Public Watchdog.org

A True “Emergency” Or Just More Financial Mismanagement?

06.10.09

In case you have forgotten, the City is looking at a $2 million-plus 2009-10 budget deficit, after running deficits totaling $3 million over the past two years.  That’s big-time financial mismanagement, folks, and it doesn’t look like it’s going to get any better anytime soon – as evidenced by the City Council’s recent addition to the deficit by increasing the hand-outs of taxpayer money to private community organizations.

And if you need another example, look no farther than Monday night’s City Council Committee of the Whole (“COW”) meeting, at which the COW  – or the 2/3 of it that was present (Alds. Carey and Ryan were absent) – voted to advance to final Council vote the spending of approximately $80,000 in non-budgeted funds to replace a leaking City Hall air conditioning chiller.  According to Public Works Director Wayne Zingsheim, the air conditioning system is on the brink of failure.  And if it fails, the lack of air conditioning could cause the failure of the City’s entire computer system, including the Police Department’s network.

Zingsheim reported that replacement of the unit was the only option because the air conditioning system is so old that nobody wanted to even bid on repairing it.  In view of that, we have a hard time understanding how the need for its replacement seems to have sprung up as such a surprise, especially to anybody who is paid to pay attention to this stuff – like, for example, our Public Works Director. 

In a similar vein, we’re also troubled by how this was sprung on the Council as a full-blown “emergency” at the May 11, 2009, COW meeting, to the point where Zingsheim wanted to waive competitive bidding so that he could get what he reported to be the only replacement unit available anywhere in the country, for which he was quoted a price of $84,000.  But when the Council insisted that the project be sent out for bid, lo and behold, the City received seven bids – the lowest of which was for $80,600 (from Kroeschell, Inc., in Arlington Heights), or $3,400 less than Zingsheim’s “deal.” 

At this point, however, we have to note that the highest bid was $148,000, which makes us wonder whether the high bidder was really trying to gouge the City, or whether these were not truly apples-to-apples bids.  We sure hope somebody at City Hall is checking to make sure that such a large disparity in price does not mean that the City is spending $80,000 for an undersized little-engine-that-barely-can system that will have to be replaced again in a few years.

But the real issue for us here at PublicWatchdog is: Why did this air conditioning situation become such an “emergency”?  Given the age of the unit, shouldn’t it’s deterioration/failure have been anticipated and put in the 2009-10 budget – or even a prior year’s budget?  Was somebody asleep at the wheel again?  Or was the potential failure and replacement of this air conditioning system well-understood by City staff but intentionally ignored so that other less-worthy items could be budgeted for – like the $200,000-plus in taxpayer funding of private community organizations – with the expectation that the City Council could always be stampeded into approving an over-budget “emergency” air conditioner replacement, just like it’s now doing?

Can you answer those questions, City Manager Hock?  Finance Director Lambesis?  Public Works Director Zingsheim?

The real bottom-line problem is that the City is left with yet another over-budget expenditure, although we are now hearing that the City may be in line for a $158,000 federal grant for energy-saving projects for which a new air chiller might qualify.  Considering that we’re still waiting for the State of Illinois money for the sound wall up by Park Ridge Pointe, however, we’ll believe that the City is getting federal grant money only after the U.S. Treasury check has cleared.

And with a $2 million-plus budget deficit still staring us in the face, even $158,000 of federal grant money doesn’t make the City’s financial mess any more palatable, or the incompetence of our public officials any more tolerable.

4 comments so far

In my company we have a kind of “sinking fund” that we fund by (in shorthand fashion) taking the expected useful life of all of our structures and systems, calculate the replacement costs, build in an inflation factor, determine how much (if any) of the replacement cost we would finance, and then set aside some portion of the difference each year.

Sounds like the City just rolls the dice instead.

Wonder how old the AC unit is?

The reports just keep on getting worse.

Does the City Manager, any other member of city staff, any alderman, or the mayor himself, have any idea how we are going to get out of this mess when we can’t even get within $2 million of a balanced budget?

This is just another example of how government has no concept of the basic economic principles that almost every taxpayer employs on a daily basis to keep themselves out of bankruptcy.

I don’t see any chance of getting this straightened out without a tax increase or mega-budget/service cuts. Can’t wait to see how our elected officials deal with that.



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