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.

    Mayor’s statement about DeKalb Public Library’s tax promises

    Mayor Smith came out this week in support of calls for DeKalb Public Library to keep its 2015 promises to repay taxpayers, and says he is confident the DKPL board “will do the right thing.”

    Related:

    DeKalb County Online: DeKalb Public Library and its property tax promises

    City Barbs: Going deeper on DeKalb Public Library’s expansion and promises

    DeKalb County Online: Something’s missing from discussions of DeKalb Public Library’s property tax levy

    Going deeper on DeKalb Public Library’s expansion and promises

    The main thing you need to know is that DeKalb Public Library made promises to DeKalb property taxpayers in 2015, and now is considering breaking its promises. But I couldn’t resist putting together some FAQs for anyone who might like more details.

    How much did the expansion cost?
    Total cost was $25.3 million. At center was an $11.6 million Illinois State Library construction grant, along with funding from a mix of public sources (e.g., TIF funds from City of DeKalb), loans, and private donations to DeKalb Public Library (DKPL). State grants involve a local match, so part of the non-grant funding covered the local share. Non-grant funding also paid for extras that were not eligible to be covered by the grant.

    What was the delay of grant funding about?
    The library construction grant is released in four stages based on percentage of construction completed. If a portion of a grant isn’t released during a given fiscal year, it must be re-appropriated the following year. The library received chunks of the grant at 30% and 60% project completion, but release of monies for 90% and 100% completion were delayed during Illinois’ budget impasse. The outstanding amounts, totaling $4.6 million, couldn’t be re-appropriated until passage of another state budget.

    Was there a real danger that the grant money would never be released to the library?
    Probably not. According to DKPL, the state had already issued bonds specific to the construction grants, so they couldn’t be used for anything else. It was just a matter of re-appropriation when Illinois started passing budgets again. The immediate threat was a shutdown if the library couldn’t find a way to keep construction going. A shutdown of any length would have been expensive in its own right.

    Why has controversy cropped up now?
    In January, the state released the rest of the grant except for a final installment of $1.1 million. With millions now in the bank, DKPL faces the decision to keep the money or to keep its promises of 2015. At issue is abatement/rebate of some $971,000 back to property taxpayers, and the removal of the emergency property tax levy of $500,000. People who attended library board’s recent special meeting saw the board “leaning” toward remitting only a partial rebate and keeping the levy for operations. Either action would break a promise.

    Property tax scenarios the library is considering. Trustees appear to be leaning toward scenario 2 or 3, but only 4 fulfills the library’s promises to DeKalb residents.

    Were there alternatives to a bank loan, and/or a property tax levy increase to cover it? Continue reading Going deeper on DeKalb Public Library’s expansion and promises

    Local EAV and TIF Performance

    DeKalb County has placed online a variety of property tax information at DeKalbCounty.org. Among the reports are breakdowns of Equalized Assessment Value (EAV) by type of zoning, which include farm, residential, commercial, industrial, and railroad properties.

    In City of DeKalb, the two top property tax-producing categories are residential and commercial. You can see below that residential and commercial losses in EAV have driven an overall steady decline since the Great Recession, until last year when commercial property saw a slight rebound (residential again lost a little value).

    [easychart type=”vertbar” width=”430″ title=”City of DeKalb EAV in Millions” groupnames=”Total EAV, Residential and Commercial EAV” valuenames=”08, 09, 10, 11, 12, 13, 14, 15″ group1values=”757, 749, 702, 669, 608, 549, 523, 526″ group2values=”695, 685, 643, 611, 555, 499, 474, 476″ minaxis=”473″]

    I also checked EAV in the tax increment financing (TIF) districts, because there is no more important sign of success for a TIF district than increased EAV.

    [easychart type=”vertbar” width=”430″ title=”DeKalb TIF EAV in Millions” groupnames=”TIF Total EAV, TIF 1 EAV, TIF 2 EAV” valuenames=”08, 09, 10, 11, 12, 13, 14, 15″ group1values=”111, 105, 94, 87, 74, 63, 58, 58″ group2values=”77, 76, 70, 67, 62, 57, 54, 55″ group3values=”48, 48, 45, 42, 38, 34, 32, 32″ minaxis=”31″]

    TIF EAV has fallen worse than DeKalb’s overall, and (though not explicitly shown in the chart) has gone from a share of 15% of total city EAV to 11% during the time period we’re looking at. Considering that both TIFs are set to expire in the next couple years, this poor performance should prompt us to question seriously DeKalb’s judgment in selecting redevelopment projects.

    This is Why Your DeKalb City Property Taxes Have Gone Up So Much

    People have been asking me why their city property taxes went up sharply this year. While much of it has to do with your assessment, of course, here’s the rest of the story.

    [table id=95 /]

    Until recently, City of DeKalb levied property taxes for pensions and FICA only. I went back as far as 2006, and the only years when the city levied for any other purposes are shown in the table, because collection of property taxes for bonded debt and for general corporate purposes is either new for DeKalb or a revived practice following long hiatus. Continue reading This is Why Your DeKalb City Property Taxes Have Gone Up So Much

    What the Hiring Spree Has Ruined

    Former DeKalb Alderman Pam Verbic wrote current Mayor Rey a detailed letter regarding the upcoming property tax levy vote. Find it here. I hope you will read the whole thing.

    Each of Ms. Verbic’s points is well taken and stands on its own. I don’t intend to rehash the letter. But her #4 relates closely to views I’ve shared for two-years-plus about the hiring spree and its impacts on city budgets, and it furthermore reminds me to look at the morality of the situation as well as the practical.

    4. Since I was a council member in 2011, I know what it means to have to lay off employees to contain costs. At that time, the number of employees were reduced by 29 from 231 to 202. No positions were eliminated in police or fire. There would be no immediate savings due to the costs of separation, so savings were to be realized on a long-term basis. This did not happen because later councils approved adding new employees, including several higher paid management positions. Last year’s staff memo concerning the tax levy reported that the number of employees had then increased back to 224.

    (My emphasis.)

    The layoffs followed several years in which the city took a number of measures to try to regain control of its finances. City officials talked layoffs as early as the latter half of 2007, which prompted early retirements. They froze hiring. They forced expense cuts. They raised taxes and fees. They delayed purchases of big-ticket items like vehicles. If I remember correctly, they even froze pay for a year.

    These actions were not enough, and an across-the-board pay cut was rejected, so layoffs became the last resort to achieve a reset of compensation to match the new revenue reality. But it needed time to work, and DeKalb only waited one year before starting the hiring spree.

    We often focus on the tax burden in a town that sees little prosperity, and of course that is vitally important to consider. However, job loss involves pain, and the recent lack of restraint in hiring has all but rendered meaningless the sacrifice of city workers for what was supposed to be the greater good.

    It’s shameful. But in my opinion, it’s an error that could still be reversed.

    Half of DeKalb is Doing Well Enough to Compare to Others

    The agenda for last night’s joint meeting between DeKalb city council members and the city’s Finance (sic) Advisory Committee included a list of 14 communities besides DeKalb and their “comparable economic data.”

    The argument seems to be that DeKalb taxpayers can afford to pay more in property taxes than the “bargain” they are currently getting relative to residents of other towns.

    The comps had DeKalb’s median family income as $61,806. I laughed.

    Don’t get me wrong — DeKalb’s median family income really is $61,806.

    But you only come up with that figure if you leave more than half of DeKalb’s households out of the calculation. Continue reading Half of DeKalb is Doing Well Enough to Compare to Others