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?

    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