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21 Comments

  1. 1

    Numbers Don't Lie

    2013 DeKalb County debt aka non current liabilities is $2.046 billion. That includes $1.24B in bond debt, $500M in Employment retirement cost (OPEB- Other Post Employment Benefits) and a $250M bond refinance.

    2008 DeKalb County debt was $1.234B. That includes $1,021B in bond debt, $67M in employment retirement cost (OPEB) and a $381M bond refinance.

    2008 DC revenue (inflow from taxes, etc.) was $888M. 2008 Expenditures were $866M. 2013 DC revenue was $923M. 2013 Expenditures were $862M.

    A couple of takeaways because the DeKalb County financial statements are very confusing, would never pass SEC muster (i.e. Sarbanes Oxley) and use different numbers for similar items throughout all of their financial statements.

    First, revenue (tax inflow, permits, court fines, etc.) has increased 4% in five years and annual expenditures has remained flat. Albeit, expenditures have come down under CEO Lee May from 2011 and 2012.

    Second, our bond debt level has increased 20% in 5 years. Additionally, DeKalb County is engaging in “scoop and toss”. Scoop and Toss is the process of refinancing debt to a later time in order to a) lower financing cost b) move the problem to a period after your election. 2008 bond debt – $1.021B. 2013 – $1.24B.

    Third, our employment, current pension and unfunded pension liabilities have increased 650%. THAT’S 650%! It increased 10% last year in a bull market. Intuition would suggest it decreased. The annual increasing bond debt, or non-current liabilities, is being funded by additional bond debt. Our current pension system is unsustainable. I.E. Detroit style. Sure, new employees don’t have access to the pension but the change is TOO LITTLE, too late.

    Fourth, CEO Lee May is the right guy. I wish him the best against a very adversarial employee union that will not succumb to the financial realities in front of us. He’ll be removed by an emergency manager in probably 2-3 years.

  2. 2

    effing

    Synopsis of above: Fiddling while Rome burns, just as state leaders (and financiers) would have it. The old white guys are about to get their hands on the till again.

  3. 3

    pmkillingsworth

    The Task Force took a major step forward with their recommendations for reform of the Code of Ethics, appointment of an INDEPENDENT internal audit function in county government, and modification of purchasing procedures. I sincerely hope that the DeKalb Delegation will move forward during this session and codify these much needed reforms.

  4. 4

    Numbers Don't Lie

    “The annual increasing bond debt” in paragraph 7 should read, “the annual increasing pension debt”.

    In reply to effing, “state leaders(and financiers)” don’t drive DeKalb County finances, DeKalb County Commissioners and CEO’s do. Financiers (bond issuers including but not limited to large asset management companies, other state run pensions and little old ladies who expect to get paid for lending money to DC) would prefer to get paid, not a Detroit style bankruptcy.

    Not sure what the “old white guys” reference means. Numbers are color blind.

  5. 5

    Numbers Don't Lie

    I love your enthusiasm, PM. They could codify every single recommendation, continue to claim city creation is cutting into revenues and blame finance problems on “purchasing”.

    Those are straw man arguments. The elephant in the room is DeKalb County pension obligations. It is politically impossible to change the current path. Take a look at the people on the board. It is filled with politicians (seven of which are implicitly supported by the union structure) and policy academics. The only one with finance experience is Mr. Irons. He used to or still runs the pension. He has claimed for years it’s unsustainable.

  6. 6

    Numbers Don't Lie

    Whoops. Ed Wall was the Pension Chairman I was referring to, not Vaughn Irons. Everything else is correct.

  7. 7

    jealous, not so much

    Fulton, Cobb and Gwinnett are all so so far ahead of Dekalb County!
    Just take a look at the quality of those counties and how they are all rebuilding their roads & infrastructure, building great new high ranked schools and attracting new companies and businesses!
    Cobb & Gwinnett both have a superb sheriff’s department, something else that’s at the bottom of the barrel in Dekalb.
    I hope this Task Force can make a difference, but I don’t know really, considering how deeply entrenched into the government Dekalb’s liars, crooks and thieves are.
    The citizens should be the Task Force, not the government!

  8. 8

    Tom Doolittle

    There IS a citizen task force. It lacks heavy-hitters and therefore has no influence, with media and all things establishment. No offense to the people who have indeed stepped up like Pat above.

    Why do you suppose elite civic leaders won’t sit on such a panel? Just identify someone in your area that has economic power and influence and ask why they aren’t leading the charge.

  9. 9

    Saul

    This is where our elected officials and citizens in north DeKalb in favor of creating Dunwoody and Brookhaven should have had a strong presence in years past. Do any of the proponents of the new cities south of I-85 have an involvement with this citizens group?

    All these little political fiefdoms being created are truly creating serfs out of all of us when it comes to our regions greater destiny and future. Think about it. Our schools are not attractive to parents with school age children, our county still has problems with leadership and management, these new cities (some with their own issues) and those about to be created fragment our neighborhoods and region.

    Yet, for its prime geographical location in the metro area, DeKalb does not have a very favorable reputation or a desirable destination point to those outside looking in.

  10. 10

    Tom Reilly

    Patrick Ejike needs to go–fast!!–Tom Reillly

  11. 11

    Tom Doolittle

    This is what’s needed–where are the people of this caliber hiding out in DeKalb?

    Metro Group http://www.bizjournals.com/atlanta/stories/1999/05/31/editorial4.html?page=all

  12. 12

    Saul

    To answer your question and mine, regarding these short-sighted politicians, people who think they are civic leaders, and the citizens that grovel at their feet promoting their (civic leaders) political agenda that they will come to regret, they are nowhere to be found when it counts. This list of people on the OTF is not representative of tax payers. These people only exist to promote government for their personal gain.

    Don’t believe me? Look at Brookhaven. The entire Brookhaven government structure exists for the gain of a select few at the expense of taxpayers. That is why we didn’t get the entire tax rebate we were due this past year. That is why Brookhaven is and will continue to morph into a larger government demanding more tax dollars to support it.

    Thank your mayor and thank Mike Jacobs.

  13. 13

    Shelton Wright

    Having a these little cities does not eliminate the possibilities of corrupt government. It only promotes more of it. Want to fix DeKalb? Change the governance to an elected county manager and abolish these racist enclaves who only want to create seperation gaps between the haves and have nots.

  14. 14

    Saul

    Sheldon, the New City Genie courtesy of Mike Jacobs is out of the bottle and Fran Millar ate the bottle cork. They clearly didn’t think just how much long term damage their actions would do to the region. If you talk to either one of these men you quickly realize they really don’t care.

  15. 15

    Shelton Wright

    Quite the contrary Sal. They both care deeply. They are good men. This is a higher directive from the Governor. The democratic power is to strong for their liking. We MUST assimilate our kind. I know this because I spent my career at the Capitol and heard a lot of stuff. The reps are just puppets for the Guvna. To and fro.

  16. 16

    Saul

    Shelton, the Democratic power is strong because of political party switching through the years to salvage individual political careers at the expense of true Republicans? There is not a Republican Party in Georgia as your under the dome experience shows. So, voting Republicans are duped into voting for Democrats “posing” and are too stupid to know what they have done. How else does more “government” get voted in?

    Mike Jacobs and Fran Millar have done nothing within their power to reform DeKalb government. With their city promotion activities they have aggravated governance in our region allowing rapid county government reformation to escape us.

    What kind of elected Republican would sacrifice their service to their citizens to promote more government? Who turns their back on their existing government leaving it in need of repair only to create more government? Would it actually be political opportunists sucking up to their party switching governor? Men that truly care don’t mind taking such self-serving, divisive actions? This sounds like what you have alluded to. The citizens have become unwilling financial benefactors of two elected officials that have done us dirty. Thank you, voters for your ignorance when casting ballots.

    So party principals are a thing of the past and for astute voters, be increasingly more attentive due to dissolved party lines? I really wish that Mike and Fran would care along Republican Party lines instead of party flip-floppers.

    Thank you, Shelton, for the insight.

  17. 17

    Shelton Wright

    Sam,

    I agree.

    I must go now. I have to go to my third job so I can pay my water bill.

    Thanks for the great words of wisdom. Remember Rosh Perdot?

    Where is that guy? We need him.

  18. 18

    Numbers Don't Lie

    Shelton, Haves and Have nots is not helpful, nor true. Like I said before, the beauty of financial statements is colorblindness. Financial statements keep leadership accountable; white, black, red or yellow. Continued race baiting or socioeconomic division is simply a distraction from the looming financial crisis on our doorstep…The DeKalb County Pension System and bloated debt to support it. $500M in unfunded pension liabilities and growing 10% per year. DC revenue has gone up every year since 2008 including the years of Dunwoody and Brookhaven cityhood. The 2013 $250M bond refinance in one fell swoop created the exact same tax revenue DC would have received from Brookhaven ($21M). It also moved the debt 20 years down the road. DC has to pay the piper in 2035 (Parks Bonds, Water and Sewer bonds, etc.). Bankruptcy usually comes much sooner because of the inability to refinance debt. Interest payments still have to be made. The first time they aren’t? Default.

    Like Kevyn Orr, Emergency Manager for Detroit, MI, told the Detroit Public Unions, “We can be in bankruptcy 1 day or 18 months.” Public unions chose 18 months, cost the city $100 million in legal fees and still took the haircut, albeit, a reduce haircut because of the large art collection. DeKalb County has no art collection to bail out current retirees. If I worked my whole life with a promised pension, I’d be p.o’d, too. But I’d be p.o’d at the people that promised it. Not my next door, retired school teacher who saved her whole life and invested in municipal bonds that expected to get paid for lending money to a city or county she/he loved.

    “Financiers”, or “faceless banks” (i.e. individual investors that lend municipalities money, etc.) lost 75% of their investment in Detroit, Harrisburg, PA, Stockton, CA, but they knew the risks going into the deal. It’s sad to continue blaming other culprits, when in fact, the current and historical leadership continues to promise retiree benefits they can’t deliver. It’s flat out wrong and does a disservice to the people who spend their whole life in civil service.

    Detroit’s debt to income ratio was 7.4 before the bankruptcy. DC’s is a little more than 2 so plenty of time to blame others for a few more years.

    http://dealbook.nytimes.com/2014/11/11/detroit-emerges-from-bankruptcy-pension-risk-still-intact/?_r=0

  19. 19

    effing

    Is there an “emergency manager” authority in Georgia?

  20. 20

    Tom Reilly

    Nancy Jester, Kathie Gannon, Jeff Rader, Lee May all now on the Dekalb County Board of commissioners–catalyst for constructive change, anyone??–Tom Reilly

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