We are not talking about a fire alarm.
We are talking about
a "financial alarm" first raised over two (2) years ago.
The alarms went off - but the Lisle Woodridge Fire Department did not respond.
No one
responded.
(1) Crowe Horwath Sounds First Alarm
Back in 2012, DuPage County hired Crowe Horwath to conduct
an assessment of 24 agencies whose governing body board members are appointed
by the county. The five (5) trustees of Lisle Woodridge Fire District board are
appointed by the County Board Chairman with the advice and consent of the
County Board. LWFD Trustees earn a salary of $4500/year to attend one meeting per month. LWFD trustees also receive additional compensation in the form of pension contributions and life insurance, per the total compensation disclosure posted on the LWFD website.
Yes, it is quite disturbing that the LWFD board which levies about $20 Million in property taxes annually is appointed - not elected by the people.
Yes, it is quite disturbing that the LWFD board which levies about $20 Million in property taxes annually is appointed - not elected by the people.
Crowe Horwath issued their final report "DuPage CountyAssessment of Boards and Commissions" on May 20, 2012.
Crowe Horwath sounded the first Lisle Woodridge Fire
District "Financial Alarm."
*** No one responded.
(2) Moody's Sounds Second Alarm
In June 2014, Moody's downgraded the Lisle Woodridge Fire
District's rating.
"The Aa3 issuer rating reflects a recent trend
of underfunding annual pension payments, highlighting the financial risk
stemming from the district's elevated pension liabilities and statutory
requirements that require the district to fully fund its employer
contributions. Additionally, the rating incorporates the district's sizeable
tax base located in Du Page County (Aaa) in the Chicago (Baa1 negative) metro
area; sizable operating reserves and healthy cash balances; and manageable debt
profile with a minimal direct debt burden and no expectation to issue
additional debt in the foreseeable future. The A1 rating on the GOLT Notes is
notched once off the district's issuer rating and reflects the inherently
weaker security, which does not benefit from a dedicated property tax levy."
Moody's also cited financial challenges of the
LWFD:
- Multi-year trend of material tax base depreciation.
- Exposure to underfunded defined benefit pension
liabilities coupled with a recent trend of underfunding pensions relative to
actuarial standards.
*** No one responded.
(3) Taxpayers Sound Third Alarm
Who do taxpayers hold accountable for the declining financial situation of the LWFD?
Back in May 2012, Crowe Horwath had warned DuPage County of the financial
decline and risks of the Lisle Woodridge Fire District:
"The Lisle-Woodridge Fire Protection District is
considered a stable organization that is showing indications of decline if it
does not act soon to develop plans to ensure its sustainability, to establish
fund balance reserve policies and to develop a formal capital plan. The
District must also address pension and OPEB funding issues to manage these
costs to ensure they do not escalate out of control."
Crowe Horwath's final report included these recommendations:
Develop a Financial Plan
• We recommend that the District complete further analysis
and prepare a long-term financial plan.
The District’s net assets have declined
by over $2.750 million in the past several years. Current and unknown economic
concerns could place future financial constraints on the District. This
District will have to consider future pension and OPEB financing issues and provide
a plan to address these costs that have increased significantly over the past
few years. A long-term financial plan is important for the District to
understand the steps necessary to stabilize its financial condition.
The District relies heavily on property taxes, therefore,
Property Tax Extension Limitation Law (PTELL) or “tax caps” limit the annual
growth of the District’s primary revenue source to the consumer price index. We
recommend that the District consider property tax caps within a long-term
financial plan to better understand the circumstances necessary to accomplish
its financial goals. Therefore, a long-term financial plan is needed to better
understand the parameter it is under.
Develop Capital Plan
• We recommend that the District evaluate its capital program
and document its needs in a formal multi-year capital improvement plan.
The
District includes one year of its capital projects vehicle replacement and
facilities improvement funds within the annual appropriation. A multi-year
capital improvement plan will help the District to understand its significant
capital needs in the short and long-terms and will provide more information for
decision makers. The Capital Plan should also include an evaluation of
equipment needs based on an evaluation of the potential for equipment sharing
with other municipalities and fire protection districts."
Lisle Watchdog submitted a FOIA on Sept 29, 2014 for a copy of the Long-Term Financial Plan prepared in response to Crowe Horwath's 2012 recommendations.
LWFD responded that they did not have a long-term financial plan.
Three Alarm LWFD Financial "Fire"
The financial situation at the LWFD has now reached "Three Alarm" status.
Sounding the alarm: (1) Crowe Horwath, (2) Moody's, (3) Taxpayers.
Who will respond to the alarm?
