The 9 million dollars in projected savings over 20 years from the implementation of the ERP Software Application under the ACT Initiative is an inaccurate statement. The implementation of the ERP Software Application was initiated by former DuPage County Chairman Robert Schillerstrom in 2010, under his initiative called Investing In Today; Building For Tomorrow. The ACT Initiative was presented to the DuPage County Board in 2012. In 2010 the county was in need of some very important capital investments. The projects included transportation and storm water projects, as well as repairs to the convalescence center and the jail. Other projects included campus emergency generators and new information technology improvements to replace the out of date system that was 30 years old. The County was in a unique position to substantially reduce the costs of financing the 69.7 million needed for these projects. The County was able to reduce the costs of the financing by taking advantage of the limited federal subsidies at reduced interest costs. The County's AAA rating allowed them to secure bonds that kept the debt service low. By taking the lead with this opportunity the County was able to fund many projects and save money in the process. Included in the initiative was the Enterprise Resource Planning (ERP) system. The system integrated sets of software applications that were used to manage assets, financial resources and human resources. In 2010 Dan Cronin opposed the 69 million dollar bond purchase. He spoke against the bond purchase at the September 7, 2010 meeting, the minutes are provided here. Today he is taking credit under his ACT Initiative for unrealized "future" savings of 9 million over 20 years, with a 7.1 million ERP project, still not complete, funded with a 69 million dollar bond purchase he did not support. The below reference paragraph is from the Investing In Today; Building For Tomorrow 2010 Fact Sheet
INFORMATION SYSTEMS TECHNOLOGY UPGRADE
Project Description: An Enterprise Resource Planning (ERP) system is defined as an integrated set of software applications used to manage tangible assets, financial resources and human resources. This common architecture is designed to facilitate the flow of information between business units. An ERP is built on a central database utilizing a common computing platform. An integrated enterprise system will bring about greater transparency, meeting new accountability demands and the ability for viewers to easily follow the lifecycle of a county contract, increase efficiencies and productivity of staff, manage grants and provide for faster, more accurate government reporting. Future costs will also be reduced through the consolidation of numerous systems and servers into one common platform. Reduction in costs through the elimination of redundant software licenses, and less expensive hardware will also save the county money. If this project is delayed, the county will incur increased software and hardware support costs due to the need to continue servicing obsolete systems. Total project costs 7.1 million.
ACT Projected Savings
You can find the Investing In Today; Building For Tomorrow 2010 Fact Sheet here. You can find the ERP Planning Document Update from July 2012 here. To watch the video from the September 7, 2010 by using the provided link here. You can read more on this topic here and here.
The news has been covering the 116.4 million savings DuPage County has declared since implementing the ACT Initiative in 2012. The Appointed Agency total savings projection is 50 million (Appointed Agencies are those in which the chairman appoints members to board and/or commissions). This includes 1.9 million in annual operating expenses from the Lisle-Woodridge Fire District. DuPage County is taking these savings at face value, something I have challenged.
In 2012, Crowe Horwath was hired by DuPage County Board to conduct an assessment of the LWFD. Recommendations from the report included the following:
Develop a Financial Plan
Develop a Capital Plan
Increase Transparency and Accountability
The report stresses the following:
"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."
To my knowledge there is no financial plan.
In June of 2014, Moody's (The purpose of Moody's ratings is to provide investors with a simple system of gradation by which future relative creditworthiness of securities may be gauged.) downgraded the LWFD rating, two years after the Crowe Horwath report stated the LWFD needed to "act soon."
"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."
Although the LWFD (Lisle-Woodridge Fire District) is asserting 1.9 million in annual savings from operating expenses, that does not include the massive unfunded pension liability. Employee benefits including pension contributions should be included in the operating expenses. Are there actual savings in operations or has the pension obligation been moved to another line item in the budget? Despite having a new board appointed after the Crowe Horwath report, the new board has voted to increase the tax levy and budget expenditures in 2012, 2013 and 2014.
The financial stability of the LWFD has not improved. The lack of a financial plan as recommended by the Crowe Horwath report, the Moody's downgrade, the increase in the property tax levy, and budget expenditures does not bode well for the LWFD.
"What are the net savings to the taxpayer?". This is a question I have posed to DuPage County.
During the February 10 DuPage County Strategic Planning committee meeting, several questions and comments arose with regards to the savings from the ACT Initiative. For example, the elimination of the DuPage County Water Commission sales tax was done by legislation. Senate Bill 580 (Public Act 96-1389) was signed into law on July 30, 2010. The ACT Initiative was introduced in May of 2012. Although former Senator Dan Cronin,current DuPage County Chairman, sponsored the legislation, this legislation is not part of the ACT Initiative and should not be presented as such. It is almost impossible to project savings out 20 years when we have no idea as to what the financial or political climate will be, "I am not comfortable throwing out numbers that have risen from 80 million to 100 million to 116.4 million," I said. I asked for an audit or something from our financial department that shows two years of savings and exactly where these savings came from. We learned the projected savings numbers are based on budgeted numbers, not actual numbers. We have based savings on manufactured budget numbers rather than what was actually spent. Staff has been given direction to run the savings on actual numbers. My colleague Brian Krajewski said "we don't want to fool anybody," and I agree.
While not really knowing what to expect from Governor Rauner's first official visit to DuPage County I thought it was important that I attend. The event was held in my district and I was eager to hear what the Governor had to say about the State and more importantly, DuPage County. The funny thing was, DuPage County was not mentioned once in the speech. No talk of working with the elected officials in DuPage County to make sure our constituents needs are met or what plans he has for DuPage. Unlike in the State of the State Address, today's speech was void of any talk or praise about DuPage County's ACT Initiative. What was mentioned in the speech many times was Texas, Wisconsin and Indiana. Are these the states we want to emulate? I certainly do not wish that, but I feel that is going to be the fate of our State. "We are going to be the greatest state in the country, ready to compete with Texas and Wisconsin." - Bruce Rauner Workmen's compensation, trial lawyer's, unemployment, liability systems and conflict of interest were hot topics. Although the governor said he will not advocate for Right to Work and his grandfather was a "union guy", he did talk about "Employment Empowerment Zones". Don't let that fool you, "Employment Empowerment Zones" targets unions and prevailing wage. Education was touched upon. The Governor wants to reward good teachers and pay them based on performance. I did like and agree with the Governor about bringing vocational training back to our high schools. The Governor ended his speech asking that we all get behind him and support his agenda, talk to our neighbors, knock on doors and even go to Springfield to help him fulfill this mission. Although there were a few things that I agreed with and could support, I can't support his agenda; I will be taking a pass on that request.
This morning I spoke before the DuPage County Board of Health about my concerns regarding the increase of parents that are not vaccinating their children. I asked that the Health Department run public service announcements about the benefits vs the risks of vaccination. Today only two states do not allow parents to claim religious or philosophical exemptions; however, all states only allow for medical exemptions. I believe that DuPage County needs to be a leader on this issue and call for no religious or philosophical exemptions and add this to their Legislative Agenda. I hope the DuPage County Board of Health would support such legislation.
On April 18, 2014, I had expressed similar concerns and you can read my comments here.