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?

Reasons to allow the city manager’s contract to expire

City council is expected to vote tonight on a resolution to “amend” city manager Anne Marie Gaura’s employment agreement, which currently expires at the end of this year.

My main concern with the vote itself is that it involves the removal of the expiration date from the contract, even though the DeKalb Municipal Code says the city manager “shall serve and hold office for a term of office specified by virtue of an employment agreement.” For this reason alone, I urge a “no” vote on the resolution.

But there are performance issues as well. Here are some of the major ones, in my opinion.

1. Failure to cooperate with, and render assistance to, elected officials. These are responsibilities required by the Municipal Code (3.08(b)). Yet Gaura deprived city clerk Liz Cliffe Peerboom of the basic tools of the job, including a desk and computer. She has also failed to comply with city council members’ requests for financial information, and brazenly ignored a residency requirement in recruiting an IT director.

2. Inability to produce a budget that covers the basics. Gaura has presented budgets that always include new hires to her inner circle at the expense of other needs. Our five-year outlook is so grim that finance advisory committee members have pledged to keep working on the fiscal 2018 budget into fiscal 2018, in order to try to make adjustments that will nudge the trajectory into more solvent territory. DeKalb has also struggled with deficiencies in internal accounting controls during Gaura’s tenure, according to the city’s auditors.

3. Damaged relations with residents, business people, and even another unit of local government. In a series of unforced errors, Gaura has had to walk back actions that took the community by surprise. The unlawful assembly and commercial inspection ordinances, for example, popped up on council agendas without previous community discussion and caused a great deal of dismay and distrust, not to mention the resources wasted in having to go back to the drawing board.

4. Inability or unwillingness to rein in staff. Gaura’s failure to set boundaries with her administrative team has allowed a range of unprofessional behavior, from the city attorney’s inappropriate participation in policy discussions, to the FOIA officer’s calling citizens liars with impunity. Staff do not even pretend at professional objectivity anymore, but rather have become a sales team for pet projects. They engage in hard-sell tactics and sometimes lie to get their way.

We can do better, DeKalb.

Feel free to join City Barbs on Facebook with your two cents.

DeKalb’s failure to fund capital projects looks familiar

Mulling over our current the lack of funding of capital projects and fleet needs, I ended up deciding to contrast the spending from three different time periods, as expressed by transfers (or in the case of 2018, expected transfers) out of the General Fund into the Capital Projects and Fleet funds. I’ve also placed rough estimates of average numbers of employees using full-time equivalents (FTEs).

Time period: fiscal years 2007 through 2010
Transfers to Capital Projects and Fleet: $521,500
Average number of city employees: 241

Time period: fiscal 2012 through 2014
Transfers to Capital Projects and Fleet: $1,768,191
Average number of city employees: 205

Time period: fiscal years 2015 through 2018
Transfers to Capital Projects and Fleet: $522,803
Average number of city employees: 230

Clearly, we’ve been here before — riding the edge of the cliff, I mean.

Let’s discuss right-sizing of City of DeKalb’s workforce

Last night during DeKalb’s budget meeting, the city manager said that DeKalb has 235 employees. She contrasted this with 2007, when she said we had 257 employees. Perhaps she meant full-time equivalent employees (FTEs), but the methodology for those calculations have changed. I do not understand them anymore, so am looking at things in a different way.

comparison of 3 yrs of budgeted positions

When the city manager said “2007,” I didn’t know whether she meant fiscal or calendar 2007. FY07, which ended June 30, 2007, was a heady year. Out of more than 1,000 building permits,76 were for residential new construction and 27 for industrial/commercial new construction. Retail sales hit an all-time high. Population nearly reached 47,000 and everyone was sure we’d hit 50,000 by 2010. Enrollment at NIU briefly touched the 25,000 mark. Continue reading Let’s discuss right-sizing of City of DeKalb’s workforce

DeKalb’s growth in personnel expenses

There’s another special city council meeting, specifically a budget meeting, set for this evening. It’s apparently a follow-up of what they discussed last week.

On Thursday, the council held a joint meeting with the finance advisory committee to outline a proposed 5 percent reduction in city department budgets for fiscal 2018. This equates to nine full-time positions and 11 part-time positions being dropped and nearly $20 million being cut.

I watched the joint council-FAC meeting that the newspaper is referring to, and it did not look like there was much cutting of staff happening. With few exceptions, department heads talked about cutting expenses in a one-off manner. For example, they suggested simply not contributing the usual $12,000 to IHSA this year, and cutting non-critical training, and putting off purchases of equipment and software. In other words, the show was pretty much the same juggling act they do every year. Continue reading DeKalb’s growth in personnel expenses

Anatomy of DeKalb’s proposals for a sales tax hike

That’s not a typo in the headline. There are, I believe, two proposals for a sales tax hike of one cent for fiscal 2018. One comes from DeKalb city administrators, the other from the city’s finance advisory committee (FAC).

Here’s the proposal staff put into the draft budget:

proposed increase of sales tax

Sales tax for hiring police officers? Sales tax for “operations stabilization?” These people have run out of money for day-to-day expenses. The hiring spree chickens have come home to roost. Continue reading Anatomy of DeKalb’s proposals for a sales tax hike

DeKalb, I’ve got your new police officers right here

DeKalb staff are proposing a one-cent rise in the local sales tax in order to meet next fiscal year’s budget beginning January 1, 2018.

They’ll tell you this is about street improvements, but they didn’t care about that last year or the year before, so I believe anything promised for streets is a sweetener to make the proposal more politically palatable.

What’s really going on is that the city has run out of money for streets AND operations now. They’d like to hire three new patrol officers, but they can’t do it because of the structural budget issue, meaning they’ve hired employees beyond what the growth in revenues can accommodate.

So they want $600,000 of the new sales tax to go into the General Fund. That’s how much they’re short for their current ambitions. But what the city council really should do is tell city manager Anne Marie Gaura to cut some people from the departments that come under the umbrella of administrative services. That’s where the most growth in personnel has happened on Gaura’s watch.


Continue reading DeKalb, I’ve got your new police officers right here

DeKalb may raise taxes, but the structural budget issue remains

DeKalb’s Financial Advisory Committee (FAC) will be recommending that the city council raise the property tax levy by $954,000, and its local (home rule) sales tax by one cent, in the fiscal year starting January 2018.

The property tax recommendation was approved by the FAC in early October, and the sales tax during a meeting November 2.*

Even if the city council passes the recommended increases, FAC members acknowledge it would not fix the basic operations budget problem. The hikes, if approved, would balance the General Fund budget for this year, and maybe next. But without a major intervention to eliminate the structural issue, they would not constitute a long-term solution.

Indeed, the city’s own five-year forecast has the General Fund in deficit of nearly $2.9 million by 2022 — and that forecast is now due for an update because of DeKalb’s recent purchase of the condemned Edgebrook property and the latest downwardly-revised projections for state income tax revenues. On this trajectory, we could be looking at a hole of $3.5 million or more in operating revenues. And the forecast doesn’t cover grimmer scenarios, such as what happens to income tax revenues (distributed on a per capita basis) if DeKalb’s population has shrunk to fewer than the currently-claimed 40,030 residents, or how we’ll end up if recession hits in the next couple years. Continue reading DeKalb may raise taxes, but the structural budget issue remains

City of DeKalb’s share of county property taxes, not including the latest wish list

If you haven’t heard, the DeKalb is setting a property tax “ceiling” during its regular meeting tonight.

This is a legal-beagle advance notification of the highest aggregate amount that DeKalb could possibly ask for when the council sets the levy during its first meeting in December.

What a piece of luck, because recently I’ve been looking at past property tax share portions in DeKalb County. Below you can see tax year 2016, which we just got done paying for in September:

chart of property tax shares in dekalb county

The proportions have remained very stable for the past decade. District 428 mostly ranges within a point either way of its current share, and hasn’t risen above 63%. Kish College has gone as high as 7% and is now on the low end of its usual range. The one exception is City of DeKalb.

In the chart below, what I’ve done is to compare City of DeKalb, its component unit DeKalb Public Library, and DeKalb County. For six years (and maybe more), the property tax shares of City of DeKalb and its library equalled the share of DeKalb County government at 10%, but over the past three years the county has done a better job holding the line on tax increases, while the city has pushed rapid growth in its levies.

Next year, what with the city’s new director of finance talking about a 9.5% share, the city will likely solidify its new status as second-highest consumer of property taxes in the county, even before counting the library.