Part 2 of Account 8306, Special Events

It has come to my attention that clarification is needed on the post about the General Fund “special events” account named 8306.

If you contact City of DeKalb and they tell you that 8306 is for events such as helping with the expenses of July 4th festivities at Hopkins Park, that is 100% correct.

However, it is also correct to say that funds coded to expense account 8306 pay for employee events (parties and picnics) and special compensation (gift cards). The February 2016 expenditures report(p. 9), for example, included payouts for an employee potluck and a spree on gift cards for employees that’s becoming infamous. Continue reading Part 2 of Account 8306, Special Events

Account 8306, Special Events

City of DeKalb has an account in its General Fund called “Special Events,” 8306 in the budget. I always thought special events were public events, such as the open house that was held for visitors to tour the new police station. Then I came across an expenditure of $5,400 for Target gift cards for employees that was coded to this expense account, which prompted me to look more closely. It appears to be an account that pays for employee parties and gifts.

Here are the amounts budgeted over the past few years from this account:

2012: $ 7,000
2013: $12,000
2014: $15,000
2015: $19,750
2016: $22,850

Even if all of the expenses are legit — and I’m not sure they are — the more-than-tripling of what’s budgeted into this account needs to be explained. I also note that the extravagance in this area comes on top of similarly large increases we’ve observed for membership dues/subscriptions and professional development expenses over the past 2-3 years.

But back to the question of legitimacy. Let’s consult the Illinois Constitution.

ARTICLE VIII

FINANCE

SECTION 1. GENERAL PROVISIONS
(a) Public funds, property or credit shall be used only for public purposes.

Are private parties and gifts for city employees a public purpose? I think not.

College Town Partners is All About TIF

Yes, “is.” Emails obtained by Michael and Misty Haji-Sheikh of Preserve Our Neighborhoods show that even though collaborators ultimately rejected formal incorporation of College Town Partners in May 2014, the intention remained to suck sweet, sweet tax dollars out of City of DeKalb via Tax Increment Financing (not even getting into NIU and use of the NIU Foundation, though we definitely should at some point). There is no reason to believe the schemes were dropped, especially now that the mastermind has wormed his way onto the NIU Board of Trustees.

Yes, “schemes.” How else to describe the dreams of a local banker (and longtime Sanitary District trustee, by the way) to transform a college-adjacent neighborhood and get DeKalb to pay for the project. He apparently is so persuasive that the other officials involved, including our mayor and city manager, went along with him for months though their status absolutely precluded participation as partners in a private entity intent on spending public money over which they exert control. It was a gargantuan conflict of interest; we should find ourselves shaken by the apparent ignorance or disregard of their duties to the public while they spent oodles of staff time and other resources to bring them to the brink of a formal agreement without council’s prior authorization.

Indeed, we’ve not heard a peep of public discourse that hasn’t been tied to citizens’ dogged pursuit of information.

Click here to read the email indicating that College Town Partners might have been buried, but not outright killed. If the Shodeen people ever get their hotel and apartments approved, look for CTP to dig up the undead baby, give it a costume change and present it as the inevitable and desirable retail counterpart to Shodeen’s residential development.

Related post: Tim Struthers Gave DeKalb’s Mayor Talking Points When the College Town Partners Story Broke

One Step Closer to the Edge

Look at that nice, wide gap between General Fund revenues and expenditures during FY2011 and FY2012.

[easychart type=”line” width=”430″ title=”GF Revenues and Expenditures Net of Transfers” groupnames=”Revenues in Millions, Expenditures in Millions” valuenames=”’11,’12, ’13, ’14, ’15, ’16” group1values=”29.2,29.1,28.9,30.7,32.7,33.3″ group2values=”27.2,27.3,27.9,29.1,31.5,32.9″ minaxis=”27.1″]
(All figures are actual as reported in annual city budgets, except FY2015 numbers are the end-of-year budget estimates and FY2016 are, of course, the projected amounts.)

What the gap represented was a huge reset of the operations (General Fund) budget that was accomplished by actively reducing the city’s workforce by some 20% on top of a couple years of attrition.

Mind you, we’d gone a couple rounds of tax and fee hikes by then, but it didn’t matter; city staff calculated at the time that if the reduction in force didn’t happen, we would be $5 million in the hole by the end of FY2011.

What the reset did was to fix the structural budget issue of personnel costs outpacing revenues during the Great Recession and the “flatlined” revenue period following (that DeKalb, by the way, still hasn’t quite overcome). A nice side effect was meeting capital needs. Following the reduction in force, there was enough money to put into the fleet, a new police station, and needed expansion/repairs of the fire stations.

But now, the gap is closing and, once again, money for capital needs has disappeared. And since most of the rise in expenses reflects increases in wages and pension contributions, it’s clear the reset has been squandered by the hiring spree that came after. Continue reading One Step Closer to the Edge

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. Continue reading New Annual Financial Report is Out

Retail on the Bottom

David Patzelt of Shodeen Group, LLC, sent a nice thank-you letter to the DeKalb city manager for attending a meeting between Shodeen principals and city officials in the matter of Shodeen’s latest project proposal. The letter was included in the agenda packet for Wednesday’s meeting of the Planning and Zoning Commission. It outlines Shodeen’s arguments against the city’s insistence on its providing retail space on the ground-floor level of the apartment complex plan.

As you know we are a commercial and retail Developer, Builder, Owner and Management Company. Like staff, we too wish that the market in DeKalb was strong enough to support commercial/retail in the lower level of the proposed residential building. As we discussed with you, City staffs position on this being a requirement is unwarranted and unfounded. Even if the City will subsidize the rent as well as commit to a guarantee of rent payments, we do not recommend the addition of retail space at this point in time. Staff continues to be unwilling to accept this without any basis other than a “want.” Empty retail space should not be a “want.”

(The underlined words appear that way in the original.)

No, it’s not a matter of acceptance, nor just a “want.” It’s an actual requirement for the downtown business district. Staff can’t change it. Only city council can.

But an even larger policy change would be the use of rent subsidies and guarantees to get the project built the way the city wants.

We knew we’d have a tussle over TIF funding for redevelopment on this site. Has the city placed other subsidies on the table for consideration?

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I’ve begun a Facebook discussion thread here.

What the Hiring Spree Has Ruined

Former DeKalb Alderman Pam Verbic wrote current Mayor Rey a detailed letter regarding the upcoming property tax levy vote. Find it here. I hope you will read the whole thing.

Each of Ms. Verbic’s points is well taken and stands on its own. I don’t intend to rehash the letter. But her #4 relates closely to views I’ve shared for two-years-plus about the hiring spree and its impacts on city budgets, and it furthermore reminds me to look at the morality of the situation as well as the practical.

4. Since I was a council member in 2011, I know what it means to have to lay off employees to contain costs. At that time, the number of employees were reduced by 29 from 231 to 202. No positions were eliminated in police or fire. There would be no immediate savings due to the costs of separation, so savings were to be realized on a long-term basis. This did not happen because later councils approved adding new employees, including several higher paid management positions. Last year’s staff memo concerning the tax levy reported that the number of employees had then increased back to 224.

(My emphasis.)

The layoffs followed several years in which the city took a number of measures to try to regain control of its finances. City officials talked layoffs as early as the latter half of 2007, which prompted early retirements. They froze hiring. They forced expense cuts. They raised taxes and fees. They delayed purchases of big-ticket items like vehicles. If I remember correctly, they even froze pay for a year.

These actions were not enough, and an across-the-board pay cut was rejected, so layoffs became the last resort to achieve a reset of compensation to match the new revenue reality. But it needed time to work, and DeKalb only waited one year before starting the hiring spree.

We often focus on the tax burden in a town that sees little prosperity, and of course that is vitally important to consider. However, job loss involves pain, and the recent lack of restraint in hiring has all but rendered meaningless the sacrifice of city workers for what was supposed to be the greater good.

It’s shameful. But in my opinion, it’s an error that could still be reversed.

$800,000 in Expenditure Cuts? Lol. Try $2.3M in Increased Personnel Costs

One argument in favor of hiking property taxes in City of DeKalb is that the city has reduced general operations (General Fund/GF) budgeted expenditures by $800,000 from last fiscal year to this one, which ostensibly shows that DeKalb has already cut expenditures to the bone.

Hogwash.

The fact is, DeKalb has a runaway spending problem, budgeting $2.3 million more for personnel this fiscal year than in FY2014.

Read through to see how this was done. Continue reading $800,000 in Expenditure Cuts? Lol. Try $2.3M in Increased Personnel Costs

DeKalb’s Shortage of Magic Rabbits

As the city ponders a property tax hike of 37% as well as water rate and fee “adjustments,” you may wonder how DeKalb has got itself mired in financial straits.

It’s actually nothing new. DeKalb’s budget issues are — and have been since at least 2005 — the result of snatching nearly every penny of revenue growth and putting them into more staff and higher salaries, to the detriment of other areas such as street maintenance.

Worse yet, DeKalb has to come up with, at minimum, a half-million new dollars in revenue each budget cycle just to stay abreast of annual personnel cost increases. It’s rendered the financial gurus unable to look ahead more than 12 months at a time because they continually need to chase the next rabbit for the proverbial hat.

Want proof? The stated Number One strategic priority of the City of DeKalb is “Infrastructure,” yet capital improvements are precisely the area that’s been starved in the current budget. That’s pretty messed up.

And a proposed 37% hike in property taxes bespeaks the latest shortage of bunnies for the hat trick. Continue reading DeKalb’s Shortage of Magic Rabbits

City of DeKalb’s Website Still Has Accessibility Issues – Updated

***Update*** 6/25/2015: I finally got a response to my letter telling council and top management staff about accessibility issues with the newly-launched city website. Someone had handed off the letter to DeKalb’s management analyst, Lauren Stott (one of the staff members who withheld estimates for a simple accessibility fix vs. a complete redesign, despite direct requests for this information from council members). Here’s what she said:

Thanks for your email. The City has worked with CivicPlus to ensure website accessibility is provided for all users. Web-based accessibility checkers such as wave.webaim.org and Powermapper.com access a website’s html code, but aren’t as effective in assessing content customized with CSS (Cascading Style Sheets). The City of DeKalb’s website, in its state of being fully customized, heavily utilizes the CSS design language along with html. Therefore, the Web-based accessibility checkers register items on the site as errors, when in fact they just represent a departure from the typical html language the accessibility tools are designed and equipped to assess. In its contract with the City of DeKalb, the website developer has agreed to follow not only Section 508 of the Rehabilitation Act but also Web Content Accessibility Guidelines 2.0. The portion of the agreement that outlines those specific requirements is included below.

1. While the contract might call for complying with WCAG, that is certainly not what happened. The “Accessibility” page on the website says the site conforms to Section 508 of the Rehabilitation Act, period. Another “tell” is the color contrast problem. Section 508 only mentions contrast in that it requires that applications not interfere with user settings. WCAG 2.0 requires a contrast ratio between text and foreground be set within a certain range. Many pages do not meet this requirement, such as the “Job Opportunities” page that, according to the WAVE checker, contains 27 contrast errors between background and link text.

2. Since Mac McIntyre introduced us to the WAVE accessibility tool, Mac sent Stott’s explanation to WAVE. Here’s what their representative had to say:

WAVE evaluates page accessibility after CSS has been applied and account for CSS in identifying potential accessibility issues. The developer’s explanation is not accurate. Each of the errors identified by WAVE indicate an actual end user accessibility issue.

I told Lauren Stott I didn’t wish to discuss this anymore with a person whose word I can’t take at face value. Then I invited city council members to send Stott’s explanation to accessibility checker websites for themselves.

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