DeKalb mayor Cohen Barnes is hoping to become the Democratic candidate in this month’s primary election for Illinois House District 76 representative. In his introductory statement during a candidates’ forum, Mayor Barnes said, “We’ve hired over 20 police officers in the last year alone — and firefighters.”
The statement is unusual in at least two ways. One, Mayor Barnes usually doesn’t share credit with anyone else. Two, the outlandish claim of 21 or more hires is very likely true.
The Hiring Spree
Annual budgets indicate the city intended to increase the police force by 10 sworn officers, and firefighter-paramedics by 13, in fiscal years 2022-2023; additionally, DeKalb plans to hire 9 more firefighters later this year to put into a new ambulance/fire station in 2025.
The hiring spree will push full-time equivalent employees (FTEs) for the two departments from 145 in 2021 to 177 by the end of 2024, a 22% increase in the number of first responders in this time frame.
Make no mistake: the numbers of new positions created are unprecedented. What’s more, they’re doing it with almost zero discussion of anticipated budget impacts.
Expense Increases & Slowed Revenues
The question is whether personnel expenses are likely to outrun revenue growth, and the trends don’t look great.
— First responder workforce growth is in double digits. In rough numbers, the police and fire departments’ combined budgets total $32 million out of a $45 million General Fund operations budget for 2024. This is about 19% higher than the combined PD and FD total budgets for 2021, the year preceding the hiring spree. For the personnel expense category on its own, the increase is nearly 24%.
— Growth in the largest revenue sources is slowing. I looked at 6 permanent, stable revenue sources* that are expected to cover about $40 million of the $45 million we need this year for operations. What I found is growth of these revenues have slowed considerably and are not keeping up with inflation (3.8% as of this writing), much less workforce growth and the raises negotiated in the latest labor contracts.
In short, what we have here is development of a structural budget issue.
Property Taxes & Pensions
Mayor Barnes is campaigning at this very moment on single-handedly lowering our city property taxes by 23% during his tenure. But how long can he, or anyone, hold them down?
Accompanying DeKalb’s industrial development is growth in EAV and property taxes. Capturing new construction EAV helps hold the line on taxes for everyone. But as the building boom slows, the rosy tax scenario can fall apart.
The city’s policy is to restrict 100% of its property tax levy to paying portions of the employer’s contribution to police and fire pension funds. This helps support daily operations in that every dollar of property tax that goes to required pension contributions frees up other General Fund revenues to pay other expenses. However, there’s a gap between the amount the city levies in property taxes and how much it owes in pension contributions. This year, the required contributions total $9.5 million but what’s collected in property taxes will be only $8.1 million. Other revenues pitch in, but the gap is widening. The question is how wide will be too wide to fill.
The chart below gives another perspective on the problem: growth of unfunded liabilities.
Police pension dropped from 58.37% funded at the end of 2021 to 48.17% funded at the end of 2022. Fire pension went from 43.69% to 36.47% funded over the same period. As you can see in the chart, the city also exceeded $100 million in unfunded liabilities for the first time. These liabilities translate into higher required contributions due annually.
What’s even more unsettling is the 2022 numbers, largely based on the addition of 11 new first responders joining the pension plans that year, reflect only 1/3 of the planned workforce expansion. Two more spikes since then have yet to be confirmed and documented in annual financial reports, but they’re coming.
Couple that position with any slowdown or pause in industrial construction and with other revenues lagging, and boom! Taxes must rise and/or programs get cut — street maintenance, for instance.
When Were They Going to Tell Us?
Hiring more first responders is one way to tackle DeKalb’s problems with crime and with overuse of emergency systems for primary healthcare. It’s also a terrifically expensive way, especially on this scale. There was bound to be some kind of financial fallout. How disappointing it is that city leadership has decided to pretend we can have our cake and eat it, instead of addressing a probable structural issue right off the bat.
As witness to previous financial reckonings in 2010 and 2018, I’ve seen how waiting too long to address these problems sets us back as a community.
So now we’ve come to the part where I explain why I’m picking on Cohen Barnes particularly (besides the way he campaigns, I mean). Clearly, all of council and management share responsibility for this latest cycle of dishonesty and denial, but one thing sets Mayor Barnes apart, and that’s his chronic habit of sabotaging city committees.
Rejecting Expertise
Examples. The mayor is currently playing procedural games to delay appointments to Human Relations Commission; before that he bypassed the commission’s role in vetting new landlord-tenant regulations and surveillance tech policies. Most recently, he’s replaced the chair and a second veteran member of the Citizens Environmental Commission without notice, which effectively throws a wrench into the production of plans related to mitigating the effects of industrialization on local air quality.
Treating the committees this way is not only disrespectful but a waste of know-how, creativity, and conscience. I hope that in 2025, we can put an administration in office that values and encourages the good work of our boards and commissions to the full extent they deserve.
This would include returning the Finance Advisory Committee, a shadow of its former self and a mere budget rubberstamper at this point, to its original mission of strategic planning to help defuse the latest financial time bomb.
*The revenue categories used are Sales Taxes, Gross Receipts, Licenses/Permits, Money from Other Govs (e.g., income taxes), Service Charges, and Fines. Property taxes were excluded from this list because of their use being restricted to paying pension obligations. Other categories were excluded because the amounts can vary widely from year to year and skew the picture — some grant revenues and transfers from other funds are examples.