From the agenda for a Special Joint Meeting of the DeKalb City Council and the Finance Advisory Committee scheduled for Monday, May 16th at 6PM at City Hall.
As directed, Irving Construction has provided cost estimates for additional options the Council had identified at our last joint session. In particular, Council wanted comparisons of new construction costs at the existing downtown location versus new construction costs at the City’s West Lincoln Highway site. The attached information illustrates these comparisons. Note the TIF offsets and the remaining portion that would have to be paid from general fund sources.
Also attached are options for the Council and the Finance Advisory Committee on how the general fund portion of these options could be financed. Part of these finances could come from the $400,000 that was “freed-up” from our recent bond restructuring efforts. The balance of the needed finances would need to come from other existing general fund resources or from new taxes to be created. For purposes of this exercise, staff has identified either a property tax increase or the creation of a utility tax surcharge as a method to create the funds for the general fund portion of these options.
Direction and feedback is requested.
Which option would you go with? See page 7 of the agenda. Yes, you may add your own options.
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20 Comments
I watched with great interest the discussion regarding the funding of the new police station at the 5/16/11 council meeting. (either at City Hall or on Lincoln Highway)
As you know, a great portion of the discussion dealt with the funding mechanism that would be utilized to pay for the police station. (Property taxes, Water Charges…etc…).
The discussion also delved into who utilizes police services in the City of DeKalb. One factor that was NOT discussed is those who do NOT live in the city of DeKalb who utilize police services
These could be individuals who are shopping here, lodging here or dining out here…etc…There are a lot of individuals who fall into this category who will NOT be paying their fair share.
The WATER meter method is NOT the fairest method to pay for the police station. The EPI report clearly argues against this method. A combination of sales tax, Hotel Motel Tax and Gasoline tax would be better suited if the council is dead set on the idea of building out on Lincoln Highway
I am staunchly against the idea of the Lincoln highway location due to it’s immense cost and the tax increases that go along with it. The keeping police station ‘IN’ the TIF District (On 4th Street) and paying for it with TIF dollars is a very good idea. We cannot afford to continue to TAX the people of DeKalb anymore. We are at out limits when it comes to water fees and property taxes
Dr. Peddle mentioned that a portion of the sales tax could be dedicated to paying for a police station, because it would be a more fair way of paying for it. The sales tax alone could not cover the costs but it would help in this community.
I heard Mr Peddle’s comments which were quickly dismissed my the rest of the committee. That was a shame
Mac
May I offer some of my own thoughts on the financing of the Police Facility. I, for one, support the option of adding a charge to the City’s utility bill instead of a straight property tax increase for the following reasons.
1. Everyone would pay the same regardless of the value of one’s property. Why should a person that ownes a 200k home pay twice as much as a person that ownes a 100k home when they both receive the same service. I.E. Police Protection.
2. A charge on the City’s Utility Bill captures those people that do not pay property taxes. The largest being NIU.
3. The city utility bill is paid quarterly while the city receives it’s share of the property taxes annually. Maybe a better bond rate can be obtained when payments on the bond are made quarterly instead of yearly. If not the city will have these funds in their hands earlier than waiting for the property taxes to be collected and distributed to the city. If the utility bill is used the City can started collecting the fees next month instaed of waiting for the next tax cycle
4. Using the Utility tax the city has much greater control over offering hardship waivers where this option would not be available if property tax is used. It is my understnding the city offers waivers for seniors and other hardship cases on the utility bill. Such a program could be offered for those truly in need.
5. If property tax is used a person who owns a vacant lot ( and not need police protection) would pay for the police staion and tax exempt property’s ( I.E. churches) that use the police would not pay anything. This just doesn’t seem fair.
6.If ( I know if) development ever returns the quarterly bill could be offset with the impact fees of the new development quarterly not having to wait for the yearly tax bills.
7. Although not a water fee increase the amount of the utility tax can be based on the size of the water line servicing the property and not the amount of the water used. A single unit residence is serviced by a 5/8th line and would pay x dollars. A large apartment building that is serviced by a 2″ line would pay substantially more. And large Conferance centers that are serviced by a 6″ line would pay the most. Although data is needed thia may very well spread the cost to those that actually overburden the services that are provided.
These are just a few reasons that I feel are worthy of discussion. There should be options other than just having those that pay property taxes be responsible for paying for the police facity.. But then again,this is just my opinion
Regards
Pevo
Your position appears to be in the majority of those paying attention, Pevo.
Mike Peddle, who has been a tremendous help in these meetings, and the EPI folks, have a problem with user fee and the lack of relationship between between the service originating the fee and police services. I share that sentiment.
At one time the law meant something to government and no one has bothered to delete the statutes in the ICS that say there must be a direct relationship between the service and the fee and the cost of the fee should not be abused as a revenue source for an unrelated item.
But I understand the wording difference between fee and tax. So many ways to skin a taxpayer, I guess. Only territorial ward fighting can stand in the way of a new police station.
Mac, On the Agenda page 7, down at the very bottom, there is an asterisk followed by language describing what must be done if the $400,000 is not used to fund the $5 million. In the sentence including “…property tax increase on an additional…”, is that “on” supposed to be “or”? Is it either a property tax increase, OR a water fee increase? Or are both required? Probably just a typo, I figured you’re more up on the budget than I. Any insight here?
Kerry, I think that its an “if not then” asterisk option. The EPI recommendation called for a property tax increase as the funding mechanism for capital improvements WHEN the financial house is in order. It recommended against any water fee increase for capital improvement. Gallagher recommended the water meter fee increase as the original fee was used to pay for the construction of the existing city hall. So I think the asterisk is staff’s way of letting the elected know what the property tax increase would be instead of an increased water fee.
Addendum: There are some on the council who want to use the $400,000 on purposes other than police station debt.
I’ll testify to the need to expand and modernize police facilities. I agree with the need for a plan. I don’t agree with the order this item was given in the budget process. First balance operations then consider further debt obligation.
Outside of the box thinking: $400,000 per year is available from refinancing current bonds. Challenge staff and the community to get the police station built within the parameters allowed by a $400,000/yr debt service. Make it work and so if required do it in phases from 4b to 4a.
What are the arguments against vehicle stickers again? They’re a bad idea because….
I could list the problems of new overhead for the police, the effectiveness of the concept when we have so many commuters from out of town, or the efficacy the concept in the first place, but for a one-liner: The city is never going to put its ugly new logo on my private vehicle so I can park on my lunar surface of a street. End of story.
We’ve skipped a few steps, actually. Here’s what the council needs to do, in order:
1) Direct that trailers be parked outside the Muni building for police use, stat. Let them sit there as daily reminders of our colossal failure until we get it right.
2) Make a formal apology to the Police Facilities Planning Committee for putting them through what they went through and then forgetting about them.
3) Fire everyone involved in pushing the latest NIU emergency services contract, which raises NIU’s contribution to the fire department’s budget from 5% to 6.5% over four years, even while services to NIU take up 13% of fire’s budget. (Based on FY2010 numbers. An annual shortage of 600,000-$700,000 depending on the budget projections you use. Wonder how many other sweetheart deals are out there that could have gone instead to the police station?)
4) Pick an option. Any option. Or drop it, as H says.
Lynn, agreement with step 1 if financing must be delayed for any reason. Agreement with step 2 in sum and total. Step 3 should be explained, the how and why this final price was arrived at. There’s never been a question Bruce Harrison hasn’t answered for me. Ummm, set 4… if I was sitting in a voting chair I would not vote to sell bonds for any purpose until I had check-in-hand as a deposit in good faith from the State of Illinois — even this needed police station.
Bruce Harrison said at a meeting that the contract was never intended to cover costs.
I know, #4 of my “step program” is not very helpful, but some days I look at the big picture and I see us skidding into Defaultsville regardless.
I send him about one e-mail inquiry per year and have never received a response.
I didn’t see Chief Harrison at tonight’s meeting. When I do I’ll ask him to explain the NIU contract. I’ve never emailed him.
Reading over what I’ve written so far, I’d like to back up to say: while Chief Harrison has so far never responded to any e-mail of mine (total of 3, probably) and it is a real irritation, I never intended to put all the blame for the contract on him. In fact, I see him as trying to play catch up:
Chief Harrison stated last year there was a seventeen percent (17%) increase in calls to NIU. He added a decade ago NIU’s contract revenues comprised ten percent (10%) of the Fire Department’s budget; now it is five percent (5%). Thirteen percent (13%) of the City’s calls come from NIU.
So it looks like the contracts did at one point cover, or at least come close to covering costs, but for some reason the city did not stay on top of this — just as with the Cortland contract and who knows what else.
My biggest gripe on the new contract is that, unless circumstances change, cost coverage will improve only up to about 50% and it will take 4 years even to get there.
Somebody also reminded me about a proposed PILOT program. I do not remember the formal outcome of that discussion, only a vague impression that everyone thought it was a good idea, so the status of that project might make a good question.
But perhaps it is a moot point. At the risk of being labeled a Henny Penny, I will point out that at the same meeting as quoted above (July 13, 2009) there was this as well:
Chief Harrison pointed out the agreement is subject to termination in any year that the State of Illinois doesn’t make appropriations. The contract is dependent upon the University getting their money from the state, and could be at risk because of other issues in the state.
Perhaps Chief Harrison will lay you odds for FY2012.
With the fire at the frat house and the resulting condemnation for code violations, I bet the fire chief was a little busy yesterday!
If we really want to stop screwing around with band-aids and build this station properly, the way forward is clear: Option 4B.
Using the sliding scale for the meter charge presented that means the average homeowner would pay around $4.34 per month. If we as a community are not willing to commit to such a small amount for basic police service, let’s stop kidding ourselves and scrap this project all together. Seriously. Take all the plans and studies out onto 4th street, put them in a pile, and set them on fire. Sell the Lincoln Hwy site for a loss and set up a Katrina-style tent city in the parking lot of city hall for the police to use. And fire anybody who uses the term “public safety” in a sentence from now on.
As for the university, they will probably say that they will need to pass along that cost to the students. Dividing that $36k number by the roughly 24k students means each student will be burdened with an extra $1.51 in fees. One dollar and fifty one cents. I’m not terribly worried about this added expense, especially given the enhanced police service they would receive from the Lincoln Hwy site.
Our police deserve better than this epic spectacle of dithering.
And for cripe’s sake, NO VEHICLE STICKERS. Somebody pull Alderman Baker aside and gently explain to him that the idea is dead and nobody except him thinks it’s a good idea. Goodness.
Challenge the total cost of the project, yes. Make sure every expense is justified, yes. Stretch the restructured money as much as possible and minimize interest as much as possible, yes. Do the due diligence on TIF, yes. But walking away on Monday night without a real plan for this station is not conscionable.
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Lynn, the Facilities Planning Committee was only used to try and give credibility to the Lincoln Hwy plan. We were told that we could not discuss location, that Lincoln Hwy was it and that they have chosen the architect and that architect and the basis of their idea was the basis for the police station concept. I have firmly stood by my earlier statements that having a police station over 50,000 square is purely ludicrous.
The current police station is 17,500 square feet of purely hodge podged space. If a 28,000 to 32,000 square foot building were truly designed for today and tomorrows police force, 50,000 square foot would be considered decadent luxury and overbuilt. Todays new design would be (should be) designed much more efficient for today and tomorrows needs and could be designed for future expansion and with several multi use spaces.
Also, we now must slow down due to the new buzz work in various municipalities looking to restructure policing in their communities and that buzz word would be “geographical” policing.
As for the fire chiefs comment about the charging of services for NIU. Absolutely appalling to say the least. I know this isn’t Chief Harrison’s baby. I’ve asked past chiefs about how NIU is charged and they said that charges were adequate and were covering expenses. This also includes the ambulance service provided to Cortland. I have always felt and said that both NIU and Cortland were not being charged enough and that the taxpayers of DeKalb were carrying the brundt of the expenses. It turns out once again that I seem to have been correct.
NIU should be charged for “real” expenses. If they do not like the charges that need to be charged to at least break even, them they should provide these services themselves as they do policing on campus. How many years have we ended in the “red” due to the services provided NIU for Fire and Ambulance? Stupidity in City Hall has to stop and they must stop giving away services that are so valuable. If you take 15 years of inadequate charges for services to NIU and Cortland, I think it would be fair to say that the City of DeKalb would be in a little bit better shape financially and that our police department would be in much better facilities than they are in today. It is absolutely appalling and disgraceful on how City Hall continues to conduct business and throw away hard earned and valuable tax dollars due to irresponsibility and lack of accountability for their actions or should I say inactions.
Mayor Povlsen and Alderman Baker should resign immediately for being the most senior on the council and for allowing this to occur these past 15 plus years. The fact that they did not ask questions and demand answers to why there was always a shortfall in monies to provide adequately for police necessities over the years is a more than a sufficient reason for their resignations. They have shorted the citizens of DeKalb key services and protection by shortfalling and constantly shelfing the needs of the police department. Now look at the problem we have and zero resources to solve them.