Kerry Mellot walked into the city council chambers a little before 10pm. That’s how I knew the school board meeting was over. We didn’t talk but I’m betting he wasn’t particularly pleased with the outcome. District 428 had two major items on its agenda. Grade reconfigurations and the 2009 property tax levy.
Alderman Brendon Gallagher looked up at the clock near the same time.
“Here we go with another marathon meeting,” he quipped.
h/t Mark Charvat
Gallagher seemed a little frustrated. But he remained feisty for the good cause. His insistence on fiscal accountability is one of the most refreshing changes I’ve seen at 200 South Fourth Street in a decade.
But he needs help. There are some with more experience who are very adept at self-preservation and all the expensive baggage that comes with status quo.
Example: from Truth in Taxation Law (see 35 ILCS 200/18-55 through 35 ILCS 200/18-100)
A Second Notice May Be Required
In some instances, a second notice may be required. If the final aggregate tax levy ordinance adopted is larger than the amount stated in the published notice, a second notice is required. The second notice must be published within 15 days of the adoption of the levy.
The above explains why last week’s published notice of the tax levy informed the public that the City could raise its portion of the property taxes by 46.45%.
That announcement generated an acidic Letter to the Editor by Mark Charvat calling for more cuts before raising taxes. His letter received an equally acidic (albeit more subtle) email response from City Manager, Mark Biernacki:
City Manager Mark Biernacki’s E-mail response received 12/10/09:
Mr. Charvat:
I was directed to your letter in the Chronicle where you assert the City is proposing to raise its portion of the property taxes by 46.45%. Please know that the legal ad in the paper was purposefully written to let the public know of the high end of the range of options available to the Council should they wish to raise property taxes. I am told that other local governments sometimes take this approach for Truth in Taxation purposes as well.
However, you have been either present at or I’m sure, have watched on TV, the City Council meetings at which the Council has never indicated any desire or willingness to consider anything near that high end in the range. As you know, the Council is instead considering raising the City’s portion of the property tax from $0.60/$100 EAV to $0.625/$100EAV, or a 4.16% increase. These revenues will only cover the City’s obligated pension costs.
Property taxes, levies, and government finances can be a very complicated matter. Because of this, it is important that citizens first call City Hall to fully understand these and other matters before making statements that they mistakenly believe to be factual. A citizen’s right to criticize City government is not being challenged. However, when they do so without all of the facts and background, resulting in alarming and hyperbolic claims and statements, they risk being irresponsible and reckless.
In the instance of your most recent letter, I trust you’ll consider writing a clarification or correction.
Mark Biernacki
City Manager
The long, short and truth of it is staff respectfully disagreed with the council’s vote on First Reading of the proposed levy that called for a 4.16% increase (from .60/100 to .625/100). They wanted a larger increase and would not have had time to publish a second notice, as required by the Truth in Taxation law quoted above.
Seizing upon any legal loophole available is the way of government in Illinois, I guess. Hey. It works. Taxpayers will pay .65/100 for their city share of the tax pie. That’s an 8 percent increase for those keeping score.
I don’t think Charvat will be writing any clarification or correction letter soon.
The bottom line reason that the staff induced strategy produced for increasing the increase was valid. To cover pension obligations the City needs to keep raising property taxes. And that’s not only because the Police, Fire and IMRF investment portfolio is sucking wind.
City councils were duped, including this one. In the 80s and 90s of the last century they were told not to worry about their workers’ pensions. The state would have to take care of them. Well, be careful what you asked for. The state, influenced heavily by the public sector unions, mandated that local governments must cover any investment losses occurred.
DeKalb mayor Kris Povlsen hit that one on the nail head. It doesn’t matter how poorly the public sector pension funds perform. The taxpayer still has to foot the full bill.
But Povlsen and the city council should give more consideration to Charvat’s call for cutting all fringe expenses before raising taxes. The guffaws and shocked look on staff faces when Charvat talked about those cuts were revealing. They just don’t get it.
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19 Comments
Howdy! Kay, and anyone else—I'll do sidewalks, cheap, discounts for seniors, will trade for brownies, cookies,coffee or cocoa too! (or scotch,rum, or tequila!) Times are tight, taxes are coming! Did it as a lad in tilton park. Did it as a teen in the Katz addition. (down the street from Ivan's fam) Did it as a college student in Boulder as well. There's something about those sleep-deprivation hallucinations that make the snow extra pretty and extra twinkle-y. Let it snow! '79-ish I remember trudging the three blocks to Inboden's through many feet of snow…
Whoa, Ivan! You missed out on Jeeps? My first plow was a 1948 CJ2 with electro-hydraulic lift and manual side-to-side pivot. Vacuum wipers, a soft top, old torn up seat, just enough heat to keep my feet from freezing and not nearly enough defrost. Not the best visibility…on top of that I remember blowing a head gasket in a blinding snowstorm and between the snow and the steam coming out from under the hood, could barely see to limp the thing to the next clear spot off the road. What an experience! That was back around 1967, the granddaddy year of all snowstorms. Then there was 1979 when I was working for the City of Wheaton. That had to be the worst year ever for equipment because it never stopped snowing and was also extremely cold. I remember the guys twisting axles off in our tandem dumps! Wheaton and Naperville probably had the best snow teams in the suburbs at that time, but we were hard pressed to manage that year! Today’s snow removal equipment sure has come a long way from the dinosaurs of old! Seat warmers and cocoa! Geeezzzzz!
Another thing is, IMRF caps you at 30 service years. You can work one or more IMRF jobs for a total of, say, 35 years, fine, but you still get ONE pension based on service years 27-30.
Not sure Kay. I usually will do sidewalks for customers if I get say their driveway for the winter. Last year was an interesting year given the 48 hours to clean following an event. With the way the snow was falling it was snowing again within the 48 and the clock started over so many would only really have to clean their sidewalks once for like six events one stretch went.
I honestly think most snow contractors doing private drives are now set up with smaller and more portable snowblowers making it easy for most to do sidewalks. If you have trouble finding one drop me a line and I can cover your needs. It’s really too bad that neighborhood kids aren’t going after accounts anymore. When I was 12 I already had 5 driveways and walks AFTER I did my parents home and their apartments. Shovel on the shoulder, a thermos of hot cocoa (the way only mom could make)and off walking to each job. Low overhead that way.
Herb “cul de sac” did a great job with his information gathering. If he just adds a few more men to his formula he’s pretty much on the money. It’s nice to see individuals in the community starting to participate. It’s very welcomed.
Kerry, I can honestly say I never sat in a jeep and cleaned snow. I heard in was an experience driving an old willys series jeep with a 6 1/2′ or 7′ manually operated blade. You know the hydraulics thing really helped out especially in a truck with electric windows, delayed wipers and a wonderful heater like most trucks have today. My favorite upgrade anymore is the power lumbar seats with the butt warmer and of course the 6 CD changers and BOSE sound system is a plus now too. Much easier today than ’66.
Mmmmm, cocoa…mmmmm-mmmmm, seat warmers…
Kay… good article by Terry Savage. A couple of excerpts:
A financial war is brewing — and it’s likely to pit these public employees against Illinois taxpayers who are responsible for paying those generous pension promises. There simply isn’t enough money in all these retirement plans to send out the promised checks. If you think Bernie Madoff had a Ponzi scheme going, wait until the wave of boomer retirement hits the reality of pension underfunding.
and…
Is it inevitable that public pension plans are underfunded? Not at all. In fact, in the midst of all the dismal news about underfunded public pension plans, there is one bright spot: The Illinois Municipal Retirement Fund. Last year it was 100 percent, fully funded!
This plan covers the employees of 2,900 local governments – cities, villages, counties, parks, libraries, and other local districts, outside Chicago. The plan covers 177,000 active members, and has 85,000 current retirees.
Based on asset size, with $24.2 billion in assets at the start of 2008, the IMRF is the second-largest public pension in Illinois.
In 2005-07, the IMRF reached 100 percent funding level, an unprecedented accomplishment for an Illinois pension fund. Certainly, it took a hit in the market crash of 2008, but IMRF fund executive director Louis Kosiba says: “When all the numbers come in, we anticipate that IMRF will be better funded than most pension systems nationwide and statewide.”
How have they managed so well since they got started in 1941? “What is unique about IMRF is that our board of trustees was given authority to set employer contribution rates, and that we have enforcement authority to COLLECT those contributions. We’ve used conservative actuarial principles . . . and we’ve been disciplined over the years about collecting the required monies.”
Here is a news article from almost a year ago comparing the pension funds:
http://www.suntimes.com/business/savage/1395694,illinois-pensions-battle-retirement-012409.article
I used to plow snow too. Started in 1966. But I’ve only used pickups, Jeeps, and skidsteers. So you got me beat, Ivan! Oh wait, since I moved to the country, I guess I should add tractors! Anyway, don’t call me, call Ivan. I’ve moved enough snow in my lifetime…don’t want to go out for hire anymore!
I’m glad this cul de sac parking restriction/snow plowing thing is a pilot program. I’m sure there are many knowledgeable persons that could or should weigh in on the discussion. When they do, and if they are as conscientious and sincere as Herb appears to be, they will create a new level of professionalism amongst our city leaders. That will be a great thing.
So, in my comments above regarding Herb’s work, I am pointing to the process, not the end result or which “side” we wind up on. In the end, there may be more than one way to get a job done and do it less expensively. If citizens were more concerned and diligently involved, our “experts” would pay more attention and things would work out for the better.
Whether Herb’s statistics end up being accurate or incomplete, I salute him for the time and energy he put into the study. Now if we could just do that for some of the larger issues (details on TIF’s retention of essential tax revenue for example) we face, perhaps things would improve.
And Ivan, I agree with you…cul de sacs belong in California…along with municipal properties paved with individual brick pavers.
Thank you to Linda Horrell, IMRF Communications Manager, for a very informative message!
Herb ‘Cul-de-sac’ came very prepared. I live on a cul-de-sac but my driveway empties into a real street because I am on the corner. The snow usually ends up in front of my house, which is fine by me. It is not like I am going to go mow! The fire hydrant is on my parkway. A couple of times I took the snow blower out to blast through the heavy stuff to get to it, then followed with a shovel.
Hey Ivan, who does sidewalks?
My question on the cul de sac issue though is the hours spent. Like Herb had mentioned no two cul de sacs seem to be the same and each one must be attacked differently. Much of the problem in a cul de sac is that there is no open(green) space to put or store the snow. Some cul de sacs have center islands and I think the city should be piling the snow in these areas and eliminating the need for a dump truck to haul it away.
This is how the city typically will come back to a cul de sac. They will have one rubber tire loader, usually two dump trucks if not three, and a pickup/1 ton truck to help clean the road down, apply salt if needed or provide labor in spotting curbs and hydrants. To me this is 4 to 5 men per cul de sac plus the equipment. With 4 men at 30 minutes per cul de sac that is equivalent to 2 man hours per cul de sac. Most cul de sacs are taking 45 to 60 minutes with 5 guys and 4 pieces of equipment(usually the 1 ton truck will have 2 men). This is then equivalent to 5 man hours spent not counting the time to get to this cul de sac and equipment time and depreciation, fuel, overtime if any is applicable, salt.
I’m sure if Rick Monas would have known that Herb was coming in so prepared Rick could have stated this a little better. I’m not trying to join any sides here but we need to use real numbers with regards the the $150,000.00. Many are thinking by using Herb’s numbers that there is a savings of over $100,000.00 to be found here. I don’t think so. Only if it doesn’t snow would be the best way.
I’ve been pushing snow since 1978. I have driven a tandem and single axle dump truck with both a 10′ blade and an 11′ blade along with a rear salter. I’ve used several different types of loaders from a skid loader to a 580 case to a 644 John Deere to push snow along with pick up trucks from 1/2 ton, 3/4 ton. to one ton with blades widths from 7.5″ to 9′. I’ve cleaned multitude of driveways for hire that were in cul de sacs and built homes in cul de sacs that I found myself assisting the city to a point just to be able to properly clean my accounts. Cul de sacs are great for a warm and no snow environment but not the midwest. They should be banned from future developments. My opinion.
Anybody still looking to hire a contractor for snow removal? Give me a call.
Well Mac, you got the attention of IMRF. I’d say that’s a good thing. I also note that IMRF is making money this year after a loss in ’08, which as I recall is something Gallagher alluded to in a more general sense during discussions of the levy rate. I wonder how many other people on council or mayor or staff track earnings of these pension/retirement funds? You’d think they’d have to in order to vote responsibly…
In the vein of your title…I was very impressed with Herb (don’t know his last name) and his presentation regarding cul de sac parking bans and cost savings. If every citizen came that well prepared, we really would save as staff would be on their toes more often and errors would be less frequent. And that, over time, would add up to better efficiency and cost savings. KUDOS TO HERB!
We read your post, “A little here, a little there, the taxes add up,” and wanted to offer some clarification about the Illinois Municipal Retirement Fund.
While IMRF did lose money during the unprecedented market downturn in 2008, it earned $1.6 billion in 2005, $2.7 billion in 2006, $1.8 billion in 2007 and $3.3 billion so far this year. IMRF is a responsible investor that designs its portfolio to achieve the greatest return with an acceptable amount of risk. It is highly diversified by investment type, geographic region and management style to withstand short-term market variations and ensure steady returns over the long-term. Sixty-seven professional investment firms handling 81 separate accounts manage IMRF’s investment portfolio in compliance with the Illinois Pension Code and IMRF’s policies.
Additionally, IMRF employer rate fluctuations are a part of the normal cost of government services. Employer contributions increase when investment returns are lower than the assumption (like now) and decrease when investment returns are higher than the assumption (as they were, for example, in 1996 through 1999 and 2003 through 2007).
For 2010, the IMRF Board of Trustees recognizes the budget challenges employers face and adopted a plan to moderate the impact of rate increases on employers. Employers were given the option of “phasing in” rate increases, which would cap yearly increases at 10 percent. School District 428 accepted the phase-in plan.
It’s also important to note that IMRF is not part of the state pension system and is not the same as the police and fire pension funds. IMRF is a defined benefit public pension fund covering units of municipal government (e.g., cities, villages, park districts, non-teaching personnel in school districts, etc.) in Illinois — and is neither managed nor funded by the state. Instead, it is independently managed by an autonomous board representing participating municipal employers, employees and retirees. It is funded by participating individual municipal employers, participating employees and investment returns.
Please let us know if you have any questions or would like more information.
— Linda Horrell, IMRF Communications Manager
I’m not against the park district and it swimming pool plan Kay. It’s just that the taxpayers in this town are running on fumes right now. Until the school district comes forward with some real numbers so that the taxpayer really knows how this last referendum is going to touch them. We must say no to all requests by referendum.
The summit would be great. Priorities could be established and all the taxing bodies would know how much money they could realistically ask for. The school district in essence has really ruined it for every other taxing body. Library would like to have a new library built, great! Question, how? Bonds are nothing more than taking out a mortgage to build something. The problem is that the property owners are responsible for the paying of those bonds when it comes right down to the end. Exactly what Mayor Povlsen is crying about in the above video.
For fifteen years Povlsen has refused to raise taxes or save dollars for important things like a police station or an additional fire station for the southside of DeKalb. Now he raises the taxes with a go for it gusto. Got to have it, state is requiring us to pay this. Well the mayors first tax hike (his claims) is a pretty big one especially when it is 8%.
I also wonder how long it will take the park, library, and school districts before they realize that TIF is robbing their working capital. I would prefer to see these dollars working in these districts especially if it would keep them from increasing their operating levies.
Ivan, I sent Rep. Pritchard a message over a year ago suggesting that he host a tax summit, bringing together everyone in the various taxing districts. Obviously that did not happen but I do recall shortly after that his office did help residents find information on the property tax assessment appeal process.
The Park District does have some great ideas for a new pool facility. Unfortunately, not too many people in town have anything extra left.
I know Creston’s property taxes went up (within the Rochelle school district) but I do know that the Rochelle area seems to be doing better. Folks I know from Rochelle believe their crime rate went down. Rochelle’s High School is very nice. The inside has designs that look like they are based on CPTED principles–it would be more difficult for students to find a back hallway to use for mischief. I spent part of a day there–the kids seemed to move in the hallways between class periods in an orderly manner.
I think I wrote this before: Rochelle’s city runs utilities, including Internet service. Oops, it looks like they have a couple of water main breaks tonight: http://www.rmu.net/
Hey, they have a sludge plant, too: http://www.rmu.net/aboutrmu.html
Good job Mark! Keep pushing on!
Common sense will answer many questions. For any taxing body that is partnered in a TIF District, any increases in that bodies taxes from the date they signed the Agreement goes to TIF. That goes for SCHOOLS, PARKS, LIBRARY, AND OF COURSE CITY ALSO.
All these taxing bodies continue to double dip into the taxpayers pockets. One is to payoff into the TIF and the other is to increase the levy enough so that they can operate. Taxpayers are truly paying more taxes in this community because of the way the City of DeKalb manages their TIF’s.
Now, this is not all TIF does. Since almost half of DeKalb is in some sort of a TIF district that means a very little from the TIF Districts actually go to the TIF body that is levying for the taxes but that means really that the rest of the areas not in a TIF are pretty much paying the bills well sort of. Whenever the community needs to do something, the selling of bonds is always brought up because well their real dollars went to TIF to be misspent. So, just like the park district is asking to do for a new swimming pool, they are going to ask for a referendum for the purpose of borrowing money so that they can build a pool. Do we do anything with plain old cash anymore?
Now, let this tick you off ….. or not especially if you are a member of Renew:DeKalb. On a $200,000.00 valued piece of property (home) about $94.00 will be going to the park district for the purpose of the swimming pool if the referendum is passed. Of course the City of DeKalb will permit this referendum to fly because if successful it becomes another windfall for their TIF. Any TIF District that the park district is a partner in (all of the TIF’s) that $94.00 per $200,000.00 will go to the TIF not the pool….once again….TO THE TIF DISTRICT, NOT THE POOL.
Hopefully more people are starting to get this game. This is exactly how the city is winning on the school referendum. You think every property tax that was increased by the referendum for the new schools is going to the school bond repayment? NOPE, once again TIF is sucking up the school increase within the TIF’s. How long are we taxpayers going to stand for this? I feel like we are being robbed.
Yes, TIF is a little more complicated then this but essentially when it comes to the flow of dollars this pretty much hits the nail on the head. That is why parks, library, and schools seem short on dollars and TIF has over $24 million sitting in its reserves. This is what also pisses me off about the burying of downtown wires for the downtown renewal program.
The $4.5 million isn’t going to come from TIF, they are going to sell bonds. These bonds are to be covered by real estate property taxes. That means those dollars will be paid by the taxpayers of DeKalb, why? They forgot to include the burying of the wires into the initial proposal and this is now an extra or after thought.
Why are so many people mad? I think it’s because this community is being run blindfolded. The right hand doesn’t know what the left hand is doing. The school district really ruined it for the other taxing bodies by really stretching our throats out on the cutting block by making some of the biggest mistakes in calculations and revenue expectations that I’ve ever seen or heard of and now this community is literally in hock because of the schools. Not that this is bad enough but the other taxing bodies continue to live in a shell or cave because they continue to spend like there is no economic problems in our city.
Yes, Mark TIF is going to capture many dollars because of the increase in city, park, school, and now library levies. Happy Holidays to you too Mr. Mayor.
During my testimony during the property tax hearing I finally got an answer to a question that no one was willing to answer. Would Any “additional” dollars from the INCREASED Property Tax Levy go be captured by TIF, The Answer was YES! (see Video below)
http://www.youtube.com/watch?v=adFnV6Mas9I
I E-mail Asst City manager Rudy Espiritu today to inquire as to what ‘ADDITIONAL’ dollar amount he believes will be captured by TIF as a result of the .65 per $100.00 EAV Tax levy. Here is the response I received from Mr Espiritu:
Rudy Espiritu: I do not have the TIF EAV for tax year 2009, but using the EAV from tax year 2008, approximately $53,451 would be captured in TIF through the $0.05 rate increase.
I also asked Rudy to point out to me, where, on the City of DeKalb website, the notice for the property tax levy hearing is/ was located? I could not locate it anywhere.
Rudy Espiritu: The property tax notice was not put on the website because the Truth in Taxation Act requires the notice to be published in a newspaper of general circulation within the municipality.
I find it quite scary that the city is now choosing to hide such important matters and only does the bare minimum (as is required by State law) to publicize the hearing. In the past, public hearings have appeared on the City Of DeKalb website….NOT ANYMORE under the new “closed-door” high-Tax Povlsen Administration.
I also asked Mr Espiritu: Can you tell me the name of the individual who is responsible for the upkeep of the City Meeting calendar posted on the City Of DeKalb website. The Calendar is absent of all listings for planning commission meetings, and Citizen’s Community enhancement committee and more. The Calendar is quite selective.
Rudy Espiritu: I will have to check into this specifically, but we post every public meeting on that calendar as soon as we know of the meeting. The agendas and meeting notices are posted here at City Hall as well.
What is going on here?????
And just how long do all of us have to suffer until they do “get it”? While an additional $5.00 a month may not seem like much to them to some it could mean missing dinner one night a month in order to pay their taxes.
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Things are just as bad in Rochelle IL. Incompetence abounds. There are so many residents barely getting by. We would be better off if my teenager runs for office…