OPEB: DeKalb’s unfunded liability you’ve probably never heard of

I don’t generally gush over DeKalb’s choices of consultants, but I believe EPI was worth every penny – both times – because of their plain talk about our financial situation and the state of city operations.

Too bad DeKalb didn’t take some important advice.

One of the harsh realities was and is the OPEB, which stands for Other Post-Employment Benefits. OPEB is a defined-benefit, comprehensive health insurance plan for City of DeKalb retirees who participate in a pension plan (i.e., full-timers who meet years-of-service requirements). Compared with the pension plans, OPEB is not very highly regulated. There’s no trust fund established, and since the city doesn’t have to pay more than a required annual contribution, it doesn’t. There are no reserves for the future.

This was the picture when EPI came on the scene in 2009:

• Depending on the retirement age of the labor contract/pay plan that applied, some city workers qualified for benefits as early as age 50.
• Employees did not contribute to the OPEB until retirement.
• OPEB covered the retiree for life.
• Some plans had spousal and/or dependent benefits.
• The city at that time was paying approximately 87% of the premium for each retiree.
• DeKalb’s contribution as sole employer of the plan came to about $1 million per year.
• The unfunded liability reported for fiscal 2008 was $29.4 million, which was more than the liability for any city pension fund at the time. Continue reading OPEB: DeKalb’s unfunded liability you’ve probably never heard of

The other problem with DeKalb’s new “FOIA Center”

Besides DeKalb’s difficulties in following the Illinois Freedom of Information Act (and basic principles of customer service in the 21st Century) there’s another serious problem: failure of its online “FOIA Center” to comply with the Americans with Disabilities Act (ADA) rules.

Mac McIntyre of DeKalb County Online, who has also written about the misuse of the new FOIA Center, discovered the non-compliance issues on those pages of the city’s website as well. They are similar to previous findings.

In a nutshell, if you have a visual impairment and try to navigate FOIA Center webpages, you’re pretty much screwed.

But at least the city’s new IT director has acknowledged the problem. Last time we broached the subject, the tactic was to deny, deny, deny. Maybe this time it’ll get fixed.

Related: City Barbs: Website accessibility and the fine print

Daily Chronicle Still on Top of NIU Resignation Story

In “NIU hired outside firm to investigate employees” we learn that NIU paid about $25,000 for investigations into what have previously been described as serious allegations of misconduct.

A contract between the university and Sycamore law firm Foster & Buick Law Group shows that attorney John Countryman was hired June 4 to investigate “named individuals within the organization.” The contract was obtained by the Daily Chronicle through a Freedom of Information Act request.

NIU hired Countryman at an hourly rate of $300. Palian said he didn’t know the exact amount NIU paid for the full investigation, but said it cost about $25,000.

University officials refused to provide findings and reports compiled by Countryman because they said they are exempt from disclosure.

The Daily Chronicle obtained the employee agreements through a Freedom of Information (FOIA) request, and I hope the paper also requests a review by the attorney general’s office of NIU’s above-claimed exemption.

Meanwhile, between the costs of the “investigation” and the severance for the employees in question, we’re up to $106,000 paid out by a public university that, in effect, keeps the facts from being known.

This is unacceptable, NIU.

City Payments to Klein, Thorpe & Jenkins

DeKalb city manager Mark Biernacki entered into a contract agreement last fall with the firm Klein, Thorpe and Jenkins, using his ordinance-given spending authority (PDF p. 55).

A professional services contract had been entered into by the City Manager, on behalf of the City Council, with the firm Klein, Thorpe, and Jenkins to conduct research and to prepare recommendations on code enforcement strategies and practices. The City Manager is authorized to enter into contracts provided the cost to the City does not exceed $20,000.

The city manager is authorized to enter into these contracts but to be more precise, the services must already be authorized budgetary expenses. He is not allowed to start new projects without permission.

Regardless of budgetary legitimacy, Mr. Biernacki obtained the blessing of the city council via one-on-one communications — no formal vote was taken at the time — to bring in KTJ under his spending authority. Then it got a bit more complicated.

To date [January 2012] this hourly rate contract has incurred a cost of $17,828 (see attached invoices). Given the growing expectations the City and the Housing Task Force have had of the firm (additional research, attendance at additional meetings, etc.), it is clear that the total cost of this contract will exceed $20,000. It is estimated the total will be in the range of $30,000 to $35,000. The Municipal Code requires that the Council ratify a previously entered into hourly contract where subsequent circumstances lead to a total cost exceeding the $20,000 cap.

Council authorized expenses incurred by KTJ up to $40,000. Shall we take a peek at the final tally? Continue reading City Payments to Klein, Thorpe & Jenkins

Reaction to the New Planters

[Update 6/21: Here’s another reaction to the new planters.

toppled planter

The person who took this photo says at least four of the planters had been toppled as of Wednesday.]

There’s already been a lot of discussion about the new City of DeKalb/NIU ashtrays urinals planters at the City Barbs Facebook Page. I don’t want to duplicate those comments, but I do want to respond to the Chronicle’s take, which is as follows:

Thumbs up: To more collaboration between the city of DeKalb and Northern Illinois University. Forty planters were placed throughout DeKalb and campus Tuesday morning as part of an initiative spearheaded by the Citizens’ Community Enhancement Commission to beautify the area. The planters feature a shrub surrounded by colorful flowers. Logos from NIU, the city and Proven Winners, which provided the plants and soil, are displayed on each container. While they may seem small, they brighten up our area.

Instead of the ugliness or the possible blocked wheelchair access or anything else that has been covered elsewhere, let’s go in a completely different direction, and by that I mean amateur psychology. Putting one’s new baby logos on 40 planters is an act that exemplifies perfectly the type of desperate insecurity that prevails in the running of this town. It’s a form of “shopping therapy” for massaging fragile egos, which is not only the worst possible motivation for public spending but almost guarantees the result will be objectionable, if not downright grotesque.

It’s not just the planters, either. The Art Deco stuff on the east side, the purple banners, and the new street signs all inhabit this category. The “planners” keep throwing up kitsch with no guiding sense of design. The Plan itself has lost whatever coherence it might have had.

OK, yeah, I’m a little extra cranky because I’ve been looking at the city’s budgeted vs. actual revenues and the latest projections again, and they don’t look so hot. I hope to have updated year-over-year charts for you soon in an effort to show DeKalb’s expenditures should stick strictly to the things we need.

Meantime, let’s think about how many square feet of concrete sidewalks could have been replaced in one of our neglected neighborhoods for the cost of the planter “collaboration.”

DeKalb’s City Manager’s Spending Authoritah

[Updated significantly about 7:55 a.m.]

Municipal Code, Chapter 54, Financial Administration (my emphasis):

The City Manager or his designee shall have the authority to enter into contracts for the purchase of goods and materials, the provision of contractual or professional services, and the construction of public improvements authorized by the approved annual budget in the amounts from $10,001 to $20,000 without the necessity of any additional City Council approval.

So was the hiring of Klein, Thorpe and Jenkins as a consultant an authorized budgetary expense? If not, a budget amendment approved publicly by the city council is clearly required no matter what the cost.

It’s a legitimate question anytime, but even more urgent because there’s a precedent. See, in October 2007 city manager Mark Biernacki secretly hired a contractor to develop a rental inspection program that didn’t exist.

Equally important is an explanation for how a project that was supposed to cost less than $20,000 now requires authorization of expenditures up to $40,000. (That’s a pretty serious miscalculation, Mr. B.) Continue reading DeKalb’s City Manager’s Spending Authoritah

Big Fat Correction

I am guilty of too much talk and not enough homework done this week.

There is indeed a scenario in which Alderman Ron Naylor paid the Ellwood House room rental for a 5th Ward meet-up, even when there’s a “RM RNTL 5TH WARD 1/19/10 MTG” note in the city’s check register. The scenario is more than one 5th Ward meeting having taken place. I mistook the 1/19 meeting for his “coffee,” and did so in error. I am sorry for the mistake.

Naylor Disputing City Paid for Ellwood House Ward Meeting

[Update: Please read the Big Fat Correction I’ve made to this story.]

Well, I just had an interesting phone conversation. It seems an online comment I made about Ron Naylor’s letter to the Daily Chronicle about his upcoming ward meeting at Ellwood House — specifically, that he should pay the room rental this time! — is being disputed by Mr. Naylor. Apparently he’s saying he paid it out of his own pocket.

I’ve written about this before. I had been upset last June to find a check written to Ellwood House Association for $100 with the following notation: “RM RNTL 5TH WARD 1/19/10 MTG.” The payment was made May 28, 2010, several months after Naylor’s ward meeting and for some unknown reason written from TIF Fund 63. That same month, the Ellwood rental for the council’s strategic planning retreat was written from the General Fund.

Find the payment in question in the June 28, 2010 agenda packet, check register page 50.

I suppose it’s possible Naylor reimbursed the city. If so, I’d like to take a peek at the date on his canceled check, to see if he did it after June 30 (the date of the original blog post).