City of DeKalb’s Post-Employment Expenditures

For a number of years, the City of DeKalb has provided post-employment health and life insurance coverage for all of its retirees, whether contractually obligated or not.

Known as Other Post-Employment Benefits (OPEB), this program has been changed for greater sustainability as a result of recommendations by Executive Partners, Inc. (EPI) in May 2009.

Perhaps EPI’s recommendations were in part made possible by GASB 45 rules implemented in FY2008 that improved OPEB reporting. Empty cells in the table indicate figures unavailable prior to that year.

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An Early Retirement Incentive (ERI) for IMRF employees was offered in FY2004, and 11 employees accepted it. The number of OPEB beneficiaries has accelerated alarmingly since.

All data have been taken from City of DeKalb Comprehensive Annual Financial Reports (CAFRs).

The FY2011 CAFR, when available, should tell us whether OPEB costs are getting under control or continuing to eat us alive.

City of DeKalb Claims Breakdown: Workers Comp

The following is a year-over-year look at City of DeKalb’s Workers Compensation liabilities along with total claims payables and Workers Comp Fund deficit information for comparisons’ sake.

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Claims Payable (in the table as “Total Claims Payable”) is a liability listed on net assets statements. DeKalb’s Claims Payable used to include health insurance, Workers Comp, and property/liability payables. In the middle of FY2008 (January 1, 2008) health insurance payables were removed from this category when the City of DeKalb stopped insuring itself and joined an employee health insurance cooperative.

Health claims incurred prior to the change typically totaled $3-4 million annually and the payable had reached $500,000+ by FY2007.

Property/liability payables, still part of “Claims Payable,” also show a growth trend, ranging from $0 in FY2003-4 up to $199,500 in FY2010.

Data comes from Comprehensive Annual Financial Reports (CAFRs) from the city’s Downloads page. “Not Avail.” means the data is not available online.

City of DeKalb’s Liabilities

The following are selected year-over-year figures from asset statements found in DeKalb’s Comprehensive Annual Financial Reports (CAFRs).

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–The liabilities reported here come from governmental and proprietary activities. They do not include pension liabilities.

–“Other” liabilities include both payables and unearned tax revenues. Both accounts payable and unearned property taxes roughly doubled during the time period, the latter holding steady at about 60% of the total. [Added about 11:30 a.m.]

–DeKalb’s net assets also grew during this time period, from $104,778,443 to $159,611,331. Assets include land and revenues but by far most of the value of assets is in infrastructure. During the early to mid 2000s there were miles of roads and water mains built. Gains in net assets have slowed greatly since 2007 and actually fell a little in FY2010.

–Figures before FY2009 will not add up to the totals shown, due to my not including unamortized premiums (ranging from less than $100,000 up to about $350,000) listed as long-term liabilities in the years prior to ’09.

RI City Filing Bankruptcy

A friend sent me this link to an article about Central Falls, RI, which has the motto, “A City with a Bright Future”.

CENTRAL FALLS, R.I. — The city of Central Falls, Rhode Island — one of a handful of U.S. cities and counties facing fiscal collapse in the wake of the economic recession — has filed for bankruptcy.

The Chapter 9 bankruptcy filing marks a symbolic blow as state and local governments struggle to pull themselves out of the recession.

The smallest city in the smallest U.S. state made the filing Monday as it grappled with an $80 million unfunded pension and retiree health benefit liability that is nearly quadruple its annual budget of $17 million.

My friend asked whether this was a sign of things to come for the Land of Opportunity and Innovation™.

Before I take a crack at it, let me tell you about delving into Comprehensive Annual Financial Reports (CAFRs). (FY2003-2010 are available online at the City of DeKalb’s Downloads page.) Right now I’m contemplating such questions as:

“Is it really a capital asset if you can’t sell it?” and

“What does it say about us that TIF property taxes are our No. 2 revenue producer?” and

“If this is audited, why am I finding mistakes?” Continue reading RI City Filing Bankruptcy

CAFR & Component Units

Library ShelvesThis is a follow up to previous posts about DeKalb Public Library (DKPL), here and here, in which I posed questions about audits of DKPL and whether the failure to estimate six types of revenues in its budget for several years ever sent up red flags for the auditor of the City of DeKalb’s Comprehensive Annual Financial Report (CAFR).

Here are the facts: Continue reading CAFR & Component Units

Fun with CAFR & the Liberry

Library ShelvesThe DeKalb Public Library has a current annual budget of $1.9 million, yet apparently has enough funds on hand to buy property valued at $1.8 million. That’s quite a reserve! Normally for slush I’d call for a refund (about $40 per resident) but perhaps we should ask DKPL to help the city save for the police station instead. [/snark]

At any rate, in trying to ascertain whether red flags went up for the auditor regarding DKPL’s budgeting practices, I’ve resorted to a careful reading of Comprehensive Annual Financial Reports (CAFR, pronounced KAY-fur) and am through nearly 40% of the CAFR for FY2009. Generally it’s not as bad a slog as one might fear, though there are exceptions… Continue reading Fun with CAFR & the Liberry

Park District Finances & Financing

Meeting minutes for the September 10, 2009 Park Board “study session” included a presentation of the Independent Auditor’s Report of the FY 2009 Comprehensive Annual Financial Report (CAFR).

[Brian LeFevre of Sikich, LLP] reported that both the District’s Golf Course and Hopkins enterprise funds were in a negative working capital position requiring them to borrow cash from other District funds.

LeFevre noted that these deficits could affect the wellness of other funds.

Commissioner Mason inquired how the losses compared to last year. LeFevre stated that they were less than last year, but recommended that the District review and measure the full operating cost of the enterprise funds to manage expenses.

LeFevre explained that due to the decline in market value, additional contributions will be required of the District to the IMRF Fund in the next few years. In FY 2009, funds were transferred to the IMRF Fund from the General Fund to place it back in balance. [Emphasis added.]

A bit later in the program, Aquatics Center financing options were discussed. Continue reading Park District Finances & Financing

Council Watch, 6/10/08

About that $485,000 rabbit. Refuse Fund info can be found both in the Comprehensive Annual Financial Report (CAFR) and on the proposed budget pages plain as day. However, before it was revealed just what the plans for it were, there was really no way of knowing what it meant. Nobody found line-items for the truck and trommel, I suppose because they were still saving for them, so if you are looking at that fund for only one budget year you would naturally assume that the fund was allocated throughout Public Works. You really have to look at several years’ worth of budgets and/or CAFRs to see that they were building up the Refuse Fund.

So what’s missing is the mechanism for calling attention to such a “savings plan.” We thought such a mechanism would be called “city manager” or “assistant city manager” but since the mechanism failed to pull the rabbit out onto the table at the first peep of fiscal crisis, we know this is not sufficient.

To be very clear on this: I consider this a major failure and, if conscientiously hidden, malfeasance. That is not the same as illegal. There are a heck of a lot of things that aren’t illegal but still demonstrate incompetence and/or violate the public trust. Question: When does somebody get fired? Continue reading Council Watch, 6/10/08

Council Watch, 6/9/08

A last-minute change to the regular City Council Meeting agenda, prompted by the city manager, put the waste-collection fee ordinance ahead of considerations for utility tax, rate and fee hikes. At that point, Public Works Director Rick Monas pulled a rabbit out of his hat. Turns out the Refuse Fund has about $485,000 that they’ve been saving up for a couple pieces of equipment but don’t need them after all, so City Council could decide to put the windfall where needed elsewhere.

I found the Refuse Fund in the Comprehensive Annual Financial Reports (CAFRs, pronounced Kay-fers). In the CAFR for end of FY 2007 (June 30), the “rabbit” was $373,083. That would have been nice to know 6 months ago, when it was probably about $400,000, instead of their yelling “Budget Crisis–layoffs–layoffs–layoffs!” I mean, doesn’t it make you wonder how many more “rabbits” are in there? Continue reading Council Watch, 6/9/08