32 thoughts on “County looks for new ways to lose taxpayer money”

1. Is this legal for one government to lend another tax-money? Good ?s CJ.

2. C.J.,
   You neglect to mention that the museum is expected to bring in millions of tourist dollars, etc. What an investment. How ‘proud’ is Peoria Proud now?

3. Just please tell me this isn’t going to hurt the museum!!!!!!

   The state is broke, the county is broke, yet somehow Illinois came up with $5 million to give to the county for a…..museum! If the idiots on the county board [excluding Merle] opted for a sales tax to get out of debt, maybe, but to support a county-wide sales tax for a museum that will cost more money in the long run?

   IDIOTS.

4. “Two Rivers Professional Development Center’s mission is to enable teachers, staff, and administrators in the member school districts to achieve their professional goals.”
   http://www.lth3.k12.il.us/tworivers/

   oh boy. So tax money is used to support those people being paid by taxes to improve their chances of getting better jobs demanding more tax money…
   ARE WE REALLY THAT STUPID?

5. as for the museum, new voice, I have two words for you: Flint, Michigan and Autoworld.

6. No, please, please do not try to convince me that Two Rivers helps anybody do anything–with the exception, of course, to provide jobs to those who leave teaching because they can’t deal with kids so that they can work for Two Rivers to tell current teachers how to teach.

7. CHARLIE : YES we are stupid because we allow things as this to exist!!The regional Supers office was questioned about years ago IF IT WAS NEEDED and WHAT did it do?? Total waste of money!

8. A couple of additional points to consider from Peoria County Committee Meetings yesterday —-

   (1) that an amendment would be made on March 11th to change the 3% interest to 0% interest and change the repayment date from June 30, 2010 to a later date (To their credit, Peoria County Board Members did express concern that this was a slippery slope and Jimmy Dillon that the ROE’s problem was now becoming the County’s problem yet board members still voted to proceed. The Treasurer was reported to have said that he felt comfortable with the ROE arrangement because of the type of State funding involved not for a line of credit for the the Health Department which would probably be expressing some budget challenges);

   (2) special update for NV …. Patrick Urich reported that Governor Quinn is getting ready to release the $5M for the museum … 25% upfront and 75% to be paid later …. does that make feel you feel like singing a tune?

   Well, it is only $5M at 25% here and anther $?M amount for some other project in some other Illinois city there and and and and and and ………….pretty soon we are talking about real money as the saying goes…………..

   Let’s remember that the state is 210 days in arrears (ie: late in paying) for medicaid payments. And we are still talking about giving money to the museum from a bankrupct state which sufering “B” dollars of annual deficits + unfunded pensions which remain a balance sheet item in the “B” range. We cannot afford to pay our bills and retire our debts yet we can still keep the taxpayer charge card charging. Simply unfathomable! 🙁

   Let’s remember that Illinois takes our money and gives some to this fund and that fund — it is still money as a whole out of our pockets regardless of where it is being spent. The same old story of budgeting needs vs. wants.

   Erik Bush was reported that he thinks that Peoria County budget will be at a $3M deficit this year ….. we have the animal shelter issue to straighten out and Bel-wood nursing home and a possible increase in property taxes for the Health Dept …… is anyone listening? Is anyone concerned?

9. Sharon – ditto on Two Rivers being basically a jobs program for ex- teachers. Completely worthless and part of the mega-money industry that sucks off the taxpayer under the guise of helping education. You are correct, as usual. Ever thought about being a job coach?

10. Hi CJ:

    * Why is it suddenly Peoria County’s responsibility alone to keep this program running? Where are the other 19 counties involved?

    It’s not. This proposal is consistent with the simple notion of intergovernmental cooperation. The scale is small to an organization operating in the hundreds of millions with investable cash, and the risk is no more than a bank would take. It’s not about “keep[ing] the program running…”, it was an attempt to be helpful at no more risk than a bank would take.

    * Considering Peoria County is itself facing revenue cuts from the state, how is it that they think it’s prudent to cover the state’s shortfall to the ROE?

    We are not actually “facing” identifiable cuts. That is an incorrect statement by you. I stated I am concerned about cuts because of the behavior of other states raiding intergovernmental revenues. Again, if a bank would make the loan, how is less prudent that the county do so?

    * How is it that Peoria County can afford to make a risky $1 million loan to anyone when they spent $4.2 million more than they took in last year?

    Good question. The treasurer has over $70 million in reserves to oversee. As you’re familiar with governmental accounting, you know it is the treasurer’s responsibility to over see their investment. Banks are offering cash investing rates of roughly 0.7% and CD rates of roughly 2-2.5%.

    Tying a line of credit offered to the ROE to budget activity is not correct. As you also know, spending more than one takes in is done in business and government all the time. It can be planned as in the case of obtaining a loan in one year (surplus) and spending it in the next year (deficit). Last year, we lost $2.8 million due to the economy in revenue sources like sales and income taxes. Another $500k was transferred to the Health Department to continue Lead Abatement, and slightly less than $700,000 was spent on the voluntary separation program, which will save roughly $6 million in personnel expenses over a three to four year period, even with backfill. This was all covered by prudent budget management over the last 10 years which allowed the county to have sufficient reserves. Reserves are at roughly $12m in the fund of which you write, and this meets the county board established minimum reserve policy.

    * If the state doesn’t come through with the money, how will Peoria County be repaid? Specifically, from what revenue source will they be repaid?

    Again, a bank saw no more risk in the state coming through with the money than I did. As we understand it, the money is there and is tied up in the governor’s bill paying process which is unexplainable because I don’t know that an understanding of their process to be available. Specifically, the revenue sources are cash paid by the state to those whom it has contract with. The issue isn’t that the state won’t, but when. This is a prudent, replenishable use of reserves.

    * How important is this Illinois Virtual School program? Maybe this is a program that needs to be shut down if the state is unable to pay its bills.

    That’s a fair question, but I think unrelated to your assertion this is an imprudent step the county is considering. I will say this too, it’s not a lump sum $1 million loan. The ROE has stated they have roughly $400k in cash and would only access this line of credit between now and June 30 IF they did not continue to receive money from other sources sufficient to meet their payroll expenses.

    I take full responsibility for this as it’s an idea I took to our county treasurer after speaking with ROE. I still think it’s a calculated risk no more dire than any commercial bank would, and has agreed, to take. I also take full responsibility if this *looks* like a movement to compete with banks, it’s not. A commercial line of credit loan was quoted around 6%, the proposal here was for 3%. To be quite honest I simply saw it as a way to actually save taxpayer money through lower interest on a short-term loan.

    I admit it’s a different idea, but would counter your argument that the risk is too high. No state has ever declared bankruptcy. It’s not that the state *isn’t* paying it’s bills, it’s that the bills are being paid late. It’s a cash flow issue and believe it or not, private sector business borrows against line of credits all the time.

    Cordially,

    Erik Bush
    Chief Financial Officer
    Peoria County

11. Erik:

    You make good points and it is clear that you have put thought into this. I have a few questions:

    Is the County securing this loan with a UCC against the State receivable or other assets of the ROE?
    Will the check(s) that is in the voucher process come payable to the ROE and the County?
    Does the County have a formal loan policy that was followed to make sure that the credit risk is proper and the interest rate being charged accurately reflects the risk?
    Is the County collecting fees similar to a bank for this transaction?

    I agree that this will save the taxpayers money. Whether or not we have too much government (or programs) is not a question for this transaction but a different debate.

12. Erik Bush–Great to see you back on the blog! Whatever happened to that transparency machine that you unveiled for District 150–back in storage? I don’t mean this snide comment to have any reflection on you–I truly do miss your insights into all things 150.

13. Erik:

    After I wrote my comment, I reviewed your statement one more time. The one big difference is that a bank is supposed to take risks (loans) in order to generate a return for investors. Investment policies from governmental bodies (at least the several that I have read) are designed to be as close to risk free as possible with credit requirements for investments (FDIC Insurance, Full faith a credit of the US obligations, AAA bonds, etc) in order to protect the public money.

14. Hi,

    I can be reached at (309) 495-4859 and am always available via email at ebush at peoriacount dot org

    Thanks again for letting me explain my thinking on this issue and to explain if fault be found it should be directed to me.

    Erik

15. Saving the taxpayer money by making a loan with taxpayer money at 3% so the taxpayer can payback with interest of only 3% instead of 6% a bank would charge thus saving the taxpayer 3%?

    Do me a favor. Please don’t save me anymore money. I can’t afford it.

16. Who gets the state/federal dollars for the enrollment and “attendance” of the virtual students? Is it the district in which they reside, or is it a Peoria School District?

17. After reading Mr.Bush’s comments, I have one thing to say…”where is Andrew Jackson when you need him!!!!”

    Two questions:
    1. Just to be clear on this, is Mr. Bush comparing our county govt. to a ‘bank?’

    2. Exactly how many banks in the U.S. and/or Illinois are failing or have already gone under?

    The public is not exactly brimming with confidence in our banking institutions. As of late, it would appear our county is not exactly brimming with confidence in our county govt. Beginning construction on a multi-million dollar museum when the CHECK ISN’T EVEN IN THE MAIL YET, seems more than risky to me!

    One of the problems that started the econo-meltdown last year was that people [and the Fed] were spending money they did not even have. What’s up with that?

18. Thanks for the post Karrie!

    By the way, I do appreciate Mr. Bush’s candid comments. Thanks!

19. NV: Are you still practicing your song?

20. Karrie,

    I appreciate you, but here is what I said:

    “If my gut feeling is correct that we’re going to have to probably trim another $3 million from the expense side, we’re going to have some serious conversations over the next few months on how we do it.”

    You wrote:

    “Erik Bush was reported that he thinks that Peoria County budget will be at a $3M deficit this year”

    What I said as stated in Karen’s article is that (1) the state’s deficit problems pose a threat to local governments in this state, (2) I’m working in the dark right now to what that means literally, (3) the $3m number isn’t real, it is from a sensitivity analysis I performed on our state provided revenue stream incurring a 5-10-15-20% reduction and where I instinctively feel it may go and finally, (4) it’s a conversation I had with the finance committee, not a factual statement made.

    As you are also aware the elected and appointed folks who work for the county responded to the economic collapse by proposing and adopting a balanced budget for 2010. The board did not adopt a deficit budget. What I am speaking to are the challenges facing us as we begin to go into formulating a strategy for the 2011 budget.

    Have a great weekend, and blog on!

    PS – NV, No, and, google.

21. this has got to be unconstitutional

22. Another point Mr. Bush, governments aren’t necessarily supposed to “cooperate”. They have seperate roles in our system, and sometimes are supposed to act as checks and balances.

23. actually, The Mouse, and unfortunately it will need be my last post because i’m going away for the weekend and need to play with my kids, it is exactly constitutional.

    Google Intergovernmental Cooperation Act. ILCS 5/220

    you can find the statutory references used in the legal agreement posted on the county’s website if you click on peoriacounty.org (http://www.co.peoria.il.us/), in the top third of the page you’ll see ‘board representatives’, and then after clicking on that you’ll see on the left hand ledger committee agendas. if you click on finance or executive committee agenda packets, you’ll be able to see all the supporting documentation. didn’t know if you knew that, so thought i’d share.

    the civics instructor in me wants to discuss checks and balances with you, but not here 🙂

    have a great day!

24. This is a plan that will actually pay the taxpayer’s of Peoria Co. back 3%, where if the money came from a bank loan, the 6% would be going to the bank investors. I want our tax moneys coming back to the community, not into a big bad bank. That 3% would be available for county programs and that keeps our dollars in our community. What part of this is a bad idea?

25. AL,

    What part of this is a bad idea?
    I guess that depends on what you mean by “county programs.”

26. Where does the money go if the “big bad bank” gets it? oh! In the community… it certainly doesn’t go into outer space, does it?

27. AL, haven’t you heard? If local government does it, it must be bad.

28. Sud O. Nym,

    Haven’t YOU heard? If local govt. does it, it must be GOOD. Like invest millions in projects that return little [if anything]…… I guess maybe local govt. is more like a bank than we care to admit.

29. “It’s not. This proposal is consistent with the simple notion of intergovernmental cooperation. The scale is small to an organization operating in the hundreds of millions with investable cash, and the risk is no more than a BANK would take. It’s not about “keep[ing] the program running…”, it was an attempt to be helpful at no more risk than a BANK would take.”

    “BANKS are offering cash investing rates of roughly 0.7% and CD rates of roughly 2-2.5%.”

    “Again, a BANK saw no more risk in the state coming through with the money than I did.”

    “I take full responsibility for this as it’s an idea I took to our county treasurer after speaking with ROE. I still think it’s a calculated risk no more dire than any COMMERCIAL BANK would, and has agreed, to take.”

    – All these references to banks? Seems like a compare/contrast to me. Lets be fair, Mr. Bush did write, “I also take full responsibility if this *looks* like a movement to compete with banks, it’s not.”

    Maybe..

    -I for one am not completely bashing local govt. I have a sneaky feeling the members of the county board wish they had NEVER gotten involved with the city and their…’special project.’ Too late now…
    I appreciate the difficult job local govt. has in dealing with budget development [given the current state of the econ], and other issues.
    I tip my hat to all of them.

    Of course, this is why I find it so perplexing that most of them have been so eager to allocate millions for a project they MUST KNOW will NEVER pay-out in the end?!?!?

30. “Land dispute complicates Downtown museum project”

    By JOHN SHARP (jsharp@pjstar.com) and KAREN McDONALD (kmcdonald@pjstar.com)
    OF THE JOURNAL STAR
    Posted Feb 26, 2010 @ 11:26 PM
    PEORIA —

    “Differing opinions between the city and county on the property rights of the new Downtown museum is the latest twist in the ongoing negotiations of a redevelopment agreement among four entities who are part of the project.”

    – Well! Now is the time for the Peoria County Board to grow a pair! How many more problems must arise before the public screams ENOUGH?

31. Erik:

    Let’s look at our statements with an equal sign (=) separating them.

    Your statement = my statement.

    “If my gut feeling is correct that we’re going to have to probably trim another $3 million from the expense side, we’re going to have some serious conversations over the next few months on how we do it. = “Erik Bush was reported that he thinks that Peoria County budget will be at a $3M deficit this year”

    I was using a method akin to interpolation of your statement. From Wikipedia …

    A different problem which is closely related to interpolation is the approximation of a complicated function by a simple function. Suppose we know the function but it is too complex to evaluate efficiently. Then we could pick a few known data points from the complicated function, creating a lookup table, and try to interpolate those data points to construct a simpler function. Of course, when using the simple function to calculate new data points we usually do not receive the same result as when using the original function, but depending on the problem domain and the interpolation method used the gain in simplicity might offset the error.

    I apologize for my syntax ….. and if the county does not cut expenses and if the money is slower or does not come in at the levels anticipated …. then your unreal $3M might be turn into a ‘real’ number lower or higher than your ‘$3m number isn’t real’ number.

    It seems that the Feds are playing the shell game with the dollar and the $12.3 Trillion in government debt. Lower the value of the dollar to be able to pay back the debt at a lower value — tricky sort of game — hoping that the dollar won’t go poof like some sort of magician’s trick.

    I know that Peoria County passed a balanced budget last year. Then viola …. the City gives the County a belated present with a huge price tag that puts strain on funds unanticipated to be used. The County has been working diligently to make a smooth transition.

    Glad to bake you a pie at the end of the year based on the numbers! 🙂

32. The vote came in with hundreds of voters believing goverment can be run like a successful business compared with a handfull believing the opposite. Of course, government is absolutely necessary but when government expands beyond the common sense of our founders, it does so with the use of more revenues collected, one way or another, even through garbage pickup hidden taxes.

    When businesses expand, they do so to make a profit, therefore enabling them to retain good employees with ususally better pay, hire more employees and pay reasonable taxes to support government that is necessary as proposed, again, by our founding fathers.

    Of course, there are similarities to compare and perhaps learn from each other. It appears bigger government collecting more revenues to expand may lead to the downfall of administrations and elected officials at all levels of government.

    Before it is too late. The hands on ther clock are nearing the Cinderella hour.

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