DeKalb’s Finance Division is a story of loss and low priority

DeKalb’s city council has so far failed to face the troubling results of its last annual audit. This has led to a failure to recognize the connections between those results and the turnover and staff reductions in Finance Division, including the loss of a full-time finance director.

And the squeeze is still on for this year.

Reorganizations”

To put this into historical context, DeKalb used to have ten full-time, in-house finance staff, including an appointed treasurer/controller and two senior account clerks. Now there is no named full-time treasurer or controller, reductions in positions have occurred three years running, and these remaining staff are supervised by the assistant city manager, who also supervises human resources and information technology personnel.

Source: DeKalb annual adopted budgets
Continue reading DeKalb’s Finance Division is a story of loss and low priority

City of DeKalb made the budget even harder to follow for 2021

Let’s say you are looking at the Fire Pension Fund in the 2021 budget.

Fire-pension-fund-employer-contrib

You can see the annual employer’s contribution is approaching $4.3 million.

Next, you decide to look at the Fire Department budget to get a feel for how much of the total FD budget is comprised of pension contributions.

FD-budget-employer-contrib

The Fire budget shows only $3.5 million in employer contributions. What gives?

Continue reading City of DeKalb made the budget even harder to follow for 2021

Charging the Water Fund for salaries in other departments is a masterpiece of nontransparency

*Note: “Departments” as used in this article should be read as shorthand for “departments, divisions, and offices.”*

Take a look at this budget from DeKalb’s Finance Division:

FY2020-Finance-adopted-budget

Seems pretty straightforward, right? Well, it’s not. It does not show all the wages the Finance employees get paid. This is a budget that accounts only for the wages coming from the General Fund (the city’s chief operating fund). Finance staff also get paid portions of their wages from the Water Fund.

Total full- and part-time wages this year for Finance people are projected to come to $157,000 more than this Finance budget shows. Likewise, the Water Fund provides part of the compensation for the city manager’s office, Building & Code, HR, IT — even the city council.

Continue reading Charging the Water Fund for salaries in other departments is a masterpiece of nontransparency

TIF forensic assessment tells us how DeKalb operates

The promised forensic audit report (now being called a forensic assessment for some reason) of City of DeKalb’s tax increment financing funds has been released by the DeKalb County State’s Attorney’s Office.

The report details miscalculations, missing documents, and other failures of due diligence occurring across the 10-year period examined.

Much of the fireworks over TIF began when members of the Joint Review Board that oversees it, particularly our school district, began questioning the size of transfers from TIF funds to the General Fund, the city’s chief operating fund, to cover administrative costs.

The report includes the document below, which accounts for 2018’s originally intended $791,744 transfer amount. You can decide for yourself whether all these people were “administering” TIF. DeKalb ultimately settled on $160,000 in transfers for 2018, and for this year has budgeted $15,000, so apparently even the city no longer thinks so.

tif-transfer-to-GF-fy18-2

The good news is the transfers began shrinking in the sunshine. The bad news is the assessment tells you just about everything you need to know about how DeKalb operates, always. If you look at the dates of missing invoices and proofs of service, for example, you see that it’s not just one or two years where missing documents are a problem; it’s spread across the entire 10-year scope of the assessment. It’s true today, too — I can confirm from my “look behind” information requests that documentation related to licensing comes up missing with some regularity.

What the TIF transfers did were to enable the city to retain more staff than it otherwise could have. In the fiscal 2008 budget the transfers came to $350,000 and the stated goal was to reduce them to zero by 2013. This didn’t happen because the Great Recession happened and they abandoned the plan. In 2010, the city was in a hole and the TIF transfers topped $1 million. In target year 2013, transfers helped fuel a nascent hiring spree that ended with another hole in 2018.

The transfers are virtually down to nothing now, but there’s still a chart similar to the TIF transfer chart and it’s also for deciding how much of employees’ wages should come from another city fund — the Water Fund. The assistant city manager recently confirmed for me that about $370,000 is charged to Water to pay employees who work in other city departments/divisions/offices.

More later.

DeKalb’s financial forecast through 2023

You need to know what that hole is, even if you can’t solve it right now. ~Larry Kujovich, Executive Partners, Inc., addressing the DeKalb city council on strategic planning (2013).

Last week, DeKalb’s finance department shared an operating budget forecast through 2023 with the finance advisory committee. Having obtained a copy, I’ve created a graphic to show operating fund (General Fund) highlights.*

Continue reading DeKalb’s financial forecast through 2023

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.

    City of DeKalb does not want you to come to this meeting

    Tonight is a special meeting of the DeKalb city council. Unlike all other council meetings, this meeting will not be recorded on video. That’s because the city does not know how to video-record meetings outside of council chambers, and council is not meeting in chambers tonight, even though this is the only city meeting scheduled.

    Instead, they’re holding it in the Bilder room at DeKalb Public Library. I understand that the Bilder room holds about 30 people. If true, it’s a potential problem, because it’s a committee of the whole meeting, where the number of participating city staff will likely outnumber the council members, and leave — maybe — seating for only about 15 members of the general public.

    If more people show up than the room can reasonably hold, that’s an Open Meetings Act violation.

    The venue makes no sense.

    The vague agenda item is also questionable when it comes to OMA: “Goal-setting session.” That’s it. Fortunately, staff were a little less lazy about putting together the agenda packet for the finance advisory committee (whose meeting has been rescheduled for January 30, FYI) so I’m able to share more. The memo to FAC says this:

    On January 24, 2018, the City Council will hold a Goal Setting Session to determine what goals they want to accomplish in 2018. As part of that session, the Council would be asked to identify short-term and long-term goals. Specifically, goals or projects they would like to address in the next one to two years would be identified. This would determine what subject areas Council wants staff to focus their time on and could impact the current and future budgets. Council will be asked to identify the broad outcomes to be accomplished in the next 18 months to three-and-a-half years.

    But that’s not all. I’ve attended several planning sessions over the four years of city manager Anne Marie Gaura’s tenure. She is incapable of hiding her hostility toward us. They place the tables in an enclosed rectangle so the audience is facing people’s backs, and between this unfortunate positioning and their failure to use microphones, what you hear is dependent on the projection skills of each individual. Meanwhile, the audience has to wait an average of four hours for a chance to speak to its representatives, after all the decisions have been made.

    It’s sketchy. Unacceptable. A 100% shut-out in every meaningful way.

    Which is exactly why you should attend if you can.

    Shooting oneself in the foot at the DeKalb airport

    We’ve been talking about fuel sales at DeKalb’s airport recently.

    This was in the context of DeKalb’s new marketing practice of deeply discounting fuel in order to bring in new customers, and perhaps reaching at some point the same successful level of sales of 2013, the good old days when net sales more than covered the wages of the airport line service technicians.

    DeKalb residents, who have been waiting for generations for the airport to pay its own freight, are interested in this subject. For one thing, word is getting out that the city redirected some $260,000 in local motor fuel taxes into the airport budget to help erase its invariable red ink. We’d rather that revenue go toward street maintenance.

    People also are unsure that city government should plan for a loss of public money in a gamble. DeKalb is prepared to lose up to $20,000 a year. A loss leader gambit should remain in the realm of private business, the reasoning goes.

    There’s a real head-scratcher among these developments as well. During the November 16 budget meeting, where department/division heads proposed cuts to their respective budgets, the list for the airport included cutting line service hours from 10 to 8 hours a day to reduce labor expenses by $19,000.

    Got that? The airport is supposedly going “all out” to gain customers by discounting fuel to the point of enduring a $20,000 annual loss, but then proposes to cut the operational hours for providing that fuel.

    DeKalb’s airport fuel sales were better in 2013

    City of DeKalb is extremely happy with airport fuel sales over the past few months, and according to the 2018 draft budget is estimating $416,000 in gross fuel sales for 2017.

    However, the recent increase is due to deep discounting of fuel, and fuel sales were better in previous years.

    Airport fuel sale data

    The airport in DeKalb began selling fuel in FY11. I’m tracking FY12 through FY16 because the data are complete and actual (not projections or other estimates).

    DeKalb actually peaked in fuel sales in FY13. After that they continued to lose ground, to the point where net sales were (are?) no longer covering the wages of the part-time employees who dispense the fuel.

    I really don’t want to be a negative nelly. DeKalb has been sending some $270,000 of local motor fuel taxes to the airport for the last couple years; I’d like to see that money returned for allocation to street repairs and improvements, and that means I’m pulling for the airport to become self-sustaining.

    But can that happen if we don’t understand the reason(s) for the loss of ground since 2013? What happens when the current discounts end?