Anan's half-baked levy-cut proposal

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By John Hubbuch

I want to thank Oak Park Village President Anan Abu-Taleb for proposing that each taxing body cut its annual property tax levy by 10 percent over the next six years. He saved me from writing the almost-obligatory Thanksgiving-themed column.

In making this proposal, he joins Governor-Elect Bruce Rauner and almost every Republican who has run for office in the last 20 years. Mr. Abu-Taleb's proposal seems a little half-baked to me. I seriously doubt he analyzed the budgets of the parks, library, and districts 97 and 200 before concluding that a one-size-fits-all, across-the-board cut was feasible. 

I'm sure the boards of those bodies would much appreciate the data and analysis on which he based his conclusions.

Implicit in the proposal is that the issue of high property taxes has not been a big concern of these governing bodies for a very long time. Each year, each board, with lots of citizen input, agrees upon an annual budget. None of these budgets has a line item called "unneeded expense" or "waste." All of these taxing authorities have been aware of the issue of high taxes for a long time and have included efficiencies in each of their annual budgets. No doubt some further savings might be possible, but I seriously doubt there is that much fat in these budgets, considering citizen expectations for a safe community, quality schools and investment in infrastructure. 

Ah, there's the rub — citizen expectations. People live here because they feel safe. They want good schools, parks, three libraries and a conservatory. We pay more because we get more. In the six-county area there are lots of communities where you can pay less property taxes for the same size house. In fact people move from Oak Park to such communities for that very reason.

In making his proposal, I hope Mr. Abu-Taleb took into account that these taxing bodies can't cut the costs of the debt service on the bonds issued to pay for referenda-approved capital improvements like new junior highs, a new library and renovation of every park in town. 

Further, the greatest expense for these public bodies is wages and salaries — often more than half of the total budgets. It seems unlikely that this big-budget item could be 10 percent less in 2020. In fact, I would be delighted if this expense only increased 10 percent. I suspect that the cost of water, electricity, heat, salt, books, furniture, vehicles — well, everything — will go up rather than down over the next six years.

There will always be a tension between the high expectations of Oak Park's citizenry and the desire for lower taxes. I understand that Mr. Abu-Taleb made his proposal before a packed house of business leaders, and it was no doubt well received. I just don't think it is either a serious proposal, or one that Oak Park taxpayers would really support. 

Maybe he should pilot this proposal by cutting the price of the fish tacos and margaritas at Maya del Sol by 10 percent over the next six years. Now that is an idea I could really support. Cheers.

 And Happy Thanksgiving.

Reader Comments

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Brian_OP  

Posted: December 2nd, 2014 10:37 AM

Dear John Hubbuch - anyone who does not believe that each of the organizations identified by Annan could not find 10% in their budgets, is smoking something - other than nicotine vapor. End of story.

John Butch Murtagh from Oak Park, Illinois  

Posted: December 1st, 2014 12:04 PM

dystOPia - First, I am not a mathematician. Second, I was using Excel; not Access. That limited the detail level of "delivered services" reporting. To bypass the problem, I used Oak Park Village as the base community and compared it to other communities using the State of Illinois Comprehensive Annual Financial Report (CAFR). If a community did not fit OP, I used other sources to fill in data. For instance; if a library or sports facility was in the general fund budget, I would see if I could get their FTE's through their annual reports. That worked well in most cases. When it was impossible to align a community with Oak Park Village, the community was dropped from the study. The process worked in creating a comparative base for FTE's, but does not have the detail level that is needed to do true comparative analysis. I pointed out in my letter to the board that the purpose of the report was to create a base model to determine if there was enough potential to justify a thorough Village Staff Feasibility Study. The context for the study was the 2013 election when there was considerable candidate discussion of the need to reduce village expense. My goal was to give the board a place to start.

dystOPia from OP  

Posted: December 1st, 2014 9:54 AM

@JBM ... I appreciate your efforts on this subject, and suggest that you find a way for us to access your full report. In researching the subject myself, via US Census and ICMA data, I found the most difficult aspect is to ensure an apples-to-apples comparison of 'FTE per capita' between communities regarding delivered services. Municipal budgets vary in their scope of delivered services, such as with library and park districts and associated FTEs. How did you normalize delivered services?

John Butch Murtagh from Oak Park, Illinois  

Posted: November 30th, 2014 11:18 PM

WJ Post Friends - I have posted since 2011 and have enjoyed the conversations I have had with a diverse, interesting, and fair bunch of posters. In my posting, I have always tried to accurate. When I make a mistake I correct it. If the mistake distorted another poster views, I correct the distortion and apologize. Fair play is best play. I wrote a report in 2013 about OP's FTE's (Full Time Employees) and sent it to the board. After not hearing from the board in a year, I decided to post the results of the study. The post can be found at: Posted: November 25th, 2014 4:58 PM. There has been some criticism about the post and some nasty comments. That's OK, I can take the cheap shots, but I don't think it is fair to demean the report. Oak Park Village has had significant financial problems during the last decade. Many residents believe the budget issues are related to excessive manpower. My report studied the manpower in 40 Illinois communities. That was reduced to 10 for size and space reasons. The report showed that the average percent of FTE's for all ten communities was 28.9% lower than Oak Park. Using an average of $100,000 per employee for all communities, the OP savings would range from annual FTE savings of $4.0M to 9.0M a year. The amount indicated might not be achievable. The study merely indicates that Oak Park Village needs a detailed manpower study to establish the level of expenditure savings that is attainable.

John Butch Murtagh from Oak Park, Illinois  

Posted: November 30th, 2014 9:31 PM

dystOPia - Below is a note re data collection that was included in the final report. Information Used 2010 U.S. Population Census 2011 or 2012 CAFR(Comprehensive Annual Financial Report) as submitted to State of Illinois annually or published on the cities, villages, or towns websites. Forty cities, villages and towns (CVTs) were selected based on similarities to Oak Park Village. The preferred data was sourced from the State of Illinois CAFR files. If not available from the state's files, the secondary choice was the website of cities that fit the population range being sought. The forty were reduced to ten that will be part of the concluding pages of the report. Information Limitation formats for reporting varied by content in the individual reports. For instance; each CAFR contained an FTE report but at different levels of content. To create uniformity, the lowest content of FTE was used. That is: Total FTE's, General, and Public Safety. Cites with major difference were eliminated from the comparisons

John Butch Murtagh from Oak Park, Illinois  

Posted: November 30th, 2014 9:06 PM

Hi Bridget - Your posted data appears to be in the range of correct. You are using 2014 forecast budget data. The data for the FTE Report was from the 2013 Comprehensive Annual Financial Report that is a state requirement with all Illinois cities, villages, towns, etc. The data should be close but not perfect as the data is from different reports that were compiled at different times.

John Butch Murtagh from Oak Park, Illinois  

Posted: November 30th, 2014 8:33 PM

Kevin Peppard - Re your post of 11-30-2014 - 12:19 a.m., I am willing to discuss how the FTE's were compiled, calculated, and consolidated. I am willing to give you a copy of the FTE Report that was sent to the board, and the data used. That might help you sort out your confusion about the data. What I can't do is to respond to the data problems you are having by reading your narratives and numbers from taxing bodies that are not part of the study.

dystOPia from OP  

Posted: November 30th, 2014 10:19 AM

I believe the local government employees per capita ratio for Oak Park is 7.2 FTE per 1,000 population. This is based on 375.75 employees (2014) and a population of 52,066 (2013). In order to seek meaning from this ratio, it is best to compare to peer communities, such as JBM did, except one has to ensure that the ratios are comparable in terms of services delivered. For example, OP's 7.2 ratio includes police, fire, and general services, but does not include library, school and park districts.

Bridgett from Oak Park  

Posted: November 30th, 2014 2:52 AM

** OP has 33 FTEs per 10,000 residents. (excluding police and fire)

Bridgett from Oak Park  

Posted: November 30th, 2014 2:26 AM

The numbers: Looking at the 2014 budget, the Village of Oak Park has 383 FTEs (full time equivalent employees).148 are police, 62 are fire, 172 are everyone else, including 8 elected officials. Figures taken from pages 14 and 15, http://oak-park.us/sites/default/files/budgets/2014-budget.pdf **Estimated population of OP for 2013 was 52,066 http://quickfacts.census.gov/qfd/states/17/1754885.html OP has 33 FTEs per 10,000 residents.

Kevin Peppard from Oak Park  

Posted: November 30th, 2014 12:19 AM

@JBM: Your numbers are still inconsistent. OP has 52,000 residents, and your adjustment of an order of magnitude still multiplies out to about 1,000 VOP employees outside the Police and Fire Depts -- no way. If we adjusted one more decimal point, now you have about 100, which is too low. According to the High Schools audit, listing major employers in the area, VOP had 358 (including Police & Fire). You don't have a misplaced decimal point, the . You have numbers without any grounding.

John Butch Murtagh from Oak Park, Illinois  

Posted: November 29th, 2014 11:46 AM

Mr. Peppard is correct. I made an error in the text of the post when I wrote: "On a 1,000 residents per full time employee, ..." It should have read 10,000 per full time employee. The data calculations for the communities in the research are all correct. The Oak Park estimated potential saving of $7.7M per year is correct. The board has had the FTE report for a year, and it is my understanding that the village staff has reviewed it. There has been no reply or criticism of my report from any board members or staff members. Am I surprised that the village ignored the report? No.

John Hubbuch from Oak Park  

Posted: November 29th, 2014 6:46 AM

If you agreed with this column, the author was John Hubbuch. If you disagreed ,it was Ken Trainor.

Kevin Peppard from Oak Park  

Posted: November 29th, 2014 12:18 AM

@JBM. What are you smoking? Your numbers, multiplied out, imply that the Village has close to 10,000 employees. I have no idea how to adjust your figures for even a misplaced decimal point.. Yet you speak with such seeming authority, with all that specificity. I can understand why the Board did not take you seriously. Much of any municipality's budget is for outside services, such as street repair. You don't know how to even start such an analysis.

John Butch Murtagh from Oak Park, Illinois  

Posted: November 28th, 2014 6:59 PM

GRYAN - I can give you a hard or electronic copy. What is the best way to get it to you. You can call me at 708 660 0132.

GRyan  

Posted: November 28th, 2014 5:18 PM

To John Butch Murtagh, can you share the report you did on the number of FTE's in this area? Very interesting...

#?  

Posted: November 28th, 2014 3:32 PM

Wow- lets cut prices on his business that provides jobs and tax revenue what a novel Idea. You forgot in your statement regarding costs besides wages we also have benefits which will never seem to change giving our wonderful Constitution that insures the demise of this great state for those few!

John Butch Murtagh from Oak Park, Illinois  

Posted: November 25th, 2014 4:58 PM

Ken Comment - "No doubt some further savings might be possible, but I seriously doubt there is that much fat in these budgets,?.." I disagree with your statement but can only speak for Oak Park Village. I know very little detail on the other taxing bodies. After the 2013 election a lot of people thought the village was ready for change and had the right leader. I was one of them and decided to do some analysis to see if there was easy ways to reduce the village budget. So I did a study of the cost of Full Time Employees (FTE's) in nearby communities. After a preliminary review I eliminated Police and Fire from the study. On a 1000 residents per full time employee, all were about the same. I then concentrated on "General FTE", non-police and fire. Here are some results and the estimated impact on the OP General Fund Budget. The most efficient were Berwyn (84 General FTE's per 1000 resident), (Park Ridge 96), Lombard (97), Buffalo Grove (98), Downers Grove (122) and Wheaton (118). The highest number of General FTE's per 1000 residents was Oak Park (193), Orland Park (155), Crystal Lake (132), and Elmhurst (131). Here's the kicker. If Oak Park's FTE's matched Park Ridge's it would save (7.7m) a year, Wheaton $5.5m a year, Downer Grove - $5.1m, Elmhurst - $4.2m. Why is it that some communities have vastly different FTE's than others? It's easy, communities that took the big step into the Information Age saved millions of dollars. Others did not. OP is a not! I sent the full report to the OP Village Board and expected to get a reply. No reply was received. I did hear from a board member that the staff thought the analysis was not worth pursuing. I doubt that the village even ran the numbers.

Dan Haley from Wednesday Journal Wednesday Journal Employee

Posted: November 25th, 2014 4:47 PM

We missed the attribution when this was first posted. It is an opinion column by John Hubbuch.

What?  

Posted: November 25th, 2014 4:17 PM

People live here because they feel safe? I would not count on it given the number of emails detailing the growing number of daytime house break ins in Southwest Oak Park I've seen in the past 2 weeks. Be nice if we heard from the police directly about them.

John Butch Murtagh from Oak Park, Illinois  

Posted: November 25th, 2014 4:00 PM

MY BET - It's Ken Trainor

Mimi Jordan from Oak Park  

Posted: November 25th, 2014 3:43 PM

@WJ: Who wrote this?

John Butch Murtagh from Oak Park, Illinois  

Posted: November 25th, 2014 3:00 PM

Anan made a big mistake by using the Business and Civic Council of Oak Park (BCC) as his forum. The BCC represents businesses in the village and has their fingers deep in the financial development pie. The BCC does not represent residents as was proven during the TIF years. Did Anan go to the meeting with the support of the board, the other taxing bodies, village staff, and some top flight independent lawyers, financial experts, and CPA's? I doubt it! Anan is a talented entrepreneur, but his non-restaurant job (Village President) requires a CEO. CEO's are about two things in the 21st Century ?" Change Management and Trust. To succeed he has to guide his ship safely through challenging and changing waters. That requires the trust of the entire crew and his trust of them. Anan is capable of being a CEO, but he needs work on delegation, commitment, and intuition.

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