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.

    Thoughts on Property and Sales Taxes in DeKalb, and Where We Go from Here

    The City of DeKalb is close to setting its property tax levy for the year. It is requesting the same amount as last year. I read in the paper that 2nd Ward Alderman Tom Teresinski is saying we will pay the same amount in property taxes as last year because even though the rate will go up to fulfill the levy, assessments are lower. Well, that might work in theory but, even with some 6% drop in my assessment last year, my property taxes paid to the city were about $30 more for tax year 2010 than they were for 2008, the final year of the infamous “we’re keeping the rate at .60 again, you lucky ducks.”

    The theory may work in fact for Mr. Teresinski himself, whose assessment was lowered 19%. But not everyone can get that deal, and the ones who can’t are no doubt the folks who can afford the rate hikes the least. Continue reading Thoughts on Property and Sales Taxes in DeKalb, and Where We Go from Here

    58 Banks Closed So Far in 2011

    There have been 58 bank closures through July 22, five of them in Illinois, including one in St. Charles.

    Daily Markets looks at the current climate.

    Looking back, there were 157 bank failures in 2010, 140 in 2009 and 25 in 2008.

    While the financials of bigger banks have been stabilizing on the back of an economic recovery, many smaller banks are still struggling to survive. Nagging issues like rock-bottom home prices along with still-high loan defaults and unemployment levels continue to trouble such institutions.

    Lingering effects of the financial crisis continue to weigh on many banks. It becomes a prerequisite for such banks to absorb bad loans offered during the credit explosion, making them susceptible to severe problems. The uncertain environment is aggravating the risk of bank failures even further.

    Failures were expected to peak in 2010, and it looks like the numbers are on track for fewer failures in 2011, but it won’t be a precipitous fall.

    Bank Troubles 2010

    The Washington Post reports that 2010 brought the largest number of bank failures since 1992.

    The total comes to 157 this year, the most since the savings & loan crisis. The Federal Insurance Deposit Corporation (FDIC) lists 16 Illinois banks with 2010 closure dates.

    The list of failed institutions at the FDIC is filled with community banks that would not be considered “too big to fail.”

    The loans that brought them down were predominantly commercial loans, Hernandez said, which sets them apart from the banking giants whose problems were rooted in home mortgages.

    About half of the the 2010 failures involved banks headquartered in four states: California, Florida, Georgia and Illinois.

    Bank financial strength, like employment, reportedly lags other indicators of economic recovery. Experts quoted in the WaPo article see 2010 as getting us “over the hump” and predict fewer bank failures for 2011.

    However, FDIC reports that 860 banks in the U.S. were on a “problem bank” watch list as of the end of September and that historically, about 20% of problem banks fail (which would be 172, but not all would close in 2011, presumably). FDIC does not publish the watch list.

    The bank regulatory roles of FDIC, Office of the Currency Comptroller (OCC) and Office of Thrift Supervision (OTS) were summarized in a previous CB posting.

    OCC local enforcement actions in 2010:

    Resource Bank: Comptroller of the Currency “found unsafe and unsound banking practices relating to credit administration at the Bank” and the February Agreement specifies actions to be taken in regards to commercial loan risk management.

    Castle Bank: The Agreement imposed June 2009, which addresses a half-dozen areas of practices deemed unacceptable by OCC, was terminated November 1 as a result of the merger of the institution with First National Bank of Omaha.

    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

    City Budget Open Thread…Mayday! Mayday!

    money The proposed City of DeKalb FY 2011 budget has total expenditures going up by about $5 million over last year, mostly due to increased spending on the downtown TIF, health insurance and the airport.

    The budget as drafted will be balanced IF:

  • there are cuts of 25-30 staff (or, alternatively, everyone takes a 12% pay cut)

  • the State pays its full share of the income tax

  • prices of commodities such as gas and road salt don’t go up

  • revenue projections are in the ballpark

  • they can continue to keep the lid on overtime
  • Continue reading City Budget Open Thread…Mayday! Mayday!

    City of DeKalb to Honor Contracts When It Feels Like It

    Last night I once again spent four hours in Bizzaro World. It was very hot inside and about the same hot outside, yet the exit from the city council meeting felt like a breath of fresh air.

    Well, it did until a certain city official tracked me down as we stood outside in little groups to process what had happened. He wanted to take me to task for “not providing context” to my gym membership figures when I spoke at the last council meeting. Seems he felt I should have gone into detail about which portion comes from payroll deduction vs. how much from the city, etc.

    [rant on] Continue reading City of DeKalb to Honor Contracts When It Feels Like It

    Municipal Morality

    If you peruse the city’s check registers you start getting a feel for certain patterns. Based on a sample of five months over the past 15, DeKalb on average pays out about $5000 per month on cell phone service, $600 for locks and keys, maybe up to $1000 or so for janitorial supplies and sometimes more than $1000 for janitorial services.

    Some entries bespeak the good life on our dime. A few jump to mind: the $145 framed photo of “B Foster” that you will have to visit the airport to see; what appears to be the entire Wogen family getting into great shape to the tune of $299 per annual gym membership; and several happy TIF Fund recipients, not the least of which are the venerable Hitchcock Design Group. I have not spotted a payment to Hitchcock for less than $14,500 (yes, for a month) and they frequently bill for much, much more.

    But there’s no money for an additional police officer, nor enough to go on supporting the homeless shelter.

    EPI Letter

    Appearing today in the Chronicle:

    To the editor:

    In a controversial action late last year, the city of DeKalb hired a financial consultant, Executive Partners Inc., to analyze our finances and make recommendations for putting the city on better financial footing.

    EPI’s evaluation, “Strategic Financial Evaluation & Planning Process,” was distributed to council members May 1. (It can be picked up at the Municipal Building or found online at The report contains an analysis, an action plan and a list of 10 priorities meant for implementation as soon as possible.

    You’d think the priority items, at least, would have been placed immediately on the DeKalb City Council agenda for consideration due to the potential for substantial savings in fiscal year 2010. Instead, a backroom decision was made to defer discussion until after the budget was approved. Continue reading EPI Letter