Snapshot of DeKalb’s pension trends through 2020

The chart below tracks the unfunded liabilities of DeKalb’s Illinois Municipal Retirement Fund (IMRF), police (PD), and fire (FD) pensions.


We expect total pension liabilities will go up with raises, cost of living adjustments, etc. However, the unfunded portions of the liabilities should not. Actuarially determined annual pension contributions are supposed to ensure they don’t rise. Yet you can see by the chart that unfunded liabilities for police and fire climbed steadily for a generation. We’ve now accumulated some $126 million in liability debt. One of the consequences is this year’s contribution total of $9.7 million, which will gobble more than a quarter of the city’s operating budget.

However, the chart also indicates that someone began applying the brakes in 2018. It’s important to explain this so we can support policies that continue the trend to reduce unfunded liabilities.

Continue reading Snapshot of DeKalb’s pension trends through 2020

DeKalb’s annual audit turns up deficiencies in physical security

Amid habitual deficiencies in internal financial controls, DeKalb’s move to a new city hall has created physical security risks, according to the city’s auditor for budget year 2020.

During our observation of the City’s internal controls, we noted the initial entrance/front of the building has limited security and minimal restriction to the departments stationed in this area. Access from the back of the building is also available and requires no key card for entry. Cash and other City tangible assets/property should be reasonably safeguarded to protect the City from loss.

We recommend the City implement a more restrictive environment, where departmental employees work together to avoid instances where one employee is left being responsible for the department, running the cash registers, and overseeing the City safe. In order to help mitigate this risk, we recommend the City implement and enforce a more comprehensive control environment where appropriate/trained employees can support the department and the public. In addition, to improve physical access and ensure security amongst City employees and the general public, we recommend implementing a key card and electronic access system.

Auditor’s Communication to the city council and management, page 14 (page 256 of the PDF file).

Management response:

City Finance Staff have lock and vault procedures in place to protect on site [sic] assets. Presently, the building maintains two entry points to accommodate individuals with a physical disability. City Staff in FY2021 can investigate modifying the Lincoln Hwy entrance into an Americans with Disability Act (ADA) compliant entry thus eliminating the need for having an additional open door on the first floor.

City hall has been in this building a year. Blaming the ADA for not fixing the entry issue doesn’t cut it, and “lock and vault” procedures aren’t a substitute for having two staff on hand when the situation calls for it.

In all, it doesn’t sound like management intends to take the steps necessary to mitigate the risks, but that is par for DeKalb’s course. Deficiencies from the 2019 audit, such as failure to assign a second person to review transactions and to reconcile bank statements timely, were not corrected in 2020. One deficiency that was corrected in 2020, that of water rates billed that did not match the rates authorized by ordinance, was originally identified during the 2018 audit.

Management is careless with our money and the record shows it. City council is either clueless or doesn’t care.

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

DeKalb might be doing some juggling with fire department budget

Below is the year-to-date expenditure report for fire operations for December 2020. Two things are startling about it. First you see that overtime expenses reached $1.1 million for the year, which exceeds the budget for o.t. by $688,000. Then see how DeKalb failed to make a final pension contribution of $708,000 on time, which was not the case for the other years I checked (2019, 2018, and 2017).


Do you remember my post about the city taking chunks of first responder pension contributions out of the fire and police departmental budgets and disappearing them into General Fund Support for 2021? (If not, or if you want a refresher, check it out here.) The amount removed from the fire budget was $746,000.

I alerted you to the change, but we never talked about the why. The city manager said at a budget meeting that separating property tax allocations from non-property tax contributions for the pensions was a way to highlight how much of the pensions the property tax revenues fail to cover. But obviously, the most practical goal in removing hundreds of thousands from a departmental budget is to create a surplus or to erase or diminish an anticipated deficit from that budget.

Looking at it this way, and particularly with o.t., missed or late pension payment, and the wholesale removal of pension obligations from the FD budget all hovering in the neighborhood of $700,000, these unusual activities start to look like a juggling act to hide a deficit of that amount.

Continue reading DeKalb might be doing some juggling with fire department budget

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.


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.


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.


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:


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.


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.