Story of Dixon sparks ideas for preventing fraud and building trust in city government

Last night I went to the Egyptian Theatre to watch “All the Queen’s Horses,” the documentary of Rita Crundwell’s embezzlement of more than $53 million from City of Dixon when she was treasurer-comptroller there.

I won’t spoil the film, because even a person who followed Crundwell’s arrest and the aftermath quite closely is bound to find a couple of surprises. If you haven’t seen it, you deserve an equal opportunity to scrape your jaw off the floor once or twice. 🙂

Let’s explore, instead, the general lack of curiosity, assertiveness or persistence, when red flags pop up, to get questions answered to one’s satisfaction.

Why do so many people ignore questionable activities? A lot of it’s the expected consequences. If you reported potentially illegal behavior at your workplace, would your employer give lip service but ignore the problem, address the party involved, or plot retaliation for you? I’ll bet you don’t have to think much about it to answer. Chances are you’ve interacted enough with the culture there to know already. Continue reading Story of Dixon sparks ideas for preventing fraud and building trust in city government

Lord Stanley’s, FOIA requests, and questions of consistency

It’s a story that won’t die. That’s because DeKalb handled condemnations of Lord Stanley’s and Stanley’s Annex poorly, but officials still won’t admit to errors except to say they should have treated the residents of the upstairs apartments better (i.e., the city should not have threatened them with imminent eviction).

This week the Daily Chronicle has examined the city attorney’s role in the matter. The city maintains that his role is strictly advisory. This is not consistent with what we’ve observed, as exemplified by an email shared with you last week, in which the city attorney appeared to be leading the process.

So today’s theme is consistency and lack of it. Continue reading Lord Stanley’s, FOIA requests, and questions of consistency

DeKalb’s housing rehab program is seriously underperforming

Last night, City of DeKalb held a public hearing and approved an annual budget for the Community Development Block Grant (CDBG). CDBD is a federal program administered by HUD that helps ensure viable communities, particularly in the area of decent and affordable housing for low- to moderate-income residents.

The general public did not participate in the public hearing. We rarely do. The CDBG budget is treated as routine and unremarkable, even when it’s not.

And this year it’s definitely not. Continue reading DeKalb’s housing rehab program is seriously underperforming

City emails reveal tactics in the condemnation of Lord Stanley’s

Emails obtained by a member of the City Barbs Facebook Group indicate City of DeKalb worked the Lord Stanley’s and Stanley’s Annex condemnations of April 6 in a decidedly business-unfriendly manner, and then blamed social media for frightening residential tenants with impending forcible eviction.

As indicated in last weekend’s post, the city failed to follow proper procedure in condemning the Stanleys, particularly as concerns notice of code violations.* DeKalb did eventually give the building owners written notices, but not until Monday, April 9, which was the same day as the original deadline for making repairs and avoiding permanent condemnations and evictions. Continue reading City emails reveal tactics in the condemnation of Lord Stanley’s

Cutting through DeKalb’s spin on the condemnation of Lord Stanley’s

***Update 4/17/2017: The Daily Chronicle published a related letter to the editor: “Social media uproar warranted regarding condemnation.” Thanks, DC.***

City of DeKalb is in spin cycle over actions taken to condemn Lord Stanley’s and Lord Stanley’s Annex earlier this month, defending its actions during the last council meeting and now on a blog hilariously called “Just the Facts.”

Item One: City is currently presenting the inspections that led to condemnation as routine fire-life safety inspections. Yet an April 7 newspaper story quotes the city attorney as saying condemnation was the culmination of months of work.

Also, the chief building official (CBO) accompanied the fire-life safety inspector on these inspections. This is anything but routine. Indeed, the CBO — the one person empowered to condemn buildings and declare structural emergencies — was hired on the argument that he would send out inspectors who are the most appropriate yet cost effective personnel for each job. He chose himself. Why?

And why the inconsistency over the stated level of involvement pre-condemnation? It’s actually weirder to think they went from zero to condemnation instead of advancing through the usual process of escalation. Continue reading Cutting through DeKalb’s spin on the condemnation of Lord Stanley’s

Alderman Marquardt is so very tired of you spoiled NIU students

Monday night, DeKalb’s city council members wrestled with proposed parking restrictions in neighorhoods adjacent to campus. Except for Ald. Mike Marquardt, who lost a wrestling match with his tongue.

At a local town hall meeting a few years ago, an audience member who pays attention to such things said the DeKalb-NIU relationship might be a “communiversity” but could fairly be considered a “commuterversity” as well.

Many of the “spoiled” students drive in from other neighborhoods and communities every day to attend NIU.

Many of the “spoiled” students have to go to work before and/or after class.

Many of the “spoiled” students drive because it keeps them safer from assault or worse.

And while I’m at it: These days, some students live in their cars.

Next time that little voice tells you to hold your tongue, Ald. Marquardt, perhaps you should listen, even if you have to bite it.

Police & Fire Pensions are only part of DeKalb’s liability story

The Better Government Association has just rolled out a statewide police and fire pension database. It tracks public safety pensions for every municipality, township, and special district (e.g., fire protection district) that have one or both types of pension funds.

According to this database, DeKalb’s fire pension showed a net liability of $42.7 million and a 39.21% funding ratio “as of 2016.” At the same point in time, the police pension fund had a net liability of $34.4 million and a funding ratio of 48.77%. The combined net liability, then, was a bit over $77 million.

I’ve checked the BGA numbers against the city’s latest annual financial report to make sure they’re in the same ballpark, and they are.

What the BGA database doesn’t tell you about is DeKalb’s other long-term liabilities related to retirees. One is the Illinois Municipal Retirement Fund (IMRF) — yeah, it’s not 100% funded as you might think. The city’s latest reported IMRF net liability is $9.4 million and funding at 83.2%.

Another, as discussed here a few months ago, is the Other Post-Employment Benefits, which is a defined-benefit retiree health insurance plan. OPEB — which our financial consultants have twice urged us to dump in favor of a defined-contribution PEHP plan* — has an unfunded long-term liability of $23.9 million and a funding ratio of 0% because the city doesn’t fund this plan in advance.

Audited numbers for 2017 should come out in May. Meantime, we’re looking at unfunded retirement-related liabilities of $110 million.

*City employees hired since 2011 do participate in a PEHP instead of OPEB.

BONUS: DeKalb’s pension funding ratios as of 1999 (as reported in the fiscal 2004 financial report):

IMRF: 109.49%
Police: 88.52%
Fire: 62.13%

DeKalb’s credibility is suddenly becoming visible to the naked eye

“Folks, we blew it,” said the mayor.

Mayor Jerry Smith recalled his previous State of the City assertion that DeKalb must “acknowledge our shortcomings and our mistakes” last night, when he brought up DeKalb’s violation of the Open Meetings Act of last Friday. “We blew it” is what he told the staff members involved, he said.

Last Friday was Good Friday, a state-recognized holiday in Illinois. The Open Meetings Act prohibits special meetings on legal holidays, but nobody stopped the special meeting until it was almost finished.

The confessions weren’t perfect. Attorney Dean Frieders and interim city manager Patty Hoppenstedt behaved like graceless children. Frieders buried an almost-apology inside of a speech taking three-plus minutes, and he used the “royal we” instead of taking personal responsibility. Hoppenstedt said she took the matter “seriously and personally” but couldn’t resist a smirk.

Still, a public admission of wrongdoing was a breakthrough, as was the city’s complete do-over of the illegal meeting.

I commend the mayor for his handling of the affair.

Here’s video of the meeting, cued up to where the mayor begins his remarks.

Between the departure of a feckless city manager and now this, things are definitely looking up.

We’ll soon see what this council is made of

***Updated 6pm: Check out the city attorney’s “blooper” during last evening’s meeting when he explained why he advised the mayor to adjourn the meeting before council could vote on the matter at hand. I’ve placed a video clip of it at the end of this post, or you could click here for the clip and to comment on Facebook. ***

DeKalb’s city council violated the Illinois Open Meetings Act (OMA) yesterday. It was a violation because the city scheduled a special meeting for Good Friday, which is a legal holiday in this state. Specifically, OMA says this:

Sec. 2.01. All meetings required by this Act to be public shall be held at specified times and places which are convenient and open to the public. No meeting required by this Act to be public shall be held on a legal holiday unless the regular meeting day falls on that holiday.

You can easily find several state departments and offices where Good Friday is not observed, and obviously City of DeKalb doesn’t observe it. Doesn’t matter. If a statute establishes it as a holiday, it’s a legal holiday and you have to watch out for OMA.

And unlike meetings where you could goof up an OMA rule but then save your public body by not taking action (i.e., not actually voting on anything), the legal holiday rule says you can’t even hold the meeting without committing a violation.

I attended yesterday in order to congratulate the council on making a major change in management, to express my understanding of the huge undertaking in finding a new city manager, and to point out that the vacuum created by a city manager’s exit has led to major overspending in the past. Continue reading We’ll soon see what this council is made of

Regarding DeKalb Library’s other loan

Here’s an excerpt from my latest at DeKalb County Online:

Thanks to recent discussion of DeKalb Public Library’s plan to pay back taxpayers for emergency help with its expansion project, much of DeKalb knows about DKPL’s $4.5 million bank loan to keep construction going during Illinois’ budget impasse.

Not many know about the bank loan of $3 million, but maybe you should. Here’s why:

  • DKPL originally took out the loan in 2013 for a term of two years, but still owes more than $1 million on it.
  • Revenues and payments on this loan have not been accounted for in library budgets.
  • Votes to renew the loan are not documented in meeting minutes, which may violate the library’s own bylaws as well as the Open Meetings Act.
  • The whole thing is here, and if you’re interested in talking about it, try the Facebook group.