“It doesn’t take a majority to win, just a tireless minority that will keep starting brush fires in the mind and hearts of their fellow men.”

Samuel Adams

Tuesday, September 14, 2010

Aldermen avoid critical vote on the financial fate of Peru. Or did they?

There was no support for any sales tax increase at last nights council meeting. Only those in opposition gave their respective thoughts on why they would not support a sales tax. Dave Potthoff stated an increase in sales tax would "discourage people from shopping locally and encourage them to do their shopping on-line". Bob Ankiewicz said "it will not matter if proceeds from a sales tax increase are ear-marked for street improvements because if an increase was approved the citizens could not afford to own cars and they would have to walk anyway". I'm not making this up. It will be in the minutes. Mikyska and O'Beirne are in favor of an increase, but only because they think they could use it to fund a pool. Good luck with that fellas. Mertel was rather perplexed after Treasurer Hylla detailed once again for them the extent of the deficits in the General Fund, the Water and Sewer Fund, and the enormous amount of debt service we are paying on. Mertel apparently still cannot quite rationalize that we are essentially "broke". Ferrari said nothing. No motion was made or seconded for a vote on the matter. Mayor Harl reminded the council that they had recently approved purchase of new diesel generators (I think about 2.5 million) and the Electric Light Fund reserves are going to be running thin and may not be able to support the rest of the funds as well as the day to day operations of the city. Hylla told them they have only two choices. #1 - Raise revenue or #2 - Cut spending. Makes sense to me. But, none of the alderman responded. I am quite sure that most of the aldermen think they did well last night and the city will go on just fine without any additional revenue. I'm also pretty sure they think they have no other responsibility or accountability in working to correct the financial mess they helped create. That's where they are dead wrong. Now more than ever before they are going to have to not only cut future costs and eliminate future improvements on streets, curb and sidewalk, sewer and now even electric system programs and improvements. They will also have to make huge cuts in existing programs and departments that will certainly include lay-offs in every office and department and that means there will also be a reduction in many if not all city services. These cuts need to add up to more than $1,000,000 according to Treasurer Hylla. Yes, that's six zeros. I think this could end up being the best thing to happen to this city in a long time. Or possibly the worst if the aldermen do not respond properly. It's kind of like a "Tough Love" program. These aldermen, specifically the committee chairmen, will now be required to make the toughest choices of their political careers. Because, if they fail to make massive cuts in existing costs and expenditures and the Electric Light Fund eventually becomes unable to subsidize the rest of the funds, this city will be financially bankrupt within one year. It's that serious folks. So if any of the aldermen are thinking they might have dodged another bullet last night, and they can go back to sitting on their hands again while somebody else cleans up the mess. Oh no! They are in for a very rude awakening. If they fail to do their duty to make drastic spending cuts very, very soon. Well, we all know the story about the state called "Illinois".

35 comments:

Anonymous said...

WE DIDN'T HAVE THESE PROBLEMS WHEN DON WAS THE MAYOR. wHAT HAS CHANGED????

Anonymous said...

Great for the Aldermen. NO increase in taxes.

Now, Steve what is Mayor Harl's next move to keep the city in the black. I guess he cannot spend for additional worthless issues. Maybe he will wake up to reality. What do you say ?

Do you agree or are you on the side of the Mayor, as his supporter.
An example of reducing the cost,why would anyone suggest to make part time employees FULL TIME. Why would anyone suggest to hire new employees at this time ? Only a person whom does not have a clue on how to run a business or the city would make such suggestion or take those actions.
I bet you agree, Steve ! (Don't look in that rear view mirror again, Look forward.)

Anonymous said...

For once the alderman made a good decision. But that is one of the few!

Steve said...

3:52 p.m. - This deficit spending mode has been standard operating procedure for quite a long time. We were never given an accurate and honest assessment of city finances when "Don was the mayor". Nor were we ever presented an accurate annual audit of city finances for at least the past eight years that I can see. When the independent auditor's annual report for Peru consistently states, and I quote "a lack of internal controls" over the city's reporting and record keeping and also contains disclaimer notices about their ability to determine the accuracy of the city's book-keeping practices, I see a "big" red flag. That's what has changed. Now you know.

7:52 p.m. - First off, the city is not in the black. Far from it. Next,I guess you know more about this part-time/full-time thing than I do. If it's justified I'm fine with it. My "forward looking" opinion is as follows. Every expense is on the table now. From hiring, to contractors and consultants like TEST and Chamlin, to capital project spending, to how much we pay for copy paper and toilet paper. As Treasurer Hylla and Alderman Potthoff have stated. It's the job of the aldermen to cut expenses. Let the cuts begin!

Anonymous said...

Steve,
Don didn't raise the library tax and commercial electric rates. Don didn't close the pool. Don didn't spend 2.5 million on generators that we already have.
I really don't care what accountants say about how you keep your books. The reality to us citizens is this government doesn't seem to know what they are doing.
What's changed?

Anonymous said...

Today the 15th. is the payday for the city employees and they did not get paid today. What is going on? This is change we don't need.

Peru Town Forum said...

8:43PM
Don didn't raise the library tax when he should have. Have you forgotten this spring the library was going to take legal action if they did not get what they were legally entitled to. We were informed by the city atty that if we did not give them the amount to which they were entitled to, we would be sued and they would win as there is already precedent set.
Don should have taken care of that pool about 10-15 years ago when the signs of deterioration were setting in but instead chose the cover up the crack route.
If this administration had been left a clean set of books, we might not have gotten this far into debt. This is not a private business but public and you better care about how you take care of your books or the atty general just might.

Steve said...

C'mon 8:43 a.m. - The Library Board raised the levy to what they are entitled to and the aldermen were legally obligated to go along with it. That's how it works. I don't know what commercial rates you're referring to. I think you're taking some liberties with the truth on that one. Ye, Harl prevented the aldermen from exposing the city to the wasteful spending and liability that opening the pool would have created.
The 2.5 million purchase of the new generators was approved unanimously by the full council based on the recommendation of the Electric Committee with a ringing endorsement from Alderman Dave Potthoff stating "this purchase will ensure low electric rates for our citizens for years to come". I remember it very clearly.
Man, you are uninformed!

Anonymous said...

ANON 8:58 I sure hope the employees got paid by now but, wouldn't that be a big cost cutter!!!

Anonymous said...

$100,000,000 in ASSETS + $20,000,000 in CASH = Broke?

Come on Chicken Little. You too Dorothy.

J said...

Being a local consumer, I would not even wince at a .25 increase in the sales tax. It wouldn't discourage me from buying or encourage me to go elsewhere. It seems like one viable solution to get our city back on track financially, a second being cut backs.The only way we're get out of this hole we're in is to stop digging. Take away the shovels and move forward.

Anonymous said...

Anon 1:12 PM You state $100,000,000 in assets and $20,000,000 in CASH - If you mean the City of Peru finances please please itemize with a list to support this statement. If this is the case you are making me feel a lot better.

Anonymous said...

Well said J. I also believe revenue from a sales tax increase if allocated where it is most needed(I know, that's a big IF)would not be an overall negative to the city or to the majority of regular Peru shoppers. I would not trust the current council with any additional revenue at the present time. The pool lobby is still alive, although on "life support" at present. Because of that, I would prefer they get moving on sizeable cut-backs in all discretionary spending and start cutting the "fat" from department to department and office to office.
To 1:12 p.m. - What a perfectly framed example of stupidity and ignorance all rolled into one comment.
I hope you're not a local accountant, banker or business owner. Now pay attention. Whatever the total asstes of Peru are, be it $100 million or $500 million. That represents real tangible physical things the city owns. From city owned buildings and property, to the Hydro-Plant and the power lines in the power grid and the utility poles, to the Water and Wastewater plants and water towers and water mains and sewers and sidewalks and vehicles and equipment and tools and fire-trucks and squad cars and on and on and on. Are you suggesting a "Going Out of Business Sale" to raise some revenue? How about a city-wide rummage sale. Literally. Let's sell it all.
What the hell are you suggesting we do with that number of $100 million you puked up in your comment. Can you hold it in your hands and count it out like cash? Snap out of it!
Now, $20,000,000 in CASH. Wow, you just solved all of our financial woes just like that. Where did you find it? Please notify Mr. Hylla and Mr. Bartley so they can begin balancing some funds and paying off some debt. They had been looking everywhere for that cash. Was it in a secret drawer in Dons desk that he forgot about?
Seriously, Of course we have some CD's and some investments. Many are restricted so they cannot be "pillaged" by unwise city officials. Thank goodness for that. I believe they are spresad out among various funds. I don't know the total value out there but I doubt your number of $20 mil is even close. I do know that about $2.5 million in CD's were cashed in by (you know who) and used to help fund construction of the new Municipal Building. In any event, you should ask Mr. Hylla why it would be very "unwise" to cash in what few investments we do have.

Regards, CL

J said...

CL,
Why are you not on the city council? Seriously, consider it.

Anonymous said...

Did you over the years, ever hear Judy or Don say, anything about funds. No! becaused they kept everything to themselves. Even the council, never knew what they were spending, and where it was going. Isn't it interesting that now that we have a REAL city clerk and treasurer, we are finally getting all the facts.
All the years before 2009, no one, knew anything about money in the city. The treasurer, just collected his wages, and did nothing.

Anonymous said...

And it's funny how well things worked back then. Now that you know how the money is being spent you know what a mistake we made in voting for these people who don't know how to run a city.

Anonymous said...

To Anon 1:36PM
Your comments are just fantasy. You have no idea what you are talking about accusing Judy and Don.

Why don't you identify yourself so we can start legal procedures.
Thank you in advance for your admission.

Peru Town Forum said...

To Anon 11:52AM

Did I miss something I don't see a name on your post? Why not repost with your signature attached.

Anonymous said...

1:36, I DO KNOW WHAT I'M TALKING ABOUT.

Anonymous said...

First of all, I agree with those who have commented that "during the past we were never informed of our financial situation." But, on the other hand, I'm going to be interested as to whether or not we hire any new personnel as has been discussed at previous meetings. Because we are now aware of our financial situation and it appears to be very serious I just can't see us hiring right now. I know we need the additional help but apparently we can't afford it. Another element on the table which, while needed, costs a great deal of money is a new truck for the electric department. Will these necessities be put on the back burner until a later date?

Steve said...

To 10:12 a.m. - I agree with you for the most part regarding a new hire for the Public Works Dept. even though we need more truly qualified employees. But, the last thing you want to do is slow or restrict the ability of the Electric Department to remain as well equipped and staffed as possible. The Electric Light Fund is the only healthy fund we have and is basically supporting the entire city with its positive cash flow. We cannot afford to limit the Electric Departments ability to operate in any way. If they say they need a truck, we need to give them a truck or anything else need to operate.

Anonymous said...

PUT THE GRANT FOR A NEW POOL ON THE BACK BURNER, THAT IS $2000.00 WE DON'T NEED TO SPEND. g

Anonymous said...

To Steve 7:24am.

NO money, no spend. Your support for a new truck is nothing but a bucket full of BULL.
Get with the program. NO is NO .
NO NO NO NO NO , It that plain enough or do we need to get a clearer translation from the dictionary.

Steve said...

9:20 p.m. - No, that's pretty clear.

Anonymous said...

I say give the employee's a raise and we will get more work out of them!

Anonymous said...

CL,

"Now, $20,000,000 in CASH. Wow, you just solved all of our financial woes just like that. Where did you find it? Please notify Mr. Hylla and Mr. Bartley so they can begin balancing some funds and paying off some debt."

Please let the ex-banker and the bartender know that the $20,000,000.00 can be found in the Treasurers Report. Tragedy averted.

"What the hell are you suggesting we do with that number of $100 million you puked up in your comment. Can you hold it in your hands and count it out like cash? Snap out of it!"


I didn't puke it out, Wilcoxin did. As for the assets, you're the person driving a Cadillac, living in a 3000sq ft home paying for your groceries with food stamps. At least Dorothy and Chicken Little were smart enough not to challenge me. Congrats on your perfectly framed example of stupidity and ignorance all rolled into one comment.


CL's Worst Nightmare

Anonymous said...

No sales tax increase for city of peru.
No to swimming pool, no to electric truck, no to spending on the frivolous issues.

LEARN TO LIVE WITHIN THE TAX / INCOME LEVELS OF TODAYS CITY OPERATIONS.

Give all city employees a raise and cut the dept heads salaries to balance the shifting of money.

After all, it is the employees that are creating value for the city and not the dept hds.
The Dept Hds , Mayor, City Clerk are all overhead without the creation of value.
We must have a zero transaction.

Why do we need a PWS to make $65K and stand around watching 6 employees dig a hole;

Why do we pay a city clerk $50K now, when he has an assistant(now full time) doing the city clerks work;

Why do we pay the Mayor $30K a year when the city council does all of the approving of any of the expenses.

WHY, WHY, DUMB, DUMB! Lets wake up and smell the roses.. Lets' bring this up to today's city council meeting.

Peru Town Forum said...

Perhaps for the same reason that the state has a Governor, Lt. Governor, Treasurer, Secretary of State, Attorney General, a House of Representatives and Senate and all the many thousands of people that work for them in various departments throughout the state. Undoubtedly we could work with less employees but no matter how many you fire you still need the people at the top or you would have chaos. Organization is what keeps things going along.

Anonymous said...

We may need leaders to guide and lead the city BUT WE CANNOT AFFORD THE ILL LEADERSHIP WITH NO GUIDANCE for the money we are paying.
Time for a change for the leaders,out .

Peru Town Forum said...

Well you can vote in April for 4 new aldermen if anyone will take up the challenge to run for those seats. Those are the only changes that can be made next year.

Anonymous said...

The aldermen next year ALL need to be re-elected. It is the Mayor race that I am waiting for so to make a change. This guy is way off base and lacks the basic understanding of running a city of our size. Those supporters voting for the Mayor have to look in a mirror and ask some simple questions, "is this what I expected, Is this city better off today versus the past "?
I would say NO to both questions and we need to make a change for the better of the city not for someone who likes power instead.

Steve said...

10:24 a.m. - Take a deep breath and count to ten. You are frightening the other bloggers. I think you forget to mention how modest you are also.
Have you asked the Treasurer to explain to you why the numbers you quote($20,000,000 or whatever you said)do "not" represent amounts of "cash on hand"? Until you do that, you will remain uninformed and obsessed.
Wilcoxson's audits were never an accurate indication of the city's true financial condition and they made that very clear in each and every audit report they ever did for Peru. And now they are no longer interested in doing business with the city. Does that make no sense or perfect sense?

Anonymous said...

I think it is a shame and an outrage that Steve 8:31AM can ONLY see the concerning issues through a clouded prism. (The current do nothing administration gets praise)
Laughable and sick.

Anonymous said...

Anon 10:30 a.m. - Steve states facts, figures, and thoughtful questions. You only insult! Now who do you think appears to be laughable and sick?

Peru Town Forum said...

10:30AM

It almost makes me sick physically to think we have people of your mindset living in our community.