Thursday, November 1, 2018

Capital Township's Inconvenient Financial Numbers

Prologue

This post contains information (administrative expenditures to actual services ratio) I was not allowed to include in a Springfield Journal-Register (SJ-R) letter to the Editor published (after 26 days of publication delay because someone did not like the publicly documented information on file at the Illinois Comptroller’s Office, particularly the administrative costs to services ratio of which I was only allowed to include a conservative calculation which did not include the 20% Township error omitting $374,925 in General Assistance administrative cost despite my documenting the error amount as an administrative expense from FY 2016 and FY2017 reports on file) on September 1, 2018, and two letters submitted on October 16, 2018, which where rejected for publication within two minutes of sending. A requested hyperlink documenting the information source (see the link below) to be published with the letter, which I immediately sent when the published letter was first submitted in early August, was never used on the SJ-R website. 

Two letters, containing much of the information below, submitted on October 16, 2018, were rejected for publication within two minutes of sending.

It is as if someone high up (not the Letters editor) does not want the public information on file at the Illinois Comptroller’s Office discussed publicly in the media.
 
Whatever the motives and reasons, the bottom line is the public discussion of this proposed merger of Capital Township with Sangamon County has been inadequate, truncated, and seemingly suppressed.

I have since learned that the Con op-ed was written as an unpublished letter to the editor a month prior as a protest of the City Council vote to table a City petition to merge Capital Township with the City and later pushed by the SJ-R as the op-ed piece with imposed significant data changes and denied the author a review of the Pro op-ed and the ability to respond to the actual Pro op-ed. This speaks directly to the intentional informational manipulation and suppression of informed public discussion on this issue by the SJ-R.


CAPITAL TOWNSHIP’S INCONVENIENT FINANCIAL NUMBERS


The Pro and Con Op-Ed articles on the proposed absorption of Capital Township, which is entirely within the City of Springfield, by the Sangamon County Board were very disappointing with the “pro’s” self-serving twists and blarney and the “con’s” overly conservative and way too politely constrained attempt. The people of Capital Township (the City of Springfield) deserve a more rigorous discussion than has appeared in local media.

While townships can provide a variety of services, such as roads, cemetery, parks, and general assistance, Capital Township provides only one service (General Assistance) in the FY2017 amount of $755,533 at a direct program administrative cost of $374,925 (just salaries?) while the total Township salaries are $906,779, central Township administrative costs are $851,449 for total Township FY2017 expenditure of $1,981,907.

It is misleadingly convenient to characterize Capital Township efficiency as a single service program (General Assistance) within Capital Township rather than the operation of the whole Township. Because a government exists solely to serve the needs of the people, the ratio of total administrative expenditures to total actual services is how a governmental unit is efficiency evaluated and Capital Township at $162.32 for each $100 of services is excessively higher and more grossly inefficient than any other Sangamon County Township government. Chatham Township, which provides road, cemetery, recreation/parks, General Assistance, and community building services has an expenditure to services ratio of $44.49 for every $100 of services. It is purposefully misleading to try to pose Capital Township solely on its welfare expenses to welfare services ratio. Capital
Township is not solely a welfare services program; it is a local government entity with taxing power and needs to be evaluated as a whole.

Capital Township has 10 full time and 15 part time employees while Chatham Township has 2 full time and 22 part time employees. Even with two professional assessors (other townships have an elected assessor qualified by law),who appear to work out of the County Treasurer’s Office, Capital Township appears personnel heavy while providing only one service. How many work Township employees work in the Township General Assistance Office and how many work In the County offices? How are Township employee’s working in the County offices documenting their Township work hours and kept separate from County work? 13 County employees are paid from Township and County funds. How is their respective work times documented? Is Capital Township subsidizing County employees? This creates serious internal control problems.

The Capital Township annual reports can be found online at the Illinois Comptroller’s website.  The Chatham Township annual reports are here.

I have used FY2017 and FY2016 numbers, because Capital Township has not filed its FY2018 CAFR unlike the City of Springfield, which has filed its more extensive FY2018 report. Considering Capital Township had a 20% error in its FY2017 report (omitting $374,925 in its List of Funds and Accounts Report which must match the Expenditures Report), Capital Township evidently needs some extra time to get it right.

In FY2017, Capital Township revenue was $2,053,170 in property taxes, $264,688 in State Replacement Tax, $8888 in Federal Welfare, and interest and other miscellaneous of $3842. At the end of FY2017, the Township had $2,489,930 in unused carry forward surplus, which grew $348,681 in one year from FY2016.

Unlike other Townships, Cap[ital Township has no investments despite its almost quarter million dollar unused surplus, but it shows interest revenue of $3217.

As a general rule Township governments do not have receivables, but Capital Township has FY2017 receivables of $860,614. The Central Area TIF District pays the Sangamon County Treasurer, by agreement, $700,000 annually to be distributed to effected local governments to refund lower property tax reassessments and appeals. From Township Revenue Reports, it appears Capital Township receives $601,314 or less of that amount. What is the explanation of the remaining $259,300 in receivables which grew $13,547 from FY2016?

Springfield Township is the only other Sangamon County Township which has a receivable and it is only in the amount of $6525.

Capital Township has Long Term Liabilities of $1,793,029 in FY2017 which is the exact same unchanged amount as FY2016. No Payments? Some explanation is needed. Chatham Township has no long term liabilities.

Depreciable assets (only office equipment and personal motor vehicles?) are $692,897 to provide General Assistance and perform assessor duties. Chatham Township which provides five services, including Roads (and the equipment necessary), has depreciable assets of $770.123. The Capital Township amount appears high.

Capital Township in FY2017 had, per GASB 63, Deferred Inflow (liability of $273,235) and Deferred Outflow (asset of $501,843) of Resources. The Illinois Comptroller’s Office in the FY2016 Error Report asked for an explanation and Capital Township provided none in its FY2016 or FY2017 Explanations Report. What are the resources being deferred? There are no deferred in/outflow amounts in other Sangamon County Townships.

In the SJ-R Pro op-ed, the County officials blatantly tout dividing the City of Springfield in to parts of 25 County Board Districts. Think about this. All of Sangamon County has 29 County Board Districts and 25 of them include parts of the City of Springfield which has been sliced, diced, fragmented, and diluted of any political influence of it citizens on the County Board which has been dominated by one political party for 80 of the last 82 years, which makes Michael Madigan, the long term Illinois Speaker of the House, appear to be a political novice. This is not representation.

The Con SJ-R op-ed repeated the City’s savings estimate of merging with
the City of Springfield at $500,000. This is a conservative estimate coming from a government budget official. Politically, politicians are more comfortable with conservative public estimates that protect against a future accusation of failure. This is understandable. The Pro SJ-R op-ed stated a County merger could possibly result in a 26% reduction of property taxes without any change in personnel and operation. Since the County Treasurer already supervises Capital Township and a growing property tax revenue annual surplus approaching 2 ½ million dollars, why has a property tax reduction not already been made?

Objectively, Sangamon County wants Capital Township because it serves them as a rich cash patronage cow and the City of Springfield should want Capital Township merges with the City because they serve the same exact citizens which provides a valuable service and offers a revenue stream which should be used only for the Capital Township (which is the City of Springfield right now) citizens it was created to serve.

Based on the above, as a business management and financial consultant with government experience, transition of gubernatorial State government experience, and private sector experience as well as over forty years of program evaluation and organizational/program planning experience and professional publications, I would be looking to cut expenditures by $800,000 (as a goal), looking for justification for two assessors, three General Assistance professional staff, and two secretary/clerical employees for a total of 7 full time employees. Consolidating the General Assistance office into an existing, government office, which does not pose a conflict of interest in use of government funds, easily accessible to the public would be a priority. I would be looking at reducing property taxes 30-33%. I would look for detailed explanations of depreciable assets, deferred in/outflow of resources, receivables, and long term liabilities. I would recommend a short term investment program of surplus funds (not just an interest bearing checking account). This process should yield justification for any results whether they are goal achieved or yield higher or lower findings.

Capital Township serves only the citizens of the City of Springfield. It should be abolished and be integrated with the City of Springfield which currently serves all the citizens of Capital Township.

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