I used to all see the potential that there's not going to be other things that I need to
really see.
You know, if they can't use groups, they don't need to want to hear to be the rules,
they're going to be subject to happening, and they're going to be going to be
going to be some of these deadlines.
They need to be part of the plea counter and use of combat with others in life.
You know, they don't need to be pregnant instead of the help.
Good morning, good morning.
As we begin 2026 budget hearings, we'll begin today with public comment.
We'll begin each day with public comment.
Today we're starting at 10.
Going forward, we will start at 930 a.m. and open each session with public comment.
At this point, I have three slips for public comment.
Are there any others who wish to make public comment other than the three that I have at
this point in time?
If so, please see the sergeant in arms so that you could fill out your slip.
We'll begin with
We'll begin with George Blass.
Thank you.
It's sickening here.
It's something un-American here.
Good morning, Mr. Blakemore.
Good morning to me.
I'm not the one.
You know what to do.
Anyway, I told the young man, and I just, I want to go viral.
Put me on Facebook.
Put me on Twitter.
Put me on YouTube.
I get millions of hits.
People see me.
And I was doing that long before it was on Facebook.
Long, I think I was more effective back then.
You see Michelle and Mr. Hall over there, and you're letting them do that.
You see them ignoring me, ignoring us, but I don't blame you, young man,
because the black people, they're not here.
They're not here, and evidently, they don't care about you, you, or me, or us, or we.
They don't care.
And you let them see Mr. Hall continue to turn and talk to Michelle.
Well, you're supposed to hit on that.
Hey, child, you're the chairman.
You don't know if that's one of your responsibilities?
Well, maybe you don't.
Maybe you do.
Maybe all of y'all are the same, you black ones, you white ones, you Hispanic ones.
Now, Mr. Hall is still talking, and you have said a thing to him.
Now, one thing about this old big-headed white man, Mr. Burk, Osmond Burk, when he had finances, he would need somebody here.
Fake news, can you hear me?
We need somebody.
Lord, help me to hold out until a change comes.
Lord, help me to hold out until a change comes.
How long can we hold out?
Lord, help me to hold out until a...
We've got to make this change come.
We've got to do it.
Let's do it.
Please, my black brothers and sisters, overcome the legacy of slavery.
You have a mental problem.
We have a mental problem.
We have fallen in love with our enemy.
We have black faces in high places setting us out.
Setting us out.
Now, I want to go viral.
I want to get a million to make.
It doesn't do any good, Mr. Blakemore.
When the man is...
Thank you, Mr. Blakemore.
Thank you for your selection.
Next, we'll have Dennis White.
That's all right.
And our final speaker following Mr. White will be Jessica Jackson.
Committee members, I know y'all going to do a vote.
And this vote is for what's benefiting Brandon Johnson and probably the illegal aliens here
in Chicago.
So I really urge you all to vote, whatever it is in this committee, vote no on it.
But most likely, you're going to vote yes.
And if you all decide to use two things, and that's common sense and a brain, that might
help some of the citizens here in Chicago.
But every time there's a budget meeting, you don't do nothing that benefits the citizens.
You benefit the liberals that don't live here, that are white, that don't have a job, don't
have an education.
And then you turn around and vote yes.
Then when Brandon Johnson said he want to do a social media tax hike, how that's going
to work out?
Is it based off of censorship?
Is it based off of getting more money out of us?
We don't have no more money here in Chicago.
Nobody don't have no money here in Chicago.
So why doing all these unnecessary spending?
How about do something like cutting?
Couldn't the some of Brandon Johnson workers that will work out because you, nobody has
not said nothing about the education system that the kids are lacking.
Can I even do math or reading in eighth grade level?
And they come out because this so-called mayor slash social study teacher slash Haitian slash
everything else is so for doing the right thing for everybody.
And if you all just use that bit of common sense, Chicago might be a better city to live in because
you're going to tax the corporate.
What they're going to do is they're going to shut their business down, pack up and move
out.
So that's more unemployment that's going to go up.
And then if the money, if the revenue will go to what Brandon Johnson proposes, who's that?
How's that money going to get spent?
You, I mean, it's like, it's like the, the prostitute is paying the pimp.
And that's what it is because every time you have these budget meeting, money, money, money
and more money, and then you, now Brandon Johnson's not the true pimp.
We already know that he just a semi pimp.
The real pimp is the cartels right there because they pimping everybody, anybody here in the
city of Chicago.
So you all don't have to vote no on this during this committee meeting.
Thank you, Mr. White.
Our final speaker is Jessica Jackson.
Well, we got another year of zero amount of progress in the city.
The only thing that has happened over this past year is more money has been spent.
The city has been put more and more in debt.
The city of Chicago citizens need to understand that we have to get away from the Democratic
Party.
They have to understand that our current city hall members are killing this city and they're
doing financial detriment.
That's going to last for generations and generations and generations to come.
It's so sad that you all have hoodwinked so many people in this city to think that affordable
housing is the answer.
You all have sat here and watched this mayor who, like they say, is Haitian and have watched
him spend this money like this on illegals.
You all have ran this city to the ground and it's been every last one of you.
We have to get you all out of your seats.
Now, how are we going to do that?
God only knows.
But to sit here and watch people like Alderman Conway now try to present himself as some
type of honest person where he got issues with Jason Lee.
When you just sat up here as a prosecutor, you and Matt Martin have sat here.
I'm on my time.
Don't talk in the mic.
What's wrong with you?
Have presented to ourselves as some type of legal people who are sitting here ignoring
crime.
That's how the crime rates are down because you all are not reporting crime.
You're not reporting it because I've reported at least five crooked judges, Judge McGuire,
Judge Gallagher, the public administration, Louis the Apostle, Thomas Liam Webber, Leah
Jubikoski, Tina Latropoulos.
I've reported all of them.
David Feldman and the circuit court herself, the inspector general, they're not doing their
job.
When I went to Conway with it, he turned around and ran and said, don't show me that.
Don't show me that.
But he want to present himself as some honest person.
Oh, no.
We coming for your seat, too.
I understand that you rich and I understand that you're going to have money behind you.
But I'm going to let your constituents know, just like you got that noise ordinance not
to let those abortion people protest.
You was the first person to violate protesters' rights.
Don't tell me that anybody's safe.
I ain't ignore them.
I ain't ignore them.
I ain't ignore them.
He's safe for me.
Get his job.
Okay, we will take our quorum vote. Beginning, we have President Alders, Irvin, Lee, Dow, Harris,
Bill, Quinn, Lopez, Moore, O'Shea, Rodriguez, Scott, Citra Lopez, Burnett, Toliafero, Cardona, Conway, Villegas, Nugent, Vasquez, Riley, Knutson, Martin, Silverstein.
We also have non-members Chico, Gutierrez, Taylor, Tabaris, and Cruz. Did I miss anyone? Non-member Walgespeck. Anyone all accounted for? Okay.
We also will have a motion for Rule 59 participation for Alders, Mitz, Yancey, and Hatton. Is there a motion to accept?
So moved by Alderman Rodriguez. All in favor, signify by saying aye.
Any opposed? Any opinion? Chesia, I.S. Havitt, and Alders, Mitz, Yancey, and who's the last one?
Hatton shall be admitted via Rule 59.
All right, Committee of Standard Ease, while Ms. Jackson, Ms. Jackson, Ms. Jackson, we are not going to go through this.
Okay, very well. Thank you for leaving. Thank you. All right. Thank you very much.
We appreciate your time and presence, but we will not go with this type of conversation during this cycle this year.
So, again, let that be the warning.
We will not have craziness and consternation in this body and in this room.
Again, we'll stand at ease while the budget director, CFO, and comptroller join us.
We will start this morning after comments with Chair Dow.
You want to start? You're the finance chair. You want to start?
Okay, no problem. All right.
Whoever wants to start, just let me know once they come in. We'll stand at ease.
Go ahead. I'm going to sit down.
Go ahead.
How are we going about who's first and who's second? It's either seniority or usually who's here first and I was here first.
So, generally, as a point of reference, we've always led with the chairperson of the subject matter of the committee that was being done, which I did.
I said, as I asked chairperson Dow, she said she did not want to go.
I opened the floor and said, who wants to go?
Alderman Rodriguez said he wanted to go first. It's fine with me.
If you want to go first, I have no objection to that.
You are the most senior member in the body now.
I have no objection.
If he has no objection, I did ask the question.
So, you would like to go first?
First, I have no objection to that, if so, if that's your desire.
Is that what you want to do?
Okay, very well.
That's no problem.
We also recognize Alderman Mosley for purposes of...
Yeah.
Just for reference, as we move forward, since Alderman Bill brought this up, the desire is that we will move...
In an order, generally in the order of seniority at the time when people are here, when we start out.
So we start you're here. We're going to we're going in that order and then try to filter those in as they as they do come in.
And I try to keep a list of people that were here when we galvan in and we will move in that particular direction.
For the most part, we will adjust as needed. If you have something that's a person that you need to do, we'll always be flexible with that.
But that's the general sense of that. Alderman Fuentes, non-member Fuentes, we have you as well.
Anybody else has come in that I've missed? Alderman Hall, I have you. I have you, Alderman Chico.
Alderman Lawson, non-member Lawson. La Spada, I have you as well. Anybody else?
OK. All right. You may proceed, Director Guzman.
Chairman Irvin, Vice Chair Lee, members of the Committee on Budget and Government Operations, members of City Council and residents of Chicago.
Good morning. My name is Annette Guzman, and I have the privilege of serving as the city's budget director.
Thank you for the opportunity to appear before you to discuss Mayor Johnson's proposed fiscal year 2026 budget, known as the Protecting Chicago Budget.
Chicago enters this budget season at a pivotal moment. Despite continued fiscal headwinds, federal disinvestment, rising costs, and longstanding structural limits on local revenue, the city remains on solid financial footing.
Through targeted efficiency initiatives that lower the cost of government, the introduction of progressive and sustainable revenues, and a steadfast commitment to equity, this budget establishes a roadmap toward long-term structural balance while maintaining essential services for those who depend on them most.
This year, the budget engagement process began earlier than ever before, reflecting lessons from last year's feedback and our shared goal of collaboration.
In addition to beginning our public engagement roundtables a month earlier, the Office of Budget and Management met with older persons and caucuses throughout the spring and summer to discuss revenue options, efficiency opportunities, and expenditure reductions.
These conversations directly informed the balanced, equitable approach reflected in this year's Protecting Chicago Budget.
At the start of this year's budget process, the city faced a $1.189 billion projected budget gap, the largest since 2021.
That challenge was met responsibly without raising property taxes or reinstating the local grocery tax.
The solution balanced progressive, sustainable revenues with targeted savings and operational reforms to protect essential services while positioning the city for long-term structural balance.
New measures such as the community safety surcharge, online sports wagering tax, and updates to vacant building and congestion fees modernize our revenue structure by capturing growth from emerging commercial activity, helping to reduce the burden on working families.
Together, these measures are projected to generate more than $500 million in recurring revenues to sustain critical services and safeguard fiscal stability during these uncertain times.
The fiscal year 2026 budget also continues our focus on efficiency and modernization, informed by the city's first comprehensive operational review in recent memory.
Many of the early actions we're taking and have built into this budget, such as real estate consolidation, fleet and procurement modernization, special event cost recovery, and the review of administrative structures and managerial spans of control, stem from that foundational analysis.
By making the investment in these cost reduction initiatives now, we anticipate such reforms will produce both short-term and long-term savings, strengthen coordination across departments, and improve service delivery.
Equally important, this budget aligns fiscal discipline with civic responsibility.
This budget invests in the people and programs that make Chicago stronger, expanding housing options and wraparound services, such as permanently funding the city's rapid rehousing program.
It also secures mental health services through the care program and strengthens community safety through the efforts that have shown to drive crime down in our communities.
This moment demands both fiscal courage and shared purpose.
The Protecting Chicago budget is not only a plan to balance the books.
It is a commitment to protect our residents, safeguard our progress, and ensure that every dollar serves the public good.
I want to thank the team in the Office of Budget and Management, who work tirelessly every day to ensure our analysis is sound, our projections accurate, and our work transparent.
I'm joined today by First Deputy Budget Director Jonathan Ernst, Managing Deputy Budget Director for Workforce Management and Technology Kevin Murphy,
Managing Deputy Budget Director for Grants Operations Matthew Schmitz,
and Deputy Budget Budget Director for Revenue Gianni Maffeo, with the rest of the team watching upstairs.
I could not do this work without them, and I am deeply grateful for their professionalism, expertise, and dedication.
Chairman, members, thank you for your partnership and your continued stewardship of the city's finances.
I look forward to your questions and to continuing our shared work to build the safest, most affordable big city in the country.
Thank you, Director Guzman. CFO Jaworski.
Good morning, Chairman Irvin, Vice Chairman Lee, esteemed members of the City Council, my fellow Chicagoans.
I'm honored to appear before you today to present the City of Chicago's 2026 Protecting Chicago Budget and to address any questions you may have.
Last week, you all received the Mayor's proposed budget for the upcoming fiscal year.
It is a budget that reflects serious and significant challenges confronting our city.
From the threats presented by an adversarial federal administration to the longstanding weight of the largest municipal pension liabilities of any public entity in this country.
Over the last year, we have undertaken a comprehensive re-evaluation of how the city operates,
using every tool at our disposal to build a stronger financial foundation for the years ahead.
This proposal not only sets us on a path to success in the future, but delivers on our core commitments to residents today.
We will continue to protect residents by providing city services efficiently, expanding affordable housing, increasing access to mental health care,
continuing to create more opportunities for youth employment,
and achieving real progress to make our neighborhoods safer through investments in public safety.
This year's budget includes continuing support for the pension advance payment,
breaking with past practices and financing extraordinary costs head-on rather than kicking the can down the road,
and focusing on structural reforms rather than one-time fixes.
The city began making the advanced pension payments in 2023 to help stabilize our pension funds and save the city billions of dollars in the future.
The payments in this policy have led to upgrades from all four rating agencies.
It has reversed the trend of ever-worsening funded ratios for our pension funds
and allowed the funds to avoid liquidating assets to pay current benefits.
The 2023 executive order establishing the advanced payment policy directed the city to begin those payments in 2024.
The plan forecasted future casino revenues would begin to cover the cost of the advanced payments after 2026.
In reality, advanced payments began a year earlier in budget year 2023,
resulting in the assigned funds balance being fully expended this year.
We look forward to the completion of the permanent casino and the revenue we'll bring in to fund advanced payments.
Within this context, we are supporting and continuing our commitment to the advanced pension payment policy
within the constraints of this city's fiscal reality.
In 2026, our total pension contribution is over $2.7 billion,
nearly three times the amount the city contributed a decade ago.
In addition to ensuring we meet our pension obligations,
this budget also addresses the city's debt service payments.
As many of you know, the city historically passed budgets that deferred payments of our debt out into the future,
scooping and tossing liabilities to future administrations.
We are staying true to our commitment and want to highlight that this budget contains no scoop-and-toss borrowing
and no debt deferral gimmicks.
We are meeting the city's financial obligations by responsibly paying what we owe
and ensuring that future Chicagoans are not left to shoulder a higher burden than they must.
Included in our financing plan is an amount to cover a portion of the cases settled by the Department of Law
and a portion of the retroactive payments owed to the members of the Chicago Fire Department
under the recently settled collective bargaining agreement.
Unlike in years past, when extraordinary costs of disease were financed over decades,
we are spreading these costs over the next three to five years to manage them in a fiscally responsible manner.
There are additional steps we have laid out to address the city's budget deficit responsibly.
The mayor's proposal includes taxes targeted towards those with the greatest capacity to contribute fiscally to society and to our city.
These proposals mark a historic moment for the city,
one where we start to shift away from a regressive and inequitable taxing structure towards a future
where those who have benefited the most are asked to contribute a proportionate share.
They will support our police officers and firefighters, continue to drive down crime, invest in our youth, and ensure...
access to basic housing and mental health care for those who need it the most.
As the mayor has said, this approach is not fueled by animosity or malice,
but rather by a sense of shared community and responsibility.
We are budgeting for a Chicago that we can continue to be proud of and feel safe in.
As economic pressures and federal actions erode the social safety net,
families continue to be driven towards poverty,
deepening the very crises that place pressures on our local city budget.
A weak social safety net will drive up our costs for homelessness, public safety, and public health.
I should note that this is not just the city of Chicago or state of Illinois issue,
but most states have realized these economic pressures
and have modernized their tax structures to meet the moment.
They recognize the change in economic activity that needs to be taxed.
We unfortunately continue to rely almost exclusively on taxing a narrow slice
of the economic activity that Chicagoans engage in.
This, as well as the fact that our state still does not have a graduated income tax,
places our local and state coffers at risk of operating within an antiquated and regressive tax framework.
We will continue to work closely with our partners in Springfield to advocate for a modernized tax structure,
which moves Illinois into the 21st century, empowers municipalities to deliver high-quality services,
and release working-class families of the tax burden they have carried for far too long.
This budget reflects the difficult times we find ourselves in,
but it also tells the story of the tough decisions we need to make during these times.
The mayor often says that the budget is not only a financial document, but a moral document,
and I share that belief.
This budget is a statement of our values.
It states that we will protect essential services, invest in our communities,
and confront our challenges honestly rather than with tricks like deferment.
It shows that fiscal responsibility and moral responsibility are not competing priorities, but inseparable ones.
This proposal is our roadmap for stability, accountability, and fairness.
It is how we honor our commitments to residents, not just by balancing the books,
but by building a stronger and more equitable future for Chicago.
With that, I would like to thank my team for all the support that they have provided for this budget
and for the work they do all year long.
We would also not be here today without the unwavering dedication of our budget director,
Annette Guzman, who deserves a special acknowledgement for leading the city from a $1.2 billion deficit
to the balanced budget we are here to discuss today.
A side note, not in my written comments, I believe this is the largest deficit the city has ever faced
based on my research.
I also want to extend my gratitude to Chairman Urban, Vice Chair Lee, and the members of this body.
Thank you for joining us today to deliberate on the 2026 budget.
I look forward to collaborating with each of you, and I'm happy to answer any questions you may have.
Thank you, CFO Jaworski.
Comptroller Jaworski.
Good morning.
I'm Comptroller Michael Belski.
Thank you, Alderman, for participating in this very important process, a historic moment for our city,
given the fiscal conditions we're in.
Thank you, Chairman and Vice Chairwoman Lee, for giving us this opportunity.
Thank you for the opportunity to appear before you to discuss the FY26 budget.
What we do at the Department of Finance supports every department and city government,
and therefore all of your constituencies.
In my short time here, I can confidently say we punch above our weight to the credit of the intelligent and hardworking members of the Department of Finance.
When I stood before you in July, I laid out a bold vision for the Department of Finance, one rooted in modernization, equity, and accountability.
We committed to harnessing technology to transform four functions, revenue collection, payroll, traffic enforcement, vendor payments, and financial reporting.
Today, I'm proud to share how those commitments are driving real change across our city.
Let's begin with traffic enforcement.
Our mission is clear.
Protect Chicagoans from preventable injuries and fatalities and reshape behaviors that put lives at risk.
But safety must go hand-in-hand with fairness.
That's why we're embedding equity into every layer of enforcement, ensuring deployment is balanced across communities
and that fines reflect an individual's ability to pay.
In November of 2024, we launched the Smart Streets Pilot Program in partnership with CDOT.
The results have been transformative.
Citations for bus and bike lane violations surged by 180 percent, with over 30,000 warnings and 8,000 violations issued.
This isn't just about numbers.
It's about safer streets for cyclists and faster, more reliable transit for everyone.
Building on this momentum, we will be expanding enforcement this week to include expired meter violations to increase efficiency on our streets.
In addition, we have partnered with the CTA, who now has eight buses equipped with smart cameras.
These mobile units are also targeting bus stop violations.
Thanks to your feedback and the program's success, the 2026 budget will expand the pilot's geographic footprint to ensure more neighborhoods will benefit from safer, smarter streets.
You spoke and we listened.
The budget adds 25 new parking enforcement aids to our current team of 100, boosting our capacity to respond quickly and fairly.
We are also investing in talent.
Our tax auditors recover an average of $2.6 million each from individuals and businesses who are not in compliance with the municipal tax codes we enforce.
Filling these vacancies isn't just smart, but it's essential to uphold our municipal tax code and fund the services our residents rely on.
And we're not stopping there.
DOF is integrating complaints from 311, accident reports, meter usage, and curb regulations to guide enforcement decisions.
This data-driven approach ensures our resources are deployed equitably and effectively where they're needed most.
In 2025, we launched two groundbreaking financial relief programs to shield residents from the crushing burden of fines and fees.
First is the Vehicle Debt Relief Program.
We gave over 100,000 motorists a chance to pay only the original fine, waiving penalties.
This saved Chicagoans $16.4 million.
The Leak Relief Program, running through 2026, offers substantial support to residents facing absorbent water bills due to underground leaks.
We're actively exploring ways to expand eligibility to protect even more households from water debt.
But with progress comes responsibility.
We're seeing a troubling rise in abuse, particularly from individuals outside of city limits.
That's why DOF is working closely with our law department to pursue every legal avenue to hold bad actors accountable and strengthen our collection strategies.
Finally, the Protecting Chicago budget is about more than enforcement.
It's about partnership.
We've slashed payment turnaround times from seven days to just five, ensuring our vendors and not-for-profits are paid swiftly
and can continue delivering vital services to our communities.
I want, again, to thank you for this opportunity.
I also want to thank my committed team who continuously strive to improve our services to the residents and taxpayers of the City of Chicago.
I appreciate your time, and I'm happy to answer any questions.
I do want to add a postscript to my two colleagues to the left.
I've worked with a lot of major cities in the country, being at a rating agency,
and I can tell you I have not seen more intelligent, capable, and hardworking people with a grasp on the numbers.
And I would say because of that, you should have a lot of confidence in this budget and how it was constructed.
Mr. Chairman, I just want to recognize my team here.
I have Chuck Billows in charge of parking enforcement, Elaine Herman, who is in charge of all revenue collection,
Alexis Long, who's in charge of all of our risk management and policy area,
and then also is, who is, I can't see everybody back there, Karen Koka,
who's a deputy in charge of all of our legislative affairs,
and Brian Carlson, a deputy in charge of revenue and tax, tax auditing.
So I, again, thank all of them for their hard work in preparing us
and for doing the good work of our department every day.
Thank you, Comptroller.
Before we begin, we'll recognize all the...
Ms. Pozzato joined us, as well as Alderman Robinson.
Any others that have come in?
Okay.
Mr. Dean, you're on.
Good morning, everyone.
Good morning.
We're going to just jump right on in because I got quite a few questions.
Let's start off with our GOCFO.
You said that we should be looking for a property tax increase a couple of months ago.
What changed?
This budget really reflects the realities of where we're at today.
One of the challenges that our residents are facing is that a number of them are facing reassessment.
We've had conversations with the assessor's office, the Board of Reviews, and the Board of Review.
And it appears, though, of course, we haven't seen the final bills, that certain parts of the city are going to experience significant increases due to that process.
We don't think it's an appropriate time to have a sales tax, especially a property tax increase, when we are still unclear as to how that's going to impact our residents.
Okay.
Also, you stated last year that if we did not make the advance full pension payment, that we would potentially be downgraded.
Now that you're proposing we don't do that, are we going to be downgraded?
Well, we've really constructed this budget in a way that we think mitigates the risk of a downgrade.
We've focused on managing within the constraints we have to still prioritize very responsible budgeting.
Again, this is the first year we don't have a revenue stream dedicated to the pension advance, but we are still prioritizing it by taking corporate fund monies to make the partial payment.
You know, we're implementing a lot of structural solutions in this budget that will pay off in the long term.
We also are implementing solutions in this budget year that are not showing up in the 2026 numbers because they'll show up in 2027 and 2028,
implementing a number of the programs that have been recommended by the working group in EY.
We think all those things –
Jill, I just asked, do you think we're going to be downgraded?
We cannot fully know what will happen.
Okay, but last year you were very confident that we would not be downgraded, and we were.
And so now we don't know whether or not we're going to be downgraded or upgraded or stay the same?
Yeah, I don't remember expressing that level of confidence last year.
Well, you definitely stated that you don't think we will be downgraded.
Have you consulted with the credit-rated agencies on this budget?
The credit rating agencies under federal guidelines are actually not allowed to give you a back-and-forth consultation process any longer.
They used to be allowed, and they are not anymore.
We are briefing all of them, though, and they have all received the budget and have submitted questions.
Okay.
Thank you.
All right, moving on to our budget director.
How much out of this billion-dollar TIF sweep is CPS getting?
Based on an estimate of the billion dollars, TPS will receive around $554 million.
Okay.
And how much out of that $550-whatever million are we getting back from CPS, from an intergovernmental agreement?
The intergovernmental agreement that is with CPS has them providing the city $175 million.
Have they voted on that yet?
I'm not in charge of the Board of Education, but I do believe that that is before the board, or will be soon.
But we're not confident that they would vote on sending us that money, but we're counting on it in this budget?
No.
So this budget, the 2026 budget, does not rely on CPS making a reimbursement to us.
The $175 million is related to our current year budget, 2025.
Okay.
So we're not looking to get $175 million this year for this budget.
That's right.
For 2026, it does not contemplate a reimbursement from CPS.
Okay.
So basically, we're sweeping our TIFs basically to have a big, beautiful bailout for CPS?
Well, one, we follow our state law as it relates to our TIFs that require us to sweep any unaccounted for or unallocated dollars.
But I think what you'll find is that since 2019, our TIFs have grown substantially by over $2 billion and are anticipated to grow by even more.
And so at a time when all of our organizations, all of our agencies are seeing federal cuts and there's uncertainty around support from the state,
I think that this is funding that is sorely needed to support critical services, including a school district that is facing traumatic cuts from the Department of Education.
The $30 million social media tax, are you confident we have legal standings to pass that and collect it?
In our discussions with the Department of Law, they feel that we have a strong case that through our amusement tax, this is a tax that the city can levy on social media companies.
Anybody else collecting it?
It's the first in the nation.
I think that this shows that Chicago, as always, is a leader.
Okay.
But we don't know if it will withstand a court challenge.
I think that with any tax, especially a new tax, there is a potential likelihood that someone will challenge,
but that doesn't mean that the challenge will succeed.
All right.
Last year and just as early as last month, you stated that the money was there for the FIRE contract.
Now we're borrowing the money.
What happened?
And where did it go?
And why did we spend it?
So a portion is being financed, not the entirety of the contract for FIRE.
So last year, there are a number of things that have changed in our budget that were not anticipated and that were put in our forecast that increased the city's ongoing liabilities.
One were over $100 million in new benefit costs that did not exist last year.
We also have seen over the last several years, our departments, because the new contracts have been put in place for all of our unions,
we have seen the cost of their overtime double and sometimes triple.
And so this year's budget accounts for an increase in overtime that's necessary to keep pace with the cost of that overtime.
So those are two things that didn't exist.
So the city has been budgeting for the FIRE, for the eventual resolution of the contract in the budget every single year in anticipation that it would be resolved.
It finally has been resolved to the credit of city council.
And so what we have done is taking the extraordinary portion of that, the non-recurring cost portion,
and amidst all of the increases in this budget, have put financing to support that one piece.
How much was spent and how much are we borrowing?
So the borrowing portion is $166 million, which reflects the salary and wage portion of the retro payment.
Okay, so the retro payment, we're borrowing because we spent it.
What did we spend it on?
We haven't spent it.
We have seen our costs grow in the budget.
It hasn't grown that much.
It's grown significantly.
Okay, well, how much did you set aside last year and the prior year?
So roughly $250 to $280 million was in last year's budget for the FIRE contract.
That, again, another year has passed, which means that it did grow and compound for another year of retro.
But, again, over $200 million of new costs have come into this budget that were not there last year, other than the FIRE contract.
All right.
So upon sweeping this large amount of TIF money, how is that going to affect Department of Housing and DPD with community development?
Because we all know that, you know, TIF is used for community development.
And, you know, by you sweeping these TIFs, you know, you all came and sold us on the big bond, $1.2 billion bond, as another tool.
Now you're taking a tool out of the toolbox and throwing it away where it's not an added tool anymore.
So how much consultation has gone in with DPD and DOH on this TIF sweep?
We have been in consultation with both DPD and DOH all year, looking at the anticipated projects as well as projects that are no longer viable within the TIFs.
No active projects, no anticipated projects that were in the pipeline have been discontinued for this TIFs sweep.
But I want to harken back to something that I said earlier, which is that our TIF fund reserve is at an all-time high.
In 2019, that was at $1.7 billion.
As of last year, that's at $3.5 billion.
At the same time, the expenditures in our TIFs do not come to nearly that amount year over year.
And so...
So there is and has been excess in our TIF fund balance for quite some time.
And by law, we are required to sweep all that's unaccounted.
Knowing we have that amount of TIF money, we should be exploding our communities with development instead of taking that money away.
I mean, we've swept TIF money for the last 11 years, and that is a tool to create jobs and opportunities in the communities.
And we're constantly taking that away.
Hey, we're not going to grow this city by taxing everybody.
We're not going to grow the city by taking TIF money away.
We're not going to grow this city, you know, as far as, you know, the direction that we're going.
And we're not on solid ground.
How are we on solid ground if we're sweeping TIF, raising fines and fees, but we don't have any cuts and efficiencies whatsoever in this budget?
And I will close with this, Mr. Chairman, before I go to round two.
I would like a list of every TIF that is being swept, the amount of TIF that's being swept, and what ward is being swept out of that TIF, if we can provide that through the air.
It's on your table.
We got that?
Okay.
Thank you.
Can I respond?
No, yes, you can.
So, as I want to hearken back to state law, but also the explosive growth in our TIFs over the last just four years at the same time that the number of TIFs continue to decline.
So, in 2019, we had 140 TIFs.
We now have 108, yet our TIF balances are $3.5 billion, and every year another $1.34 billion is added to the TIF.
So, every year, because of the growth of the property values within the TIF districts, revenues are increasing every single year to support the work of economic development as well as infrastructure in our wards.
In addition to that, TIF is one tool.
DPD also has the Chicago Recovery Bond, where the Community Development Grant sits, and they have about $60 million that has been unallocated in that.
And they also have the Housing and Economic Development Bond, which actually broadens their ability to do more economic development across the city beyond the TIF districts.
Madam Director, you know, I don't know if you believe the stuff that you're selling in this budget.
And, you know, this is all smoke and mirrors, and I think once the smoke clears, I think everybody in this body will see that this is a horrible budget, and it needs to be changed.
And, you know, I'm committed to helping change it.
Thank you, Mr. Chairman.
Thank you.
We appreciate your assistance.
All right.
All right.
So, you want to sign up for round two, you said?
Okay.
All right.
All right.
Before we start, again, everybody on the initial go has 10 minutes, and then, if need be, you can sign up for a second round of questions.
Next, we'll have Chair Harris, do you have any questions?
We'll proceed.
Followed by Vice Chair Lee.
Good morning.
Thank you, Mr. Chairman.
And good morning, everybody.
I'm kind of alarmed about the sweep of the TIF because it doesn't account for future projects.
So, with this kind of drastic sweep of TIF dollars, you now say to communities with me that don't have, like, $40 or $50 million in a TIF that we can't do future projecting.
So, I hear that there's money sitting, but it takes so long in the city of Chicago to bring a project to the table for people to get comfortable enough to even have the TIF asked.
So, if we sweep the TIFs in communities like mine, then my future projects are just dead.
They're dead on arrival.
And so, with so many other Phase 2 projects that need to happen in my ward and Phase 1s that will happen out of some of these TIFs, it scares me to death that these projects have the potential to be taken off the table because they haven't really gone through a full DPD process.
So, I like to know how we got to the point where we picked some of these TIFs because I was under the impression that there's so many small amounts in here, and we've never swept small amounts.
And so, I'm concerned as a person who has TIFs that you're going to sweep away, and actually, maybe unintentionally or intentionally, we lose projecting in communities of color.
So, can we kind of talk to how we got to the point where we're doing this kind of massive sweep?
And secondly, why we weren't even told, and the first thing I get hit with is what's on the paper.
Not blaming you, but whoever put this document together, I think that every alderman has the right to know that their TIFs were going to be swept before they got here today.
So, you're not hitting the face with, bam, here's my TIF, money gone.
So, thank you for your question.
The manner in which we calculated the TIF surplus is the same manner in which we calculated every single year.
If you see a small amount in a specific TIF being swept, that's because it's the unallocated portion and the rest is encumbered with projects.
And so, again, we did not disencumber or delete a project or terminate a project to get to this TIF surplus.
And by law, we are required to sweep anything that's not encumbered for a project.
There are exclusions to the TIF sweep that are documented within not only our policy, but within our budget book.
And so, we don't sweep from transit TIFs.
We don't sweep from TIFs that are created for a very designated purpose, like an RDA, specific RDA.
And we don't sweep from neighborhood TIFs that are created with the designation in the state law of a neighborhood TIF.
For all of the other TIFs, as we wrote to you in the letter from me, we sweep 100% from, quote, unquote, downtown districts.
And we, for the rest of the remaining TIFs, we use a formula that we apply to the different levels of funding that are unallocated in that TIF to allow for there to be at least seed funding for the next year as the new revenues for that TIF come in from the property tax.
So, as I mentioned, we are not sweeping our entire fund balance.
This is out of the $3.4 billion that sits in our TIF districts right now and sits, frankly, in our bank account.
This is the unallocated portion of the TIFs.
So, as I mentioned, 80% of our TIFs are seeing growth, 83% actually, of our 108 TIFs are seeing growth and increased revenues year over year.
And I think two districts are seeing flat growth.
And so, every single year, the EAV within our TIF districts continues to grow above and beyond what was there before.
And so, not only will you see a replenishment of your TIFs for not only projects next year, but future projects, there's still significant balances within all of our TIF districts to support existing and future projects.
Okay.
Again, I want to express that I'm concerned about future projects.
I trust the paperwork that you all have not taken money there for income.
I trust that.
I don't have any problem with that.
I'm concerned that in communities of color where these TIFs just, these are like lifelines to us.
And to take money out of them and not know what aldermen are working.
So, we can't even give you a projection or we haven't been asked by DPD or the city what our projected projects are.
And to say that you left future money in there without having a conversation, I don't know.
If you got the crystal ball, y'all need to tell me so I don't know where my projects are so that I'll be happy about it.
But I am just not very happy about the mass reaping of the TIFs, not just in my ward, but across black wards.
But I just think that, again, for me, they're lifelines in my project and world.
So, and we talked about that.
Can we go to something else?
There are certain funds that are really important to me.
The demo fund for the building department.
So, we talk about why that has experienced a loss of funding.
Did the funding go down for demo?
No, it's remained consistent.
What's the, how much is still in it?
It's $10 million a year.
Okay.
That's really important to me.
Live in a ward where I got so much bad stuff lately that needs to be demoed.
And there were growth in some of the city departments like police and fire and OMC.
Just for the record, just tell me why.
Is it because of the increased costs in the contract?
Yeah. So I think it's a combination of things, because if you look at CPD, for instance, their total FTE count actually went down by 44.
But they're they're the highest paid employees in the city of Chicago, both from a salary and wage perspective, but also benefit perspective.
We also right size CPD, OEMC, CFD and frankly, all departments over time, because as you rightfully have noted and said to us for a couple of years now, you know, the amount of the OT budget for our departments isn't consistent with the amount that they're spending.
And so we did a pretty deep analysis this year to understand trends, to understand how they were using the overtime, if it was necessary over time and have been working with our departments over the course of this year to actually limit the overtime to what's absolutely necessary.
And so if you were to look at the hours that each of the departments actually incurs, it's actually gone down year over year, especially CPD.
I think they're like a million hours less than they were in 2023.
The cost is more expensive, despite the fact that they're incurring less hours of overtime.
So for CPD's budget, it's actually not that large of an increase year over year, but it's because, you know, we're in the third year of their contract, which is compounding, and we right size their overtime.
And so will this year, will we be able to correctly kind of say that we feel that they'll be fiscally, they'll be fine with what we put in the budget for them?
We've had conversations with CPD and the measures that they're putting in place, continuing to curb their overtime usage.
I think there's two things that we're very focused on with CPD this year, and we do have an ordinance that's coming before you that will tap their overtime.
One is, you know, continuing to work with them to civilianize their office, which drives down costs.
The OPSA medical audit, which I believe all of you received through the chairman, which really will get officers who have been on layup back into active use, which will drive down the cost of overtime.
And the third one is working with them to recover the cost of special events.
So those are all three things that really do drive up their costs, and those are things that we're really focused on with them.
And we've had conversations with them about we basically doubled their overtime budget and have discussed with them about living within that budget for 2026.
Well, I thank you, but again, I want us to, and we'll have a real offline discussion, maybe with the Department of Planning and yourself about how the TIF, because again, that's like a real sore spot for me.
So thank you.
Thank you, Mr. Chairman.
Thank you, Chairman Harris.
Vice Chair, I apologize.
I told when we initially started that Alderman Rodriguez would go first.
Now he's been booted to third.
As it relates to TIF, I do want to make a comment.
The point that Chair Harris made as it relates to where these dollars are coming from, approximately 70% of these dollars are coming out of areas where socially, economically disadvantaged areas.
And quite frankly, what I would like to see from CPS and the other taxing bodies is what are their plans for these dollars?
I mean, these are significant dollars.
Even SSAs will see increases in funding.
So I do believe that we need to see a plan for that.
And one thing that I will say here today, and I got to believe that many members of council agree, this budget will not leave this committee without a signed intergovernmental agreement from Chicago Public Schools relating to their pension obligations, previous and post to us.
I think we must have that in order for us to move on anything, to move forward on this budget process.
So, again, hopefully somebody on their end is listening.
But, again, we will not advance from this committee without such documentation from them that's enforceable, fully ready for us to move forward on as it relates to anything going towards CPS.
So, Alderman Rodriguez, your next one, I want to recognize Alderman Mitchell for the purposes of quorum.
Alderman Rodriguez.
Thank you, Mr. Chair.
Comptroller Belsky, CFO Jaworski, and Budget Director Guzman.
I just want to thank you all for your diligence in putting this together.
I know each and every one of you has been extremely responsive to me, whether it being in the neighborhood with specific issues, whether it be giving me a timeline on the yacht tax, or responding to all our questions in the briefing.
I really appreciate all that's been done to get us to here, but there's a lot more to do.
So, with that said, I do have about three or four areas of questioning.
I'll try to get through my 10 minutes.
So, on the social media tax, one of my questions was, where is that?
So, it sounds like it's a part of the amusement tax.
Is that right?
That's where it shows up?
Yes, it'll be its own section within the code, but it is a part of the amusement tax.
Okay.
And then, what would be the start date on collections of that tax?
And you alluded to feeling, or the law department, who exactly feels confident that we're able to implement this?
Let me not assume it.
The Department of Law.
We have received analysis from the Department of Law related to our position on this particular tax.
And when is the intention, what date would, given due passage here in its current form, what date would that collection commence?
January 1st.
Okay, very good.
The next set of my questions are really related to my position as chair of the Workforce Development Committee.
I truly believe that we cannot balance this budget on the backs of working people, and particularly those working people who are employed by the city of Chicago and city residents.
For every individual that is a part of our workforce, one less means one more individual less paying into our pension system.
So, I know we're quite clear that I could not support a budget that's balanced on the backs of our workforce.
With that said, I'd like to know from the number of positions lost, what is due to ARPA funds being cut versus Trump cuts?
Yes, and so we can break that down in more detail for you, but there's definitely some very direct cuts from the Trump administration.
The first is impacting and most importantly impacting our public safety offices.
So, our UASI grant, which supports and funds a number of equipment and critical public safety infrastructure for fire, CPD, and OEMC, is seeing a massive cut in 2026.
We are in court right now, so I can't talk a lot about it, but it went from around, I believe, $60 million to about $9 million for the city of Chicago.
That's a significant decline for those departments.
We're also anticipating cuts to Medicaid, and that is important because it supports the ambulatory services provided by the fire department, and that's how we recover for the services that they provide.
As I keep, as I've said many times, I don't anticipate people will stop calling 911 for ambulatory services, but will we be able to actually get reimbursed for those services?
It also, Medicaid also supports other programming that we were looking to extend in CDPH related to family supports.
And so, those are real direct cuts.
We are obviously seeing the expiration of ARPA in 2026, and very little is actually funded on ARPA in 2026.
It's the last bit.
It's about $24 million supporting mostly the closeout of the grant, so grant administrators who are working to finalize the documentation to the Treasury.
It is supporting for one more year the CARE program.
It will offset the costs that are currently in the corporate budget and a couple of other smaller programming, but that is all really finalizing those programs and closing them out.
And it's my understanding, the CARE program is very important to, I'm assuming all of City Council, very, very important to a number of people.
I also am understanding that that funding structure would then be shifted on to this social media tax that is being proposed here.
Post-2026, when the ARPA dollars are final, that is a sustainable source for not only the CARE program, but for expansions of our mental health initiatives.
And then back to these ARPA and Trump cuts, how many of those positions are being moved to other funding sources?
How many are being deleted completely or eliminated, I should say?
So, the ARPA position...
So there has been a lot of movement in ARPA positions over the year as programs have closed out through CDPH.
As they're doing that work, they have done the process where people can bid into other positions on other grants or on the corporate fund that exists.
And that work continues on ARPA. It'll go from one hundred and eighteen positions to eight or to four in 2026.
I don't have it in front of me right now as to how many switch to other grants and how many move to the corporate fund.
But I can get that to you through the chair. Excellent.
And then will there be any services that the city provides that would be eliminated via these cuts on ARPA?
Yes. And or the you know, what's being impacted by the federal government?
So, you know, as I said, UASI just means that we will not be able to have the funding that supports a lot of the equipment that we regularly either service or purchase each year.
So that's a significant loss to the city of Chicago, given our position as a global city that has two major airports.
So that's one. There are a lot of other grants that, you know, the federal government has tried and we're in court defending against our FEMA grants are grants that CFD perceives securing the city type grants.
CDPH has some grants that are at threat by the federal government that we're also in court defending against.
So for the I'd say, by and large, the programming that's going away is the programming that was expanded during the COVID-19 pandemic that was meant to help recover from the from the pandemic.
And so you're seeing a retrenchment back to pre pandemic levels for a lot of the programs that existed prior to COVID-19, whereas some of the other programs that were created in the in the midst of the pandemic to respond to the pandemic are the ones that are expiring.
And what you said earlier, as far as through the chair, I'm assuming that would also basically give us an understanding of how many city positions are being absorbed via these cuts into the corporate budget, right?
Some of them are in the community safety fund, so like GBV, youth employment.
OK, there's some things in other operating budgets and some other grants that are more that will continue beyond 2026.
The only thing that is from ARPA that is moving into the corporate fund is the permanence of the rapid rehousing program.
So that's fully funded in corporate going forward.
I'm sure I'll have a follow up once we get through the chair and we'll talk offline.
A couple other questions in the finance general category.
There's a contracting and delegate agency that we're budgeting here.
Is so is is that under a parent department or.
So the contracting and delegate agencies in the community safety fund.
Yes.
So the city, along with its partners at the state and the county, as well as private philanthropy, are working on sort of a larger, broader focus on CVI.
And so that is the dollars that will be used to support sort of that collective plan towards community violence reduction.
OK, so then the delegate agencies are ones in which we've approved already.
We haven't approved.
So that'll be a part of a process of once the plan is finalized.
So would it be approved or renewal?
This is the community safety fund you're talking about.
It hasn't been those those agencies haven't been identified yet.
We haven't gone through the RFP process for them yet.
OK, I'll have more questions on that.
And then just in my final minute, just a couple of through the chair requests that I could probably put in writing as well.
So, again, just want to know who's included and excluded in the hiring freeze.
I believe you guys have a slide on that so we can get that through the chair.
This may be for deep public health, but just thinking about the care team position count and staffing plan.
In the briefing, we talked about the per capita number of CPD officers.
I like that also through through the chair.
And then finally, we talked about having an offline conversation on the investigators and procurement, those field analysts.
Yes, I'll give you a vote on that.
You can take it behind chambers.
Very good.
Thanks, Terry.
All right.
I want to recognize Alderman Napolitano, who has joined us, as well as non-members Gardner and Manna Hoppenworth.
Anybody else?
OK, cool.
All right.
Vice Chair Lee, followed by Alderman Riley.
Thank you, Chair.
Good morning, Budget Director, CFO, and Comptroller, for all being here and your teams.
I know you guys have been working very hard on this budget.
And all year round.
So I appreciate the work that went into it.
I'm going to sort of pick up where my colleague, Alderman Harris, Chair Harris, left off around TIFs.
I was pretty shocked at the number.
And I get that we are legally obligated to surplus anything that's unencumbered.
We just haven't done it to this extent previously.
And to not have had the conversations with us at the ward level, at the aldermanic level, was very off-putting at the end of the day.
I have projects that are not currently encumbered yet but have been in the works for several years.
And because, as we said, it takes so long to get projects off the ground, oftentimes what we're doing as alder people is we're sort of saving up for the projects we know we have coming.
And there was no conversation about what we have coming up.
I have a field house for Donovan Park that is in the stage now where we're waiting for the Park District to actually contract an engineer and a designer to give us what the cost is going to be.
They've given me some cost estimates, but now that TIF is going to be completely swept down to, like, a couple million bucks.
And I'm very concerned about the delays, further delays, that's going to cause in development in these wards.
So, you know, I fully anticipate we're going to have more conversations about that amount.
I understand that we have been using TIFs in this way.
I worry about what that's going to mean in subsequent years.
I know, you know, $3 billion and a surplus, it is a huge amount of money.
And that's not to say that we haven't approved these surpluses, but this came as quite a shock.
I'm also part of the Pilsen Industrial TIF that, you know, I know we have tons of plans to fund things like affordable housing.
That is also going to be taken down to a couple million bucks.
And it's a healthy TIF.
It's going to regenerate itself, I know.
But it's the delays that I believe that that's going to cause that have ripple effects.
We haven't talked about the ripple effects of all that, not just the impact to our communities,
but the impact to jobs at the end of the day for these construction projects that are going to be further delayed.
So, you know, it's more of a comment than a question.
And the question to you is really, you know, where are we going to have the opportunity to come back and negotiate some of this, frankly,
because I think I speak for many of my colleagues who have highly impacted TIFs here,
that we're not going to be okay with exactly what's being suggested for these surpluses.
If that's a separate meeting that we can have, and I would appreciate that with the Department of Planning and Development,
because what I'd like to know, and I don't know if this is something that DPD can get us through the chair,
but I'd like to see between CPS and Chicago Park District, what projects are in the queue, not encumbered yet,
not to the point where they've gone through the TIC, but we're already in the queue,
and how that's going to be impacted by these suggested surpluses.
That can definitely get you that.
Just one thing to note is, you know, CPS and Park District are recipients of the TIF surplus, right?
Please understand.
But we have projects that are in the queue, and there's no guarantee that those funds are going to be used for those projects
that were already earmarked in the communities where these TIFs are.
I 100% understand that the Park District and CPS will benefit from this, from getting their share of the funds back.
But, again, the TIFs as they're set up and the things that we have going on in each of our wards
are already beginning to be earmarked.
Whether or not it was technically encumbered yet, many of them are not.
But we all have plans.
We all have plans, and that's what I'm trying to get at.
Like, we haven't seen that impact, and I would like to see that.
I'll switch gears because I know I've got limited time here.
On the CPS, and I think you addressed it earlier, and I may have just missed it.
We have a shortfall in this year based on the CPS nonpayment of the pension payment.
How are we covering that, or what is our plan for that?
I know it's not the 26 budget, but I just want to get through 25 first, too.
Yeah, no, that's a great question.
So the $552 million TIF surplus that goes back to CPS, we are currently – they have
an IGA in front of them, in front of their board, for $175 million of that to come back
to the city of Chicago within our fiscal year 2025, which would erase the deficit that we
forecasted as part of the 2026 budget forecast.
So because of their fiscal year and our fiscal year, we're able to do that.
So – and this 26 budget that's before us now does not include a pension payment.
And this 27 budgetally is a high vision of the financing payment code, which is about the
um, from CPS. That's correct. Okay. Um, all right. Uh, I'll move on. Um,
on the, I, one of the things that, uh, is in the budget currently is a hiring freeze. Can we
talk about how much, um, how much the city's forecasting the city will save by implementing
this hiring freeze? Um, around $50 million. $50 million. And can you talk a little bit more
about how the hiring freeze is going to be executed in practice? Which position, which
positions are exempt from the freeze? Um, and then what happens when vacancies naturally
occur? Yes. So, um, the positions that are exempted, so we call them categories, um, categories
of positions that are exempted from the hiring freeze include, uh, revenue generation, revenue
generating positions. Uh, so for instance, Mike Belsky, the department of finance got 25 additional
parking enforcement aides. Uh, those are exempted, right? Things like that are public safety
positions, fire, police, emergency management, um, legislative positions. So city council,
um, elections. We have a pretty critical election coming up next year. Um, and they're already
gearing up for that, uh, positions that are related to legal obligations. So, um, ones that
we have to do because of a collective bargaining agreement or consent decree, um, positions, um,
IT, um, a lot of the cost saving initiatives that we have noted, um, are part of this budget are going
to, um, depend upon a fully staffed and, and, um, and, uh, fully engaged IT department, um, mental
health positions, uh, let's let it, those positions that will help us drive down the cost of external
counsel, uh, as well as, um, positions like ward superintendents. And then in these non-exempt
categories, in the non-exempt categories, what happens when vacancies naturally occur?
Um, so they'll be a part of the evaluation process, um, as we are doing the work with DHR and DLL,
looking at spans of control layers within departments, those will each, um, be reviewed
individually. Um, attrition is not included within the cost savings that we are anticipating for
2026. So, um, you know, naturally we would expect a lot of those to be filled, um, because,
you know, right now the city is at a deficit, meaning that our workforce continues to go down
year over year. Um, and so we anticipate that those will be filled, but we will be reviewing them
in the context that we are just generally looking at our, our, our, our spans of control and layers.
Um, I'm not sure that you can answer this question. This might be more of like an HR question,
but I'm wondering, um, having not necessarily dug into all of the vacancies that we've had,
um, throughout the year this year, did we do any analysis on, um, why we had whatever the number
of vacancies were in, let's just say, I had a conversation with, uh, with, uh, Dr. Ige just the
other day about the sanitarian, uh, position. We have 12 of those positions, uh, that are still
currently vacant and they've been able to maybe hire two in the last year. So, you know,
in those, and I know that one's, let's say it's revenue generating because they've, they
generate fines and fees, but if it wasn't, are we doing an analysis of, um, the positions
that we, we really do just need to keep, even if they are not generating revenue, but, uh,
for minimum sort of levels of service. I'm just wondering if that sort of analysis was conducted
as well. Um, yes, we did that as part of, you know, getting to the departmental savings. We've
worked with all of our departments to understand, you know, what impact, um, would have either if
we laid off people or if we reduced vacancies, um, and then ultimately, uh, through the hiring
freeze. So, you know, we will, as positions come up throughout the year, we will have those
conversations continuously with our departments. Um, you know, some, some positions, and you can look
at the data and see this, some positions are just notoriously difficult to hire into.
Yep. Um, and we'll have more questions for HR on that. I'm not going to put you through that here.
Um, can we talk about, um, the, the head tax a bit? Um, I'm sure many more questions are going
to be asked about this, but how, what do we anticipate the impact to, to business is going to
be? I know, you know, the downtown's really just starting to bounce back now, and I'm, I'm hard
to think that adding additional expense onto corporations is not going to make us all that
more attractive to bringing in new businesses, let alone those that might be considering moves to
places outside the city. And then we're going to dig into this more in terms of just how that's
going to be implemented and what, what that, um, who that's going to include. And if you can provide
through the chair, um, a list of the companies currently that you anticipate is going to be part
of that 3% of all companies, um, and the total number of employees, because I know 3% of the
businesses sounds like a small number of businesses. Sure. It's a small number of businesses, but the
number of employees, if we did the math backwards, just crudely, um, I believe it's closer to 400,000
employees. Um, so, you know, we'd like to, to see that which companies that's going to include
and that'll take around to later. We have time for it. Okay. Cheda. Yeah. Point of information on the
request that the Alderman Lee just made. When can we get that list? Commissioner, I've asked for that
list last week. Um, I apologize for the delay in getting that to you. Um, I will check in to
understand the timing on that and let you know. Thank you. Thank you. Was that all? Okay. All right.
Um, Alderman Riley followed by Quinn, you have a question? Oh, follow by Alderman Quinn. You have
questions? Thank, uh, thank you chairman. And, uh, good morning to the panel. Um, I guess I'll,
I'll start with, uh, you director, uh, Guzman. Um, so a couple of people have asked about this. I
just want to make sure I understand it. Um, you're projecting more than $30 million from a new tax on
social media companies, um, that would be invested in mental health services. Um, you say you've
admitted that we would be the first, um, in the nation to, to do this. Um, how confident are we
of the city's legal standing to levy that tax? Um, based on our conversations with the department
of law, we feel very confident that we have the legal standing to levy this tax. Okay. Have you
gotten any opinion from outside counsel to help support that idea? Um, I don't know if, uh, DOL,
um, uh, relied on outside counsel, but I rely on the department of law. I can't speak to how they
bring that up when the law department's in front of us. Um, I bet to be hard pressed to say that they
have, um, you know, you, you highlight in your, in your budget address that you're balancing the
2026 budget with stable revenue streams yet, as has been mentioned before, this is being modeled
on surplusing roughly a billion dollars in TIF, which is a, a one-time fix. How does that square up?
Um, I, the budget is balanced. Um, I think that as I mentioned before in my same address,
that this is a roadmap to structural balance for the city. Um, the city didn't get here
overnight. Um, in fact, this has been decades in the making and the city won't get out of it overnight.
Um, and you know, given our discussions last year regarding the, the wastefulness of the former
vice mayor getting this unprecedented $400,000 on staff budget, um, I'm happy to see that that line
item is, is gone from this year's proposal. So thank you for that. Um, but where is that money
going? Into your wards. Now, is it going into our wards or is it going to the other chairman of the
various committees that exist? It went to your ward budgets. And are we seeing an increase in
committee budgets for, uh, the various chairs as well? Uh, there were not any increases to committee
budgets? None. Um, and I also wanted to take a moment to congratulate you on your, your 8.29%
raise that you, that you have in the proposed 2026 budget. Um, I mentioned this at a time when
we're contemplating a $21 per employee per month head tax, um, and facing down a $1.2 billion budget
deficit. It begs the question, how many non-union city employees will be receiving raises in the
2026 proposed budget? The non-union employees get COLAs. Um, they are 3%, um, and they are actually
applied at mid-year. So they don't even get the entire year. Um, in addition, um, our union employees
under, uh, contracts are getting between three to 5% increases. Um, and city council also by
statute receives a, uh, increase. And what is the COLA? What is the actual percent? Uh, it's a CPI
based. Um, I believe it's 3%, but I'll get you the exact percentage. So where, so where does the 8%
raise that you're scheduled to receive? What's that, that based on? It's based on.
Salary compression.
Sorry?
It's based on salary compression.
Salary compression.
Through the chair, if you could get us a list of all of the positions that are scheduled to receive.
Salary increases that are non-union represented, please.
I have a question for – a couple questions for our CFO.
Good morning, Ms. Jaworski.
One year ago, right around this time, you came before this body, and you were adamant.
And actually, I agreed with you a million percent that anything less than a full payment of the pension supplement would result in a downgrade from credit rating agencies.
And I backed you up on that, and I praised you for being truthful.
Now, a year later, with the city budget deficit much, much worse, and numerous revenue sources have been taken off the table by your boss, the mayor,
you're now before us defending a drastically reduced supplemental pension payment.
Could you explain your change in position between last year, this time, and today?
I think that there's really differences in the budget last year and this year that are reflected in the actions that we've taken.
So, for instance, last year, we had a surplus that had been designated.
We had a signed fund balance, prior year surplus that had been designated for the payment.
And so it was not coming out of the operating fund budget.
It was monies that were already assigned to it.
You know, this year, we're – you know, that has been expended, you know, as we – as I mentioned earlier.
And we also have not got to a point where we're receiving the amount of revenues for the pensions from the casinos that we –
Yeah, that was predicted.
So we're, you know, managing – we're showing, I think, our commitment to this by using corporate fund revenues to make the payment
when we don't have a dedicated source of funding in this particular budget year.
And do you have any basis for believing that this proposed reduced payment is not going to result in the downgrade?
We can't predict what will happen.
Did you have any conversations with the rating agencies before you –
Under the federal regulatory framework, they are not allowed to provide feedback like that.
And did you discuss with anyone who may have used to have worked for rating agencies
or might be consultants with expertise in that area to advise you on whether or not it might result in a rating downgrade?
We have discussions with consultants and advisors all the time.
We really cannot predict, ultimately, what the rating agencies will do.
Okay.
But last year, it was a certainty that they would downgrade us if we were to reduce or eliminate that supplemental payment,
if I recall from your testimony then.
I won't belabor the point.
One thing that the mayor has said in his proposed budget is that this $21 per employee per month head tax
inexplicably is not a job killer, but instead a job creator, which was interesting to hear.
Alderman Tunney and I were the chief sponsors of the repeal of the original head tax
that had been on the books under Mayor Emanuel.
And at that time, it was only $4 a head.
And I can tell you the business community cheered.
And it was also an important talking point that we used, Mayor Emanuel and myself,
when wooing corporate headquarters for potential relocations to downtown.
And during that period, we had incredible success in stealing headquarters from other cities
and from the suburbs to bring jobs and revenue downtown.
Wouldn't you agree that this incredibly high head tax is going to have a chilling effect
on our ability to try and recruit new employers or retain existing employers
here in the city of Chicago if built into this budget?
And again, I want to remind folks, we're pegging this at about $100 million in revenue
in the grand scheme of a $1.2 billion deficit.
Do you see that being a disincentive for employers to remain in Chicago
or to bring jobs, say, from Deerfield to their downtown headquarters
if they're going to be penalized for having those employees here?
So one of the things that we have done is taken a look at what were the impacts
when the head tax was repealed in the past.
And, you know, as you mentioned, that was, you know, a high priority at the time
and it was done, you know, in support of and with the hope that that would bring,
you know, more businesses into Chicago.
What we found is when we looked at the data comparing the growth in Chicago of jobs
and the economic recovery post-recession was that the Chicago did not vary compared to the state
or the country when that action was taken.
If you could, Ms. Dorski, it would be great to share that math with us through the chair.
That's very, very hard to believe, especially given the tremendous success we had two administrations ago
in luring new headquarters and jobs here.
I wanted to also ask you about the impact the Cook County delay in issuing property tax bills is going to have on us.
It's already had a significant impact over at CPS and some of our sister agencies.
And it also required us to do some creative accounting to make sure the firefighter's pension had proper solvency.
But could you just explain to us what just in a short amount of time, the negative impact,
the failed technology contract to Cook County, $250 million spent on a system that does not work,
that is not issuing tax bills on time,
and what that's going to do to the city and our sister agencies in the short term?
So, you know, I can speak to the city directly.
I can't speak as well to the sister agencies.
You know, the city does have a lot of liquidity,
which helps bolster us if there are revenues that are delayed or declined at any given point during the year.
So we are able to manage through because of the liquidity we have.
You know, as you mentioned, sister agencies and other governments, that's not always the case for them.
You know, you did mention the FIRE pension fund.
You know, we are very cognizant of the impacts of the pension fund,
and we want to ensure that they do not have to sell assets during this time while they are waiting.
So the treasurer, you know, in consultation with the team, has made funds available,
and we have been loaning funds on a monthly basis to the pension funds as they request
so that they don't have to sell assets to meet their needs,
and that will get reimbursed to the city when the county tax collections are in.
Oh, thank you.
I'll wait for round two, Chairman.
Round two?
Point of information on Alderman Silverstein.
Thank you.
If we could just go back to the reduction in the pension payments,
if you know or if you don't know through the chair,
could you let us know how much this reduction is going to cost the city in the future?
How much the what is going to cost in the future?
By reducing the amount of the payment.
From $260 to $120 million?
Yes, we will get that information for you.
Thank you.
Thank you.
Alderman Quinn, followed by Alderman O'Shea.
Thank you, Mr. Chair.
Sort of picking up where Alderman Riley left off, does this budget call for any contributions to our rainy day fund?
That's done at the end of the year.
Once we get to the end of the fiscal year 2025 and are reconciling the books with the comptroller, the surplus will be reviewed to assign.
Do you anticipate making a contribution to the rainy day fund?
I know in past administrations, that was part of the narrative when they rolled out their budget.
So we have made a contribution each year and with the contribution from the TIF surplus to CPS, we anticipate a surplus once the IGA is signed.
And so, again, as we get to the end of the year, we anticipate that one of the assignments will be to the rainy day fund.
On salaries, how many city employees make more than $200,000?
I don't know off the top of my head, but if we can get you that.
You don't know off the top of your head.
Okay.
Okay.
Very good.
Just a comment on that.
When we're taking raises beyond 5%, 8%, it really speaks to trust.
And we all have a responsibility to our constituents of earning trust.
And optically, it's poor.
And when we have more than 50 employees that are in the $200,000 club and we're facing a $1.2 billion deficit, you start to erode the trust of the taxpayer of the city of Chicago.
And so I just wanted to put that on the record as a comment.
Moving on, in paragraph 5 of the mayor's proposal, he says,
talks about flood relief. Can you speak to flood relief?
In what way?
What is that program?
It's a number of different programs.
Through the award that the city received from the federal government, from HUD,
we're rolling out flood mitigation and recovery programming for those who experienced flooding from 2023 and 2024.
For the floods in 2025, this summer, the first step for each flood mitigation program is working with OEMC and FEMA
to collect the data and recover dollars under the flood mitigation programs at the federal level.
Yeah, I've been working with OEMC since July, capturing the data in the 13th Ward,
and not so confident that anything's coming from the federal government.
So I'm a little bit frustrated that my ward wasn't considered in any of this flood relief conversation on the front end.
I give Alderwoman Emma Mitts a lot of credit for really advocating for her constituents,
but I would like to see the 13th Ward included in flood relief as well.
Moving on here,
I noticed in page 43 of the budget book, Office of the Mayor,
there was an uptick of $116,000 for lobbying.
Can you speak to that?
I can speak to the fact that we have a number of needs at both the federal and the state level.
At a time when the state is also going through its own fiscal issues,
it's more critical than ever that we have people downstate advocating for the city of Chicago.
I couldn't agree with you more.
I was a little disappointed to read in April of this year that the mayor had a modest agenda in Springfield.
That was what was, I think those were his words, in fact,
a modest agenda when we're facing a $1.2 billion deficit or hole.
I also find it a bit disingenuous when we talk about Springfield and changing things there,
but don't have a plan.
So I really find that to be incredibly disingenuous.
The item that's been coming up the most with my residents in recent weeks is the mounted patrol.
There was a report that they were going to cut the mounted patrol to the Chicago Police Department.
Can you speak to that?
That was not a report from the mayor's office.
I think that was in the budget working group's working group.
Still, the mounted patrol is not going to get cut?
No, it's not in the mayor's budget.
That's good news.
I think that's all for now.
For now, does that equate round two or just for one?
Oh, wait, just one final question.
In terms of revenue from speed cameras, red light cameras, where is that in the budget?
Yeah.
Which revenue line item is it?
Yeah.
Give me a second and I'll get that for you, especially which account it is.
But it's in the budget.
Is cop troll you aware of that?
Yeah, so we enforce the collections from those violations.
And for this year, it's budgeted $80 million in revenue from speed cameras and $50 million from red light cameras.
$80 million for speed and $50 million from red light.
You'll find that in the fines and penalties portion of the budget book.
In the revenue section, parking tickets, $181 million.
Automated speed cameras, $78 million, red light cameras, $61 million, and judgments and settlements related to that at $29 million.
And so just so I'm clear, this budget calls for $130 million from speed and red light combined.
Okay.
No further questions, sir.
Thank you.
Thank you.
Alderman O'Shea, Father of Alderman Sposato.
Thank you, Chairman.
Good morning, everybody.
Good morning.
I'd like to start off, last year, during the lengthy budget process, I had several discussions, including one rather heated meeting in what is now known as the Conway Room back here.
We're talking about, this year, reaching across the building to the Cook County President's Office about where we could talk about possible consolidation, where we could identify eliminating redundancy functions.
Did we get anywhere with that?
Because I was asked specifically to work with the former COO on that, and here we are almost 11 months later, and I was never invited to be a part of any discussion.
Thank you for the question.
I don't have any information about the specific conversation that you're speaking of.
I can tell you it's a discussion that we continually have.
It's actually something that the working group is tasked with looking at in their phase two report, because it is a long-term structural change, you know, them taking on, you know, things that you've identified, elections, animal care control, and might be others.
And so that is something that obviously will need to be looked at in depth.
There's a lot of political will that will have to go into something like that.
But I do think it's a necessary conversation, and one that we know will be taken up in the coming months by the working group, and we'll be providing them the data that they asked for for that.
I'm going to add a comment to that.
I've had conversations with other electeds at the county, and it's very clear that they have no interest in taking on additional responsibilities from the city of Chicago.
How we craft or create that is going to take some time and maybe even referendum, but there's clearly no interest on them taking additional costs on from us, where they would have to bore additional responsibilities without the revenue to support those responsibilities.
Ergo, they don't want to essentially raise taxes in order to take on responsibilities.
So, again, I've had those ad nauseum, and I do believe, as you do, that there are some responsibilities that the county could very well do in certain aspects.
And you talked about elections.
We talked about animal care control.
We talked about public health, some other places.
But they, at this point in time, do not appear to have the will to want to do that.
So that just solidified my point.
I had three leaders in this administration in the Conway room who talked about this at length.
I was asked, would I be a part of it?
I said, absolutely, I'll go over with Roberson tomorrow.
It never happened.
But yet my colleague just informed me they have no appetite.
And then we talk about all the help we need from Springfield.
And who's our voice down there?
The director of legislative affairs for Springfield is John Arena.
Do we have any wins down there with the legislative director, whatever this title is?
Have we accomplished anything down there?
I can't speak to the legislative agenda or the so-called wins.
I think that's a conversation that we'll have to have with IGA.
Veto session starts next week.
And I see that we canceled this exercise next week so the people could go down there.
I think the administration needs to present a concise plan as to what they want to accomplish in Springfield.
And it might help if some people in this building stop taking shots at the leadership in Springfield
who've made it clear, just like our friends across the way at the county,
that they're not interested in working with us on anything.
Okay. Moving on.
We're seeing a delay in the tax bills being sent out.
What discussions have we had with any of our county partners, the assessor's office, the board of review,
clerk, treasurer, anybody, on what financial impact that's going to have on us in this budget?
So we're in regular contact with the Cook County Treasurer's Office trying to understand their anticipated new dates
for both tax bill distributions as well as collections.
What they have said to us is, and, you know, this has changed several times, but what they've said to us is tax bills out November, collections, December.
All we can do is take them at their word.
And I know that the president's office regularly posts updates on where they are in the technology upgrades that necessitate the distribution and finalization of the tax bills.
As it relates to conveying to them the impact that that has on us, I think, you know, we're uniquely situated to be able to withstand, you know, delays of this nature.
This is not the first time the city has done that, and we are in a healthier cash position than we have been in the past.
The impact is going to be more acutely felt in some of the other taxing districts.
In fact, so much so that the county did set up a bridge loan facility to support those entities through this delay.
I want to talk about TIFs briefly.
We see a significant sweeping of the TIFs.
I've had a significant investment in many of my parks across the 19th Ward, some of them over 100 years old.
And I submitted all the paperwork.
I've actually gone so far as to have meetings with the former superintendent and the current superintendent of the park district, who both said, we want your money, Alderman.
We want to make these improvements in our parks.
And yet this administration has had a hold on every single one of those projects.
Some of those projects have been in for a year.
Actually, no, next month will be a year.
I would like somebody to get back to me on why there's a brick on projects to improve 19th Ward parks while we're going to be sweeping TIFs, including mine.
In closing, one of my colleagues mentioned trust.
Another colleague mentioned our plan in Springfield.
We've been talking about this stuff for over a year.
We've got nothing to show for it as far as help from Springfield.
And the people that we represent, not trusting government.
We just talked about we're going to we're going to reach out to our folks across the building.
When is the urgency going to hit?
When are we going to actually try to do something here on these fronts?
We can't continue to talk about it.
We need action.
And if the answer is no, then the answer is no.
But let's get the answer.
Thank you.
Thank you, Audemars.
And I will say that I think everyone should take a look at the TIF reports if you have TIFs in your wars.
Also, part of that report was a was a 10 year look forward for those that have expirations that go out that far as relates to revenue and projects that are that are out there.
So it may give a better sense of what the overall impact of the surplus may be in your particular area or your particular ward relating to projects and everything that you may have going on.
And again, if there are things that are in the mix, I do think that the time is now to have those conversations and to make sure that funds are allotted for those projects that you're looking to have funded.
And also looking at the available resources as we move forward.
So, Audemars Sposato, you have anything?
Thank you, Chairman.
I don't have any questions.
I didn't come with any prepared questions.
So I just have a couple of comments.
First of all, thank the three of you.
I know this is really tough and this is going to be a long, brutal budget hearing and I don't look forward to it.
Thank you.
And your helpers in the box, I just thank everybody.
I know we're in for a battle.
I think we're off to a good start, I will say.
I don't know if anybody noticed, we have over 40 people here today.
I think in my 15th budget here, I think this may be a record for the opening day of the budget hearing.
So it's obvious to me that people are taking this serious and they're going to be dedicated and prepared to roll up their sleeves and do the work.
So with that, that's all I have to say right now.
You can put me down for a round two if I come up with a question for later and that's about it.
But thank you, everybody.
Thank you.
It doesn't have to be brutal.
I mean, it's just a conversation.
It doesn't have to turn brutal.
So Chair Dow, Chair Dow, you ready or you want me more time?
Yes, thank you, Mr. Chairman.
I appreciate you indulging me this morning.
No problem.
Followed by Alderman Service thing.
All right.
I'm glad you said what you said regarding the TIF surplus reports.
I believe that every alderman should have an opportunity to have a review and sit down with both DPD and the budget office to make sure that we are all aligned.
And so I will be reaching out to you because there are at least two TIFs that I think require some additional conversation.
Absolutely.
I wanted to ask a question about the surplus, which goes to a portion of that.
I'm wondering if you could tell me what the process is for getting that money back to them.
My understanding, on the one hand, I hear that it should come directly from Cook County.
Cook County should write those checks and send it to them.
But then I hear that both the budget department and the finance department are involved with a sign-off from DPD, which delays the check that those SSAs should get.
And it doesn't all come at once.
So can you tell me what that process is transparently so that I can let people know?
I'll take the second piece first about it doesn't all come at once.
So TIF doesn't all come at once.
Our surplus is not distributed all at one time, partly because the surplus is made up of both declared surplus as well as expiring TIFs.
And expiring TIFs, we can only use the dollars for work done or projects completed through the end of the year.
And it has to go through a reconciliation process and an audit so that those TIFs can be closed out.
So while the first distribution of TIF surplus from us to the county, to the county, to all of the taxing districts, usually happens in February, March of every year for the ones that are not expiring.
The ones that are expiring, that second distribution usually comes closer to June because we have to close out the books.
We have to submit paperwork to the state, making sure that all of the dollars and all of the invoices and all of the projects have been closed out.
As it relates to the SSAs, OBM does have to approve their annual budgets before the distribution goes out to those SSAs.
OBM, not DPD.
OBM is prepared by DPD.
Okay.
All right.
I asked you for a list of the Community Safety Surcharge Investment Fund and what was covered in that, and I did receive that this morning.
As I'm looking at it, I'm wondering if you could tell me what represents new initiatives.
I'm of the thought, Budget Director, that when you have maxed out your credit card and your bill is high, you shouldn't be adding new stuff to the house.
So, I would like to have an understanding of what is new here.
Thank you for the question.
So, the items that are new, I wouldn't consider them to be new.
What I would consider them to be are permanent investments that were previously supplemented with ARPA dollars.
But the ARPA dollars were enhancements to existing programs.
So, for instance, the youth employment programs, that's our youth job programs.
And so, that program was expanded since 2022 with ARPA dollars, getting us to the record levels of job employment for youth that we've seen over the last several years.
And that total number from last year, if I recall, was about 28,000?
29,000, that's correct.
29,000, okay.
So, this not only supports maintaining that number, but it also supports us being able to increase their wages to minimum wage.
So, minimum wage increases every year.
We seek to...
make sure that our youth are making at least minimum wage.
Secondly, My Child, My Future, which is an existing city program supplemented by ARPA dollars,
is also one that is made permanent at the levels that we were able to maintain during the COVID-19 pandemic with ARPA dollars.
The additional new funding in here is within the finance general section,
and that is, I think it was Alderman Beal who asked this question earlier.
Excuse me if it wasn't. I think it was you.
The additional dollars, oh, maybe it was Rodriguez, sorry.
Additional dollars where we will be able to allocate to delegate agencies who are doing crime reduction
and community violence intervention work in their communities in collaboration with our partners at the state and county level.
So what I'm taking away from this is that none of these are new initiatives,
but there may be increased funding for those initiatives that are listed here.
Sustainable funding, that's correct.
Increased funding.
More dollars.
More dollars from a sustainable ongoing operating budget, yes.
Can you tell me what the difference is between 2025 and 2026 for all of these programs?
All right.
Now, you also mentioned the major investments in the 2025 budget that are carried over in 2026.
And I'm just going to use youth employment as an example.
You say $20 million for youth employment to expand the opportunities.
But in the violence or this new fund, that number is $48 million.
Right.
So prior to last year, the city's commitment, frankly, prior to the mayor coming in,
the city had a much lower corporate fund commitment to job employment.
That was expanded with ARPA dollars during the pandemic.
Last year, we shifted $20 million of that into the corporate fund.
And this year, the entirety of that, plus the remaining amount that was on ARPA,
is shifted into the community safety fund.
Okay.
So when you give me that breakdown, can you tell me corporate, ARPA,
and corporate 2025, 2026, and ARPA.
I can't pronounce that.
ARPA 2025 and 2026.
All right.
I had the same question for these other major investments, so I'll skip that.
How is the online sports wagering tax going to be implemented?
So I will actually, first, I'll say a few things,
and then I'm going to turn it to Zhang and Comptroller Belska,
who will be responsible for collecting it.
It will be collected the same way we collect our other amusement tax.
The corporations that are subject to this tax are required by ordinance once passed to actually render payment based on the calculation set forth in the ordinance.
So, again, you get the first 100,000 users of your platform are exempted, but it's 50 cents per user, active user, on your platform that live or that reside in the city of Chicago.
So it is incumbent upon them to render the payment based on the terms of our ordinance,
and the Department of Finance is responsible for auditing based on the material and financial forms that they turn in to the city to ensure that they have paid the correct amount,
in the same way that they do every single taxing revenue that corporations are required to do.
Do you realize that the social media tax and this online wagering tax is going to be passed off to the consumer?
You're right.
So I got the two mixed up.
I was talking social media.
You asked about online sports betting.
So the online sports wagering is in the same way that the current in-person sports betting occurs, which is, again, the companies are rendering that payment to the city.
But we are changing how the tax works.
Instead of it being 2% based on in-person betting, it will be equal to the sales tax and applied to the adjusted gaming receipts of the sports wagering company, whether they're in-person or online.
And what accounts for the $12 million decrease in revenue from the liquor taxes?
$12 million decrease in liquor.
Where are you seeing that?
I don't have my page number here.
I wrote these questions down.
You can get that to me through the chair.
I'll take a round two.
Very well.
Alderman Silverstein, follow by Alderman Lopez.
Thank you.
A lot of my questions have been asked already.
I did just want to say that anything that could cause a credit downgrade is of huge concern to me.
I just want to put that out there.
So all the questions asked by my colleagues, I second that.
I did just have a question for you regarding our libraries.
I know that the mayor has just said that, you know, he wants to protect all Chicagoans.
And it's not just about Chicago public schools, but it's about parks and our libraries.
But yet you have cuts to the library positions.
Could you tell us how many of those cuts are being made to the Chicago Public Library and which libraries are affected?
So, as you know, the library is 100 percent funded by property tax.
And so with the lack of increase in the property tax, we do have to economize.
But there are economies to be made in the library system.
I think the EY report confirms that there is economies to be made and for us to run more efficiently at a lower cost.
The cuts that are being made relate to the CPL putting in place a security contract that actually is more aligned with the needs of each particular library.
It's more strategic rather than having the level of security that was put in place during COVID-19 to enforce spacing requirements that were in place in the city of Chicago.
It's more akin to the level of security needed per community, per library.
The second area, they also will have no layoffs in their operations, but they are looking at their vacancies in the same way that all of our departments did.
Very little impact on their ability to provide services within the community, but areas where they were able to economize given their revenue.
Is there going to be a reduction in the hours and in particular Sundays?
No.
So Sundays will continue?
Sundays will not be reduced.
Okay.
That's important because the Jewish community can't go to the libraries on Saturday.
So it's really important that they stay open on Sundays.
That's it for me for now.
Thank you.
Thank you, Chair Silverstein.
We'll have Alderman Lopez followed by Alderman Moore.
Thank you, Chairman.
And if Alderman Silverstein and Spisato don't mind, I'll take the rest of their time, too.
No, you get your own 10.
Everybody get their own shot.
Oh, it's worth a shot.
I know, Ms. Guzman, I'm so excited.
I like your boldness.
I appreciate it.
I'm trying.
So good afternoon, everyone.
Thank you, and thank you, members of the committee.
First and foremost, let me just start by saying, as so many of my colleagues did, that the TIF sweeps are a non-starter for me.
As I look at what is available to my ward, you are basically taking $3.3 million from communities like Back of the Yards, Canaryville, not to mention what I'm no longer a part of, which is also inclusive of the greater Englewood community.
Believe it or not, we actually had TIF commitments from the previous administration, totaling $24 million, which somehow have vanished from being a priority from DPD, shockingly, and are now being part of a TIF sweep that is not structural but is concerning to me.
But I do have some questions specifically to what has been presented, and I want to – and I will, Chairman, be providing you through email a list of – through the chair requests, so I don't want to spend time on those.
But, Director Guzman, how much of the revenue in this budget currently relies on –
It's on non-existent taxing options.
Sorry, non-existent?
Taxing options, things that we have to create in order to be able to access those dollars
based on what was presented.
So of the ones that are currently in the budget that don't exist today, that is the community
safety surcharge, which we have forecasted at $100 million based on the parameters, the
online sports betting, which is, again, we have in-person but not online.
That's $26.2 million.
Hemp regulatory, which in its first year, given the delayed effective date, is $10 million,
but over time will be closer to $30 million.
Those are the three brand new ones.
The other ones exist in ordinance today.
Except for the online.
Yeah, the social media tax, but that is not something that is currently relied upon against
an existing expenditure.
We want to introduce it, build that fund to provide a sustainable revenue source post-2026
for our mental health infrastructure.
And that would?
And we forecast at $32 million.
$32 million.
And the head tax, which doesn't exist?
In year one, $10 million.
Okay.
Hemp tax.
Thank you.
You say head or hemp?
Hemp tax or hemp tax?
Head.
Oh, head tax.
The community safety surcharge is what I mentioned earlier, $100 million.
I'm sorry?
It's $100 million.
So that is what's part of the safety?
Community safety surcharge and the community safety fund, yes.
So the community safety surcharge is what you're referring to as the head tax?
Yes.
Okay.
Sorry.
Thank you.
And all of those numbers are based on what?
Forecasts that were done by our financial analysts.
Okay.
Sorry, I'm trying not to make sure that I'm not rehashing what we've discussed.
Can you tell me, Director, what is the total valuation of all the tax exemption or property,
like 6Bs, 7Bs, and all of that?
What is the total valuation of that in fiscal year 2025?
Exemptions on properties?
Correct.
So when we offer a 6B, a 7B, things of that nature,
what is the total valuation of all of those tax exemptions that we are offering as it relates to our budget?
I apologize.
I don't have that information because it's not done out of my office but done out of DPD.
So we can definitely get that information for you.
Okay.
Now, I know that we keep saying that the budgets are balanced,
and we're talking about some of these budgetary items like our settlements, like our overtime,
and actually what I found interesting way in the back of the book was the decrease in CPD, CFD,
survivor payments from $4 million to $2 million.
Are we just shrinking this just to get us to a closer equation, or are there grounds for actually materializing these goals?
So the one that you mentioned in particular, the death survivor benefits, is that the one you mentioned?
Yes.
So there was a significant backlog that we've been carrying, trying to get through them for the last couple of years.
We have gotten through a significant amount of that,
and so we've actually forecasted out what the annual amount would need to be to support that.
So that's why you're seeing that reduction.
It's not to decrease what we would pay or provide to survivors, families,
but it's recognizing that we had a significant backlog, which carried us for a number of years.
Across all departments, how many DEI-titled full-time employees or DEI-related positions would you say are within the budget?
How many positions are DEI-related?
Specifically categorized as our director of diversity, our director of inclusion, or however we title them.
How many would you say are within the budget?
I don't have that information at my fingertip because we don't title our positions in that manner.
We do have positions that are focused on equity, that are focused on ensuring that certain principles are carried out in how we do our work,
ensuring that all communities' voices are reflected in our work.
But I don't have the number for you as to how many positions are specifically dedicated to that type of work.
And I just also would like to clarify, earlier with regards to questioning by the Alderman of the 42nd Ward,
you said that no committees were seeing an increase.
But pages 109 through 118 shows every committee is getting a budgetary increase.
Can you explain that discrepancy?
I'll look into that.
I do know that each of the ward offices were received an increase of 8,900.
If there are subtle increases in committee budgets, it's because of COLAs.
So the COLA that we provide to every employee in the city of Chicago.
Okay.
With regards to the Department of Finance and Revenue, Comptroller Belsky, if I may,
thank you for sharing the information with regards to tickets and boots and booting.
Are we on track to match what we saw last year?
Because it would look, I know this is just a point in time, seven-month or six-month review.
Are we going to match or exceed what we've been able to do in terms of enforcement collection opportunities this year?
Thank you.
So, in 2024, our vehicle violations amounted to $260 million.
Year-to-date, we're up, and we're expecting it to be at $278 million year-end.
And you mentioned earlier that you're onboarding more individuals.
And what timeline can we expect those individuals to hit the streets, knowing that we have like an eight-month backlog?
Our expectation is that once hired, it takes about a month to train them.
So we believe that we could have them out on the street by February of 2026.
So, I'm sorry, by February?
Yeah.
Has the Commissioner of Human Resources committed to immediately hiring people?
Because we all know that it takes her roughly six months to do all of her work.
Well, I mean, it's in this budget.
So, once this budget's passed, we would have authorization to go ahead and start hiring.
Okay.
And what are your – how many zones are there for enforcement?
Excuse me?
Well, how many zones are there for enforcement?
About 104 zones.
And we try to, you know, cover those on a regular basis.
But we also do use data to focus on areas where there are most violations.
I'm sorry.
I've got 25 seconds.
That's why I keep cutting you off.
What's the target goal for the department to generate for fiscal year 2026?
Well, if we get some of these positions filled and the Smart Streets expansion, you know, that would add probably about $12 million to that number, that base number that we have about, you know, $179 to – so it should be over $200 million.
Okay.
If I may, just one – to finish the thought, Chairman?
Sure.
Thank you.
Can you explain how you intend to ensure that we're able to generate the funds that we're targeting using the labor force that you have, as well as the labor force that you hope to have in a citywide manner?
And I would also like a round two, Chairman.
Okay.
So my management approach has always been, you know, you use meetings on a regular basis to monitor results.
I also believe in using KPIs and metrics, so it would be things like revenue per PEA.
It would be things like how fully staffed are we.
And so what I plan to do is have the team responsible for that to meet with me every month, and we'll be tracking each violation and other types of revenues we collect, where they are relative to actual.
And, you know, if we're not meeting those metrics, it means we need to figure out what we need to do to fix it.
If we're meeting those metrics, you know, we'll be happy.
So, you know, I think there's a saying, if you can't measure it, you can't manage it.
So I believe in using KPIs.
I think that's something that this budget is informed by through the EY study using benchmarks.
So, you know, it's not just about holding people accountable.
It's also about, you know, what sort of management changes or process changes you have to make as a result of, you know, where your results are coming in.
That was a slick move you pulled over there, Mr. Lopez, but I'll catch up with you later.
All right.
Next up, we've got Alderman Moore.
Are you ready?
Sure.
Alderman Moore, follow Alderman Villegas.
Thank you, Chairman.
And is it afternoon yet?
But good morning.
It is afternoon.
Okay.
Good afternoon.
Thank you all for the presentation.
And thank you all for the briefings.
And I appreciate each and every one of you for trying to do your best to make sure that we close this budget gap.
I want to touch on a couple of things and try to, and if some things through the chair I get in, I think I asked some of these questions during our briefing.
I want to make sure I get this information.
But this one is a new one, and I just want to make sure.
Last year, we passed the ordinance.
You all helped me pass an ordinance, keep Chicago clean ordinance, because one of the things we're doing is costing us more money by not having Chicago clean from our boards and everything else.
And I talked about doing a campaign around there.
Now, last year, we didn't put any money in it for it.
I didn't press it at that time.
But what I see here, and I'm hoping that we can have a conversation around it, and that's the, I think it was seven, give me a second, around protecting our environment.
The $7.5 million, which is, we're going towards Office of Reentry, which is good.
I want to know, is there a possibility that some of that funding, because I know we're tight here on the budget, but can some of that funding be used not only around running a campaign for keep Chicago clean?
Because at the end of the day, although I'm spending some money, it's all about saving money as well and getting our youth and our people in reentry involved in this scenario,
whether cleaning up or from the youth standpoint, running the campaign in schools or running the campaign on buses and ads.
And so if you could just speak briefly on that, and we have to have an offline conversation.
But I would like to put some money in there this time around and this budget for that.
Thank you so much for the question.
And I could not agree with you more.
I mean, one of the things that you know and that everyone in this chamber knows is that Chicago is known for its beauty.
Chicago is known for how clean it is compared to our pure cities.
And so I wholeheartedly share your desire to not only continue to have all parts of our city be clean and beautiful, but to also lower the costs that we inevitably incur when we have to clean up, when people are not being as prudent with their waste.
So I would definitely welcome that conversation with you.
I liked how your head was going because I was trying to figure out how the cannabis fund could potentially do that, because that is a highly regulated special revenue fund where we literally have to everything that we think about putting into that fund.
We have to have eligibility conversations with the Department of Law looking at state statutes because it is governed by state statutes.
But I think that we can have conversations around this, whether it's from that fund or if there's other opportunities to look into what you're asking about.
I appreciate that.
That would be very helpful as I move forward in trying to support this budget to make sure that that's there.
The other part is the exempt of the 97 percent of all employees.
And in the hearing we said it only prior to 3 percent of large employers.
I want to be clear that and that when we talk about small business is not impacted.
I have when we talk about McDonald's, for instance, right, because I know where we're going with this when you say 100 employees or more.
Right.
But when we talk about when I think of 100 employees more, I immediately think of a Walmart.
I would think of these big some of these big businesses, but I think sometimes we forget and I don't know how we're going to delve in this is when we have small businesses that's ran by independent contractors in our community.
But overall, they may have 100 employees throughout the city and suburbs, but they're really a small business and their margins are getting tighter and tighter.
Whether it's a small black McDonald's operator that I that I look at and I've seen McDonald's close, which when we talk about youth employment and even some of our seniors, they're going there.
And I'm trying to see how can we mitigate impacting businesses like that if possible.
And it's not just McDonald's, there's probably some others as well that have a small business.
They may have maybe two or three restaurants, but they're really a small business, but they have 100 employees.
So how can we mitigate that?
Thank you for your question.
I think it's an important question to ask and an important question for us to dig into together.
You know, Chairwoman Dow asked for the list that we're preparing, I think, for not only her, but for the rest of the council to see where this is likely to hit.
We share your concern that we really are trying to ensure that the impact of small business is minimal, if not non-existent, because they are, for many of them, the life and the backbone of our communities.
Absolutely.
So I think we're open, and we welcome the conversation once the data is made available for all of us to look at.
I appreciate that, and definitely I'd love to look at that because I know what we're trying to do, but I don't want to counter what we're trying to do by hurting some of these small businesses.
My other one has to be-
Hold on.
Hold on one question.
Hold this time.
The 100, is that raw?
Is it FTEs?
Define that 100.
It's 100 full-time employees, not part-time.
So on McDonald's, I have 300 part-time employees.
Is that count, or does that not count?
Does not include part-time employees.
Doesn't include any part-time employees.
Okay.
How are we defining, then, full-time employees?
Oh, I don't have the ordinance in front of me.
It's employees who spend at least 50% of their time on, please excuse me because I don't have the ordinance in front of me, but 50% of their time on matters within the city's parameters.
Okay, so theoretically, what he just brought up, a McDonald's probably wouldn't hit the threshold of being required to pay on that tax.
I'm not an expert on how McDonald's franchises work, but if it's made up of part-time employees, it would not count towards that.
You didn't work at McDonald's growing up?
I never did.
I didn't either.
I mean, I worked somewhere else, but I'm just saying, just as a general, I mean, generally, a lot of part-time employees in that mix.
So my apologies, but go ahead.
I just wanted to kind of see what that was.
So go ahead.
Thank you, Chairman.
But I think, and if it was just part-time, because what we've done with minimum wage and fight for this minimum wage, those are some good wages now.
And you've got a lot of those employees are really working full-time and sometimes a full-time and a part-time at a McDonald's or Burger King to run their household.
So it's more, it's not like when we were back in the day, it has changed totally in terms of full-time.
So I just wanted to make sure we do have that conversation.
The other one is, and I asked for this through the chair, CFO, and I think you answered it when we were online, but I wanted to see it.
And that was about the, for not doing the CPI, for not paying the pension, the partial payment to the point that we normally pay it.
I asked about what could be the impact of that.
And from a financial standpoint, especially if there was a downgrade, because I wanted some more of that structural strength in there, in this budget, from CPI and from that.
And just provide that through the chair.
You don't have to answer it here, but I really need to see what that possible impact could be.
And I'm sorry, go ahead.
Analysis impact, which we'll provide.
I didn't hear you.
I didn't hear you.
And I just also want to just mention that this budget has more structural fixes in it.
And one time fixes. And that's really important, not only from, you know, explaining to the credit rating agencies, but also for the long term structural health of this of this kind of the city.
And the briefing that we provided to city council, one of the things that we showed is that our revenues have only been growing at an average of two, 2.5 to 2.8 percent per year, which is not supportive of the growth of our expenditures.
So that's what we were seeking to really align our growth with on both sides of our ledger.
And before I run out of time, I just want to hit on that. I want to have a conversation around that Englewood TIF.
I was surprised, again, that Englewood was in there. I know we talked about hitting some of these, you know, rich TIFs, if you will.
But to see Englewood in there was a bit of surprise, especially for the stuff that we're trying to do.
And also, which is not really a part of this budget, but if you can, well, I guess that would be the director of development.
But also you all, because you all go out for bonds in terms of that, because I asked for the report on from the bonds that we did for the development bonds.
I need to see what we're going to be doing in the future or this year on that, if we're going to be releasing some more money, because I know, you know, there were some areas that was important to me that I would like to see done.
So are we going to be releasing some more money? And if so, about how much?
As far as the allocations go and the commitments from DPD, DOH, you know, they're doing that every single day.
You know, it takes some time to enter into agreements.
Tell me if I'm wrong, but I know you asked for a list of projects thus far committed and allocated and by warrant.
If you didn't get that, I'd follow up.
No, I have that. I have that. And that's why I'm asking is some additional monies.
Yeah. So we have it updated through September that we can get you the updated list if you don't have that.
As it relates to the issuances of bonds, I'll let Jill take that question.
Yeah. The timing of the bonds is based around either actual expenditures having been incurred or about to be incurred.
I mean, in general, we're trying to treat the HED bonds in a similar way that we treat our CIP bonds, which is that, you know, if we've got projects,
we tend to use first our own liquidity to pay for project costs, and then we put that on a line of credit when we need to reimburse ourselves,
and then we issue bonds to pay back the line of credit.
Now, we've not followed that exactly with the HED, so we have issued some bonds this year that we have the funds in an account unspent,
but they are – the intent is that they'll be spent on very quickly.
So we've been working closely with DPD and DOH to make sure that we're not getting into a situation where we're borrowing money
and that we're paying interest and it's not going immediately into the projects.
That being said, we have a lot of capacity left on the bonds,
and so our intent is we will issue as regularly as we need to to make sure that the funding is available for all the projects that are being advanced.
One thing that, you know, I noted during one of the briefings is some of these projects under the program take time,
and so for instance, the green social housing has taken time because of passing the ordinance,
constituting the Residential Investment Corporation Board.
They will need to hire a director and then pick projects, and then the money will get expended.
And so there's – on that, well, that is a very big part of the HED budget.
It's slow going out now, but it will accelerate a lot once that board is staffed and the projects are coming in.
So it's lumpy in how the money is going to go out,
but we're prepared to be in the market as often as we need to be to make sure that the funding is there.
All right. Thank you.
And I just want to thank you for always having your door open to, you know,
want to talk and explain any questions that I have,
and that means a lot to me as well as the budget director.
And in terms of keeping us, you know, informed and, you know, just being available, that is very important.
Neither one of you, however, turned me down, no matter how tough the conversation is.
And I want to say just – I just want to say thank you to you and your entire team.
Thank you.
Thank you, Alderman Moore.
You good?
All right.
I want to recognize Alderman Hopkins, now committee member Hopkins, joined us.
I think we had Alderman Villegas followed by Alderman Cardona.
Do you have anything, Felix?
Very well.
Go ahead.
Thank you, Mr. Chairman, and good afternoon, budget team.
So I wanted to talk a little bit about the IT modernization of the city.
And Budget Director Guzman, you're familiar with time and attendance, right?
I am.
Yeah.
So why haven't we implemented that here in the city?
I share your level of inquiry and desire to get that implemented as quick as possible.
We have been working all year with DTI and DPS to finalize not only the contract for the system but the implementer for the system.
Current estimates is that the timekeeping and payroll system will be in place by at least fourth quarter of next year.
We've also, in a management ordinance that will be introduced to city council, included a regular update on progress towards that timeline by DTI and the comptroller so that you get regular updates on how they're progressing on getting the implementation done by fourth quarter of 2020.
And that's about $40 million a year in savings based off Cook County utilizing it.
Yeah, and I think it's both savings to ensure that there's no fraud, waste, or abuse in the system, but also there's a permanent role in the city called timekeeper, which the county used to have too, that they no longer have because it is a pretty automated system that is self-service.
So we anticipate that as it's rolled out and as people get used to the new system and how it functions, that there'll be a lot of different ways that we'll be saving as a city.
Okay, and ERP has obviously stalled for two years now.
And so, you know, there isn't a sense of urgency.
And it's frustrating because, you know, last November I introduced a resolution that passed that required the chief procurement officer to take a look at putting out a third-party contract to take a look at the way we do business to figure out how to modernize it.
But it's mind-boggling that we're not moving on that, especially there's, again, I think there's over $100 million in savings alone there.
I share your desire to get this done.
So how do we get it done then?
I love that we're on the same page.
You're on the same page.
And I would say two things.
One, I would not say that there's not a sense of urgency.
ERP infrastructure projects are probably the most complex and usually take the longest of all IT infrastructure projects for not only governments but any type of organization because it's the backbone of that organization's financial systems.
The state is still going through theirs, and that's like five years in, right?
So, you know, I think what we're doing first is implementing the timekeeping and payroll because we share your sort of assumptions that that's where some real cost savings are going to occur really quickly.
The other thing that we're doing is, as I mentioned, I can't remember who asked me the question early.
I think it was Rodriguez as well.
DTI is not part of the hiring freeze.
They're not what?
DTI is not part of the hiring freeze next year.
They are a critical part of not only getting the ERP fully implemented but in a lot of our technology initiatives that will lead to short-term and long-term savings for this city.
Can I just add to that response?
So, Alderman, in our department we're in charge of payroll, and we have antiquated technology for timekeeping.
We have multiple systems that are used by different departments.
We're now testing a web-based and desktop-based app where people can sign in.
We're using it also with our parking enforcement personnel, and it seems to be much more successful and accurate.
And, you know, in my view, as a corporate organization, it should be uniform throughout the city, and it's something we're going to push through through the course of the year.
I appreciate that.
But, again, we're here to help try to get this thing accomplished, especially with the savings.
Through the chair, or unless you know it now, how many lines of credit does the city have?
What are their balances?
And what are the interest rates on those respective lines of credit?
So if you can get that, if you have that information, fine.
If not, you can get through the chair.
Thank you.
And then could one of you – could potentially one of you or your staff members opine on the slots at the airport as a revenue stream that the General Assembly gave the city of Chicago the authority three or four years ago that would generate approximately $25 to $30 million to pensions?
And, you know, based on the press release I saw yesterday, O'Hare has reclaimed the top – not destination, rather, but traveling through O'Hare, 24.3 million passengers traveling through O'Hare.
Do you think that would have been a good opportunity to capture some revenue from folks that are not from the city to help pay for police and fire pensions?
And we haven't done it for the last three years, even though we have the authority.
So are you – is the administration going to move on that?
Thank you for the question.
Yes, we have been in conversations with aviation, with Bally's, about moving that forward.
There's a couple of points to note.
One is it's not really – you know, Bally's is a private enterprise, and it is not sort of – the city cannot enforce them to put a facility or slots out at the airport.
If we can't force them – if we can't force them, they have a right of first refusal, but we can issue an RFP if they do not want to take advantage of that.
Yes, and they – we have been in conversations with them about investigating that.
They are – they have expressed interest.
There are some technical challenges we have to deal with, ensuring that we're complying with all the regulations that are at the airports.
But those conversations have been ongoing.
They have identified a site at Midway, and we continue to work to move that forward.
Okay, yeah, because I think it's a good idea.
I know that the administration said it was not a good idea.
It's a good idea.
It's money that – 60% and 70% of the revenue is going to come from people that are not even from Chicago.
So we get an opportunity to capture some –
Sure.
I don't think the administration has said that it's not a good idea.
Maybe –
I'll send you the article.
Maybe that was VGTs.
I'll send you the article.
You can take a look at it.
Okay, well, we have been working to move that forward.
Okay, well, I appreciate that.
And then yesterday on the briefing, Director Guzman, I was having a hard time – I'm still having a hard time – around the corporate tax windfall that's being talked about, even though the tax law is from 2018.
Can you – can someone explain what benefits did the corporations get through the BBL that – no, I'm sorry, BBB, Big Beautiful Bill, right?
BBLT or the head tax?
No, the federal tax that the Republican –
The Big Beautiful Bill, yeah.
Yeah.
So the Trump tax cuts were extended in the bill that Congress passed, but there are other areas within that bill that provide loopholes and exemptions to the upper 1% of the country, which allows that large sort of transfer of wealth to happen from lower income to higher income individuals.
And so the effective tax rate under the Trump administration for corporations is actually 12%.
What we were trying to demonstrate is when the head tax was first put in place by the city of Chicago at a much lower rate in the 70s, corporations were paying 48% in taxes to the federal government, ostensibly to states as well.
They're now paying 12% effectively.
And on top of that, they have other loopholes.
We mentioned how a lot of employers and employees – employers and companies get exemptions and depreciation for their boats now because they're spending more time taking meetings on boats, which allows them to get full depreciation.
They have other loopholes.
There's a lot of favorable cash treatment within the IRS code for corporations, tech companies who are investing in things like AI, research and development, and things like that.
So then the argument is that in 1970s, the corporate tax were at 48%.
Over the course of the last 50-plus years, the corporate rate – corporate tax has come down to 12%.
Thus, corporations can't afford the $21 head tax because over those 50 years, their corporate tax revenue – I'm sorry, their corporate tax revenue has dropped.
Is that the narrative?
Is that –
I think that's only part of what we have put forth as the rationale and the justification.
I think the other part is twofold.
One, in our discussions with corporations, their number one issue that they want the city to focus on is crime reduction.
And a lot of that comes through the types of tools and programs that have been in place under this administration that have seen record lows in crime in the city of Chicago, which is why the mayor continually says that he believes that this is a job creator.
Secondly, the other part of this is related to the fact that because of that upward transfer of wealth and the fact that the One Big Beautiful Bill actually increases the tax liability on the lower income in this country, shared responsibility, those who can should contribute to help us maintain services to those who need it the most.
I appreciate that.
So if you could just, through the chair, send me – let's relate it to Chicago.
I know that affects the nation, but I'm only looking at Chicago to kind of figure out.
I appreciate it.
I think it's more acutely felt in Chicago as well.
I appreciate it.
Thank you.
Thank you, Chairman.
Thank you.
Thank you, Alderman.
Next, we're going to have Alderman Cardona.
After Cardona, we're going to break for lunch, and then we'll come back one – probably about two o'clock.
We'll say two o'clock.
Thank you, Chairman.
Thank you, Committee, for having this.
First, I want to state that this TIF surplus sweep, especially in the northwest side by – that we have several.
So it's very detrimental for us to keep it instead of putting in a pot to use for other expenses.
So, you know, I just want to give my concerns on that because we do have projects that my colleagues who share those TIF districts – you know,
we have plans to improve the neighborhood, especially the TIF area that it represents.
So I know we talked briefly about fines, parking, speed cameras, and light cameras.
What is the budget on that?
I mean, what was the projection on that again?
For red light cameras?
Yeah.
For speed cameras as well.
For speed cameras, 78 million.
Red light cameras, 61.
Okay.
And that's – have you – it's projected to be increased for 2026, correct?
These are the 2026 numbers.
Because of the new speed cameras that we installed in the neighborhoods along the city of Chicago.
In 2025 this year?
Yes.
This would reflect the cameras that would be in place in 2026.
Okay.
So Mayor Johnson campaigned on a promise of to unburden Chicago's from regressive fines and fees,
yet the revenue fines for the fees increased from $345 million to $389 million in 2026.
How do you explain the contradiction of this promise to the voters versus the reality of your budget proposed?
I don't see the contradiction.
I think that our – I think that the narrative that this budget is balanced on parking tickets is not correct.
I think that what we do is we have, as we are allowed to under state law, applied cameras in areas where there are public safety issues in collaboration with members of this council who have requested for those cameras to go into their neighborhoods.
And so what you see is, one, when we put up a new camera, there is a period of warning.
There are period of notices where zero tickets are actually issued to those who have not complied with our ordinances, again, put in place by the city council.
This is a public safety tool, and that's why it's restricted to parks and schools, areas where our communities are going to be safe and going to ensure that, you know, when they walk to the park, when they're walking to school,
that they do not have to worry about someone barreling down and potentially harming their child.
I see the thinking behind that, but it's generating a lot more than we thought it would be.
I have another question.
CTA.
Alderman, if you don't mind, I'd like to speak to that.
So some of the application of the technology we have, it is picking up.
more violations.
So that's why you're seeing an increase.
I would say this, that the safety issue is real.
When red light and speed cameras have been put up
and they're limited to school and park zones,
you know, the reduction in fatalities citywide
or in those zones is 11% versus 7% to 9% citywide.
And just crashes 19% citywide, 24% in those zones.
The other thing I would say is that on all of our vehicle violations,
we do have relief programs for people that are overburdened by these tickets.
We have a clear path relief where people can make a small down payment
and make payments over time and also have their fines and fees absolved.
Okay.
I'm going to switch it up too.
I know you guys are extending the zone for ride share, but how, here's the thing.
You have people who are scared to take the CTA because of violence, trains,
you know, people go on trains, they're still smoking on trains,
even though we passed an ordinance, you know,
they're still doing things with their, you know, on the CTA.
And those people who don't want to take the train have to go to work.
And majority of the work is within that zone that you guys propose,
especially you extending it even further.
That means they're going to pay a little bit more,
even though they probably make minimum wage or, you know,
but they need to get to work.
Don't you guys feel that you are attacking the working class right there
when expanding the zone?
I think that we are balancing a lot of competing priorities.
One, the data shows that the ride share companies overwhelmingly contribute
to congestion in the areas that we are expanding the zones to.
So that's one.
So there is a traffic safety and a real issue of congestion
that the city does need to take seriously.
So what we have done is we have built in measures to get at equity.
You know, the areas that we're talking about are also related
to certain demographic data within the city,
but also we've built in by changing and converting the rate from a flat rate
which you pay currently you pay no matter what your income level is
to one that is based on percentage gets at how long you are using our roads, right?
So if you are taking a $60 trip or you're taking a $10 trip,
your taxes are now going to be reflective of how long you are using our roads.
The other thing is a lot of people actually use a combination
of both public transportation and ride share.
So the last mile commuters will actually likely see a decline
in the cost of their ride share because if they're taking CTA to work
and using an Uber or Lyft for the last mile,
because they're using less of our roads,
they're actually seeing less of a tax burden on them
rather than the person who is exclusively using ride share
to get to and from and using more of our roads.
So, you know, again, we are balancing a lot of competing priorities,
including the fact that we do have a lot of road congestion
in the same manner that we do in our existing zones
in the areas that we are looking to expand to.
We're also taking into account the equity concerns
that you are raising right now.
Well, thank you for that.
I appreciate it.
But we all know that CTA is going to raise our fares.
So, again, it's also a burden on the working class.
And then doing this, you're already affecting the working class.
So it's a double whammy.
I think we are not taking consideration the working class,
especially how trying to get through the city is very difficult with traffic
and also with all the other things happening.
So, again, I don't think this is helping the working class.
It's doing the opposite.
I think it's incumbent upon all of us to have a strong transportation system in our city.
We're the third largest city in the country.
And CTA supports over 80% of ride share in our economic region.
And so, you know, we are continuing to advocate for additional funding for CTA
because it is mostly used by working class Chicagoans.
And so I implore all of us and encourage all of us to continue that conversation downstate
to ensure that the city of Chicago receives the funding that it needs
because we need to make it safe.
We need to make sure that people have that as an option.
But we also need to make sure that we are doing what we can to address congestion in the city of Chicago.
Thank you.
Chairman, I'm done with my questions.
Thank you much.
Before we break, we want to recognize Alderman Hopkins and also Alderman Curtis,
non-members but that are present with us today.
With that being said, okay, Alderman Kezada actually will add you for purposes of quorum.
Anybody else?
I got you.
You've been – we have you now.
And you were actually here on time.
Yeah, you were here on time.
Yeah.
Slept at the door.
I think his office is in here, so he'll get a chance to do that.
So be that as you may.
We're going to break.
We'll return at 2 o'clock.
Lead-off will be Nugent, Alderman Nugent.
You're up.
Yes, I have an anecdote.
I know.
Staff from Budget, feel free to join us on 3 as well, members in the well.
Thank you.
I know I didn't want you to see my baby before I do.
Tell her that I'm ready for you.
She can tie my head behind my head.
She can slap my chest until it turns red.
She can get my check and take it to the mall.
She can buy what she wants until it's all gone.
She can buy what she wants until it's all gone.
Alleluia!
We're back on
We'd like to
Thank 2FM for our
Intermission selections
Well we have
I mean he's got to come out of the 60s
Or at least get us in the
He started in the 60s and then he
Migrated to the 80s then went back to the
Like early 80s, 70s
You know
I see he's got a
Have you determined the theme music for each department yet?
Waters
Waters is going to be water
There's a song about water
There's a song about water
So that's your task for the
Ballancers to come up with theme music
Appropriate for each department
Alright we're back on
It won't be
Bad Boys or NWA so
We'll make that go
Alderman Nugent
You may proceed and I'm going to go out of
Order a little bit. Alderman Kizada
Has a family issue
We're going to go to Kizada
After Alderman Nugent
Go ahead
Great thank you
Thanks chairman
And thanks everybody up in the
Up front and in the box
Appreciate it
I think a lot of questions
Had been answered before the break
But
I had some questions surrounding the department of environment
It looks like last year we had 14 employees and we budgeted that at about 2.399 million
And this budget is showing 79 employees in 52 million
Is that accurate?
It is
As was part of the report that was submitted to the committee on environment
This is the phase two of the transition for the department of environment
So the areas within 2FM as well as CDPH that deal with environmental regulatory and permitting work
Are transitioning over the course of the first half of next year into the department of environment
So is it net neutral or are we taking on 50 million additional?
No it's shifting up the positions from those two departments
The only increase in DOE's budget are additional administrative functions
I believe five roles to support an expanded and bigger department
So I just want to make sure I get it
So we're transferring 65 positions from CDPH and 2FM
Yes
To the department of environment
And
And we're only adding five
How much are we funding
How much are we spending additional in environment this year then?
It's about
It's an increase of about $390,000
In the department of environment
All of the personnel and non-personnel
That go along with those functions
That are currently in CDPH and 2FM
Are moving into the department of environment
Okay that's it
Is it fair to say that those
Were previously in environment
Before it was eliminated
And then is being brought back?
That's correct
Okay
Okay
I don't think he's leading the witness
Make my own legal judgment calls
Sustained
That's it
That's fair
Okay
I think I'd like to learn a little bit more about
And I could talk
I guess to Angela Tovar
When she's up there
Happy to provide you the transition report
That was provided to the
Committee on Environment
That walks you through
The transition
Okay
I'd appreciate that
And then
I want to move over to hemp
For a minute
I know that there's some
New things on hemp
In the budget
How did the city come
Come up with the dollar amount
Of $2 per unit for hemp
I'm actually going to pass that
To Brian Carlson
Who's the deputy over revenue
For the department of finance
Because that is their forecasting
And they're
They said it
In relation to other
Items that we tax
But Brian
Could you identify yourself
For the record please
Is this on?
Can you hear me?
Okay
Yes
Please identify
Identify yourself for the record
Hi
Brian Carlson
Deputy director
Of tax compliance
Thanks for the question
You wanted to know
How we came up
With the $2
Per product unit
So the
Hemp
Industry
Had given us
Some figures
When we were
Attempting to
Get regulation
In place
For
These types
Of products
And
Using that
We were trying
To
Get to a reasonable
Percentage
For different types
Of products
However
We
Are not
Allowed to
Tax
These products
At a percentage
Level
Because of state
Limitations
So we had to do it
At a per product
Level
So
$2
Per product
Unit
Seemed like
The best
Most reasonable
Place to land
Given a
Sample of
About 60
Different products
That we had
Reviewed
And that's
Where we
Where we
Landed with it
So what's a
Unit then
Like for example
If
Like if it's
A hemp
Beverage
A six pack
Is
Each
Can
A unit
Or
Is the
Six pack
A unit
Like how do
We do that
A
So, when we were looking at the product sample, we were looking at how the product was being marketed and sold at the point of retail sale.
Okay.
So, if it had been sold as, to your example, a six-pack, that would be one product unit.
If there were six cans sold individually, then that would be six product units.
So, it kind of depends on the packaging.
Okay.
So, one can would be an additional $2 if you were just buying a loose can?
If you bought a single can, yes.
Okay.
Are there any similarly situated cities that have some legislation like this?
Not that I'm aware of.
This is new to me, too.
Just $2.
How did you come up with that?
Like, was there an analysis done, or how did you create that as the landing point?
There was an analysis done on products.
The sample included edibles, beverages, and other hemp type of products.
So, we wanted to come up with a per product unit rate that would still result in a percentage when you compared it to the actual price that would land somewhere within a reasonable level.
Okay.
And you guys think that you could be live with this January 1?
The proposal is that it comes into effect July 1st.
Excuse me.
July 1st.
So, you'd have – okay.
It seems – might need – it doesn't seem fully baked out yet.
I guess that might be an interesting choice of word.
But, like, I would think that there's some work that would have to be done, right?
That's why July 1st is the proposed effective date, so the work can be done, too.
And I just want to make sure I understand this.
You guys think that you can raise $10 million in six months from this?
Based on modeling that we've done?
Yes.
Based on the unit modeling that you've done?
Yes.
Okay.
Okay.
Thank you for that.
I want to move back to a different topic, Chairman.
Earlier today in conversations, we spent some time talking about CARES program and ARPA funding covering CARES, but I was confused.
It's my understanding that CARES was still under ARPA for this year, but it's under – we have it in the corporate budget.
We don't have it under ARPA.
Can you help me understand that?
Sure.
It's very similar to how we provided $75 million in this year's budget to the fire department.
It's budgeted in the corporate fund, but it is repaid by ARPA.
So the same principle applies for the CARES positions that have been moved into the corporate fund for 2026.
They are budgeted in the corporate fund with the reimbursement for 2026 being ARPA dollars.
Do we always have to do that, where we have to budget it in a department and then get reimbursed by ARPA?
Or couldn't you just say it was being covered by ARPA and then use that money for something else?
So, again, ARPA dollars can only – because we obligated the dollars at the end of 2024, they can only be used for the purposes for which they were obligated.
And so given that we did have another year, as we are working to build the fund that the social media tax is dedicated to, it was important for us to use the dollars that were dedicated to CARE for the final year while those dollars are being accumulated in that fund for them to be able to support those positions sustainably going forward after the ARPA dollars have been expired.
Okay.
I know there was some talk in the budget about lowering the motor fuel tax.
How much revenue did we get from that last year?
Do we know?
I'm just curious, like, why we were lowering it.
The motor fuel tax?
We – you know, the motor fuel tax is money that we receive from the state based on the consumption of gas in the state of Illinois.
And as you know, we have not only seen gas consumption go down because there's more fuel-efficient cars, but there's more electric cars being driven on our roads.
Oh, understood.
I appreciate that.
I know some colleagues have asked about the head tax, and I know there's conversations about the head tax.
Is there any data that shows that any cities that have implemented a head tax have had increased development or business come to their community?
I'm sorry, could you ask the question again?
Yeah, I want to know if any other cities that we're aware of have introduced a head tax and then have had more businesses come to their city.
I think that there are other cities that have it in place that have not seen a decline in business.
I think that the way that we're looking at it is a little bit differently than that.
You know, we have seen in data that more macroeconomic impacts have an influence on business decisions than local taxes.
And we're also looking at it based on what they have told us is important for them in driving business here, which is reducing crime.
Sure, but I would – so I don't – so the answer to my question is no?
The answer to your question is the cities that have it in place, we have not seen a decline in business.
But we haven't seen an increase in business?
I would have to go and look at the data.
Denver has it in place, and, you know, I'd have to go see if they've seen businesses being turned away because of it.
Understood.
Thank you, Mr. Chairman.
Thank you, President Pro Tem.
Alderman Cozada, I know you had a matter you needed to tend to, so you can go ahead, followed by Alderman Martin.
Thank you, Chairman, and thank you to all of our presenters.
Budget Director, I want to first commend your team.
I'm sure many of my colleagues have said this before me, but presenting a budget without a property tax increase, without reinstating the grocery tax,
without increasing garbage fees, including no layoffs, at a time where the federal government is attacking public institutions, at a time when the federal government is attacking our states and cities,
and at a time where a lot of cities are grappling with legacy debt and budget constraints, this is, in my opinion, a very progressive and very responsible budget proposal.
Many people in my community have come to me in my time as an alderman and even my time as a county commissioner struggling with the rising costs of living,
but especially in regard to property taxes, which is one of the largest driving factors of displacement and gentrification, especially for our senior citizens and folks on disability or, you know, income, restricted income levels.
So this is a budget that I think brings a lot of relief to our communities.
This is a budget that I think is a reflection of the moment that we're in.
And I think that this budget analysis on saying that the wealthiest corporations and individuals right now are having a payday.
We're living in a second gilded age in this country.
And I think it's not an ideological conversation to say that there needs to be higher taxes on wealthier corporations or individuals.
I think it's actually responsible policymaking.
That is actually sound policymaking.
It doesn't make sense to continue asking money or, you know, driving people out of our communities who are poor, who are working class, who are working two to three jobs and who are struggling to buy groceries.
When at the same time, you have corporations making record profits, record profits.
And my colleague here, Alderman Villegas, and I were just talking about how, you know, a lot of these tax breaks were given a number of years ago during Trump's first administration and were continued during the second administration.
But I think that is even more of enough reason why we need to be fighting to ask the wealthiest corporations in our city, our state, across our country to be paying more in their fair share of taxes, because the amount of profits that have gone up, especially during the years of the pandemic, is astronomical.
Astronomical, truly astronomical.
Alderman, Alderman, Alderman, Alderman.
Is there a question here?
Yes, there is.
Sorry.
I was just getting a little excited ahead of myself.
And I'm also learning how your process works.
We're a little different over here.
My questions.
But thank you, Chairman.
A lot of us over here.
There's only 17 you guys over there.
I'll save for the budget, Gil says here.
Very well.
So two questions or a number of questions.
But so when it comes to the criticisms that have been made around the corporate head tax, I know there have been some people in the business community said that corporations are already paying.
They're making investments through philanthropy to help out with some of our public safety initiatives.
What would you say as to why we need to be fighting for a corporate head tax, despite some of these initial investments that they've already made toward our city services and programs?
Thank you for the question.
First of all, I want to...
give due where due credit should be given for those who have stepped up and who have recognized
that, you know, this is a group project, right? You know, more and more we see people relying on
local governments to provide services, but to provide answers to the things that we see in
our communities. So first I want to say for those who have stepped up, who are looking to support
efforts around driving down community violence, you know, I applaud that. It is being done on a
voluntary basis. And as we know, anything that's done voluntarily can stop being done voluntarily.
And this issue is too important and too critical to the very nature of how our communities thrive,
how they overcome historic disinvestment, and how we actually get to the root causes of violence in
our community to just leave it to a voluntary payment. And so we've built this into the
infrastructure of our budget in a way that prioritizes it as something that we know is needed
to provide investment in our communities. Thank you. In regard to the personal property
lease transaction tax, what's the justification? Why do you think there was room to increase
the rate of that tax? So, you know, the conversations that we've had over the last several days,
one of the things I try to continue to drive home is the need for us to tax activity in the areas
that our economy is growing, in the way that we consume, in the way that we do business.
You know, over the last eight months, and even before that, what we have seen is, you know,
a lot of exceptions, favorable tax treatments being given to tech corporations and social media platforms
in particular, as they continually invest in AI, as they continue to, you know, advertise more and more
to businesses and individuals for the use of their services. And so with that, what we see is this
part of the industry has grown exponentially in not only the last year, but the last several years.
These corporations also use and do consume a lot of our services, including energy costs, right,
whether it's through data centers or otherwise. Between 2023 and 2024, the revenue from the personal
property lease tax increased by 10%. And again, this is a percentage-based tax, which goes to how much
in revenue they are collecting every single year. So we do believe that there is room to grow here.
In fact, when we were debating this last year, this is actually the rate that a member of the city
council actually said we should be taxing this particular activity at.
Thank you. It also looks like that our expected revenues from the intergovernmental fund source had
one of the largest declines this year, about $179.2 million in the revenues data set. What are those
revenues and what's causing the expected decline?
The interfund transfers?
Intergovernmental funds, yeah.
Oh, the intergovernmental funds. That is CPS.
Okay. Got it. And then there was a $166 million increase in expected revenues from proceeds and transfers in.
Can you tell us what that revenue source is and why the expected increase?
The expected increase?
Yes.
That is the revenue that the CFO was talking about earlier, which is used, the debt financing used to
support the retro payments for the local two contracts. Again, that is not even, that's not the entire
amount of the retro that we owe with the ratification of the contract, but that's the portion that is the
non, the one-time payment due to our firefighters and members of local two over the last four years that the
contract went unratified.
And just to go back to the corporate head tax one more time, the original rate was $4, right?
And we went to $21, and that was adjusted just for inflation? Is that right? Is that the only marker?
So if the rate had been adjusted for inflation every year since it was first introduced in 1974, it would be $21 today.
Got it. And so that at the same time does not include adjustments for the tax breaks that have been given, correct, right?
That's correct.
So I know that the Institute for Public Good and other advocates have actually called for a higher corporate head tax
because they think that is a much more sustainable way of actually getting the revenues that we deserve.
Is there kind of an analysis that you can provide that kind of grapples with not adjusting it also for the tax breaks
that have been given?
You know, we debated this, and this is where we settled, given just the nature of looking at our taxes based on inflation.
One thing that this does feature in the proposal is an automatic adjustment for inflation going forward
so that we are accounting for the very thing that you're talking about going forward.
Got it. Excellent. Well, thank you very much for your answers. I really appreciate it.
I think that this is a really good budget. I really look forward to talking with you all more about this.
But, I mean, we have to hammer it away at home again. We need to tax the rich. Thank you very much.
Thank you, Alderman Cazada, for your soliloquy.
That is correct. That is correct. We've got a new tax. We'll call it the Timmy tax.
This will be all right. All right, Alderman Martin, what is it? Alderman Martin, go ahead.
Thank you, Chairman.
Thank you, Chairman, and good afternoon, everybody. No soliloquies for me this afternoon.
A few quick hitting questions. We'll direct these to start to Director Guzman.
So, for last fall, I think we were projecting for 2025 a $986 million budget gap.
What percent of that gap was filled with structural solutions versus one time?
Like X percentage with this, Y percentage with that?
With the budget that eventually passed or the budget that was introduced.
The budget that passed was 68% structural, 32% one time.
And then for this year, based on the budget proposals that currently exist for a $1.2 billion gap,
what percentage structural, what percentage one time?
60%, 40%.
60% structural.
Okay.
For CFO Jaworski, if this budget or any budget that we were to pass before the end of this year
were to prompt a credit rating downgrade, that would amount to – or that would involve approximately 15 to 20 basis points.
Is that a fair range?
Yeah, I think when we had talked about this at the hearing earlier in the year, you know,
we had talked about sort of a difference –
I have a lot of questions.
So, if –
Yeah, if 15 is what –
10 to 20, depending on, like one or multiple.
And that is equivalent to about $410 million to $415 million in increased borrowing costs?
Yeah.
Over what period of time?
That's for the bonds that would be issued through 2028 for the CIP.
And 30-year bonds, 40-year bonds, what would you say?
Like, over what period would that $415 or so?
I think we did that analysis, assuming 30-year bonds.
30-year bonds.
Okay.
I will double-check those numbers, though.
Okay.
I want to highlight a through-the-chair memo from last year.
This was November 12, 2024, in response to some questions from Alderman LaSpada about
the rating agencies and credit rating downgrades.
And all of this is a direct quote.
Moody said that an upgrade is possible with a continuation of advanced pension funding policy,
while a downgrade is possible if there's a weakening of adherence to advanced pension
funding policy.
In the same document, Standard & Poor's said, the stable outlook reflects our expectation
that the city will maintain very high reserves and continue to make advanced pension contributions
to preserve pension plan-funded status, and also said that a lower rating could result if
there is a movement away from the city's policy regarding advanced pension fund contributions.
So I am looking at a proposal that has a reduction in the advanced pension payment, higher reliance
on one-time fixes than the current budget, which prompted one rating agency to downgrade
us, and the use of multi-year bonds.
to cover one-time expenses in terms of firefighter back pay.
I add those together, and to me, that says this is an invitation for a credit rating downgrade
that could cost us over $400 million over the life of these bonds.
Tell me why I'm wrong.
So I think, you know, as you say, there are things that, you know, have been pointed out
by the rating agencies, you know, that are occurring in this budget, but they're not
occurring in the budget in the sort of extreme way in which the rating agencies tend to think
about them.
So we're not stepping away from the policy.
We're doing a partial payment this year, but that's not-
Isn't that stepping away from a policy?
If the policy that we've adopted has consistently said this is what approximately a full payment
is, never did we say we are establishing a policy and then we're doing half of that policy
until this proposal.
In addition, when they're referring to financing of one-time expenses, that's really referring
to taking those one-time expenses and financing them over a long period of time, not financing
them over near-term budgets and just sort of spreading that amount over a short term.
That's really looking to, I'm going to take this, I'm going to issue 30-year bonds, and
I'm not going to pay for it in current budgets.
You know, we're really looking at, for instance, on the legal settlement costs, how long-
would it have taken us to settle those cases if we didn't have a global settlement, for
instance, in the Watts case?
But my point is more around the back pay.
I understand that point.
And what was presented to me and I think some other council members a few months ago, and
we were considering and ultimately approved that, I think, sound structure of $90 million
was that it would be over two years, not five years.
Nor was it brought to my attention that we would be looking to use bonds to finance back
pay for $166 million.
So that's new, and I just want to flag, I see real problems associated with what's currently
in this proposal based on what was communicated to the city council last year in writing.
But I want to move forward with some other questions.
So the CARE program, 49 budgeted positions this year, we're holding that same number
next year, which I think is good.
I think this is a good, sound policy and is something that we should be looking to expand
over the mid and long term.
However, only 13 of those 49 positions are currently filled.
So when we're talking about setting ourselves up for success, I'm curious how, if the remaining
vacant positions, assuming they make it in the final budget, are those going to be subject
to a hiring freeze?
And if not, what can we do to ensure that we're filling more of those?
Because 13 out of 49 for an important policy, I think it's not where we need to be.
Thank you for the question.
So as I mentioned earlier and in our briefings with you over the last several days, the hiring
freeze does not include mental health positions within the city of Chicago.
So those are not subject to the hiring freeze.
CDPH has the ability now to fill those positions.
And I believe...
Do you know when they put out a job posting for anyone from the CARES team?
I can't answer that question.
I'm not over job postings.
Okay.
If we could get that through the chair before the CDPH hearing, that would be good.
Um, uh, in terms of through the chair requests at the mid-year budget hearings, which I know
weren't really mid-year, I had submitted a through the chair request around third-party
contracting.
Do you know if that's been, uh, through the chair request been fulfilled yet?
Was that submitted to DPS?
Was that a through the chair to DPS?
I don't know who was directed to, but I, I ultimately had asked it of you, but I'm not
sure if you know whether it's been shared.
I, I will look into it, um, you know, the, through the chair requests that are made directly
to a department, um, I think those departments do, uh, work to, uh, fulfill those requests.
They don't all go through me.
So, um, we will look into whether or not DPS has fulfilled that, that through the chair
request.
Okay.
Um, I see that the proposal involves a cut to the chief operating officer position.
Um, I'm wondering why that's the case, especially when, as we discussed at the mid-year budget
hearing, the city currently does not do, uh, key performance indicators, key performance
metrics.
And I know that when we were talking at that mid-year hearing, I think you and I were in
agreement that that would be something that would be good for us to focus on.
So whether it's the broad scale adoption of KPIs or ensuring that our departments on the
ground are doing a better job, despite continuing to work very hard on providing core services,
especially in the infrastructure space, how is cutting that position going to help us get
closer to adopting KPIs and improving inter and intra departmental collaboration, especially
around infrastructure improvements?
Thank you for the question.
Um, so the sort of structure of the mayor's office is, you know, their purview and, um, you
know, they have a chief strategist in the office now.
Um, so the decision of what to call their titles and what positions to include is, is purely
their own, um, as it relates to.
Strategist position to, uh, largely overlap with or completely mirror.
The job title, the job responsibilities of a chief operating officer.
Am I wrong?
I think that's a good question, um, to have in a discussion to have with the mayor's office.
But you're the mayor's budget team.
Like we don't have the mayor's office come before city council.
So again, like with, uh, be able to answer that.
I think like with each one of you who are able to make decisions about your office, the mayor
made a decision about his, as it relates to the implementation of KPIs citywide within
the, within the budget.
Um, when you see that happening in other, in other cities, it's through the budget office.
So whether or not we have a person that quote unquote call the chief operating officer does
not negate the ability for the city of Chicago to implement KPI or budget or performance-based
budgeting.
Okay.
Um, through the chair, can you provide a list of all proposed positions in the FY 2026
budget that are currently vacant and that have been vacant for over a year?
Um, and I'd like that to include title, departmental affiliation and compensation, and I'll do a round
two.
Is it all?
I'll do a round two.
Nah.
Um, you guys got the, his request?
Okay.
All right.
Um, go ahead, Vice Chair.
Um, Chair Irvin, can we check from the mid-year, just because I've heard a few people ask for
mid-year through the chair responses.
I know I got at least one.
I don't know if everybody got all of their responses.
So can we just make it a point to check with those that we did make requests of from the mid-year?
So the, the, to my understanding, the mid-years were sent to, um, individual authors that asked
for them.
And then I asked that the responses in total be placed on our website.
On the website.
So that was the, that was the cadence of, of what, what the direction that I gave was as
related to a mid-year, uh, through the chairs.
So, but I, I say that, and without knowing 100% of all of them have been answered, so.
We can just double check that just for everybody else.
No, it's fine.
And if you can provide the, which website it is.
Uh, the committee's website.
Okay.
Committee's website.
And I, and the, uh, the director stated that she's also posting them to her website as
well.
Thank you.
That's all I have.
Thank you.
Okay.
All right.
Um, Alderman Cito Lopez followed by Alderman Scott Vasquez Knight.
Okay.
Alderman Cito Lopez followed by Alderman Scott.
Uh, my apologies.
I know I said your name, but you, you were on the late bus.
I, I can't, uh, you see you sitting all the way over there.
You supposed to be sitting over there.
Yeah.
What time?
Leave here at 4.30 at the very, very latest.
Oh, good.
You, it's not even three yet.
You good.
All right.
Alderman Cito Lopez.
Thank you, Chairman Irving.
And thank you, um, to the budget director and everybody in the box.
Um, in terms of the, in terms of the ask of, um, of the Chicago public schools around, um,
around TIF, I think that some of us have gone to all the board meetings and we have said
time after time that it was important to have a conversation about that surplus before we
make commitments, but many members of the, um, council signed a letter, you know, supporting
fully investing and fully fund our schools.
Um, as, as you see with the TIF surplus or what I think top of the list in terms of the
TIF surplus.
And that is one commitment that we made to make sure that we help, um, with that budget
deficit, $720 million, um, the expectation for us to pick up some of that, including a
pension payment agreement.
Thank you.
that the previous CEO had committed to make,
but yet now city council is responsible to make.
So in that sense, just to explain,
and again, I'm fully support for us to make those commitments,
especially those who signed the letter to fulfill that commitment
and make sure that within our words,
we do everything we can to fund our schools
and be responsible in those commitments.
So just in terms of the process, and again, in my word,
I know that there's a surplus of about $120 million.
I know some of our colleagues now are complaining about the delays,
but we've been aware of those delays,
and we've been trying to work with the administration
on finding solutions to fulfill those projects.
So I just want to make sure that we're honest in this conversation
because we have been, and we have been also aware
that this will be having issues with our words.
So I can attest that we've been working in good faith,
and even though in some of the proposals that we had
have not come to fruition,
but I support us being responsible in what we commit.
So in terms of the process of the TIF commitments
and what came from CPS, if you can share.
Sure.
So the IGA that we typically sign with CPS
is with their board and their CEO for review.
It is an IGA that puts forth CPS paying the $175 million
to cover the pension payment within our 2025 budget.
We don't make any further commitments to CPS
as it relates to the TIF surplus in future years,
and we also have not signed future year IGAs with CPS.
So as I can't remember who asked me earlier,
but the 2026 budget does not rely on receiving any reimbursement
or revenue from CPS to support the pension payment.
The IGA before CPS currently is to ensure that we receive the revenue
that we did depend on in this year's budget
to cover the pension payment.
Thank you.
I appreciate the...
Before you go on, hold this time.
The $175 would then do what to our fund balance?
Where is it projected right now,
and what would this do to our fund balance in 2025?
So based on the forecast for 2025,
we would be able to add additional surplus to our fund balance.
We would end the year in a surplus.
Without this, would it approximately,
would you anticipate we land?
It would essentially,
because the funding that we have in our budget
is supporting the pension payment,
advanced pension payment,
we would have very little left in our fund balance.
And then adding the $175 gives us some room.
Okay.
All right.
Go ahead.
Thank you.
Thank you, Chairman.
And I appreciate also, Chairman,
attending the Board of Education meeting
where we had this conversation.
We want to make sure that we have a sober analysis
of what the commitments that we have.
So thank you.
I know in some of the conversations around the issues
that we're dealing with,
and I think it's not only the city, state,
the analysis around that we do have a revenue problem,
not a spending problem,
because that's what we're going to hear a lot
in these council chambers
and how the need to address the spending.
But it's really an issue of revenue
and the issue that we have had for time after time
that the revenue tends to come by the same people, right?
So I'm glad that there's not property tax increases in this.
And then what are the options that we have
in terms of revenue and sustainable revenue?
So in terms of like the corporate head tax,
I do believe that businesses have gotten a tax break
by the Trump administration that now we are absorbing
because those cuts come at a tremendous cost to our city,
especially when they hold all this.
So in terms of like that issue of revenue versus the spending,
what options have been in terms of also,
can we connect with the state level?
You know, state level,
because I know that there are constraints
in what can we generate.
So in terms of maybe what can be done
also at the veto session
and in terms of users, you know,
describing a little bit the analysis
around the spending issue versus the revenue issue.
Yeah.
So, you know,
this budget has both balanced,
what we believe is a balance of progressive revenues
and strategic spending reductions
because we should always be looking for ways
to reduce the cost of government
where we can without sacrificing vital and critical services.
And so what we put forth before city council
in this budget is a number of initiatives
based on the analysis that we did with EY
over the last several months
to look at areas that are cost drivers within our budget
and how we can responsibly reduce those costs over time,
starting now, frankly.
On the revenue side,
you see the proposals that we put forth,
but we're still going to Springfield and saying,
not only will we benefit from progressive revenues,
but you will benefit from progressive revenues
in a state that still has a structure of regressive taxes,
which harms the working class
more than it does high net worth individuals
in a town and in a state that is progressive in nature.
And so, you know, the asks are not only for them
to look at instituting progressive revenues
like a sales tax on service, which grows our base,
relooking at the LGDF income tax allocations,
the PPRT, the personal property replacement tax,
stopping diversions, which is wholly a municipal tax,
stopping diversions from a municipal fund,
looking at new revenue sources like digital ad tax,
like package delivery tax,
and then also, obviously, outside of our budget,
but still important for our region,
making sure that we are funding our schools,
making sure that we're funding
our public transportation system.
So those are some of the sort of asks that are on the table
and have been on the table for quite some time.
And I just want to say that, you know,
usually, especially when you're asking people
to do something new or something different,
it's not going to be just one conversation, right?
It takes several conversations,
and it takes a groundswell of people having that conversation,
but also showing how it benefits everyone.
And so we will continue to go down.
We will continue to help our legislators understand
how what benefits Chicago benefits the state as a whole.
Thank you.
My next question has to do with this oversight body,
especially around overtime for the Chicago Police Department,
chronic vacancies.
I know that there is,
and again, we're looking about ways for us
to address these issues that have been there for a long time.
So around chronic vacancies and overtime,
how does this oversight body will work
and in reporting on city council?
And then I know we may not have enough time for that one,
so the other one is around the pension,
the advanced payment pension, you know,
and that what we're thinking along those lines.
Because as this chronic vacancies continue,
I will continue to delay this conversation.
So around the chronic vacancies and this oversight body,
and then, you know,
what we're thinking around the advanced payment
that we have to do.
Sure.
So as I mentioned earlier,
we did a historical analysis of overtime
across all of our departments,
across all of our funds,
to understand, you know,
why we were continuing to see certain departments,
not all departments,
but certain departments go over their budgets.
And what we found is not only a couple of things.
One, the cost of overtime is more expensive now
than it was when those budgets were set,
but also a concerted effort by our departments
to actually be more thoughtful
about when they are using overtime.
And we've been working over the course of this year
to really highlight to our departments
the need to be more strategic
and to use overtime only when necessary.
So we right-sized the budgets
for each of our departments
in order for us to account for the fact
that the cost of that overtime
is more expensive today than it was before,
but to also hold them to that budget.
And so what you see is an increase
within CPD's budget
so that we're being more transparent
about how much is budgeted for their overtime,
while also, you know,
they have frozen a number of their positions
in the FY26 budget,
accounting for how many positions
they know they will actually hire into next year.
So we're not using vacancies
to overcome the overage that they have
in their overtime budget,
being more transparent
about how much we're costing for that
versus how much we're costing
for the positions that are open
for them to actually hire into.
Thank you.
And about the advance payment,
pension payment,
what is the rationale around the payment?
And, you know,
just what is presented to the body?
For CPS?
Yeah.
The discussion with CPS right now,
the IGA is with them.
I don't have the date.
I don't know when it's going to be brought
I don't know when it's going to be brought
before the...
I don't know when it's going to be brought
before the...
board, but it is before them for review.
And we have been in conversations with them about it.
Thank you. Thank you, Trevor.
It'll be before we conclude these hearings.
I think I have Alderman Knutson.
No, I'm sorry, Alderman Scott. I forgot you came here early.
I'm sorry. You're not in the class. You're in the class all by yourself.
All right. Good afternoon, everyone.
I hope you enjoyed your lunch. I have a few questions.
The mayor has made it publicly about the Trump administration cutting $800 million for community
violence intervention, and that's very important to me because many of those groups are active
in my community. Is that figure nationally or locally?
That's a national figure, but a number of our own groups that we also fund have seen cuts
from that budget because that's the budget that DOJ provides to community violence intervention.
What's the direct cut in funding expected for Chicago?
From delegate agencies that receive directly from the federal government?
Yes.
I'll get you that number.
Okay.
Okay. So everyone has talked about the TIF, and I know this will be the 11th consecutive
year of sweeping a TIF. And, you know, I looked at where a lot of the other wards were, you
know, this, you know, from my observation, this would have, you know, it would be like the
aldermen's are crabs in a barrel, really picking at, you know, who's going to be funded, who's
going to be awarded. So did you all actually sit down with DPD to actually discuss how this
would affect projects currently and moving forward? Did you all have a talk with Sierra?
We've had a talk with all of our departments who received TIF dollars for projects, looking
at both projects that were sort of ideas, not fully formed, as well as those that were no
longer viable projects and having those conversations. I will say this, that after
surplusing a billion dollars, there's still $523 million in the TIF with $103 billion expected
in the TIF for 2026. So my question is, if we ask her...
Monique, hold up a second. That number's not right. You said $103 billion?
$1.3 billion.
Oh, I'm sorry, $1.3. Okay, you said $103. Okay.
$523 million left after the surplus. $1.3 billion generated a new, so brand new revenue coming
to the TIF in 2026. So the commissioner will tell us that they approved this level of funding.
What I would say is we are required by state law to surplus what is not allocated to a project
in the TIF districts.
So I want to read something that I just read maybe like 30 minutes ago. It's from the governor.
He said, I am absolutely four-squared opposed to a head tax for the city of Chicago, Prisker
said, Tuesday at the Economic Club of Chicago. It penalizes the very thing that we want, which
is we want more employment. And he also can veto the head tax. What will we do?
Who? No, no, no, no.
Yeah, I read that.
The governor cannot veto the head tax here in the city of Chicago.
I read that.
That is wrong.
Okay.
I can tell you that 100%.
You can't.
Correct me, but I did read that.
Yep.
Audemann Bill.
Chairman, the governor can preempt if the House and the Senate votes to take that authority
away from the city of Chicago.
That's a different conversation than vetoing anything that this body decides to do if it's
within our purview to do. So if they do that, that's a different conversation. But today he
does not have the ability to veto anything that we pass.
But we're discussing it today because if it does happen, then what do we do with this head tax that
we're proposing that's going to be $100 million, right?
So thank you for that question. I think this goes to the very thing that we keep saying
around state authority versus home rule authority. Municipalities continually over the last several
years are seeing their revenues taken from them by the state to plug their budget holes,
leaving municipalities, and we're not the only one, leaving municipalities without the very tools
to support the work that their constituents need on the ground. And that's important because that
leaves us with the tools that are regressive in nature, property tax, fees and fines. And so,
you know, what I would say to you and to everyone in this body is that these are the serious
conversations we need to have with our state legislators about how they handicap municipalities
with the very tools meant to actually support our constituents and the very work that's actually
happening at the local level.
Okay. So I want to go into the social media tax. And I don't think that we've actually,
can you explain how that's going to work?
Yeah. So it is part of the amusement tax that the city already levies, but this time it'll be levied
on a different activity and a different entity. So for this, it's social media companies, and I don't
have the definition in front of me, but think TikTok, think Facebook. And it's based on their users,
they're active users. So per the ordinance, the way that it would work is those companies are required
by ordinance, once this passes, to collect and render to the city of Chicago a percentage of
their profits based on the number of active users beyond 100,000. So if there is a social media
platform that has less than 100,000 users in the city of Chicago, they're not subject.
So how would the city determine that?
The company has to determine that, but they also...
Not the company. How would you all determine what...
Through the tax returns and other financial documents that they are required, just like
most of our other taxes, they're required to file with the Department of Finance.
So this would be under the amusement tax or a special use tax?
It's part of the amusement tax.
So this revenue wouldn't be expanded. So we're taking the social media tax to support the mental
health, correct? So that's not going under a special revenue fund?
It would be collected in a special revenue fund with a special purpose, yes.
One more question. This question is for the...
One quick clarification. The social media companies report on their user data in their
financial report filings. So they report it publicly.
Okay. Another question. I know we talked about that $111 million for... affect the cuts of streets
and sand? How is that going to affect our services for snow, plow, rodent baiting, forestry, et cetera?
How will what impact our services?
How will the cuts to streets and sand, you know, impact our services and our wards?
Yeah. So thank you for the question. You know, we've worked really closely with streets and
sands in looking at... Because, you know, every department was given a target to meet as it relates
to efficiencies and reductions. So again, these are vacancies that are reduced, not people.
You know, we looked at a number of ways to ensure that streets and sands is still able to do their
work. They're still able to collect our garbage at the same rate that they currently do with this
workforce. There are some impacts as it relates to, you know, their forestry unit that they're better
able to explain. But again, you know, in our conversations with streets and sands, you know,
they always say, we'll get it done.
Okay. So this... I have another... My last question is to the controller.
Right now, payments... I know you talked about the software needed to be updated, right? You talked
about some of our systems that are outdated. But right now, payments to subcontractors take
about 180 days. And we know that our subcontractors have to wait incredibly long times to get paid on
city construction projects. What are you going to do to reduce the wait time?
Thank you for the question. So we... I've been dealing with this issue since I've been here.
And what I've found in many cases is that the holdups at the department level. And there's usually
multiple steps for approval. When it gets to us, we can usually turn around a payment in five to eight
days. So when I contacted the director of procurement, and we're working together, we're going to...
we've actually picked some sampling of where the holdups are, where they occur in different
departments, and the longest ones, and kind of reverse engineer them.
and figure out a way to streamline their process.
If we have to do a better job educating them on what they need to do so that things don't get kicked back, we're going to do that.
And then we're also looking at technology and vendors that actually take over the payment process.
But, you know, I absolutely appreciate what you're saying.
You know, a lot of these subcontractors live hand-to-mouth.
They've got to pay their employees.
And, you know, to me, that sort of timeframe is unacceptable.
So we are meeting on a regular basis to try to fix this.
So I know that they were working on an RFP, the last controller, for the third-party administration to handle the construction payments.
Are you still working on that RFP?
I'm not aware of that.
But I just know I was approached by a company that does this sort of work.
And then we were talking to them about maybe doing a no-cost pilot on some of our payments.
So I'm not aware of a previous one, but, you know, again, you know, and this goes back to metrics and measurement, is that, you know, we're going to set what's the reasonable standard among cities across the country, and we're going to try to set ourselves up to meet that.
But that is all.
Thank you.
Thank you, Autumn.
On that point that you make, that has been an ongoing issue with contractors and everyone.
It is generally accepted that while the amount on a $400,000, $500,000, $600,000 invoice may not be balanced to the penny, there's generally an acceptance that we do owe some level of funding to company A.
Why not implement a 70% or 80% payment for that company upon, you know, invoice presentation, and then as it gets reconciled through the process, you know, to me, that's more of an accounting issue.
Because ultimately, when a company anticipates a delay in payment, that is added to the cost of what they bid or do for us, and if that's 60, 90, 120, 150, 180 days, that's costs that many companies can't, they don't have a balance sheet to carry, and ergo, they're paying interest costs, and therefore, we're paying interest costs.
Has the department ever considered a level of payment upon invoice presentation with the clear thought that we have a contract, we have an obligation, even though the invoice may not be balanced to the penny?
As part of the effort that I mentioned to you, we are considering that as well, and we do understand that these companies usually have to draw on a line of credit.
until they get paid, so we're trying to address that problem.
Is that a execution point, or is that a legislative point?
Would you argue that you have the ability to do that today?
I would have to get that answer through the chair.
I know there's some things that the controller can do just administratively, but some things do require to be done by ordinance, so I will get that answer through the chair, through you.
Okay.
You're going to answer me to me?
That's an interesting one.
All right.
Be there that's me.
Alderman Knudsen, followed by Alderman Burnett.
Chair, I'm going to hold my questions at this time.
Thank you.
Don't give him that opening, man.
He'll run.
He'll run.
It's not the U.S. House where you, you know, reserve my 32 seconds back to the year of my...
All right.
Alderman Burnett, do you have anything, sir?
Oh, I'm sorry.
My apologies.
You're not chopped milk.
I'm sorry.
It means a production speech, and now the guy's already gone, and here I get passed over again?
You've got your own room now, so we can go back there and meet and talk about it.
Go ahead.
You're correct.
Alderman Conway, go ahead.
Yeah.
So, you know, I was looking...
Most of my questions are just simple follow-ups from prior ones, but I was looking at the TIF waterfall this year for LaSalle Central versus last year,
and I see that in last year's waterfall, it said that the LaSalle Central TIF was going to supposedly bring in $192 million in revenue,
and this year I see it's projected to bring in $125 million in revenue, so a significant drop.
I didn't know if you knew where that come from or what's...
or want to opine on what's driving that.
I know there's 108 TIF districts.
I can look into that and get back to you.
We do know that based on the anticipated assessments from the Chicago reassessment that 83% of our taxing districts will see an increase in their property value,
which means an increase in the amount of revenue coming into the TIF districts.
About 13% will see a slight decline, and about 2% will see no change whatsoever.
I don't know if that's one of yours, but we can look into that and get back to you.
Yeah.
I think that the biggest TIF in the city, experience a 30% decline in tax revenue, is kind of something that should be discussed,
and I think perhaps speaks to the broader issue that downtown is having, emerging from the pandemic.
Could you just repeat the TIF district one more time?
Yeah, it's LaSalle Central.
Thank you.
It's like right outside here.
You guys have good lawyers down here.
Get your assessments down here.
It's going to be the largest.
Now it's the second largest to Kinsey Corridor after with this fall.
A follow-up I had from, I think Alderman Beal originally asked this, regarding the retroactive pay for firefighters,
that I know we had allocated $163 million for that last year for contract salary adjustments,
and now we have to borrow that, as you discussed, is, you know, what's really causing that change?
Is it the pension sweetener that came out or something else?
So I know that – I think this question has been asked a couple of times as to why it was budgeted, it's not budgeted.
Was it budgeted?
Why are we borrowing?
So I just want to be as clear as I can because I think this is a really important question,
and I thank you for asking it.
So, you know, every year that the contract has gone unresolved is another year of retro that the city has to pay.
So every year, you know, in the first year we didn't set out $300 million in the budget
because that wouldn't have been how much was due had the contract been settled one year out from being expired.
And so we have another compounding year from last year for the retro payment.
At the same time, because the retro payment is a one-time payment, right,
that's based on four years of not having a contract in place.
At the same time, we have seen other areas of our budget, which were not anticipated to grow,
grow exponentially, which are ongoing costs.
So our health care benefits up by $118 million year over year, not over time, year over year, just in one year.
Over time, which is an ongoing expense, up over $110 million in one year.
So, again, those are costs that are going to be ongoing in nature.
And so when we were looking at the kind of panoply of options and tools at our disposal,
what Jill and I talked about was, you know, these one-time extraordinary costs,
which are not going to be ongoing in nature, let's use the tool that allows us to field that over two to three budgets
rather than all at one time.
But to your credit, you put aside $163 million last year, and there was $185 was the number.
So you'd think that, to your credit, you kind of got it right, but yet the $163 is not there.
Where did it go?
So the other costs that are now in our budget that were not there last year,
so the health care benefits over $118 million over time increased by another $100 million.
So we have unanticipated costs that were not in our budget, not in our forecast over the last several years.
So OBM took it upon themselves to reallocate $163 million that was set for contract salary adjustments
to something else, to health care, to overtime, to...
So every annual budget is an annual budget, right?
So, you know, you guys pass an annual budget, not a multi-year budget.
And so this is the proposed budget that the mayor has put forth in front of you for consideration
and how we handle each one of the obligations that are...
that before the city. We set aside $163 million for a specific purpose, and you did not use it
for that purpose. Because the contract got ratified last week. So what happened to the
$163 million? So the $163 million should still be there. This is still 2025. The payment is due
next year. So what'd you do with $163 million? It's still in the budget today, but it's not
being paid until next year. But then why do we have to borrow the $185 million?
The retro payment is due in the 2026 fiscal year.
The $163 million is still sitting there or not?
Okay. Maybe I'm not explaining it correctly. So this is this year's annual budget.
I think you're explaining it very clearly. $163 million was set aside for contract salary
adjustment, and you used it for something else.
No, we haven't used it for anything else. It's still in the budget for this year. The payment
is due next year. So we're talking about how do we pay for it next year?
And so at the end, okay, okay, okay. We, we, we, we, there are two things that are happening
here. Number one, yes, there was an appropriation made by this body for that retro payment that
has not happened and is due next year. That money is still there. If you look at it in the
ledger, it's still saying zero there. Now, that doesn't account for other things that may
have been out of whack, that may have been overexpended or underexpended. Again, a budget
is merely a plan. I will though. And I'm, I, the accountant in me does not reconcile the difference
from years one, two, and three coming into year four and five as to the ability of this
being an accrued liability on our enterprise-wide statements. And so, and I think in somewhat as
to where he is and a little further back from where I am, is that we should have this liability
accrued somewhere. Now, if what you're telling us is that we don't have the cash to support the
payment of the liability versus the fact that as if the way it's being described as if we did not
anticipate this to be a liability. And if you guys can reconcile those two things, I think it may help
us balance this whole thing out. Yeah. So one, I think it's important to understand the difference
between accounting basis and budgetary basis, right? Those are very two different things. And I think
as the comptroller has said, that this is an accrued liability within our ACFA every single year.
How we handle it from a budgetary basis is different year to year. So when you appropriate
in your annual budget, you appropriate for that year only. And so what we have done is accounted for
all of the obligations that the city has next year in the budget that's before you. And in certain
instances, and in very important instances, other costs have gone up, right? So the things that you
appropriated this year are not carried over year over year into the next year's budget. So what we have
put before you is a different allocation of dollars for your consideration in the annual budget.
Yeah. I just, because I don't understand why the $163 million asset is not still sitting
there. Because it doesn't carry over year to year. We don't carry an operating budget over
year to year. But the cash is still, the cash is there. It's now the budgetary line. What
we're proposing is that it goes to a different cost that has grown in the budget, including benefits,
including overtime. Okay. I will go ahead and move on. So earlier, in previous remarks,
you said we had a gap of $146 million for fiscal year 25. Was that closed? Or what ended up
happening with that? The 2025 gap? Yeah. So what we have proposed through the TIF surplus that is
being distributed in 2026, $554 million of that goes to CPS. What's before them right now is an IGA to
pay the city back the $175 million that we have counted on within our 2025 budget, which would
actually erase the deficit? I got it. Okay. Did we, you mentioned this earlier, this kind of following
up from Alderman Ryland, Alderman O'Shea, how we loaned the firefighter pension money last month.
Have we gotten that back yet? No, we will get that back when the second installment of property taxes
are collected and those have not been billed yet. Great. Got it. And following up on one that Alderman
Lee asked, I think you said we're going to deliver this through the chair anyway, but regarding the head
tax math, I mean, it seems that, I mean, it's pretty clear that $21 a month times 12 is $252
a year. And if that's going to raise $100 million, it's going to affect give or take 400,000 employees,
which is something like a third of the private sector workforce of this city. So maybe the response
is that 3% of companies employ a third of the workforce of the city, but the math doesn't seem
to make sense. And I don't know if you wanted to speak more to that or just return it through the
chair per Alderman Lee's request. I think the chairwoman has requested the list of the
corporations that would be implicated in the tax. We will provide that as well as we'll give you our
math. And, okay, great. And regarding sports wagering, I saw there was a $26.2 million online sports
wagering, uh, allocation. Is the, is the city able to, how does the geofencing of the cities of the
better done in that situation? Do the companies do it or somehow does the city do it? The company does
it. Okay. All of these companies geo locate all of us. I thought by state, I just didn't know if they
did it, uh, did it by city. Um, Mr. Chairman, that's all I have. Thank you very much.
Thank you. Um, to go back, just so we're clear with this, uh, fire retro, uh, conversation at the end
of 2025, we will accrue the full amount of what the retro payment is on our financial statements.
Correct. In the, um, audit, which is based on accounting principles. Yes. That's correct. Okay.
Now you're asking to borrow an amount that's equals what as relates to the overall liability of what we
have. The amount that's, uh, related to the salaries and wages, uh, retro for the local to, uh, um,
contract. So not the full amount that will be due, not the amount of, of, uh, money needed to
increase their salaries based on the new contract. So it's, it's a very, uh, um, specific amount
that's based on the retros owed. So the, the, the, the 100% of the amount that you're, you're asking
for borrowing wise is purely the retroactive components of. That's correct. That's it. Now,
help me to understand this important portion, even though we have accrued the full liability as we
come into 2026, um, you, what you're theoretically saying is that we just don't have the cash to
support the payout of that liability. So, um, I think maybe if I clarify the difference between
fund balance and budgeting, right? So private, uh, the, the, I think the way that maybe people are
thinking about this is that the amount sat in our fund balance, um, on reserve instead, because,
you know, we always have to be ready anytime the department of law finalizes the contract. This has
been in the budget every single year and currently is in our budget this year. Um, and so, as I said
before, you budget an annual appropriation every single year. And so with that not being paid out
this year, we now have to pull it into 2026 budget because it's due in 2026. And so as we look at the
totality of our budget and every line item, a number of them went up, including benefits, including
overtime. And so it's not like our budget stayed static and therefore every line item is exactly the
same. And that we could just carry this over. We always have, we also have to make, uh, room for
the ongoing obligations that we have in other areas. And so again, accounting for another year
of retro and the fact that, um, we have other costs, ongoing costs that are going up. The portion
of the retro that is one time in nature is the portion that we are assigning to the, uh, financing.
Go ahead. Hold on, Alderman, uh, Conway. We, are we borrowing the full 185 million or some lesser
number? It's 166. It is what is 166. Okay. I mean, I think your questions are all good ones,
Mr. Chairman. Obviously the money was not kept in the authorized fund balance. It's not there.
So I think, well, I, I think the, the amounts and I, and I think this goes back to a broader
question of, uh, that we have to address is around overtime and the over.
extension of things that we definitely can't control
but must pay. So from
all looks of it, the amounts have been eaten away through
other overexpenses, which primarily have come
in the form of police overtime. But that's probably the biggest chunk
of it, in my opinion, as it relates to the budget.
We also have to recognize that
the difference between what that amount would have
been had it been paid during the times, if it
were not retro, would have probably been continuous
hits on the fund balance anyway, because if we would have paid those
amounts at the time they were due with the same scenarios,
we would not. It'll all flush out at the end of the day.
It's just being done over a longer period of time. Although we responsibly
set it aside and then it became time to pay it and it's gone. We have to borrow
it. That's the problem, you know.
That's one way to look at it. But it's
primarily based on
overexpenses in another area of the budget.
And those have been centered around public
safety at the end of the day. Chair Dow.
Point of information, listening to this back and forth. Budget director, can you explain how you
closed then the 2025 budget gap? Just to...
The 2025 or 2026?
No. 2025.
Oh, okay.
It's IGA.
I don't have that one in front of me. And as you know, it continued to change throughout the
process of the budget last year, after the property tax was
rejected by the city council. I don't have the 2025 gap closing in front of me. I can get that for you.
All right. Thank you, Mr. Chair. This was
his line of
questioning stimulated that question
because it's
not clear. Well, the biggest chunk of
the payment will come from
the CPS pension payment,
which is
their year. The irony is
that their year is half of our year,
so it straddles. So
their payment will help that.
Anticipate that's
where the answer was going.
But
let's say it doesn't happen.
I still want to know how
we anticipate closing that budget.
Yeah.
Oh, 2025.
Yes.
Oh, sorry. The deficit.
Yeah, that is
that is the way that we are anticipating closing the gap is through the payment.
It's fully the payment by CPS.
Also, we
have a hiring freeze in place
currently this year,
a travel freeze,
and departments have continually
continued to lower their costs
through
other means as well.
And I don't need to round two, Mr. Chairman.
Thank you.
Thank you, Mr. Vice Chairman.
I just wanted to get my little question in.
Appreciate that.
Back to you.
All right. Are we all settled on this
illness issue?
We know you're not going to ever be satisfied.
This is all right.
We're going to we're going to we're going to get you there eventually.
So.
All right.
Alderman,
do you have any questions?
Yeah, thank you, Mr.
Thank you to the team.
I know this has taken a lot of
hours and I appreciate all the supplementing documentation you provided up to this point.
My primary questions will be surrounding the TIF funds and really trying to understand operationally how it works.
Again, I was presented the waterfall balance for my ward, which is awesome to see what it shows is that the surplus for 2025 effectively takes out the existing balance for the account at this point in time.
But there's a revenue that replaces it.
My question is, when does that revenue come into effect where we're able to then allocate those dollars again?
Yeah, thank you for the question.
So the TIF revenue is replenished throughout the year when the property taxes are distributed by Cook County.
So March is usually the first distribution.
Now.
I will say that with a caveat.
I have not heard that the treasurer is going down to Springfield to ask for that to be moved based on the delays in this year's property taxes, but set in March.
And usually the second installment comes in August.
So it comes throughout the year.
Gotcha.
So it's effectively broken up to three, two to three times a year is when we.
Yeah.
But I should also say that most of the things that get paid out in any given year are not projects that are encumbered that year.
Right.
So a lot of times projects that are getting paid out are ones that were encumbered previous years because they're in development at that moment.
Understood.
Understood.
My question is more so about us, our ability to then forecast out new projects.
If we're sweeping the TIFs completely and we start off with a zero basis at the beginning of the year, how can I then forecast out what I can use TIF dollars for in the future?
Yeah.
So thank you for that question, both in the packet that each of you received for your specific wards, but for the city as a whole, we project 10 years and we give you the revenue for each year.
Right.
So you can see if there is no other projects that happen in your ward or but also with the projects that are currently encumbering funds, you can see how much revenue is coming in to each of your districts every single year.
How that compounds year over year and though we can't 100 percent forecast, you know, year after year about how much that will increase because of the property values going up in your wards in those TIF districts.
It does give you a sense of the growth margin of those revenues within your TIFs over a 10 year period.
Understood.
Thank you.
So just to role play with me for a second and in this process, seeing as the Kinsey corridor, large TIF district is going to be written down or swept based off of how we are required to do so.
So in 2026, if it's saying it's going to be replenished by 100 million dollars over 2026, I should then go to DPD over that time in 2026 to then say, hey, I want to allocate X amount of dollars or from this TIF to a certain amount of project.
And we're doing that now. So, you know, for projects that will encumber in 2026, 2027, 20, like however long it takes for that project to develop, start and then finish, we put those cash flows into the TIF districts.
The dollars don't have to be there today because we know that they'll come in over the course of the year.
We know that based on cash flows related to any projects, they'll probably have a little bit of excess because they don't use all the dollars.
And so we program, we can program from day one. We can start now for 2026.
We don't have to stop because we can forecast the revenues going forward.
Understood. So I should be looking more so at that 2026 imbalance rather than the 2025 imbalance of what I can use.
You can look at the imbalance for 2025 too, because it'll show you and then it'll carry over into 2026.
Gotcha. Thank you for that answer. And so the surplus is pretty sizable, as we've all, as my colleagues have all noted.
My question will then be how, what exactly is this TIF surplus addressing that is one time in nature that we can kind of not worry about for the 2027 budget?
Because I think the concern here is a lot of structural risk in making sure that we're able to cover.
I think it's a great question. So I think, you know, every, every, as I said before to someone else, you know,
the issues that we're facing as a city weren't created overnight and they're not going to be resolved in one night or one budget.
And it'll take successive budgets for us to truly reach a hundred percent structural balance.
And so I look at this as us making concrete steps every year to resolve our structural deficit.
So for me, what this does is it's really hitting a number of issues all at once.
We're at a time politically where we do see not only for the city of Chicago, but for our sister agencies, you know, real threatened attacks on their viability for the grants that they receive from the federal government.
We, like a lot of our sister agencies, receive most of our grants directly from the federal government.
And so this, I think, is trying to support not only the city, but our sister agencies at a time where they're seeing a loss in federal funding,
which we hope there'll be favorable outcomes in the midterms to allow for there to be mitigation against those threats.
I think at the same time, we're also working on, along with our sister agencies, on progressive revenues at the state level.
And I think that that is really important because it does take more than just our actions to provide revenues for the city,
for our sister agencies, in particular CTA, for them to stabilize their budgets.
And I think that it is incumbent upon the state who holds that authority over the bulk of the ways that we can raise revenues to acknowledge that authority
and acknowledge that they are the ones who are in the position to provide.
the type of true fiscal relief that not only the city of Chicago needs, but also our sister agencies.
I appreciate that.
You know, I think it's, I understand that we are trying to approve a budget for this year.
I think going forward, given the challenges that are happening at a national level and funding issues across all municipality levels,
it will be important for us to see the projections out for multiple years so that we're trying to address some of these structural challenges up front
and making sure that we're not repeating the same mistakes of the past.
Absolutely.
The second question or next question I have is regarding the personal property lease transaction tax.
I'm just curious about where, what are the comp bases for this type of tax?
What other municipalities are doing so?
And where does our rate stand in comparison?
Well, the state's doing it for one.
They just put that in place at their level after we've had it in place for a number of years.
You know, other states don't have to do this.
Other cities don't have to do this.
You know why?
They have a sales tax on services.
We do not.
Understood.
Similar question for the online sports waging tax.
Have we seen this in other states where they're aggressively or attacking attacks specifically for online portion of gambling?
Are you talking about the online sports wagering?
Correct.
Have we seen others, places who are doing this?
I'm actually going to turn that one to our chief of policy.
I'm sorry.
Is it you, Jill?
It's you.
It's Jill.
Sorry, Jill, to talk about where we're seeing this in other places.
We are not a first mover in this area.
I will have to get you the data on the other cities.
We have that.
But this is not a, we're not a first mover.
And the state instituted it already.
Awesome.
No, and I would just love to see the data.
I think it is something that is very progressive in a way that we're attacking an issue, and I say an issue because online gambling has become very prominent in terms of some of the mental health effects that are happening across our city and across our state, and particularly my demographic of young men in their 20s.
And so to provide a, I guess, a disincentive through the taxation can be something that is beneficial and something we can use.
So thank you for the team for coming up with that, this progressive taxation that we can benefit, especially because the online presence is such an elusive business to track.
And I also want to just note that the city currently taxes sports betting, but only on site in physical locations, right?
So this is just bringing it where the activity actually occurs.
Level in the playing field.
I appreciate that.
And I guess my last question before my time is up, there's fines and fees in terms of parking ticket revenue, or I guess it also includes the red light cameras.
There's a $43, $44 million increase year over year.
Can you all tell me or explain what the big difference is of why that's such a big jump?
And the parking tickets?
It's parking tickets.
Speed lights, parking tickets.
Speed lights, yeah.
Yeah, so I think there's a couple of things, and I'm going to turn it to Belsky, the comptroller, in a second to elucidate a little bit more.
But working with his team, not only in looking at the increase to the number of parking enforcement aides that will be within this budget and that will have more coverage of the city,
but also their ability to expand their work on debt checks, which means that for those who are trying to get, you know, coveted licenses, permits, you name it, from the city of Chicago,
if we find, and we have a bigger ability to check this under new technology that they're implementing,
if we find that they owe the city of Chicago money, we will make sure that we get that money before they're able to get their permits and licenses.
But I'll turn it to Belsky to give a little bit more about the work that his team is doing.
Thank you, Alderman.
We've developed what's called Chi-Pay Wallet Portal, and we have a team that does debt checks.
And as the director explained, that, you know, before you're going to be employed here, before you get a building permit, business license,
we check to see any sort of debts you have with the city before you can proceed forward.
And right now, the people that work in that group have to access seven or eight different sources for that information.
The technology is going to consolidate it into one.
People will be able to come online and see their entire bill.
They'll also be able to pay online.
And then from the standpoint of our department, that same technology allows them to be much more effective time-wise
because they're not going after those seven or eight different sources.
So we think that's going to lead to an increase in collection.
Thank you.
And, Chairman, if I can ask one question so I don't have to go into the next session.
So you're telling me that if you ask this question, you're out.
Yes.
Go ahead.
And so there's this process and transfer and there's an other category that has a large jump.
And I'm just very curious.
It goes from $28 million to $194 million.
And I haven't been able to reconcile what that is.
Can you –
Which category is it?
It's process and transfer in dash other.
Oh, that's the debt financing.
Debt financing for the –
The local too.
Okay.
Thank you.
I'm done.
Thank you.
You good?
I'll tell your father you did good today.
I'll tell him you did good.
You know, we – I really like the younger members when they – you bring a different perspective.
We've all been here for a while.
So fresh set of eyes on anything doesn't bother us at all.
So I appreciate your questions.
And, look, you've done your homework and done well.
So we appreciate your thoughtfulness on this.
So, all right.
I think we've made it through all of the – are you – hold on.
Hold on.
Okay.
So for you all that came late, okay, if you will allow me to finish my statement, you will
understand where we're going.
So we've made it through all of those that were here on time that are on the committee.
So it's what we've done thus far.
We will begin now to integrate those that were non-committee members that were here when
we started, as well as those of you all who are on the committee as well.
And we'll go by – we'll still use the same methods.
That's all – that was the only thing that I wanted to say.
So did you – I saw a hand over here.
Alderman Robinson.
Meaning – oh, you want to go?
Oh, no, I got you.
We got you down here.
We're going to work it out.
So Alderman Taylor is no longer with us.
I mean, she's not here today.
I'm sorry.
She's with us.
Is she online?
Oh, okay.
Okay, that's the way he said it.
Okay, that's the first statement.
She's not here right now.
Yeah.
So Alderman Taylor is not here right now.
Okay.
Alderman Tabarez is not here right now.
Okay.
Alderman Chico is not here right now.
Alderman Gutierrez is not here right now.
Alderman Wagespeck is a lucky winner.
I don't know about that.
Thank you, Chairman.
I'll try to go through these pretty quick.
For the $30 million new tax on the social media, can you provide the DOL analysis through the chair for all the aldermen?
I'm sorry, the what analysis?
The Department of Law analysis that you referred to.
We'd like that provided through the chair.
For, and I just, I think going back a little bit to the issue that's come up over and over again on the advanced pension payment.
You know, given the hundreds of millions of dollars in bonds that were issued earlier this year with kicking the interest payments down the road for 20 years,
I really think it belies the rhetoric that we keep hearing about taxing the rich when you're really just taxing our kids into even more debt than we could ever imagine now.
So I would just like to make sure that people understand not everybody believes that kicking the can down the road for interest payments is doing a good service for our families.
But could you tell me what the exact long-term financial impact is on this reduced advance pension payment for all future payments?
So I believe last year you had Aon look at the impact of reducing the payment by 10, 20, and 30 percent.
And taking a 30 percent haircut, as it was quoted, would save the city $81 million in the upcoming year, which was this year.
But if you could, could you just provide through the chair the exact impact, the amount that you reduced it by would have on those payments?
We have that information.
Pardon?
Yes, we have that information.
Okay, thank you.
Just on the Ernst & Young report, I do appreciate you guys putting that out there.
I know that, you know, we asked for it early on,
and there might have been a little disagreement about how quickly it got out,
but I do appreciate it.
It is a good report, supplements the Reynolds report,
and I would just hope that as we move forward, you know,
when we're looking at, for instance, just the part about special events,
they said that there could be $32 million collected,
and I guess what I'm seeing is just $7 million in the budget,
and I wonder why we haven't gone after those immediately,
especially where it says in the report,
and we knew this, I think, as Alderman going back two or three years
before I think you took over.
Why are some of the other recommendations not implemented immediately
where they don't require city ordinances or passage by the city council?
Thank you for the question,
and I am definitely going to tell Jim Reynolds that you named his report,
the Reynolds report.
I think you'll find that amusing.
So thank you to, you know, special events is an area that is acutely important to me,
just given, you know, all of the overtime and all of the cost incurrence
that I see our departments expend every single year,
because we want to have thriving events in the city of Chicago.
That's what draws people to this city.
What the report says is without any changes from the existing ordinances we have in place today,
of that $21 million or so change that we can recover,
$7 million is based on the existing ordinances today.
The other amount, so that's what we've put in the budget,
because we conservatively want to go after everything that we can do under our existing ordinances.
The other amount, which is inclusive of not just overtime,
so all EY looked at is our existing ordinances in the way that we currently incur and bill,
which is based on overtime.
There's other costs, which we can't even currently quantify because we don't track regular time.
We don't track administrative expenses.
Not only is that going to require us changing our permitting process,
it's going to require us to develop a calculator of costs that we can put forth to the community
and say, if you want an event at this place in the city, this is how much.
Not only is the permit going to cost you, but the administrative expense,
as well as the expense for whichever departments have to support you.
And that is actually going to require changes in our ordinance.
And we don't want to get ahead of conversations with city council, the mayor's office,
and frankly, the public about those types of changes that are needed to bring us in line
with our other cities, our peer cities.
There are a lot of things that, you know, in conversations anecdotally that I've had
with members of this council where, you know, there's a, yeah, I hear that,
but I don't want this parade or this event to fall under, you know, a cost recovery.
And so those are the very important conversations that we're going to need to have,
and the working group is going to continue into next year before we can put something
in front of city council that says, here's this for your consideration.
What do you think about this?
Do you want us to be in line with New York?
Do you want us to be in line with Atlanta?
Both of which require parades to provide recovery of costs, right?
So those are the types of things that we need to work through.
Okay.
Thank you.
And I did see there were a lot.
There were, it looked like 15, maybe more different sections in there.
So I do appreciate that.
Have you increased any parking fees with the parking meter system this year?
Or do you intend to?
Are you asking if we've increased parking meter fees?
We have not done so.
Okay.
On the head tax, how many businesses, over 100 employees in this discussion,
got tax breaks from the Trump administration?
Did we break that down?
Did we break down which companies that would be subject to this new tax got tax breaks?
Yep.
I don't have that level of modeling.
But what we can say is that overwhelmingly, based on how our tax structure works at the
federal level, income tax structure works, the 3% that we're talking about being subject
to this tax will see favorable treatment from the federal government and have received
favorable treatment.
Now, hopping over to the congestion surcharge zone to be levied on rideshare, what is the
direct impact that you calculated on CTA revenue with the surcharge expansion?
I'm sorry.
You asked what the impact on CTA revenue would be?
Yeah.
So if you calculate this based on information that you get from the CTA or work with the
people that we appoint to the CTA board or the RTA board, have you had any discussions
with them about the impact that it would have on CTA revenue?
Will it increase?
Will it decrease?
Will people who won't say anything?
I have not done an analysis of what the impact of expanding the congestion rideshare zone would
do to CTA.
Okay.
I mean, is that...
The extent that it is people's behavior is economically sensitive, I would expect that
there would be people who would choose to take CTA instead of a rideshare.
Okay.
Let's see.
Going over to this issue of the line of credit that was extended about a week ago, I think
you put in documentation into the city clerk about three weeks ago.
The city had a line of credit going back more than 20 years for, I believe, $225 million.
Over the past couple of years, it's been tapped into a couple of times.
About a week ago, you increased that revolving line of credit by $100 million.
And in keeping with practices that we've seen in this administration, first of all, the
maturity date was extended by two years.
It was supposed to expire this year.
I know the banks, RBC and Royal Bank of Canada, or the RBC gave you that extension date.
But what's the interest rate on this and the total amount for repayment two years from now?
I couldn't find it because there wasn't a schedule in the documents.
So I was wondering if you could provide it for us.
So the interest rate is a floating interest rate.
It is not a fixed interest rate.
Let me just see.
I'm going to pull up the amounts that we have available.
The floating interest rate and the...
So the amounts that we have on our general obligation lines of credit right now are $153 million
on the lines currently, and we have available capacity currently of $537 million.
So what's the floating interest rate again?
Let me check for you what it was at the last interest rate reset.
I'll give you...
Get that back to you in just a moment.
And specifically on that extension and the increase of the revolving line of credit, I would imagine it must be more than the normal GEO.
No, we use the lines of credit because they are less expensive than bonding.
So we, you know, typically the way we finance our capital costs would be that we often use cash first to finance those costs,
and then we take and reimburse ourselves with the lines of credit.
And then as we build up the line of credit, we'll then issue bonds and repay down the lines of credit.
And that keeps us from having to incur the higher long-term interest rates for as long as possible.
So it does stay stable, essentially.
It does stay...
Did you say stable?
Yes.
Well, it floats around, but lower than our long-term costs.
Yeah, we would need an inverted yield curve, which we don't have at this moment, which is unusual, for that to be...
For our short-term costs to be higher.
And if they were, we would just pay down the lines and go long-term.
We would not leave things on the lines if that were to occur.
Could you provide the schedule of payments through the chair for us, please?
And, Chairman, that's all I have for the moment.
My other questions I'll just submit through the chair.
Thank you.
Thank you.
Next, Alderman Fuentes is not here.
Necruz?
Go ahead.
Thank you, Chairman.
I have a couple questions.
A lot of questions have been asked.
But one of the questions is regarding the surplus.
I also want to express some concerns regarding one of my TIFs being surplus.
But my question is, $554 million will be, at this plan, allocated to CPS.
What about the remainings?
What other agencies and what are the amounts for the other agencies?
So this is included with.
So this is included with.
in the packet that we provided to each older, but I think this is a great point because at a time,
again, when, you know, so many of these agencies are seeing cuts at the federal level, this will
provide them relief. So in addition to the Board of Education or CPS ourselves, the city gets $233
million. Cook County will get $56 million. Water Reclamation District of Chicago will get $50
million at a time where we are seeing, you know, more need for stormwater management. Park District
will get $46 million. City colleges will get $23 million. CPS's building fund will get $21 million.
Our own public library will get another $19 million. So, and then it goes down to all the SSAs and
they're seeing significant increases by this as well year over year. Okay. One of my colleagues,
now that you bring up the libraries, brought up a point about they're experiencing a cut. I know
she asked about operational hours. So with this, $90 million will help public libraries?
So this, they receive Tipster Plus every single year in addition to their property tax
levy. So this will help. But again, the primary way that the libraries are funded is through their
own tax levy. And, you know, with the tax levy not being increased over the last, I think this will be
five years, there is a funding crunch within their operations. And as, you know, the discussions I've
had with the commissioner, as well as even within the EY report, there is room and space for the
libraries to run more efficiently and for them to lower their costs. And those are the things that
you'll see in this budget. No layoffs. The Sunday hours remain for the libraries.
Okay. Now that you brought up regarding some of these departments will be facing some of
cuts. Is there, I believe another Macaulay requested this, but is there a list that you can share with us?
What are some of these departments that will be affected because of the Trump administration cuts
compared to the, or because of ARPA money? So we just want to make sure that
we can identify these are being cut due to ARPA and these are being identified, you know,
being affected because of the Trump cuts. I think we're putting that together. I think
another Alder asked for that as well. Also another request that I have, I think this has been brought
up many different times here regarding the fire contract, what has been set aside, what has been
borrowed. I have different notes from what it was at the beginning. I know something that I have
set aside 250 to $200 million for last year budget, but we're borrowing $166 million. And I know other
amounts we're throwing around. Is there any way you can create something for us? Because I know some
of them are saying, you know, it's money that was allocated. It's not there anymore. Is there any way
you can put a graph to detail exactly the amount of numbers and where the money's at? I know we have
heard about it sitting there, but there's some others that's not sitting there. Would you be able
to create something for us that breaks down exactly where the money's at in the borrowing?
And again, you know, the financing doesn't cover the entire amount that is due to Local 2 upon
ratification of their contract. We're only financing a portion of it. And it's the portion that is the
salary and rate retros for next year. Okay. Got it. Also, were departments asked to make some cuts
to their departmental budget? They were. Every single department. Every single department. And
what will be the savings? If you put it all together, what would it be amount? So this budget
includes about over $200 million in just operational cuts and efficiencies within departmental budgets.
Okay. Also, would you be able to provide a list of the departments that will be impacted due to the
hiring freeze? Sure. Okay. What else? And another of the concerns is also the downgrade. I know have
been receiving different input from residents and they are concerned about making a partial payment
to our pension fund. And I know all the men at Martin did very well when it came to, you know,
reading the Moody report and what would this mean. I know our CFO said she has been in communication
with different consultants and this is something that is being considered. But what are some of the
feedback from those consultants? What are they saying? Are they also concerned? I just, again,
we're having those conversations. What is the feedback?
I just also want to be clear, just to the point of clarification, that we are making the full
required statutory contribution. We're not making a partial payment. The amount of the advance,
which is the additional amounts that we put in on top of the required contribution, is what we are
not making, that we're putting a partial payment on this year. I mean, I think, you know, everyone who,
you know, has looked at this overall has, you know, I think, had the same kind of opinions that,
you know, have been discussed in the past, which is the advance pension payment is a very positive
thing for the city to be doing, you know, which is why we added it to this budget without a dedicated
funding source, continue to fund it and continue to remain committed to bringing it back to the 100%
level. It is reducing our costs in the long term. It's helping our funds get to financial health
more rapidly. So the, you know, the perspective is that this is a positive thing that the city has
done and should continue to do. Thank you. Those are my questions, Chairman. Thank you.
Thank you, Alden Cruz. Okay. For the record, I have remaining Alders, Laspata, Mitchell,
Moseley, Lawson, Manor-Hoppenworth on round one. And then on round twos, I have Lee,
Bill, Lopez, Riley, and Martin. Did I miss anybody? I have more. No problem. Did I miss anybody?
Okay. All right. Next up, we're going to go to Alderman Laspata, followed by Alderman Robinson.
Thank you so much, Chair. I won't belabor the points that had already been made where the
advance pension payment is concerned related to our credit rating, but something that had also been
shared with us is that we were making these advance pension payments, which to note are not
equal across the funds. It's a negative from last year's payment, negative 7.5% against the MEBF
fund, negative 8.2% for the laborers and retirement board pension. But we had been told in previous
years that if we weren't making these full payments, it would result in us having to sell our assets to
cover our pension obligations. What are the odds that we would have to be selling assets to cover our
pension obligations in 2026? So just to clarify what I've said in the past is that one of the big
benefits of doing the advance pension payment is it helps the pension funds from them having to sell
their assets in order to pay benefits. Because their pension funding ratios are low, if they are not
receiving the full statutory contribution and a little bit more each year, they're having to sell
some of the assets that are under investment, which means they're not allowed to stay in a long-term
investment mode, and therefore they're not achieving as much interest earnings in order to pay the
continuous benefits that they're having to pay out. And so doing the advance pension payment helps
keep them from having to do that and allows them to keep their funds invested and therefore increase
their funding rate. So the argument that you would make is that we can reduce our pension payments
and also keep from having to sell assets to make our obligations? Well, we are different from the
funds. So we are not selling our own assets to meet our pension fund contribution. The pension fund
contribution that we make to the pension funds comes from multiple places. We have a property tax levy for it.
We make a corporate fund contribution. We have a dedicated water sewer tax that goes to it. Our
enterprise funds pay a portion of it. And then the casino taxes are also dedicated to it. That is the
contribution that we make to it. In addition, above that amount... I have... Sorry, I appreciate that. I'll
follow up more offline. I wanted to ask about the bond-funded initiatives against the police
settlement, the police settlements, but also the local to retroactive payment. Is the plan for us to
vote on those bond authorizations at the same time that we vote on the budget?
The expectation that I have at this time, based on conversation with IGA, is that those bond
authorizations will get submitted in November.
Can you provide through the chair of what the payment schedule is going to be on there? And
for usually for general obligation bonds, my understanding is we would pay that against a
part of our property tax levy. I heard...
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In a previous briefing that we were going to be paying these against the corporate fund, which of those is accurate?
So the property tax levy is used to support two things, pension and debt service.
And so a portion of our debt service is paid with the property tax levy, but not 100 percent.
Not 100 percent for pensions and not 100 percent for debt service.
The rest of it is from a corporate fund contribution.
And this would, in essence, be from that amount that's above the property tax.
And the amortization would be from three to five years.
Three years for the retro and five years for the settlements and judgment.
OK, on the head tax, I wanted to understand what if we look at the last 14 years since Chicago eliminated our head tax, what other comparable cities have instituted head taxes and what can we learn from the economic impact of that?
I think a couple of things to always remember.
We're it's never an apples to apples comparison with other cities because taxing structures are different.
A lot of cities have income tax that they're able to levy and apply.
We don't have that right.
We don't have that right under the Constitution.
So, like, for instance, New York doesn't have a head tax, but they have an income tax.
I understand that by at that local level.
What would the apples to oranges comparison?
Are there other you have to look at the entire taxing structure within a municipality to get an apples to apples and look at the level of support provided by corporations to that taxing body?
I ask this because I want the naysayers to be wrong.
I don't want to believe as I feel like we're just going to tell workers to spend their work from home days outside of the city or not hire full time and move towards part time.
I also want to ask why why did we move with a model that is once you're rather than a marginal rate, so like the first hundred are exempt employees above there get hit with the head tax.
Why did we choose a model where it's once you get to the hundred and first, that's when everyone below that number also gets targeted with the head tax?
Because I think that's why we're getting a lot of the pushback against this discourages growth of companies in Chicago.
So I think one level of clarification, this is not a tax on an employee.
This is this can't be passed on to an employee by a corporation.
So it's not as if you get to the hundredth employee and every employee now has to pay.
They're not paying it.
The company is paying it.
The company is paying it.
Right.
So the hundred.
So to answer your initial question, this is the version of the corporate head tax that was in place before.
This is how the structure of that worked before, which does withstand legal scrutiny.
Right.
And so that is an important aspect of how we think about our taxing, our taxing structure is we've already had this fight.
Right.
I think our, our challenge is that work is a very different thing.
What it is geographically, locationally is a very different thing than it was in 2011.
And that's what I'm trying to get at.
I have a couple of minutes left.
I wanted to ask about the, the DV surcharge.
The total appropriable funds that we have from the DV home share surcharge is $12.1 million.
What we are appropriating is $6.18 million.
In a year where we saw about a 30% increase in domestic violence related homicides, why are we appropriating only 50% of what's available?
Give me one second to get to the page that you're on.
This is from the summary pages.
Yeah.
Sorry.
This is from.
From the summary pages at the beginning of the budget.
Yeah.
I'm just looking at the actual budget book.
So this is the house share.
The domestic violence house share surcharge is right next to the homelessness surcharge.
Yes.
One thing I can say is that the house share funds in general are receiving less funding than they have in the past.
And in the last year to two years, the Department of Family and Support Services has been using a lot of fund balance, accumulated fund balance to support the costs going forward.
So I'm just looking at the DV fund.
So I'll just be clear that I don't accept DFSS's rationale on that, because if we're surplesting from this past year, $3.8 million, and we're expected to take in, I think they said $8.3 million, the idea that we're of what we expect to collect next year, we're only appropriating $2.4 million of that.
I'll speak for myself.
That's not an acceptable number.
So let me just be clear, under its fund 0B94, the domestic violence fund, there is $2 million of prior year available resources and $4.1 million of new revenue coming in in 2026 for a combination of 6.182.
That's what I think you're looking at is the homeless services fund.
No, that's what we're appropriating.
There's a different page that shows the total appropriable.
You know what?
I will go back, and I'll follow up with the chair.
The last point that I wanted to make with the minute that I have left here is so we were talking about different funds and the specificity of use related to them.
We talked about the HAMP charts, that the state is really specific with the opioid syndrome, where that can go.
There's a whole list of them.
I think you mean the cannabis?
On page two, we look at a variety of non-property tax funds, and they're all illustrated through the budget.
I wanted to ask about this related to automated speed enforcement.
So we know that there's only four purposes that we can put this towards.
We know that it's highly regulated by the state.
But rather than that being a non-property tax fund, we just put those funds into the corporate fund.
My question is why do we put it into the corporate fund?
And from there, how do we track how those funds are being appropriated against the four state-mandated purposes?
So as to the reason why it's in the corporate fund, I can't actually speak to the original decision as to why that was made by this council.
But what I can say is that we can easily determine how much we spend on the eligible uses under state law,
and we can also match that to the dollars that come in for that specific purpose.
I'll ask a final question, Chair, and then I'll relinquish a round two on this.
So our municipal code as well says that automated speed enforcement revenue has to be kept in a separate account.
Based off of that as well, can you provide through the Chair what that separate account is so that we can track that more appropriately?
Sure.
Okay.
Thank you, Chair.
Thank you, Chair.
Thank you.
Audubon Robinson.
Chairman, thank you very much.
To the folks sitting in the box, to the two wonderful ladies that have been running this meeting this morning and afternoon, thank you very much.
Before I get my questions, I just want to thank Chuck Billows, who was sitting in the box.
I don't think he's there anymore, but I'll be on the record for his help this summer.
And my ward of the 31st Street Beach.
So, Chuck, thank you very much.
My first question is, how does the fact that our property tax bill is being late, how is that affecting us?
How is that affecting our bottom line?
Sure.
So, one of the things about the city is that while we may have budget challenges, we do not have cash challenges.
And so, the city has enough cash so that the delay is not having a major impact on our operations.
The area that it is having an impact on is our pension funds, who rely upon their pension tax levy.
And so, we have notified the pension funds a few months ago, when it became clear that these were going to be quite delayed, that they should notify us if they needed us to provide a loan to them so that they would not have to sell investments in order to make payments to their beneficiaries.
So, at this point, we have loaned about $115 million to the pension funds.
This is actually the third year in the last four that we have had to do this.
And the pension funds will reimburse us for that when those second installment property taxes come in.
So, we are helping manage their cash flow issues right now.
And the Cook County treasurer – or, excuse me, the city treasurer and her team have really been extremely helpful in this regard and very thoughtful in making sure that we're assisting the pension funds.
Thank you, Jill.
So, I'm assuming that would – along with no interest?
That's correct.
Okay.
How can we assist our SSAs that don't have cash, knowing the great work that they do across the city?
This is putting them in a really precarious situation.
And then we'll see howett's connection.
Um.
And I'll see you next time.
I mean, I'm not sure that anyone has approached us and asked us for any assistance.
If they have, I'm not, I am not aware of that.
You know, certainly.
You look into that, Jill.
And Chairman, I think you brought a question up about SSAs.
We can ask them, Chairman, and if I didn't get this correct for your question, please correct me.
But certainly we can ask the SSAs to lay out, right, what their plans are, what their budgets are to be able to assist them.
But it's hard when they don't know if that money is coming and if they don't know how much is coming.
I think it's not a function of, I think it's a function of timing.
And the other question came out of the surpluses that some of the SSAs will receive based on their overlapping and overlay with TIF districts.
So, which was also, should have been in that package.
It wasn't every SSA, but there were several SSAs that will receive surplus dollars.
Last year.
Okay.
And then I guess that it'd have to be brought up on a case-by-case basis, depending upon their various sets of cash challenges they may have.
I do know that, and I don't know if they're eligible, but something that we will definitely reach out to the CFO's office at the Cook County is the tax bridge fund program that they put in place.
And I don't know if you've had conversations with the county, but recognizing that they're late, they put aside $300 million to loan to taxing districts.
And we just need to confirm if the SSAs would be eligible for that.
Got it.
My last question about the SSAs is, which department here at the city is responsible for the rebate funds when they are available?
Do we know, is that DPD responsible for that?
I believe so.
Thank you.
TIF has been brought up, the TIF suite has been brought up on several occasions.
It's certainly, I want to ring the alarm in the fourth ward that it's certainly a concern for me as we utilize this to move our ward forward.
And I'm still kind of unclear on how this is going to affect projects that are coming up.
And so I just want to make sure, I just want to be on the record asking that same question.
Regarding CPS, it would be great to get a list of what their plans are as I look at schools across my ward,
particularly on the south end of the ward, crumbling infrastructure, the exterior, interior of schools.
And so we know that we are putting money, sending money over to CPS, but I'm still talking to my principals about infrastructure.
And it's really sad to see the state of our schools.
And my question is, again, to CPS, hopefully they're listening.
Do they have a list of what they're going to be doing with those funds?
And then how are we going to manage it? Because, again, just in my ward alone,
I am talking to principals on a regular basis about the needs that they have for their school buildings.
Let me say this. I think it's part of our conversation regarding the surplus.
There are two things. Number one, the idea is of utmost importance.
Number two is that if you look at where this money is coming from, as I said earlier in this meeting,
70 percent of this money is coming out of our community.
And I think it's a fair conversation to see what is going to happen as it relates to the communities these funds are coming from.
I do think it may be incumbent upon us to bring CPS in prior to passing budget.
So there's some clarity as to what's what their game plan is.
I know that they had budgeted some level of TIF in their operation.
However, in my if I recall correctly, this is above and beyond that.
So I do think it's a fair conversation to see what their plans are with these dollars that are coming primarily out of a big chunk of our community.
So I wholeheartedly support you in that effort. Mr. Chairman, are you saying that you're going to bring CPS to me?
I didn't say I was bringing myself. I said we as a council.
I mean, it's not here in this committee. But I do think before Chairman Taylor's committee,
that that's a fair conversation that ought to be had.
And I've been very clear with my my thinking is that I do not anticipate releasing a budget out of this committee
until that conversation had in an IGA signed to ensure that they're going to give us those resources that they were supposed to give us earlier.
But, you know, somehow I failed to do that.
So both are top of mind to me.
And I think as to me of our colleagues, if that amount that is declared to be a surplus does come to fruition.
Mr. Chairman, I would support that.
Please let me know how I could be helpful bringing CPS in.
This is a real issue that I would like to address.
Moving on, regarding CDPH, majority of our HIV funding is coming from the federal government.
And it has been there have been there.
There are other municipalities that are not reliant on the federal government.
I know that CDPH will be in front of us, but certainly as the budget tiers,
how can we help them to make sure that we're not back here again next year?
Knowing that this is a big issue, particularly in the African-American community,
we will hold the line this year, but I am not certain we'll hold the line next year as relates to HIV funding.
And so, again, my question is, although CDPH will come before this body,
it'd be great as the budget tiers to help them to figure out how do we offset this for next year.
So just curious if you ladies have any thoughts on that.
Sure.
So one thing I'll say is, you know, for the at least the third or fourth year in a row,
CDPH will see an increase in the number of corporate funded positions that they have.
Right.
Which I think signals a commitment to supporting their work.
Now, the numbers are a little bit nuanced because we do have a whole slew of people
leaving CDPH to go to Department of Environment.
But when you look at apples to apples, CDPH is increasing by 45 positions in the corporate fund.
I think the way that we help sustain CDPH is that we we look for dedicated revenue sources for their work.
Right.
Which is why, you know, passing the social media tax, amusement tax is an important step towards that goal of providing sustainable revenue to our public health department.
I also say that, you know, quote unquote, apples to apples comparison of our city public health department and another city's public health department aren't apples to apples.
What we cover within our jurisdiction isn't the same as what other public health departments cover.
And so we have to, you know, understand that reality.
You know, in a in a taxing regime that is regressive, that provides very little tools to a city to put in place progressive revenues or revenues to begin with.
You know, you know, you know, there are a lot of competing priorities that we have to balance.
And so, you know, from our perspective, what we'd like to do is let's grow our tax base.
Let's grow the revenues that are coming into the city of Chicago budget so that we can provide that sustainable revenue to CDPH.
And then also, let's what are the partnerships that we are building with our Cook County Public Health Department, with the state's health department.
To, you know, provide those necessary services and that it's not 100 percent on the city to provide them.
Thank you for that.
And lastly, it's just a comment.
Matt, you mentioned Springfield and that it would be it'd be great if we could get a clear one pager of what our ask is of our folks in Springfield.
Certainly, they're in the veto season session right now.
But whether it be five things or 20 things, we really should know as a body.
Right.
For my colleagues who work very closely with our state delegation, what our ask are, because we certainly need them.
And many of them, as we know, are tie into the city of Chicago.
But it should be clear what that ask is.
And so if we can get those items to the chair through the chair, I would appreciate that.
Absolutely.
Thank you.
Thank you, Alderman.
Alderman Mitchell.
Thank you.
Thank you, Chair.
Director, let me just jump right in.
In preparation for the 2026 budget, you noted that you sought to seek, you sought operational efficiencies through the request to eliminate positions within the departments.
What specific instructions were given to the department here regarding these eliminations?
They were given targets based on a variety of factors, including their...
Outside of September, if you sought to eliminate voices within one person, people out of fact, you know,
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For some reason.
Maybe it's just before you have done this.
So that is, I believe that they were presented.
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mayoral priorities, but also the percentage of the corporate budget that they
inhabit. And they were given the instruction to both look within their departments for
efficiencies, as well as areas that we might have overlap, duplication, in order to reduce
the cost of government. And they came to us with their suggested reductions, and we worked with
them, because we knew that we had to be realistic about impacts and think critically about the ones
that would have the least impact to services. Okay. Well, how did the budget office evaluate
whether or not these departments exceeded those efficiency expectations? Yeah, so we know a lot
about departments, because we work with them, and we meet with them a lot. You know, one of the
things that we talked a lot about was overtime with our departments, because we literally talk about it
with them every single month, because we send them reports about their overtime. We talked to them
about absenteeism, we talked to them about the things that are costing and driving their overtime.
And so we talked about what are methods and ways for them to continue to, you know, make sure that
their workers are active, productive, so that we can drive down the cost of overtime. But we also
talked about the fact that, you know, we've seen persistent vacancies in certain titles, yet the
work is still getting done, right? And so those are the types of things that we've raised to our
departments, because we knew it couldn't just be from non-personnel reductions in their budgets, because
of large-scale projects that they're trying to implement to make the cost of government go down
through technology and other types of automation. So it was, we literally had months of meetings with
our departments about this. In addition, we were able to bring forth with a lot of them the
recommendations that EY put forth, and had really significant conversations with them about that as
well. Okay. Do you have the total position citywide of the cuts that have been proposed for this budget?
We do, and that itemized list is being put together for city council.
Okay. Is that the list that Matt Martin requested? Because I know he requested it.
I think he requested a different, I think he requested a list for all vacancies that have been in place for a year.
Okay. Can I add to that request, instead of just the cuts?
Yeah. Those positions had been cut by department, the job classifications, and if they were vacant with the length
of the vacancies? Yes. By ward, yes. By ward? Our positions aren't done. Oh, yeah. By ward.
I jumped on that. Okay. Do you know the total projected savings from these reductions?
Over $200 million. So what portion of these savings has been or will be offset by the raises that are
anticipated for staff? So the bulk of our staff, probably like 98% of our staff are on salary
schedules. 89% to 90% of those are collective bargaining agreements, so those are required
under contract. The rest of our non-union employees were recently put on a salary schedule over the last
two years to address compression, and so they are now on the annual step increases based on their salary
schedules, and they also receive COLAs. The difference between our union partners and our non-union staff is
that their COLAs are done mid-year in line with our trades, whereas the rest of our unions get them at the
beginning of the year. So those are all scheduled salary increases by contract or to mitigate
compression. So can you provide the net effect of the cuts versus the salary? Can you provide?
Sure. I mean, the forecast, so when we develop our forecast, this is all built into that,
the increases. So every year we forecast out what our salaries and wages are going to cost the city,
which is what leads to the structural gap because our revenues weren't increasing at the pace of our
expenditures. So that was already built in. The $200 million is actually of just operational
efficiencies and cuts are mitigating against those natural increases that happen.
But you see where I'm going with that? I want to see if these cuts actually resulted in a zero
and zero to the budget because... Well, it naturally is part of how we got to zero. The salary
increases were already included within the gap is the point I was making. Okay. Let me see what
you're saying. Okay. You talked about the direction that you guys get in working together on creating
these operation efficiencies. I want to know, I'm concerned about a few things when it comes to the
departments. One, how staff reductions both, how later staff reductions through retirement or things
like that have an impact on intellectual capital. And that leads us going forward because I think if
we don't account for that, we could be spending more money in the future. So how was that part of
this discussion? Yeah. I mean, that's the big part as to why, one, we put all of our non-union
positions onto salary schedules because there was significant salary compression happening because
our non-union workforce was only receiving COLAs for the last 10 years. And that has a tremendous
impact on retention and recruitment across the city. And so I think that by doing right by our non-union
staff members, getting them on salary schedules so that they can anticipate receiving an annual
increase actually has a lot to do with us being able to retain workers. And we've seen our attrition
is down and has been down since those have been implemented. Was there an analysis done based on
long-serving employees and their current eligibility toward retirement? We do. We have a dashboard that we
review every year about the retirement eligibility of our workforce. There are certain departments that are
more at risk of retirements than others. And I agree. And that's, you know, part of the work that my office, but
mostly DHR does in looking at how do we not only recruit, but also succession plan within our departments to
ensure that that sort of intellectual property, that informational capital is not lost.
In your analysis,
did you come up with the fiscal impact, including both
the fiscal impact of those potential
retirements, including both salary savings and both cost savings for experience?
Yeah. So we build that into the budget every single year. It's called an attrition rate, and it's based on
sort of historical trends around staffing. It includes when we, there's two main periods of the year when we see
most retirements within the city of Chicago. And it usually probably, you probably get it aligns with
when people hit pensionable age. And so we factor all of that in when we are thinking around how much attrition do we
anticipate will happen. And we also look at that in conjunction with the eligibility of members in our current
workforce to retire.
Okay. Now, a little bit broader from an operational standpoint, what is the citywide organizational strategy for achieving greater
efficiencies within departments?
So you saw in the briefings that we gave sort of our initial phase one approach, which includes areas that are big drivers
and also are within the authority of the existing executive authority as it relates to our real estate.
We have more real estate and more office space than we need for our current workforce.
Our current workforce continues to decline, not only because we keep removing positions,
but the implementation of technology has allowed for us to work better and work quicker.
And so we have a comprehensive review of that, not only consolidating, selling properties that are no longer needed.
Fleet is another area where we need better governance, better ability to look at usage of our fleet and allocate it based on that.
We also are looking at procurement.
I know that this is something that this council cares deeply about, but we need more diversification within our vendor pool in order to drive
down costs. And the EY report, I hope that everyone does take time to review it.
That's an area of significant savings.
The other area of significant savings is within our public safety infrastructure, namely within CPD.
We need to get our staffing levels at CPD to mirror more of our peers.
And I'm not talking Atlanta. I'm talking New York. I'm talking L.A.
One more question, Jen. Well, I have more, but one more question.
For those positions proposed for elimination, has the formal process to eliminate those positions been started?
I never, as long as I've been, I never knew.
You put in a budget as cuts, have the formal process to eliminate those positions been started?
So the positions that are proposed to be eliminated in the budget will occur once the budget is appropriated?
And then...
He's low with the budget next year.
Okay.
So there's no process for us to do that other than they're not in the budget.
No money.
Gotcha.
Gotcha.
All right.
I'll submit the other questions to the chair if I don't get around to it.
Okay.
Very well.
Thank you, Chair.
Thank you.
I think Alderman Mosley, you're my last committee member.
Any other committee members that have not had their round ones?
Alderman Mosley, go ahead.
Thank you so much, Mr. Chair.
I'll continue on with layoffs where I really need guidance.
This is one of the key things that I'm looking for in this budget.
When we did our briefings, it was stated that there would be no operational layoffs.
But as I also understand it in procurement that we just talked about the need for diversification,
there are five field analysts that are set to be eliminated.
How does that work?
And then also, I understand these are union positions, too.
And we are in the middle of arbitration with that particular union, ask me.
So how does that work here?
And how do we define operational staffing?
Yeah, so the cuts are not related to the budget.
They're related to restructuring and how the work is being done in procurement.
And that is, you know, within the realm of the commissioner to, you know, continually look at how to make efficiencies, how to streamline the work,
looking at better ways to provide services and to, you know, lower the amount of time it takes to get from ideation of a contract to actually finishing a contract
and then enforcing certain aspects of compliance around contracts.
So every union member, in the same way that we have a lot of positions in our grants that are also, you know, not going to continue because those grants no longer exist,
they have the ability to bump and to bid into other positions by right of their contract.
We have been working with DHR on those particular positions that will have the ability to bump and bid into other vacancies within the city of Chicago.
And this isn't, like, elimination of a grant, and I'm even wondering.
It's a restructuring of their department.
And as we freeze vacancies and so forth, like, how would that bid in?
There should be vacancies available for those positions to bump into.
Okay.
With the corporate head tax, I remember reading around July, businesses, these corporations that I can imagine are part of the 3%,
also came up with $100 million in just a matter of a few, what, months.
Do we expect to see that same participation from these same corporations and could result in us having more funds to do violence prevention work?
The volunteer payments that they're making, or are you talking about through the head tax?
So head tax is looking to raise $100 million.
Yes.
They've raised $100 million before in July in just a few matter of weeks.
Is that something that – do we expect for them to continuously to engage with the city in that same fashion?
And how will we use those funds, if so?
So just to be clear, the $100 million that is being raised through philanthropy does not come to the city.
That is dispersed through nonprofits and philanthropic organizations.
You know, we do that in concert with those organizations, as well as the state and the county.
But as I said earlier, I can't remember who I was responding to.
They're under no obligation to continue doing that.
Understood.
When we talk about sharing, like, our budget constraints and solutions, what can we as alders do?
I've had constituents come to me and say, hey, if I'm going to be out of a job, why are you still taking pay increases and so forth?
Is there something that collectively that we as alders could do to help share the sacrifice?
You know, I leave that to the body to deliberate on.
You know, there have been increases over the last two years in the budgets related to city council.
We just did another increase for city council, but, you know, we don't dictate to you what, you know, you bring forth if you want to also reduce your budgets.
We, you know, have had conversations in the past with Chairman Irvin, but I know some of your colleagues did not take their pay increase this year.
That was in line.
The mayor didn't take a pay increase for 2026 either.
That's two years in a row.
So I think it's to each – up to each alder as to whether or not they're going to do something individually or if it's going to be a collective reduction.
Thank you.
CFO, I'm wondering when we talk about the advanced pension payment, is the TIF surplus something that we can look to help make the payment similar or along the same lines of last year?
Well, you know, the TIF surplus amounts that come back to the city go into the corporate fund, and the corporate fund is the source of the advanced pension payment.
So, you know, the body of monies that come into the corporate fund are what we are using to pay for it.
I don't think we're going to be increasing the TIF surplus any higher than what was proposed, so I don't think there'll be any more there.
But the body may be able to come back and say still that same amount of surplus but just different allocations to different line items.
Yeah.
I mean, it's coming from the corporate fund.
It's not allocated to a particular line item.
That's the challenge we have this year is we don't have, you know, a dedicated funding source for it this year.
So, certainly, there can be different ways to think about it, but, you know, we don't have a dedicated funding source for it this year beyond our, you know, corporate fund revenues.
Thanks so much.
Comptroller, wondering the information that we see today, the tickets, the boots, the red light cameras, is that based off of location of where it occurs, or is that the individuals where they are in the city?
Speed and red light cameras are where the violation occurred, so at that light, as opposed to where, you know, the violators.
Can I have a list of the red light cameras in the 21st Ward?
Sure.
I know I haven't issued any, but the number is a bit staggering for my ward in particular.
And to that note, what are we doing?
No, I have the number.
I want the actual locations.
Thank you, though.
What are we doing to help folks encourage or to encourage folks to participate more in a debt relief program and contesting their fines and fees?
We, you know, we have been regularly, Chuck Billows and I, meeting with the aldermanic offices.
We're giving them information, palm cards.
One thing that we did do is we had a recent amnesty over the summer, as you recall, and our goal was $16 million.
And about a month, with a month to close, we ended up, I suggested we do PSAs and target areas, and that $8 million came up to the $16 million within a month and a half.
We extended a month, so a month and a half.
And I feel that we should probably take the same approach with all of our relief programs.
Because at the end of the day, relief programs, they not only provide relief for the person economically, but it's also revenue we probably would have never collected.
I would love to participate in those PSAs, if it's as simple as a graphic that I can show in my office or a flyer and so forth.
And Chuck and the team has been amazing.
We have the opportunity to work through the equity and fines and fees together.
And even this next thing, can you tell us more about, well, actually, before I go to that point, the revenue from speed cameras and red lights, we know that there's a state statute of what we can and do with them.
Can you share how we are or have been expending those dollars?
I know it's supposed to be like for pedestrian safety, violence prevention, and so forth.
I would defer to the budget director, but I do know that, you know, part of the intent is to spend money on improving infrastructure, signage,
all those things around school and park zones that promote compliance with the speed and red light cameras.
Got it.
I would love to have that through the chair to look through.
I believe I've made that request before to the departments.
Also want to ask about how are we improving our disabled permit parking process?
It's something that's been taking just far too long.
The need versus the process is just too over-cumbersome.
I appreciate the question.
Thank you.
So we're in the process.
We're fully staffed up.
We're going to digitize the applications.
So we're a little antiquated in that respect.
We're going to digitize the applications.
We're going to digitize the applications.
We're going to digitize the applications.
We're going to digitize the applications.
Thank you.
and do more outreach. So we're trying to process those faster. And as I said, with all the other
initiatives, we're going to try to look at what's a reasonable time frame and make sure we're
meeting. Yeah, looking forward to that. And then as we talk about violence prevention,
we'd love to see how we can do more coordination events for My Shot, My Future, getting the CVI
groups into public assets like parks and libraries and so forth to better create cohesion between
community and those groups. So thank you, Chair. Thank you, Alderman Mosley. I believe we have
exhausted our committee members. I think I have two members left. Alderman Lawson, I hope Alderman
amount of hopper work that comes back before we go to round two. Great. Thank you, Chair. Thank you
all. I was hoping I'd get in before five, but I think I got a minute to spare. So a lot of my
questions have been asked. There's just a couple of things I wanted to go over. Controller, it looks
like we are on pace to write less tickets and have less red light tickets this year compared to last
year. Am I reading this right? I mean, part of what's happening with red light cameras and speed
tickets is we're finding a reduction in violations and a high level of compliance from initial offenders.
Got it. So they're ticketed, they come to compliance. And as I said at the beginning,
you know, the intent here is safety. Sure. No, I understand. So while, you know, we always like to
collect more revenue, we're obviously trying to help the city with their budget. But at the end of
the day, I'd rather see less accidents around parks and schools. Absolutely. And I think this is one of
the ways that we do that. We're not raising any fines for parking or red light, right? That's all
static. All right. I know my whole word is going into the proposed SmartStreet expansion. I'm not
sure if I heard you right. Did you say that's expected to bring an additional $12 million in?
Well, the whole expansion, it will take a while to implement. But I think the number we have,
probably about $10 million a year. This reflects just, it's going to take like three months to ramp up.
So what we anticipate is a little over $6 million. Okay. So next year, an additional $6 million.
Yeah. Most of it out of the 40th. Yeah. I mean, what we've learned from the original
SmartStreets is that we saw violations go up by 8,000. So if you think about this, we have the
traditional parking enforcement. So parking enforcement, so that jumped by 180%. I mean,
that's the benefit of technology. Absolutely. And that resulted in the $650,000. So in addition to
expanding the geographic area, we're also expanding, we're just starting doing parking meters and then
street sweeping is our goal for next year. And I'll just put it into the universe because we're going
to talk about crosswalks too. Because that's the issue I have mostly, especially around schools.
I got a bunch of stuff, so I'm just going to kind of go quickly. The congestion fee,
what is that expected, that expansion expected to bring in? And again, all my word is new for me.
But what do we expect that that will bring in annually?
An additional $55 million.
Right. And I had said in the briefing, it should go all the way to the lake. There's a lot of
harbors and yacht mooring there that people can pay for in addition to the regular folks. Because
let me tell you, the lakefront is as congested as anything on a hot summer weekend.
So we mentioned cross recovery earlier, and I'd asked at the mid-year hearings sort of what the
update was, and no one really had one. And it sounds like the working group was continuing to work.
So no one's going to get a bill on December 1st due to the end of the year that, hey,
we need you to pay more for what we've been providing. Right. And that's all going to be
handled in the next year. I'm sorry, can you ask the question?
As far as cost recovery? Yeah.
Nobody's getting an additional bill this year.
So this year, you know, we began to fully recover the costs of CPD's traffic management
that we prior to this year had not been doing.
So that is something that was implemented this year. But as far as the things that we're going
to be doing to implement the things that EY reflected, those will be starting in the working
group as next year. So the CPD traffic management, those bills have already gone out. Those organizations
know they're getting a higher bill. I mean, they go out all the time, right?
Right. So who is paying those? Maybe that's a list through the chair.
Actually, the Department of Finance can get you that because it all goes through their ARM system.
But, you know, all the stadium owners, you know, the convention centers.
Right. Well, and they pay for TMAs too. But, okay. So we probably have, if we could see that
list and what the amounts that they're paying, that would be helpful.
I think operational efficiencies, we talked about it last year. Are we seeing the kind of
numbers that we wanted from last year? And then the other part of that is I think in the
briefing docs, it was like $120 million, but you'd mentioned $200 million today. So what
sort of the change maybe or what are we looking at?
The briefing doc that we gave yesterday and I think over last week, it had the number
$200 million, over $200 million in it. Your question of year over year. So what I think the
difference between last year and this year is that we have efficiency initiatives that'll be
reflected and made a big part of 2026. Last year, what we asked our departments to do was to simply
do the cost-cutting measures and exercises. Next year is actually initiatives to cut our costs
long-term. So the types of things that are driving the costs in our budget.
All right. I know we had talked about the head tax. I think to answer my colleague's question,
most businesses are not going to voluntarily donate if they are being taxed in a roughly
similar amount, although they can donate and write it off if it's to a nonprofit, but it's
still working with us. We had talked to the briefing. So this does apply to part-time employees,
correct?
It does not.
It does not. So my notes were that it was anyone who makes $4,200 per quarter and half of their time
is in the city. So this is just, is it a dollar threshold? Is it an hourly threshold? What are we?
It is a dollar threshold. I may have misquoted the dollar amount. The final draft ordinance will
reflect the correct part-time hourly wage.
Okay. So then that makes my next question mood about tips paid to the employee. Debt check came up
earlier. And I think it's something that continues to be a barrier for vendors, for people that want
to get stuff done. You could be held for weeks, months on, on a, what most would consider a small
debt. Has there been any discussion in saying, you know, if it's under 5,000, we're going to issue
your permit, your contract, whatever it is, and then we'll come back and collect it either in the
first payment or over a certain period of time so that we're not waiting to get the work done that
we need so desperately? So we, we, every, everybody that has these debts are eligible for some of the
relief programs so they can make payments over time. And then the, the other thing that we have
done in some cases, especially when it's a development, we want it to move forward, get sticks
in the ground. We have, we have allowed for conditional approval for the permit with the understanding that
we would get paid. Is there a average length of time that debt check takes?
Um, I can get that 40, I'll do. And the average amount while you're at it, you know, what are we
talking about here? It's a couple hundred bucks where that's a lot of time that we're. We can do
that as well. I mean, I know the total amount that we have outstanding, but we, we can get you the
average. All right. Um, are we talking about service taxes when we go to Springfield? Great. I'm very
happy to hear that. Um, I know when we spoke about this last year, if we, we were told if we pass this
budget, we're going to have a, a larger deficit next year. If we pass this budget as is, what does
2027 look like? Given our growth, our natural growth in, in salary and another costs that continue
to go up and volatile revenues as we're finding. Yeah. So, um, great question. Thank you for it.
Um, so as I said, this budget has about 60% structural fixes in the budget. So you can
anticipate that being the, that roughly being the level of structural, uh, carry over into the
2027, uh, development of the budget. Okay. So we would anticipate though, that there would be some
gaps still. Yeah. But, um, again, this is long-term structural problems that we're fixing.
No, I get it. Um, so, uh, I think I want to ask, I've said this to a few people and I'm not sure if
I have two controller, but 44th Ward has Sunday meters on every one of our arterial streets, not
on our wraparounds. And I'm one of the few neighborhoods that does. Um, and that's an
opportunity for me. It's about driving people to businesses, right? It's the second busiest day.
You want to have access for people to get in, do their shopping, have their lunch, whatever,
and go out. If we had a real conversation, or maybe this is for, for your list about where we, it makes
to add Sunday meters. I know downtown they're 24-7 every day, but there's an opportunity there
that'll help us clean up our contract a little bit and get on the right side with Chicago
parking meters. Has that been looked at in a serious way, and can we start to have those
conversations with my colleagues? Placement of meters?
So, for example, in the 44th Ward, you have to feed the meter on a Sunday from 10 a.m. to 8 p.m.
In the 47th Ward, I don't believe you do. I got a lot of meter tickets, so I know I have a lot of
volume, but how do we look at that citywide, and what does that mean when it comes to not only our
budget, because it's a new meter, right, or a new time, but also our contract with the parking meter
folks? Okay. I would defer, I guess, to the CFO, because she handles the contract with the parking
meter company. We're just more involved in enforcing, you know, the parking rules.
I think we would welcome that conversation. There's a range of things that we're looking at
that would, you know, help reduce the annual payments that we, the trip payments that we
end up having to make every single year. So, you know, that's an area that I think is a very positive
one for us to be looking at. But let me be helpful for you on that. We got a lot of pushback
when it went in, and now everyone's used to it and expect it. You know, it's easier to park if you
have to feed the meter than if it's there all day. So let's continue to pursue that.
No, absolutely. I live in the South Loop where we have to feed the meters on Sunday,
and you're 100% right. It's not hard to find parking because people don't stay all day.
Exactly. Exactly. I think that's it for now, for me. I don't need a round two.
Don't worry, Chair. Thank you.
You say for now.
I don't need a round two. For today, I'll say.
For now.
We'll do it all again tomorrow.
For now.
Thank you, Chair.
All right. No matter how important you have any questions.
Thank you, Chair. I first want to say thank you to Director Guzman and team for all the
engagement that you provided us since the spring. I had a question about, first,
firstly, we've seen an increase in ICE activity in the 48th Ward, so I want to put that out there.
And I'm glad to see that there is $1 million in Department of Law affirmative litigation to
protect immigrant communities and defend against the federal cuts. But I just, I wanted to make sure
the Chicago Legal Protection Fund also had a corrected clerical error, I understand. I just want to make
sure that their level of funding is the same as what it was last year. Is that something that you
could confirm?
Which fund?
The Chicago Legal Protection Fund.
We're working and looking into that. But that one, the level of funding that has been in the
corporate fund has remained the same. As you know, during the pandemic, they were
ARPA dollars, which have expired or have been exhausted. So we're looking at ways to support them.
Okay. If you can just confirm with me later whether or not that level of funding is going to be
maintained, that would be helpful. And also, if the ARPA funds have expired, where would we be able to
find that funding to keep it level?
Yeah. I wanted to also say that I'm also interested in what Alderman Wagaspak was asking for regarding the
social media tax and the legal briefing that you all have about that. Is that something that we are going
to be able to be briefed on as a body?
Yeah, I think that's a conversation that we're having with DOL right now. Obviously, there's a desire to
probably have more offline conversations with DOL, just given that this is all about litigation
strategy to the extent that this is litigated in the same way that we have confidential briefings
around settlements and judgments. But that is something that we have been discussing with DOL.
Great. And then, can you hear, just list what social media is? Like, for instance, is Waze
considered social media?
I don't have the ordinance draft in front of me. I don't know if Jung has it off the top of her head.
She's probably a better person to just sort of give the definition. But it is the types of media
that provide entertainment and that are engaging with users in that sort of format, which is why
it's an amusement tax. And it's not like your traditional news organizations or some of the
other non-entertainment type social media companies. But I'll turn it to Jung to provide that response.
Thank you. Thank you for that question. Hi, Alderwoman. So the way we define social media
in the ordinance that will be shared with you is it means websites, applications, products,
internet platforms that allow consumers to view, share, or otherwise engage with images, videos, audio,
in formats, including but not limited to performances, promotions, memes, augmented reality,
artificial intelligence, and live streams. So we really are seeking to capture like TikTok,
Facebook, Instagram, the really traditional social media. Within the ordinance, we also exclude
explicitly that it does not mean, like Director Guzman said, media, news providers, internet search
providers, internet service providers, emails, all of that is excluded. So it really is when you think
about social media, what you do to, you know, doom scroll, you know, just kind of check out or just
enjoy kind of entertainment. It is, it is that type of app. Okay, thank you. That's helpful, Jung. Thanks.
Regarding the head tax, was it ever considered instead of a flat tax per head to have a percentage?
That it's not allowed, um, under, uh, the state, uh, constitution. Okay. And then, and then I'm also
interested in TIF surplus. Of course, my word has had a great hit with the, um, tax assessments. And also,
we have a school that does not have a gym. Probably the only school in, in Illinois that does not have a gym
is what they say, McCutcheon school. So I'm interested in those conversations with DPD and CPS,
um, regarding the CPD and staffing levels and overtime. So in my word, we have a great, um,
desire to see our, um, officers on the streets, especially in our small business corridors.
And often they say, I'm here only because of overtime. And so can you just help me understand
when you're talking about CAPS on overtime, how that might impact someplace like the 48th ward?
So, you know, there's a lot of drivers to overtime that, uh, CPD puts, puts forth. Some of it is
because, um, of the number of officers that are on layup, which is something that we are addressing,
uh, based on the, uh, recommendations in the OPSA medical audit that was provided.
And that is, um, you know, at any given time, there's about a thousand officers that are not,
um, on the streets. They're at home. Um, some of, and, and the bulk of them that are at home are not
due to injury. It's due to sickness. And so we want to make sure that, you know, we're, we have a,
a process and a regime in place that gets those officers back into active duty, uh, quickly.
Um, so that's one. So that will actually drive down the, the number of hours that officers are
having to do that type of work on overtime because they'll have their full force. Um, secondly,
you know, CPD continues to hire, continues to hire. They're not part of the hiring freeze
next year. Um, other than, um, the, uh, positions that they have frozen that they know they won't be
able to hire into just given capacity. Um, the other thing that I think, you know, we're working on
is the civilianization of the police department. So, you know, they're currently, um, uh, civilianizing
a number of positions that'll only get them to 8% civilian versus sworn, which is dramatically lower
than our peers, which are closer to 30 to 35%. And so by, by identifying, which is part of the ask of
CPD this year, identifying the additional positions, uh, that are administrative in nature
that can be civilianized, will actually free up more of our officers to be in our communities,
on our streets, uh, providing, uh, um, the types of, uh, uh, of services that we rely upon our police,
only police officers can provide.
Terrific. Thank you. And then regarding the departmental reductions and the targeted hiring
freeze where you have, um, you're going to have $50 million in, in, uh, savings. I just wanted
to confirm that there aren't going to be no cuts.
to departments related to the accelerated moving events that are happening,
especially with, for instance, we had a,
so we have a couple of trouble buildings, SROs,
and we need to relocate those folks.
But at some point CARES was only able to send a couple of folks.
We don't want cuts to CARES because we need folks like them
to help us relocate these very vulnerable people.
So can you just confirm that there are not going to be any cuts
to departments related to rapid rehousing?
Off the top of my head, I don't know that we have a lot of cuts in DFSS
as far as vacancies,
but I'd have to get that through the chair to you
because I don't have it off the top of my head,
but I can look into that.
But the bulk of the position reductions are in other departments,
not within DFSS.
As it relates to the hiring freeze,
we do have some departments that are affected by the hiring freeze,
but public safety is one area that is exempt from that.
Yeah, and I feel like that housing is truly a part of public safety.
A lot of businesses talk about housing in terms of public safety
and the feeling of safetiness in their communities.
So I would just like to advocate that housing be prioritized
when we're talking about which jobs to preserve.
My team just confirmed there's no positional cuts in DFSS.
Yeah.
So that's all for now.
Thank you, Chair.
Thank you, Autumn.
Autumn Gutierrez, do you have anything?
Okay, very well.
No, no, no, no worries.
I think that gives us to round two.
So go ahead.
Just as my colleague also reiterated about the funding,
hopefully for the relief one, right?
Speak it to the mic.
Hello, hello.
There you go.
Thank you, Chairman.
At this point, I think all of my questions have been asked,
but I just wanted to reiterate what my colleague,
Manah, was mentioning.
Hopefully, instead of that $1.5 million,
they could get the funding as they're requesting.
Legal protection?
Legal protection funds, please.
Yeah.
We need to still advocate.
They've been doing a tremendous job.
I think, I know without the ARPA money,
it would be hard to come up with that amount,
but I think it's needed.
Hopefully, we can match the $3 million they're asking for.
Thank you.
Thank you, Autumn.
Okay, we're now to our round two.
So I have a Vice Chair Lee, Alderman Beal, Lopez, Moore, Martin, and Riley,
but I don't see Martin and Riley.
So I'm going to start with Alderman Beal, followed by Alderman Lee,
followed by Alderman Lopez, and then Alderman Moore.
Thank you, Mr. Chairman.
Let's dive right back in.
Under the –
I'll be able to hear them.
Under homelessness, I see there was a huge increase,
$5 million for services and another $2 million for personnel and contractual.
Could you explain that?
Sure.
The increase of $5 million is to the Rapid Rehousing Program that was being supported through ARPA
this year, and there is a certain level of households that we seek to maintain,
given the vulnerability of that population right now.
And so with the additional $5 million in corporate funding to the Rapid Rehousing Program,
we'll be able to sustain up to 1,000 households into 2026.
So when you're saying that population, you're talking about illegal migrants?
No, I'm talking about those who are homeless in the city of Chicago.
Which – what percentage of our homeless population is illegal migrants?
I don't have that information, and I don't know to what extent the – how a DFSS categorizes their population.
Can you get that information through the chair for me?
We will work to get that for you.
Thank you.
How much money have we spent over the last two years on TIF money that we have given to CPS?
So I think this is also in the packet that we provided, but let me get that for you.
So last year, we eventually surplused around $700 million after the expiring TIFs were accounted for.
And to CPS, that was $421 million.
In 2024, we surplused $434 million.
That to CPS was $228 million.
Okay.
And that does not include the amount of money we sent over to CPS throughout the year for TIF projects?
That's correct.
You have that number?
We can get you that number.
Yeah, I would like to have a total of TIF surplus along with projects that we have sent over to CPS over the last two years.
I would say that we've done this calculation a number of times, and I think that we've briefed city council on this.
We have supported CPS to the tune of about a billion dollars every single year.
A billion dollars.
So this year, they're getting a billion plus a billion five.
Or is that – you're saying that's a billion total?
A billion with the support to their MEABF pension.
But then when you add in the support we give for the TIF surplus, it'll be a billion five.
Okay.
Yeah, you just add quickly that they – in addition to the TIF surplus, to TIF projects, to MEABF,
there's debt that we pay for that was for school buildings that were issued quite a ways in the past.
So there's some grant programs that we provide to them.
There's a whole range of supports.
Okay.
I get it.
All right.
Also, most of these programs – and I think this is part of our budget problem we've been saying over the past couple of years –
is that we've been spending ARPA money, COVID relief money, on pet programs that we've created,
and now that the money's running out, we're shifting all those over to our corporate –
isn't that why our budget is escalating?
No, I would not agree with that statement.
Of all of the ARPA programs, which I believe are over 50, only about four will continue into some form of our operating budget,
whether it's the corporate fund or different other funding sources, rapid rehousing, our youth engagement programs,
including youth employment.
I'm trying to think of what the other ones are.
CARE.
CARE.
Thank you.
CARES and Family Connects within CDPH.
But I can get you the full list, but it's not a significant amount.
Most of our ARPA-based programming is ending.
All right.
Last year, we turned the corner with almost over $300 million in the fund balance, correct?
Yes.
Okay.
So if we turn the corner in 2024, going into 2025, and right now you're saying if we don't get that $175,
we will be depleted in that line item.
Is that correct?
I think it will – it'll be significantly lower.
Yeah.
Okay.
Can you provide us a list of everything that you have spent out of the fund balance since 2024?
Since 2024.
Since 2024.
Yes.
Absolutely.
Okay.
Let me – that's a – I don't think that there is a direct span with the exception of the pension payment out of fund balance.
It's a balancing – it's a balancing act.
So I don't – to your question, it theoretically is the net of the difference between our revenues and expenses.
So I don't – what you're asking for, if you're asking for a direct expense to the fund balance,
the only direct expense to the fund balance really is the pre-pension payment.
Are you – where do you –
I would like to know where the money is.
That's all I want to know.
Chairman Irvin is right.
It went to balance the budget.
So it went – it comes into the corporate fund to support general operations other than the pension fund payment,
advanced pension fund payment, which was a specific amount.
Okay.
And lastly, if I can wrap up so I won't have to have a round three.
I'll keep going.
We're good.
Okay.
Thank you.
How much is –
Thank you.
We'll be right back.
being cut in total out of CPD's budget?
CPD is actually going to see an increase year over year.
They did cut around, I think it was $80 million out of their budget,
but because of the right sizing of their overtime and the,
mostly the right sizing of their overtime,
but also the net increase year over year,
if there's salaries and wages,
it's going to have a incremental increase to their budget year over year.
Great.
Now, are you all looking to put a tax amendment in the management ordinance to
say over a certain amount of overtime for CPD has to come back and be approved
by the city council?
So with the right sizing of their overtime,
we believe that they should have sufficient room based on historical trends
coming down.
And just like we would want to put some accountability measure in place with CPD,
we want to be able to come back to city council for additional appropriation,
should and if they need it.
Okay.
So the answer is yes.
If they need it, we would come back for appropriation.
So why are you all looking to put the blame on city council for approval if they need additional
overtime?
Aren't you all additionally trying to just put the burden on us and put the blame on the
city council in the event CPD needs overtime?
And then that way you all can say the city council did it,
or the city council doesn't want to provide adequate services for the people to protect the citizens of
Chicago?
I don't think that's how we see it at all.
I think that we would have to come back to you for additional appropriation to begin with.
You haven't come back thus far.
So again, we've right-sized the budget.
We believe that this is sufficient dollars.
You'll be able to track it.
But I also think this is a group project.
I think that we all benefit from CPD services,
and we've all, including this council,
been asking for transparency and accountability from CPD.
Okay.
Did we have transparency when you guys went and found another line of credit for $100 million
that was like 20 years old?
You found a line of credit that you all are just tapping into?
That was in Bloomberg?
That's based on an authorization that city council created.
We are doing that all under city council authorization.
Okay.
But did you all come back to us, or is that transparent?
The authorization has been provided.
We manage our lines of credit on a regular basis.
I think the reason it's gotten a lot of attention was because it was noted in a press article,
but we, in fact, are extending or replacing, sometimes canceling,
changing our lines of credit on a regular basis.
It's just something that we manage.
We have them for the aviation funds, for O'Hare, for Midway.
We have them for all of our managing our CIP.
We use them for our GO bonds.
It's part of our debt management position.
Okay.
Well, okay.
And it's just amazing how we look to have transparency,
and we want to be forthright when it comes down to something like that.
But all the moving and things that you all do on a day-to-day basis,
we don't know anything about until we see it in the press.
We'd be happy to provide updates if you like.
Okay.
Anytime.
Thank you, Mr. Chairman.
All right.
Who's next?
Vice Chair Lee.
Don't leave.
Come on, hang out with us, man.
Thank you, Chair.
You might want to wait to let the traffic ride down.
Congestion.
I'm telling you, it's congested.
I'm going to – yes, we haven't talked about the congestion fee.
We're not going to talk about that right now.
I want to pick up on something that Ronnie brought up earlier in terms of layoffs.
Are there other positions like that in the budget that we see that are actually like elimination of existing positions?
I know that ARPA, notwithstanding, are there positions that are being eliminated, even if it's on a small scale?
There's a significant number of grant-funded positions across departments, but particularly within CDPH, that are coming to their natural conclusion based on the expiration of those grant dollars.
So those have been happening throughout the year as those grants expire.
Can you provide through the Chair a list of the grants that are expiring and the positions associated that are going to be going away?
Sure.
Awesome.
Thank you.
Then I'm going to go back to the head tax.
We covered this a bit in the briefing, and I just want to dig into a little bit more detail about how we establish what companies sort of this applies to.
You know, is it any company with more than 100 employees?
Do they, like, what does the residency requirement in Chicago for the company, not the individual employees, of course?
If you're a large company with a regional office with, let's say, less than 100 people in Chicago, but you have more than 100 people in your company, how would that apply to you?
Yeah.
So this would work very similarly to how it worked before.
So this is companies with offices in the city of Chicago with employees who work at least 50% of their time within the city of Chicago.
There are exceptions.
Nonprofits are not included within the scope of the employer.
And there are a couple of other exemptions that I don't quite know off the top of my head, but we can get that for you.
It would not be, say, a company that has an office here, has 10 employees, but globally has, like, 10,000 employees.
It wouldn't apply to that.
And, you know, I know Alderman LaSpada mentioned it earlier.
You know, we do business very differently these days, and I know many corporations have hybrid work environments where their employees may not be required to be in the office more than a few days per month.
How is that going to look for this head tax?
Right.
So it's when they're engaged in work.
So if they are hybrid and they work at home and their home is in the city of Chicago, they're still doing work for their employer.
Okay.
So if half the workforce lives outside of the city of Chicago and they only work two days a week in the office, that would not apply to that portion of their company?
It depends on, well, 50% of their time they would be in the city of Chicago.
If they're two days at home, three days in the city, they're more than 50% working in there.
No, no, no, two days in the office, I mean.
Right.
Yeah.
So it depends on where they're domiciled.
Okay.
Okay.
All of those things matter, right?
So it seems like there's going to be some loophole ability there.
Have we talked at all, consulted with any of our city vendors about the impact of the head tax on their operations?
And is that going to have any adverse effect on, you know, our contracts with vendors?
I mean, I think if you're asking me if there's an exception, if someone does business with the city of Chicago government, there is not a specific exception for that.
A lot of the people that we do business with are large corporations, frankly.
And so I think at the end of the day, we keep coming back to first principles, which is why this is being put in place in the first place.
One, we have to diversify our own revenue sources.
We know that corporations are receiving tremendous tax breaks over the next and have been for the last several years.
They use an enormous amount of city resources, and they have identified the one thing that they believe will bolster their ability to not only recruit,
but be domiciled here in the city of Chicago, which is the continued reduction of crime.
Got it.
I'm going to move on to sports wagering.
Can we have – let's go – let's ask this question first.
With the sports wagering, I know that it's not meant to be sort of a per-bet type of tax necessarily.
It's on the gross – I think you said it was like the gross –
The adjusted gross – the adjusted gaming receipts.
Okay.
The gross gaming receipts, sorry.
The gross gaming receipts.
But how is the city going to track and verify which bets are occurring within city limits?
Is this like a geofenced sort of thing that we're going to require from the online vetting companies?
It's – yes, and it's also up to the organization to confirm that because they're the ones that are geocoding us.
But they'll have to – when they file their returns with the city of Chicago, confirm how many of the bets took place in the city of Chicago.
Got it.
Chair, I'm going to keep going if you're okay.
So I just read yesterday that something was introduced at the Illinois General Assembly that would preempt our ability to invoke this tax.
Can we – can someone talk to us about how – what the list of bills the city is supporting to get more revenue down in Springfield?
I know there's a – there's an action day next week, but I think, you know, it's not – we need to talk about who's supporting us on these things because I think there were a handful of Chicago state representatives who are also sponsoring this bill.
Just put $30 million of new projected revenue in this, and now, you know, it looks like it's in jeopardy potentially, and how are we going to fill this hole?
Yeah, I mean, I think, one, that IGA is tracking that, so they're definitely going to be the ones to better speak to that, and I believe that they are having conversations with our own delegation.
But, again, I think this keeps going back to the principle I have in which I keep talking about, which is the vast majority of services –
are happening at the municipal level. A bill like that doesn't just affect the city of Chicago. It
affects all municipalities. So one of the things that we're looking at is, you know, our coalition
of mayors and coalition of other cities that continually have their resources being taken
away from them for activity that is happening in their jurisdiction from the state. So I think that
it's incumbent upon us to have those conversations because, again, this goes back to the conversation
around VGTs. We're not the beneficiaries of VGTs if we were to put that in place. The state is,
right? And so we've got to advocate for and advocate very strongly and loudly for the things that are
happening in our jurisdiction and the resources that are being taken in our jurisdiction and
advocating for the revenues to support the services being provided. I think you'll find a lot of
agreement on this council. Many people have asked about the legislative agenda and priorities. So
we want to be able to be supportive of that. I think we'd like to be more engaged on what the
strategy is, who we're talking to, you know, the mayors and, you know, other older people of other
municipalities. You know, that's, I'm not saying it hasn't been said before. It's the first that I'm
present to that there's other conversations going on with other municipalities. A lot of the focus has
just been what's the city's agenda with the state of Illinois. So I'm glad to hear that there's other
conversations going on. I think we'd love to hear just sort of like, how is that coming together?
Are we putting pressure on other state legislators that are in our municipalities, cover our municipalities
and how are we working with them to bring back some more of this revenue? Last thing about TIFFs.
Last year, we surplused 298.1, well, we returned through the surplus 298.1 million to CPS. And then
we gave them additional surplus based on the expiring tips, which we don't know what those
amounts are going to be until the year ends, right? So frankly, many months after it is many. Okay. So
at whatever point, there is some additional funding that comes through. So what's proposed in this budget
is about a million dollars in surplus that would provide 552.4 million to CPS. And we know that CPS
has also stated that they would be willing to provide MEABF payments if we provide the same level
of funding as we did this year, anything above that. So what they got total this year has been about,
I think, $379 million. So anything above and beyond that. And this figure comes out to about 172 more.
My question is, do we have any sense of what the expiring TIFFs might do to provide an additional
bucket of money at some point during the year? And can we make some adjustments?
Well, the $1 billion is inclusive of our estimate of the expiring TIFFs based on the level of activity
that is currently encumbering the funding in those eight TIFFs, I believe there are. So it's already
inclusive. It's already baked in. Okay. So last year, if anything, we hope that all those
projects... It could be basically based on that then, because we don't know what it's going to be
until months into it. So then last year, we didn't do the calculation the same way.
No, we do the calculation the same way every single year. So we make... The TIFF surplus is always an
estimate. The only portion that is known at the time that we surplus is the declared portion,
which is based on active TIFFs. The portion that's based on expiring TIFFs is also an estimate
because it has to do with cash flow and what's left in those TIFFs after all of those projects
finalized at the end of the year. Even if those projects continue to bill or incur costs beyond
the end of the year, they can't apply them to the TIFF dollars. And so there's a massive reconciliation
process that happens between DPD, my office, and DOF to reconcile the expiring TIFFs at the end of the
year, which is produced through DPD's audit to the state that gives us the final amount that's left in
those expiring TIFFs, which will then in June get dispersed as the second half of the TIFF surplus
distribution. Got it. So if I'm understanding you correctly, it could be lower, but it could also
still be higher depending on what is actually spent. Correct. Okay. Okay. Okay. Got it. That was helpful.
And the last question I have is about
Finance General. We have new
scheduled wage adjustments. So
of $197.7 million, does that include
enough money for the new contract for Local 2 and their increases
based on the new contract, as well as the AFSCME top steps that aren't reflected in the salaries in
these departments? Can you point me to the specific line item in my team looking this up as well?
I don't have it right in front of me, but the point is that it's been raised a couple times to me that
the Local 2 numbers aren't necessarily what, they don't reflect the current, the new contract that's
just been signed. I'm going to actually pass this to Kevin Murphy, Managing Deputy Budget Director over
compensation. Thank you. Oh, thank you. Kevin Murphy, Managing Deputy Budget Director. Thank you for the
question holder, Lee. So yes, it does account. So we, because the contract hadn't been ratified
on the day of intro, we do not include the wage adjustments. So the salary adjustments for the
contract will happen in waves. So
there's a 2025 schedule that we will implement
as of November 1st, which employees
will see essentially the catch-up to their kind of current rates
based on the contract on their first check after that,
which is approximately November 22nd. And then
the retro calculations have begun. So that work is ongoing. We meet with DOF and work on those with
the department. And once those are evaluated, we'll know the true cost of the retros. But the funds for
those are captured in Finance General, or both. The increases in FY26 salary schedules, plus the retro
costs that we anticipate. So we won't see the actual, well, we won't know what's actually,
what the actual costs are until after it's been paid out.
Correct. But we've done an analysis based on what we think is owed, based on both the current...
That's why it's not line item down right now. Okay.
One thing you will see now that you guys have ratified
the contract on the day that this budget was
introed. Once we, once City Council ratifies
the contract, we actually move the costs into the
departmental budget. So in the technical
amendment phase of the budget, it'll be
moved into CPD's budget. Okay.
Okay. Great.
I think that's all I've got. Thank you very much,
Sharon. Thank you,
all three of you and everybody that's here. I hope
you're not seeing numbers in your nightmares right
now.
And that didn't even get my joke.
Did you hear my joke? Are you seeing numbers
in your nightmares? Thank you.
This is what we do all day.
And I see numbers in their sleep.
No, it's not like that.
We have Alderman
Lopez followed by Alderman
Moore.
They're seeing Raymond Lopez's in their sleep.
I think everybody sees
you in their sleep, dude.
Especially when we're here at six
o'clock. Thank you, Chairman. I will get right
to it. Director Guzman, if you can,
I send all of you a list
of through the chairs. Appreciate your
responses. I do want to actually
add for an additional, if you can
show and highlight by department
the ARPA-related positions
that are being transitioned to
other funds, including
the corporate fund. I don't think that
was asked for. I think it was just generally asked.
But if we could have a line-by-line who's
moving where, I would appreciate it.
I've looked
in the budget.
What happened to the gunshot detection
technology line that was in there
from 2025, in 2025's budget?
It's still in there.
It is in
Fund 353. I believe it's in
OPSA's budget.
But I will confirm that for you.
That's fine.
But it's in there.
You know,
I don't know if it's
categorized as gunshot detection,
but the funding for the new
contract is in the budget.
That's fine.
So then I guess the question then,
to follow up on both what
Alderman Conway and Alderman
Beal were talking about,
are things like that,
when city council issues
these budget
purposes,
and they are not expended
as we saw this year
with the $8.9 million
that was for gunshot detection
technology,
does that get put
into the assigned
or unassigned budgets?
It's available
as fund balance
for that fund.
So this is a special
revenue fund,
so every special revenue fund
has its own fund balance
to the extent that it has
unspent dollars.
So
353,
to the extent that there's
unspent dollars
at the end of this year
or any prior year,
has unspent
fund balance available
for use in the next year.
When we think about
I think you see that
in this budget,
if you were to look
at the revenue side
of 353,
I think that there's
fund balance being appropriated.
Okay.
Because that also
brings me to
one of my other questions.
When I look at
I think it's about
it's about
the revenue,
I really hope
I know we talked earlier about the 260, I think that was the advanced pension payment versus the 120 that is being spent.
Last year, Mr. Oski, you stated that we were stopping the bleeding by making our advanced pension payments.
So if we are not making advanced pension payments in full, do you feel as though we are bloodletting ourselves in this moment?
And you've got 20 seconds, please.
Yeah, we're putting $2.7 billion into the pension systems.
And that is, you know, $130 million, $140 million short of what we would like to do.
It is a very substantial deposit that we're putting in.
And, you know, I think that it makes the amount we're putting in, it makes a difference.
Would we like it to be more?
Yes.
And that's why we're committed to doing that in future years.
Do you think that the priority should be on making larger payments and not necessarily just adding on new employees or converting ARPA employees that were basically seasonal for a few years onto the budget?
I'll leave that as a rhetorical if you want.
But I do know that we saw four days ago where our sister agency had hundreds of millions of dollars offloaded, borrowing offloaded.
And I know that we've seen an increased reliance on debt under this administration.
We've seen more debt taken on.
My colleagues just talked about scouring for debt from 20 years ago just to get through operational issues.
And CPS, I believe, through your management actually, had $7 billion in new debt, which leaders like Stacey Davis Gates and others have, you know, when they were trying to continue that, called it reckless, called it dangerous, said it was, you know, just tax swaps.
But my understanding is that, you know, if we're going to see our sister agencies relegated to junk and offloaded by investors, how soon before we become next as a city of Chicago?
How soon before our bonds are offloaded as junk or not worthy of being maintained because we are so heavily reliant?
That's a lot of questions, I think, in there.
Some of the things that you mentioned, for instance, CPS, CPS does have a severe cash flow issue, and they are reliant upon TANs and the delay in the Cook County property taxes is putting extreme amount of pressure on them.
That is not what we use our lines of credit for.
So, you know, yes, the authorization for those lines was initially put in place 20 years ago, but it was also reauthorized by this council 24 times.
And it is something that we use to manage our capital expenditures.
So, I know that you've worked on the private side of this.
I know our city comptroller, Mr. Belsky, has worked in rating agencies and working to address and deal with these matters that we've seen at the municipal level.
Both of you are familiar, I would imagine, with the four points of impact.
And I think that when we're dealing with those issues, and I know that you have said previously, Jill, that we don't talk with our rating agencies.
We're not asking, we know that things are not necessarily as dramatic and apocalyptic as they seem to be.
We talk with the rating agency all the time.
But we've also negotiated with them regarding our rating and the actions that are in this election.
May I finish?
Hold on.
Let's call and response.
Let's get it there.
So, are you finished with the statement?
No, not yet.
Okay, all right.
Because I still have a question in here.
Because my concern is that the last time we were in this room, even though you don't recall, many of us do, we were told that our ratings are not going to decrease,
that we're not going to see any adverse reaction to the increased borrowing that we continue to do.
And then a few weeks later, we were immediately downgraded.
That is a fact that is undeniable in this room.
And if we need to start pulling up the articles, I'm sure we can do it.
But I actually want to pivot and ask our comptroller, who recently just left this universe to take this job here,
is there what we see when it comes to these pillars that we constantly refer to, the points of impact on our bonds,
are we in an environment that is conducive, in your opinion or in your experience,
to being able to ask for increasingly more debt with any sense of an ability or confidence in the market that we are able to manage those obligations?
Alderman, before that question is...
Actually, I am asking the comptroller.
It's true, but I would like...
Can I ask the comptroller the question?
I would like to make a point about something you said about me.
Alderman, Alderman, Alderman.
That was a direct question to the witness.
Alderman, Alderman.
And I'm being interrupted by that witness.
Alderman, Alderman.
Chair, I'd like to make a comment.
Alderman, you finished your statement.
Could you allow them to answer the question?
And the question was directed to the comptroller.
Any witness here can answer.
It's okay.
Then she can get answered when he's done.
Go ahead and answer the question.
The question was asked to the comptroller.
And I would like him to respond first.
You're asking...
Based on your experience in the private sector working for rating agencies, are we, in accordance with the four points of impact, which, by the way, are dealing with economy, finances, debt, and management, are we creating an atmosphere that is conducive to creating confidence in our ability
to both take on new debt as well as meet our current financial debt obligations?
Well, you know, I will reiterate what my colleague said, that you can not predict what the rating agencies are going to do.
But when you take those credit factors, they're interrelated.
So you've got the economy, that's our tax base.
You've got our budget, and you have debt, and debt are things like pensions and bonds.
And then you have management.
And I would say, at least in my opinion, in this budget, you know, the way they do it is they have those categories, and then they have specific things that they weight, percentage-wise.
They do a weighted average.
So, for example, you know, fund balance and things like that are weighted.
So there's a lot of things in this budget that probably weren't presented before with respect to what the cost-saving measures and efficiency measures are, a variety of revenue sources.
You don't want to be over-relying on one or another.
So even though maybe the pension advance is not as high, it could be very well offset by some of those factors.
But you can't predict with accuracy what the rating agents are going to do.
They give you those metrics, but they also make a real strong caveat that there can be other factors that influence the rating.
That's probably the best way I can answer that.
Jill?
I think it's been stated at least three times today that I said in this room we would not get downgraded.
I want to make it really clear.
What I said about us not getting downgraded last year was related to the budget that was proposed by the mayor that was 80% structurally balanced.
That statement was never said in connection with the actual budget that was passed.
So the budget that was passed resulted in a downgrade, and I never said it wouldn't.
That comment was related to the budget that was proposed.
So as a point of fact, I want to stop in the comparison that I misspoke.
To this day, I don't believe I misspoke.
If we had passed that budget, which was very structural, we would not have been downgraded.
But that's not what happened.
So ultimately, the choices the rating agencies made were related to the actual actions that occurred, not to what was proposed.
In addition, I know you're talking a lot about the amount of debt that we keep taking on.
We're paying down 45% of our debt in the next 10 years.
So yes, we issue debt to fund our capital projects.
We also actively pay it down.
We are not issuing debt and, at the same time, just adding on and on into the future.
We have a tremendous amount of principal that we are paying down right now from prior bond issues.
So we take a very balanced approach to our debt.
And when you read the rating reports, they are not talking about the way we amortize debt or the amount of debt we're taking on as being the factors in our rating.
The total amount that we have, which has been accumulated over time, and the pensions, which is our largest liability, are a very, very large factor, for sure.
But we are very actively paying down our debt.
And I think it's an easy misconception to have that we simply accrue debt and don't pay it off.
And that's not true.
We are. Are you finished? Go ahead. Go ahead.
As long as I've been in this room, we have operated under deficit spending from three different mayors.
We have borrowed to cover those deficits every single year to say that we are not just taking on new debt.
When this administration passed a billion-dollar housing thing and has zero projects to show for it and actually beefed up an entire department, yes, you are borrowing for the wrong reasons.
When you have to go back to find even just last year, we are talking about having to come up with $700 million from surpluses 23, 24, 23, and beyond just to come up with how to pay for things.
And, yes, we do do that because we did it for the migrants the very moment this administration walked in the door because I remember that was the first time any of us heard about assigned or unassigned balances in this room.
We just now found out, as my colleagues were talking, about, yes, there are a wide variety of ordinances that this body passes allowing for borrowing, bonding, and what have you.
Some of them are partially activated.
I'd say probably all of them are probably 90% activated.
But that means you've got 10%, 12%, 6%, 5% here, there, and everywhere that you are tying together now for the sole purpose of getting through today.
And that's where we find ourselves in.
So forgive me if I find it a little bit disingenuous to say what you just said, because it's not true.
And I think that's why we have such a very quieted atmosphere in this room, to be perfectly honest with you, because I think most of us don't believe what this says to begin with.
We are not having truthful conversations on what's in here when we're doing the budget gimmicks that we're doing right now.
So I appreciate the indulgence, Chairman.
I thank you for the questions.
But I'd love to be able to say that we come out of this November 20th having a real legitimate conversation with our departments and not just playing this smoke and mirrors show that we got going on.
Thank you.
Thank you, Alderman.
I appreciate your perspective on this.
You've been here for quite some time.
But I think you hit on a really important point where you said that deficit funding has been happening under three administrations.
In fact, it's been happening way longer than that, which is why I keep saying that we did not get to where we are overnight, and we certainly won't solve it overnight.
And so I think every single budget, we need to demonstrate how we are taking steps to get to structural balance.
And this budget does that.
Last year's budget did that.
We're taking even more steps in this budget as we are literally putting in the types of initiatives that will lead to long-term savings.
And we want to work with city council on that, but I don't think that anything that Jill just said was actually factually incorrect.
It was actually correct.
The way that we do debt, debt is a part of every single organization's budget.
You have to have debt in order to support multi-year capital projects.
That's what we have in our budget.
So, you know, what we look forward to is having conversations about how a very difficult budget gap that was made, not overnight, is being solved by not increasing property taxes, not laying off workers who provide the very services that your constituents rely upon,
in which every single member that's been here today has asked me the question, what are you cutting, and how is that going to impact my residence, right?
And we're not increasing fees and fines on the very people who can ill afford to pay for them.
So those are the things that we are balancing in this budget as we look to move towards structural balance in the years to come.
On the bill.
Yep.
Just a point of clarification.
I think part of what my colleague was alluding to is didn't we borrow money and then punt the payment off for two years?
For what?
It wasn't, there was a bond issue.
Which one was it?
Wags?
The line of credit?
Is this, is this the, is this, is this, are you all speaking of the $40 million from the Michael Reese site?
Is that what we're talking about?
No, I forgot which one it was, but it was one that Conway actually pointed out.
That was, that was it.
That was a part of the balancing last year was the lack of a payment.
I think it was $40 million.
For the next two years.
For, for a school's particular site.
It's, it's things like that.
I think that we.
But that wasn't something that was you then.
Let me finish, let me finish, let me finish.
It's things like that when my colleague had to find and point out that we were borrowing money and not making a payment for the next two years.
And, you know, whether whoever the next administration is, if it's this one or the next one or whoever, that will be their responsibility to make that payment because it was punted off for two years.
That's part of our frustration and what we're talking about.
Just.
No, I appreciate that.
And I just want to add a clarification.
We didn't borrow that money and punt it off for two years.
What we did not do was take the opportunity to accelerate that debt and pay it off before it was actually due.
So this isn't an issue of us borrowing money and then not making a payment.
This is, you know what?
We have a very tough budget in front of us.
We could accelerate this debt and pay off something that's not due today.
Or we can continue on the amortization schedule as it was originally said.
Alderman Moore.
Thank you, Chairman.
This is one of the questions I asked through the briefing.
I just want to make sure I get it.
I asked about the year-round jobs in terms of what we did last year and what we're doing this year and what that cost, you know, what that amount is for all the year-round jobs.
Not only the cost, but how many youth that we have working those year-round positions, not just summer, but the year-round.
The other one I think I asked for, a question I asked about was the, and you sort of explained it, but I just want to be clear if you provide that answer through the chair, when I asked about the employees and the enterprise funds.
Now, if you know factually that there are no forts besides, say, the water department, right?
And that's water department, right?
So, outside of the water department employees, are there any employees that's being paid fully, not partially?
So, I understand the thing where you got employees that may serve something in HR.
They may serve something in the enterprise fund that way, and therefore, some of their money get taken out.
But are there any employees, if there are any employees that's being fully paid out of the enterprise funds outside of employees that are working for the water department, can you provide that list through the chair?
Yeah, we can provide that, and there are employees that are fully paid out of the water fund.
Right.
Out of the water department.
Right.
And hold on, just so we're clear, because we talk about water.
You mentioned enterprise, and let's be clear that that also includes aviation.
So, people that are...
Excuse me.
Okay.
You're right, Chairman.
I didn't mean all the enterprise funds.
I was speaking specifically the water fund.
So, what is your question?
So, there may be employees, and I think it came out last year, where we saw an employee being paid out of the enterprise fund, a salary there.
I'm just trying to see if there's any other salaries besides employees that work in the water department that's paid out of that enterprise fund that's non-water department employees.
And you can see that in the book that's in front of you.
Go ahead.
Yeah, that's the line item budget.
So, if you go to each of the departments, and you can even see it just by looking at the table of contents for every department...
It's broken down?
Yeah, in the bigger book.
Okay.
If you go to the table of contents, and we've organized the book by department and then by fund.
So, for each department, you can see every single fund that supports that operation of that department.
And so, you can isolate for just the departments that are funded by water that way.
And what you'll see is there are a number of departments outside of the water department.
And I see the commissioner in the back, and he's probably like, oh, I get these people off my fund.
But we have a lot of departments.
CDOT, we have...
I believe there's some Streets and Sand workers.
We have some members of the finance department who work exclusively on the audit for the water department that are funded out of that,
as well as a number of other departments who provide, including law, the legal department that provides services to the water department, procurement as well.
Yeah, Alderman, even in my department, in my group, because we work on...
I believe there's some still representation...
So, there are also...
Ed and Finance, and pensions, which affect all of the departments and the enterprises, in my team alone, we have people that are allocated to each of the enterprises.
So we're pretty – and we review that thoroughly each year to determine if there's any place where we should be applying a cost to an enterprise that we're not.
Right.
And are they usually assigned to that? Because I know, like, in corporate, when we did activity-based costs, it was more, you know, okay, if you did any activity in that department, then that department paid for.
But I also may do activity in another department.
Yes, we'll do –
I wasn't fully funded from that one department. I'm just concerned if anybody's fully funded outside of doing just work-related.
There are whole positions that are on the water fund from other departments.
But you also have situations where you have people who would work on multiple things, but there are multiple people working on multiple things.
So we have a consultant that actually comes in and says that's a – you know, that's essentially an FTE working for water.
It's essentially an FTE working for aviation, though it might be three people that split part of their time each on doing it.
So it's not restricting that one individual, like, you can only work on water.
It's that, you know, when you look at the work that's done in the aggregate and how much is being done for each of the departments, that determination is being made.
I see.
I see.
I see.
Okay.
Thank you.
And then just my last thing, Comptroller Belsky, I just want to, you know, Chuck Billows, thank you so much for all of your work that you help us with out in that board.
We're dealing with so many issues in terms of, you know, abandoned cars and trucks.
But you guys have been so responsive and it's helped the community and the community is appreciating that so much, you know.
And it makes a difference.
And I just want to say thank you all so much.
All right.
Just for you, Aldermore, if you look, Summary D within the line item budget book, I believe it's your page eight or page nine, the water fund.
Of my budget recommendations?
Yes, budget recommendations.
Um, what you'll see is a basically a workbook that reflects the water fund.
And if you, and it, it breaks it up by each of our eight main, nine main categories, personnel, contractual service, so forth.
And so you can look at the water fund and see under personnel services, which is people, all of the departments on the water fund that have people on the water fund.
Okay.
Thank you, chairman.
Okay.
And thank, pleasure to be with you.
All right.
Um, you got round two?
Go ahead.
If you ask.
Just quickly, there's some thanks, uh, to the departments, of course, Chuck and, uh, John Paul and everyone that helps us be a better ward.
And then we'll ask, uh, I could use some assistance at a location in the ward, uh, 821 West 115th Street.
I can work with finance and water on a resolution to an issue.
It would be greatly appreciated.
Thank you, chair.
That was not a question.
Oh, that was a, that was a request.
Oh, wait.
Oh.
Uh, well, uh, now, now it's time for the chairman's question.
So I got it.
I got it.
I got a, I got a series of items for you all.
Uh, you got one.
Go ahead.
Go ahead.
Wax.
I thought you said you didn't have a second round.
He did say that.
So, uh, a lot of, uh, things piqued my interest there.
Um, well, I was just gonna, I think what Alderman Beal was referring to, first of all, was the
H, the housing and economic development bonds.
Uh, I think that's what you're referring to, where we weren't making principal payments on
that bond deal for two years and then 20 years of no interest payments.
If that's the one you were referring to.
So that was basically kicking down the can for 20 years and getting 130 million plus in
interest payments at some later point.
Um, my question was though, for this, uh, line of questioning from Alderman, um, Lopez,
how often has the city entered into a hundred million dollar or more increases on lines of
credit, um, where the authority of the CFO is used?
And then if the CFO could provide it to us now, um, could you list all the lines of credit
as requested by any CFO since 2010 and what those specific amounts were?
Um, and in particular, how many were over a million dollars?
Um, we'd have to go, yeah, compile that list going back to 2010.
Yeah.
Um, because we, um, have banks that move on and off of the list, whether it's because
of pricing, we re-RFP on a regular basis.
So we do a combination of RFPing, um, and then negotiated extensions.
And so the, we definitely mix the RFPs in to make sure that we're getting the best pricing.
Um, so that can, as the most common way that we are changing what banks that we're, that
we're using.
Um, I can certainly go through the facilities that we have now, if you'd like.
Can you, let me ask this question.
That might be, go ahead.
Let me ask this question.
I guess, um, what sounds like potentially a level of, uh, of busy work.
What do you, what are you, what are you trying to get to that?
Because it seems like that could be a very exhaustive list of which it may not have any relevance.
I want to try to see if we can narrow that.
And what is it that we're actually trying to get to in that, in that conversation?
Just trying to save my taxpayers.
Butts.
No, I mean, I'm, I'm, I'm okay with that.
I'm just trying to, I mean, if you have a, uh, a line of credit that was open and closed,
I mean, that's what I was trying to.
I've had, I had conversations with some CFOs in the past where we were looking at things
like tax anticipation notes, um, amortization, you know, deals that were restructured.
Um, in this case, line of credit.
So I was just, you know, this is the largest one that I've seen in my time here.
And I know that there were other ones.
So I was just trying to figure out, uh, what specifically the 100 million is for, as I,
I think I asked earlier, but, um, how often have we gotten to this point is I think relevant
just to how we're approaching not just this budget, but how we've done budgets in the past.
So, um, that's really why it was.
If it's, if it's, um, something that can be done quick.
I mean, I looked it up with, um, partially what I saw in the city clerk's website, all
the ordinances that were presented in the past, but as she stated, there might've been other
processes that they used without having to go through, um, the council.
We have, we can definitely compile the information for you.
That's not a problem.
I mean, we obviously track all the authorizations and what's outstanding.
And then we have the history of all the banks that we've used.
Um, I'm happy to touch on though, I think the broader question of you had said of like,
how did we get here?
So one of the things that we've done, um, it over time is, uh, you know, migrated the
way in which the city is managing, uh, funding its capital expenses.
And so in the past, the city used to issue bonds to fund all its capital expenses and it
would issue the bonds before the expenses were occurred.
And so when there was an authorization for multiple projects, those bonds would get issued.
Um, and, uh, the projects inside of it, uh, would determine for instance, what the average
life was.
It would all go into the tax certificate.
Um, you know, you'd be designating the bond proceeds for specific projects.
And then some of those projects would be much delayed.
Some of them would never happen.
And we would end up with all these pockets of money that were, uh, like a trapped inside
of these bond proceeds accounts that we couldn't use because that project wasn't moving.
And so over time, the city has gone and, you know, slowly reallocated those monies, cleaned
those accounts up, got them spent.
And we've shifted to this methodology where we don't issue bonds generally until after
the monies have been expended.
And so the lines of credit are what allow us to, you know, help get, keep funding those
projects and then issue the bonds later.
So it's a cash management tool for our capital expenditures.
It's not a cash management tool for our operations.
Um, we have a lot of liquidity at the city.
We don't need that type of cash management.
We don't need tax anticipation notes.
Those are something like that CPS needs because CPS has so little cash that they cannot actually
pay their teachers if they wait for their property taxes to come in.
They don't have enough money to do that.
They don't have enough cash.
And so they use tax anticipation notes.
Whereas we have a lot of cash because we have a lot of TIF surpluses.
We do have concession reserves.
We have a variety of reasons why we have a lot of cash as an entity.
So managing when our taxes come in is not a problem for us, but we do want to manage
our capital spending to lower our costs as much as we can and to not get into that situation
where we bond fund, we pay a long-term interest rate, and sometimes we trap money.
And just to give you a recent example of, um, like some money that we, we use that was
trapped was, uh, because we were over budget.
So, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we, uh, we
on settlements and judgments earlier prior to the Watts settlement, we actually used some money
that had been bonded for in 2017 and was still sitting in a fund. So we've been paying interest
all that time because it was bonded for then. So we continue to find these pockets that we're
clearing up. And you had asked a question earlier about sort of what's our cost on the line of
credit and we pulled that information. So just to further illustrate the point, right now on any
balances we have on the line of credit that we have extended, the last reset rate was 3.98%.
If we issue long-term bonds tax exempt, we'd be looking at about a 5.5% interest rate. And so
it's better to keep it on the shorter rate than it is on the longer one. Now, we also expect that
that's likely that those short-term rates will come down. The Fed has been talking about more
rate cuts and that affects our lines of credit directly. It doesn't really affect our long-term
buying rate, but it does affect the lines of credit. So it's really about the strategy for how do we
just minimize our overall costs. And I don't think the fact that we use them and that we have them
in size indicates distress, we have that for the flexibility to be able to spend over a year
of capital expenditures and to be able to manage that and then bond it out afterwards.
I appreciate your position on that. Thank you, Chairman. I'll let you jump into yours.
Thanks.
All right. Thank you much. Just one thing I wanted to, we talk a lot about on the budgetary side,
but as far as the other word about that is management. And I know a lot has been talked
about related to middle management and spans of control and how have we managed that component
of the operation and for lack of a better term, flattening the organization?
To put it simply, I don't think the city has, to be honest. I think, you know, there's been a lot of
discussions over the last two budgets. I think during the pandemic, the city was essentially flush
with cash and, you know, could not necessarily have to focus on these types of governance questions,
but that's no longer the case. And so, you know, that is why we brought in a company that has
not only national span, but international span. And they do this for a living. They work with
both governments across the country, but also private sectors. And one of the things that we
had them look at is our organization in comparison to our peers. So New York, LA, Seattle, Houston,
and the list goes on. And what they found is in many cases, our spans of control are above leading
practice and our layers are above leading practice, which means that we have a lot of supervision
and we have a lot of people who manage less than what the leading practice is. So there's
opportunities for us to look within our processes to understand why we have such small spans of control
and so many layers and see if there are ways for us to become more aligned with how our peers are doing
things. But also a lot of our peers have started shifting towards shared services, which means when
you have small departments, do they each need an HR department or can you share an HR liaison that
really supports all of those? When we look at things like the fact that we have little mini payroll
departments within a lot of our departments and we actually have a payroll department, are there ways
for us to, you know, centralize those types of functions in one place so that we aren't having
this decentralized operations, which a lot of times can work slow processes down. So those, that's the
type of work that, you know, when I say that that's what we're, that's why the hiring freeze is in place.
We don't want to continue to hire into a structure that when we look across at our peers is not in
alignment and give us the time and space to go to those departments, look at how their, their processes
work, look at why they have these spans of controls and, and, and, and a lot of times less people under
each supervisor and have those real conversations and say, hey, how are you moving your, your, your
processes? How are you looking at the number of people that are being supervised and how can we get closer
to our, our, our, our leading practice? Um, what, well, two questions. Um, how long will that process
take the department to, uh, do question number one and question number two, is anyone pegged or do
through, through the consultants pegged a financial number as to, um, what that savings ultimately could
be? Yeah, it's in the EY report. So both in getting to, um, best practice, um, in spans of
control, um, trying to look at there. I remember there was a, there's a chart in the report that talks
about the spare, the, the layers and the spans. What I didn't see was a, was a dollar amount associated
potentially with that. Yeah. So if we optimize, I mean, this is obviously doing just an apples to
apples comparison and they have it for each of the departments that were part of that, um,
part of that analysis, just of those 10 departments, if we were to do an, an optimizing of managerial
spans of control and allocating it against leading practice, that's $37 million. Um, but even they say
the implementation timeline, that that's a midterm, that's not going to happen overnight. It's not going
to happen within one year. Um, so each one of the recommendations that they have in here does have
a dollar figure tied to it. So what is the, uh, then I guess the better question is what is the plan
of how, how long do you think that it will, uh, take, or are you doing it by department? Are you doing
it by layer? Uh, how, how are you going to implement what they have laid out here? Yeah. So even,
you know, even we, we, we take a, um, we take a page from their book and they do have next steps
for each one of the recommendations that they have, uh, put forth and you guys can read that along
with us. But, um, you know, again, midterm, I think is between, uh, zero to two years, um, because it
does take time and it requires us to do a level setting with our departments about how they operate.
Um, okay. So, so then the expectation, um, is that are, will there be periodic updates of that
report through the consultant or is this something that's totally being done in house at this point?
So I think it's a combination of two, uh, two of both of those things. Um, you know, I am meeting
with DHR to map out, um, based on the recommendations that EY put in place. And we were doing this with all
the departments where those initiatives are happening. I don't know, it'll be EY that's
going to support us, but, um, uh, but that is, you know, so if we do bring on a consultant,
um, I know Cook County did this and they've been doing it over the last three years, um, uh, across
all of their departments. Uh, so we could look at potentially piggybacking off of their contract
or putting out another RP if we believe that we need additional support in this work.
Uh, is it fair to expect an update on this, uh, mid year? Yes. Okay. Um, so we will be seeing
your department report on this, uh, July one. That's when the mid years do. Okay. So, um,
as I anticipate this will be a part of your mid year conversation. Uh, I will be happy to report
out on this. Okay. All right. Do I need to reduce that to writing? No, I'm saying it on
the record in the same way that I said on the record that you would get the EY report.
I guess it's fine. Um, it's always you, it's always you. Um, no, um, secondly, uh, we talk
about the, uh, the, the TIF sweeps have been, uh, a point and I think a bone of contention,
um, um, with everyone as we look toward the, um, ability to continue to redevelop and work
through, um, the blight and the other challenges in our respective communities.
Your, your earlier testimony dealt with, uh, projects that had not been at certain points
in the process to, for lack of a better term, justify encumbering, uh, future, uh, future
revenues. Um, several members have expressed, Hey, I don't, it's not there, but it is there.
Um, how are you all reconciling the, the desires of the local alderman and the impacted neighborhoods
and TIFs versus the plan that you all have put out to essentially, you know, surplus a very
significant amount of money from those respective TIFs? So, you know, every month.
You know, we sit and we have a process, used to be the TIC process is now the TRR process, where we go through with DPD, with our infrastructure departments, the projects that have been put forth.
A lot of these have to go through and have gone through maybe months or even a year of analysis to ensure, one, that they're eligible, two, that we understand the financing for that project, and that they're, frankly, in the TIF district.
So there is a lot of analysis that goes into that, but it happens every month.
And as I said before, as I think Alderman Burnett asked, that process is still continuing, even for encumbrances to happen in 2026.
So because we can forecast out the revenues that are coming into the districts next year, those conversations are still happening.
But what we can't do is encumber dollars that haven't gone through that process, haven't gone through an approval process to be included within the TIF.
And frankly, you know, my office doesn't always know what, you know, the conversation that might be happening at the local level, but hasn't, you know, gotten to DPD, hasn't gotten to 2FM, hasn't gotten to CDOT.
And those conversations have to occur in order for it to go through the approval process in order for it to end up as an encumbered project within the TIF.
Well, it sounds like there's some miscommunication or noncommunication between DPD and the respective TIF participants,
because we've continued to hear today that there are projects in the oven, for lack of a better term, that are baking, but have not, you know, fully rose to that point.
And I think that everyone has has a level of skepticism around, hey, will the money be there to deal with the project that we've been working on locally in the community, but, you know, may not have gotten to TIC or TRR at this particular point.
And I think that is a major concern when we begin to to surplus.
Now, if. If these things are not eligible or not.
Doable, that that's one thing.
However, I think that many of my colleagues have a good idea of what their plans and thoughts are and what to what they anticipate, you know, working through in their various various communities.
So it looks like that that may be a point where we may have to we walk through the various districts with the impact at all.
There's just so that we are clear that there is revenue there to support the projects that are anticipated,
even though TRR may not have gone through the full presentation and everything that we must ensure that those funds are available for development for TIF eligible expenses.
I appreciate that question.
And my team just reminded me of something that DPD just rolled out that we've been working on with them for the latter part of a couple of months.
So anticipating that very question and need that not only Alders have, but frankly,
our departments have as they're thinking through and proposing projects that are not fully baked,
might not fully have cost projections associated, real cost projections associated with them.
We just implemented and just rolled out a new proposed project form for departments and frankly,
projects that come to DPD through Alders or through other avenues for us to be able to encumber funding for projects that are still being worked out,
are still not fully baked, might not have 100 percent of cost projections or cash flow modeling done,
might not have the full financial stack because TIF is sometimes not always the only financial source that is supporting a project.
So that was just rolled out by DPD, I believe this month.
Okay.
You had a question?
Go ahead.
Oh.
Sorry.
Thank you, Chairman.
Actually, if I may just as a follow-up to that question, I've never heard of a TRR.
I know what the TIC is.
It's a successor.
Every administration needs something else.
Okay.
So then if you could provide us through the chair who the members are of this new iteration of how we determine TIF projects,
what projects your department was aware of as being baked and encumbered before the TIF sweep,
I think that would go a long way to helping us better understand what exactly we're looking for.
I'm sure some of that is DPD-related, and we'll get to Commissioner Boatwright when she appears.
But I think that the fact that you have a new process for getting things on the radar, for lack of a better expression,
with regards to TIFs and whatever stages that they are in the oven, I think we're all hungry right about now.
Do you have a hundred?
No, no, no, no, no.
I said hungry.
Oh.
But I think understanding why and how aldermen cannot submit directly.
Yeah.
To DPD?
No, to the TRR.
The proposed project is what you're talking about.
Yeah.
Any project, for any ward, for that matter.
So I have a call with DPD this week.
I don't know what their plans are to roll that new proposed project form out beyond just departments,
but we can ask them if they are planning to brief alders on that.
Well, I think also, Chairman, that might be something that we need to look at, perhaps legislatively,
a requirement for aldermanic notification when it comes to these projects,
because oftentimes departments will tap into TIF without us knowing until the very last minute
after everything's already been put together, most notably SPIF and other things.
But also if we have an avenue upon which to make direct introductions that don't rely on the department,
bringing our request to this mystery group,
I think that will also help a lot of us have more faith in our overall ability to ensure that our projects
are not just simply being kept off the table.
Well, there's a report, the 10-year report.
I'm going to ask the committee to send that around to everyone.
It's a 10-year projection report.
It's on my website.
I know.
That's where I got it from.
Really?
I saw the – there were two reports, actually.
I think the 10-year report kind of gives you a greater sense as it relates to the available balances
and the projected revenue moving forward and what those things look like.
And quite frankly, I was actually in a better space after reading the 10-year reports.
And again, I think every alder who has TIFs and that have TIFs will get a report related to the TIFs
in their respective communities and also a full piece of the surplus and how all of that plays out.
And I think it gives – it puts a different light on what the available balances are, what the stuff that's on the table right now.
And if there's something that is on – that's in the oven that's not on the table, I think those are the types of things that need to be put out there.
And because in many cases – and I looked in my own ward to see that there are several – there are balances, there are anticipated revenues.
And when you think about it, hey, when these things are going to occur, will the money be there for that to happen?
And I think that's the overall gist of what you'll find in that particular report.
Now, what it does, though, say to me is that this is not a continuous process that we can do to balance the budget
because, again, that begins to take into the out years of being able to do the various projects.
What might be good today, I don't think if we do it next year and the year following, the year following,
I think that kind of blows a hole into everything else that goes on.
But I do think it would be a good read for people to see and understand what's actually happening in each one of these TIFFs
and what's on the table, and that all of us need to look at what's going on in their respective TIFFs in their district.
Okay.
My final point, we talked about the management.
I do want to thank you all for your diligence and work on this process.
I know this is not an easy process when we as a council sometimes tie your hands and tie your feet, too, on certain sources of revenue.
And also, we also have an expectation that the services that our constituents are accustomed to still exist.
So, again, I want to thank each and every one of you for the jobs that you have done to craft a proposal
that does not raise taxes in places that we believe are most impactful or harmful to everyday citizens of our city.
And, again, for the diligence that you all have provided, the information that you all have provided.
Thank you.
Thank you.
the continued work that you all will provide during this process.
So, again, we just want to thank you as chair of the committee and on behalf of the council
for everything that has been done.
So if there are any other items at this particular point in time, we'll have the committee to
stand in recess until tomorrow, Wednesday at 930 a.m.