This morning the Chicago daily newspapers are reporting that the Chicago City Council Budget Committee passed Mayor Daley’s 2011 budget recommendation with minor changes. The budget will use much of the remaining parking meter proceeds and revenues from TIF districts to plug a deficit of about $655 million according to WTTW’s Chicago Tonight.
The committee, it is reported, passed the mayors proposal unanimously.
The one substantive change to the budget was the council is rejecting $3.5 million of cuts to local chambers of commerce. That money, which is largely unaccounted for by the chambers, was used by the Lincoln Square Chamber of Commerce to pay for outside public relations counsel, the chamber has told media outlets.
In other chambers the funds pay for salaries and other services.
At a meeting of the Lincoln Square Chamber of Commerce last month Schulter announced he would oppose any budget that did not fund the chambers.
The Bulldog contacted Ald Eugene Schulter (D- North Center), Pat O’Connor (D-Budlong Woods) and Dick Mell (D-Irving Park) to ask about the budget proposal and to hear their thoughts on the budget debate. The three aldermen sit on the Budget Committee.
The Bulldog contacted the aldermen twice by e-mail over a period of a week for their views, without any reply from any of them. The Bulldog looked at their web pages (the links for the web pages are in the paragraph above), but there was no discussion of the budget.
The Bulldog also contacted the Rahm Emanuel campaign, requesting their views on the budget. Emanuel’s campaign didn’t respond either.
The only person who did respond was Ameya Pawar, a North Center challenger to 47th Ward Alderman Eugene Schulter.
Independent of the silence of the elected officials the budget did receive other reviews however:
- The Chicago Inspector General issued a report detailing $243.8 million of savings on Oct. 25. The council tells the IG to mind his own business.
- Fitch downgraded the city’s bond rating on Oct. 28 citing reduced reserves, above average foreclosures and high unemployment.
- The Civic Federation Wednesday released its report on the budget. The federation said the budget does not address the “structural deficit and relies too heavily on asset lease reserve funds and debt restructuring.”
- On Thursday the city delayed an $800 million bond sale citing increased interest rates. According to the Civic Federation, debt service now accounts for 21 percent of projected appropriations in 2011, largely due to increased debt load. This despite historically low interest rates.
- On Friday Standard & Poor’s downgraded the city’s bond rating. It cited an “ongoing structural imbalance and heavy reliance on non-recurring revenues” such as the parking meter fund.
- Tuesday morning (today) Rahm Emanuel told the Chicago Sun-Times’ Fran Spielman he would support proposals that would eliminate ward based garbage collection and other proposals that could lead to savings estimated at $65 million annually. As noted previously, Schulter had opposed this plan, even cutting short a vacation to vote against a proposal by Daley earlier this year.
In the comments The Bulldog has listed Pawar’s unedited reply. There you can see the questions put to the aldermen, but not answered by them. Directly below, a graphic of the proposed savings listed by the Chicago Inspector General and the Civic Federation.
Beyond that, on is a tab for suggestions. You can use it to give your suggestions on resolving the city’s budget issue.
Related posts:
- City budget to drain millions from Western North TIF
- Schulter promises support for chambers; funding cuts loom
- CPS budget hearings at Lane tonight
- Monica Schulter demands removal of LEN story
Download Ameya Pawar’s budget platform from The Bulldog.
Ameya Pawar’s response to Bulldog questions:
Welles Park Bulldog –
What is your reaction to the Inspector General’s report? Is it accurate in suggesting that the actual deficit of the city is closer to $1 billion?
Ameya –
Inspector General Ferguson’s letter to the City Council and Mayor states his office is charged with: “promoting economy, efficiency, effectiveness and integrity in the operations of the City government.” The City Council has the same charge. Except in their case, they must legislate on our behalf to net us economy, efficiency, effectiveness and integrity in the operations of City government. But for a long time, our aldermen have run wards like medieval fiefdoms without regard for how things actually get done and what they cost. So today, because of their reticence to carry out their charge, we hear about how things can be done differently from our Inspector General. And instead of using this report as a catalyst to begin a discussion, we hear reactions like: “If you have some special magic information that can help us balance the budget, your responsibility is to share it with us, not to try to get some publicity out of it . . . It’s tacky and it’s poor taste. It leads people to believe inspectors general . . . are only interested in promoting their own careers.” – Ald. Lyle. Perhaps even more vexing is the silence out of Alderman Schulter’s office. As one of the most senior members of the council, one would hope he would bring his 35 years of experience to jump-start the discussion on the budget deficit. So my reaction is disappointment – Alderman Schulter has known about the budget deficit for at least a decade. He’s known about the pension problems for many years and yet all we hear is about the past 35 years. Where is his plan for the next 35 years? How is he going to address the budget deficit and pensions without mortgaging our future? The last time we needed to make tough decisions as a City, he pawned our parking meters and with them went $9.58 billion dollars. I am running because I am intent on addressing the budget and pension crisis so that we don’t have to keep asking residents and business owners in the 47th ward for more tax dollars. I will be a legislator that cuts costs, finds efficiencies and helps structures services in a sustainable way. It’s not about the past 35 years – it’s about finding solutions to problems today.
Next, let me address the pension problem. I agree with your estimate. If we add in what it would cost to keep pensions current, our deficit would climb upwards of $1 billion dollars. But again, if we restructure our budget, I think we can avert a financial disaster. We can protect services and ensure that our retirees can receive what they earned.
Welles Park Bulldog –
Which of these proposals would you support?
Ameya –
Again, this proposal should be seen as a jumping-off point. I don’t think the IG was trying to represent himself as an expert on service delivery. As the IG said in his letter, “…the report is intended merely to provide a background and framework for more detailed analysis and public discussion.” So let’s start the discussion. Every alderman should go to their wards and have an honest discussion about City finances. The time to talk about past accomplishments while ignoring the larger problems is over. Our elected officials have a duty to explain to all of us how services are structured, delivered and what they cost. We should be presented information and have enough of it to make an informed decision with our elected officials on how to move forward. This is what we do at home when income does not meet our expenses. We take stock of what we have coming in and what goes out. The City has to do the same. It’s time to involve us.
I will not support a reduction in force in the Fire Department. I say this because I believe there are better places to cut without compromising public safety. We need to look at every line in the budget and identify what works fix what does not and get rid of what cannot be fixed. While personnel expenses account for the largest percentage of the budget, a solution designed to simply eliminate personnel is short-sighted. Eliminating fire personnel impacts how our OEMC prepares and responds to disasters. Cutting social service personnel impact our police protection. Cutting public works staff impacts our infrastructure. All of our services are inter-connected – we must find out where our services intersect and then leverage assets and streamline functions. Simple cuts are not the answer. To illustrate this point, I’ve broken down the IG’s fire cut.
Reductions in force (RIF) will not net us the savings we seek. Service delivery (especially in public safety) is dependent on a number of variables: population density, development, economic base, nighttime/daytime populations, infrastructure, etc. So subtracting a firefighter (1) from each apparatus might be detrimental to response in one area while netting us cost efficiency in another. A simple RIF is not the way to go. We need to look at the whole picture. Are there other areas in administration where we can cut? Can we increase equipment rotation schedules? Is it possible to hire in a manner that keeps the department from experiencing massive retirement waves which stress pension payouts? How does a RIF impact other municipal services? Will a RIF impact our insurance premiums or increase risk exposure? Will a simple RIF make us more vulnerable to disaster? These are just a few of the questions that need to be answered. By asking the right questions, we’ll end up asking many more. By asking more questions we will build credibility with Fire officials. The bottom line should take into account the financial reality along with service demand. We need buy-in from our hardworking employees to reduce costs and streamline operations. Next, we have to engage the community so that they understand how changes in service impact them. We have to arm the public with enough information so that they are part of any decision we make. Paramount in this process is placing trust in the public. At the end of the day, we are one City and we are a family. So we have to get our house in order and we need to do it together.
There is value in the IG’s benefits recommendation. We have to restructure employee benefits for new workers. What’s clear is that the current system does not work. It does not work because our elected officials have failed to properly fund the retirement systems and because the amount we must payout from retirement to death is unsustainable. So I am going to take the lead. Once elected, I am going to reduce my salary from $110k to $60k and find ways to opt out of the pension system. When elected, the City is going to have to pay about $96k +benefits to Alderman Schulter from the pension system and then pay me $60k +plus benefits. That amounts to over $156k in salary plus benefits. Now just think how much of this goes on in other departments. Every time there is a retirement we pay pensions and benefits and then we hire someone new to replace the retiree. So for many positions, we are simultaneously paying at least two salaries for one job. It’s just unsustainable. We have to do right by our retirees and find ways to cover their retirement and implement a new benefits system for new employees.
Welles Park Bulldog –
Which of these proposals would you oppose? Why?
Ameya –
I think all the proposals are good starting points. The privatization of garbage worries me. We would save money by moving garbage collection off City books but we have to look at what the private sector will charge for garbage collection. I don’t think the public is in any mood to privatize garbage. That said, I think we should have a discussion in the ward about privatization and the sale of any public asset. I also think it is time Alderman Schulter explains his vote to sell off parking meters and $9.58 billion dollars. Once I am elected, I will introduce an ordinance which requires payback of the funds we borrowed to plug deficits. The payback ordinance would build in a mechanism through which the public could decide on how to invest the money in our future. For example, we could use portions of the money to invest in schools, infrastructure, hiring police, reducing poverty, etc. I would work with the City Council and Mayor in a way that guarantees public participation in allocating those dollars. We may not get the $9.58 billion back (we might if we can cancel that contract) but I will make sure we get our $1.2 billion back.
Welles Park Bulldog –
If you oppose these cuts, which programs do you propose cutting instead? By how much and why?
Ameya –
We need to conduct a line-by-line audit of the budget. Then we should go to each department head and zero-base budget. Next, we need to take the 900+ Shackman exempt positions and cut those salaries by 15%. We must move to a grid-based service delivery. We need to install a benefits system for new employees that are more in line with the private sector. And finally, we need real TIF reform. The program should be scrapped and we must start over. There has to be a community wide dialogue on the merits of the TIF program and find ways to restructure it so that there is real local control.