July 29--The Naperville Development Partnership is hailed by local politicians and business leaders alike as a successful public-private alliance with a proven record of attracting, retaining and promoting Naperville's businesses.
But a Naperville Sun investigation has found that, while the not-for-profit relies almost exclusively on public dollars, exactly how it spends those funds remains largely private. The partnership, which has received about $11 million from Naperville since 1999, has also awarded contracts to partnership leaders and made contributions to political candidates.
The group is mandated under a 1999 funding agreement to provide quarterly reports outlining "a detailed list of revenues received and expenditures incurred," among other documents. But city officials have been unable to provide a comprehensive set of those required reports, as well as all audits and other paperwork called for in that agreement.
The city's contributions comprised between 81 to 89 percent of the group's total annual revenue since fiscal year 2002, according to reports the tax-exempt group files annually with the state and the IRS.
Such public-private arrangements hinder the public's ability to ensure that tax dollars are being properly spent, according to David Melton, executive director of the Illinois Campaign for Political Reform, a nonpartisan organization that advocates for government accountability and transparency.
"If it's taxpayer money, then we should have a right to know what's being done with it," Melton said.
Naperville Development Partnership Executive Director Christine Jeffries said the group is not subject to Illinois' open records laws. She said the group provides the city with financial statements, bylaws and meeting minutes on a quarterly basis.
Naperville Mayor Steve Chirico, who served four years on the City Council before he was elected mayor this year, said he was not sure which reports the group was supposed to send to the city.
"I don't think we get regular reports," said Chirico, who serves on the partnership's executive committee. "We may get an annual one."
Melton said the public should be able to see reports on how its tax dollars are being spent in such a situation.
"There should be someone in city government who is interested in seeing that enforced," he said.
In response to a Freedom of Information Act request for such documents, city officials initially provided only a few copies of partnership meeting minutes from 2004 to 2007.
City Clerk Lynn Zilinksy said "we are looking into it" and that they would be in touch "when/if we find anything."
The clerk later provided meeting minutes and other partnership documents, as well as some budget and audit documents covering 2010 to 2015. But documents covering 2007 to 2010 were not provided.
"If they were not documents created by the City we might not have them anymore," she said.
According to records, the city provides about 90 percent of the partnership's purse, or $816,050 of the group's $914,759 in revenue for fiscal year 2014, according to state filings. Other reported revenue included contributions totaling $95,400, as well as about $3,200 in "program service income" and snow globe sales.
Those same records note that the group's conflict of interest policy, financial statements and governing documents are not available to the public.
Other public entities contribute to the group as well. Naperville School District 203 and Indian Prairie School District 204 have each paid $10,000 annually to the group since 2009, according to records. Naperville Public Libraries paid $5,000 annually over the same period, while the Naperville Park District has paid $5,000 annually over the past two years.
Chirico said the partnership has helped Naperville grow its economy in a variety of ways. Operating privately allows the partnership to be "very nimble when dealing with prospective business development," he said.
"NDP can assist businesses with land acquisition privately," Chirico said. "This is critically important because if this information were public, then competition could move to derail development plans and stop the competition."
He pointed to the recent decision of SKF Group to locate to Naperville, which he called "a victory for the community's economic development goals."
"It's really a matter of first of all selling the city," Chirico said. "They take (prospective new businesses) through that whole process, that courtship."
Executive Committee Chairman Ray Kinney said the partnership's successes include bringing the IP network multinational Alcatel-Lucent to town, among other initiatives that have grown the city's tax base. The Naperville Chamber of Commerce website credits the partnership's efforts with creating thousands of new jobs in town and creating "an exceptional vibrancy in the business districts" of Naperville.
The partnership is governed by 26 local business people and seven public officials. Some of the people on the governing board have received business from the group.
Kinney received about $261,000 in printing business from the partnership from fiscal years 2012 to 2014, according to the state records.
"I've always done some business with the NDP over the years," said Kinney, who said he has been a partnership member since its inception.
Kinney said the contracts he received from the partnership are put out for bid, though Jeffries would not answer questions on that topic.
The group's fiscal 2014 filing also shows past chairman and current executive committee member David Kelsch being paid about $11,300 for what is listed as "phone system." Kelsch is president of the Naperville-based Advanced Data Technologies, Inc., according to state records.
Jeffries said the group purchased "a second hand phone system" from Kelsch, "which was also deeply discounted."
Melton, the open records advocate, said this should be an issue of interest to public officials, given the taxpayer dollars involved.
"If you're doing business with insiders, at a minimum, you have to demonstrate that it's a good deal, that you're getting a good price and that it's not an insider deal," he said.
Unless such an organization opts to release the relevant records, examining such publicly funded decisions is largely impossible, said Maryam Judar, executive director of the Citizens Advocacy Center, a nonprofit that advocates for increased government accountability.
"If you don't have a way to evaluate (whether) there is some fair process by which they're granting these contracts for these projects, then how can it not lead you to believe they're not steering them to their own?" Judar said.
Businesses owned and operated by partnership members like Kinney and Kelsch are listed as "partners" on the group's website. Jeffries said those partners "make a financial commitment to the organization," but she would not answer emailed questions regarding how much they pay in.
Records provided by Naperville offer no explanation regarding how much the partnership's business members pay into the group annually.
The group has received state grants to print visitors guides, Kinney said, and partnership members sign conflict of interest statements each year.
"We do business with members of our board, we do business with companies that are not members of our board," Jeffries said, "but we always try to do business exclusively with Naperville businesses."
Jeffries said the group prefers to use vendors who give back to the community.
"The NDP members are typically those business people that donate goods and services to community groups," she said.
In addition, state election records show the Naperville Development Partnership made numerous political donations to two area candidates from 2000 to 2007.
Records show the group donated $6,893.75 to longtime DuPage County Board Chairman Robert Schillerstrom in that time.
The group also donated $500 to U.S. Rep. Peter Roskam when he was a state senator in the early 2000s.
A gift basket worth $200 was also donated by the partnership to the Naperville Township Republican Organization in 2005, according to state records.
State election records list the Schillerstrom and Roskam donations as "individual contributions," while the gift basket is listed as an "in-kind contribution."
Jeffries said the donations were "purchased tickets to what was assumed to be charity events, not direct campaign contributions to any individual."
Since the partnership receives contributions from private businesses, Jeffries said, "these types of events are permitted."
Jeffries did not respond to additional questions.
"Your subsequent emails were requesting information related to the internal operations, policy and strategies of the NDP, which the NDP is not willing or obligated to disclose," Jeffries said.
But Melton questions why a group getting so much public money would make political donations.
"Generally, you don't use public money for this kind of thing without the public's knowledge and full consent," Melton said. "Here, I'm not sure you have that."
Melissa Jenco contributed.
geoffz@tribpub.com
