City Finance Director Fails Transparency 101


Mayor Dave Schmidt has made “transparency” a central theme of his, both during his 2-year tenure as 1st Ward alderman and in his 5-year tenure as mayor.  He has done so not just for transparency’s own sake but, also, because transparency is essential to accountability.

For information to be transparent, however, it has to be readily accessible in user-friendly form so that the ordinary taxpayer, as well as the ordinary alderman, can understand it and effectively use in understanding how City government is operating.

Which leads us to the subject of today’s post.

Tonight the Park Ridge City Council is scheduled to adopt the 2014-15 Budget.  Although that budget has to be approved prior to May 1, we’re hoping that doesn’t happen tonight, if only because the budget the Council has been given by City Staff – and which is still titled “preliminary” – projects a $6,050,768 overall deficit and calls for a 16.38% property tax levy increase.  Neither of those points sounds promising.

But arguably more problematic than those unpromising numbers is the way City Finance Director Kent Oliven is presenting them, specifically in his April 18, 2014 FY2015 Budget Summary Memorandum (the “Summary”).

The narrative in Oliven’s Summary contains good news: that the City’s General Fund from which it pays its day-to-day operating expenses is projecting a $581,877 surplus.  It also contains what sounds like bad news: that, overall, the City is projecting revenues of $61,673,703 but expenditures of $67,724,471, for a $6 million overal budget deficit.

But Oliven has made understanding why there is such a large deficit a significant challenge.  And in so doing, he pretty much undermines the value of his “summary” document for both the Council and for the ordinary citizen who might want to better understand City finances and how our City officials are dealing with them.

For example, Oliven reports that $2,131,612 of that $6 million overall deficit comes from bonded debt being incurred for relief sewers and high-capacity line connections during the last year of something called the “Sewer Construction Fund.”  That sounds like needed long-term capital improvements to us, but we’re just guessing because Oliven doesn’t make any attempt at explaining what the “Sewer Construction Fund” is, what it was created to do, and what it has done and spent in however many years prior to the upcoming final year.

Another $992,807 of the deficit is projected for the Water Fund, but the reason for that deficit is not described at all in Oliven’s narrative.  Another $601,208 deficit is projected for the Parking Fund, again with no explanation other than “the City Council decided to review parking rates in FY15.”  So not only aren’t the taxpayers being told why the Parking Fund is deficit spending, but we are being warned that WE may end up paying for that unexplained deficit spending through higher parking rates.


There also are no explanations in the Summary for the Municipal Waste (Refuse/Garbage) Fund projected deficit of $123,325, the Library’s projected $368,510 deficit, the Motor Equipment Replacement Fund deficit of $939,393 and the Technology Replacement Fund deficit of $401,901.

The financial black hole commonly known as the Uptown TIF Fund is budgeting for a $653,804 deficit, based on a reported “increase in bond payments.”  We can’t tell from Oliven’s  Summary narrative, however, the amount of that year-over-year increase; and whether that $653,804 is the entire bond payment or only the net payment after TIF revenues (also unidentified) are deducted.

Curiously, Oliven projects “$200K for Court Fines, which is significantly above the $56,721 FY14 budget amount” due to “better enforcement and collections.”  Only a few years ago, however, Oliven’s predecessor discovered over $1 million in uncollected fines, including penalties and interest – which we wrote about in our 11.08.11 post – which is why we would have expected an explanation of how the City is planning to increase its fine “enforcement and collections” by approximately 350%.

We suspect that all those figures mentioned above as MIA are included somewhere in Oliven’s 210-page budget document.  One of the early lessons taught in “Bureaucrats 101” is how to hide information in plain sight by burying it in comprehensive that include as much information as possible, preferably indiscriminately and in a way that discourages casual readers from accessing it without enduring painful tedium.  That’s because so long as the information is somewhere in the report somewhere, the bureaucrat’s derriere is covered – and the taxpayers don’t get easy access to the kind of information that might lead to unpleasant questions.

Make no mistake about it: there are plenty of places to hide information in a 210-page budget document.

But, frankly, the ordinary taxpayer – or even the ordinary alderman – shouldn’t have to wade through 210 pages to find those figures and explanations missing from the Summary.  If the subject is important enough to be addressed in an executive-summary fashion, that executive summary should provide enough basic detail so that the issues can be understood from reading that summary, without diving into the 200 pages of back-up for each point made.

But Oliven doesn’t seem to get that.  And because it appears that simply leaving important numbers and explanations out of his Summary isn’t troublesome enough for ordinary citizens and aldermen alike, Oliven adds insult to injury by providing an “Index” of the entire budget document that lacks any page numbers.

So much for transparency.  And maybe for competence, too.

To read or post comments, click on title.

14 comments so far

Love it. Can you say, “hide in plain sight,” class? They teach it at those conferences, you know.
Meanwhile, what, if anything, is the City doing to hold the TIF-area building owner(s) accountable for the shortfall? If the answer is “nothing,” then we have the classic public pays/ private gains thang going on. I know it’s the republicans’ highest value, but still. Market be damned. If they won’t rent at a reasonable rate to the types of retailers past Councils in good faith agreed to — “reasonable” being defined as “such that at least a few retailers go for the proposal” — then we need to make some changes. This was the elephant in the living room during the much-maligned but actually quite competent Economic Development Task Force’s wasted efforts: The usurous rental rates demanded. If the owners incur no penalty for leaving their spaces empty for aeons, that needs to change. Now. The iron, invisible hand of the market can’t only be applied to the helpless taxpayers.

EDITOR’S NOTE: Many of the aldermen who grabbed their ankles for PRC back when these deals were done were reportedly avid Democrats, so let’s not get carried away with any “D” v. “R” stuff when what we had was non-partison boneheadedness and/or opportunism.

As for the “actually quite competent Economic Development Task Force’s wasted efforts,” had the Council listened to the boneheaded advice comeing from the EDTF, the City would be out $2 million of sales tax generated by Whole Foods – as we wrote about in our 03.09.13 and 05.17.13 posts.

Finally, we are unaware of any ordinances, statutes or constitutional provisions which allow municipal governments to dictate to owners of private retail property what rents they can charge – except maybe the old Soviet Bloc countries, China and Cuba.

A 16% rate increase? I don’t think we are going to get 16% more services out of the City.

Hopefully there are expense items in the budget that can be removed to get this rate increase into a more reasonable range!!!

EDITOR’S NOTE: Given their irrepressible throw-caution-to-the-wind and rush to judgment on the Uptown TIF and development done, perhaps former mayors Wietecha, Marous and Frimark – and/or their former Council stooges – might wish to provide some magic-bullet solutions for dumping that TIF debt or otherwise reducing that deficit. Oh, wait, Wietecha moved to Barrington before the deal was even done, and neither Marous nor Frimark have shown up at any Council meetings involving the TIF since they left office.

12:14, the only competent suggestion in the entire 14-page EDTF report was the one liner “Penalize landlords who leave property vacant for an extended period” and it also happened to be one with essentially no cost to implement (and possibly even a revenue generator for the city, either way).

While PD is right that there is no law that allows for forcing a private property owner to charge a lower rent, there are disincentives that could be used on landlords who leave their properties vacant for extended periods. The city could consider charging a “vacancy registration fee” for any vacancy of 6-months or more with the fee increasing every additional 6-month period. Or they could create new tax classes for vacant or blighted properties that amounts to 2x or more per $100 of assessed value compared to a non-vacant space.

Needless to say I’m doubtful that vacancies are even the real issue. Disappointing tax revenue generation among the non-chain businesses that move into these spaces seems like a much larger problem. Like it or not, this real estate was budgeted with the expectation of large chains and as much as “mom and pops” might bring more character to town, they don’t bring enough money to justify the existence of the “Shops of Park Ridge” hence our ongoing deficit. Consider the fact that Charles Schwab won’t generate any tax revenue at all, but agreed to pay the city a flat fee that is still 4x more profitable than Amphora was in the same space:

In fact, anyone who wants a realistic perspective on the state of retail in PR versus the deluded fantasies of the EDTF should read that article I linked.

Another thing it dispells is the ever popular opinion that if we simply paid someone six-figures to be an ED coordinator and “market” the city to prospective businesses that it would solve all our problems. There is an enlightening quote from the woman at Mid-America Asset Management Inc WHO IS ALREADY BEING PAID TO MARKET PARK RIDGE to businesses and is having quite a challenge selling the spaces:

“[She] stated that Mid America has had “more than our fair share of rejection” from prospective retail tenants. She explained that retailers are looking for closer parking options than the Shops of Uptown provides and that current leases with existing tenants have restrictions built into them preventing new “American restaurant and bar” establishments from opening within the development.”

EDITOR’S NOTE: No offense intended, Paine, but we don’t think the City can do anything about vacant property so long as it is adequately maintained and not “blighted.”

But maybe if the City buys up the north side of Northwest Hwy. from Prospect to Meacham, buldozes the buildings and asphalts the whole thing, we might have enough of those “closer parking options” that retailers want and PRC – with the blessing of the City – didn’t deliver. Would another $10 million of General Obligation bonds cover the cost?


Don’t worry. The Small business revenue from Uptown is sure to pick up with the several weeks of parking and street closures starting today in the heart of Uptown. I was their about 12:30 this afternoon. Every space from Pickwick to the old Pines space was blocked off along with most of the road and there was not a truck or workman anywhere to be seen. Lunch break???

SO if we add that to the closures just before Christmas 2013 what does that add up to?? Two months of reduced business.

EDITOR’S NOTE: Hey, maybe you should show up at City Hall tonight and suggest to the Council that it renegotiate the roadwork and paving contract so that the crews would only work from 10:00 p.m. to 6:00 a.m. – and unblock everything, including the equipment, during their off hours.

But go ahead and average the other 10 months and add that per-month average x 2 to the total and tell us if the revenue knocks your socks off.

Oh, c’mon; thanks you you and your personal Charlie McCarthy, aka Chuckie B, there was no rushing of any kind involved. The dang thing dragged on forever; almost up until the recession, when of course retailers and retailers were not looking for new, uber-costly spaces. And enough with the Whole Foods fracas. SOME of the people on the Economic Development group pushed Mayor Dave to give WF consessions to come here. It was by no means the whole Task Force and I don’t think you’ll find “give wads of taxpayer dough to potential renters” was one of the ideas brought forth to try to increase sales tax revenue.

EDITOR’S NOTE: Maybe you’ll be able to get away with that revisionist history in another 10-20 years, when the double-handful of people who were paying attention have croaked and there’s no institutional memory left of there being NO LEGITIMATE DELAY because Baldacchino was denied an injunction by Judge Richard Siebel; and, nevertheless, the City Council promptly gave PRC’s lenders whatever guarantees they wanted to ensure against any significant project delay.

More importantly, it’s not any non-existent delay, or indifferent retail, or even the recession that jackpotted the City on the Uptown project. It was the City’s stupidly pouring tens of millions of CITY dollars (via bonded debt) into that project and getting basically NOTHING in return, after having given PRC a sweetheart deal on the price of the Reservoir Block without the City’s even getting its own appraisal.

And before you come up with more revisionist history, Mr. Baldacchino loudly and consistently opposed both boondoggles.

Former aldermen did not “grab their ankles” for PRC. They did what you often advise: They relied on the probity, due diligence, and basic competence of highly paid employees in the Community Development department, who assured the elected officials over and over that all was well and when it wasn’t, that all was SOP. Sort of like what happened to you as President of the Park District and its Senior Center’s management manque. Ooopsie!

EDITOR’S NOTE: Of course they did. But, taking your argument as true, anyone who could even consider relying on the “probity, due diligence, and basic competence” of then-city manager Tim Schuenke is either an idiot or a crook.

As for the Senior Center operations from May 2004 through April 2005 when this editor was president of the Park Board, we have not seen any financials that establish that the Senior Center was operating at a six-figure loss, or any loss; or that the Senior Center even had its own line-item back then. But if the Senior Center WAS operating at such deficit back then and that information was known or reasonably knowable to the Park Board, then the buck stops at the president’s desk; and this editor is accountable for whatever mismanagement permitted those deficits.

Anyone read the H-A?

They’re gonna close Prospect and Summit Aves. for 3 weeks because crosswalk construction.

Why can’t they just paint new lines for it instead of doing whatever they’re gonna do?

EDITOR’S NOTE: Hey, the City’s just making those crosswalks that much more attractive to lure retail and retail customers into Uptown – just like those Economic Development Task Forcers want?

Oh I see it was mentioned already.

So sorry.


It seems to me that someone who is going all freakin’ crazy over 20K for Sunday library hours is the wrong person to lecture me about small numbers.

By the way, it may not be that way for a big shot law firm, but those two months are a big slice of business to our local retailers. They represent at least 16.6% of their total revenue. When you consider the first closing was during the Xmas buying season it is probably more than that.

EDITOR’S NOTE: This editor isn’t “going all freakin’ crazy over 20K for Sunday library hours”: he is going all freakin’ crazy about CLOSING THE LIBRARY ON SUMMER SUNDAYS, arguably the Library’s busiest day (on a per/hour basis) because senior Staff and the Board majority prefer to wage a political war against the City Council.

So show up tonight at City Hall and tell the Council not to do any more road paving, sidewalk repair and “street-scaping” in Uptown because it hurts our local retailers.

“No offense intended, Paine, but we don’t think the City can do anything about vacant property so long as it is adequately maintained and not “blighted.””

Well I have seen bureaucrats define “blighted” as simply overgrown with weeds. Of course that would make the most blighted properties in town the former Napleton lots which we are already paying to remedy. The argument could also be made that empty storefronts give the impression of decline and hurt the values of nearby locations, although I don’t know if that could legally justify a fine? I still stand by my opinion that this was the BEST suggestion in the EDTF though, at least worth an hour of research by someone at city hall.

EDITOR’S NOTE: You’re absolutely right: that’s what mayor Wietecha and the then-Council did with the Uptown TIF, but the property the City took back then wasn’t even overgrown with weeds or otherwise “blighted” – which is why D-64’s TIF expert told that Board that they could defeat the TIF if they wanted to.

That well may have been “the BEST suggestion in the EDTF,” but that body’s barbecuing of the Council for not ankle-grabbing to the tune of $2 million of sales tax revenue sharing at the request of Lance Chody and Whole Foods, along with its recommendation to reinstitute the facade improvement subsidies, destroyed the EDTF’s credibility in our book.

Like those crosswalks are really gonna help!

EDITOR’S NOTE: Didn’t the streetscaping on Prospect double the sales tax revenue for that block?

“Over one-third of that deficit, or $2,131,612, comes from the Sewer Construction Fund, where bond monies are supposed to be deficit spent in order to add relief sewers and to connect some lines to higher capacity sewers”. I didn’t realize that deficit spending on bond funds meant you are supposed to spend more than you got from the bond funds. Can someone explain where the additional $777,545 BEYOND THE BOND FUNDS, are coming from to complete this (mostly unexplained) project in FY15? Hidden at the bottom of the extraordinarily confusing budget impact document it shows that the sewer construction fund had an FY12 audited fund balance of $5,492,742. I looked for the FY13 audited fund balance but the FY13 audit isn’t posted on line. Which is curious seeing as it was due to the state 10/31/13. But I digress. If you take the audited FY12 fund balance, subtract the monies spent in FY13 (which are listed as “forecast” even though this fiscal year ended 11.5 months ago), subtract the FY14 forecast expenses then also subtract the monies budgeted in FY15 you come up with MINUS $777,545. Where is the money coming from to complete the project? And why is the capital project detail for the sewer construction fund towards the end of the document blank? The city is going to spend ALL of the bond funds PLUS $777,545 of unbudgeted magic money and they can’t even bother to fill in some blanks to tell us what they are spending these millions of dollars on? Now for fun look at the sewer construction fund document on the very last page of the 210 page document. Notice it shows a zero balance in the sewer construction fund at the end of FY15. Not minus $777,545 like it says earlier in the document. Maybe because the figures presented throughout the document don’t match. Which is correct? Is either correct? Sad thing is under the current leadership we will probably never know.

EDITOR’S NOTE: What do you expect for a measly $250K (Hamilton’s and Oliven’s salaries)?

I tried to read through last night’s budget memo this morning and it was so tedious I stopped about half way through it. To your point, PW, all that detail and all those projections are fine and should be made public, but the “summary” has to be a lot more user-friendly if its going to be worthwhile. The summary also needs to be footnoted so that the reader can know what page(s) of the back-up materials he needs to go to if he wants to confirm that what is in the summary actually has backup.

An Index without page numbers reminds me of the D-64 Board packet, which is one long (100 pages plus) pdf with no index that you have to scroll through. Tremendously inferior to the way the City breaks its packet into a separate pdf for each subject. So despite Oliven’s screw up, it’s still a lot better than D-64 as far as transparency goes.

EDITOR’S NOTE: We agree: the D-64 packet is nothing less than a pain in the derriere to use. But given how transparency-challenged it traditionally has been, that’s not unexpected.

But, hey, they make up for it by being one of the Top 10-ranked elementary school districts in the Chicagoland area, right?

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