Mercer County & the Role of Transparency in Good Government

Illinois’ Mercer County lies south of the Quad Cities and comprises part of its metro area.

Perhaps you’ve heard that the county’s treasurer, Mike Bertelsen, has been arrested and charged with stealing at least $13,000 from the county’s 911 Fund, the result of investigations that followed a forensic audit in the county office.

The Illinois Policy Institute has pointed out Mercer County transparency failures that IPI counts as red flags:

  • A lack of online transparency
  • A failure to file annual reports on a timely basis
  • Violations of the Freedom of Information Act (FOIA)
  • Violations of the Open Meetings Act (OMA)
  • I’ve suggested before that failures to turn in Comprehensive Annual Financial Reports (CAFRs) and Tax Increment Financing (TIF) annual reports to the state might signal trouble, as tardiness correlated with financial corruption cases in Alorton and Dixon.

    The violations of OMA and FOIA are either mostly or wholly related to Mercer County’s hideously dysfunctional and incomplete website. FYI: Dixon’s wasn’t much better at the time Rita Crundwell’s crimes were discovered. Continue reading Mercer County & the Role of Transparency in Good Government

    Need & Recommendations for Medical Cost Containment

    A couple weeks ago I mentioned that DeKalb’s financial consultants made recommendations for medical cost containment deserving of their own post.

    Here it is, finally. Turns out it’s not just the recommendations after all and it’s very long, so grab a cuppa something and make the jump when you’ve got time to hang out for awhile. Continue reading Need & Recommendations for Medical Cost Containment

    DeKalb’s Pension Picture Updated

    I’ve added FY2012 numbers to the set of charts you’ll find in DeKalb’s Pension Funding Progress. They come from the latest Comprehensive Annual Financial Report (CAFR).

    [easychart type=”line” width=”420″ title=”Yearly Funding of Pensions by Percentage Funded” groupnames=”IMRF, Police, Fire” valuenames=”’99, ’00, ’01, ’02, ’03, ’04, ’05, ’06, ’07, ’08, ’09, ’10, ’11, ’12” group1values=”101.47, 109.49, 111.34, 107.18, 98.78, 82.83, 72.48, 73.17, 77.08, 80.46, 60.69, 62.50, 54.54, 57.73″ group2values=”88.52, 86.68, 73.96, 66.09, 65.26, 66.86, 67.12, 67.24, 71.63, 64.38, 55.91, 59.59, 64.99, 55.06″ group3values=”62.13, 57.64, 57.03, 52.85, 51.19, 53.21, 51.64, 49.44, 50.20, 46.16, 40.39, 42.59, 45.77, 41.65″ minaxis=”40″] Continue reading DeKalb’s Pension Picture Updated

    DeKalb’s Budgetary Reserves Do Not Mean What You Think They Mean

    The City of DeKalb has been re-growing its post-recession General Fund reserve since FY2011, when a large reduction in force coupled with windfall revenues helped the city regain its financial footing. But are annual budget surpluses an indicator we’ve set out upon the right financial path? The latest Comprehensive Annual Financial Report (CAFR) is now available, so let’s see if we can spot the trends.

    [easychart type=”vertbar” width=”420″ title=”General Fund Year End Balances in Millions” groupnames=”General Fund Ending Balances” valuenames=”’04, ’05, ’06, ’07, ’08, ’09, ’10, ’11, ’12, ’13” group1values=”3.26, 3.59, 3.83, 3.30, 2.90, 0.05, 0.022, 2.69, 4.67, 3.25″]
    The years represented in the above chart are the fiscal years, each of which runs July 1 through June 30.

    The reserve looks pretty good now, but I believe it has given city leaders the wrong idea. Continue reading DeKalb’s Budgetary Reserves Do Not Mean What You Think They Mean

    DeKalb’s IMRF Contributions and Their Budget Impacts

    Putting together DeKalb’s pension picture has been like a forestry hide-and-seek. Facts are the trees and while facts have been examined, there’s often an underlying feeling that the ecosystem has not yet been adequately described. So I keep going back in.

    One “specimen” whose significance I failed to fully appreciate earlier is the shortfall between what is collected in city property taxes and the annual required contributions to the three pension funds. Unlike the State of Illinois, DeKalb faithfully makes yearly contributions; and if the property taxes don’t cover them, the city must free up additional revenues from the General Fund.

    So far, such shortages appear to have fallen exclusively on IMRF and below is a piece of that picture.

    [table id=65 /]
    Continue reading DeKalb’s IMRF Contributions and Their Budget Impacts

    DeKalb’s Pension Funding Progress

    The Comprehensive Annual Financial Report (CAFR) includes a table called “Schedule of Funding Progress” for each pension fund that the city is responsible for. An actuary determines the fund assets and liability, and from these are calculated the percentage that the fund is funded as well as the unfunded liability in dollars. I’ve pulled numbers from three or so CAFRs to bring you 12 years’ worth* of these calculations in graphic form.

    [easychart type=”line” width=”420″ title=”Yearly Funding of Pensions by Percentage Funded” groupnames=”IMRF, Police, Fire” valuenames=”’99, ’00, ’01, ’02, ’03, ’04, ’05, ’06, ’07, ’08, ’09, ’10, ’11” group1values=”101.47, 109.49, 111.34, 107.18, 98.78, 82.83, 72.48, 73.17, 77.08, 80.46, 60.69, 62.50, 54.54″ group2values=”88.52, 86.68, 73.96, 66.09, 65.26, 66.86, 67.12, 67.24, 71.63, 64.38, 55.91, 59.59, 64.99″ group3values=”62.13, 57.64, 57.03, 52.85, 51.19, 53.21, 51.64, 49.44, 50.20, 46.16, 40.39, 42.59, 45.77″ minaxis=”40″]
    Continue reading DeKalb’s Pension Funding Progress

    Dixon Redux from Yet Another DeKalb Point of View

    The appearance of “Dixon Embezzlement Serves as ‘Case Study’ on Oversight Practices” over the weekend gives me another shot at commenting on this story (now that I am out of the hospital, hopefully for a good long time). Thanks, Rockford Register Star!

    First, let’s take care of the error in the story. Continue reading Dixon Redux from Yet Another DeKalb Point of View

    The FY2011 Central Area TIF Report

    …can be found here (It’s a 64-page PDF so give it a minute to load).

    As an incorrigible repeat offender I could not stop myself from submitting a Freedom of Information Act (FOIA) request to obtain the following information:

    1. The breakdown of the transfers so we can tell how much is going to the General Fund and how much is going to Debt Service. As you can see below, they used to break it down:

    [table id=50 /]

    I tried to look it up using the city budgets, but the numbers there do not add up to the sum stated in the TIF report. It might be important. Especially nowadays with EAV falling and with half of the property and sales tax increments being paid out to all the overlapping local governments as surplus, we need to keep an eye that the city can still cover its debt service payments as well. Combining the transfers as they did for FY2011, so that you can no longer tell where they went at a glance, is a step backward in transparency anyhow.

    2. The reason why Joint Review Board annual meeting minutes are not routinely submitted.

    3. The reason why DeKalb’s CEO doesn’t do the required CEO compliance certification.

    Bonus table: Central Area TIF state and local sales tax increments:

    [table id=51 /]

    The sales tax increments pretty much mirror what has happened in DeKalb overall: taxable sales plunged by tens of millions in 2008-9 and have not yet climbed back to pre-crisis levels.

    Sales and use taxes also make up 40% of the revenues in DeKalb’s General Fund budget. DeKalb is hoping to collect $12 million in sales and use taxes during the current fiscal year, 2012, which ends June 30.

    Additional sources: City of DeKalb’s FY2012 Adopted Budget (PDF pp. 120-124) and FY2011 Comprehensive Annual Financial Report (PDF pp. 211-214).

    DeKalb’s Pension Cost Acceleration

    [easychart type=”horizbar” width=”420″ title=”Police and Fire Pension Costs in Millions of Dollars” groupnames=”Annual Pension Costs” valuenames=”FY2004, FY2005, FY2006, FY2007, FY2008, FY2009, FY2010, FY2011″ group1values=”1.55, 1.72, 1.8, 1.98, 2.23, 2.38, 2.86, 3.36″ minaxis=”1.5″]

    Annual pension costs (APCs) are what the city contributes to the pension funds each year.

    APCs were increasing about 10% annually earlier this century, but now they are jumping 20% a year. Or to put it another way, we’re now adding to the police and fire pension funds at a rate of $1 million every two years.

    The reasons for this acceleration are that 1) we’ve added 17 retirees during this period, 2) newer retirees are more expensive than the old, 3) retirees get pension raises every year, and 4) retirees don’t die like they used to. Continue reading DeKalb’s Pension Cost Acceleration

    New Per Capita Debt Numbers

    [Update 8:30 a.m.: Table headers edited for clarity.]

    You’ve seen most of this table before. I’ve updated it with FY2011 data from the new Comprehensive Annual Financial Report (CAFR).

    [table id=49 /]

    Most of the overlapping increase came from DeKalb Community Unit School District 428.

    Mind you, these figures reflect only gross bonded debt. The total per capita city debt burden for DeKalb residents, for example, was $929.28 as of June 30, 2011.

    Gross bonded debt gets special attention because repayment is guaranteed by property taxes. If a governmental unit does not have enough money to make the payments, property taxes get raised as required to meet them.

    DeKalb is unusual, Continue reading New Per Capita Debt Numbers