During this seemingly never-ending election cycle, we are reminded on a daily basis how politicians like to talk about what they’ve done, how good they are, how bad the other one is, etc.
When an elected official talks about their accomplishments, or refers to progress, they generally mean progress made as a result of their actions, during their term in office. They’re usually not talking about accomplishments resulting from motions enacted under their predecessor.
On numerous occasions on the dais, Mayor Chirico has stated that “we’ve” reduced debt, sometimes citing a reduction of $16 million, and more recently citing a reduction of $20 million. At the last City Council meeting on March 6th in response to public forum comments from a former Councilman, the Mayor said that “…we have reduced the debt…we have reduced that by $20 million in the last several years…”
At the City Council meeting prior to that, on February 20th, the Mayor stated “...we've made a commitment to reduce this debt…we’ve reduced our debt by $16 million since we made that commitment…”
(The commitment Mayor Chirico mentions is financial principle #3, "The City will actively seek to increase its reserves to 25 percent and reduce its debt by 25 percent in the next eight years," first introduced in budget year and calendar year 2016.)
So when Mayor Chirico states that “we’ve reduced our debt,” it’s logical to assume that the reduction has occurred as a result of actions he’s initiated, and under budgets passed during his time as mayor, right? Mayor Chirico wouldn’t be referring to progress made under Mayor Pradel’s term or budgets, would he?
For background, prior to April 30, 2015, the City was on a fiscal year basis, running May 1, through April 30. The City had a short reporting period from 4/30/15 to 12/31/15 (“Stub Period”) and began reporting on a calendar year basis beginning 1/1/16 (“CY 2016”).
City of Naperville General Obligation Debt (not liabilities), ($000’s). See Fine Print/Note below for sources of the data.
Relevant timeline:
Steve Chirico was elected mayor 4/7/15, and sworn in 5/5/15;
the Stub Period budget for period ended 12/31/15 was approved 4/8/15, the day after Mr. Chirico was elected mayor and about a month before he became mayor.
the first of Mr. Chirico’s budgets as mayor was for the year beginning 1/1/2016 and ending 12/31/2016; that budget was approved by City Council on December 1, 2015.
the new financial principles were approved by City Council and first used in calendar and budget year 2016.
Nevertheless, Mayor Chirico uses December 31, 2014 as the starting point for measuring the amount “we’ve” reduced debt. The implication being, of course, that the reduction in debt since that date is due to actions taken and accomplishments achieved during his term as mayor. However, calendar year 2015 activity was the result of budgets passed when Mr. Pradel was mayor.
Take a look at the table above. Any idea why Mayor Chirico would use a date – 12/31/14 - one full year earlier than his first budget as the starting point for measuring debt reduction? The year ending 12/31/15 wasn’t a budget passed when he was mayor either, yet he uses 12/31/14 as the point to start when referring to debt reduction “we’ve” accomplished. The logical place to start measuring progress during his term as mayor would be the amount immediately prior to the budgets passed during his term as mayor. That would be 12/31/15.
We’ve had two years of financial results with budgets passed under Mayor Chirico. Those were the years ending 12/31/16 and 12/31/17. The debt balance on 12/31/15, the last day of the last budget passed under Mayor Pradel, was $150.1 million. The debt balance two years later, after the first two budget years under Mayor Chirico, we believe was $150.6 million. So all the additional taxes and fees introduced under Mayor Chirico has resulted in debt reduction of, well, apparently a slight increase.
Yet, Mayor Chirico says “we’ve” reduced debt by $16 million, or $20 million. Well, collectively as a city “we” have reduced debt since the end of 2014, the amount depending upon if you're looking at the reduction in total debt or Govt. debt. It seems we have Mayor Pradel to thank for that. (That former Councilman the Mayor addressed in the video clip above was also on Council when the 2015 budgets were passed). That little detail may be worth noting the next time Mayor Chirico mentions the progress in debt reduction “we’ve” made.
**Progress can be easy to measure. It just depends upon where you start. **
(Fine Print/Note regarding table above: In the City’s Comprehensive Annual Financial Reports (“CAFR”), the City classifies all of its General Obligation debt (“GO Debt”) as Governmental Activities (“Govt.”) and Business-type activities (“Bus.”). Despite all of it being GO Debt of the City, the narrative on the dais and the amount in the City of Naperville Annual Operating Budget and Capital Improvement Program (“Budget”) in 2018 and 2017 is on Govt. debt. The table lists total GO Debt, with the classifications the City uses.
Source for table above: CAFR for the respective years listed, except 12/31/14 and 12/31/17. Source for Govt. debt for those two periods is the 2018 Budget, page 101 Those are denoted by one astersik . The Bus debt amount as of 12/31/14 was the same amount as 4/30/15, confirmed by City of Naperville staff. That is denoted by two asterisks. The Bus debt balance of 12/31/17 is our estimate, using the Bus debt balance as of 12/31/16 less scheduled 2017 principal payments per the 12/31/16 CAFR. That is denoted by three asterisks. If additional Bus. debt was issued in 2017, that amount will be greater).
