Good afternoon committee.
I'm budgeting government operations come to order.
Uh, first off, let me apologize for, uh, my tardiness
had a matter and award
that took a little longer than I anticipated,
so please forgive me for my tardiness today.
Uh, we're gonna open with public comment.
Uh, we have 1, 2, 3 Indi,
four individuals slated for public comment.
Uh, any additional members, Sergeant arms. That's it.
Okay. First we'll start with Danielle Carter.
These are your, Okay,
So Humboldt Park improvements,
11.85 million Humboldt Drive improvements,
1.4 million Small
Business Improvement Fund.
I don't know what that is. Mm-hmm. 925,000.
We just sat here in this meeting and, and, and,
and we just witnessed why the s
and p report is where it is now at junk status.
Almost at junk status,
because you all have no clue how to run a business
or run Chicago.
We all see that you have a spending pro problem.
We have a spending problem here in Chicago,
and all you all do is just figure out different ways to,
to launder money and funnel money.
These programs, we know all that money is not going to this.
We don't even know what this is.
And because you all don't have no audits going on, no checks
and balances, this is what you all do.
And that's why your credit, uh, credit scores
is going down and down.
It went down twice since Brendan Johnson been in office.
But you all approved those budgets
because we understand that if you keep spending
and don't have no clue how to bring money in, money in,
and that's what they are looking at.
The s and p, they're looking at the budget.
They see that you all are spending, spending, spending.
But how are you all going to bring money in?
You all have no clue and everything.
And know these budgets, all they do is incentivize
businesses to leave, people to leave,
and they don't incentivize people to come here and,
and open up businesses.
And all we see is that you all are protecting illegal aliens
and spending money on that.
So everything you all are spending money on brings you it.
It's not a profit. It brings in no revenue for Chicago.
It's not helping Chicago. Everything is hurting Chicago.
And you all sit here and keep voting on these budgets time
and time again.
We ask you all when you all were spending that money
before on these illegal alias not to spend our money.
And this is what you keep doing in these field houses
and this TIFF money.
All you doing is just finding new ways to to,
to launder that tiff money.
So it can go in you all's pocket. Pocket.
The TIFF money is supposed to be with our property taxes pay
for with the TIFF money,
and that's our property taxes supposed to go for the schools
our kids can't read.
Our schools are just, I don't know what
to say about our schools because when you look at
what they're teaching our kids, they can't read,
can't do math at, can't write at just a basic level,
but they can learn about transgender.
Thank you for your comments.
Next, we'll have Zoe Lee,
followed by George Blakemore.
Good afternoon. Mayor Johnson
just recently said on whether the 17th Ward Field house was
a sweetener to get David Moore's support.
Alderman Moore has been working hard
for more recreational space in the 17th ward, which aligns
with my vision for Chicago.
This is just another example of our commitment.
So Alderman David Moore votes for
that terrible budget last year
that helped dig Chicago even deeper into the hole.
And now he finally gets a $12 million fill house built
in the 17th ward.
How does a fill house cost more than the ward itself?
These TIF numbers are outrageous
and anyone paying attention can see what's happening here.
This is an investment. It's a political payback.
The people are struggling.
The city's broke,
and yet somehow there's always money for a favor.
But when it comes to using Tiff money to rebuild
what was stolen from my mother
or to develop on the land she owns in David Moore's Ward,
suddenly there's no commitment when it comes
to the compensation owed to my godfather
and mother, the very people harmed
by corruption and neglect.
There's still no accountability.
All of this happened on David Moore's watch.
Now I'm unhoused
mother's unhoused.
Y'all will not settle this case.
Y'all spending millions of dollars not to settle the case,
but for some reason,
we can get a field house in the 17th ward.
We can get all of this money.
I mean the, the, the numbers that you guys are pulling out.
And we're here right now about to do a special meeting
about trying to find more ways to save,
uh, in this budget, because clearly you guys don't know how
to count, but I, I saw that, you know,
when I first started coming down here.
Um, I don't know what it's gonna take.
Uh, I know it definitely a forensic audit.
Um, a city charter.
Uh, people who understand government
and business also know how to calculate
and understand that $12 million for a field house
and one of the worst wards in the city
of Chicago makes no sense when we,
when we don't have any housing,
when we don't have any small businesses,
when we can't even acknowledge a simple mistake
that happened in that ward.
But because he votes for the worst mayor of all times,
budgets that keep getting worse, he gets his field house.
Y'all are pathetic.
Thank you for your comment. Next,
we'll have George Blakemore followed
by our final speaker, Dennis White
Civic Federation.
Joe Ferguson, the Women League of Voters,
NAACP Urban League.
The black church. Something is wrong here.
And this they have now today.
The budget is the
voodoo economics.
Here it is totally
voodoo economics here.
And where is Joe Burgers? Where did he come from?
He used to be the Inspector Jones, uh, over here
with Lady Life.
But when she was in, they just recycle 'em all.
It's sickening. It's sickening.
Joe Fer. Yeah.
Typical federation, water reclamation.
Cook County Boy, all Democrats, a
complete
spool of incompetence, unprofessional,
corrupt fraud and abuse is going on here.
Pay to play. Often being indicted, often
going to prison, coming out.
Oh, oh, it's terrible.
And, and, and you going to say Trump
can clean up this swamp.
It'll take him a a long time.
It's a culture of corruption here. A culture.
These are corrupt people here.
And I'm not going to beat up on
Brandon Johnson, all of them.
The Altima. Sometimes they have little
internal fighting Uhhuh.
And then when they get to vote, I, I, I, and you see Mr.
Old Shade that's got up and going over there
and talk this, this only white woman down here,
all these other say they Mexican Jews.
Look at 'em. They don't care. They don't, they don't care.
And not only they don't care. The people don't care.
The people allowed this to happen.
Look how Erica, he still talk,
play like you're listening to me.
If you're not, just pretend you're happy when you're blue.
It's not. I know all of you,
all of you Trump, when this election come,
Reverend Trump, these same white faces and blacks
and Hispanic faces, they might not be here,
but this Democratic machine will still be going on.
It'll take you to be elected the second time Trump Reverend
Trump, because this is a culture.
Look at 'em now. They still arrogant.
Shut down, shut down out.
Thank you for your comments.
Uh, next we'll have, uh, final speaker is, uh, Dennis White
Spending, spending, spending, that's the name of the game.
Taxes, spending money on parks,
field houses, uh, corporate taxes, yacht taxes,
social media taxes.
But nobody ain't saying nothing about how to save money
for the investment of the city.
And that's the title for Brandon Johnson.
He's looking for investment,
but is he investing it on the south side, the west side,
or is he investment for the illegal aliens?
That's the question. It is.
Now you fit you all, you alderman that's in this chamber.
You are responsible to say no,
but every time there is a budget meeting, I
finance your meeting.
I any mean Y'all say it's, I I have not heard now,
one no.
From you all. It's like you all are afraid
of Brandon Johnson or Brandon Johnson is putting money under
the table for the greed.
And then everything he say is like
a habit of, of a liar.
And Brandon Johnson always know how to lie
because his, his protege, George Soros
and the cartel teach 'em how to lie.
They overhear, he overhear want to attack Trump.
Everything he screwed up. It's on Trump.
But see there, you all know
that Brandon Johnson is of complete failure.
You all know Brandon Johnson is an idiot.
You all know Brandon Johnson don't know how to use money
to save the city.
Now, these business are leaving
like it's never happened before.
And I'm gonna tell you some,
I'm gonna address something to the alderman.
You are the most disrespectful alderman that I've been here.
I haven't been here a year yet.
Some of you all on your cell phone, you talking
to somebody else, Brandon Johnson, he don't show no respect
for nobody who speak to him.
These, uh, this is a problem we have right here.
And I'm gonna say this with a severe warning,
your cease are going to be taken
before then Brandon Johnson's seat going to be taken
or else he going to do some serious jail time.
And I hope the jail time come before his cease is taken,
because that's one thing I will like to see.
Brandon Johnson is very incompetent.
But for you all to vote for what Brandon Johnson, uh,
wanted, it's like you all just as disgraceful as he is.
So just remember this warning
because 2025 was not good for him, is not going good
because Isis here, he's snatching these illegal,
they snatching these illegal out here.
And then these who don't live in Bridgeview,
they wanna protest in Bridgeview.
You all don't, y'all can't even do nothing for the city.
But you wanna go to Bridgeview to protest for the
Thank you for your comments.
Um,
actually, um, I thought we were still in budget,
but this is a whole new meeting.
So, uh, actually established a quorum with Alders,
Irvin Lee, ADA, Dow, Yancy, Mitchell Harris, bill
Quinn, Lopez, Moore, OSHE, Mosley, Scott C. Lopez, Burnett,
Cardona, Conway, Cazada, Viegas, Mitch bdo, Nugent,
Vasquez, Napolitano, Riley, Nuon, and Silverstein.
Did I miss any members that are present that I did not call?
Okay. We also have joining us non-members, Chico, Coleman,
Taylor, Cruz, wa, spec and Hopping Worth.
Did I miss any non-members that are not, uh, here.
Gardner's on Zoom as
Well. Okay,
thank you.
We have Alders Lawson,
Ramirez, Hopkins, and Gardner, uh, wishing to join remotely.
Is there a motion to that effect? So move Alderman Harris.
All in favor Second by saying aye. Any opinion? Uh oh.
Also, uh, could we amend your motion
to add Alder Alder Lawson?
Okay, uh, Lawson is a, a non-member, uh, being added.
All in favor signify by saying aye. Any opposed?
Any opinion of the chair? Is the ayes have it.
And, uh, alders, uh, Gardner Lawson, Ramirez
and Hopkins, uh, will be added to the, uh, to, to the role.
Um, thank you Chairman.
Chairman Robinson is on virtually.
Okay, my apologies. I, I thought you said something else.
Uh, motion to add Alderman Robinson to the, uh,
to the role for this meeting.
So moved by Alderman Yancy.
All in favor signaled by saying aye.
Any opposed any opinion?
The chairs the aye is having in Alderman Robinson too shall
be added to, to the role.
Good to see so many of you today.
I hope to see you all Wednesday and Thursday as well.
So, um,
before us, uh, we were subject matter hearing, uh,
in relation to the report from, um, from OMB and Ernst
and Young on the City of Chicago's report on Financial
and strategic reform, published on October 16th, 2025.
As this being a subject matter hearing,
no votes will be taken on this matter.
Uh, we will begin with, uh, opening
by our budget director Annette Guzman.
Uh, also, uh, the principals from Ernst
and Young will give a statement and then
we'll open the floor to questions. Director Guzman,
Good afternoon. Good
afternoon. Uh, members of City Council,
thank you for being here today.
Um, have a, just a brief
make this work
okay.
Have a brief, uh, presentation to, uh, go over prior
to opening questions today.
Um, again, Annette Guzman, budget Director.
I'm joined by Jill Jaworski, chief Financial Officer, uh,
as well as, uh, my first deputy, uh, budget director,
Jonathan Ernst in the box.
And my, uh, managing deputy budget director over workforce.
Uh, and, uh, um, it, uh, Kevin Murphy.
And before we get to our presentation, I also would like to,
uh, introduce, uh, our engagement lead for this, uh,
work from ey, Adam Chapnick, who has a statement
that he'll read prior to the presentation.
Thank you. Budget Director. Um,
and, um, hello to all the distinguished members
of City Council that are with us today.
Um, I am grateful for the request, uh,
that I join you here today.
Uh, I submitted to the chairman a letter, uh,
that can be shared with, uh, my other members
of the city council that speaks to the,
uh, comments I'm about to share as well.
Uh, so by way of introduction, I am Adam Chapnick.
I lead EYs national efforts, helping governments, uh,
with turnaround and restructuring
strategies across the country.
I was also the lead principal, uh, overseeing the work, uh,
that EY performed, uh, in, in collaboration with the city.
On this engagement, our team, uh,
support cities across the country, uh,
to identify potential opportunities to improve
operating efficiency, to address fiscal needs,
and to invest in long-term growth.
EY is actually also really proud
to be a major employer here in Chicago.
Um, and we are deeply invested in the city's fiscal
sustainability and success.
Uh, we have more than 4,400
of our people working at our office out
of North Wacker Drive.
I understand that you have questions about the analysis EY
performed, but before we turn to those, I would like
to briefly speak about the nature of the work
that EY performed.
Um, uh, in collaboration with the city in late April, 2025,
the City of Chicago engaged EY to perform services, um, uh,
on the evaluation of potential cost reduction opportunities,
um, and, uh, service delivery
and proven opportunities that could be considered by
by the mayor and his executive team.
Uh, this work is very similar to work that EY has performed
for other municipalities across the country,
including places such as the city of Houston, the city
of Milwaukee, the city of Detroit, and others.
In close collaboration with the city staff,
nearly 50 EY professionals worked over several months to,
uh, analyze data for more than 22 different city departments
and offices, and participated in more than
75 meetings and interviews.
EY ultimately delivered a white paper report to the city
of Chicago's Office of Budget
and Management on Octo in, uh, mid-October of 2025.
That report is publicly available on the city's website.
I believe all of you have a copy of it as well.
Um, but as detailed in the report,
EY compiled nine work streams focused on evaluating more
than a hundred potential opportunities for improvements,
both in the short term and just
as importantly over the long term.
Uh, finally, I'm aware of recent media reports
that have characterized EYs work for the city
of Chicago a bit inaccurately.
And so I'd like to clarify a few points for you
before we begin the presentation and,
and questions that you may have.
First EYs work was in no way an audit
or a forensic analysis of the city's budget or finances.
Second, EY did not perform any services in connection
with the preparation of the mayor's budget proposal
in front of you all today.
Third, EY was not involved in discussions about which
options were presented
that were presented in the white paper report should be
adopted by the mayor's proposal in front of you today.
And finally, EY has not audit, audited,
or analyzed the Mayor's 2026 proposed budget.
So I do certainly hope to answer any questions
that you all have, um, in, in relation to the, the analysis
that we performed as part of the white paper report.
But I do, uh, wanna say
that all questions about the Mayor's 2026 budget proposed
budget are better directed, uh,
to the city's representatives here with you today.
Uh, Mr. Chairman, thank you for the opportunity
to make those pre preliminary remarks.
Thank you. Uh, begin with, uh, director, uh, Guzman.
I do wanna recognize, uh, alders Hall
and Curtis, uh, who have just, uh, joined us
as well, director.
Thank you. Uh, just really quickly,
we'll go over the report background and overview.
Uh, as part of our agenda today,
we'll talk about the work streams
and analysis methodology that was performed by ey.
We'll talk about the impact on the city's budget, um,
for FY 26 and beyond that these recommendations will have.
And then we will turn it back to the chairman
to open it up for questions.
So the analysis that, um, an evaluation
that was done comes from the executive order
that this mayor, um, signed in April of this year,
executive order 20 25 1,
which tasked my office in conducting a comprehensive review
of city operations and programs.
Naturally, uh, that's a dawning task.
And so we reached out
to trusted partners at the Civic Consulting Alliance
to help us scope and as well as determine the goals
of the review.
And with their assistance
and with the assistance of the CFO, we ultimately engaged EY
to assist us in this comprehensive review.
We did not, and I will say again, we did not engage EY
to conduct an audit or forensic audit
of the city's finances.
That is a separate and distinct type of review,
which was not the scope of the engagement ey
as another trusted partner worked collaboratively with e
with OBM as well as our city departments on options
that ultimately are a part of the report that has been
before you since mid-October.
Work began in earnest, uh, with EY
and our departments in May of 2025,
and concluded in October of 2025 along the way
in briefings to city council as well, in April and May.
The scope of that engagement was pre presented and provided.
Looking at that engagement,
nine EY teams over nine work streams since may have been
working to identify
and work collaboratively with my office as well
as departments on options benchmarking along the way
to over 40 peer cities within my office alone,
12 of my senior staff were engaged in this work throughout
the year, as well as my entire staff.
22 City of de city of Chicago departments were, um, engaged,
interviewed, sat in meetings,
and ultimately worked through options with my office as part
of the 2026 budget
and setting up structural reforms for, uh, 2026 and beyond.
And then, as I said, stated earlier,
over 100 recommendations
and options are included for consideration
by the city in the report itself.
This ultimately is the most expansive evaluation
of the city's budget that's ever been done.
And it was done again to help us identify structural reforms
because the city didn't get here overnight.
And the structural reform won't happen overnight,
but you have to begin somewhere.
And we have decided that 2026 is the year in which
this work will begin.
You see before you, the nine work streams
that were included within the scope of work for ey, each
of the ones with the check mark next to it are ones
that are included within the 2026 budget, either
as a cost savings or the beginning of the scope of work
and the work that the departments will do
to realize savings over time.
I encourage and invite each of you
to read the report in its entirety,
because it has a lot of information in it,
but it also contextualizes how you actually get
to the structural reforms.
The figures that you see in the report reflect not only,
oops, sorry, reflect not only that we estimate, you know,
over 530 to one point, uh, $4 billion
are identified options.
But these figures include options for both immediate relief
as well as, and most importantly,
long-term structural reform.
I understand that there are a lot of, uh,
comments out there about what can be achieved in one year
and what can be achieved over time.
It actually takes conversations with our departments,
forecasting by my department to actually understand, um,
working collaboratively together, what can be achieved.
And that is what you see before you in the report.
And most importantly, what this report does say over
and over again, that by starting,
we are laying the groundwork for a more resilient,
efficient, and equitable future for all Chicagoans.
So, as I mentioned
before, beginning in earnest in May of this year,
EY began meeting with departments across the city, uh,
using methodologies that they use when they're supporting
cities around the country, looking at identifying ways
to reduce costs and improve services,
not only within each work stream, did we, um,
not only have multiple work streams happening at the same
time, but each of those work streams were scoped to,
um, identify potential cost saving options,
improve on our cost recovery methods,
and provide potential operational efficiencies
that complement our efforts.
As I mentioned before, all of our work streams
identified peer cities in which we, uh, we're going
to benchmarks benchmark ourselves against.
Because a lot of times, uh, what we don't know is
what other cities have implemented
as leading practice or best practice.
So bringing in a firm such as EY to help us understand
what other cities are doing,
not only on the efficiency side,
but also on the revenue side, was important for us
to contextualize the options themselves working directly
with our departments.
We prioritize options based on fiscal impact,
anticipated feasibility, operationally
of implementing options
and aligning with our city priorities.
We also looked at how we can implement things like, um,
outcome-based budgeting,
which will help us drive more data-driven decisions
around our budget in futures, future budgets to come.
And then finally, working with EY produced the deliverable
that you see before you, which is the report that was
released on October 16th.
So, as, um, I mentioned in briefings to city council prior
to the budget being implemented,
this budget does include over $80 million in
cost reduction initiatives.
And out of the 100 plus recommendations
and options that are in the report, 50%, over 50%
of those are actually being implemented
and beginning to be implemented in 2026, which will lead
to even greater savings.
So while there might, uh, not be a cost saving for some
of those options, in year one,
which is also reflected in the EY report, the anticipation
of cost savings structurally over time, um, will uh,
be anticipated through the implementation of those options.
So, um, highlighting a couple of them here, uh, real estate
consolidation and vacant land sales, we have a target
of $12 million in savings and revenue generation.
But the potential long-term savings by starting
that work now is over a hundred million dollars.
Special event cost recovery, which is something
that I know is, uh, something that a lot
of elders in this room are in particular, um,
very interested in, and how we can make sure
that the support we give to private events is actually, um,
reimbursed, um, to support our, uh, frontline workers
as well as those who help to administer, uh,
the work in-house.
Uh, we have a, uh, target of $7 million in, uh,
immediate recovery under our existing ordinances.
But as the EY report makes very clear
to see additional savings
and recovery from our special events will require changes in
our ordinances to align with leading practices
that we see in other cities.
So, while, uh, changes to our ordinances could, uh,
help us bring in long-term
over $21 million in just overtime cost recovery, uh,
we're also looking to align ourselves
with other cities leading practices that allow us
to also recover on regular time, as well
as the administrative costs
that we incur from supporting special events
fleet modernization.
Um, we, uh, anticipate in this budget being able to realize
at least $3 million in revenue from the sale of outdated
and outmoded, uh, uh, equipment.
Um, but again, uh, putting in place beginning to,
in the 26th budget, working with our Department of Fleet,
um, services, we will be implementing governance changes
as well as, um, uh, uh, the way
that we allocate fleet, uh,
based on the options in the report, which will lead
to on over the long term $30 million in savings annually.
Organizational evaluation,
as we have noted several times in meetings
and briefings, um, the $50 million hiring freeze
that's going in place, targeted hiring freeze
that's going in place in 2026 is coupled
with the recommendations that, um, are in this report.
Uh, looking at centralization efforts, looking at our spans
of control and layers within departments, um, in order
to make changes that align with leading practices as well.
And, uh, once those things are in place,
once we have better governance structures
and decisions around, um,
the centralization also shared pool, uh,
resources administratively across our departments,
the potential to save over the long term is
$120 million, um, annually.
Procurement modernization, another area of costs, uh,
drivers within our budget, uh, beginning that work
with both DPS and DOF.
Um, actually, that work has already begun
with the implementation of a new ERP system,
which will take time to implement.
Um, so we're starting with the low hanging fruit
by renegotiating our contracts in the short term,
while also looking to implement the leading practices
of category, category, um, um, management
that is reflected in the EY report, uh,
which will save the city potentially between 55
to $100 million in the long term.
There are other things in the report that we are working on,
including our benefits, uh, which require, um, negotiation
and consent, uh, with our unions,
because our workforce is, um, 90% unionized,
that work has already begun
and will continue as you know,
as we've briefed many members,
our healthcare costs are going up over a hundred million
dollars year over year.
In addition to that, um,
there's a management ordinance in front of this body, uh,
related to the phase two of CPD ization,
as we know that even with the, uh, phase one ization
that CPD is um, implementing,
we will still only be 8% civilian,
whereas our peers in New York and LA
and other cities are closer to 30 to 35%.
Um, that management ordinance requires that CPD work
with my office, DOL
and DHR to prepare a report on phase two of ization,
which is due in August of next year.
Implementing that type of work will save the city upwards
of over a hundred million dollars as more
of those positions are civilianized.
And with that, I'll turn it back to the, um, uh, chairman
and I welcome your questions.
Thank you. Um, first off, let me, um,
add, uh, alderman Martin, uh, to the role as well as
a non-member, uh, Fuentes,
uh, Laro.
I think that's, I think we've got everybody accounted for.
Um, I'm gonna lead, uh, with a couple
of questions, uh, myself.
Um, and then, uh, we will go pretty much by
seniority, uh, to the balance.
Yes. In a few years.
You, you, you'll be able to go first.
Oh, just a couple questions.
It relates to, um, the rationale behind having EY
to do this work in conjunction
with the Mayor's 2025 executive order.
Um, be, uh, so, you know,
we knew we were facing a structural deficit.
As I mentioned before, this structural deficit
wasn't created overnight.
Uh, it won't be resolved overnight,
but it was important for us to identify areas of our budget
that were significant cost drivers, um,
of the structural, um, imbalance.
And so that's what this, um, does, uh, ey uh,
support cities across the country, as you heard Adam say,
do this very type of analysis and evaluation.
Um, and so it was important for us to bring in, um, uh,
an expert and a trusted partner to do that work.
The second, uh, component, uh, this same group,
uh, work with our, um, larger
body of folks as well. Correct.
The working group. The working group. Correct.
They, um, provided initial estimates
to the working group earlier this year. Yes.
So just, I think, as you said, it wasn't an audit,
but more of an operational, uh, review, which has a, a scope
that's a little more limited than
what we traditionally would see in an audit. Correct.
Well, an audit has a different focus.
An audit is typically done to, um, identify fraud, waste
and abuse, um, non-compliance with ordinances
or policies and procedures.
This was different. We were, uh, looking
to understand cost drivers look for areas of efficiencies,
understand operational implementation and feasibility,
and make decisions, um, around, uh,
prioritization and phasing.
So just to be clear, this was,
as they worked hand in hand, this is something that you all
was more collaborative than a, uh, for lack
of a better term, uh, um,
like a gotcha type audit type situation?
That's correct. Um, we engaged ey, we brought them in.
I liken this, uh, how the difference being, um, the audit
that you did receive around the OPSA medical unit
that was actually a traditional audit looking for fraud,
waste, and abuse, looking at non-compliance of ordinances,
uh, general orders, as well as, um, looking
to provide recommendations for how to shift.
And an audit generally has timelines for implementation,
um, which that one did.
Now you talk about the structural reform
that the city needs to undertake,
but of course, that's gonna take a little longer
than just one year.
Can you explain in the context
of these recommendations, how you arrived there?
Yeah, so I think it's really important when you read
through the report, the, the, the theme that comes up over
and over again is how one, a lot of the recommendations
and options build upon each other, um,
and recognize the implementation requires steps
to be taken in order to achieve those savings.
Um, and so we took that into account.
We, we sat in a number of meetings, not only
after the options were, um, were identified,
but we, but we sat with our departments
and literally talked to them about what does it take
to actually implement these?
What does it take to actually, do you have the resources?
Do you have the technology? Do you have, um, the expertise
to implement a lot of these recommendations?
And so, um,
a hundred recommendations you wouldn't be able to implement all at one time.
But also not all of the recommendations
or options are, are feasible in the city of Chicago.
We are unique, um,
and we have to think about how any options
would be implemented in our city,
even though they might work in other cities.
And so we talked with our, our, uh, uh, departments,
we under, we got an understanding of what it meant
to operationalize, uh, specific options
and the feasibility of doing that.
You also talked about there were over a hundred
recommendations, but you all looked at 50 of 'em.
Can you talk about some of the things that you did do?
Yeah, so it's 50%, not 50.
It's, it's probably more than 50 that, I think it's
around 70, so that are in this, um, budget, um,
or the implementation begins in this budget.
So these, this is just, um, I, I, for lack of a better word,
because, you know, for those of you who wanna go line
by line item with me from the report, happy to do that.
But these are the general categories
that you will see reflected as part of the budget,
but also the operational prioritization
of our departments for 2026.
Now, the, you talk about over a hundred.
How did you decide which ones you were going to take in?
Working directly with our departments,
understanding prioritization, um, in alignment
with city priorities, feasibility of, um,
implementation, as well as fiscal, um, impact.
And so the reason why the ones you see on the screen are the
ones that are of our biggest priorities
because they're interrelated.
And again, that's another theme from the EY report is the
interrelation of specific options.
A lot of these revolve around people.
People are our biggest drivers in our budget, um, as from,
from a cost perspective.
And so when you're talking about
where do people sit when you're talking about the facilities
that we have
and that are required to be maintained,
when you talk about the fact that it's people
who are providing services to private events, it's people
who are using our fleet
or have allocated, uh, resources from our fleet.
It's people who are making up our organizations.
It's people who are using contracts
to carry out their day-to-day work.
These are all interrelated.
Um, and these are the ones that will see the,
the largest cost savings over time,
and that includes benefits as well.
And you, as you talk about people, uh,
being a major driver, uh, can you clarify
how the administration is approaching the reforms in a way
that not only protects workers,
but also protects the service delivery
that's are residents have become accustomed to?
Yeah, I mean, one thing that you'll see
that you won't see in the report is, um, a specific
call for cutting out services or cutting
or laying people off.
What this report does is it identifies areas
where the city can run more efficiently, um,
and options that other municipalities, um,
states have put in place that lead to structural, uh, costs.
And so for us, this is about
in our environment at this day
and time, what are the, the ones that the biggest bang
for the, for our book, um,
and will lead to significant structural savings over time.
I didn't even talk about the fact
that this report also has a number of revenue options in it.
'cause I know that this, um, hearing is more about the
efficiency side of the ledger
Also. Uh, we talk
about the work with our, uh,
collective bargaining partners.
Uh, can you talk about their process
and, uh, what's happening with that?
Because I know that's a major concern
and driver of cost as well.
Yes. So, um, in particular
the conversations around organizational, um, evaluation,
the decisions that we'll make around, uh, re any reductions,
um, based on spans and layers
or our benefits, those will all require, uh, um, uh,
negotiation discussion
and ultimately determinations in agreement and approval
and ascent with our union partners.
And those are things that do take time.
Those are things that we are being very intentional about.
In particular, as I mentioned
before, we have already started negotiating
and discussing the recommendations, um,
and options around the benefits, uh, work stream
with our union partners.
Um, and that is ongoing work, again, with such a,
a steep increase year over year in our benefits
healthcare line.
That is a particular area that we will need to see savings,
um, in, in the future.
Okay. And this, uh,
final question I have is actually for Adam.
Um, I know that EY has done this work in other cities.
Can you compare what you did here in Chicago to what other,
uh, peer cities are doing in this effort?
Sure, sure. Happy, happy to, happy to Mr. Chairman.
Um, I, I'll just say as a baseline, um, to sort
of give you a sense, you know, our outlook has been
that the fiscal outlook for, for state
and local governments is quite challenging going forward.
And this is across the country, whether it's the wind down
to the pandemic funding that's left,
which I call the ARPA fiscal cliff,
or things like rising inflationary costs,
which rises the cost for goods
and services that cities per, uh, purchase
or the cost of, um, the cost
of compensation for their employees.
Um, rising risks around federal, uh, federal funding aid
and, um, and the use of remote work
and its implications on commercial property valuations.
And so there are a lot of challenges, uh,
for cities going forward, and they are looking at
similar types of studies.
And at the same time, residents want better, better
and more efficient services,
and they want, uh, the employee, you know,
the government to be the employer of choice.
And so, um, you know, when I look at
how this effort proceeded with Chicago, the city of Chicago,
and this collaborative effort with the government,
I will say it stands out both in terms of its breadth
and its depth that, uh, was undertaken.
Um, you know, what makes this particular set
of analysis relatively unique is the fact
that it did not just focus on one area.
When we worked with other cities
and other places, they've looked
at a select number of areas.
So whether it's procurement
or operating efficiency,
this analysis was really taking a holistic review
of city operations across nine different work streams
for opportunities and, um,
and benchmark in total against more than 40 jurisdictions,
peer jurisdictions across the country,
depending on the work stream.
And those are big and small.
Other, other, uh, peer jurisdictions,
whether it's New York City or Los Angeles, Philadelphia
or Houston, depending on the work stream.
And all of those cases, those cities are,
are looking at pieces but not
necessarily being comprehensive.
And so, Mr. Chairman, I would just say this analysis, um,
you know, is really trying
to be comprehensive and data-driven.
And it's, and it's, um, um, options that were identified
and looking at ways to integrate lessons from best, best
and leading practices across the country in a coordinated
way is how we,
how we approach the analysis on the nine different work
streams that we performed.
Alright, thank you. Thank you. Much direct.
Is there anything else you wish to add?
Yeah, I mean, I would, I, I would, um, encourage, uh,
everyone to read the entirety of the report.
'cause I think it will contextualize, um, you know,
the presentations that we have put forth
around not only this budget, but budgets going forward.
I would also say that I look at this as,
um, a roadmap, right?
This is something that will not only live
for this budget cycle, but for future budget cycles,
and really provides us the tools to have the conversations
around not only accountability for the things that will, um,
happen beginning in 2026,
but years forward, what additional options
do we think work in the city
of Chicago that have been put forth?
What ones, um, you know, will, you know, not only provide,
uh, better services to our constituents,
but allow us to also continue to tackle the structural, um,
imbalance in our budget, uh, for years to come.
So I think it's, um, a comprehensive report.
Um, I think it's a report that will continue
to be discussed and debated.
We welcome those types of honest conversations
around the budget as well as the operations of the city
and what drives the cost of our operations.
Um, and look forward to working
with those in this chamber on, um,
how we realize those structural savings, uh,
not only next year, but in the years to come.
Alright, thank you Director.
We'll begin with, uh, vice Chair Lee, followed
by Alderman Beal.
Thank you Chair and thank you Budget director and CFO.
Uh, and thank you, uh, again for being here before us.
Um, really dare I say excited to dig into this.
Is it something to be excited about?
We were excited to Do it. Yeah, no,
and I, I, I'm glad that we have, um,
I'm gonna chair.
How, how are we doing time limits here?
How I, I just wanna be respectful of everybody else.
Well, I, I, I put five minutes on the clock for everybody.
Thank you. I, I didn't pay attention to that. Okay.
Give you a little latitude. Great.
I'm gonna, uh, we won't go in order.
I'll, um, I'll kind of pick up where I,
I left off in the briefing, um, with questions around fleet.
Um, thinking about, um,
the questions that I asked around, uh,
projected financial impact of the now timeline.
I think that a lot of, you know,
what you're probably gonna hear today is just, um,
what else can we be doing?
Um, do we know what the projected financial impact
of the now timeline components are on this priority list
for the fleet stuff?
Can you talk about that? I know we, I asked
that in on the call, but you didn't quite have that yet.
Thank, thank you for the que thank you for the question.
Um, uh, I did follow up
and I do have the numbers and I'll share that.
I think more broadly, um, you know, I would say a lot
of the, a lot of the options in the report writ large
will take time to implement.
And so as it relates to the fleet, um, uh, component, uh,
we estimated between eight
and $15 million, uh, could be achievable in year one.
We say year one in a lot of places in the report,
because that's not necessarily the year calendar year
of 2026, it's really from one,
once you start beginning the process in earnest.
So within that first year, we do estimate
between eight and $15 million.
The primary components of that are asset disposition.
So think sales of the rolling stock, sales
of the cars and light trucks.
Uh, and then, um, repair
and maintenance optimization, uh, is the bulk.
Those two are the bulk of
where we believe you can get near term savings. Can
You talk at all about what you see as the, the pre-work
that has to be done leading up
to the year one realization of savings?
Yeah. I, I it depends on as it relates to fleet or Yeah.
As it relates to fleet. Yeah.
Yeah. I, I, I'll defer to, uh,
the budget director in terms of the internal city focused,
um, approach and what, what has to happen as pre-work.
I think generally speaking though, um, you know, uh,
there's data collection that you would wanna prepare.
There are, um, uh, you know, there are processes
and controls you wanna put in place.
Uh, and we list a lot of that out in the report as well.
Yeah. So, um, for fleet, all, all of the options
that are in the report are the options that will be begin
to be implemented in 2026 with our, um, uh,
fleet, uh, bureau.
Um, there are a lot of things that they will have to do, um,
to shift to utilization modeling
'cause that's not what we currently use.
We use mileage as a way to determine, um, car usage.
Um, this report, um, uh,
suggests a completely different way, uh, for us to allocate
and determine, um, how our cars are being used.
And so shifting to that, um, will take some time.
Um, we're working with our, um, uh, commissioner
for two FM to not only implement,
they're part of ERP as well.
So, uh, getting the requisite technology in place, uh,
shifting to, uh, utilization metric.
We'll have to work with DHR
'cause one of the other, uh, recommendations is how we do,
um, mechanic work in the city of Chicago thinking, uh,
the difference between in-house versus um, uh, uh,
external, uh, work.
Um, what does our in-house team do?
What does external team do?
So those, that's contracting,
but also, uh, what is the skillset from the mechanic job
that we wanna have in-house to do that work?
Um, and so those are all things
that are gonna start in 2026, um, that were, uh, recommended
or that were options within this report.
Thank you. Um, one of the things that, uh,
was included in your recommendations had to do
with just warranty.
Um, and just making sure that we're, we're leveraging the,
our warranties on vehicles.
Um, I would, can someone talk to me,
whoever is the appropriate person here, um,
just based on pure city performance, like how does
that work in other cities today?
Um, with making sure that you're using,
you're utilizing the warranty versus your own labor, um,
pool for mechanics to on repairs with which you,
you still have vehicles under warranty?
I, you want me to take it? Sure.
So, um, as it relates to mechanics
and as it relates to warranty.
So we already have, you know, um, a process internally
around warranty and it actually lives with
the, uh, two fm.
So, um, you know, they're responsible for ensuring
that we can leverage the warranties that we have in place
with both the, uh, vehicles that we purchase.
And we have all the stratification of the types of vehicles
that we have in the city of Chicago is very vast and large.
Um, so not only do we leverage that, I think part of
what you, you know, we note in the report
is how do we do that better?
How do we, how do we, um,
leverage even more return from our warranties, um,
when we have a car that has either been in an accident
or, um, needs to be repaired.
And that's something that we'll be looking into.
Interesting enough, if you look at the roadmap in the EY
report, that's one of the, uh, priorities that would,
that's probably after we do some of the other pre-work
and some of the other things like putting utilization, um,
metrics in place, shifting to that being our,
our performance metric, getting our mechanic, um, uh, uh,
skill sets in place
and making decisions around
what we want our intern in-house mechanics
to do versus our external, uh, vendor contracts to do.
Um, and so other cities, typically when it comes
to mechanics, um,
because one thing that you'll see if you look at the
attrition rate in two fm is that that's a,
that's very high attrition.
Um, uh, year over year.
Um, it's, you know, we're competing with your Jiffy Lubes
and your good, good years for those types of mechanics.
And so if we can put in place, um, you know,
our mechanics will, will, um, be responsible
for this concentrated type of work.
And anything outside of that will always go
to our external vendors.
Then you can only, uh, gear your, um, your recruitment
and your job descriptions for a very particular type
of mechanic, which hopefully what we anticipate
and what the report talks about is you'll be able
to retain those people because one,
their job satisfaction will go up
'cause they're really sort
of doing the same thing all the time.
Um, but it'll alleviate, um,
hopefully people having attrition, right?
Because you'll be scoping the job correctly for
that particular type of work.
You'll be able to scope the compensation correctly for
that type of work, um,
and um, be able
to recruit specifically for that type of work.
So that's one of the, one of the things
that we'll be working on with two FM
and DHR over the coming year is to make the decision about
what will we do internally and, and literally just do that
and what will we send out.
'cause those are more complex types of, um, repairs.
And also, um, one of the things
that we've found internally is when you try
to do all of the complex repairs in house, you also have to,
to be able to buy the parts.
And a lot of times what you see happening
in our operations is we're waiting a long time.
'cause because it could be unique types of repairs
that we're asking our in-house staff to do,
which then we don't have the purchasing power
for those one z two Zs.
If you send it out, you're able to scope that better
and actually get better cost savings.
Yeah. Um, thank you for that.
And so I just wondered if there was anything in the
immediate sense with, um, warranty and how,
because it seemed to me reading the report that we're,
we could be performing better.
Um, I'm just utilizing warranties
and when I, you know, sort of the layman's reading of
that is, you know, are we paying for repairs
that we shouldn't be paying for?
So, you know, I get all of that and,
and all of the complexities with that.
And I imagine there's purchasing, purchasing power
that we don't have because we're not some big
automotive company to begin with.
So sourcing some of those things does get
to, to be more expensive.
But from the perspective of just wanting to, looking at
where we have gaps today, are there still yet other things
that we can do to eek out a little bit more savings in terms
of how we're utilizing warranties?
I, I, I, I don't really have a particular, um,
specific answer to, to that.
I think generally speaking, I would just say, you know,
implementing system based alert based alerts on what's an
eligible type of repair.
Um, having a regular cadence to review warranty policies
and eligibility for, for warranty reimbursement
and having a, a coordinated
and centralized process is one of the recommendations
or one of the options that we had presented that could lead
to some additional savings.
Thing I'll say is if you look at the savings opportunities
within the fleet area, that's one of the lower end ones,
which is why, again, this is about
prioritization and phasing.
The things that we're focused on, um,
in the roadmap will lead
to greater savings in the initial, uh, term. Thank
You. Come back around
Whenever the rounds go after all
that you still wanna round too.
Alright, so, alright.
Very well, we, we will, uh, you know,
get, get strict with it.
We, uh, I I don't want to do 10, uh,
because it, I mean if all of us are here,
I mean we'll be here all night,
but again, um, I would like to start with the, uh,
start with the five to get everybody a first round through.
If we need to go to a second round, we can.
Uh, but I, given the number of members that are here,
given the time of day, we, uh, we will try
to do that as best we can.
Trying to give a little latitude, uh, so
that we can you get your, get your thoughts in
and, uh, move forward from there.
Tmobile, please proceed. Thanks,
Mr. Chairman. Uh, the
time of day was set by you, Mr. Chairman.
Well, there was another meeting here
before this, so, uh, we were trying to work with things.
So I think people to five minutes is,
um, that's a little short.
Okay. Goes. Thank
You. Just jumping right in.
Um, Adam, what parameters were you given, uh,
when you were given this project?
What your firm, were you restricted as far
as the parameters in which you were looking at to come up
with this, um, report?
Uh, I, I apologize. I don't quite understand.
So in ter, I mean this was a,
Were you open to just dig in
and get all the data that you needed?
Were you, were there perimeters set in place
to prohibit you from looking other places
or were you just given all the data?
Yeah, I, this was a collaborative effort from the
outset. So we, we talked
Collaborative doesn't mean you were,
were you given all the information?
Uh, certainly, uh, I believe all the information we asked
for from the city, uh, was provided to us.
Um, it was reviewed
and it, it was not an out, what I'm trying
to say is it was not an outside in assessment.
This was a collaborative effort throughout the process.
So there was data
that was iterated on throughout the entire effort
on all of the different work streams.
Was there any data that you all requested
that you did not get?
I, I cannot think of anything off the top of my head
that was not provided to us. I don't,
No, and, and, you know,
my office was this centralized area to, um, make sure
that departments were giving the data, um, outside of,
you know, a couple of delays here
and there, anything that EY asked for, they received.
Okay. Um, did they have car blanche to
ask you all for additional information
and you comply with No problem?
Absolutely. Okay. Um, out of the 70 recommendations out
of the hundred, um,
and we only come up with $80 million in cuts, uh, in this,
out of this recommendation, um,
we identified $1.3 billion in this report.
And I understand it has to go over time,
but what is the biggest basically bite at the apple
that you all saw that in the report
that we could have taken advantage of, but didn't
I have to defer to the budget director to No,
I'm, I'm asking your opinion on your report
that you issued, what are the biggest dollar values that we,
that you all submitted that were not in the budget?
I have to defer to the budget director
because we didn't, part of our scope was not
to review the budget proposal for the mayor. So I'm
Not asking you to review, I'm, you, you,
you presented information 1.3 billion
in efficiencies.
Okay. Out of that 1.3 billion, what do you think are some
of the biggest dollar amounts
that was in that recommendation?
That has nothing to do with our budget.
I'm just asking you in the report,
what's the biggest recommendation? Oh,
Uh, well, in, in terms of the, of the categories
of savings that we saw, it varied by, um, by opportunity.
I think in terms of like, if you wanted to break down
between the nine different areas where we saw the,
the potential largest, um, options in, in a sense, um,
that was either in areas of service optimization,
which we started with 43 different options
and did some more detailed analysis around 23
of those options, I believe sort of worksheet number nine,
um, that we have, uh, there was a lot of savings in, um,
the organizational, um, assessment.
Again, something that, that you would, we say, we say, uh,
in the, um,
in the report in the white paper report will take time
to achieve those, those savings.
Um,
Uh, real estate is the last, uh, real
Estate. Yeah. Re real
estate's another area where you can, where,
you know, the options yielded substantial savings.
But again, it's not just, um,
it's not just selling real estate or land.
That's, that's part of that set of options.
There's a coordinated tenure strategy that the city should,
um, look at as an option.
And just like all of our clients, I mean,
the city retains full discretion about which
of those options to prioritize and,
and which to, to, um, to enact.
That's why I'm saying I would defer
to the budget director on the specific elements
of what's in the budget proposal.
Okay. Uh, budget director, you mentioned that, uh,
you're still having ongoing conversations, um,
because the biggest part is personnel.
When did those conversations start?
Um, the conversations, uh,
around the benefits part started, um, in earnest right
after the working group report came out, um,
from the task force.
Um, and like I said in the presentation,
we've had four meetings thus far with the, um, the LMCC
and I, I'm actually gonna turn it to Kevin in a second
who's been in those conversations.
Um, but those started, uh, shortly
after I believe September.
Um, uh, around the benefits when it comes
to the organizational analysis, that's gonna take time
because we actually have to do the work internally looking
through the roadmap that has been
provided by ey, um, looking at the, uh, spans
and layers of the specific departments.
Um, having conversations internally around, um,
uh, do we wanna do more shared services, um, like some
of our peers have shifted to, and,
and what does it mean to, to, to, to shift
to something like shared services across departments.
We have one example of that with, uh,
DOH has shared services between DOH
and DPD, do we wanna do more of that in the city?
Um, and so, um, if, if we're gonna do things like that and,
and it will lead to changes in our unionized workforce
that will require additional conversations
with our union partners.
But as it relates specifically to the benefits section,
which again, as I said is a particular focus for us
because of how much our benefits are
going up year over year.
Those conversations started in earnest in September.
Kevin, I don't know if you wanna add anything to that.
Thank you. Kevin Murphy, managing deputy budget director.
Um, yes, actually, um, the, the city's taken steps for, uh,
increasing, uh, non-represented, um, contribution
of benefits to, to mirror our union partners.
Um, as part of the conversation, um,
the LMCC is a labor management, uh, cooperation committee.
Uh, that's defined by our non-sworn union agreements,
actually includes the fire department.
Um, and we're having lots of conversations about the impacts
of costs to the city.
Uh, in terms of benefits, this year has been an outlier.
Um, for FY 26, uh,
it was over a hundred million dollars in increased costs
that we're seeing due to, um,
new drugs that are coming online.
Um, expansion of services that the states, uh, requiring
of all health plans.
Um, and so those conversations have been productive,
um, and very useful.
Um, the LMCC has not met in earnest, um,
until, uh, this year.
Uh, the, the prior administration didn't have a lot
of conversations with the LMCC.
And so really the, the muscle memory of the union
and the administration working together
to find solutions has started.
Um, and we're starting to see, uh, impacts from that.
Um, one of the other recommendations about the wellness
program, um, where we've come to some consensus about how
We can expand. My biggest, my
biggest question is this, that, I mean,
you know, we know that if this is the biggest part
of the apple that we need to buy, why do we have to wait,
um, for a report to start having conversations?
Um, when we know you guys are in this budget
every day, you're livid.
Why do we have to wait for a report
to start having discussions on how to bite this apple?
So I think we are in a better position when we are able
to demonstrate how other cities also attack these,
these same issues, right?
Um, we are in a much more, uh, a,
a much stronger position in those conversations than we can,
we're able to say, well, look,
you do the same thing in New York.
You do the same thing in California.
You should be doing it here in Chicago.
So part of what EY brought to the table was the ability
to benchmark to our peers.
Um, and that is a very powerful thing for us to do.
As you heard Kevin say, the LMCC hasn't been active,
um, for quite some time.
It wasn't even really used in the prior administration.
Um, and the same thing that EY needed for them
to do their analysis.
You know, now the LMCC is asking us
for the same data, right?
These negotiations, um, they don't happen overnight, right?
Um, but we're, uh, doing them in earnest,
we're having good conversations.
Um, I think they were just as surprised as we were at how
dramatically our healthcare costs went up in just one year.
And so those conversations take time.
I get that. But this is the third budget
that has been presented to us,
and we are just not realizing that we ne we need
to have these conversations.
I don't think that, I don't think
that we're just realizing that we need
to talk to our union partners.
As, as you've asked me many times in many hearings.
We talk to our union partners all the time.
Um, I think, again, we're in a much more defensible
and better, more credible position when we're able
to put forth what other cities are doing,
where these unions exist as well.
But this is a $3 million report that we've been saying
for free for the last three years.
We've been saying we need cuts in
efficiencies, cuts, inefficiency.
We've been saying that for years,
and you guys have totally ignored that.
I don't think we've ignored that. Elderman.
Well, you're 80 million,
but then you want to raise a hundred million.
So, you know, that's a, that's a net 20 million
as far as I'm concerned.
That's the amount from just, um,
the implementation of the options.
We have over $200 million of cuts
and we've had, uh, cuts in every single budget
that we've put before this city council. Well,
Um, they're not enough cuts
and real cuts need to be, you know, cut a lot deeper.
Mm-hmm. Because right now,
all you guys are doing is skimming around the surface.
Um, and we need to dig in a lot deeper.
And I, you know, I believe this report
will, uh, be a roadmap.
Um, but coming outta the gate with 70 recommendations out
of a hundred, and we come up with $80 million, um,
I don't think that's worth the price of tea in China.
I think I'm happy and welcome.
Thank you for any of the cuts that you'd like
to thank, discuss.
Thank you. Um, you like round two? Okay.
Ah, it's gonna be a long one.
Be that as it may, uh, alderman Harris followed
by Alderman. Do.
Thank you. Um, good afternoon, everybody.
Um, I have a question about the comparisons
and comparing us to other cities.
Like are we apples to apples or apples to oranges?
And that we are, have a huge labor population here,
and the workforces mostly union.
Are there other cities across the country
that have these huge union work basis,
um, in the study?
Uh, I, I, I can start and,
and maybe you can, you can supplement.
Um, so, you know, each city is, is different both in terms
of the functions that it provides, whether it's, you know,
a city county type structure right?
In, in, in terms of, of, of the roles
and responsibilities that each jurisdiction has.
The, um, part of the pro, the initial part of the process,
the very beginning, we started with, um, a list
of potential comparison cities based on the individual
criteria for each of the nine work streams.
So you'll notice we, I mentioned we had over
40 peer jurisdictions.
They were not the same for each work stream.
And so we tried to identify
what were the most comparable jurisdictions for
that given work stream.
And so, you know, when you look at, at the, at the benefits,
you know, work stream as an example, you want
to include Cook County, and you want to include the state
of Illinois because those are competitive government
employers for your employees here in the city.
And we did a similar type of analysis and comparison
and set of discussions with the city representatives
to first, you know, try
to hone in on the specific peer jurisdictions.
Um, I would say that, you know, also, uh, you know,
local governments across the country do have, um, unionized
and, uh, and, and, uh, workforces that are, are bound
by collective bargaining agreements, uh, in varying degrees.
Uh, and so this is not unique in terms
of having a unionized workforce that is a partner in all
of the services that are provided to residents
and businesses in the city. I dunno if,
And the thing I'll add to that,
and thank you for this question.
'cause I think it's actually really, really important
to contextualize, um, data can only tell you so much about
how you could implement something in your jurisdiction.
Um, and so that's why the conversations
with our labor partners are so important.
It's also why it's so important to have the conversations.
You know, once you have an idea of an option
to have direct conversations with departments
and literally ask them, what does it look like
to implement this in your, in, in, in your space, right?
And that's what we did. Um, you know, part
of the reason why the conversations around the, uh,
with the unions are so important is
because we will show them data.
We will show them, well, you know,
this is being implemented in New York this way,
or at the state level this way.
And, and they'll try to tell you, well,
Chicago is different.
You know, Chicago is a different place.
Um, like I said
before, it puts us in a better position to be able
to show these comparables to other cities so
that we can have stronger conversations
with our labor partners.
I would also say that, you know,
these are a list of options.
Um, there'll probably be options in here
that you don't agree with that the city
of Chicago should implement.
It's the same analysis that we're going,
what makes sense here?
What makes sense here? And also at this time.
And then also what is feasible
to get done in a short time and over a long time.
And then also, as we said
before, what gets us the biggest bang
for our buck structurally.
And that's what you see in the recommendations
that we put forth in our budget.
Okay. And I'm just gonna add to
that IE our equipment like Snow today and mm-hmm.
As we talk about equipment, um,
and, uh, they, they have access to our annual audit
that they get a chance to take a look at the
Fer. Mm-hmm. I
mean, it's available.
I don't know that that was, um, part of what they looked at.
Again, this wasn't an audit.
It was a, an evaluation of operations
and how we can make more efficiencies within that.
It wasn't a, it wasn't a forensic physical audit.
And finally, did, was there anything
that happened that e EY did
to look at our outstanding amount
of collections that we have?
Hmm. Did they take a look at that?
Um, so that wasn't within the scope of, um,
the EY analysis.
I know that that's something that the working group is
looking at, um, and will be
probably including some recommendations
around that in the report.
Internally. We're looking at that.
That's something that, um, my office, the CFO's office,
and more importantly, the Department of Finance
and the Department of Law have been looking at.
It's actually one of the reasons why we increase the number
of attorneys in this budget for the Department of Law.
And part of that has to do with affirmative litigation.
But part of that also has to do with strategies, sorry,
around recovery on the debt that, that, um, that is due
to the city already.
All right. Thank you. That was my questions, Mr. Chairman.
Thank you. Uh, alderman Harris.
Next we'll have Alderman
Dow, followed by Alderman Walker Speck.
Uh, thank you, Mr. Chairman. Uh, good afternoon.
Um, when I think about my constituents,
I think when it comes to this budget,
my constituents are looking for, uh,
holding the line on our budget, uh, not
expanding programs, not adding new programs,
and being, uh, very efficient in
how we utilize our dollars.
I wanted to ask, uh, and I focus mainly, uh,
and I'm sure other people will have other parts
of the work stream, but, um,
I looked at work stream number one,
which is the special events cost recovery.
And, um, EY found that in 2024,
we spent 32.3 million in costs
and recovered only 7.4 million.
And that in this year's budget, our target is 7 million,
which is less than what we recovered in 2024.
Um, I would assume that that's probably
because NASCAR is not, I don't know what that is,
so maybe you can explain that.
But I assumed it was
because NASCAR wasn't gonna be in the city.
Um, but EY also found out
that we could have recovered an additional 6.3 million
without any changes in our ordinance in 2024.
So I wanted to ask Mr.
Nik, um, what makes up the $6.3 million figure?
And, uh, would you expect that to,
to be a similar figure in 2026?
Uh, thank you. Thank you for that question.
Um, the, uh, the six point, uh, $3 million,
I think we described this actually on
page eight of the report.
Uh, we have a listing of, of where we think, um,
those cost recovery, uh, could be focused.
And that's on a combination of recovering full, um,
full cost for CPD, uh, for the, for CFD as well.
Um, things like, uh,
charging full freight on overtime costs,
which I think are currently, uh,
recovered at 1.4 times versus 1.5 times, which is the cost.
So there's some very specific elements, um,
that are included in that, in that cost recovery component.
Um, you know, I will, I will say this,
this work stream in particular,
there are really two main cost recovery elements.
One is on pure cost.
So you have, you know, you have, uh, city officials
that are out, um,
performing services for these special events.
There are more than 2,400 of them, by the way, uh,
annually that we have in the report.
Um, a a lot of it's related to film production,
but still a lot of other, uh, a lot
of other events also on page eight of the report.
Uh, and then there's process related cost recovery options.
And those will take more time, uh, to implement.
But to really recognize the, the fullest extent
of the options and the savings, um, you know, having a, uh,
a consolidated and more streamlined process
that tracks cost across department is, is one
of the options we, we talked about to really be able
to maximize the savings.
And If I could ask, answer the,
the budget question that you're asking.
I thank you for the question.
'cause it, it actually helps me, um, clarify
what the $7 million is actually reflected.
So as it relates to what we currently recover,
we're assuming we're gonna recover that
that's in this budget, right?
So that's revenue that we already receive based on the way
that we currently operate to recover.
This is an additional $7 million on top of that,
which is in line with what EY has reflected in their report,
what we aren't including as a target
or revenue option. So
You're saying this is above
Yeah, this is above what this
Is $7 million in addition to what we already,
what we already recovered.
Right. So the 6.3 million is we're
to the good you're saying, right?
Mm-hmm. And,
and we'll be working over the, um,
we have a working group already set up.
We'll be working over the course of this year to all,
actually all of the recommendations are ones
that we are implementing.
Um, part of that will be working with the working group
and DOL to prepare additional ordinances
for consideration by this body.
Um, as you can see in the report, we are, uh,
very different from our peer cities, um, as far as
what ordinances we have in place
that allow us to recover costs.
Would you agree that, um,
well, let me ask this.
How do you feel about putting some of the,
the recommendations in order to, um, optimize some
of the EY findings, uh, in a management ordinance?
I, I think you already have it. It's in the budget.
The budget is in ordinance.
No, I'm not talking about the budget.
I'm talking about the things that, like you did
for the medical audit for OPSA.
You put that in the management ordinance,
which then made the actual, uh, audit happen
in 2025.
Are there elements within this work stream
that could be put in the management
or ordinance that would give me and my constituents comfort
and knowing that in 2026 you're gonna move on
those things? Yeah,
I think one we did, uh, one ordinance that we did put
before you has to do with the CPD ization work.
And, um, making sure that we are really not only, um,
capping our overtime,
but also working towards phase two of civilian
that comes directly out of the report.
I think that's the things
that we're gonna put in front of you next year.
Um, our ordinances related
to special events and cost recovery.
Um, other ordinances
that we are gonna be working on over the course of this year
as it relates to these work streams have to do with, have
to deal with real estate space allocation.
Um, one of the ordinances that we're currently looking at,
um, if we can model it
and do it on this side, is the,
the county's ordinance related to space allocation.
Um, and, and so that's, we wanna make sure, we wanna work on
what that language looks like, um,
and, uh, how the governance structure will work
before we put that in front of you.
But I think a lot of these things will end up being, um, uh,
updates or changes to our existing, uh, uh,
management ordinances that'll be put before city council.
But I think it's a little bit, uh, premature for us
to have ordinances ready except for the one
that we've put before you today.
Um, Mr. Chairman, I have one other question related
to this work stream, and then I'll probably take round two
'cause I have some other questions related
to some other things.
Um, in the budget, I think you put $13 million
for audits,
and there's something in there for special recovery,
special events, recco cost recovery.
Where in the budget is that money and what is it for?
I'm not, um, sure what you're referring to,
but if you're talking about the investments needed
to get at these particular Exactly, um, initiatives, uh,
that's in finance general.
Um, and it is, as we're working with our departments, um,
any technology, um, needs that they have any, um, uh,
other contracts that they need to put in place
to support this work is, uh, what that money,
um, is to support. So we know that, but
Not all of the 13 million is for special events.
Cost recovery, no. Can you tell me how much is for special
Events? We're still working
on the final number for that.
It, it will not come close to $13 million. Okay.
And then lastly, what's the status of the task force?
You said that was the last one you
coming up for round two, right?
Uh, the task force I met last week, uh,
they kicked off phase two.
Um, and they are literally, I have emails in my,
in my inbox right now about that work, so thank you.
They're working. I, they'll be, uh,
putting together a meeting with the, uh,
legislative advisory group
for both the city council and state soon.
Rough Ryan, I feel like I'm at home,
but, uh, um, well, then
Another question.
No. All right.
Beck. Followed by Alman Riley.
Thanks, chairman. Um, first I just wanna say
that I thought the level of incorporation in this, uh,
from this document was unacceptable.
If we're really asking Chicagoans to bear the burden
of this large budget gap, um,
and I really think the administration needs to go back
to the table here, come back to counsel
with more options drawn from this report, uh,
to help close the,
the deficit while we're gonna lessen the blow to Chicagoan.
So that's really, um, I think all of us
that are asking questions are gonna say, what can we go back
to and find in here that could be on the table, um, for Mr.
Uh, Nik, what is the second part of the agreement
with the administration?
Um, we have an understanding it's
for another $3 million next year.
What would that, uh, entail in terms of work for you?
Um, I'll answer that since it's a contractual question.
Um, the agreement had an up to amount of around $6 million.
That 3 million that you're talking about is if we were
to implement phase two around the, um, performance,
performance budgeting, which we have not implemented.
So, um, as of right now, EYs, um, engagement has ended.
Okay. So for the, um, that work stream,
essentially we'd be doing a second part
of $3 million just for one work stream.
Um, uh, if we had implemented it, um, one thing
that if you read the report
and you read it in its entirety, what you'll find in
that particular work stream is the, um,
that one in particular will take an extreme amount
of resources and an extreme amount of time
and effort to put in place.
Shifting our budget in the way that we budget
to performance-based budgeting is a fundamental change to
how the city budgets.
Um, and that's why you don't see it in very many
places in this country.
Um, so our only peer that does it
and doesn't even do it to the extent that
that report talks about, um, is LA and, um,
and so it is, is it is a, a, an incredible shift, um,
that we would have to happen in this city to get.
So we would need EY to come
and tell us in a second phase report
that this is how we would do it.
No, we, we know how to do it,
and I'm very happy if you would like for me
to do a presentation on how the city could shift
to outcomes-based budgeting.
I know this is something that, uh,
chairman Martin has asked several times,
and I have, I have said if he wants to champion that
with me, happy to do that. Um,
Thank you. Um, thank
you for that answer.
Um, so moving over to procurement. Um, Mr.
Chapnick, uh, the, you know, we had an issue
with procurement when they came up,
and I know you weren't part of the budget meetings,
but how much Maverick spend have you seen in other
reports from other cities?
And when you mention in your report on page, um,
I believe it was, I'll have to look it up there, uh,
procurement policies
provided by DPS didn't contain foundational information
expected to prevent or detect
potential fraud, waste and abuse.
Could you provide examples
of foundational information missing in this procurement, uh,
report, especially compared to other peer cities?
Page 49. Thank you.
Yeah. Uh, so I think two, two questions there.
As it relates to procurement, I,
I'll say there were two components to, um,
to this particular work stream.
The first was a spend analysis,
and the second was a transactions level analysis.
Both of these were generalized, um, uh, reviews of,
of procurement, starting
with the $4.6 billion in procurement spend,
and then narrowing down to 1.1 billion of what we believe
to be addressable spend.
The rest are things like funds
and enterprise funds, special revenue funds,
or capital funds tied to federal money.
So you couldn't, wouldn't
necessarily see savings off of that.
Um, in terms of, um, you know, the element
around the transactional piece, um,
that was a generalized review to look at, you know,
where potential risks could, could exist
and encouraging, um, the city to evaluate that option
for, uh, potential savings.
So whether it's sole source
or emergency procurements, things like gift cards,
which we often see in, in different jurisdictions, um,
duplicate vendor IDs and addresses and, and and such.
Um, uh, in terms of the, um, uh, in terms
of the, what, what you're calling Maverick spend
or spend outside of a contractual process,
I don't have the numbers in front of me, uh, uh, to sort
of address your, that, your question
around comparison to other cities.
Uh, but I will say, uh,
we did find significant opportunity and two areas.
One is, um, uh, uh, or options in two areas, I should say.
One was in the non, um, procurement services related spend.
So the city has around half of its spending that happens
outside of, uh, procurement services.
And that was an opportunity to, um, consolidate, um, uh,
and improve purchasing power.
Uh, it was one option. The other is in, um, the vendor mix
that the city has.
So, um, we have something called the, you know,
follow something, recommend something called the Pareto
principle, which looks at, you know, yeah, 80%
of your spend should be with 20% of your vendors.
You'll notice in the report we talk about, you know, 80%
of the spend is really in, uh, for most categories of spend,
3% of your vendors, which
that over concentration limits the city's buying power,
it shifts too much, um, buying, um,
power to the vendors.
And, uh, and the flip side of that is, is for
that remaining 20% for, it's, it's across too many vendors.
So you, you lose the purchasing power.
And those synergies are kind of the second category
of savings that we, that we identified
through the procurement work stream.
And that's, um, chairman, if I could,
and that, uh, that is just what you see.
You, you review those in every study that you do
for other cities or peer cities.
You typically, if you're doing procurement, you if
We're doing, if we're doing procurement, not every city
that, like I said, it's sort of at the outset in my
introductory remarks, not every city,
um, reviews, procurement
Has the word. Yeah, I,
I read a few of your other reports, that's why, um,
I mentioned that just to make sure we were kind
of understanding, um, peer-to-peer, you know,
what we're looking at here.
So thank you very much. Thank you, chairman.
I'll take a round two unless questions come up.
Thank you. Alright,
Thank you very much. I'm NuGen. Yes,
Thank you, Mr. Chairman,
I just, I wanna make sure I understood
what you were just saying to alderman wag back, Mr.
Chapnick, um, when he mentioned that you wrote in the report
that the policies
provided by DPS did not contain the foundational information
expected, uh, to prevent and
or detect potential fraud, waste,
or abuse, what were the foundational list it for me,
like I was trying to follow your answer,
I just wanna make sure I understood it.
Can you tell me what those, what
that foundational information is?
I, I think there was some policy related, um, information.
It wasn't, I wanna be clear, there wasn't, uh, this,
this review was not, um, was not, uh,
focused on evaluating specific areas of
violation or potential concern in that.
It's sort of the, the areas that we would see, um, cities,
uh, looking at for, uh, protecting against fraud, waste,
and abuse in other, in other matters.
Right? I, I'm not trying to be annoying.
I just, when I read a statement
that says it did not contain the foundational information
expected, I naturally wanna know
what is the foundational information. Yeah.
It is some of the policy, some of the policies
and documentation around, around those policies. Um,
So we lack the policies.
No, that just, we just didn't,
did not review those elements.
We did, we did not receive those elements to review them.
So, oh, so you
as EY did not receive those policies.
I'm trying to understand this 'cause I,
this, this was a part of the report.
That part, frankly, I highlighted
and thought it was really shocking.
So I, I was trying to understand what that means,
Um, if I might.
Um, so I think, again, at the beginning of every, um,
engagement that they had with departments, they had a list
of requests for documents, data, and so forth.
We facilitated getting at those documents and data.
I think this is one where when it was requested in,
in the manner that EY would typically see from another city,
um, the Department of Procurement Services did not have
that level of documentation to provide to ey.
And is that normal ey
or would a similarly, would you expect
that documentation from a city
Altman Nugent? I'm sorry. I'm
just like, it's a really important, I don't
Think you did anything about not disagreeing with you na,
the nature of the point, but, uh, I think you've gone
beyond the scope of a, a point
of information and I'll agree. I'll
Take that later. Thank you, chairman.
Thank you. I appreciate that. Alderman Riley.
Thank you chairman. Uh, good afternoon.
Um, I guess my question is for the gentleman from ey, um,
you mentioned at the beginning of your testimony that, um,
there were certain areas that you, you did look at
and others that you couldn't or didn't.
Um, what was specifically aside from,
aside from auditing
and all this stuff you've already told us,
what else was excluded from the scope of,
of your investigative work for this report?
What was deemed out of bounds per your engagement?
Nothing was deemed out
of bounds within the scope of the engagement.
Okay. Were there two task orders associated with this, uh,
assignment for ey?
There's one task order,
Just one.
Is it referred to as task order two? Correct.
Where there are 10 work streams spelled out, correct?
Correct. And I want to make sure I'm,
I'm correct here.
Those work streams were procurement spend
and forensics analysis, benefits review, real estate,
land and lease analysis, fleet
and maintenance review, special events, cost recovery fees,
fines, analysis, community working group, PMO,
organizational analysis, service optimization
and performance budgeting,
forward looking. Is that accurate?
Yes. Were there some other items
that should have been included on that list?
Director?
I think that we put together a pretty comprehensive review
of the city's budget and based on, based on the areas
that we know drive costs.
And, uh, just just so I'm clear, um,
did EY need to get your express permission CFO
or budget director to look at anything out,
out outside of that scope?
Um, just like any con contract or vendor, they, so the
Answer yes or no,
They work through their contract with the scope
that they are scoped to do.
This was not an audit?
No, this was a, this was not an
investigation as you mischaracterized
My time budget director.
Um, so there was a limited scope for what EY could do here.
There was a scope. Yep, it was limited.
And, um, what exactly
did we get for this $3 million?
I guess I'm gonna ask the question differently.
Did EY bring to the work group a list of suggestions
for controlling costs, managerial practices, management to,
to, to, to direct report ratios that are appropriate?
Or is it the other way around?
Did the work group come up with a whole host
of brainstorming ideas and say, Hey, ey, look at these.
I'm gonna answer the question. So first of all,
I don't think the scope was limited,
as you heard Adam say very clearly. I'm
Ask you to answer the, the last question I
asked of EY, I guess,
But, but you asked, you asked both. Oh,
No. Hold, hold.
Stop,
Stop. Hold on, hold on.
I don't wanna get
filibustered. Just don't,
Please, please.
It's running out the clock thing.
I've, I've, who have I stopped at five
minutes here? Nobody,
Not me yet. I've
not stopped anybody.
I'm allowing, just trying to allow this to play out.
Again, allow her to answer the question.
You ask your question, allow her to answer the question
and we'll go back, back and forth as we normally do.
So again, what was your, what was your,
you gonna answer this question, please proceed.
Um, I do not think the scope was limited.
As you heard Adam say very clearly early on,
this is probably one of the most comprehensive, uh, reviews,
uh, that a city has done.
Whereas most cities do limit the scope to one area.
We did not do that to your question as to
what the working group did.
Just like, um, ey,
whenever they asked for data, they receive that data.
One of the things that they asked for was information around
what EY was reviewing and evaluating within our budget.
And so that information was provided to them.
So, uh, we had to give ey $3 million to tell us
that we have a skewed manager to employee relationship.
That frankly our ratio is way outta whack
with most major cities in America,
and certainly everyone in the private sector.
Do we need them to teles that?
I've been saying that for 18 years.
Gimme the 3 million bucks. I'll ask a better question.
Budget director, why are we paying these guys 3 million
bucks to do your job?
I don't think that we paid them to do my job.
My job is to develop and monitor our budget.
Um, what we ask them to do is to come in
and provide, like we do most of our, um,
trusted partners perspective on
how other people are doing this work.
We don't often have the ability to
look deep into another city's budget, another city's
practices or policies to understand what is leading practice
and what's not leading practice,
and how do we, uh, compare to that.
I think that that is valuable information that we don't
otherwise have access to.
Okay. Well I would argue we're looking at this
$1.2 billion budget deficit this year
because of the work you all did last year, right?
So, so this didn't just happen to us.
This was actually predicted last fall
when we were in these various seats having this very debate
and you were told we have a massive structural deficit
that you are not addressing.
And it's incredibly frustrating for you to tell us now
that they're looking at best practices in other cities when
in fact, we knew when this budget passed last year would be
in this horrible position this year.
It begs the question, when,
when we're already 1.2 billion in hock, we're able
to find $3 million to give EY with a limited scope
of investigation
and without them bringing to the table recommendations
and ideas for us to react to, rather than to go
and do some research as assigned by you
or an unpaid work group that the mayor put together
as a blue Raymond blue ribbon panel.
That is incredibly frustrating. That's 3 million bucks.
We're not getting back.
And it took us forever to get you all here
to have this conversation today.
What, a week and a half before you want us to,
to, to vote on this budget.
That is incredibly frustrating. Incredibly frustrating.
And you know, I'll give you one example.
The fleet services piece.
You guys are looking at generating a total
of 3 million bucks in savings by accelerating the sale
of end of life vehicles.
When it was pointed out to you that we have one vehicle
for every 17 full-time employees, when the industry
standard is one vehicle per 65,
why aren't we doing something about that
in this budget recommendation?
We are great. What are you doing, director?
First of all, the 3 million is not savings, it's revenue.
So I wanna make sure that we're classifying what this,
what the budget and the report says.
Secondly, as I mentioned, every single one
of the recommendations in the fleet area is being
implemented as part of this budget, as part of the work
that will be prioritizing for our departments.
I I gotta say over
and over again, the budget didn't get this way last year
and the budget won't become structural in one year.
These are phased approaches
and phased strategies that we are implementing.
And the work starts in 2026.
Yeah, well, you know, the mantra from the fifth floor has
been the buck stops over there.
This administration has blamed the governor,
the general assembly, the last 10 mayors of Chicago,
every city council since the existence of this city.
And there is no ownership for the budget
that you passed last year, frankly, without my help
that landed us in the position.
We are here today, $1.2 billion in the hole.
And respectfully, it was raised not just by me, many members
of this body, the 24
or so who voted no on this budget,
said we've got a structural deficit coming our
way next year.
'cause we wouldn't make big changes.
And one of the biggest components of your bailout
for this year is a billion dollar TIFF surplus compounded
by an asinine $21 per head per month head tax.
Did EY evaluate the head tax proposal
and say that's a good idea for us?
Not in their scope. Alderman,
the EY has not evaluated anything related to the budget.
Not gonna say that. Again, just put that on the record.
And EY did not evaluate anything related
to the 2026 proposed budget.
And for the record, our time we've been here,
ma'am, that's one.
Um, as we begin to move forward,
would you like around two sir? I would. Thank
You Chairman. No
Problem. Next
up, we'll have alderman OSHA followed
by Alderman Hopkins.
Thank you, Mr. Chairman.
Mr. Chapnick. Um, appreciate EYs hard work on this.
Um, please don't take the frustration by many
of us in this room, uh,
as an attack on your organization or yourself.
Um, what what's most frustrating
to me is when Mayor Lightfoot left,
we had an $85 million budget gap
and we knew the crushing wall was coming,
having experienced last year some of the games being played
and people being offered different things in the 11th
hour for their yes vote.
And yet we waited until April
five months later to reach out to an organization ey
to take a look at what we were doing, knowing
that we had this, this crushing wall.
Mr. Chapnick, um, in our briefing on Friday,
you mentioned that you guys have worked with
some other large cities, uh, including, uh, Detroit,
Houston, Milwaukee.
Is there anything based on your report, your study, that
your work with those other large cities in recent years has
done in the post COVID world, uh,
that we should be implementing?
Well, I think we, we, you know,
provided all of the options
for the different work streams in the report.
Uh, it really al always on all
of those examples you just shared,
and in this example as well, comes down to our client's, um,
prioritization and, um, evaluation
of those options on which ones to implement
and which sequence and the amount of time it takes based on
that city's, um, you know,
particular facts and circumstances.
So in terms of implementation, I would, um, defer
to the budget director, uh, for that part of your question.
But, um, it's always, you know, uh, the city's, uh,
evaluation of the options
and the prioritization of those options that happens
In looking at this current proposal.
I think this is a lazy budget.
I think this is an incomplete budget.
And before we go to the residents that send us down here
to do this important work
and say, we're gonna raise these fees,
we're gonna raise these taxes, we're gonna borrow more
for the debt, I think we have a real
obligation, all 50 of us in this room
to turn over every single leaf
and try to identify more cuts and efficiencies.
It's frustrating that we ask for EY to be here today
and yet every other question a y can't answer.
I was hoping we could have a forum with the budget director
and the CFO after this hearing today,
but I feel like we're getting a two for one.
Mr. Chapnick, would, would you agree with me that there's
some missed opportunities as it pertains to
some of which you had in your report, uh, regarding our,
our fleet services, um, uh, vacant lots, some
of the real estate that we own.
Would you agree with that?
That there's more to be found there?
Well, I, I think the, the options in the,
in the report identify options
and opportunities to capture what is not currently captured.
If that's, if that's what you, you mean, would you say
We're being aggressive enough based on the
financial situation we're in as a city?
I, I think the re the report was designed to provide
as many options as possible
and, you know, in terms of how things are implemented
and the timeline that they take to implement
that is in the city's discretion.
Um, to review all of that and evaluate all of that.
I, I, I just like to close by saying,
I think the administration's gotta go back
and come with a different scenario for all of us
to consider, and it's gotta start
with more work being done on where we can find cost savings,
where we can find efficiencies.
Thank you, chairman.
Thank you. Ottman Oay, um, Ottman Hopkins.
Yeah, thank you Chairman. Uh, I, I wanted, uh, dive into,
get a little more granular with one specific, uh, I,
I think it's a recommendation in the report that, uh,
seems to suggest that the ratio in the
Chicago Police Department, uh, in terms of, uh,
civilian versus sworn positions, uh,
if my understanding is correct, is not in line with,
uh, similar agencies around the country.
Is that, uh, is that an accurate statement?
That's correct. Okay.
Well, first of all, I'd like
to make sure we're comparing apples to apples.
Uh, what are the agencies that are being, uh,
listed as our our peer group for comparison purposes?
Uh, New York is one, LA is the other.
Okay. There Is others as well. Uh,
And did we look at, uh, you know, our,
our rather unique, uh, staffing model in terms
of public safety, uh, as a, as a total entity
and, and try to make sure we're comparing properly.
We have quite a few civilian positions that perform
a public safety, even a law enforcement function, uh, in,
in OEMC, the Department
of Emergency Management Communication, our 9 1 1 center, uh,
for example, and we have a public safety department
that is separate and distinct
from the Chicago Police Department.
Uh, and these are all civilian positions.
Were, were those taken into consideration, uh, that
may cloud the comparison when you look at other agencies
that have those same positions in those same functions
under the banner of a police department?
Um, yes. This was a really thorough analysis,
and again, the civilian, um,
analysis was on CFD and CPD.
Uh, we were very, very intentional around looking at CPDs,
uh, organizational structure, the divisions within CPD
and literally comparing them
to the exact same divisions in those peer cities.
We worked directly, all of all of this was done directly
with departments.
And so CPD had the opportunity
to also weigh in on additional opportunities for civilian,
which is why the management ordinance is in front of this,
um, body today.
Because in that analysis
and looking directly at the divisions within CPD
that still are not civilianized,
but our other peer cities have civilian,
there are opportunities to
increase our ization rate closer to our peers.
And I'm assuming then the reason to do that,
especially in the context of this conversation,
we're in front of Chairman Irvin's Budget committee, uh,
not my committee on public safety here,
but, uh, still I, I can't help but focus on this
because, um, we're gonna have a, a staffing study
that we'll be talking about on this very topic in a few,
just a few months from now.
So I, I just wanna make sure we're setting the
stage properly here.
Uh, all other things being equal, a civilian position within
a police agency is going
to come at a marginally lower cost.
All other things being equal, uh, than a sworn position.
Is that, is that the assumption here?
So we're looking at a potential savings if we're able
to reduce, uh, the ratio of civilian to sworn
The savings are actually pretty significant, um,
as you know, uh, based on your work with our police
and fire departments.
Um, while the salaries
and wages might be marginally differential, other costs
that are related to being a sworn member within fire
and police aren't, not costs that, um, are applicable
to a civilian uh, worker.
So it's not just the salaries that will be different and,
and marginally lower,
but benefits as well as other duty, uh, payments
that our sworn members receive.
Okay. Uh,
and is, is there a,
I'm not sure I'm using the proper term here,
but is there an industry standard, so to speak?
Is there a, a generally accepted benchmark as far as
what the ideal ratio should be ratio, uh,
when you look at law enforcement agencies and,
and the people who have expertise in staffing them, uh,
what, what is the desirable range for the ratio of civilian
to sworn positions?
I'll start and then I'll turn it over to Adam.
I, I don't know that there's going to be a, um,
a definitive number that will work for every single city.
It's, it's the reason why for all of these, um,
these work streams that we directly worked
with our departments to understand their
perspective as well.
So when I mentioned
before that New York is about 35% civilian LA is about 30%
civilian, those are great benchmarks for us to understand
and conceptualize,
but we also have to do the work directly
with our departments to understand, okay,
New York has this division that's civilian, you guys,
don't you still use sworn members to do this exact work?
Tell us why you might think that that has to stay sworn
or is there an opportunity for us
to civilianized in the way that our peers have?
And by and large, when you look at the, the responses
that we got back from CPD, um, as it relates
to their peers in the divisions that are still sworn
that our peers have civilianized, there are opportunities
for us to shift to civilian civilian workers in those areas.
And they have acknowledged that.
And Adam, do you wanna Okay.
Ottoman Hopkins.
Uh, yeah. Okay. And then my, my final point, uh,
do you have any indication in advance of
what the conclusions are of the workforce allocation study?
That I know is, if it's not done yet, it's, you know,
it's gotta be at least past the halfway point here.
Uh, and we expect to receive that sometime in, in 26.
Um, and just based on the experience right now, uh, of, uh,
constant, uh, stabbing shortages, excessive overtime,
which is to paper over the fact
that we don't have enough sworn resources, uh, long, uh,
backlogs that happen in some of the busier districts,
and not only on the weekends, but even during the week.
Now, all of that suggests we don't have enough
police officers, uh, sworn patrol resources.
Now, obviously, one way to correct the resource imbalance
and the ratio that we're talking about here is, is to reduce
the number of sworn patrol police officers.
Uh, I hope no one's implying that, that
that's a good option here.
Although it, you know, I suppose
you could make that argument.
Um, do you have any advanced knowledge of
what the conclusions are going to be of
that resource allocation study in regards to the number of
sworn patrol officers that the city
of Chicago has versus needs?
Um, I really like this question
because it wraps up so many things into one, uh, question.
So if you just indulge me for a second
to respond comprehensively
to your question, I'd appreciate it.
Sure. I don't, thank you. Don't,
I don't have advanced knowledge of what the study will say.
I will say that we did have an opportunity to, uh, speak
with the, uh, independent consultants that are doing
that work to ensure that we weren't overlapping
and duplicating that work.
So, um, what you see here as far as the
ization, uh, recommendations
and options are really purely a benchmark
against other cities.
Um, not necessarily taking into account what the outcome of
that study would be, but I would,
I would challenge us a little bit with the causal, um,
notion that, um, overtime is, um, you know,
every year they go over
and overtime, um, as, as a indication
that we don't have enough officers.
A number of things that we're doing in this budget get at
exactly what you're talking about.
And I think that they're important to highlight
and how they actually will help drive officers
into our streets doing the work
that we've trained them to do.
First and foremost, again,
I wanna highlight the management ordinance that is in front
of you, which will, um, require CPD to work with a number
of agencies to develop a transition
phase two ization.
And that is based again, on intentional, um, um,
engagement with our, uh, police department on
what opportunities exist based on their structure
and the structure of their peer institutions.
Secondly, we know that, um, in the, uh, um,
OPSA medical audit that we, that we released
to the city council, that a big driver
of their overtime costs has to do with medical layup.
And we're not talking injury layup.
That's not the biggest part of why officers are out.
And that study in that audit reveals it, it is for, for,
for your quote unquote non-injury illness.
These are injuries that,
and illnesses that were not actually incurred
while they were on the job.
And so, working and,
and providing resources to our medical unit within O-O-P-S-A
to really streamline governance, streamline processes,
get the right types of technology in place,
get the right types of orders, um, in place, uh, with the,
um, with the superintendent
and the commissioner of fire
to get our officers back onto the job.
Um, doing the work that we've trained them
to do while also making sure that they are well enough
to do it is a big part of the implementation roadmap of
that audit, which does come with
specific timelines embedded within that audit.
And so we, um, anticipate that the work
that OPSA will be doing,
and we've already, uh, created a steering committee
to manage and monitor and maintain
and make sure that those recommendations are implemented.
We will see a number of, um, of, of, of, uh, or,
or the bearing of fruit from that work.
The other thing that we did was we ensured
that we right-size CPDs overtime budget,
this council has said repeatedly over and over
and over again that we needed
to be more transparent in the cost
of the incurrence of that overtime.
And so we rightsize their budget,
but also put in place a cap on that budget
because we need to ensure accountability on all,
on all fronts, not only with CPD,
but also with, um, you know, the, the, the administration
and giving, uh,
city council the rightful oversight of that work.
Part of the, uh, the management ordinance
that's also in front of you is a regular, um,
report out from our, um, not only our OPSA director on
that audit, uh, recommendations,
but also for the, uh, department of Finance comptroller
and the, uh, CIO of the city to come
before this council on a quarterly basis to, um,
report out on the implementation of the payroll
and timekeeping system.
Because that is truly the way that we're gonna be able
to ensure, um,
that we have a good handle on our overtime, not only in CPD,
but all of our departments currently.
CPD does not use our timekeeping system.
And so there's a really big delay in our reporting
capability and the information
that we get from CPD about their overtime usage,
that's gotta stop in order for us to find meaningful ways
to ensure that they're using their overtime in the way
that we need them to, as well as, um, that all of
that overtime is going to productive use.
The last thing I'll say, 'cause I know I've, I've,
I've said this would be a comprehensive review, um, is
or response to your question.
The last thing is the special events cost recovery.
We know that a lot of overtime is going to that work, um,
which is stretching CPDs rank and file pretty thin.
And so not only are we gonna be looking at not only
recovering the full amount of that cost, so it doesn't put
as much pressure on our corporate fund budget,
but we're also gonna be proposing ordinances to put
before this body that really gets at either, you know, what,
um, events are we going to, um, require, um,
uh, uh, provide that reimbursement of costs,
but also let's look at the whole ecosystem to ensure that,
you know, our police force is actually used for policing
and not for private security for, um, private events.
Thank you. Well, thank you. I, I appreciate the level
of detail in that response.
It's, uh, obviously very important topic and, uh,
and I'll have more to say on it,
but I believe that is my time.
Thank you so much, Mr. Chairman. Appreciate it.
Thank you, alderman. Uh, a follow up to, uh,
alderman Hopkins' question, civilian
we talked about in other cities is much higher than ours.
If we look at the ratio of sworn
to our peer cities
and the ratio of civilian individuals to our peer cities,
if we get more of our individuals, our officers
that are doing work that can be done by civilians, would
that put us in line with our peer cities
or will we still be behind, uh, as it relates
to officers per capita, uh, in, in that respect?
Yeah, I, I think a couple things, uh,
wrapped up into your question.
One, um, it's a good start.
We won't be, um, in line with our peers as,
as I mentioned earlier, and CPDI think may have said this
during their hearing, even when they finish the current
phase of civilian and the, the,
the positions in their budget today
and have been in their budget for a couple of years
that are civilian roles, they'll still only be 8% civilian,
um, civilian to sworn, as I mentioned
before, New York is closer to 35, 30 8%, LA is closer to 30.
Um, and so the, the work that we've done over this, uh,
past few months to identify literally by division, uh,
within CPD and comparing that to the exact same division
in our peer cities, um, it's a good start.
It still won't get us to the, the, the percentage that, um,
that our peers at and,
and frankly, we'll, we'll have
to have those conversations with CPD.
I mean, they have, they, they,
they believe certain things, right?
They believe that certain things in this city require us,
uh, to have, um, you know, sworn versus civilian.
And those are conversations that we'll have
to have conversations about.
I will also say that per capita,
we have more police officers than our peer cities.
Um, could you provide, uh, through the chair those items
that could be, or,
or should be transferred from sworn personnel
to civilian personnel that we've seen in, uh,
our peer cities and what those responses were from CPD as
to why those same functions that are being done
by civilians in other cities can't be done
by civilians here in the city of Chicago?
Uh, sure. We could provide you, um, the analysis
that was done, and I don't think CPD uh,
said in their survey that they can't be done, um,
by, uh, CPD.
I think that there are some things partially, uh, uh,
union based that will have to be worked through in order
to achieve the, the, the types of civilian that the survey,
um, and the work that we did with them, um, allow for,
Is that, and when you say, uh, is that with the FOP
or is that with all of the labor partners
that are involved in CPD?
I think a lot of them will be, uh, related to FOP.
Um, but we'll, when we get down, part
of this is getting down, um, to, okay,
what is the actual position not, uh, civilian position
that would replace, um, this, uh, work.
So it's not only FOP on the sworn side,
but we also have to work with our unions, um,
on the civilian side too, um, around, you know,
which position would replace that.
So it's, it's a both end. Okay.
Very well. Alderman Lopez, uh, followed
by, oh, he, he left. Okay. Um,
He's right, he's right there.
Oh, I'm, okay. Alderman Moore.
Good evening Chairman, members of the committee.
Good evening over here.
Okay. I thought he said Alderman Moore. I'm sorry.
No, no, he's first followed by Alder Moore.
Okay. I only go by Alderman Moore on the weekends.
Um, I just wanna
clear down Hallstead.
Yes. Oh,
Let's not, let's not go down.
All right. I just just wanna clarify something.
So this is your report, correct? Mr. Uh, Che, it's,
It's the white paper report.
Correct. So this is the 2025 budget that is
what your report is based on?
Correct. A review of this, the 24,
I think it's 24, it's, it's not a based on budget,
it's based on, um, operational data that was provided to ey.
So the operational data is comprised from
2020 five's budget.
So it de um, depends on the work stream.
Um, there has been data that's been
provided for 2024, um, in some areas, uh, year to date, uh,
through 2025 was also
provided as it relates to especially procurement, um, spend,
um, I think 20, 24 special events, uh, I'm sorry,
special events was 2024
because that's the, the full year of data that we were able
to provide when they started their work.
Um, a lot of events hadn't happened yet,
so it just depends on the work stream.
Is that generally how you would do a, an audit
or an evaluation of mixing multiple years
across different categories to come up with a
cohesive picture as opposed to one defined year?
Well, we did, we did not complete an audit. Just to be
Clear, I didn't say you did.
I asked if you were to do an evaluation of anything,
would you have used multiple years for multiple streams
as opposed to doing an apples
to apples years to years comparison?
Is that how you generally have done the other
evaluations of our peer cities?
Well, in any, any yes
or no, well, in any review,
it depends on the specific work that's required. What,
So is that a yes or a no?
Well, it depends on the specific engagement
and the specific work that's reviewed.
So,
So it would make sense to be able to do a citywide audit
of our systems across multiple years comparing different
budget priorities, different budgets and, and different,
and quite frankly, almost different administrations
to figure out answers.
I I, if I could just No. Really clear.
It's not a budget review respect.
They didn't, they didn't review our budget respect
Budget director. I'm asking
the person who put this together.
I think that's a, a really important clarification.
Well, I think that if I were to say I want,
but I want my 28 departments evaluated,
I wouldn't cherry pick years from 24 that were good
for one department, 25 for others, and so on and so forth.
So I'm trying to get Ernst
and Young to tell me if this is how they do things generally
for all or is this a, a re
a requisite for the city of Chicago?
I, I think just to clarify on, um, that might be helpful.
A clarification might be helpful.
The work that we did was done
in collaboration with the city.
This wasn't just a data review from I'm period time,
I'm specific. I'm, I'm
just going around in circles with this answer.
If you're not gonna answer, that's fine.
But what I will say is that whatever years this encompasses,
24, 25 or whatever
before then, you know,
I think a couple things I think
should have been also addressed.
The fact that we don't talk about debt
and the impact on our city's government
and its finances, that we don't talk about reduction
of workforce and that we don't talk about revenue
and economic growth, as well as how we can do better, uh,
quantifying metrics for costs related
to service year to year.
Now, I know you said earlier
that this was based on client prioritizations.
Were any of those the client's prioritizations
Again, um, Director,
I'm ask respectfully. I'm asking, you asked
About the client. I'm the
Client. I'm asking
if these were the client's prioritizations.
I'm asking him as the person who put this together,
was this, were any of those four things?
I just gave you the prioritizations of your client.
Only the client can tell you what their prioritization
Actually, the, the no director.
It's not because the person
who is responsible for the work can tell me that.
So I don't know why you keep interrupting me
and my time when I'm trying to get him
to answer this question.
I have 10 different questions
that I wanna ask about this report
and you keep interrupting me.
I would love to be able to hear from the person
who put this together on
what he's presenting to the city of Chicago.
Now, I'm trying to understand the basis
for how you put this together.
I'm trying to figure out what the prioritizations were so
that I can get to the questions that I want answered,
which have to do with actually
everything that's in this report.
So I'm
Alderman Alderman hold the time
the report was generated at the behest of the department,
the department, I understand that.
Let's be clear. The department has set forth things
that it wanted to be focused on.
It's not a fair question for him to say as to
what he was done
because again, the department working for the department
to do a report based upon
what they have stated in their work agreement,
Respectfully chairman,
it's well within his ability when he brought up
that these reports across the country have been designed
by the client's prioritizations, his direct words, he said
that they provide cities options that are as presented
and that the city chooses from therein.
I'm just simply trying to figure out
what exactly the prioritizations that were given
to him to create this.
Now, the city, the client, the mayor's office
can interrupt
and say, well, we're the client, we're gonna tell you
what we told them respectfully.
I wanna hear from him what was told to him.
Because when I'm looking at all of the things,
whether it's wellness, whether it's the, the fees,
whether it's the pe, the, the health stuff,
which I've got highlighted up the wazoo
because none of it makes sense,
or even something as basic as the vacant lots,
which the numbers are wrong.
All of those questions come from who told him
what was the priority?
And I wanna know from him what was told as the priority.
I think the, the question's been asked and answered. It
Has not, but, okay. Okay. Well,
We'll Then I guess I'll take my round two
later for all the other questions.
Alright, thank you much, Alder. Be more.
Thank you so much chairman.
And thank you all for, uh, appearing, um, before us.
Um, I just want to first thank the, um,
CFO, the budget director
and even the mayor's office for, um,
conducting this type, um, of analysis.
Um, since I've been here from day one
and my first budget, um, we wanted coming outta corporate,
um, what are things,
we were always just taught find your cost drivers,
find your cost drivers, find your cost drivers, um,
and anytime, you know, for profit, for cost savings, really
as we were, um, um, during our budgets each year, it was
what, what's driving our costs
and how can we be better at what we do?
So I i I gotta commend you off of finally looking at that
because I've been asking for that.
Now, with that said, I I, I need to understand,
um, for, um,
lemme get back to my question.
I need to understand from the standpoint of
when we're looking at things like if we say, if we look,
when we are looking at cost drivers, and I, and I,
and I keep hearing, um, personnel that's a given,
but what into personnel have we looked at those things?
Like for instance, um, I often say, and I,
and I know I understand all the union issues and all that,
but somebody has to talk about that.
I often say the truck driver on the back of a garbage cut
should be getting out doing something,
even if it's putting something into 9 1 1 saying, my alleys
are full of, um, debris so we can get it done.
Because yes, the amount
of money from a person is the driver,
but what's driving it?
It, and so that's what I'm saying.
And the same thing with if it's in water.
Um, if I'm paying people in the, um, water department,
um, what's driving it?
Is it because we are laying more pipe somewhere?
Do you under, are you following what I'm saying?
So yes, there's a personnel thing,
but there's a personnel to doing something
that's driving even those personnel costs.
And I'm, I just wanna get at are we digging that deep
to look at that, to resolve those issues or to answer
and be, be really out the box
in some cases in, in addressing those?
Yeah, and I think there's some really interesting outta
the box, um, suggestions in this report and,
and, and options, right?
I think one is in the service optimization area
where there is a suggestion that we should look at, um,
you know, um, having a hybrid position
that does both traffic management and uh, ticketing, right?
We don't currently have that. I will tell you
to do something like that is gonna take a ton of discussion
with unions, but we also have
to make sure if we think it's right, right?
If, if it, if it works, um, in, in our, um, city, uh,
you know, for me the question you ask, um,
have we gotten down to the nitty, I mean,
these are questions that are constantly being asked, right?
We're constantly, uh, talking to our union
about things like, um, you know, why can't a driver
of a truck also, you know, empty the trash can.
Like these are all things that if we did them,
would be operationally different than the
way that we currently do it.
We are limited by, you know,
what our job descriptions currently say and, and the roles
and, and and duties that are, uh, job descriptions are
for our unionized workforce currently, uh, say.
And to the extent that we wanna change them,
to make people do more than they currently do,
not only requires negotiation, will require discussions
around compensation, um, and so forth.
So, um, you know, I will tell you one area that we are
that's in the report that we have been looking at, um,
and we constantly look at, across each
of our departments is the shared motor
truck driver pool, right?
Um, currently we have different
job descriptions depending upon which,
if you're in CDA versus water versus streets
and sands, we don't have the ability to say, okay,
today you're at aviation tomorrow,
you're at at water or, or whatever.
So those are things that we're looking at
that you see other cities do, frankly, um, that, you know,
we we're looking at, we, we think are interesting,
innovative ways for us to do it,
but we also have the context
that we are a very different labor town than a lot
of other, other places.
And, and with that said, I think that's has
to be presented to us and whether we present it
to the community or this administration,
there's gotta be pressure points.
Um, I'm gonna make this statement then I'm gonna
ask one more question.
I was just always under the belief in, in,
in the way I I came up, um, if you wanted
to make money, you went to corporate.
If you wanted jobs stability, you came to the city and,
and that was over time.
It, it wasn't a job that you were gonna get real wealthy.
And, and I think we are missing that point sometimes.
And so I just wanna make that statement.
And then my last question, so I'm gonna have
to do a round two within the 80, uh, million dollars cost
reduction initiatives, I heard things like, um, this,
this is a target, like the, I think it was what,
the 12 million somewhere?
Mm-hmm. I didn't have it. This is a target.
What happens target versus this is I know what I can get.
Mm-hmm. So what happens if we don't meet that target? Yeah,
That's a great question.
And, and if that's part of the, the savings
and the balance, this budget, then
what happens if we don't meet that target?
Yeah, I think, um, that's a great question
and provides me the opportunity to say that we think
that these are the targets that we're gonna hit.
The question is, will we be able to, um, overachieve
what our targets are?
Um, you know, we think
that in the special events cost recovery, we're probably,
um, uh, gonna hit that target.
It's gonna require some additional work to, to,
to reach even further than that by changing ordinances.
Um, you know, in the land sales, um, you know,
DPD has a bunch coming up, um, this month I believe
that will implicate next year's, uh, revenue.
Um, and so because, you know, a lot
of these recommendations require additional steps
and other other parts to, to go in order to meet the target.
You know, we're being, um, uh, you know,
we're providing estimates that we believe we can achieve.
If we can overachieve, we're absolutely gonna go after that
and we're going to do as much as we can to,
to make these savings or even revenue targets, um,
even bigger than what you see in the budget.
But I have to make a budget
and I have to balance a budget based on
what I believe we can do.
Um, because if we don't reach a target, then that means
that I'm, I'm midyear gonna have to cut something.
So we are very confident that we'll reach the targets
that we have set before you, um,
but we're gonna be reaching even further
to get even more cost savings
or even more revenue even within 2026.
But again, we didn't wanna be in a position
where we didn't reach something, some astronomical number
and not, um, be able to bear that out
and then have to cut midyear.
Alright. Thank you. Thank you.
Chairman Alderman, um, alderman Curtis followed alderman s
Okay.
Alderman, uh, Viegas followed by Alderman Napolitano.
Thank you Mr. Chairman. Uh, good afternoon.
Budget director, CFO and Adam.
Um, so I'm glad to see that this,
that we broke down government into these nine sectors.
Are there more categories that make
that we could break it down even further?
Or, or do you feel comfortable that these nine,
these nine project areas are what make up government?
Um, I'll answer then I'll, I'll pitch to, to Adam.
So I, I think someone asked us earlier why we didn't reflect
on pensions or debt, you know, that that's under the CFO
and she has a ton of consultants that help her with
that work already.
Um, and we also had a working group
that focused primarily just on debt.
The working group that is putting together their phase two
report is also focused on that as well
and gonna bring a lot of, um, research and things to bear.
I think this is when we look at our budget
and we think about cost drivers outside of debt, uh,
which is an obligation that we can't get out of and,
and pensions an obligation we can't not pay for.
These are the cost drivers.
These are the things that, um, if you can make sure
that you're doing them efficiently, then you can make sure
that, um, your expenditures are moving more
in line with your revenues.
And so that's why we focus on
These. Yeah, no, that's
great. And, and again, I appreciate this
because this leads to something that I've been pushing for,
uh, and a resolution that passed the city council
around putting an RFI for tech
around these nine project areas.
If these are, if these are the, the, the, uh, the factors
that are cost that, that are, are driving cost, like we need
to overlay tech on this to figure out
how can we create these efficiencies and not,
and not customize, not customize the solution,
which in turn minimizes the efficiency.
So that's a statement and I'd love to see us get there.
This body already passed the resolution on that.
And so we gotta get there. And that would be incorporated,
that would be, uh, with you yourself, the C ffo
and the comptroller, uh, putting out RFIs to figure out,
hey, this is, this is how, this is what we do as government.
How would you guys do it? And allow them to, to to,
to generate the, in the innovation.
So the CIO is a part of, um,
almost all of these work streams.
So special events, procurement, um, organizational analysis.
So, okay, we agree with you.
Perfect. Uh, and then I know we're different,
but we're not that different.
Government doesn't manufacture cell widgets.
We provide a service. Now, we are different from California.
'cause obviously today we had about two inches of snow,
but we deliver services and,
and if we can identify what those core services
that we all deliver, measure
that I'd be interested in seeing what that looks like.
What does government
and all our peer cities do to what we do?
And what, what's the cost? What's the manpower, et cetera.
Has that analysis been done?
Um, that is, um, embedded implicitly within this.
Again, we benchmarked to a number of cities
and I do do think it's important to look at cities, um,
because we operate a lot differently than states.
Yes. Um, and, uh,
and oftentimes, often differently than how, um,
private sector corporations operate
because we do at the serve, at the core of what we do,
we're providing a public good, which is different from, um,
private institutions.
The one thing I will say is, um, you know, this is the,
the foundational basis of continued exploration
and road mapping, right?
So for instance, in the report they talk about, um, uh,
modernization of our 3 1 1 system
and how we provide that service.
I think it was San Diego, but don't quote me on that.
San Diego has really, if at San Diego
has really done a lot to change
how they do 3 1 1 services in that city.
Um, and that's an area that we want to look at, um,
because they not only been able to, um, provide, uh,
or respond to more 3 1 1 requests than they were when they
were a hundred percent manual or, um, uh, uh, call center.
But they've been able to respond quicker to constituents.
Um, and that's where you see technology being able to help.
Well, here, I'm telling you that's
the only way to drive down costs.
Uh, we, we have, we we're we gotta
and double down on technology. Um, yeah.
And we're looking into that, just so you know. Well,
We don't need to look at it anymore. I mean,
You mean how we would implement that here?
Okay, thank you. Time and attendance. Time and attendance.
Cloud storage for cameras for CPD, for the body cams.
I mean, those are low hanging fruits
that are not incorporated in this budget. And
Time and attendance is incorporated in this. So
40 million is what's incorporated in this budget.
So the time and attendance actually was just on a,
a meeting about this, this morning.
The, the rollout date for the payroll
and timekeeping system is the end of this year,
fourth quarter with the cutover date for 2027.
So the, the, the dollar amounts to implement
that system are in the capital plan
and in this budget, um, the, uh, the, the savings
that you'll see will begin in 2027.
Okay. Um, I'll take a round Two, Mr. Chairman.
Alright. Thank you much.
Uh, Altman Napolitano followed Altman Ne Spoto.
Thank you Chairman. Uh,
thank you all for being here today.
I, I think what, where I feel like there's like a little bit
of a hangup here is, and it's kind
of been brought up numerous times, is the concept of, uh,
reiterated over and over that this was not an audit.
Uh, and we did not audit,
we did not audit, we did not audit.
Now to Mr. Chapnick, is that, if I pronounce that correctly,
I, I apologize if I didn't.
Have you done this an audit like in other cities before?
Has that, has that been something that you, compared to
what you've done here, have you done an audit process in
other cities and come up with evaluations of, you know,
cost effectiveness, where we can save,
where we can generate more revenue?
I'm really just prepared to speak
to the, the microphone's on.
But, um, to speak to what's within the report in front
of us, not to other,
Can you speak to your experience for us hiring you
as a contractor and paying you $3 million?
Has EY done an audit in the past
for another city where they've looked at cost effectiveness,
savings and ways to generate revenue?
I mean, I think that's a fair question.
We're we're, we're paying for that as tax dollars. Yeah.
I I think, I think part of the nuance here is, you know,
uh, we are as, as a company, we have a large audit division.
Yeah. And so the word audit has a very specific connotation
to, to us and to our regulators
and to the people, the clients in which we serve.
And we wanna make it very clear
that this work in no capacity,
not an audit, was, was an audit.
And I would characterize the vast majority of the work that
No, no, I got it. I got it.
I think I, I I, I, I think we've over, we've made
that an overabundance, uh, uh, a point
that we did not do an audit here.
And what my question is,
and you know, I'm, I'm kind of a caveman, I was a fireman,
you know, break walls down and stuff,
but I think I get a little bit of common sense
or a lot of common sense as part of the caucus.
Have you let, the best way to put this, um,
do you have levels of degrees
of services?
So you said you've done audits in the past
that you're offered at and or,
or your company, EY has done audits.
Yeah. Do we go in, is it like a la carte, like, Hey,
give me the, uh, here's 3 million, give me what we want,
or here's 3 million, gimme an audit
and find out how we can do this better.
Is there different degrees of this type of task
through ey? Yeah,
I mean, I, I, I, I'll, I I didn't
answer the other half of your question.
I think it's a fair, I'll
answer the other half of your question.
The work that my, my team
and the professionals that worked on this engagement, um,
the work we would typically do
for other cities is also not considered an audit
either, if that's what you're asking.
It's typical. It's typically operational analysis options,
identification for service, delivery improvement, ways
to improve the way you deliver services or to reduce costs.
That's typically the type of analysis we would do.
And it's consistent with other cities.
Have you done an audit directly answer your
Question, but have you done an
audit for other cities, though?
That's my, that's my question.
Um, let, let's, let's, let's stop this.
An audit is a fin,
an audit is a very defined term in his line of business.
And again, what they did here was not
that it was not an audit.
An audit is, is when you're auditing financial statements,
it is a totally different item that you're asking for.
And they have not done an audit, uh, as
that is traditionally defined under, under standards. So,
Chairman, chairman, I, I, I, I understand that.
I I absolutely understand that.
I don't need to, I don't need to have
that explained to me. Well,
You kept asking The same question.
Um, no, I'm not asking. I'm asking a simple question of
what we paid for,
and I've been told 50 times we
haven't had an audit done here.
I got that. What I'm trying to find out,
has EY done audits in other cities
and come up with cost effectiveness, how to save money, how
to fix debt, to compare what we paid $3 million to, to
what other cities got
and might have done a lot better than being in a three,
a $1.2 billion budget?
I get that. I'm a simple, that's just a simple question.
So are we getting what we asked for,
or could we have asked for a little bit more?
Or could we pick something else a la carte to get us?
I, I, I don't want a piece of paper to just say,
we ran something for $3 million,
but we're gonna go with this budget.
What did we do here? Did we get what we needed?
And how do we prosper?
So I, I get what you're saying, chairman,
but I'm not even going down that road.
I'm just trying to figure out what we did here.
In all due respect, I'm, I'm not trying
to put him on the spot here, but he's on the spot here.
But I would say, uh, if I can respond to your question,
and I appreciate your question, um, what we hired
EY to do is consistent with
what they've done in other cities
that are facing the same types of, um,
budget gaps that we're facing.
We actually did a much more expanded, um, analysis
of our operations to find efficiencies than
what in some instances EY has been hired
to do in those other cities.
And, and I, I excuse my approach to all of you
and even raising my voice, 'cause it's not called for,
but what I'm feeling here is that we paid $3 million
to run an analysis to get an answer that we could.
So we could say that we did it,
but we're going in a different direction.
Whereas if we could have maybe paid $3.5 million
to do a full audit, and how do we get this done better
and make our city a little bit stronger,
that's, that's my feeling.
That's the neighbor. That's what our neighborhood feeling
gets the people that I answer to the people that, that
hopefully want to keep me here someday
because I'm asking those questions.
So all I wanna know is,
is there two options to this?
Could we have run an audit
and come up with different analysis
and different responses from you?
I would say that an audit has a different purpose than
what we are trying to do with the evaluation that we
contracted EY to do.
Again, we did do an audit and we
provided an audit to City Council
of the OPSA medical division.
And that had a very different purpose, um,
because there were concerns raised
of fraud, waste, and abuse.
That is why we did an audit of
that very particular division.
And it was very concentrated, um, um, and, um,
and dug really deep to get at, um, you know,
what we could do differently as a city
to ensure there's no fraud, waste, and abuse.
All right. I, I'll leave it there.
I just, what comes to my mind is
if we would've delved in deeper with a larger scale
research in an audit,
I think we would've seen things done a lot differently.
Maybe we would've seen things with the city
that we're doing completely wrong and things that we've done
or we're doing completely right.
So I, I'll wait till the second round and hopefully I can,
And I'm happy to have those conversations with you, um,
at your leisure.
I would say that this is very typical
of what other cities are doing. No,
I agree. But this
is the, this is the forum that we're in for this,
you know, I mean, we could definitely do that offline,
but this is a city forum, so thank you.
Thank you Alderman.
Uh, alderman Lata followed by Alderman Coleman.
Yes. One, two, there we go. Uh, thank you very much.
Uh, I, uh, process is one thing.
The, the product I find very interesting to be able
to read the substance in here.
'cause, uh, having worked at KPMG
before coming to office, it seems like we want,
what we wanted was a consulting team to do consulting work
rather than an audit.
Which budget director Guzman, as you've pointed out,
is a very specific thing in an audit from a financial
perspective, I would argue would be
less helpful than what's in front of us right now.
So I, I appreciate what this document is
and I kind of wanted to speak into that.
Um, my first question actually was marginally related
to the scope because what people are really talking about
is a, a broader scope of work,
which is something we can always discuss.
I did want to ask about the enterprise funds.
So it looks like we focused on departments that are within
the corporate fund.
I was wondering if we looked at the enterprise fund like
aviation or water, because even though those have
to stay in their particular lane, it would,
particularly when I'm looking at the supervisor numbers,
curious how that, what we would learn from in terms
of efficiencies were from our water program.
Uh, thank you for that question.
Um, obviously the, the big focus of this was how
do these types of operations impact our corporate fund?
Because that is the fund
that has the most variability when it comes to revenue.
So controlling costs become that much more acute.
Um, I will say that even when we were looking at this,
so like special events, cost recovery,
procurement spend analysis, the data
that they received was for all funds.
So we actually do know the impact on our other
funds for procurement.
Um, and, and the report does say,
and when you just isolate that just to the corporate fund,
this is how much you could save.
But it doesn't mean that the analysis
didn't cover all of our funds.
And I would say, you know, again, this is the beginning.
This is a roadmap. This helps us align with
what our peers are doing.
So while we might start with certain departments
and organ analysis, the parameters, the, um, guidelines
that we would be using would be applicable across all
of our departments as we are going department by department
to make those determinations.
I, I'd be fascinated to learn more about that.
I mean, if DM DDWM can run a $9 million surplus, that
that may be an indicator that there's efficiencies
to be found there as well.
I wanted to ask, I'm looking
specifically at page 63.
This is the, this was eyeopening.
This is the one that looks at supervisors with one
to three direct reports supervisors
with 10 plus direct reports budget director.
This helps me understand more the spirit behind
the hiring fees as you've been talking to us about.
'cause there's, there's not a way at like
adjusting right sizing direct reports to supervisors
without targeted hiring.
The question that it raises for me though, is
why not put more of a hiring freeze on those management
level positions rather than on the direct reports?
Because like Streets
and Sanitation, DFSS cdo, I still want the people coming in
who are doing like the grunt work
of it all. You know what I mean?
No, and I, I think, I think that
that is what we're doing, right?
So what we don't wanna do, and,
and I'm gonna actually gonna have Jill talk a little bit
about this 'cause she does actually a better job
of talking about this to me is we don't wanna hire into a
structure that we might change, right?
Um, when we're looking at departments
and saying, okay, you literally have one supervisor
and one report.
That next supervisor has two reports
and that supervisor position is vacant.
Do we wanna spend the time?
And we will be spending the time right now saying, well,
we can get rid of that vacant supervisor in 2027
and reorg with that department.
Some of this is also looking at, um,
levels of managers, right?
We have, I, you know,
It's on page 62 I think looked at this.
But there, there are like levels of managers
that are reporting to managers that are reporting
to managers that are reporting to managers.
And so it's like, well, where's the work being done? Right?
Um, and so that's actually work that we're doing right now.
And I've sat in calls with DHR
and um, um, some of the departments
that they're having those conversations
with right now saying, we need
to collapse, get rid of some of these.
And some of this will happen over time.
We'll have to burn some of these titles.
Um, 'cause there's people in them right now.
But over time we'll be able to, you know, have
that be a burnout title so
that we're not continually hiring into those, those levels
and levels and levels of managers.
And I don't know if you wanna add something to that, Jill?
'cause you talk about this way better than I do.
I don't really think I have too much to add,
but I think the hiring freeze for us is
to force the departments to take the time
and the space to do the reorganization that is necessary.
And if we try to pick
and choose how much of a hiring freeze we're doing,
I don't think we're gonna get the same results
because ultimately we do need a reorganization, um,
in a number of departments.
And you cannot implement that overnight
and not lose services.
You have to be thoughtful of how
to do it and take the time to do it.
Right. And I think this is something that
this body has been really clear to us about.
I I don't think we have ever had a meeting about budget
where it hasn't been said you have
too much middle management.
So we have heard and EY has documented it, it is clear
and we wanna be able to fix it.
Chair one question
and I will forego around to, okay, so
one is a through the chair question, which is I would like
to understand, uh, fines
and fees listed in here that we are adjusting closer
to peer average, I will say is my
like actual final question.
This is the first time I learned about the Pareto principle
in procurement, which I found fascinating.
This idea that 80% of your spend should be with 20%
of your vendors to see us at 80% of our spend
with our top 3% was,
I'm not even sure like as an al
person how to read into that.
How, what is the path that gets us closer to that,
that 80 20 principle?
What is the path to get towards the 80 20?
Oh, uh, uh, the, the path I would say to,
to get more towards the standard ratio you want to see, uh,
is just to continue a, I would say a comprehensive review
of your contracts and your procurement spend over time.
More, most importantly, I think you want to be able
to have a consolidated procurement strategy.
So right now, given the the spend that's happening outside
of a centralized process, you have no limited or,
or limited control over, over that spend and the, um,
and the negotiating of bargaining power
that you want to achieve.
And so, um, bringing
that together I think will help
get you closer to that alignment. That's the path.
And I'm gonna give a little bit of a, um, shout out to,
uh, chairman Viegas.
'cause this is technology too, right?
So, um, you know, you're gonna see me
and probably Chairman Irvin over and over
and also Chairman Viegas harp on ERP.
So procurement is a part of, there,
they're a module within the broader ERP, um, part of the,
the issue with Pareto's, uh,
reason why you see things like Pareto,
a principle happening in places like the city of Chicago,
um, is not only decentralization,
but we also have an EM employed
categorization, uh, management.
Um, so that would allow us to do more strategic sourcing.
So, um, uh, being able to go out
and diversify the pool a lot more looking at
what other states already have in place,
what our sister agencies already have in place.
Because right now the way that we are working is like,
because departments just need contracts in place
and they need contracts in place to get their work done.
They're just grabbing anything, right?
They, they're, they're, you know, department of Streets
and Sands has a contract in place.
I'm just gonna go grab that, right? Mm-hmm.
With the vendor piggybacking. Yeah. Yeah.
So I'm just saying like, we're,
because of the way that we currently work,
because we don't have that categorization management in
place because we're not doing full scale strategic sourcing
departments just to get their work done, are,
are really just going after what exists today.
I appreciate that. It's a fascinating
piece of work. Thank you Chair.
Thank you. Uh, alderman a spot Alderman, uh, Viegas
And just so a point of information.
So, um, my colleague from the first word brought up the 80,
the 80 and three does not slow pay
from the city contribute to the fact that people
don't wanna do business with the city.
Yes. Yeah. Okay.
Just wanna make sure this is on record.
Yeah. I I, I, so Not only does it contribute to,
to not want to do business, but the price that we pay Yes.
For goods and services.
If I know I gotta wait
sixty, eighty, ninety, a hundred twenty days for my money,
I, I have to add that cost to you.
'cause it's costing me money to provide that service. So,
So part of, um, that work stream
that we're gonna be working on with DPS
and DOF is looking at the complexity of,
of not only getting a contract in place
'cause it's, it's incredibly complex
and our systems aren't helping us right now,
but also on the backend, on the payment side right now.
And this also dovetails with the organizational analysis
that, um, uh, stream, which is why, again, all
of this is on, this builds upon each other
because one of the things
that we've been looking at is we have procurement people in
like all these different departments, right?
So one of the options and,
and what I like to call is a recommendation
that we're looking at is centralization of, of, um,
of personnel in the place
where the work is actually needing to happen.
Departments are experts at what they need.
They're not necessarily experts in procurement, right?
But we have these procurement people sprinkled out
everywhere in every department, which really just, uh,
elongates the process
because you have to have all these different people in
hands on something.
So that's something that we wanna look at as well.
And also, and when that happens, you have so many people
that not only have to do the front end on the procurement
side, but on the back end just
to get an invoice approved, right?
It's, it's going through too many hands and,
and too many hands are looking at it for different reasons.
We need to streamline that process. Thank you.
Thank you Chairman, miss.
Thank you Chairman. Ever since you all gonna talk about
the contracts, uh,
I wanna make sure that you know that in I misses the chair
of contracts oversight and equity.
And if you have anything going on,
make sure I'm included in it
because it was I who helped to shepherd that, um,
technology through the committee.
And the other thing I want to say is that all
of these departments
and bureaus that we have has been said over Chairman Irving,
I mentioned this to you, that procurement should
have a oversight.
These, these departments, they'll go out
and they'll order supplies
and they've been doing it for years,
and the cost is way higher than if you had our dollars in
one, uh, pot where we could be able to buy the book supply,
whether it's pen, pencils,
everybody shouldn't have that freedom.
And then continue to allow other companies to
benefit from our dollars
and we're not getting the benefit from.
So I just want, uh, make sure that we don't make
that mistake as we doing here in this budget
and leaving our peoples in these
conversation that we are having. Thank you.
Um, thank you for that reminder.
We'll definitely make sure that we keep you
apprised. Uh, chairwoman mi
Thank you Chairman. Uh,
Altman. NuGen, you want to two minutes now?
I got you. Uh, thank you Chairman. Go ahead.
So, um, I wanna go back to page 49 in the report.
Um, the policy and procedure observations.
Um, I think when, when I was trying to get at earlier,
if you can help me out, uh,
the first observation, help me here.
Procurement policies
provided by DPS did not contain the foundational information
expected to prevent and or detect
potential fraud, waste or abuse.
Just what would the,
what would the foundational information be?
I would have to get back to you with more specifics on, on
that specific bullet.
It's your observation, like it,
the observation section is like the takeaways, like I,
I guess we're reading your document.
I'm, I'm looking for any way to find efficiency, I guess.
So then my followups would be like, well, what is budget
and finance or procurement doing to rectify that?
Does budget or do, do you know what the foundational,
foundational information is?
No, what I think, um, Adam is just mentioning is
as it relates to the specific request that they made of DPS
and the specific data that, um, was not, uh,
provided, um, or didn't exist, he would have to get you
that he would have to follow up
and get you that specific item.
The observation is the observation based on
the work that was done.
What I would say what we're doing is exactly, you know,
what I, what I've said a number of times we are going
to be working with DPS and DOF over the course of 20.
I really have a lot of to implement the,
you asked the question, so I'm, I'm okay though.
I'm gonna just move on
because I really expected us to be able to answer that.
Um, in the second policy
and procedure observation, um,
EY reported it's unclear whether DPS
or DOF has primary ownership for assessing vendors.
One, uh, for ey.
Is that something you've seen in other cities?
Are we unique?
Uh, I I I think it depends on the
specific review that's completed.
So I don't really have a perspective
to share on other cities in this specific bullet point.
Were you surprised that I,
I guess I was surprised when I read that it was unclear.
Were you surprised?
I mean, I would say that this is an observation
and so in addressing this element of the scope
and trying to find, you know, trying to, to find
and shape protections that you wanna make sure are in place,
this was an observation that we found.
I will say I was surprised and it's the reason why we're
gonna be working with DOF and DPS to do that.
This has existed in the city for decades
and I think that in a, uh, a functioning procurement system,
there should be zero question as to who is responsible
for this very important task. I agree.
How soon will we have some feedback on that?
And hopefully, would it be safe to assume
that DPS would be owning vendor assessment?
It, so it's not vendor assessments, it's vendor, um,
it's vendor management.
So who ke who's the record holder of the address
of the vendor, the payment information
ultimately in conversations with D-P-S-D-O-F and EY
and OBM about this very topic,
it really depends on your focus for contracts.
So a lot of where I've come from in the county
and the way that the city has set it up this way to be owned
by DOF is
because there's alignment with fiscal management, right?
You wanna make sure you know where all the money is going.
Okay. Other places where DPS
or the procurement arm is the owner, it's
because you want to align with
strategic sourcing priorities.
So it is a policy question.
Sure. It actually, in that vein, something that really
I found pretty upsetting, um,
and it was on page 47 of the report.
For example, it mentions
that vendor a has eight contracts across 25
departments, uh, of the city.
Uh, and I think that's at $6 million.
So did we, what are we doing as a city?
Can we, can we marry those contracts?
How do we turn that into
or perhaps EY have, how would you advise a city
that has eight contracts across multiple departments to turn
that into one city contract?
Like how would you advise this?
'cause I would assume we're just bleeding money on that.
Yeah, I mean, I mean certainly I, I would say
that there's, there's two core elements
in response to your question.
They're both in here in the, in, in the, in the document.
The first is a category management system.
So buying by category will help consolidate
the purchase of goods and services.
So whether it's, you know, you're buying fuel
or whether you're buying office supplies, you don't need
to have the purchasing happening across
departments individually.
And so having a category management system will help
consolidate that spending and enable you
to have things like master service level contracts,
better pricing, cost savings as a consequence. And
How long, if we were to try
to marry up eight contracts across multiple, uh, uh,
or eight separate contracts with the same vendor,
how long in your experience would that take
to get it into one master contract?
I, I think it would, I mean, I'll defer
to the budget director on this, on, on sort
of the specifics of this example.
But more generally, I'll say it depends on the contract.
Mm-hmm. The length of the contract, the services being
provided, we put in the report.
We think in, in total from start to finish,
it will take three to five years
to get a full category management system in place. Three to
Three to four or three to five, sorry,
Three, three to five is what we say in the report.
And then I, I noticed you guys wrote about how 49%
of the city spend was outside of procurement.
Is that, is that normal?
Like do you see that across other cities?
Like clearly there's gonna be some spend outside of DPS,
but like what is a normal, what's, what does good look like?
Yeah, I, I I, I think, um, it's, it's high.
If, if that's um, if that's, if that's your question, um,
each city differs in terms of, of of its
of its procurement processes and approach to purchasing,
but more centralized, um, systematic approach to, um,
to purchasing generally is will help reduce cost.
But like, are there cities that only spend
5% out of their procurement?
Like I, I just don't know how to measure us.
Yeah, I don't have the specific numbers of sort of other,
other specific examples to be able to share.
Is that a, is that a number that is, uh, ascertainable
through some national organization of what that
mean or average looks like across, uh, municipal enterprise?
I, I think the question is if you were to,
um, compare us to
Other states No, no, not us.
We, we already know what we are, are,
the question I think is where are others at?
And uh, his testimony is that we are high.
Um, how high are we? Right?
I mean, what is the mean, uh, of cities?
I know we're, we're hard to measure because of our size,
but there's gotta be some standards, maybe if it's ICMA
or some other places that have some standard
that even for a city of our size could be,
I mean, I'm not, I'm not expecting it.
I'm not expecting someone to have a hundred percent,
but I'm also not expecting it for it to be 50% either.
But I think the question that, that Altman Newsin is asking
is where, where does that look, what does that look like
in average or normal mid to large city settings?
Yeah, I mean, I mean there are,
there are industry bodies like the,
and we mentioned some of this in the report on the bottom
of page 48 as an example.
So the National Institute of Government purchasing,
you know, looking at, at the coding, um, for there
or some other industry associations.
I don't have the specific numbers, um, that I can,
I can share in other comparables right now, but,
but we can follow up with that information. No,
If you could follow up on, on what that looks like, um,
through those types of organizations, uh, that would be,
that's what we're looking for. Yeah.
Thank you. Uh, just may I ask one more question? Go ahead.
Sure. Um, yeah, I would really appreciate that follow up
because I think, I think we have to control that spend.
The other thing you, you brought
up is actually a good point.
About 50% of,
of our spend didn't even have proper, proper coding.
What is did, is there a recommendation
to us that we're not coding?
I mean, I mean I know we have duplicates
and all sorts of issues with that.
Like do you have a recommendation to us on,
on the coding component?
I don't know if I characterize it as as a recommendation,
but you know, one observation would be, you know,
having clarity around all the data is definitely helpful in
terms of making an assessment on other opportunities
for more efficient spend and inability to reduce cost.
So having better visibility across your spend can,
can be helpful in identifying areas for savings.
Are we, can I, can I respond to? Yeah.
Um, 'cause I,
I will tell you procurement is probably an area
of intense focus for me
because I think it's an area that needs a lot of focus.
Um, one of the things I don't know, you keep,
I keep harping on the ERP,
but I literally just had a conversation with our, um,
comptroller this morning, which is a continuation
of a conversation I keep having with him around how we need
to simplify our chart of accounts,
which is the foundational basis for all of the things
that we're talking about now.
Um, as well as simplifying the, the fields
and the coding within our ERP system in
the procurement system.
Because I will tell you as a department, when I go in
to not only do a contract,
but then to ultimately end up paying for it,
and I can't even imagine what it's like for vendors.
It's overly complex and, and overly complicated.
And I think that we would do ourselves a service
with asking ourselves what information do we actually need
and how do we streamline
and make this simpler for departments to
categorize not only a contract,
but the invoice that they're paying.
Um, and, and ultimately, what is it that, um,
serves us in making decisions?
Now we can, you could go into a system
and put a thousand categories in there
because you for some reason wanna track it a certain way.
But is that really the best way to develop and,
and implement your system to get at strategies
around procurement?
And that's the question that I've put forth
to our comptroller as well as our, our, uh,
procurement chief as they're designing their new ERP system.
Thank you. And I, and I appreciate that.
And I just, I continue to harp on this section of the report
because I just think that we're wildly inefficient in
what we're doing in procurement
and the fact that we have multiple
contracts with the same vendor.
It's, it's ridiculous.
We're losing, we our taxpayers are losing,
our constituents are losing, we are losing one contract
with a vendor citywide and,
and the Maverick spend the off contract spend.
The, the fact that we even allow various departments
to enter into contract vehicles when we already have a
contract through a de another department.
Why doesn't that department just piggyback off
of another department or just use it like I I I,
I think that we have to do some so forth. The
Answer is real simple.
It's to restrict contracting authority
to the contracting agent.
Um, there's a lot of places in our code
that give contracting authority to individuals outside
of the chief procurement officer.
And, and those would need to be evaluated to kind of say,
Hey, you know, why can't you procure through the CPO?
That's, that's the person
that's charged with doing it, right?
And I think ultimately that's, that's where it has, you have
to stop it by policy, not by, by wishing
and thinking we have to do that by policy.
Uh, I, I agree. Uh, I I will go for a round too, I think.
Thank you chairman. Appreciate it. After,
I'll let you still wanna go the round?
No. Al Auman Vasquez followed by Alderman Martin.
Uh, thank you very much. Um, I guess
to now run through my time too much, um, would you be able
to do the chair to send us
basically every recommendation that was given?
Which ones are in the budget, which ones are not,
and what decisions were made on the ones
that were not in the budget and why?
Yes. Like spreadsheet super quick. Thank you.
Um, I guess I,
the ERP thing is driving me crazy the way I know it's
driving you crazy and other people here
because we want to figure out savings.
We look at what the report says is what can be saved,
and then we look at what we
are actually saving in this budget.
And there's a delta that I would imagine is frustrating
to most people because if we're talking about trying
to solve a deficit and we've got the public asking us
to find ways to find efficiencies,
that is a huge question mark as
to why we can't close the delta between
what the report is saying we can save
and what the budget is actually saving, what the heck needs
to be done for this ERP to be finished.
Thank you for that question.
Um, can you, I I would say one thing is
to pass the management ordinance we put in front of you
because it literally requires the two people
who have to do it to come in front
of you every quarter to give you updates.
And I, I personally, you know, this is just me, it's,
this is not me as budget director, but just me personally.
I think that, you know, putting things in the, in the light
of day, um, you get, you get results, right?
And so, you know, I, I am as frustrated as you are
because I've been pushing for the ERP to
to happen at a much faster pace.
Um, there's things that go into that.
There's procurement issues there, um, uh, vendor,
vendor issues that, that have,
have stalled some of that progress.
But I also just think that inertia takes hold in
in some places, right?
And so for me, I thought it was really important to include
that in the management ordinance so
that we can have transparency around this issue
and then also make, you know, if,
if there are delays be upfront about why
those delays are happening.
So I think that's the first thing.
I think it's, you know, those of us who are the,
who are living without an ERP in place
and dealing with the, the result
of not having that in place.
I mean my department's one of the biggest ones.
It's continually pushing to get it done.
But I think the first thing is we,
we did put an ordinance in place to give not only the man,
the administration, but city council
the ability to ask that tough question.
Why is it taking so long?
I appreciate that. I think as somebody who had to draft it
for CTA for CPS
and to do a midyear budget report,
I appreciate that as an ordinance.
It doesn't need to be in a
management ordinance in order to get done.
It wasn't done prior. Um, I also have concerns about stuff
that wasn't a management ordinance last year related
to budget reforms that didn't really
come out the way they should have.
Um, for example, we were supposed to get line item transfers
on a quarterly basis.
Uh, we did not get anything related
to any line item transfers that happened at CPD at all.
And whenever we brought it up during budget
and we were told that it's because it's in the same bucket.
So we weren't gonna get the line item transfers,
even though legally in the municipal code we
were supposed to get every detail.
So I've got, um, concerns as to what we say we're gonna pass
and then what actually it looks like after.
So I, um, yeah, I guess
how do you put teeth to something like that? Yeah,
I mean, I'm happy to sit down with you.
I actually don't recall any transfers
that CPD has done this year between accounts.
So I'd be interested in what transfers you have seen that.
'cause every transfer comes through me.
I have to sign off on every single one.
And I know the departments that have put transfers in
and they do ref, they are reflected in the report that you
Get. So I appreciate that. So
then if we were budgeted
for $82 million for settlement
and we end up, uh, having to pay 300 million something,
where did that money come from,
if not transferred from somewhere?
Yeah. Um, so, uh, as I think, you know,
we have, have spoken about the, the budget currently
is about payments, right?
And so we are not over in while you have approved
settlements, they haven't been paid
because of the timing of those payments.
Um, and that's, that, is that by the settlement itself,
Is that to say we owe 300 million for this year alone?
We're only paying the 82 million.
The rest is still floating out there.
No, I'm, what I'm saying is you asked a very specific
question about transfers.
We have not had to make any transfers in CPDs budget.
Um, yeah, no, for settlements and judgements
because the settlement agreement dictates, dictates
Payment. I got that. I got that answer.
What
I'm trying to figure out is this.
If we're being told we budgeted 82 million bucks to pay
for settlements and we have to pay 300 million,
where's the money coming from?
And when do folks get paid? 'cause they have settlements.
We are Using our, we borrowing to pay that.
Is that something we're gonna find out later in a budget?
We are using the line of credit right now to pay that.
We're using what? We're using our line of credit,
and that's how we're gonna pay those items. We're
Charging it to the game.
I'm gonna call it. That's
The game. That's a description
Now when the bill comes.
So, okay. So, so, so to that, to that point,
if we're using a line of credit to pay off settlements,
we're budgeted for 82 million, we owe over 300 million.
You use a line of credit for something,
there's interest on paying it back, right?
So there is Interest,
Which means we're paying more to pay off money.
We are. When do we find this stuff out?
Is this just us asking here?
We talked about this during the budget hearing
Trust. My colleagues don't
have a clue about that one.
We talked about this during the
budget hearing. Hang wrong,
Please. Someone correct me
if I'm wrong,
because we're being told all the time how much budget is,
is actually allocated for these settlements
and then we have to pay more.
And we're asking to figure
out where the money's coming from.
And trust me, they're not looking at me this way
because they all know and I don't.
Well, let's, let's for one example,
the watt settlements on their face,
I'm sure we paid interest
Again, the watt settlements on their face was
structured to be paid out over time. We,
A lot of the, we know that of
The, We all knew about that deal for the 9 million.
Everybody here knows that
A lot of, a lot of, a lot of settlements are structured
to work with some of the budgetary challenges that we had.
So through the chair, I wanna know
how much we're paying an interest for everything we're doing
a line of credit on to pay back settlement.
And, and just to be clear, there was a request for this
during our budget hearing and it is in it through the chair.
You guys sent the credit.
The amount of interest we gotta pay.
It's, I think it was for All of it
or just that one little settlement deal.
No, you, there was a request for the history
of settlement, um, uh, budgets in the city of Chicago
as well as the current year budget.
And that is within that through the chair.
Yeah. If you could forward that one back
up to us, we'd appreciate it.
Thank you very much, chairman.
Thank you. Alderman Vasquez, uh, alderman, uh,
Martin's all about, um,
go ahead man. I'll figure it out.
Okay, thanks. Uh, good afternoon everybody.
Um, one point that I just emphasized about the need
to move expeditiously on this work is
that this body passed unanimously in ordinance specifying
that the workforce allocation study needed
to be done this fall.
Um, and that's not the case.
Like we're talking about Q1 next year at best.
So I think even if we put stuff in the management ordinance,
I think that generally we have not the sort of culture
that we need to work backwards from getting stuff
done in a timely fashion.
Um, and so I think that it's good to have the EY report.
It's good to have the task force report.
There's a lot of good stuff in there talking about like
short term, midterm, long term.
I think what you're hearing from a lot of people is
that we need to move more quickly,
um, on a lot of this work.
So I just wanted to emphasize that.
'cause that's when we're, we bicker every year about CPDs
budget and we are in no better a place this year than we
were last year, despite this body saying the work needs
to be done this fall.
Um, can I
Just respond To that? No,
I got, I got questions.
Um, so through the chair,
please identify the 148 positions in CFD
and the 92 positions in CPD that were analyzed
for civilian potential.
These pages 78
and 86, including the 76 CFD positions
and the 82 CPD positions
that EY said could be civilianized.
Um, next I find it curious on page 52
that we have a redacted chart talking about procurement
related saving percentages and then saving dollar amounts.
One, I think that, uh, it's inappropriate
to share important information like this
in a redacted fashion.
So would like through the chair for an unredacted copy of
that chart to be provided.
Um, next I wanna talk about
the employee be employee benefits analysis.
Um, so this is for you, Mr. Chapnick.
The recommendations that I understand would be least likely
to increase cost to employees
or reduce benefits
to employees include the network slash pharmacy benefit
manager and carrier opportunities.
We're talking about 15 million to 24 million.
Would I be correct in assuming
that these potential savings would not in fact limit
employee access to healthcare
or shift cost to employees if adopted?
I, I, I would say the vast majority of all
of the options in this particular section do require
collaboration and discussion. Not my
Question.
Would these would,
so this is refine PMB benefits, five to $6 million.
Engage service provider for claims
and fee integrity, study four to $9 million, expand centers
of excellence usage to include cancer care, $2.6 million,
refine the carrier networks two to $5 million,
revise the wellness program
by increasing the additional contribution
for declining participation.
I'm just wondering, putting aside the point about working
with, uh, our union partners, would any of this,
uh, RESO require either more money being put in by employees
and or a reduction in the benefits that they receive?
Uh, do you wanna answer that?
Uh, um, I would actually like to pitch this to, um, that
managing deputy over, uh, workforce
because he's in the direct conversations
with the unions about this.
And I will say just, uh, by
and large, I think anytime that you,
I think this report also talks about how we are below, um,
the percentage that the employer
contributes versus our peers, um, relative
to employee contribution.
Um, we are at a lower percentage, so we are, we're,
I'm sorry, we're at a higher percentage than our peers,
so we're putting it in more from an employer
standpoint than our peer cities.
But, um, so naturally if we're gonna dip
That, I'm gonna ask that
that response come through the chair
If we're gonna shift that, that would
naturally require employee.
Yeah, I need to move on to my other questions.
Um, so next question.
Um, uh, the EY report goes into greater detail with regard
to specific steps the city can take
to achieve operational efficiencies like optimizing
managerial systems, consolidating overlapping divisions
and functions, establishing shared labor pools
and reducing external legal counsel spend.
Um, are any of those things in your experience, Mr.
Chapnick, that could be done next year?
And if not, what additional things would we need to do
as a city to be able to bring those on board?
Uh, i, i, in, in this section?
So I think you're speaking essentially to the section,
to the organizational, uh,
analysis section on starting on page 55.
So this requires further study generally, I think in,
in order to put the, the systems
and the approach in place to be able
to evaluate both the spans
and layers, the duplication of responsibilities
and, um, and being able, would
You, would, would EY do that if we were
to engage you subsequently?
Or is this this work that we can do internally?
I would turn it Kind of, it's frustrating to hear that
with so much work being done
and so much money being spent,
that additional analysis would be needed in terms of how
to act, how to make this actionable.
So that would require, um, both internal work as well
as a partner to do it.
Uh, uh, you know, these are large scale
identified options to make them work in your actual
organization requires additional work.
So while we can benchmark ourselves
and say that CDPH in the city of Chicago
has way more managers than the public health department in
New York, that's a data-driven analysis.
But then you actually have to do the work to say, okay,
which managers, um, can we consolidate, uh,
within our CDPH?
So I, I understand, um, the,
the point you're making around, you know, we spent money
and we got this level analysis,
but that is a broad base analysis.
You then have to dig in and you have to do the work.
Understood. But that's, I think, part of
what we've hired ENY to lay out in terms of short median
and long term, um, strategic approaches
and where there are deficiencies in terms
of our current personnel
and operations to get that work done.
Um, and then lastly, I'll just share
through the chair in writing, um,
something highlighting the real estate piece.
Um, but I'll wait to see if, uh, a colleague brings this up
because I see a, a potentially problematic delta
between the various things
that have been identified in the EYs report specifically
for next year, not just like five, 10 years from now,
but next year, um, versus the 12 million
that is currently here.
But I'll, I'll wait to see if a colleague asked
that before I put it through the chair.
Thank you.
Go alderman. Uh, alderman Hall. Thank you so much, Mr.
Chair. Uh, I had a few questions I saw highlighted, uh,
in the report, the need for, uh, efficiencies around fleet.
And so I had a couple of questions that I wanted to ask.
Number one, who, how do we get to the number, uh,
that was listed in the report
and when I say that,
how many vehicles were put in the report that made
that number relevant?
So, uh, we started by looking at,
the city owns about 15,000 assets.
A lot of those are not, um, relevant
for this type of type of review.
And so that's everything from, um, all of the,
all the rolling stock out at the airport, um,
heavy duty equipment like fire trucks and uh, and such.
And so we, we narrowed it down to 5,000 vehicles,
which are lighter medium duty vehicles,
which is basically cars or light trucks.
So we have 15 total, but we only selected 5,000 outta 15.
Correct. Because we excluded he,
what we would call heavy duty rolling stuff. So why did
We exclude? Well,
it's things like snow plows at the
Airport, they cost money.
Why did we exclude?
Well, so this review was focused on
Gotcha.
Alright, so how many, um, when it comes to, uh,
the assets that you just mentioned, the vehicles
and things of that nature to get to that number.
Um, quick question. Do you know how many assets,
fleet management managers?
I would have to, It's probably the 15,000 number. Yeah.
Okay. So essentially at the end of the day,
we've subtracted 10,000 vehicles that we pay for,
that we lease, that we need to know the conditions.
We omit that
and we say that out of the 15,000,
only five will save us annually the amount
that you all put in the report for next year.
So what I would say is, again, when it came
to the options presented in this report, looking at the
fiscal, um, amount that we could save the feasibility
and the how, how long it would take to get to those savings.
The reason why we focus on the 5,000 is
because they're a combination of both owned and leased.
Most of the equipment
that you're talking about in our fire department, streets
and sands, those are all owned assets today.
Um, we have a combination of leased
and owned in our, you know, in our non heavy duty.
And those are the areas when we're looking at, you know,
again, all of this is built upon each other.
Our organization, our allocation of space, our allocation
of vehicles, that's
where you're gonna find the most immediate savings
and immediate revenue from selling off unused
or outmoded, uh, equipment.
Gotcha. So I wanna save some time,
but I think that, can we send to the chair how many vehicles
that we own and lease?
And secondly, well, thirdly, quick question.
Um, when it comes to tracking our vehicles
and things of that nature, what do we currently have?
Now when I say tracking, yeah,
I'm looking at route management.
Yeah. For example, today it snowed,
but at the end of the day, did we maximize A,
where the vehicles were B the amount of salt that was used?
And then c as mentioned by my colleague,
we've ran up a bill count in the hundreds
of millions for lawsuits.
And within that, they're the petty, what I, well not petty,
but there have been lawsuits pertaining to vehicle being,
vehicles being in accident, city liabilities pertaining
to drivers and things of that nature.
So the sum total of the question is this,
what technology do we have
that assesses route efficiencies, number one.
Number two, does the current equipment that we have
in this same fleet, does it have capacities
to protect the city with the correct hardware
to capture number one, location of vehicles?
Number two, what's happening in these vehicles in real time?
And then number three, with that information being used
to settle or to throw out some of the frivolous lawsuits,
do we currently have sufficient contracts on those vehicles?
Great question. Thank you for that.
Um, so I would say that we don't currently have the right,
um, ultimate technology in place to both, uh, track
what I would say is utilization not mileage.
We, and that's one of the recommendations
that we'll be working on in 2026.
Um, and we don't currently have across our departments
because it is, it is department by department two FM is not,
um, strategizing around, um, route maximization
that is really a departmental
No, no, I get what you're saying, but just
to No, I get what you're saying.
'cause I want to, you know, honor the time.
So I want to then with these last two questions.
Uh, chairman, do we have a plan in this efficiency model?
Number one, when it comes to life, uh, lifecycle
of our vehicles and things of that nature?
Do we have a lifecycle management plan?
Meaning that if vehicle A has been in the system
for upteen many years and we are paying X, Y,
and Z amount of maintenance,
do we have a lifecycle management plan
to phase out the vehicles that we lease or to resale those?
What I would say is the city has a plan.
I don't think that it is strenuously followed.
Um, which is different from
what I've seen in other jurisdictions.
It's part of this plan.
The entire scope of the fleet recommendations are part of
what we'll be working on
with two fm beginning in 2026. Okay,
Got you. And last but
not least, when looking at how much money,
frivolous money, for example, that we spend on
maintaining vehicles, just car washes for example.
Right? The amount of money that we spend on this,
which is absurd.
So do we, and I think you just answered it,
but just for the record to be clear,
do we have the investments in place currently to monitor
the, not just the usage of the vehicles,
but things such as maintenance outside of the typical go
to the, the, um, auto mechanic things such
as car washes, which take up time.
IE from employees,
but we spend a lot of money paying
for car washes and things of that nature.
So do we have a plan in place to be more efficient
with things such as car washes as well as, again,
locating vehicles that we have in leases
that are not being used or being used for personal reasons?
'cause I see these city cars at two o'clock in the morning,
it ain't nothing happening at
two o'clock in the morning. Yeah,
Great question. I,
this report doesn't focus on the, the, the level
that you're talking about as it relates
to things like car washes.
We can follow up with two FM
to see if they have a policy in place that monitors that.
I don't know off the top of my head
how much is spent in our budget on car washes and, and,
and in particular how much is spent on the corporate fund.
'cause obviously we have cars and departments across mm-hmm.
Across all of our funds. I think all of this goes back
to your question of governance
and that is a big part of
what we'll be working with with two FM.
You know, I found out a lot during this, um, analysis,
which, you know, these are practices
that have been in place for decades, right?
That, you know, until someone asks the question,
no one knows that these are the practices that are being,
um, carried out in our departments.
And so this, this, this analysis was eyeopening for me
as well as a budget director.
And what I would say is in conversations with the two fm,
um, you know, part of what they really wanna focus on
and why they were excited about the
analysis in this report is
because they wanna, they want to tighten up governance.
They often feel
that they need better measures in place in order
to implement and enforce.
And so, like I said,
when Chairwoman Dow asked the question part of
what this work will be over the next year in the,
not only the technology, not only the, you know, selling
of assets, not only the, uh, getting rid of,
'cause this budget actually includes getting rid
of a hundred leased vehicles right out
of our city, um, inventory.
Um, part of what we'll be doing with,
with two FM is thinking about governance
and is there a management ordinance
that we wanna put in place that gives them certain
powers authority that no one can question?
Yeah. So in concluding what I'm hearing then is
that the report only used 5,000,
but there's a possibility of over 15.
Secondly, there needs to be a gutting out with two FM
and procurement of exactly what we have, uh, coupled
with the right contract deal flow to constantly monitor
what we have for the sake of efficiency.
And arguably with the gutting out of two FM
and procurement working, I believe to follow a plan
with the coupled technology, then the number
that was put down could actually be more
if we do the necessary steps IE in the evaluation of
what we have with technology and with a streamlined system.
Because what I'm hearing in what I've, you know,
done research within our departments is that all
of these vehicles are fractioned, meaning
that one person signs off on this, one person signs off on
that, but they all are owned
by the city or at least by the city.
So I'm looking forward to
a more comprehensive approach from EY on all
of the vehicles, coupled with your recommendations in 26
for the correct approach to procure, uh, procurement
for vehicles and assets
that we can get the best value out of.
Thank, thank you so much. No, and
I appreciate that. And if
I can give you an example of how
that work has already started.
So, um, one of the things that started this year,
but will really ramp up in 2026 is the phased replacement
of our fire vehicles ambulatory, uh, engines,
ladders, and so forth.
And, um, I requested, um, a sit down with, and,
and frankly, uh, commissioner Na Nance Holt did
as well a sit down with procurement
and two fm now, so we can talk about,
there's one vendor in the country that manufactures
largely one vendor that manufactures, uh,
fire engines in, in, in the country.
Um, and we are not their priority.
If you go to New York, they have fire trucks that come
to them on schedule on time every single year
because they put their order in years in advance
and know ahead of time, I'm getting 10 engines
and I'm gonna get rid of 10 engines.
I'm getting one year, I'm getting 20 engines the next year.
And so they're prioritized.
And one thing that commissioner Nats Holt
and I want to talk with procurement and
and to f fm about is if we go now, we are replacing
over 200 pieces of equipment in,
in fire over the next five years.
If we go now and have that level of purchasing power today
to say we're putting in an order, we right now,
can we get better pricing
and can we guarantee
that we're getting these vehicles off the line every year,
but at the time that we need them? No.
I, and I agree that that's an a approach,
but I'm also concerned with the fact that we,
you mentioned buying power,
but we don't know what we should buy.
Like if we don't have real time technology, going back to
what was mentioned from our colleague, uh, alderman Viegas,
if we don't have technology
that says we have 30 fire trucks,
this one has been on the road for 15 years, the tires
are down to 10%, the oil is such and such, such
and such and this, that and the other.
If we don't have that in real time, what good is going
to a meeting to purchase if
we don't know what we should purchase?
We know what fire trucks we, no, we, we definitely know
what fire all, all of our fire equipment is, is no,
It's the principle, not the particular.
And the principle being that we don't know what we have
nor the condition of it.
And we are wasting money on maintenance and,
and we are not purchasing relevant
because we haven't A, assessed what we really have
and b, have the right vendor
to give us real time information
and in real time, uh, data so that we can constantly update
through procurement and through the correct, uh,
purchasing from two fm.
But I'm, I'm done, but I appreciate the work. Seriously.
I I, and I wanna be really clear, we know the condition
of our vehicles, we know the years of our vehicles.
What the EY report is telling us is that we should shift
how we allocate based not on mileage, but on utilization.
Utilization is a very different focus
and metric for how you determine how many cars
or assets you need
because it's a, it's, it's asking you the question,
how long are people actually using the car?
Well, I just think the technology
that we do have is pathetic.
And what I mean by that is, coupled with
what this report has said that other cities are doing,
we are light years behind as it pertains
to the technology needed to, number one,
protect us from frivolous lawsuits.
B, wasteful spending, C where the vehicles are
D what's the conditions of them E how much it would cost.
F how do we prepare for a future so
that we are relevant in not only our purchasing,
but making sure that we are fiscally
responsible with what we have.
We don't know what we have
and if we got only 5,000 in this report versus a 15,000,
that's 10,000 questions we ain't answered.
And I think that fundamentally it's irresponsible fiscally
to continue to purchase and we don't know what we have.
We continue to use vehicles
in the way in which we are doing.
And then see the, the biggest thing is we are constantly in
lawsuits pertaining to vehicles,
and we have no evidence to suggest
that the city did not do anything wrong.
So at this pathway in which we are going,
we're gonna continue to blow money, we're going to continue
to have horrible vehicles,
and then we're gonna be caught up in court
because someone has something to say.
So I'm looking forward to the recommendations so
that in 26 there's a completely different framework
for evaluating what we have the technology to support it.
And then last but not least,
that we are fiscally making the right, uh, decisions
that reflect what the data says with technology.
That's 2026
and not whatever we have currently because it's failed.
'cause if we had what we needed, now we wanna have X, y,
and Z amount of lawsuits pertaining
to vehicles being used by the city.
B, we wanna have people hiding cars like certain police
stations that hide them so that they can always have them
and make sure that they're not being tagged so
that they could be turned back in.
So that's all I'm saying.
I'm not saying that what's been done has been irrelevant,
but what I'm saying is that we are missing key components
to make a fiscal economic sustainable
decision. Not saying that we can't get
Thank you. Thank you.
And I had to cut you off.
Thank you. No, I mean you keep saying the same thing.
That that's all, that's all. It's the
Principle not Involved,
but I don't know how many principalities we going,
uh, give up though. Alderman, osha,
Mr. Chairman. Um,
did I hear we pay for car washes?
Yes. Okay.
If we're, if we got a $1.2 billion hole
and we're paying for fricking car washes, hello.
So pull a Hose out folks.
So what I would say is we also live in a city
where there's snow, and snow is corrosive to cars,
which would, which which degrades a car a lot faster.
So I I I hear that and I understand it.
I, I, we will pull the data. We,
We've had six snow events in the past 24 months.
Snow is not the only thing that's corrosive to a car.
Um, I was using that as an example.
What I would say is we'll pull the data, I don't know
how many car washes are happening,
but I would, I would say that
that is actually a part just like your own car,
that's a part of maintenance for your car.
We should get on that because that's,
that's absolutely crazy to me
that we're paying for car washes.
I mean, uh, alderman, that's, uh, I mean that's part
of ongoing maintenance of any type of a vehicle.
And, and in fact, uh, uh,
I think if you think about from a cost perspective, uh,
using your analogy to, uh, grab a hose, uh, that,
that would cost us even more, uh, to do versus just, uh,
you know, having a third party, uh, take care, take care
of the vehicle in that manner.
Uh, ultimate Coleman, you had a point
Just clarification.
I don't know if it has been requested,
but can we, uh, through the chair get a list of
who those carwash vendors are and the budget
and their locations?
Sure.
Okay. Confirm. It has not been asked before.
It has not been asked. Okay. Definitely not. Okay.
Alright. List and, uh, the minority status,
if any of those vendors.
Thank you on the Conway.
All right. Thank you Mr. Chairman.
I don't hope it's okay if I stand. I, my back is killing me.
I'm, I'm a veteran half of the military day
before Veteran's Day, so if
you get, sorry, I don't need anything of that.
I'm just kidding. I don't mean, I don't mean it as a, as a,
as a in intimidating thing.
Anyway, I'll run right through.
Um, uh, starting at workstream one,
um, I, I saw on page
13 there was discussion about the permit process
for Parade and Public Assembly.
Uh, the fact that we still do those on paper, uh,
and then there was some discussion
that we should probably do them, you know,
move into the 1990s and do them electronically.
Is any savings we would potentially get from that?
Is that included in that chart in page eight or not?
So the special event cost recovery, um,
work stream is about cost recovery, uh, meaning
reimbursement for the cost that we incur
to support special events.
I think that, um, as I've said, uh, several times,
and as your colleague Chairman Viegas has said,
there's obviously gonna be marginal savings anytime
that you implement technology.
We didn't quantify that in this
'cause it wasn't the scope of the, of, of the work.
It was really looking at how much are we incurring as a cost
to support events and how much should we
and can we be, um, reimbursed
by under our existing ordinances.
Would would in in alignment with, uh, would
ENY did ENY analyze any savings
that would come from elect making?
The, the permits for those become electronic?
As I said, it's, it's
Not scope. Well, I can and budget
chairman, I think your brilliance
and to your credit, you're very accessible,
but I know we have limited time with ey, so I'd really like
to hear from them about their own analysis. Well,
Well, first of all, thank you for your service.
Uh, I think that's important. Fair enough.
Uh, but in terms of, in terms of this specific option,
I think on the process improvements,
we did not include specific cost recovery elements for,
for like that specific piece.
Putting in place a more standardized technology focused
process for, uh,
for permits on an end-to-end basis will help we believe, um,
the city recover additional cost.
Great. And, and so moving, moving to, um, a lot
of my fleet questions were asked,
a shocking number in the report was that our light
and medium vehicles were only driven 7,000 miles per year.
Uh, and I saw on that same page in the total cost per asset,
you said the total cost per asset is $8,900.
Um, which is,
and then you went on to say it's higher than the government
fleet average of $6,400.
I was, uh, you know, what's, what's really driving that?
And this is all on page 17.
Um, you know, what's driving that difference, noting
that it seems to come to a pretty significant number.
You ask the question again.
Sure. So I saw, um,
it looked like the total cost per asset
on page 17 is $8,900 per asset.
And it says, but the government fleet average
for such assets is $6,400.
So, uh, obviously we're paying much more worth noting
that it, that the report seemed to indicate
that from fleet savings, we can get 16.5 to $30 million here
and we're only taking three.
So I, you know, was wondering what is driving the, uh,
additional costs
that we face versus other government entities
Maintenance? 'cause we
keep our cars longer,
Ian y is that correct?
I believe so, yes. Okay.
Um, do you think that's what's driving the difference
between the $8,900 and
$6,400 difference
There? Certainly part of it,
yes.
Um, all right.
I think, uh, alderman Martin was gonna dive into real estate
here, but I'll go ahead
and go right to page 25.
You kind of noticed, um, uh,
you noted potential year one savings of 29.5 million.
And I know there was the disclaimer, uh,
early on in this presentation.
Um, and you, you specifically identified 14.7 million
for office optimization.
Is that number coming from the analysis?
Uh, that's referenced on page 27 that
we had 4,009.
You, we were like essentially at 33% over allocation
of desks, uh, that you kind of talked about on page 27.
Is that, does that feed into that 14.7 number
EE Exactly. And
so, so just on the real estate,
since we have not talked about it, let me sort
of lay out just at a, at a high level, just
Yeah, that actually be great. Yeah.
So, um, so we looked at two different scenarios.
One is a a four day a week scenario in office,
and one is a three day a week scenario.
In office, if you have a different number
of required days in office, you need less office space.
Um, and so there are different considerations that go into
that though, because it, it potentially reduces downtown
traffic, um, and impacts local businesses.
And so, um, using those two scenarios impacts
how much office space and what the savings could be.
That's the difference between essentially table one on page
25 and table two on 26.
That's why there's different numbers on those.
So, um, in terms of, of the, of the, of the work point
analysis that you, um, cited to, okay,
there are more work points than employees,
and so you can look at both the number
of station workstations that you need, as well as the amount
of space that you need for each employee.
Um, some of that is also dictated, I believe, by the,
by the bargaining agreements the city has in place.
And so I turned to the budget director to sort of, um, speak
to the ability
and timing around, um, achieving some of those savings.
The last thing I would just mention is year one here is
deliberately year one, and we don't say 2026.
I hear you. Yep. It takes time to implement.
No, that, that, I, I got that from the first part.
Um, uh, I mean,
you did identify on page 28 leases
that could be terminated seemingly immediately.
As I, well, I, I know my time as the last Mr.
Chairman, I could either continue to run through this table
and I got, I got a lot more up.
I could, or I could just sign up for rounds two, three,
and four if you'd like.
No, I know. Uh, but, or I could come back to on this.
What, uh, what do you have left?
Well, I, I got questions on each of the streams,
but I can finish up real estate
at least and come back, finish.
Let's finish, finish real
Estate. Okay, great. So
on the, um, and by the way, Mr.
Chapnick really appreciate you discussing industry two,
table one and two 'cause I wasn't quite, uh, tracking that.
All right. So I get the 14.7 and the, what's 15 three
and the other one, now I see that you have the industrial
and office buildings, um, net revenue from the sale
of those buildings, um,
which is the same on both pages, which makes sense.
Is that, um, I know you talked
about building disposition on page 28,
and you specifically said five additional non-office
properties were identified as cancer
for disposition based on their location.
Neighborhoods with recent real estate development activity
probably means Alderman Burnett's war,
but it might mean mine or Alderman Riley's.
But is that, is that, um, is the disposal
of those five buildings?
Is that, is that what's going to the 7.7?
Uh, I believe I, I believe so, yes.
And, and just to elaborate a little bit,
I think I thought it was four industrial
properties that we had identified.
Not five, but I can, you know,
correct me if I'm wrong. And, and those, uh,
I can tell you the report says five,
but, uh, you know, we've, we've, we've all had typos.
In fact, I think your name was misspelled in the OBM
presentation, which I apologize on behalf of the city there
because I know it doesn't spell NICK.
It's just NIK. But anyway,
so typos happen if that's what that is.
Uh, I, I, I apologize.
I I I, I know, I know the, the way we, um,
the way we looked at the city's real estate portfolio was
to start with around the 500 owned
and leased properties around 10,000 vacant la vacant land
partials we took out of that.
Things like police stations, libraries,
community infrastructure, public safety related, um,
buildings to narrow down on the 10 core office buildings
and the 45 industrial properties.
Um, as well as looking at things like the river walk, um,
and opportunities for monetization, uh,
and cost recovery there.
Um, and then around 50 prioritized land plots.
The land itself was small plots.
And so we had to look at the assemblage and,
and other characteristics to try to identify
where you could get savings faster, um, in that category.
So I see the, the land, like on page 29,
it said it looked like a present value of 45.8 million
of noting that's a, that's a big number.
What made you put in only 5.6 million in, in year one there?
But
I think the land sales are, are in, are intended
to happen over time, is how we,
how we would typically talk to this.
In the report we talk about this is essentially,
and I, I think the grids sort of speak to it very clearly
that this is essentially a 10 year plan.
Okay. I'll, I'll come back. Mr.
Chairman, that's all I have for real estate. Thank you.
Thank you all. Thank you, Adam. Thank
You, uh, Al, miss sdo.
Thank you, chairman. Thank you everyone. Thanks.
You're doing a great job.
Um, very well, uh, very well prepared and I appreciate that.
So I know it's un tough circumstances, kind of sorta, um,
some very good questions and some kind of bad questions.
Um, some very short talkers and some very long talkers,
but I can assure you, I'll be the shortest talker.
So I just have one question.
It's only something you touched on,
and that was about the police, about us having more
police per capita.
I, I think it's kind of an incomplete answer to me, uh,
director, because the, the people
that have less police per capita,
they have less crime than us,
or do they have more crime than us?
So I, I'm not sure if you understand what I'm asking and,
and you could give me the answer through the chair.
So I'm just gonna make a town up.
If Milwaukee, Wisconsin has less police per capita,
but they also have a heck of a lot more crime per capita.
I mean, that would tell me something
that the more police per capita is helping us a little bit
on keeping our crime down.
So what say you,
and if you don't have to answer, you
wanna get it to me, I'm fine with that.
Yeah, I mean, obviously there's contextual, um, you know,
markers to any data driven assessment or analysis, right?
I, I only raise that like New York has
less officers per capita,
obviously they have less crime per capita.
Oh, I I should say they have less crime than the city.
Um, they also have more crime in other, depending upon
what category of crime that you're talking about.
So I would say that, you know,
you can cut the data any way that you'd like.
I was just making a analysis of how many cops per person
in the city do they have?
They have less, um,
and they have more civilians
that work in their police department than we do.
Okay. I mean, they have less,
but they may have more crime.
I don't know. It's a tough, it's a tough call.
Uh, that, that said, I appreciate it.
I, I was the shortest talker, so I I I, I beat 'em
amidst by about 15 seconds.
So thank you chairman. And I will not need a round two.
You will not, you said you will not, will not.
Thank you for your, uh, consideration.
We appreciate that you, you're,
you're not reclaiming your time.
Oh, okay. Just wanna make sure. Okay. Alright.
Don't do that. Don't do that. Don't do that. Okay.
All right. Uh, we have, uh, I just wanna make sure we,
everyone who's, uh, had an opportunity,
I know I have some online, they've all indicated
that they want, uh, that they, they don't have any questions
or the questions have been answered, uh, in this, uh,
before we proceed to, uh, round two,
we'll gonna take about a five minute, uh, break, uh,
before we proceed to round two,
after which, uh, we will open with, uh,
vice Chair Lee for round two.
We'll, cam will stand at ease for about five minutes.
All right. The, uh, committee will come back to order.
Uh, we will begin, uh, round two.
Just, uh, just some quick housekeeping.
I have alders, Lee,
Dow,
and Walker Spec.
Those, the only people in the room.
And, um, vie he's not here.
Conway. Oh.
So again, Lee, Dow,
Conway,
Riley and Vasquez are not here
in Walkers Bay.
Well, if they beat the clock we'll, we'll service 'em.
Vice chair.
Thank you chair. Um, I'm pop back over
to procurement for a minute.
Um, so the EY contract, um,
was done under the CFO's authority.
Um, so I wanna wanna make it through the,
through the chair request.
Can we get a list of all departments
with procurement authority, um, outside of DPS?
Um, yes.
And if, and if possible, what, what their,
what the spend breakdown is for those departments.
Um, you know, I think that's, that's something
that we've really gotta dig into.
'cause the, this contract is on the
sole authority of the CFO.
Um, and it's not listed
as I understand it's not listed on the public website
of city contracts.
Um, I know this was done in a short amount of time.
I, I think there were lots of great, probably good reasons
for us from a timing perspective.
Um, how many, um, how many kind of vendors did we, uh,
did we look at potentially for bidding on this contract?
How many vendors that we look at? Yeah. Outside of ey?
Yes. Just total. Yeah.
Yeah. There were, um, three firms
that we interviewed, um, for the position.
Um, and, uh, so, uh, in addition to ey,
we also interviewed mb, MGT and PFM.
And, um, you know, we thought we had a longer list of names
that we sort of started with
and then narrowed that down
to the interview process. Um, and
We also interviewed kth And what
Kth Oh, that's right.
Kho also. That's right. There was four that we interviewed.
Um, and so from there, um,
we had asked people to provide us information.
We did interviews and we did follow up
and asked them quite a number of different questions, um,
and, and narrowed it down from that based on what we felt
was the firm that could provide us both the,
the broad scope of what we were looking for,
had the experience and expertise in that,
but also could bring the, the level of services as far
as the number of people we needed to be able
to actually be in the departments, uh, doing the work, um,
doing the analytics, um, and pulling the report together.
And I think it was about 50 people
that EY deployed to work on this project.
Great. That's helpful. Thank you.
I'm gonna, I'm sorry, I'm gonna jump around.
Just in the interest of time, um,
from a special events perspective, um, it seems,
I think in, in the report you referenced, uh, EY referenced
that there are things that, um, we have the right to do
that we're not doing currently, like cost recovery,
uh, for certain departments.
Um, but that's not necessarily included in
what we're doing in, in terms of 2026, uh, collected for
The special event. Yeah,
no, we are.
So again, um,
what we have included in there is an additional
$7 million target.
So again, continue what we do today, uh, um,
achieving the revenue that we do today.
But on top of that, the additional 7 million that if we, um,
uh, worked to recover under our existing ordinances,
we are entitled to do.
And we'll be, um, doing that.
We're also gonna be working, um, to,
through the working group to prepare policy recommendations
for changes to our ordinance that will get us
to the higher number that would make us in line
with our peer cities.
It, that's pretty clear what our peer cities do
that we don't do as well as, uh, cost recovery,
but also working to make decisions
around streamlining the process, um, technology
that will help us consolidate the process in one place.
Having, um, things like making every department sign off
on their part of the work.
Um, in order for us to make decisions around whether
or not we're gonna issue a permit.
If CPD says that they're stretched too
thin, let's have that on the record. Right? So
Are we gonna codify that someplace then,
or is that something under consideration
for the management ordinance?
Codify what? Um, just the, to make sure
that we're doing all the things that we're supposed
to be doing, because clearly we're not doing it today.
So in order to maximize the amount that ey
included in their report, we have to change our ordinances.
Those are things that we're gonna put
in front of city council for
Consideration. Got it. Okay.
Let's jump to fines and fees then.
Um, the,
the report claims that fees
and fines, uh, with the most revenue raising opportunity
could provide 8.6 to 49.7 million annually
with potential revenue of 20 million to 74 million
for all identified fees and fines that you reviewed.
Um, your analysis of the fines
and fees is primarily based on how Chicago levels of fines
and fees compare to other jurisdictions.
Um, did you compare Chicago's overall fine
and fee burden with other jurisdictions, like
as a percentage of revenue?
We did. They did look at that.
And then, do you know how making the changes in this level
of, uh, indi, do you know how making changes in the level
of, uh, individual fines
and fees, um, would impact, wow,
that five minutes went fast, would really fast, um,
would affect, um, that comparison?
So what would that do to us?
Like how, how would that place us in, in comparison
to other, uh, peer cities?
Well, it, it depends on
how you adjust the fees and the fees and fines.
And so the, the, the range that we came up with
was whether you maximize it
or you go to peer benchmark levels.
And so it depends on, you know, what you adjust it to.
I know that, um, And if I, if I
could answer your question too.
So the analysis, when we, that was one
of the first things we looked at to understand, you know,
what would happen if we increased fees, right?
Like how do we compare to our peer jurisdictions on that?
Um, the, the data is a little bit murky
because it depends on how, um,
other cities structure their budget.
Most of our fines and fees are in our corporate fund.
Mm-hmm. Whereas it's not the case in other cities.
They might have special funds where all of those types
of fees and fines live.
Ours mostly live within our corporate fund.
And so when you're looking at apples to apples
and corporate fund fees, um,
make up a higher percentage in our budget than other cities.
But again, we have more, if not all, almost all
of our fees in that support our car corporate fund, um,
which is different from other cities. Was any
Part of the analysis looking at sort of the,
the time it takes to, I mean, so building permit fee,
uh, as an example, you know, I know that
that's been doubled year over year.
I'm not, I wasn't here for that, for that hearing that day,
so I wasn't able to ask these questions.
What are we, what are we giving back to people for the,
the amount of money we're asking them for have?
What can we quantify it? You mean,
What's the return on value? Yeah.
What's the return, um, on that?
So like, what's the average time
to permitting in other cities,
and was that part of the analysis,
or was it strictly dollar amounts that we were looking at?
Because I think that's also really important.
You know, I, I think most
of us wouldn't mind collecting more, more fines and fees,
but I think we have to have a return on investment for, uh,
the people that are applying for the permits.
So I think the departments are in a better, um, position
to talk about, you know, their timeframe
to get a permit out.
So it was not part of the analysis to look at
how long it takes us to
get a permit out versus say, New York.
Um, it was purely, um, you know,
how much do we charge versus a New York
or another peer city?
By and large, what the report shows is that we are, uh,
well under a lot of our peer cities when it comes to, um,
the cost of a lot of the fees that we have in place.
What, what I would also say is
what the report doesn't show is the analogous of that,
which is we don't know how long it takes in
New York to get a permit.
Right, right. And, and largely they're more
expensive than, than we are.
Mr. Chairman, did you have anything to add to that?
Not particularly, no. Okay.
I just, you, you look like you were ready to say something.
Um, chair, I, I can, I can try
to, after other people, I'm gonna change subjects,
so I don't need to go anymore right now.
I'm just gonna see what everybody else ask before I ask for.
Thank you. Okay. That's fair.
Um, re I'm sorry, almond dial then.
Uh, no. Dial Walker back then. Riley?
Yes. Thank you, Mr. Chairman.
I just have some through the chair request.
Um, uh, budget Director Guzman, can you
through the chair tell me, uh, at
what level did you include each recommendation at for
that's in the, the report for this year?
And can you provide a
Hold? The desk has asked that too. So
we,
And can you provide a list of the items you expect
to get savings for for the next year?
Yep. Okay.
Um, when you, uh, respond
to Alderman Vazquez's requests of the recommendations
that are not being implemented in fiscal year 2026,
can you explain which ones you'll be able
to implement in 2027?
Um, I, I de definitely will.
I think part of this also goes to alignment with operations
and, and policies.
I don't think, and maybe Adam, you can confirm
or not confirm in presenting options.
It in no way, shape,
or form means that you have to implement every single one.
I think that, again, part of what we presented as part
of the 2026 budget
and priorities are the ones
that we think are in our estimation, not only the lowest,
lowest hanging fruit, but are interrelated and,
and will, um, lead to the most cost savings
initially, as well as over time.
Um, there are things in there that, you know,
we'll have to have discussions with.
There's an entire section about automating 3 1 1.
I wonder how alders feel about that. Right.
Not every alders gonna say yes to that. Yeah, I know.
So I'm just saying there are things that we have
to have serious conversations around about whether,
how they are, how they work in our city.
All right. Um, you know, EY listed a list
of potential fines that we could increase offhand,
do you, I mean, I haven't looked at what you're doing and,
and all of what they said.
Is there anything that you did not do?
Absolutely. Um, for, for, for one, I think that there's,
uh, correct me if I'm wrong, like 40 something, 35 fees
and analogous fines.
Um, I, I, I don't think
that we would ever implement all 35 fees in one year.
I think that, um, one, there's, uh, intentionality
around the ones that we decided to do, uh, this year.
And we also listened to our departments.
You know, there's a whole, uh, maybe three
or four that are related to, um, permits in zoning
and buildings and in discussions with DPD, um,
the incremental value that we would get,
and we would raise from in increasing those
to either peer average
or peer max, um, didn't outweigh from their estimation.
And, and they're the experts in this, the reputational, um,
maybe harm that we would have
with our developers in implementing those.
And so those are the types of considerations
that we put in place.
One thing that we did, um, for the ones
that we increased this year,
which is a recommendation in the report, is
to peg our fees to inflation.
And that is something that you will see in
the revenue or, okay.
So time that we do that, we'll be having consideration as
to whether or not a fee should be pegged to inflation.
Okay. So I made a little list here. Just say yes or no.
Vehicle and mobilization booting,
Uh, vehicle mobilization,
I don't believe is in this, in this ordinance.
Towing, No.
Storage. Yes.
Driveway permit? Yes. Canopy permit. Yes.
Regulated business license? Yes.
Uh, limited business license? Yes. Food violation. Citation?
Yes. Recycling fines? Yes. Parking vehicle permit? Yes.
Annual inspection for food?
Yes. Sign permit review fees. No.
Thank You. Thank you, Mr.
Chair.
Thank you. Well, why not? The towing fee
That has to do with, um, frankly, a policy,
uh, and values alignment that the administration has.
If, if, and, and it's also,
I don't believe was one in the working group report, either
or at least there was a dissent on on that particular one.
The, the, the, the, there's a lot of discussion around, yes,
if you violate the law, you should pay, I think for
that one, because so many people in there are parts
of our city that are, that don't have
as great public transportation is we would like
to, to to get to.
And so they completely rely on their cars to get to work.
And so when you tow a car
or you make it unavailable, then you're also then, um,
having implications to how people feed
and finance their families.
So I'm not saying that, um, we are not
below our peers in towing.
I just think that there's some other considerations
that at least were brought to bear for us and,
and analyzing and considering that one.
Okay. Um, on Milwaukee spec. Yeah.
Is that, is that all you? Good? Okay. On Milwaukee spec.
Thanks, chairman. Um, just one question, uh, for Mr.
Chapnick. Um, have your EY services under this contract been
terminated yet
where you're, you're still working within the scope of, uh,
this first contract or task
or master consulting agreement?
You're still working for the city?
Well, well, we, we've produced the deliverable for,
for this particular scope of work.
Okay. But if, if there were things in the report that you
saw, you would, you could go back and review them again.
I mean, has the CFO basically said,
you've completed the master consulting agreement and
therefore you don't need to do anything else?
I, I would say that they have completed their deliverable
under the, the task order.
And so if we have further things that we wanna do with ey,
we would have to enter into a new task order with them.
Okay. So within this part of the contract, this, um,
this consulting agreement, you've been kind
of hearing today what's, uh, happening here
and what Alderman are really concerned about
and looking for, um, when you look at this report in
what you're hearing today, could you come up
with an additional a hundred million dollars in efficiency
to be considered in this year's budget?
Yeah, I mean, I, I would just say that, you know,
it was not EYs role to predict
or judge what should ultimately be incorporated.
That is strictly in the city's discretion.
Oh, no. I mean, uh, were there additional items in here
that you looked at?
Maybe they weren't up to the level of what, um,
the city wanted, but did,
could you find an additional a hundred
million in this report?
Uh, not just in the report,
but, um, in your scope of, of work?
Yeah. I, I, I, I don't,
I don't wanna give you an unsatisfactory answer
to your question, but the reality is, you know,
the work we did was to prepare options
and analysis around these nine categories, deliver
to the city who reviews
and, um, evaluates those, given the city's specific facts
and circumstances, and evaluates what can
and should be incorporated in the budget, not us.
And I, and you did make that, I think,
clear earlier about your observations as opposed
to maybe another definition.
Okay. Well, thank you very much.
Uh, thanks for coming out today.
Um, I appreciate your insight into a lot of these issues.
Um, I think, you know, obviously when you look at, uh,
what our peer CDs are doing
and what Chicago's doing, we have a, a long way to go
to fix our budgets here.
Um, and I think the way I see it,
when we're looking at just 175 million savings
or efficiencies on a 16 billion, billion dollars budget,
16 billion, I don't think it's too much to ask for it.
Not from you, Mr.
Chapnick and ey,
but from the city to carve out another a hundred million in
savings for this budget.
But, um, again, I appreciate you being here today
and sharing your insight and observations with us.
With us. Thank you very much, chairman.
It's good to be here. Thank you. Alderman Beck.
Alright, next up we have
Alderman Riley followed Baldman Nugent.
Thank you, chairman. Uh,
and this question is for, um, E and Y.
So we've acknowledged that only 35 fines
and fees were analyzed, we're actually,
were the more than 200 fines and fees looked at,
but only 35 were included in this report,
Correct? Yeah,
I think, I think the city has a, has 240
and then it was narrowed onto the 35.
We talk about in the report the process for doing that,
which was to look at the impact
and scope of, of those particular 35. So
Did you look at the 200 plus or just the 35?
We, we started with the 240 and narrowed in on the 35.
It did, it represents I think
around $92 million in the corporate fund.
And, and,
and why is it that you narrowed it from the 200 plus down
to those specific 35?
It was done through a collaboration
and a discussion with the city.
Did, did you tag, uh,
potential revenue upside to the other 170 plus
that were excluded from what was brought to us here, the 35?
Did you look at making adjustments to the other fees
and fines that are not among the 35 before us here?
Uh, what I would say is the contract, um, allowed
for 35 to be deeply analyzed.
And so through a collaborative effort with EY
and our departments
and OBM, we selected the ones
that would have the most upside from a
financial perspective.
And 35 sounds like a pretty specific number.
How did that land in the contract?
How did we end up with 35 versus a hundred versus 150
fines and fees being looked at?
The level of effort it takes to review to an,
to benchmark against, I believe this one had over eight
or 10 benchmark cities.
Um, and the timeframe in which the review, um,
was being asked to be done within,
Okay. I mean, it's a little
frustrating
because of the, those 35 fines
and fees account for only 12%, uh,
or so, uh, of all the fines
and fee revenues the city realizes.
And so that's a pretty small, um, subset there.
And if I could say, um, uh, alderman,
we review every single fee in, uh, in the city
of Chicago every single year.
We have a pretty, uh, robust, uh, fee analysis.
This was to compliment on top of the analysis
that we do every single year
And where fees
and fines have built in mechanisms that allow
for annual increases based on CPI have all
of those adjustments been made as a part
of this budget before us.
Yes. So every single one of them that,
that is tied to cpi. Some
Of them, some of them are at the discretion of the, um,
the commissioner and others happen automatically.
And, and if they happen automatically,
then they are included within this budget.
So have there been some that, that are not being touched,
Um, as it relates to commissioner discretion?
Yes. Um, I believe so. I can, I can confirm that for you.
Uh, it would be helpful through the chair to get a list
of those fees and fines that,
that are under commissioner discretion
that are not being touched in the proposed budget for 2026.
If we could get that through the chair
before we vote on the budget, that would be very helpful.
Um, more than 60%
of the corporate fund is tied up in personnel expenses.
Was EY allowed to look at
personnel expenses aside separate from benefits, um, as far
as cutting headcount
or eliminating additional funded vacancies?
There's an entire work stream on personnel in, in this,
uh, engagement organization analysis.
Sorry, I didn't hear the answer.
There's an entire work stream on personnel called
organizational analysis.
Right. And so specifically, was EY allowed to recommend
cutting certain funded vacancies?
Um, to you all?
EY was not limited in the options
that they could bring forth to the city layoffs, if, if
that's your particular answer, was not, uh,
one of their recommendations.
Rather, their recommendations centered around organizational
structure benchmarked against
how other cities organize themselves.
So specifically was EY either directed to
or not to look at non-union personnel as far
as, um, managing our headcount. So, so
I think that's a very specific recommendation
and of an option in the report is
looking at spans and layers.
And when you look at layers, um, including managerial, most
of them are non-union, um, uh, uh,
staff of the city of Chicago.
So that was inclusive of the report.
So just so I understand this right, EY did not recommend
eliminating any funded vacancies
or cutting existing personnel.
Um, the report actually does
recommend getting rid of vacancies.
Um, it also recommends, um, in collaboration
and coordination with the implementation
of a timekeeping system, er, ERP system,
that the likelihood of being able to eliminate the role
of the timekeeper in the city of Chicago is highly likely.
Okay. But that, that's, that's a handful
of positions in the broader scheme of the budget.
Um, I have one last question, chairman.
Um, did EY
at any time during this conversation
recommend the city implement zero based budgeting
where we actually build each department up from $0, um,
to justify total spend for that department?
I would say one, one of the work streams was moving
towards an outcome-based budgeting process,
which aligns the outcomes you want
to see achieve rather than focus on output.
And so it more aligns around prior strategic priorities
and then you measure against those priorities.
Zero-based budgeting is a type of
performance-based budgeting in, in a sense,
I think our recommendation
or our option that we laid out in here, um, was really to,
to, to start the transition process towards an outcome-based
budgeting process, which the budget director laid out
earlier in the session.
But essentially, you endorsed the idea
of implementing some form
of zero based budgeting no matter what you want.
You can call it what you'd like,
But Yeah, I, I I just wanna be careful.
I I, I wouldn't say endorse.
We, we didn't endorse any of these particular, um, pieces.
Just I want to just reiterate
and be clear, I think what we laid out was an option to try
to prioritize the budget around the strategic priorities
and then measure, um, how the output of those, uh, of
that spend is, uh, impacting businesses and residents.
I feel, I feel bad for you, sir.
I I wish you'd been able to just kind
of freely answer these que I feel like you've got some
lawyers looking over your shoulders somewhere in the ether,
um, to make sure you don't say the wrong thing
and get in trouble with your soon to be former client.
Um, you know, I, I appreciate you being here, sir.
I I really do truly wish we'd heard a lot more from you.
Um, this whole conversation was organized
to hear from you primarily,
and instead we've heard from the folks we've been
talking to for the last three weeks.
Um, and so, uh, thank you for being here. I appreciate it.
Um, but I'm, I'm, I'm not feeling like I'm getting the full
three point whatever million dollar value out of, out
of the study because we didn't get a chance
to really pick your brain
and have you answer our questions openly and transparently.
Um, thank you, chairman.
Thank you. Uh, alderman Nugent followed
by Alderman, uh, oay.
You good? Okay. Alderman Oay.
Thank you, chairman. Um, the EY report
it in, it indicates that, uh, centralization,
uh, purchasing decisions, uh, will increase buying power
and enable the city to negotiate hopefully
better deals moving forward.
Have we discussed
or talked about what organizations, what departments
with procurement capability, uh, would make the most sense
to include in such a consolidation?
Um, that is part of the work that we'll be doing, um,
with DPS, um, in the coming year.
We've had some initial conversations.
Um, there are reasons over time why this body has given
procurement authority to other departments.
And we have to examine fully why
this body gave those authorities to those departments
and whether or not they still service
How many departments currently have, um,
purchasing capability?
I don't have that number off the top of my head,
but I know that obviously the CFO has it.
Um, some of our, um, uh, uh,
human services departments like DFSS have it.
They have it for very limited purposes.
This is not like they can go out
and even the CFO's purch, uh, procurement power is limited.
It's not un unlimited.
Um, and again,
there are specific reasons This body over time has given
that limited procurement authority to those departments,
we have to fully examine why
and determine if those are still serving us
or if we need to consolidate down.
So for instance, a department can't go out
and procure for office supply separate apart from DPS.
That's, that's a DPS procurement authority power.
The CFO has varied limited procurement authority
that she can, um, implement for a very specific purpose.
Okay. Um, that's all I had Chairman.
Um, other than I would strongly
urge that we double back
and try to identify more efficiencies.
It's clear to me the administration wants a
budget vote in 10 days.
That would be Thursday, November 20th.
And it's evident by today's proceeding that we're, uh,
we're nowhere near ready for that.
Thank you. Altman, osha, Altman, Nugent.
Oh, she said she didn't. Oh, you, you passed. That's right.
Um, Altman Conway, you got,
you got a question? Okay. Or
If someone else does. All set.
Yeah, go ahead. Alright. Thank you.
Um, well, I said I was done with real estate,
but I forgot to ask one question.
When you looked at, on page 27, the 4,917 work points
for 3,703 employees, did you think, um, any reason to think
that's not a representative sample of, of,
uh, the city workforce?
Uh, I mean, use the,
Well, well, well, I, I, I think it'd be hard
to extrapolate out because you have a, a large portion
of the workforce that is not
sort of in those types of roles.
So whether it's sanitation or police
or fire as an example, right?
Like those are gonna have different
functional responsibilities.
And so I don't think you can kinda expand out.
We, we, we, I think this is a fair representation of sort of
for that universe of workers what the overage could be
and how you could consolidate.
Also, if I could just take a bit of a liberty
and correct myself from my statement
earlier, you were correct.
It was five, five properties, industrial properties.
I was thinking about four neighborhoods. Oh, in my mind.
And so I, that's what I was doing off the top of my head.
No, no, no. Versus the report itself.
I apologize for that. You were correct.
No, yeah, no problem. Um, yeah,
and that makes sense on the terms of how, um,
different work tasks may affect that, uh, uh,
the work point employee thing on that.
So, um, I know this was asked a few times in fines and fees,
and I didn't quite pick it up.
The 35 that were analyzed, did, did E
and Y pick those or did OBM or did the city pick those?
We did it together. What's that?
We did it together. You did it together.
You did it together,
Yes. Um,
do, were those, were those 35 chosen
because they thought that would be, like the most bang
for the buck, or was it random, or how were those 35 chosen?
Yeah, as I mentioned during, um, the top of, of, of,
of the, uh, presentation, when it came to
the options that come, come
before you, a lot of it had to do with, um,
prioritize prioritizing based on fiscal impact.
Okay. Feasibility and alignment with priorities.
So fiscal impact was a data point that we use
to determine options.
And, and just to confirm, head tax was not analyzed by ENY
and Tiff surplus was not analyzed by ENY,
It's not part of their scope.
Okay. That's a no, It's not part of their scope.
Um, turning to
see if I got more on procurements, um,
I know Alderwoman NuGen kind of pulled into this,
and I know it's sort of E and Y's, uh,
deliverable has been delivered,
but that, that sentence,
as she mentioned on page 49 about fraud, waste,
and abuse really did jump off the page
and made it seem like we are allowing fraud, waste,
and abuse, or not doing any oversight.
If, if there's ever a time where there's re-engagement
of this, I'm, I'm sure that we would all appreciate, uh,
what the city can do better to detect fraud, waste,
uh, fraud, waste and abuse.
That's just a comment. Um,
Can I just, I, I don't think anyone
allows fraud, waste, and abuse.
And I wanna be really careful
because we are, um, an entity that is subject to litigation
as well as fiduciary responsibilities.
I think the comment in the report is meant to highlight that
one, they didn't receive certain information,
but also ev it could be in existence, it could be done.
It's just not written down.
So I-I-I-I-I-I, I have to push back on your characterization
of whether or not the city allows fraud, waste and abuse.
Yeah. And there could be a long conversation on some
of the things the in Inspector General has said in in recent
weeks, um, and to
what extent those recommendations were followed.
But I mean, the report speaks to itself
for itself when it says the procurement policies
provided by DPS did not contain the foundational information
expected to prevent and
or detect potential fraud, waste and abuse.
That's literally what a public document says.
So it's hard to not say that.
It doesn't, does it mean
that they don't have processes in place
to prevent fraud, waste, and abuse?
Um, so I'll move on from that.
Turning to page 63 on the organizational analysis.
Um,
best, how do you think, I,
I guess it's a broader question for, for Mr.
Chapnick, based on other cities, you think, what sort
of made you, made you zero in on supervisors
that have less than three direct reports,
and how do you think we should be thinking about that
as, as sure.
Providing oversight?
So, so this category, uh,
of work included a couple different components to it.
The spot you're speaking about talk, it, it speaks
to the spans and the layers of the organization.
The spans is about how many people are, are,
are essentially managed,
and the layers is how many layers do you have
between the top of the organization and the bottom,
because you have too many layers, it's hard
for the people at the bottom of the, of that list
to be connected to the strategic
priorities of the organization.
On the spans component, what we found is a lot of the
agencies reviewed had, like you're talking about
below average reporting responsibility, so more, you know,
managers managing very few people as an example.
And, uh, and so you want to align more closely with
what we would consider more normal dispersions,
and that'll reduce, um, the complexity of the organization
and I and ostensibly the cost as well.
So this, now I noticed you analyzed 10 departments, um,
in this, uh, did was, were those selected by ENY
or were those selected by,
were those directed to you by OBM?
My director can chime in as well,
but I, as I recall, it was a collaborative process
to identify the 10 and then the seven
for the time in motion study as well.
Say that, say that last part
Again. And then there were
se seven of the 10 that we performed
what we call a time in motion study.
So how do people within those departments actually spend
their time, um, in the different categories?
Um, and, uh, yeah.
Okay. So the city did have some role then in choosing,
which tend to analyze
and which ones not to it be fair to say,
As, as we've said, many times, we engaged EY in
as a partner in this work.
They were not auditing us,
But for, I mean, for whatever reason,
D case wasn't looked at,
the police department wasn't looked at
as a, as a few examples.
And it's trying to get,
Oh, there is a staffing study being done
independently by CPD.
So of course they were not included.
That's in this, because what I said earlier is
that we weren't looking to
duplicate work already being done.
There's obviously many departments
that aren't, that aren't listed here. And
One thing I would say, um,
what you learn from looking at one department,
you can extrapolate to other departments.
Part of what this tells us, um,
and one of the things we've talked to both DHR
and EY about is actually we don't have a parameter
by which this type of analysis is done in the city.
We don't have a parameter
or a guideline that's ever been in place that says we need
to be closer to
and aligned with leading practice that says
you should have no more than seven layers
and your span should be between six to eight, uh,
for a supervisor that will be used as we are working
through this with every department, um,
there is a practical impact, uh,
and practical consideration to,
to understanding this work was done within six months.
There's, there is a limit to
how much you can get done in six months.
No, I thought, actually, I think that's great.
I, in fact, I asked specific questions of CDPH with regard
to this report and the fact that they seemingly are
a huge outlier here.
Uh, and they said they were getting
after that, which, which I appreciate.
Um, looking at, uh,
page 61, which is where Chicago is compared
to other, um, other cities.
Uh, now, Mr.
Chapnick, I know you've looked at, you know,
looked at a lot of different cities.
You know, Chicago is unique in the sense that we have these,
you know, sister agencies, you know, as you probably know,
the park district is separate, CTA is separate,
the public schools are separate.
Do, um, to what extent was this chart
adjusted to allow for those differences, if at all?
I would have to get back to, to you on that specific
Or budget director. And you can
Ask. Yeah. So this is direct
correlation.
So this isn't us, um, include not including CPS,
whereas other cities have CPS within their, their,
this is literally looking at the number of, of
agencies that we have in the direct relation to
that within these peer cities.
So does that, does
that mean it was adjusted or not adjusted? It
Means, it, it, it is,
it it's adjusted. It's it's a direct
Oh, so it, so it is at least kind of apples
to apples in terms of what sits under it.
Yes. And, and when we look at this, um, as we were,
you know, looking at the data with our departments,
there was a direct correlation.
So we looked at CDPH in the city
and then looked at what the equivalent of
that CDPH is in other cities,
and, um, note, well,
this city doesn't have this in their department.
We do, right? Like, we cover this and another city doesn't.
So those levels of, of intentionality
around the analysis were part of it.
I'm just trying to get, get an idea of
how useful this is now.
And also, I, I, um, and this is my, my last question.
Um, it, it, I, I may have missed this in terms
of EY engagement.
Um, they talked about like,
like the phase two was gonna happen with ey,
but then it sounded like it's not, or,
or at least it's an open question at this point.
And so anyway, I was just asking for clarification on that.
Yeah, I, I think that was an in, in the context of the,
of the outcome-based budgeting process, which sort
of ha was laid out in the contract
as having an initial phase
and then a subsequent follow on phase.
And at the moment, we are not moving forward with phases two
or three that's listed in this scope of
Work. Yeah. So was, so was
phase one of work stream 10 was done,
but not phases two or three?
That's where it's
At, correct. Exactly.
Okay. That's, That's, and, and that, and that and,
and that, uh, those observations are,
are essentially laid out here in the, in the paper as well.
Wonderful. All right. Uh, thank, yeah, thank you.
Thank all three of you, three, three of you for testifying.
And Mr. Chapnick, I Sure it was a real pain
to get here based on everything going on in DC and here.
So, so really, really appreciate you, uh, being
so generous with your time.
And, and Mr. Chairman, that's all I have.
I don't, I do, I don't need a round three.
You won't, you won't get around for us. Okay.
Alright. Um, any other items?
Oh, I'm sorry. Al, Nicole, man. Thank you.
Thank you chairman. Uh, to, um,
our executive director
and CFO, uh,
is there any minority participation within this, uh,
Ernest and young report?
Do you mean on the contract itself? Correct.
Um, so ey, I don't believe engaged in any sub um,
contractors for this engagement.
I think it was at the prime level.
Why, Um,
the level of analysis being done in the timeframe
and it was being done in such a short amount of time.
Um, we made the decision to keep it at the prime level.
Minorities don't provide, uh, professional services.
No, I'm not saying that they don't.
Um, I think that there's gonna be a lot of work
that comes out of this report
that will be done over the next several years.
And that provides us the opportunity to, um,
engage additional, uh, contractors on this work.
So there's no reason,
particularly other than we just did not have any minority
participation on this report
In this contract.
Um, because of the timeframe needed to do it and,
and the expansive nature of the contract, uh, we went
with the prime for this contract.
What was the last thing you said?
We, we just went with the prime for this contract.
You went with the prime for this contract.
We went with the prime for this contract.
How many times have we heard that, um, our council
as well as the city of Chicago?
It's very diverse.
So I would hope, especially in the seat
that you are sitting in that minority participation
is an agenda and not going with what is convenient,
especially in the seat that you are sitting in.
When will this contract,
or when will this opportunity be reconsidered
for minority participation?
Um, so we are in the midst of, um, reviewing contracts
for a lot of the work that will come into fruition
for 2026 and beyond.
Um, those are the areas where we see opportunities for, um,
not only 'cause we, we have some minorities that are not,
uh, subs, they're primes, right?
So we see that as an opportunity,
especially around procurement.
Organizational analysis is another area.
Um, those are gonna be really large contracts, um,
for us to enter into.
And I think that those are absolutely prime opportunities
for us to engage.
Um, uh, not only at the prime level,
but also the subcontractor level
To any African Americans work for ey.
Uh, uh, uh, we, we have a wide variety of, of people
and backgrounds that, that work in the company.
We're actually really proud of it.
Um, in terms of our, I don't have our diversity statistics,
um, in front of me,
but happy to provide that as a follow up.
But please, I will tell you,
we're a very diverse organization.
We're proud of, um, proud of that actually.
And, and the group from EY
that worked on this was very diverse.
Are any of them here? Uh, not in this room today,
but it was a very diverse group
of individuals on the project.
Okay. Uh, do you work with any minority subcontractors
for professional services?
It depends on the engagement,
but we work with a wide variety of, of subs, yes.
Okay. Any particular
that you can name off the top of your head?
I, I don't know, understand the
question particularly, but don't there
Any Minority? I don't
have, I don't have any, any particular
Any minority firms that EY
actually have partner with or work with?
Yeah, I, I mean, I would say that as a firm, we,
we partner with a wide variety of companies depending on,
on the effort and the backgrounds
and scope are of those companies are very different.
Um, depending on the engagement.
I don't have a specific part teaming partner that I,
I can name for you right now off the top of my head,
but happy to follow up with you if
Please do be helpful.
Thank you. Thank you, chairman.
Thank you. Uh, any other items before we close out?
Mm-hmm. You have something vice here. Oh, okay.
Oh, okay. Well, ooh.
Well again, um, I I think that, um, this,
um, go
Ahead. Um,
I like to request that for the last three years
of the participation of those contracts, please.
Which contracts? This,
The contract that we're speaking of now,
This was a six month contract. This Yes.
I would like for, I know that there have been other firms
that have done this work as well.
I like to see who's been doing
that work for the last three years.
Thank you. Wait, wait. No, no, no.
This, are you asking as it relates to this?
'cause this was like a task order that was given to ey.
There was no one before them,
and potentially no one after them through
The CFO.
What other firms do similar work in the last three
years with the city?
For the city, correct.
Okay. We don't have any, particularly
to do this exact same work,
but we do engage with a lot of other contractors.
Um, is that what you're looking for?
Start a broader range of contractors? Yep. Sure. Thank you
Beck. Perfect
question for you.
Um, we have administrative hearings coming up,
uh, Wednesday.
Uh, they will, I'm gonna send out a,
there'll be slight changes to the, uh, to the schedule
because we wanna bring back, um,
the fin the financial team come from a lot
of questions that have come up.
So we'll be making some adjustments to this schedule.
Uh, my goal is to get that, uh, either tonight
or tomorrow morning on
who will be joining us Wednesday and Thursday.
Okay. Uh, there will be some,
there will be some slight changes, uh, to, to the lineup
for both of those days in order to accommodate bringing the,
uh, bringing the financial team back.
Can I ask for one thing through the fair on this?
If, if possible, um, on page 93, there's a
sentence about estimates for parking enforcement combined
and it's related to OEMC.
Um, could we get a little more
of the analysis on the estimates built in on collected value
of 65 million in 2024, um,
while fines assessed summed to 125 million.
So it says increased collection rates may increase revenue
generation opportunity from this option.
Um, if there's more background on that,
can we get that through the chair?
Sure, we can, we can get that to you.
I will say that parking enforcement is a big part
of the 2026 budget.
Not only did we provide more parking enforcement aids
to DOF, but they're also, um, implementing changes
to ensure that they can go
after more of the debt that they collect that they,
that is owed to the city of Chicago.
Okay. And this is 2024, so it's a little
behind, but mm-hmm.
Okay. Thank you. Thank you, chairman.
Thank you. Uh, again, um, thank, uh, both,
um, well all, uh, ENY
and our finance team for the time today.
Uh, as you all can see, um, there is no quick solution
or quick answers to any of these challenges that we face
as a city, and it's going to require, uh, us all
to participate.
Uh, one thing I I did not hear, uh, from, uh,
from the body is what I heard.
Let's do something, but do what?
Um, I, I think that we are as a council, uh,
partially charged with some of the policy direction
that moves, uh, moves forward as part
of this budgetary process.
Um, I know that, that I've asked, I know
that we all need to come up
with solutions if we are very interested in making those
types of adjustments on expenditures.
Um, it seems like, I, I say this
and I say it all the time, that everybody wants to go
to heaven, but nobody wants to die.
And I mean that because, uh, if we are serious about wanting
to make efficiencies as we want to term them,
but at the end of the day, these are cuts and expenses.
Um, we need to part chart forth the fa a path in order
to, uh, make that happen.
If that is the reality that we, uh, would like to, uh, like
to entertain, um, I think it's something that again,
if we are, are willing to put our, excuse me,
put our John c**k on the line to do such, then we
as a council need to make those types of decisions.
Um, and again, not continue to just jump up and down
and say cut, cut, cut.
So, um, I hope that's a collaborative conversation, uh,
as it relates to things that can happen, um,
and, uh, things that we want to see happen
uni uniformly as a, as a council.
So I hope that through this, uh, through this process, uh,
we reach a amicable place.
I know not everybody's gonna be satisfied.
I know, uh, everyone never is satisfied.
So, uh, which generally is a result
of a pretty good compromise
to get to where we need to get to.
Uh, one thing I do know is that we have to pass something.
Uh, we will not turn into, uh, Washington DC where we will,
uh, not function or not operate.
So, uh, again, all hands on deck to make that a reality
for this particular season.
Uh, with that being said, uh, vice chair, you have a motion
to turn, you get five more minutes?
Was, was, was there over, was there a over under that I'm
that I'm making somebody lose on?
Very well. Vice chair Leo, on the motion to adjourn, I,
I would like to make a motion to adjourn.
Alright. All in favor, SMA by saying, aye.
He must, he must have lost some money then.
All, all the opposed Chair a have it.
How much longer did you think we were gonna go?
You know, they.