The village of Dolton, a suburb of Chicago, has been facing significant financial challenges since 2021, with a negative $3.65 million balance in its general fund as of May. Despite statutory requirements to submit audited financial reports, Dolton has failed to do so. The absence of a city treasurer and the vacancy of the finance director role have created a lack of oversight in the management of public funds.
Under the administration of Mayor Tiffany Henyard, general administration department expenditures have increased by 47% since fiscal 2022, while police department expenditures have risen by 21% during the same period. These spikes in spending have been primarily driven by large overtime increases, contributing to the financial strain faced by Dolton.
Former Chicago Mayor Lori Lightfoot, along with consulting firm Charles River Associates, has been conducting an investigation into the misuse of public funds in Dolton at the request of village trustees. Despite facing challenges in obtaining cooperation from the mayor, Lightfoot presented preliminary findings that point to widespread financial mismanagement within the village.
Over the last three fiscal years, Dolton has experienced a nearly 30% increase in average monthly expenditures, while revenues have remained stagnant. The general fund balance has plummeted, going from a $5.6 million surplus in April 2022 to a negative $5.5 million as of May. This sharp decline is indicative of severe fiscal distress within the village.
The village has been struggling to meet its financial obligations, with a significant number of checks being held back due to insufficient funds. As of June 18, there were 589 checks totaling over $6 million that had not been processed. Additionally, Dolton has 22 bank accounts, with most monthly operating costs being paid from a single account with a balance of only $715,000 as of June 30.
Dolton’s financial woes have been exacerbated by the issuance of a $2.9 million general obligation tax anticipation warrant in late 2023. The village also has $10.7 million in outstanding general obligation debt, with concerns raised about its ability to make payments on a $33.5 million judgment in a case of police misconduct. The withdrawal of underlying ratings by S&P Global Ratings in 2015 further underscores the village’s financial instability.
An investigation by Charles River Associates revealed that Dolton had used six different credit cards from January 2021 to May, with purchases rarely accompanied by receipts. Unauthorized spending included $40,000 in Amazon purchases and cross-country trips for one to ten individuals, raising questions about transparency and accountability in the use of public funds.
The fiscal crisis in Dolton highlights the urgent need for improved financial management and oversight to address the misuse of public funds. The findings presented by Lori Lightfoot and Charles River Associates underscore the gravity of the situation facing the village and the necessity for immediate action to prevent further financial deterioration.