levels. I anticipate they will have to come up with $500,000-$700,000 more for this budget category next year.

In other words, despite the rosy picture staff will paint next month in an effort to persuade the city council to hire a human resources director, the council should no way, no how approve any more hires and, in fact, should let attrition do its work for awhile.

Next up: sales tax revenues, which make up more than 40% of DeKalb’s tax revenues.

[easychart type=”vertbar” width=”420″ title=”DeKalb’s Taxable Sales by Fiscal Year in Millions” groupnames=”Locally Taxable, State Taxable” valuenames=”01, 02, 03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14″ group1values=”279, 303, 324, 356, 377, 405, 415, 407, 367, 385, 384, 379, 381, 388″ group2values=”562, 525, 478, 514, 540, 582, 594, 590, 528, 542, 535, 529, 523, 538″ minaxis=”278″]

Sales taxes are still anemic, especially the local ones. You might think the better showing of the state sales and use taxes demonstrates that Illinois overall is doing better than DeKalb. You’d be right. Another type of revenue the state shares with us, namely income tax, is the only major source of revenue for DeKalb that has been growing steadily each year for the past few. Considering that per capita and median family income in this city have dropped — and there’s no way in Hades that DeKalb is growing — other communities are obviously bouncing back in a way we can only dream of.

The last thing I want to look at today is the pension situation.

[easychart type=”line” width=”420″ title=”Annual Percentage of Total Pension Liability Funded” groupnames=”IMRF, Police, Fire” valuenames=”03, 04, 05, 06, 07, 08, 09, 10, 11, 12, 13, 14, 15″ group1values=”98.78, 82.83, 72.48, 73.17, 77.08, 80.46, 60.69, 62.50, 54.54, 57.73, 59.66, 65.11, 86.95″ group2values=”65.26, 66.86, 67.12, 67.24, 71.63, 64.38, 55.91, 59.59, 64.99, 55.06, 53.06, 55.64, 49.27″ group3values=”51.19, 53.21, 51.64, 49.44, 50.20, 46.16, 40.39, 42.59, 45.77, 41.65, 41.95, 44.07, 40.34″ minaxis=”40″]

It looks like IMRF might have gotten cranky with DeKalb to spur progress, but the police and fire pensions are still struggling. That’s because the liabilities are so huge. The fire fighters’ net pension liability grew by $4 million in FY2015 to $60.2 million, while the police net liability rose by $6.7 million to a total of $29.8 million. What this has translated to, as I’ve mentioned before, are required pension contributions that have grown an average of about 9% annually since FY2013.

The chart below shows the gap between what our property taxes pay for when it comes to pensions and FICA, and the actual costs. The wider the gap, the more the city must take out of other General Fund revenues to make these contributions.

[easychart type=”line” width=”425″ Title=”Property Tax Coverage of FICA and Pensions” groupnames=”Property Tax Collected for FICA and Pensions, FICA and Pension Spending” valuenames=”06, 07, 08, 09, 10, 11, 12, 13, 14, 15″ group1values=”2.67, 3.03, 3.41, 3.68, 3.77, 4.16, 4.11, 3.98, 4.24, 4.2″ group2values=”2.97, 3.31, 3.64, 3.61, 4.09, 4.62, 4.47, 4.2, 4.87, 4.84″ minaxis=”2.5″]

The hike they’ve just made in our property taxes will help close the gap for one year so they can keep up with the personnel cost increases. That’s the rabbit for the next budget. After that they have to come up with a new trick.