The special meeting of the DeKalb city council, the finance advisory committee and staff concluded with a general consensus that public safety is a high priority and a solution must be implemented to address space and facility inadequacies for the police department. There was no consensus on how to pay for it.
In May of 2009 the city received a Strategic Financial Evaluation Report from Executive Partners, Inc. (EPI). I strongly suggest that current city council members review the report and to those newly elected aldermen – this is a must read.
Here’s a few highlights:
EPI Report: Analyze capital investment and allocation decisions
Unanswered questions (because they haven’t been asked)
- Does it yield long-term cost reductions? How much and when?
- Does it impact outcomes and to what extent?
- Have all capital alternatives (or alternatives to capital) been financially analyzed and what is the result of comparative analysis?
- Have financing costs and all alternatives been analyzed?
- Have operational performance enhancements and incentives been included in financial analysis?
EPI Report: The City should adopt a formal debt policy
The City of DeKalb (City) does not have a formal policy on the issuance of debt. Many communities have a formal debt management policy that outlines the general policies of the City with regards to all types of debt issuance (general obligation bonds, revenue bonds, capital leases, tax anticipation notes, bond anticipation notes, and private activity bonds). The purpose of this policy would be to set guidelines for the issuance of debt, and to specify the purposes for which debt proceeds may be used or prohibited. The policy should include the term, type of debt, use of financial advisors and underwriters, responsibilities for reporting to the bond market, investment of proceeds, criteria for determining method of sale, and use of derivatives.
EPI Report: Paying for buildings or other long-term assets
EPI further recommends that the City not utilize other short-term revenues such as sales tax, hotel tax or water surcharges to pay for buildings or other long-term assets, but rather use general obligation bonds to finance the construction and property taxes to pay for an asset that will have a ten year (or longer) life expectancy.
EPI Report: Before going into further debt…
- Adopt a formal debt policy
- Purchase excess liability coverage to protect the City against unforeseen claims
- Get financial house in order
Click Here To Submit A News Tip Or Story
4 Comments
I’m 99.36% sure that the water surcharge is still in place and now goes to the General Fund. I’m less certain how much, if any, goes to the peanut butter fund. 🙄
Great reporting Mac!
HEADLINE: Ald Gallagher is no longer a fiscal conservative! He has been taken over by the “POD PEOPLE of City Hall”. Ald. Gallagher dropped a bombshell last night’s special City Council meeting. He ACTIVELY pushed to RAISE our water rates by ‘at least’ $10.00 a month to fund the larger police station project. (that’s $120.00 a yr for the average home owner). NIU pays NOTHING!! This clearly violates the recommendations of the EPI Report as Mac mentioned at Monday night’s meeting.
Mr Gallagher has clearly tossed aside the recommendations of the EPI report. If you voted for Mr. Gallagher in the 4th ward in the last election based on his conservative spending principles, then you have now been lied to. Shame on you, Brendon!
Actually, Mark, I thought Gallagher came prepared to offer ideas for financing the police station and renovations to City Hall. He applied logic to a financing plan that used the same mechanism as was used to finance the current building at 200 S 4th.
I don’t see how the police station needs can be addressed without some kind of financing either through bond sales or creative financing that will need a dedicated revenue source. I believe there are savings in the budget and opportunities available to abate any increase necessary to secure the financing. But I believe that (if) any increase should be in property tax as property values are directly tied to public safety.
I think its important for the elected legislative department to dig their heels into the EPI recommendations and not let the City go further into debt — for any reason — until it has adopted a formal debt policy, purchased excess liability coverage to protect the City against unforeseen claims and got its financial house in order.
Those concerns should be addressed immediately and the police facility needs should then be of the highest priority, imho.
Leave a Comment
You must be logged in to post a comment.
Mac – Question for you…Ald Gallagher referred to a water surcharge to finance the current City Hall / Police Station at Monday night’s meeting. Is that surcharge still in place? That is “Are we still paying the water surcharge now that the current building is now paid off. I believe we are. Since that surcharge is still on our water bills, why can’t that surcharge (the one already in place) be earmarked for the new project?
I think I know the answer. Let me guess, the surcharge from 1968 is still in place and being absorbed into operation expenses (Peanut butter, plastic sporks, $800.00 DVD Burners and dunk tanks come to mind). Am I correct?