Good morning, ladies and gentlemen.
We are going to begin, even though we are one short of a quorum, we are going to begin.
We do have enough under the state statute to have a public meeting and such we will move in that direction.
We're not taking any votes or taking any final action.
However, I do believe we will reach quorum at some point during this conversation
And I don't want to keep everybody waiting
And we can begin this particular portion
And then move into quorum once we do establish that
Via having our 15th member
With that being said
We will begin
Did you make 15?
No, he's not 15.
No, okay, you were already here.
Okay.
So at this point, we'll begin with public comment,
after which we will then hear from our...
which we will then hear from our Mr. Chapinick from Ernst & Young.
Also joining us today is our budget director, Jonathan Ernst.
So with that being said, I'm going to have Zoe Lee will be first,
followed by Peter Lara.
All right, can we come to order, please?
This is my fourth budget season here,
and I see that we're paying Ernst & Young $9,920,000.
We're $882 million in the deficit.
None of those things that you guys recommended
or our terrible socialist mayor.
Mr. Lee, I'm going to ask you to start off.
we actually do have our 15th member
so let me do that and we'll start
over and I'll give you your time so my apologies
ma'am unless you want to continue
and I'll do it afterwards it's up to you
I mean I gotta start over now
go ahead it's up to you
alright just have a seat we'll be with you in one second
we'll open
with the roll call
Vice Chair Lee
Alderman Lopez
Alderman O'Shea
Alderman Rodriguez
Alderman Cardona
Alderman Quezada
Alderman Viegas
Alderman Nugent
Alderman Vasquez
Alderman Napolitano
Alderman Martin
martin alderman hadden alderman silverstein i'm here what did i miss oh i'm sorry alderman
rosanna rriga sanchez 14 and i make 15 okay we do have a quorum again we will have public comment
uh beginning with zoe lee followed by peter lara oh also pursuing to uh rule 59 we have the following
Alders who've requested to participate remotely.
Alders Robinson, Yancey,
Mosley, Cicha Lopez, Conway,
Mintz, Knutson, Lawson,
Moore, Harris, and Gardner. Is there a motion
to allow them to participate remotely?
So moved. All in favor signify by saying
aye.
The chairs and ayes have it, and
Alderman
Robinson.
Alderman Robinson, are you on?
Alderman Mintz? I'm sorry, Alderman Yancey?
Alderman Mintz is on.
Alderman Mintz, I have you. Alderman Yancey?
Present, Chairman.
Audubon Mosley.
Audubon Ciccio Lopez.
Mosley's present, Chair.
Who is that?
Mosley.
Mosley, got you.
Ciccio Lopez.
Present as well.
All right.
Audubon Conway.
Audubon Conway.
Audubon Mitt.
Oh, it's got Mitts Knutson.
Present, Chair.
Audubon Lawson.
Present.
Thank you, Chair.
Okay.
Audubon Moore.
Audubon Moore is present, Chairman.
Audubon Harris.
Alderman Harris
and Alderman Gardner
Gardner's present, Chairman
Gardner's present, okay
very well
now is our time for public comment
Ms. Lee, you're on
alright
Um, my name is Zoe Lee, um, and Ernest and Young is getting paid $9,920,000 for this
2027 budget, and these recommendations are absolutely terrible, uh, but our socialist
mayor, uh, he's terrible as well, that's why we gotta get him up out of office.
Also, I don't understand why he has 106 employees.
he has a
socialist Brandon Johnson
has 106 employees
his chief of staff
who is one of the worst racist
chief of staffs in
American history, Chicago history
Hispanic KKK, Christina
Pace on Zayas, makes more
than him
she gets paid $223,560
he gets paid
$221,052
then Kennedy Bartley
who y'all got rid of the intergovernmental affairs uh employees who actually knew how
to do intergovernmental affairs you she gets paid two hundred and three thousand dollars
for what like at this point we went to uh portage park yesterday and met with a small business
owner he has a magazine store city news and the pplta tax it's it's killing him
let's say but y'all don't care because y'all are small business killers and mr ernest you're
getting nine million dollars instead of doing a forensic audit so we can see how much money
they're stealing then we're dealing with the uh inspector general right this white liberal racist
who keeps finding things to fire black police officers
while Governor Pritzer is hiring undocumented Hispanic illegals to police us.
Then we have Father Flager's gun buyback program
with the help of Eileen O'Burke,
who is putting these guns on our black males
so they can get mandatory eight-year sentences.
This is Democratic Party.
This is the city of Chicago,
the most racist city in the country.
And you think you're gonna let these Hispanics come in here
and take over our black Chicago
because of a socialist Haitian?
Y'all crazy as hell.
And you black, born and raised aldermen here,
shame on you, Coons.
Thank you for your comments.
Next, we'll have Peter Lara followed by Jessica Jackson.
I love that we have these meetings all the time,
or at least periodically, because nothing gets done.
you people want to prance around the line make it seem like oh well we're gonna help chicagoans
we're just gonna you know embezzle our tax dollars like usual what was recently proposed now a package
tax a package tax and then other fees that now the city wants to put on chicagoans and various
other taxes what type of nonsense is that you know how we should save money we should start off
by cutting the alderman's salaries this is classified as a part-time job a part-time job
a part-time job that pays around 120 000 six figures 120 000 let's cut that by half
if it's considered as a part-time job why do you need to get paid that much
need to get paid that much that's ridiculous that's already a lot of money there as it is
and we're in so much debt and a lot of chicagoans don't seem to realize it they don't know
what you guys are proposing on the table and at this point in time veto whatever the mayor
wants to do because he's getting voted out anyhow vote out these people veto it is it that hard are
you afraid that oh i went against my constituents oh it's it's so terrible come on wake up we didn't
elect you just to sit there and just to eat in front of people and drink whatever we didn't
elect you for that. We elected you to do the job that you're supposed to do. Focus on our
communities. None of you want to focus on them. They're suffering right now, and they're going
to suffer even more by adding more proposals to keep charging us, to charge us to live in our city,
to charge us, and then want to add a $7 entry and exit fee to go in and out of the city?
how stupid is that that's retarded misappropriation of our funds Chicagoans
we're not going to tolerate this any longer we're done everything that they propose on the table
is to make us poor so then we have to live off of the government and when you live off of the
government they can control you that's communism communism communism doesn't represent the
that the american dream how dare you thank you now the final public speaker is jessica jackson
this is crazy uh this way too much okay so we had a city of chicago financial and strategic reform
meeting with michael rodriguez and this other dude whatever his name is sitting up there laughing
and chit-chatting while this
other alderman, stand up, Vasquez.
Stand up, Vasquez.
He's an alderman.
An alderman. And on the back of
his jacket, it says, till Chicago
ends.
It's people like him
who got on their mind, they're gonna bring
their government ways
over here, and they're gonna tax us
to death. They're gonna take over our government.
They're gonna bring the slow-life mentality
in here to do just like
what his jacket says, till Chicago
ends. They got
people like y'all. Come on, let's talk
about reform. Come on,
because we can get on that clown all day.
We'll see him on social media.
Reform by definition
says, reform generally
means making changes to a
law, system, or institution
to fix errors, stop
abuses, or improve how it works.
How y'all going to plan on
doing that? You going to fire that clown
that's sitting next to you first?
You got to get him first.
Jason Irvin, we've been in here for four years.
Chicago flips red.
Shout out to Zoe Lee for her vision to do it.
We've been in here for four years, and for four years he can't balance the budget.
he can't balance the budget. But for four years, y'all keep making money. Who friends
are y'all? Who paying you? Let me tell you how to get some strategic reform. Go over
there to them courts. Start with J.B. Prisker, who's still in real estate. Get your boy.
Get your boy. Because you know him. Public administrators, the office of public administrators
over there that's helping him steal property for the public officials that he appoints.
Louis G. Apostle, Leah Jubikoski, Tina Lestropoulos, then circle on back, get that forensic audit,
get Mayor Johnson and all these Hispanic KKK cartels, Rosa, what did she at, that Sanchez
chick, what's her name, Rosa Rodriguez, get her, get them.
That's where you start looking for the money, friends of Mayor Johnson.
Chicago ain't going.
Black Chicago ain't going.
We finna show them immigrants how it's done.
Black people fight against our government on our soil.
Y'all ain't running us nowhere.
We gonna show them why everybody pay attention to black people.
We gonna show them this is how you fight your government on your soil.
Thank you for your comments.
We're going to move into our portion of the meeting.
I want to recognize Alderman Mitchell for the – excuse me, could you please –
hey, could you take care of that?
All right.
Alderman Mitchell, we got you for the purposes of the quorum.
Alderman Hall is here as a non-member.
If you have one more outburst, if you have –
If you have one more outburst, if you have, could you remove her?
Please remove her.
Thank you very much.
Have a great day.
All right.
Okay.
I'll see you there then.
Also, we've added Alderman Mitchell,
and Alderman Hall is a non-member joining us today.
Anyone else come in while we were doing public comments?
Okay.
Alderman Harris.
um chairman who's here who's i thank you who is i alderman harris oh hey michelle good morning
alderman harris good morning okay we've got you down virtually thank you you've been recognized
um chairman robinson is here robinson thank you sir and those are all of our rule 59s with the
exception of uh sorry alderman yancey's here yancey i already had you yancey so we're just
missing alderman conway that's it so when he comes on we'll recognize him okay so today we
will have uh ernst and young uh our um folks who are doing uh efficiency uh strategic reform
financial and strategic reform. So we will hear from the lead partner on that, Mr. Adam
Tepenik, who will give his presentation related to that. Also with us is our budget director,
Jonathan Ernst, after they do their presentation, and we will open the floor for
questions and comments. Any questions before we get rolling? All right. Welcome to Budget 2027.
Devin, all right, we're rolling.
All right, Mr. Spinnick.
Thank you, Chairman, and hello to everyone on the council.
I appreciate the opportunity to provide you with this update on the city's financial and strategic reform work that we've been supporting.
As the chairman mentioned, my name is Adam Chepanek, and I lead EY's work nationally helping governments develop and implement turnaround strategies.
I'm also the lead principal responsible for our team's work supporting the city with this effort.
As I testified last year, our effort began with a very broad overview and review of potential
options to look at ways to improve operations, strengthen financial performance, and build
long-term institutional capabilities. Today, I plan to share with you how that work has progressed
from identifying those opportunities to the implementation of several reforms,
and as we're tracking the results. So let me just start with where the work began
and what has happened since then the original diagnostic was intentionally
broad and very ambitious there were nine areas selected for the initial
assessment by the end of that analysis we had evaluated more than a hundred
potential options engaged dozens of departments and drawn on benchmarking
from more than 40 peer jurisdictions for the city of Chicago that work
identified a range of between 530 million dollars and 1.4 billion dollars
in potential cost savings additional revenue opportunities and value
creation opportunities. Some of those were near-term opportunities, and others require
policy decisions, legislative action, collective bargaining discussions, operational changes,
or several years to fully implement. That distinction is important, and we'll talk more
about it today. The original report identified opportunities and options for the city's
consideration. Realizing them, and this is a critical thing, realizing them requires implementation,
and the report emphasizes the importance of implementation efforts throughout.
Since the reports released last year,
the city has determined which options it chooses to advance,
to advance the pace at which to advance those options and whether implementation should be
handled internally by city officials and city staff or with outside support so i'll speak today
about specifically the initiatives that ernst and young continues to support the city on where
there are tangible results including increasing special event cost recovery proceeds from fleet
dispositions lease exits and properties that we've identified for potential sale and consideration by
the council in the city. We are at one point in what will necessarily be a multi-year
transformation for the city. So if you look at the slide here, this page shows you the breadth
of that original review. The city, under their direction, selected areas ranging from organizational
redesign and employee benefit reviews to fleet, real estate, procurement, special events, fees
and fines and public safety optimization. The realization period differs by category. Fleet
reforms, for example, were evaluated over a three-year life cycle. And the real estate
opportunities looked at one-time and recurring values measured over 10 years due to the time it
takes to exit leases, sell buildings, and realize that long-term value. The city is currently
implementing several initiatives using its own internal resources and did ask Ernst & Young to
continue supporting the areas in the red box that you see on the screen. Importantly for your
consideration, the absence of a phase two estimate for a work stream does not mean that that original
opportunity disappeared. It just means that implementation has either not advanced to the
point where an estimate can be attributed or the city is doing it that work independently on its
own. And the budget director who's here today can speak to those efforts. I also want to emphasize
that that the true value the really the way to unlock value from these options depends on the
city moving from assessment to implementation it is the gateway um to unlocking that value
So briefly, this page just describes to you the approach that we took from implementing
and identifying opportunities to realizing that value to date.
Phase one really relied on city data, on departmental input, on multiple interviews
and peer benchmarks, and various analytical assumptions to identify the potential options
for the city.
Phase two, which is underway right now, is validating those opportunities and translating
them into specific actions financial estimates governance structures and implementation plans
as this work progresses estimates will continue to be refined to reflect additional operating
requirements policy choices and implementation constraints that evolution is important context
for the numbers i'm going to share with you um through in the specific efforts in a few moments
for the efforts where we continue to support the city um you know we're looking at various quick
wins, like building out costing dashboards to recover cost, and actioning various other
initiatives. So this page is key to understanding the numbers, where they're at and where they're
going. The second column shows you certain potential opportunity ranges identified from
that initial diagnostic. These were potential options measured across various realization
periods given how long it takes to fully execute on those initiatives. The third column shows you
the FY27 estimates for phase two initiatives that have advanced far enough for us to be able to
quantify at this point of the fiscal year. For special events, the current estimate for instance
is around $14 million. It's 6.9 million higher than last year and subject to ordinance, contract,
and implementation decisions that the city needs to make. For fleet, the estimate is around 7.3
million of total value, including around $1.7 million of budget impact and $5.6 million of
avoided spend or other economic value. And I'll talk more about that in detail. But
or other economic value and i'll talk more about that in detail but this is things like if you
reduce idling time and um in the fleet vehicles you spend less on fuel the real estate numbers
reflect savings from estimated rent and operating savings lease lease exits and such together with
a potential transaction of a property related sale that the city is considering when to execute upon
the remaining initiatives and work streams are being managed directly by the city
and I believe those remain under evaluation
and require additional decisions by the city officials.
I do know that you all have been receiving monthly updates
on the progress of this report since last year.
Those reports are publicly available as well
and it is just a portion of the value
that's being created through this effort.
If you look at things like advanced telematics
that are being installed in the fleet
or if you look at things like
the updated garage maintenance systems
to reduce and free up operator hours to focus on higher priority tasks and new vehicles,
there's a lot of value being created.
If I move now to share a little bit about each specific category that we've been working
on and supporting, first starting with special events.
This is a diagram we had in the original diagnostic to share with you where we were at originally
to strengthen cost recovery on special events that the city holds.
That analysis identified several tools used elsewhere in other cities to look at planning
and cost recovery, including tiered fees, clearer authority for recovering certain public safety
costs, and advancing collection of certain payments. The purpose is not to suggest Chicago
should simply just copy another city, but they are policy options that the city and the council
can evaluate within the city's legal requirements, civic traditions, event economy, and equity
considerations. That work also, by the way, culminated in the city's identification of
14 potential ordinance changes that are designed to both improve cost recovery.
changes that are designed to both improve cost recovery and the management of special events
which were released with the mayor's budget proposal earlier this week if you look at where
we're at on special events right now in that in that cost recovery process the work has created
something the city never had before and that is a centralized event level view of cost incurred
across departments for across departments you can't recover what you don't track
Since May, so less than a year, the city has tracked approximately $30 million of costs across 389 events, giving it considerably greater visibility into the true cost of providing event-related services.
Not all of those costs are recoverable under current ordinances.
So far, we're tracking that around $6 million has been billed, and current projections show that around $14 million of estimated recovery is possible in fiscal 27.
Like I mentioned earlier, it's around $6.9 million above the current fiscal year, and that is subject to city decisions.
But this also illustrates how estimates change during implementation.
The initial analysis and the range we presented to the city and to you as the council was based on the best information available at the time.
Once information and costs were tracked, finally, at the individual event level, the overall cost
universe actually proved to be, cost recovery possibility proved to be larger than initially
forecast. At the same time, policy decisions from the city also affect what can actually be
recovered. The 14 ordinances that are before you today did identify opportunities for both
process improvements and expanded cost recovery that require council action to fully realize that
that cost recovery similarly the city decided for instance to postpone cost recovery on an element
that we had that we had included as an option for parades for instance at this time but they may
decide to revisit that in the future operationally the city has also established a centralized process
has also established a centralized process to collect departmental costs, generate a consolidated
invoice, and reduce billing cycles that previously took up to nine months to recover costs now take
less than 30 days. An IT assessment was also completed, which provides a roadmap and a vision
for the city to tie in this cost recovery process into its ERP solutions and other artificial
intelligence-enabled solutions, with D-Case as the lead. Moving on to fleet. So our work
supporting fleet modernization is another example where we've achieved several quick wins and put
in place longer-term reforms. This is a good example of options that will take some time to
be fully realized as the city transitions to a formal disposition and maintenance life cycle
routine and the amount of value creation that can be expected to continue to increase year after
year after year. Our analysis is helping the city modernize management of approximately 5,000 of
the 15,000 assets the city owns through around 20 different initiatives that are designed to
improve cost, utilization, and asset performance. These initiatives are collectively designed to
enable 2FM to continue shifting towards proactive data-driven decisions that improve cost, utilization,
and asset performance. One immediate opportunity was accelerating vehicle dispositions.
To date, since this process started, the city has disposed of approximately $4.7 million
in gross proceeds from the sale of around 796 vehicles, almost 800 vehicles.
The city is expanding the use, also expanding the use of telematics and looking at visibility
into vehicle utilization and operating behavior.
This is things like tracking, excessive idling, rapid braking, and speeding by vehicle, which
is all reducing fuel costs, maintenance costs, and other savings.
And those savings we expect will continue to grow.
savings we expect will continue to grow. Preventative maintenance intervals have
also been brought in line more closely with manufacturing standards, which has freed up
around 22,000 technician hours. That does not necessarily translate directly into budget
savings, but it does create significant operational capacity to address the city's
maintenance backlog, which is over two years in length. We also identified over 500 potentially
underutilized light duty assets for further consideration. Additional work is underway
looking at utilization, leased vehicles that the city pays, warranty recovery processes,
disposition procedures, maintenance offers, and lifecycle planning. These reforms will take time
to mature, but the objective is pretty straightforward, actually. It's to create
a disciplined life cycle in which the city buys, uses, maintains, and disposes of vehicles
based on its needs. I'm going to move now to the third area, which is real estate.
As it relates to real estate, this work has addressed, you'll see at the top here on this page,
It's addressed lease exits, potential building sales, portfolio governance, space utilization,
and capital planning processes.
As a reminder, if you look on the left side here of this page, this analysis began with
the review of approximately 508 facilities representing 22 million square feet that the
city owns or operates, as well as more than 10,000 vacant parcels of land and a review
of the Riverwalk agreements.
based on the city's direction we progressively narrowed that universe to protect facilities
providing essential and community services this is properties like aviation facilities salt domes
libraries clinics police stations fire stations etc ultimately we performed a focused analysis on 91
we performed a focused analysis on 91 facilities representing approximately 5.4 million square feet.
Our team toured 29 buildings. We surveyed 32 departments and we conducted structured interviews
with 21 of those departments. The resulting roadmap that came out of that process focuses
on significantly reducing the city's leased space, evaluating selected dispositions, and making better
use of city-owned facilities. The city is now beginning to execute that roadmap, including
providing notice already to two leases that the city will be exiting, and examining opportunities
to continue increasing the utilization of core-owned spaces in places like City Hall, here where we're
at today, 400 West Superior, and also leased spaces with long-term leases in place like two
North LaSalle. That'll increase the utilization of those spaces more consistent with what cities
typically operate their spaces at, which is currently for you at 70%, bringing it up closer
to 80%, 85% utilized. We go to the next page. You'll see another example of how this work has
progressed from the phase one diagnostic to where we're at today. So this shows you how the work has
progressed. If you look on the left side of the page, the range we originally presented to the
city was between $157 million and $202 million of opportunity. That range was predicated on
several actions that the city would need to consider, including lease exits, potential
building and land sales, and changes to Riverwalk revenue sharing agreements, as well as different
assumptions regarding space utilization in the city's in-office policy that it manages.
We looked at, at the time, multiple lease exit opportunities, the sale of up to nine buildings,
and up to 50 assembled land parcels, and also increasing the gross revenue share that comes
from the Riverwalk concessions. The city then made decisions about which options it wanted
to prioritize and pursue. Certain items, including land sales,
Certain items, including land sales, the city determined should be handled internally by
the Department of Planning and Development, who, by the way, does a very good job at that process.
Others, like increases to the Riverwalk gross revenue sharing agreements, the options we had
proposed, were postponed or held off for the moment, and several potential building sales
were removed from the list. At the same time, though, as this process progressed,
new lease exit opportunities, new building dispositions, and new vacant property opportunities
were added. The resulting phase two roadmap, where we're at today, represents, right in the
middle of the page you'll see, around $75 million over 10 years on a nominal basis. And again, that
is just building sales and lease considerations. It does not consider opportunities from the Riverwalk
concessions or from land sales, which the city is also handling itself. So another good example
of something that was added, we added the sale of potentially a portion of 20 additional vacant
buildings that we identified as the process continued. So again, it's important to distinguish
between one-time property sale proceeds, though, and recurring rent and operating savings,
savings which we've broken out for for the city the then if you look at fiscal 27 so all the way
here on the right um that's how we play it forward into into the current opportunity between the the
sale of up to 20 vacant properties the lease savings and then um you'll see on the on the
right uh we discussed the sale of one core office and mixed-use building which the city has decided
for the moment to mothball until it decides to sell the sell the building that opportunity on
the right. That $13 million does not disappear because they're not selling the building today.
And you'll accrue additional savings in the interim until such time as the city determines
it's appropriate to sell that building. That building is the combination of 66 and 72 East
Randolph. So...
So the last slide on the real estate topic that I'd like to touch on briefly is that the real
estate roadmap we've created for the city is not solely a financial exercise. It also provides an
opportunity to increase occupancy in city-owned spaces, to reduce fragmented departmental
footprints, and to co-locate certain resident-facing services to make the city more accessible to your
residents. In addition, approximately 150 staff positions are contemplated for relocation from
downtown offices into city-owned community locations, further expanding the city's in-community
presence. The roadmap also creates a more consistent process for annual real property
review and major space decisions by the city. That centralized process and decision-making
did not exist previously. Those operational considerations should be evaluated alongside
the direct financial impact because they affect service accessibility, asset utilization,
and long-term portfolio management. Moving on to the organizational analysis efforts that had
been underway, this is a two-year redesigned effort covering 30 different departments
and six core back office functions that the city provides. Phase one of that process used city data
and peer benchmarks to identify potential opportunities involving organizational structure,
recruitment, vacancies, managerial spans and control, back office processes, and operational
overlap. Phase two now goes considerably deeper in that process, examining individual department
structures and processes, developing future state options, and developing potential implementation
roadmaps. The objective is to develop departmental specific options based on service delivery
requirements, operating needs, and detailed understanding of how each department functions,
mapping down to the individual stakeholder level. That diagnostic that we performed on this
that we performed on this particular work stream identified between $147 million and $257 million
of savings once fully phased in. That is not a one-year fiscal year number. The team is currently
engaged with 22 departments and reviewing those six back office functions to develop the future
state options in collaboration and under the guidance of city officials. While significant
opportunity still very much exists, the amount that's realized from this review will depend
ultimately on the options for implementation that the city chooses to perform. That implementation
model, the sequencing and timing of decisions is critical. Until that work is complete, the phase
one range should be understood exactly as it was presented in the original report, which is medium
to long-term savings potential and not a current year budget commitment. This page illustrates why
this work takes time. For each department, we have to establish the detailed fact base, map the actual
organizational structure that did not exist on paper previously. We have to understand each of
the functions, develop the potential future state options, and assess the operational impacts and
dependencies associated with potential changes. We're helping to build a detailed understanding
of departmental responsibilities and functions that can support both near-term decisions and
longer term organizational improvement. The analysis is very intensive, I'll say. But doing
the work is essential to developing options for the city that are financially and operationally
meaningful. If you move on to the fees and fines opportunity and options, let me talk through this
for a few moments. During phase one, you'll see in our report, in the report that was produced
last year, during phase one, the city selected 35 fees and fines for closer valuation. That
represented around $100 million in collections, the majority of which went to the corporate fund.
the majority of which went to the corporate fund the analysis looked at both the financial
potential and policy readiness including how chicago's rates compare with peers and whether
changes and charges have mechanisms for periodic adjustment this was never an option to increase
every fee or fine that the city maintains each involved different considerations for the city
relating to cost recovery residents businesses enforcement importantly equity and administrative
of feasibility. Based on the options considered, my understanding is that the city has already
incorporated around $16 million in additional budgeted fees and fines beginning in fiscal 26
that the budget director can speak to better than I can. If you come up forward to phase two,
there was also a more fundamental issue that was uncovered during the initial diagnostic,
which is unlike Cook County, the city did not have a single comprehensive inventory
connecting its fees and fines to the municipal code and identifying when each of those fees or
fines had last been updated and unadjusted. That inventory has now been developed and includes more
than 250 fees and 20 fines. I know it's very small font, but a screenshot of that inventory is on the
right. What we learned through that process is approximately two-thirds of the inventoried fees
have either not been updated in the last five years or the date of the most recent update could
not be determined at all. The next step is to confirm that information with the departments
and the law department and continue providing that data and processes used to monitor collections
with the aspiration to make that public, similar to how Cook County does. So let me conclude here
with a broader point. Over the last year, this work has moved from identifying options to taking
specific actions. Special event costs can now be tracked at the event level. Fleet dispositions and
operational reforms multiple of them are underway real estate actions are advancing the city had
now has a consolidated inventory of fees and fines it can make decisions about how uh how if and how
it wants to adjust those and the organizational analysis process is moving from a diagnostic into
a very detailed future state design at the same time the opportunities that are not reflected in
fiscal 27 have not disappeared some opportunities require analysis some require policy or legislative
decisions like your passage and enactment of the 14 ordinance changes and others require sustained
implementation. The path forward there is to continue executing on the initiatives already
underway, make the city decisions necessary to unlock the validated options, and continue
sustained results with tracking and accountability to you as the council. This year's process is an
important step in a multi-year effort. It's not the end point. And the ultimate financial and
operational impact will very much depend on the decisions that the city makes and how consistently
those decisions are implemented. I appreciate the time to walk you through that and happy to answer
questions along with the budget director that you may have. Thank you. Just on the start,
there are a series of legislative actions that we need to take as it relates to making changes
that will allow for certain things to occur, fees to change. Have we clearly identified those 14
items and what um what are they in in totality um uh so my understanding is that the 14 um
ordinance changes have been um shared with with council they fall into two main categories one
is to broaden the capability to potentially recover fees so for instance make it tangible
for you all cfd the cfd cfd costs that are incurred um and streets and sanitation costs
that are incurred are typically outside the ordinance provisions permitting cost recovery
so if you have the fire department deploying resources and personnel to a special event you
cannot currently under the current ordinance recover that cost other ordinance changes
consolidate different types and categorizations of events for for outdoor events or stadium events
that'll make it easier to consolidate and recover those fees okay and so um are those uh and i guess
I'll direct this to Mr. Ernst.
Have you all evaluated that
and intend to bring that forward
as part of the management ordinance,
or is that up for further discussion?
Thank you, Chairman.
Jonathan Ernst, Acting Budget Director.
So that has been submitted
through the management ordinance,
those 14 adjustments.
This year?
I thought.
I don't know. I'm asking. I'm still reading. I got a lot to read, so.
They were to be included, yes. My understanding is they are.
Okay. All right.
Okay. So we're going to have a list.
So the first up was Alderman O'Shea, followed by Alderman Vasquez.
First, let me recognize Alderman Riley for the purposes of quorum.
Also, non-member Walker Speck as well.
Did anyone else come in that we did not recognize?
Oh, non-member Cruz.
All right.
Go ahead, Matt.
Thank you, Mr. Chairman.
Good morning, Mr. Chabonik.
In May of 2025, the city of Chicago entered into a contract with EY
at a cost of $3.2 million.
cost of 3.2 million dollars this past april of 2026 the city of chicago contracted with you
six months ago uh 6.7 million dollars for ey to once again um come and take a look at our book
so to speak how much of the mayor's 120 million dollars in savings in this budget proposal we
heard on Wednesday is your work. Yeah, so built into the FY27 budget, we have across all the
various lines of work, we have $52.2 million built into the budget. We have an additional
$8 million in value add, things that we can't necessarily, say, reduce a budget line, but
there's true value add.
It's something that Adam alluded to a little bit earlier.
I think that the largest example is the efforts within our fleet modernization and becoming
more efficient in the way we perform the maintenance on our vehicles we have a we have a
backlog that needs to be addressed i can't go in and reduce a line that funds their maintenance
but what will happen is they'll begin the process of of catching up on their backlog so it's you
know maybe three four years down the road I can't predict how long it'll take
but at some point in the future we may be able to look at a reduction of budget
look at a reduction of budget line can't see that today but there's a true value
add in the work that's been done in that area so is there a number we could put
to the the hundred and twenty million dollars in savings the mayor claimed to
the media after the budget address 48 hours ago how much of that is part of
what EY has been paid $10 million to identify much information that last
year we were told you know the first year we're not going to see a lot we're
now in the second year how much of this hundred twenty million dollars is based
on what EY took a look at and identified sure again the the 52.2 million is is
what is the savings that we have in the budget FY27.
Now, that is a slightly different number
than when you talk about the 120,
because some of it we actually saw a year ago.
It's not, we're not including that in FY27.
So really the area there is special events recovery.
We had 7 million built into FY26.
This year we have 13.9 built in in cost recovery.
so 6.9 is new this year it's part of that 120 but in total we have 13.9 that is coming out of the EY
work so last year we were told initially we got a I'd call a report in August without a lot of
detail, and then many of us here in this room raised a little bit of hell, and in October
we got more information.
For whatever reason, the administration wanted to keep that from us.
We were told that the EY report has identified anywhere between...
identified anywhere between 500 plus million and 1.4 billion in savings how
long is that going to take to start seeing real numbers because 13 million
50 million two years in at that's sure it's a the report was looking at a 10
process. So if we don't, if there's no more gains moving forward, which certainly is not
the case, we're moving forward all these lines of work, talk about $52 million in one year,
you look that out 10 years, that alone, we're at half a billion dollars.
Mr. Chapanek, in the work conducted by EY, did any of your recommendations
call for a head tax or a higher lease tax
as the mayor is now proposing?
That was not part of the report.
Not part of the scope of their report.
Not what they were engaged to do.
And with that, how much of the roughly $349 million
they would raise could your ideas uncover?
Give me a ballpark.
if we implemented a year in 15 months into your report if we implemented more what what kind of
savings could we realize well I think that that's really up to the city ultimately to decide which
are the options it wants to implement so I think we put out the ranges of the opportunity and you've
seen I think what I was showing was how things have evolved over time new opportunities have
come in new properties for disposition um and things have come up the list or is being handled
internally with city officials
internally with city officials okay i appreciate it mr chapanek that's all for me all right thank
you uh alderman oshay i also want to recognize alderman quinn who has joined us also alderman
cicho lopez uh next up you're leaving you saying are you up go ahead alderman vasquez followed by
vice chair lee thank you chairman um i want to appreciate we're having this conversation i think
a number of us might feel a little bit kind of rushed as far as some of the information. I think
I, along with some of my colleagues, upon hearing about the 14 ordinances, had the immediate
question of, like, which 14 ordinances? We've never heard of them. I was asking my colleagues
about it. So I think I'm a little dismayed that we're hearing that it's in a management ordinance.
Would you be able to explain the 14 or some level of synopsis? Because we're looking at it all,
and I think this is a surprise to myself and a number of my colleagues. I think we can provide
a summary if that would be helpful yeah great there yeah just get because like i think it
makes perfect sense that if you're looking at how we can find efficiencies and streamline our
processes make improvements if there's things that are being that are hurdles that the city
council could then kind of clear the path for we're more than happy to i think we all have a
self-interest in doing so but the fact that we don't even know what they are they haven't had
briefings or conversations about any of them is a bit concerning so if you would share even like
a brief summary that'd be great yeah i mean the big as adam mentioned that one of the big changes
is we've got two ordinances right now that aren't completely aligned for different types of events
and the ordinance proposal is to combine them there's no reason to have two it causes confusion
cause it can cause inconsistency around the way it is applied so it's really bringing them
together and then making it consistent the way we
making it consistent the way we apply to the various events, regardless of type.
And then there's opening, a lot of the rest of the changes are around opening up opportunity.
Now, you know, whether the city chooses to take that or not, I think it's for all of us to determine,
you know, how much do we want to be charging this type of event versus that.
but we first we need the opportunity to be able to do so so it's opening up the opportunity to
now that we have taken all these events looked across every department that's involved and
realize the the costs we now have this data that we can make an informed decision around all right
how much of this do we want to collect but we need the ordinance to be written in a manner
where we can actually collect because right now we're very limited limited on what we can collect
a lot of what we're putting out there on the street during an event is something that we
simply have to we don't have an option to recover so we need to broaden that in order to to then
have you know opportunity to be able to move right around it i got you no i appreciate that i think um
and let me back up a little bit out of the management ordinance you mentioned 14 ordinances
but how many are we talking are in the management total just so you get into any is it it yeah
hold on lopez uh if i may point of information is this are these 14 all under article four of
the management ordinance i'm not familiar with which article the one that says cost recovery
and special events? Is that where all 14 of your discussed ordinances are?
Let's do this. We're not 100% sure as to where that is. We're not ultimately discussing the
management ordinance today. We do know that there are 14.
ordinance today. We do know that there are 14 ordinances that both Ernst and Ernst have
brought up. And I think that as we get into hearings next week, I think that may be a better
opportunity for us to delve into that. Because right now, we're just kind of speaking around
a bunch of stuff that we really don't know what the answers are. And I don't think the director
is prepared to have that conversation today. He should be prepared to have that conversation
next week when when he's before us uh and they're making their presentation like to kind of uh i
want to say refocus us back to and why even though those 14 components were part of that conversation
i just don't know if we can have that full discussion today that's all i appreciate that i
think i think for me it's just highlighting the fact that we could have had briefings prior but
it is what it is i guess through the chair if we could get like a one pager or something that would
give a breakdown in advance of going into all the meetings because we're gonna have multiple
questions at different hearings about different things that's fair yeah so through the chair
would be totally fine i think similarly we um have regular conversations about the ernst and
young's uh efficiencies and savings compared to what the city is or isn't doing it it appears
usually like more abstract conversations i appreciate the presentation sharing more insight
but is there a way to just kind of almost on a chart so these are the things we're proposing
here's what the city did in relation to what we asked here's what their savings are here's what
they chose not to so we understand better coming into different budget hearings what to ask of the
administration if there are gaps the delta between what you feel could be accomplished and what has
been i'll just one observation so there are monthly reports that do come out on all the all the work
streams both those that ernst and young is supporting but also that the city is is managing
internally so like procurement and service optimization efforts are being managed internally
through the city and that is publicly available i think it comes to you to all the alders
publicly available i think it comes to you uh to all the alders every month with with a with a
summary and then a fair amount of detail about the the individual steps that are being taken
yeah i think part of what i'm trying to identify is like knowing how it's all challenging to move
government in different directions it's also those are snapshots as opposed to how's it all
trending is it working in the way i think for us to gain a better understanding would provide
clarity for this council so it's not operating from different assumptions when we always bring
up the E&Y report um that having regular conversation about how we're doing not just
like the snapshot but so we can ask these kind of questions I think would be helpful because I think
many of us feel a little bit I don't speak for too many um kind of at a loss having this meeting
come up and not feeling like we've got more background we could have been delving into so
that's this is all I got if I can get that through so so think about it this way um E&Y is making
recommendations, then the city can take a look at those recommendations and implement what we think
makes sense. Now, on our end, it's going to be, are we going to enable certain actions to take
place? Let's use cost recovery, for example. Do we want to enable the administration to go after
costs from fire for festivals? And that's a decision that we have to make. And I think that
is the decision tree that we have to have to look at and at the same time kind of take a look at all
of the recommendations and and make those particular determinations some of them we may want to do some
of them we may not want to do but again uh what you're asking for is to say hey what is everything
you want to put everything on the wall and figure out hey what do we want to do and what do we not
want to do that's that's exactly right and i think the other piece which is a conversation i have is
what implementation execution looks like once we've made a decision that we're like hey we agree
on this one is it moving in that kind of speed that we wanted to move but yeah to me getting
that through the chair just to start working would be great all right thank you very much
if i could just add uh one more sort of nuance to this i think you talked about sort of it started
this i think you talked about sort of it started abstractly and that's a really important point
that first year report that they put out was very obviously it was very high level um and it was
before they got into really the details of the work it was more of a this is a potential um
based off of the work they've done across cities you know across america this is sort of quick look
at what you have this is sort of a potential now in the last year in working closely with each of
the departments impacted that then changes then they say oh this area actually you're good there
there's nothing to do there or you're for some reason you're limited on what you can do here
and there's examples if i think about our our actual physical footprint right looking at
they had in that initial initial report they had just sort of had all of our all
the buildings that we own and lease and an idea of like who was in there right
and then when they actually started doing the work of looking at what each
of those buildings were used for there are cases where it was like well it
looked initially it looked like it was being underutilized but now that we've
talk with that department we know that that's where they you know during the like there was
an example of where that's where when there's a an emergency with the city that's like the that's
where they they centralize all the operations so sure it's sitting empty for long periods of time
but if we were to get rid of that we would destroy our ability to correct emergency so
those are the sort of things that were included in the initial like if you look at that big number
from the initial report included but then gets backed off at some point in time yeah no i think
it's absolutely valid right because we're talking about really assist
valid right because we're talking about really a system as big as the one that we're talking about
you're going to have a level of conjecture a sketch of what we're talking about and then as
you're getting more visibility into it i think that would make adjustments and projections might
change i think that would be good to inform us of as well right if you're looking at it
year over year or phase over phase and go actually we can only say this much in comparison to what
we initially thought that would be important to kind of report on the same way because i think
it's um y'all are setting a precedent right by by doing this that the first time it was announced
about what savings were it became a story across the city i think equally with that voice every
time there's readjustments to that um analysis or estimate make sure the public understands it too
because if not people are going to talk from like two-year-old talking points as opposed to where
we currently are which i think would be helpful so yeah that's all i got thank you chairman
Thank you. I also want to acknowledge Chair Dow. Are you with us online, ma'am?
Yes, I am, Chairman.
Okay. We'll take a motion to allow her participation remotely. So moved by Vice Chair Lee. All in favor, signify by saying aye. Any opposed? Any opinion? The Chair's eyes have it. We have you down. Chair, are you asking for questions?
When I have questions, I'll put my raise the hand function.
okay all right very well no problem uh vice chair lee followed by i'm also online mr chairman
requesting to get in okay all right good rule 59 okay we've got uh also um jesus christ i was i
had i was gonna call him something else but i'm gonna leave him alone today uh alderman bill uh
also has joined us via uh rule 59 uh all in favor for his uh his uh his participation
and signify by saying aye.
Any opposed?
The opinion of the chair's ayes have it.
And also, Alderman Bill will be acknowledged
for purposes of the rule of 15.
You want me to add you to the question list, sir?
Not at this time.
Okay, very well.
Okay, Vice Chair Lee followed by Alderman Lopez.
followed by Alderman Lopez. Thank you, Chair. Well, I'm going to be a little all over the
place. I'm going to start with thank you for being here and providing the report out here.
I think we'll have a more in-depth opportunity to talk to commissioners when they're in here
for hearings in the next couple of weeks. Your summary kind of focused on event, fleet, real
estate and organizational analysis but where were the other couple of big subject areas from the
report namely um employee benefits and procurement do you have anything on that was that was is work
being done on either one of those currently you have to turn to the budget director for that
yeah so that's not a line of work that uh ey continued into phase two it's work that the city
the city took upon ourselves to carry out i'll come back to you for those questions later
thank you i won't ask you those um uh on an employee benefit that's employee benefits i'm
sorry organizational analysis um i know that you mentioned that the work is actually going
really well you're you know realigning a lot of things how does that play into um how does it help
help hinder or impact work that's going on for the ERP system because surely an ERP system is
built on how we are organized as a as a city government so can can anybody talk to me about
how that um how that plays into what's going to be going into the ERP system this might be a
question for Nick but I think it's worth asking here because there's great work going on but
simultaneously we're working on the erp system and if we're building an erp system off of you
know data mapping and uh and organizational charts from a year ago and we're doing this work that's
going to have an impact that's probably more suitable for me
that's probably more suitable for me to me for me to speak to okay i think um we're we're not
at that point in the um erp yet right now it's more of the design of or or we're we're um gathering
sort of across departments the the needs that will need to be built into that system i think
what you're referring to is more once we have a system to then start to take our
our city data and pull it into or pull from our old system and pull into
this work will certainly impact what we're pulling in there that the goal of this work
is to determine to look at across departments to determine how it's currently how they are
currently organized are we looking at sort of benchmarking across standards of you know
standards of like how many layers that a certain division has a span of control to look at are we
are we staffed efficiently so ultimately if they're if if what comes out of that is a particular
department is overstaffed understaffed in a particular line of work you know that that's
that's adjustments that will be made in more of the positions that are I think that's a little
bit independent that's as we build our budget every year we're making those adjustments and
ultimately the budget gets will get pulled into that ARP system um I'll accept that answer for
now i'm going to be interested in talking to nick when he's here too right because that
my understanding of erp systems is uh you know is there i guess we need to know where we are today
to really answer the question that i just asked which is you know as we're as we're looking at
tweaking uh how we are organized as a city where there might be
how we are organized as a city, where there might be overlap and how we might have
synergies between departments. Those things can be literally, you know, created in the ERP system
so that there are systems that talk to each other. So in as much as I know ERP systems are meant to
create the efficiencies there, if you're reorganizing people as you're going along
while you're building it at the same time, those two things have to talk to each other. I think
we can hopefully we can agree on that part um so we'll talk to nick a little bit more about that
before we go on or jonathan can you talk about why um the city decided that um to leave out of
ey's phase two um work the employee benefits as well as procurement items sure i think the
employee benefits is something that you know this the city has uh has has a team that is you know
tasks with tasked with um we have team in dof tasks with uh benefits you know they handle all
of our benefits they make decisions around um what you know they make decisions around what
our benefits are going to look like and how we realize those and then we have a team that's
tasked with discussions you know negotiations with labor this all plays into what we can do
with benefits so EY to carry that out they would have maybe been a an
organizer you know pull together meetings things like that but it didn't
seem like a an investment that needed to be made so we handled that we are
handling that in-house for procurement I think Commissioner Roberts can can
probably speak to more to this but ultimately it's something that her team
has been taking on she's walked me through her progress to date
me through her progress to date and so they are again much like many of these efforts it's a
it's a multi-year process but she's begun that process of sort of reimagining the way they
approach procurement and that so that's something that she felt confident that that they could carry
out in-house um i i think i might speak for a couple of uh colleagues here when i voiced some
concern over the procurement department leading this part of the efficiencies piece of it we
recently had a meeting of the licensing committee where the the commissioner didn't even show up for
the meeting to talk about a procurement or gun detection that has been sitting for over a year
now. That doesn't feel very efficient to me at the end of the day and where the opportunities
are. And we were told about a pilot that kind of spawned out of nowhere. So I'll just leave that
there. Look, I think that I appreciate the work that EY is doing in terms of the other phases of
work. Chair, I just have two more questions and I promise I'll move on and maybe come back for
round two. Jonathan, I'm going to stick with you for a second. I know it's not part of the phase
two work, but it was part of the EY recommendations. So specifically on the EY recommendation
regarding refining pharmacy benefit manager contracts for five to six million in savings.
Do you know where the city is in the process for the RFP on the PBM? I'm sorry, can you repeat that?
Sure. One of EY's recommendations was to refine the pharmacy benefit manager contracts, the PBM,
for $5 million to $6 million in savings?
Do you know where the city is in the process for the RFP on the PBM?
I don't at this time.
I can get that to you through the chair.
Okay.
And then also then what's the status of the non-LMCC healthcare PBM RFP?
pbm rfp i can give that to you as well great what could you break those acronyms yeah so the um
the lm i gotta look that up it is the it's it's it's the labor somebody help me here
labor management oh the labor management yes all right sorry it's alphabet soup in my head right
now um and then uh that was the health care yeah that's the the health care uh rfp the pharmacy
benefit management. Okay. But I thought, was that something separate? Were you also talking about
healthcare benefits as well? Yeah. One's the overall RFP and then one's for the non-LMCC.
So two different numbers. But they're still on pharmacy benefit. Yes. Okay. That's all. Thank
you. Yep. So Jonathan, one last one for you then. The following up from April, EY found that the
city's 10 largest office buildings have 33 percent more workspace than employees enough to leave up
to three buildings by ending the two leases and selling one and put real estate savings at about
30 million dollars in the first year last year's budget took 12 million and in April your office
promised the council a lease exit plan and a list of 30 plus sites by September 30th your September
30th report shows zero um of a 1.78 million dollar target realized through august do you know um
why the the mayor's office has uh let the september excuse me september 30th deadline
um pass at this point do you know what the status is we can give a status of where we are in the
the real estate process yeah i i um i think on the lease exit provisions there have been
termination notices issued to two landlords that the bit that the city will be exiting
that the bit that the city will be exiting those those buildings um i think i put those in the
in the presentation the specific addresses so it's it's uh 1900 southwestern and uh 111 west
washington which by the way as this process evolved um to the alders um a question earlier
that was a new property that came on onto the uh onto the process so notices have been given uh for
exits and plans have been made to exit those those two buildings um and then on the disposition
proceeds i think we've identified property to to dispose of in the city is um considering when it
wants to i'm just going to see those a little later than what was it yeah as you've seen sort
of what's been going on lately now is not necessarily the best time to be market trying to
to sell yeah so um but you know that sits there that opportunity sits there uh when when the time
is right yeah fair enough thank you okay uh alderman lopez followed by alderman rodriguez
thank you chairman and good afternoon good afternoon members of the committee
um first off who wrote the management ordinance law writes the the management ordinances i'm
sorry law does just law and when do they inform you of what the changes are mr lopez
Yes, Alderman. We're not getting into the management ordinance today.
Can we focus on why we got a whole two weeks to deal with that?
Well, with respect, Chairman, one of the things that we talked about was cost recovery as it relates to EY.
And since it's brought up, I don't necessarily see the concerns that were referenced with regards to cost recovery as being part fully of this ordinance.
I just wanted to point that out because I do have it.
I found it and I know as we're talking about things that we are trying to save money and
save money and collect it for our taxpayers, you know, it behooves us to make sure that
our work is getting to that point.
One of the things that we talk about or that was referenced with regards to employee benefits,
how deep did EY look into various benefits for salaries and things of that nature for
non covered employees non-union non-contractual I have to go back to the
the report from a year ago but I know there was a lot of benchmarking that
happened on various options there's best guess like and if I may did did the
report actually look into the practice of how we deal with raises and wage
increases the the the work we focus on was on benefits analysis so things like
health care benefits and things of that nature it wasn't was not salaries as I
recall okay is there is there or will there be opportunities for you to review
that moving forward for the duration of your contract with the city that's not
currently contemplated under the scope that we have in the city okay then how
about for budget now I heard you reference that you have other
departments that deal with benefits and things of that nature who sets the wage
increases for non covered employees there are salary schedules that are
ordinanced in so when you have for example both alderman and staff there
it's by ordinance by cpi but that does not apply to thousands of individuals who work for the city
government correct that's more discretionary it's not discretionary it's actually in the back
Rector.
Hey, we focus on E&Y. This is stuff we got two weeks to talk about. I mean, we can focus on what this gentleman is here for so we can do work on that, where you're talking about wages and all of that.
Well, again, Chairman, I believe that this is about reforming government. I believe that was one of the topics that was discussed. How do you structurally reform how we do things?
And the question that is, that was not his charge. He's not part of that conversation. This is about the Ernst & Young report. It's not about wages. That is subject really more for the departments as we get into the next two weeks. You'll have plenty of time to have that conversation. It's just not today.
well then to be perfectly honest and this is more of a farcical conversation because if we're not
able to discuss reform in all its forms we're cherry picking as this report did how we're
going to make changes to address the financial situation facing this government did you did you
engage in debt review of debt as part of the as part of the report yes it's not part of the scope
No, not part of the scope. What else was not part of the scope? So I know what not to ask you.
Just ask what's in the report. He's gone through what they were tasked to do. He went through the
various lines of work. I was here for that. I saw the little red boxes around here. I just, I just
don't, I'm just having a hard time understanding how you can't have a complete conversation about
the various things. This city
is drowning in debt, but we
can't have a discussion on debt. We have
wages that are triple CPI being
increased, which we can't discuss.
We will have that discussion,
Alderman. We're not saying that you can't
have a discussion, but it's just not with
these gentlemen here. That's all. That's all I'm saying.
all I'm saying. You've got two whole
weeks, two and a half weeks. We've got nine
days together. Yes, sir. We've got nine
days together. You get to
spend a little more time than you thought.
We're all going to be here. I'm
ecstatic to get an extra day with you, Chairman.
Lunch on you. Thank you.
I believe that, and
I'm sorry, are we still paying you?
Are we still paying, Ernst
and Young? We are.
And if we are still paying,
what are we paying for moving
forward? Sure. I have that. That's a fair question. Yeah. I got one of them. So currently the lines
of work in FY26 were as, as Adam walked through the organ analysis, fleet services, special events,
real estate, um, the working group, which is now completed, uh, the fines and fees assessment,
which is now completed um and and then just sort of overall support uh it's they call it you know
the pmo support which is adam uh overseeing everyone else among with a few others um for 27
the organalysis is something that um will will go into its second year that will continue uh the
Fleet Services continues. It goes, I think, a couple months into next year before it's over.
And that's really all as of today that we have them contracted for.
And when does the 2026 report become available?
The 2026.
So there was a report that was produced last year, correct, for work that was put together.
we have them for two more years where you they just are going to do the litany of things you
just announced is there a comprehensive report that's going to be shared with the committee
on budget and indeed city council based on the progress of what they are doing for
based on the progress of what they are doing for the next two years uh yeah you know we haven't
there's not a formal requirement that we do that but we can i mean i think opportunities like today
are our attempt to be transparent get you up to speed on where things are um the report that
they produced was was a report that was the culmination of that first year of
work that we contracted them to provide that report for us to make decisions on
what we were going to move forward with so that that was the intent of that
report so we could then make decisions on what we should move forward with and
what didn't make sense to move forward with so then the question I guess would
be to you do you intend to release that report to city council so that we could also make our
appropriate that report is released as a public 26 and 27 reports the future reports the culmination
of their work for 26 and 27 will you be releasing those reports to city council as well
there is not a report from 26 when it is finished there's not there's they aren't contracted to
create a comprehensive report there are deep into these lines of work working side by side with
city departments on implementing the work that came out of that that original report so for
two years there's not a single report or or guide of what they're putting together with each
department we're just jumping in with ey at every department level making the changes as they want
as they propose without sharing that with city council no we we send you an update monthly
that you get a report every month that shows it's extensive it has
It's extensive. It has line by line the work that's being done.
I think that, let me reframe this.
EY is acting as an implementer of processes that are being done.
So let's call them a contractor that is helping the department execute the plan.
so while they have done a comprehensive report initially they're now shifting from a role of
review to a role of implementing right and so it's like not may not necessarily have an
implementation uh report on that now if that's something that we would like to see then that's
something that can be be asked for but I think in their role of what they're doing is not necessarily
really being creating another report but actually doing the work of the implementation that the
city has asked them to help with similar in some cases the city is doing it on its own
sometimes they're asking for help from outside groups to make that happen is that does that help
you all to man just one go ahead clarification the city the city is implementing we're supporting
you're supporting i understand you're you're supporting implementation um uh autumn nugent
thank you thank you chair just who who actually oversees this contract vehicle like who signs off
to ensure that ey is meeting their deliverables obm does i mean obviously the the lines of work
there are departments that are sort of leading that work sure so they you know if you're talking
about like signing off on invoices is obm so at the end of the day obm is looking at the contract
vehicle and determining whether or not ey has met met the deliverables correct okay
Okay. Thank you, Chair.
Okay. Chairman, if I have...
Go ahead.
Okay. So I've heard twice now about some monthly report.
I'm looking through my emails for a monthly report.
What monthly report are we talking about that we get?
The monthly report that's sent to all 50 elders monthly.
Okay. I've asked about five and no one knows what we're talking about.
So what are we talking about? What's the title of it?
I have the September copy here, but it's publicly available as well.
it was in my dm apparently oh all right so we'll we'll make sure that everybody gets a fresh copy
around of those reports and uh and actually and actually chairman if we may then can we have
all of those copies for the past 12 months or whatever you've been issued are they posted on
your website yep they're they're posted you absolutely do you do you have these reports
Scott Scott's got them so you got
them so it's not like they don't exist
maybe we just have to help you find them that's
all okay okay
thank you all right very well I
think we had
you Rodriguez followed by
Napolitano
thank you Mr. Thank you
so much Mr. Chair
I
just wanted to start by saying I think
we've mentioned 1.5 billion
over 10 years I think
I
I think those numbers need to be put into proper context.
The fact is, I think city council needs to have significant discernments in what that
end number actually ends up being, in that these are recommendations from professionals
who've done an excellent job, I might add, but the devil's in the details.
And we have a job to do to make sure that there aren't unintended consequences.
So I'm specifically interested in the potential.
specifically interested uh and the potential undermining of um city services city staff
um obviously not of an out of intention but i you know i want us to be very critical about this
so i'll cite in the report page numbers um specific in the report that we should be talking
about today in the ey report uh did i mention the ey report chairman yes you did okay uh i think
under organizational analysis, service optimization, we're talking about recommendations
that would affect frontline staffing, public safety, response time, quality of neighborhood
services. I'm just curious if there was some assessments on what potential impact there would
be on frontline services, frontline staffing levels. I'm a firm believer that cutting union
staff is not something that I want to do. I want to see, and I'm pretty sure my colleagues feel
the same. So that's why I'm a little bit concerned at just saying, you know, hey, we're going to save
$1.5 billion with these recommendations without this discernment to make sure that our frontline
staff, Chicagoans, everyday Chicagoans aren't negatively impacted as well, who are our base
of tax donors. And if we cut their jobs, we're cutting our tax revenues, right? So I'm just
curious as to what what what was the thought what were the guidelines to ensure that we're not you
know um i don't know what the say it is but but you know cutting off your nose to spite your face
i forget what the stain is right yep yeah i and alderman i'm with you on that i couldn't agree
more um you know the two-year process that that eui is is working with us on is being done
you know let me take a step back when they put out their report you know the
numbers in in the initial report from 2025 it's done with it's a lot of
It's a lot of potential.
It's a lot of from, you know, 30,000 feet up, what we think could happen.
This two-year process is them digging in deeply with, I think it is 30 different departments,
maybe, somewhere along there, to get a sense of what their organizational structure is.
so we can't really speak to what the true opportunity is until we get past we get all
of those assessments done and then I'm completely in agreement with you that you know city employees
it's important to protect city employees and you know when we do when we get there when we get the
you know we're talking about moving at that point in time we're talking about moving into 2028
to start to assess all right now that this mapping has been done across all these departments
let's really dig in and see what it's telling us so let me ask the question maybe of mr
and if you're going to say something that just let me add something on and maybe it'll it'll
inform what you're going to say you know i'm thinking more specifically like are we talking
about more overtime are there other unintended consequences um are we ready to delay service
delivery um and things of that nature was that necessarily contemplated when we discussed these
consolidations when these consolidations were looked at yeah well i was just going to add just
in terms of what's in and out of scope a little bit i think helps to frame it so police and fire
are out of scope to be clear because i think you were you're implying that and the back office
functions are things like human resources and recruiting and um uh finance law so some of the
back office functions that take place in the departments as well as within its own department
itself and so it's looking at the responsibilities and how people spend their time and better aligning
spend their time and better aligning that how they spend their time to the core mission of
that department as opposed to shadow functions that exist currently across the departments
and so i don't know if that answers your question around around service alert but it is very much
focused on making sure that the city employees are able to focus on the tasks of um their their
role and responsibility not these shadow tasks that often take place it doesn't strike me as
though that service delivery was a goal as well we weren't trying to maximize for service delivery
when considering some of these operational efficiencies for lack of a better term
on some level we are so i think hr is a great example that we're we're digging into around and
it's something that i've heard for probably over a decade from this council around i've heard um
through budget hearings, various years, questions of department X, why do you have five people
that are in your HR department? Isn't that for DHR to be doing? And so we're looking at that
to say, what makes sense for the department themselves to be carrying out versus DHR to
be carrying out? And so could there be some centralization of that to be more efficient,
to deliver? If the goal is to reduce the amount of time it takes to hire a position,
are there things that we can implement or centralize within DHR in order to realize that?
That is what is in scope. So when you talk about service impact, we are looking at efficiencies
things like that. What we are not looking at is we need to be doing less of this service
to our communities. That's not in scope of, well, we need to provide less services in this department
provide less services in this department or that department that will impact our communities.
That is not in scope.
And what I'm suggesting is we have a duty ourselves, in my humble opinion, to make sure
that whatever efficiency, quote unquote, is created or consolidation is implemented, that
it doesn't have a bottom line impact to our residents as far as service delivery.
Speaking of HR, I just had on pages 42 to 46, we're talking about employee benefits analysis.
We're also talking about essentially in that section, health care and staff savings.
And I'm just curious whether those are just savings to the city's bottom line that are suggested there at the expense of those costs being put on our city workforce.
so essentially our city workforce uh is paying for these again quote-unquote efficiencies
that that is something that's being looked at looking at the benefits that our employees are
receiving i think the one thing to go back to some previous questions that has been implemented is
it was through this it was determined that represented employees were actually paying more
in health insurance contributions so then non-represented non-represented employee
have now seen that bumped up to be you know to be in line with with union represented employees
those are the sort of things we have identified and yes it does it does mean that non-represented
employee is paying more in health care but through the assessment as they it was found
that our the employee health care contribution was was low and uh were those
And were those assessments also taken into consideration or suggesting contractual changes?
Well, in this situation, it was non-represented, so there was not a contract involved.
And then just the last thing, and this will be my last question or line of questions, Mr. Chair.
I'm also interested in this question around distributive impact.
essentially um for the lack of better way of saying it um the progressive nature of some of
these implementations or lack thereof for instance i think the fines and fees are potentially that
right are working class people bearing the bulk uh of these of these again quote-unquote
efficiencies was was that type of distributive impact that progressivity in uh implementation
of these reforms was that taken under consideration in this report? Distributive impact. That's a
nice one. You like that? Yeah, I like that. I'm going to go teach that to this. I'm going to go
to UIC. So I think the decision-making process that the city went through on how to evaluate
fees and fines to adjust is a better answer, I think, by the budget director. I just want to
share equity and doing these options on an equitable basis was very much included in the
report but in terms of service efficiency which you were touching on earlier i want to just make
it clear that that also filtered into the other work streams so on real estate for instance there's
going to be new customer service facilities on the first floor of city hall that didn't exist to make
things more accessible we're moving certain resources out into the community to make city
op you know sit uh the city more accessible to the residents and so when i think about service
efficiency it's not just about like who's doing what it's also across all the work streams and
the fleet process is to have all the rolling stock more available and not in the repair shop
where it's not being used.
And so that theme does hit across multiple work streams.
I don't know if you want to touch on how the city's making its decisions.
You know, if you want to go back, I know you have in front of you slide 15.
It's that with that graph with all the bubbles.
so you know these are all of the opportunities that EY helped us look at those in the upper
right are the ones that really presented the best opportunity because they were low compared to peer
cities and you know it just those are the ones that made sense to really look at where we focus
and you look in that box those are the ones that we increased because we simply we weren't in some
cases weren't covering the cost of the cities you know to implement um that action and extremely low
compared to what ey had shown across the country okay i just continue to urge uh my colleagues and
certainly the time left here i'll i'll be at the forefront of making sure that equity is something
we're talking about and we're focused on um so thank you mr chair thank you it is a quick
question like if you guys had to kind of take a a forward view based on what you knew then to what
you know today what changes might you all have made or what revisions may you all have looked at
as far as the cost and your potential for savings based upon, like, being –
you learn as you become part of an organization, you kind of learn some things.
What would you have done differently or what thoughts would you have had?
have done differently or what thoughts would you have had that are that you had then that you don't
have now or pro or con um well i think uh we now have more visibility than existed previously so
on special events for instance the city had no way to track the centralized cost that it was
incurring and so you can't recover what you don't track and so um we now have a lot in that that
factors into multiple work streams on fleet they're improving the maintenance the maintenance
system that um the the um auto shops use to be able to better manage that there was i think 500
vehicles that were in the city system for maintenance that didn't that didn't exist anymore
city had disposed of those so i think we have a lot more visibility now um on individual
opportunities and ways to uh and you know help the city make options on and choices with that
like have you all make adjustments to what you originally thought the savings would be
based upon your experience now having been in the in the system for you know 18 months
yeah i i think what we've observed is that new opportunities have come up and then they're the
city has made decisions to take things off the list so um you know back you know kind of on
special event cost recovery to parades not being part considered at the moment for a cost recovery
from non-city sponsored parades. Real estate, new opportunities coming on. I think we had up to 20
new vacant parcels or buildings that the city is considering disposing of that weren't not on the
original list. So you just learn more information and savings opportunities as you progress.
Who's next? Napolitano, I think you were up, followed by Viegas.
thank you chairman i just got a couple of brief questions um
thank you guys for being here just really quickly and and i mean this with the utmost respect as far
and i mean this with the utmost respect as far as like this pant this packet right here
like a quick synopsis from you like what what is what's the purpose of this right here what what
was your goal and what did you create what were you trying to get out of it just like i know what
it is but i just like a statement wise if you had to break it down to a quick statement what what
was your goal with this that's today's presentation or yes the september update okay um yeah october
23rd yes yeah um this was meant to inform you all about the progress that's been made on the
initiatives that we're supporting okay as far as initiatives supporting to accomplish
different efficiencies revenue raising opportunities and cost reduction opportunities
and i mean i'm not like questioning you probably putting them right the reason why i'm asking is
like when you go into something like this or putting together a packet like this are you
given are you 100 independent or are you given guidelines by the administration any administration
to work more in this direction than in that direction or are you completely independent
in your summary when you're putting this together and what i mean by that is if an administration
has an agenda of something that they want to accomplish in this budget and let's just say
like the last two budgets it was a head tax or to implement a head tax would they say hey this is
what we're going after this is the amount of money we're trying to get out of in a head tax
so you can work your efficiencies in a different direction because they want to accomplish the
head tax like say for political purposes is that that's not a fair question for him that's an
absolutely fair question it would be based off of if he's told to go in and work independently
or if he's told to, this is what we're doing.
There is no independence in the sense of a,
they're not performing an audit, right?
There's a different set.
So there is no, I would call independence
call independence is in the sense that the public would want it to be i mean the departments are
being asked to do certain things he's being brought in as a consultant to do certain things
is there guidelines okay then not is there guidelines or guide rails that you're that
you're you're set on so i want to make sure and if i'm not following your line questioning please
redirect yeah but the work that they've been doing over the last year has been in conjunction
side-by-side with city departments.
They've been helping consult those departments
to get to sort of what you see in this report today.
I got you.
To, you know, the initial report from a year ago
was obviously they were getting information
from our departments,
but it was a little more of them making,
giving us potential,
like some here are recommendations of areas you could go down and then out of that report then
we said these are great here let's go down these roads and we want you for a lot of these lines of
work we want you to help us through the process so they now are sitting down working with 2FM
working across you know special events was geez I don't know 10 12 different departments
and being that sort of that quarterback to orchestrate it all
and pull it together and provide guidance
and additional recommendations for us to get to this point
to achieve what we've achieved.
And my question is, I'm not trying to do an EY got you moment at all.
I'm just asking as far as if you have something that you want to accomplish
and you want to make sure you get it done and didn't accomplish it the first time
and you're trying it the second time with some of your
with some of your ideas or concepts it might say that that concept isn't even needed because we can
have efficiencies or we can we can do better in this direction i'm just wondering are you do you
have guidelines are you set on a track or is it just free for all find out whatever you can do
to for efficiencies and and you know is does that make sense do you understand what i'm saying there
in the categories that we've been working on we've looked at pretty there was no restriction
in terms of of looking at opportunity okay you channel that opportunity so real estate's a good
example i mean we started with more than 500 properties right and you kind of had to take
out all the police you know the police stations the fire you know the fire stations assault them
you kind of narrow that list down but there was uh there you know it is done in at the guidance and
direction of the city okay and last i have a couple more questions but i'll probably come
back on them because i don't want to take too much time when you're not like you said you're
you're kind of given the ability to go at it and find whatever you can here when you're looking at
fines and fees what what's the total when you look at fines and fees what's the total number
that the city is is missing as far as fines and fees what what are we out what's that number
uh well so so in phase one so that was looking at 35 of the of the fees that the city charges
in total it represented i recall a little over 100 million dollars about 91 million of which
um went to what goes to the corporate fund there's a small piece that that doesn't um and we looked
at opportunities for cpi adjustment that had not happened in five plus years we looked at the last
time you know those fees and fines were adjusted there was a working group established with the
city to help um evaluate where those where the opportunities um could be because you have you
know things like the vehicle sticker tax that we i think is on the list but it's just you know it
It could create a lot of money but was deprioritized by the city.
was deprioritized by, by the city as an option. And so, um, that's kind of the scale of what we
did in terms of the analysis, the phase two piece that I mentioned was cataloging and pulling
together all, you know, 200 plus fees and 20, 20 plus fines into one, one place. It wasn't really
looking at a revenue opportunity, which is what you're asking about. It was more, let's get all
the information in one place. And then the city will decide and evaluate if it wants to pursue,
revenue changes to any of those fees or fines but at no time when you're putting this together
do you take you know that 100 yard elevated look down on it and say over x amount of years
the city is owed x amount of dollars or is out or missing x amount of dollars and fines and fees
and what can we do to make that better to collect on those fines and fees and if you did let's just
say over a 20 year period of time do you know what that number is where we're at right now
what yeah what the city's missing is fines and fees from the 35 that were part of the report
we identified between 20 and 70 million dollars 20 million and 70 million dollars of incremental
collections that the city could collect if it acted on um you know the analysis we did which
was the low end of that range the 20 million was to go to the average peer jurisdiction for those
particular fees that were benchmarked the 70 million was if you maxed out at the highest fee
that your peer jurisdictions have which is ultimately a decision the city needs to make of
nothing something or you know where it wants to land but it was 20 to 70 million of incremental
revenue on those 35 fees which i think represented at the time around 12 percent of all fee collections
but if you weren't taking those 35 categories you're looking at what's the
the total universe is what you're asking
are you asking the total universe
Are you asking the total universe on all fines and fees
or just the $35 that they look at?
All fines and fees.
I mean, we've talked about it before.
I mean, I know it changes year over year,
but, I mean, we're in the billions, correct?
So let me, just so that I understand what you're asking,
you're asking for, like, a universal review of all fines and fees
and the potential of adjustments if we take the low, the mid,
and the high range.
Is that what you're asking?
The total universe, because I know it changes year over year, but I mean, last we looked at it, it's an exorbitant amount of money.
My next question is...
No, I understand your question.
And the question, I think, and this goes back to the director, has that type of an analysis been performed over all of the city's fines and fees per what all the Napolitano's looking for?
Nap, chairman.
Yeah.
I mean, my goal is at the end to make life easier for all of us.
I mean, I just don't know if we're doing our due diligence
or going after the whole thing and finding a way to do it the proper way.
You know, nobody wants to hurt people at the same time,
but there is an exorbitant amount of money out there.
And you know what?
This is probably a question we could talk about throughout the budget.
I don't want to take too much time in it, but can we expand this universe
and say, hey, instead of us fighting over $800 million
for this budget right now, we can look back and say,
hey, we have over close to $8 billion owed to the city of Chicago
in fines and fees.
Is that a universe that we should be allocating funds to,
to putting manpower to, to saying, hey, this is what we need
to find a way to go after with kick gloves on for our residents?
You're talking two issues.
We're talking about going forward on fines and fees about making adjustments legislatively to the amount that we charge versus what.
charged versus what has happened in the past that is unpaid.
Unpaid on the collection.
So I think to their point is that what Alderman Napolitano is asking for is that universe,
and you landed on 35, and if that universe should expand, maybe that's a fair question.
But then the component of the collection of what is already in the past, that's a separate
question that i also think that between was not the budget it's more uh with the comptroller's
office that would need to ask which i think is a fair question for him uh come monday but do you
understand what what what the ask is uh director yeah yeah i think and you know what to be honest
director chairman you hit it on the head we you don't if that's something that we can start to
pull and i don't need you don't have to go into it now let me because i think you raised some good
points and I'd like to sort of walk you through the process we've had the last two years with
with EUI so the first year was looking at these 35 that we identified um that you see you know on
the on here and you can see I color coded buying the ones in yellow those are the ones we moved on
you see there in that upper quadrant because those are the ones that had the most um opportunity
and when we look at where they were set right now
and the costs, you know,
that it was in the case of fees,
like how much it was costing the city to implement.
It just, those are the ones that made sense to move on.
Now, to your question around a more comprehensive look,
that is what we, that's why we spent this year
working with EY to create this extensive database
so that we we have it all tracked you know what the rates are last time they've been increased
we now have that document that
that document that we can year in year out look at and say all right which ones are we going to
focus on this year which we do every year my revenue team takes probably a couple dozen
and says let's look at these this year consider whether it makes sense to increase them or not
works with DOF to determine if if it's something that we want to include in the revenue management
ordinance we do that assessment to determine you know we work with the departments to say
all right what does it take for you to implement this this uh fee uh you know c dot what like
talk talk to us about the manpower it takes for you to to implement this fee and then
we determine all right well what's the revenue that comes in from this right and and determine
should we be increasing this to cover our costs are we good where we are we do that across probably
a couple dozen every year now what came out the work that came out of this year is uh it's just
we have the data to probably better make decisions moving forward and i appreciate that and i'll wrap
mine up right now chairman i appreciate it but my my thing is i guess what this is where you're
looking at changing in the implementation implementation and where we can change and
where you can collect money off of fines or fees,
and mine is the back end where we have fines and fees
that have never been paid, it's like you're creating more,
but we're not collecting on the backside.
At one point, tell residents in the city,
there's those that are paying, those that aren't paying,
why does anybody pay at all?
And at some point, they're going to collide with each other.
So I just wish, I hope we could put more impactful research
research into the outstanding fines and fees because that number is ridiculously high.
that number is ridiculously high but i really appreciate the work you guys are doing i understand
what you're trying to do um but if we can find a way to catch them before they collide and
eventually nobody pays anything because no one else no one's paying anything um i think city can
we can really benefit from it we might not have arguments down here because of it so i appreciate
chairman thank you for your help thank you um to those of you all who are uh virtual uh if you
all have questions please let us know we're getting down to the end of our people that are
here oh that's fine um that are here so if you could raise your hand so we can know what we're
working with uh you ready uh alderman viegas followed by alderman walkerspeck thank you
mr chairman lawyer yeah um yeah over here so quick question for the ey folks
and maybe the budget as well.
So I heard you talking about HR and the consolidation.
So is this in line, EY, did you guys look at the ERP system
or budget look at the ERP system that we've been talking about
for a few years and whether or not that's part of the efficiencies
or part of the cost savings that was being analyzed by EY?
We're working with a different vendor on the ERP.
so there is a contract that's finalized who's the vendor because i know you were you were
who is the vendor yes it's a guide house so guide houses and so is in that inclusive of
the time and attendance component as well yeah okay and then under real estate um i know that
you took a look at that someone said that it's not the right time to sell yes i said that and
And that was...
In relation to some of our vacant
or could become vacant buildings,
it's given what's really happened
just in the last three, four months,
I guess a little further,
it's probably not the right time to sell.
But we now have the information from EY
to have you know keep that and when the time is right consider then selling
those properties so was there any type of discussion or analysis of maybe not
even owning property but perhaps taking a look at our whole portfolio and trying
to package it where we would sell that and then potentially lease back over the
course of the time so that we were not having to pay for maintenance etc is
there any any consideration on that I know that so the reason why I asked that
because Canada a couple of cities in Canada Toronto used triple P option
there to consolidate some of their government offices by selling off their
assets and just leasing back on that is that wondering if the EY took a look at
that option. That's not something we had EOI looking at. No. Okay. A lot of my questions
have been asked, Mr. Chairman, so thank you. Thank you, Alderman Villegas. Alderman Walgespeck,
followed by Alderman Hall. I understand that you're a member, sir. It's okay. We're here.
That's all. Go ahead, Alderman Walgespeck. You waltzing here two hours after the hearing
starts this man's been here the entire time come on man here if you want to get your spot up go
It doesn't matter to me.
All right.
Thanks, Chairman.
I just wanted to go back to procurement.
So under procurement in the September report,
it says that there was a potential total of $10 million in savings,
all funds $14.85 and then $7.81 in the corporate.
And I don't know if this is, I think, Jonathan,
and this is probably for you but um what was the total amount that was projected by ey in last
year's report for potential savings for procurement i don't i don't i don't have that number in front
of me i i think to get to your line of question it was significantly more over a 10-year period
one second i'll look it up there it was um i had 55 to 111 a million i don't think that
was over a 10-year period though was it that was i think that's annual what once you have fully
implemented yeah once you get to category management so what what the savings we're getting
in right now is more immediate savings we can get through renegotiation of contracts
procurement is has put in place a process to modernize their their procurement you know that
that's something that will take several years to start to reap the benefits from was procurement
really so bad that they have had i mean i've read the august report the september report
it looks like they never existed in terms of practical or um what should be uh government
procurement practices i mean if you read through the amount of stuff that they put in in each one
of these reports and the progress update, it looks like they were doing absolutely nothing.
update it looks like they were doing absolutely nothing for the last few decades in terms of
good practices is that what you guys found in the e i mean the what they're putting in here
looks like they started from scratch um well let me go let me step back a little bit so last year
we asked uh several questions about things like maverick spend um there was 381 million in uh
uh procurement that was identified as Maverick spend has that decreased in 2026 or what is the
expected Maverick spend this year yeah I think this is a good opportunity to maybe provide a
little perspective there you know what what EY looked at they were looking at high level all
right these are contracts that go through our procurement department and then here's this
other group that does not go through procurement and that's that's plain and simple what what
they presented you know there's opportunity to bring things within back within procurement
for savings and there certainly is don't get me wrong I'm not suggesting that there's not but
you know there's aspects of this that ey can't really see into that are important there are
hundreds of millions of dollars that don't go through procurement because they go through our
social services departments i'm talking about delegate agency contracts right hundreds of
millions of dollars every year we pointed that out last year yeah and there's that is the best
way to administer those contracts so i wouldn't i wouldn't refer to those as maverick spending
that is the efficient way to have our social services delivered
through our community organizations but there's zero oversight over those
organizations but there's zero oversight over those 380 million dollars then well i i worked
at family support services for 10 years and i can say there's significant oversight working with
those agencies on monthly in some cases weekly basis to talk about uh you know we would we would
have meetings with, say, for one program area where we've got eight different agencies delivering
the same service. Bring them all together to talk about how everyone is delivering their services
so they can learn from each other. On top of it, the invoicing process, I'll say the invoicing
process for delegate agency vouchers goes through significantly more review than any other invoice
that goes through the city.
That is very closely watched
by our Department of Family Support Services,
our Department of Health.
There is a lot of oversight
and a lot of collaboration
with our community organizations.
Okay.
I mean, I think that
that might be a good example there,
but I think they identified
several other areas that were problematic.
When we asked last year
how to rein that in we were referring directly to the ey report so there's a lot of things in
the september report and the august reports that that were sent out that really um they said they
were going to do but when i look at this and they say it's potential 10 million at the end of this
year i don't see where they did any actual work to rein in the savings that were identified by
ernst and young which were 55 to 111 million sure i mean i find it i it kind of hard to believe that
they couldn't figure out how to do some of this within uh one year and then we only got up to
And then we only got up to maybe $10 million
because there's four asterisks on the $10 million,
which means that it's much less than anticipated.
Those are not my asterisks.
Those are the department's asterisks.
So I've sat with Department of Carement Services.
They've walked me through where they are in the process.
I'm sure they can speak more to this
when they're here in the next couple of weeks.
But they are taking the steps.
It is something that takes time,
just like the organalysis is a two-year process.
I would imagine this procurement work
is at least a two-year process to...
Look, they need to create better databases.
They've talked through that.
Without good data, everything is difficult.
and so they are putting that in place but it takes time yeah and they're realizing what they
can right now they're not you know the reason we have savings figures now is because on top of that
they're they're working to renegotiate existing contracts or when there's a new contract in
place they say you know this price let's work on this price a bit before they award the contract
That's what we're seeing in the short term.
How much of that 365 that was initially brought up is, are those types of contracts versus
the type of contracts I think he's really going after, which are procurements that are
done at the department level that one may argue should go through DPS and that don't?
What is, if you were to segregate that number, what is that approximately?
I think we probably need to go back to the data that EY put together a year and a half ago.
put together a year and a half ago but
I just know from my own experience the level of
delegate spending that. I get that. We take delegate
spending out. What is that somebody buying
I don't know salt or widgets
and. $320 million based on what the mayor's budget is this year
which he said was $40 million for delegate agencies or at least CVI.
So we're talking $300 million.
Well, I'm sure it was larger than that because it's just CVI.
That's the question I think that we need to understand.
How much of that spend is non-delegate spend?
What does that look like?
And what can we do to either A, reduce that spend at the department level?
Because evidently there was some rationale as to why this is done at the department level versus at the central level.
And understanding the whys of that.
and then potentially saying, hey, Commissioner X, you no longer can do that.
It must go through here.
Yeah, and just one other point, if I could add on to that.
The EY report said that there were 100-plus construction contracts
with the 45 largest vendors that ended in December of 2025.
So they did not rebid any of these to realize the savings.
i where these contract and i'll i'll ask the procurement chief but it seems like if they're
not following the guidelines that both ey and the city council said to follow they're not realizing
the savings that that could have happened at this point today it's been almost a year since
we asked them to do these things so at the end of last year 100 plus construction contracts
that should have been rebid for potential savings that came from the ey report not from me
not for me and if we're not realizing if we're not following through on those things and i'm not
blaming you but seems like procurement's putting a lot of fluff words into these reports when
they're not actually following through on some of the significant things that were in work stream
number six in the ey report last year yeah i'm just so i think that procurement and and those
you know departments i'm assuming you're talking it's probably c dot contracts water contracts i
think they can speak to where they are in that procurement process i'll have to drill down a
little bit more um chairman just uh one other area work stream number five work stream number
five last year showed potential for 80 to 100 million and i suppose long term short to long
term fixes um do we know how many of those savings were implemented in 2025 and 2026 year to date
is it the benefits review work stream uh pardon the benefits review work stream which works for
me referring five uh that would be um employment or employee benefits analysis page uh 42 your
report sure and your question is how much have we realized today two million okay and the potential
savings there were um well they were pretty significant um 80 to 103 million so we we
realized 2 million of the could you tell us why we were only at the 2 million versus
yeah that's you know short-term potential uh the the uh i'm being corrected we're at 4.4 million
as my
HR person
is sending to me
the larger
the larger number savings we're talking about this needs to be realized through negotiations
uh which of course takes take time sure um you know so contracts don't come up every year yeah
well last year though it says in the reports that the lmcc meeting was august of last year
august of 2025 has there have been other meetings yeah they meet on a maybe a quarterly basis okay
so the last one was um sometime this fall um is return to work policy and the management
ordinance update uh finalized on those on those two issues return to work policy
and the management ordinance which you handed out this week i suppose um
there was a decision memo presented i don't remember seeing that on the return to work
policy and the management yeah those conversations are still ongoing okay is there well if a decision
memo was presented doesn't that mean it's final no that doesn't mean it's final it means that
there's now a need to discuss you know all right here here's a potential decision memo says here
are potential options okay need to determine all right what direction are we going with this but
the September report that was presented says it was in the management ordinance update and I don't
see it in there so yeah the a couple other things the the return to work policy you mentioned is
currently being sort of familiarized I'll say with the unions so that's where we are in the
process there and that's just a union related one or is that entire workforce for the city
um that is because i think the direction from the council was it should be enforced
covet is long overdue and
covid is long overdue and long overdone i suppose if we're talking about people not returning to
work yet um that was something that the council put on the table last year and said this needs
to be followed up on and um and that practice yeah it it does include everyone it's not just
unions i mean we're obviously we're we need to to walk through it with the unions but it also
includes non-represented can we get a more um definitive uh update on that other than what's in
the um document from september august and september sure through the chair absolutely
on on which item the rtw on the return to work return to work policy and it says the management
ordinance has the update in it with the decision memo presented but um that's not in the
management ordinance that was handed out very well all right is it okay very well
alderman riley followed by alderman hall finally you know chairman i i really do hope that
members of the budget committee will be recognized for questions during the upcoming hearings before
non-members are as has been tradition in this body for decades um you know before i get into
some questions. I want to understand Ernst and Young's relationship with this body. So I'm pretty
sure I understand the nature of the relationship Ernst and Young has with the mayor's office and
the administration and OBM. Who does Ernst and Young work for here? The city of Chicago is the
incorrect answer. So is it the executive or the legislative or both? Our client is the city of
chicago i just asked you not to answer over broad who hired you the office of
the Office of Budget Management.
Right.
And have you been made available to members of this body
without a chaperone or supervision from the administration?
Could a group of aldermen meet with you
and members of Ernst & Young's team
separate from the administration?
If I wanted to start a work group with five alders
and you and whomever's on your team,
without OBM there, without the chairman there,
without the mayor there,
Is that something I can do since you work for the city of Chicago?
There'd have to be funding.
I'm asking Ernst & Young if he could maybe.
He can't answer that question.
Only I can answer that.
Only the chaperone.
I think I've sat here and let him speak freely.
Except for right now.
He can tell you he can't answer that question.
Well, I don't know.
It seems like he needs your permission to say whatever it is he says.
Well, I mean, the answer to the question.
I'm trying to understand if this gentleman here from Ernst & Young,
who I don't know very well, who's been in front of us a few times, is as loyal to the members of
the legislative body as he is to the executive. That's all. It's a simple question. It's not a
trick question. The city is our client. And so we are, our fiduciary responsibility is to our
client. Correct. But your client is made up of two separate bodies. One is the executive branch.
The way the city works is we have two co-equal branches that run this town.
The mayor is one, and the folks, the 50 folks here, we're the other.
But we do that together.
We don't work for the mayor.
Technically, you're not supposed to work for the mayor.
We're supposed to, it doesn't happen lately,
but we're supposed to collaborate to pass a budget.
The mayor proposes one, we decide if it's any good.
And so to tell me that you work for the city,
I am fully aware of who's issuing you these massive checks.
with little result. Do you work for this body?
result. Do you work for this body or the mayor or both? Simple question. You're a smart guy.
I don't know how to answer that other than say that our client is the city of Chicago.
Yeah, that's a talking point, I suppose. It's the evasiveness. It's the opaqueness. It's the
lack of transparency that led this administration to get roundly embarrassed last year when this
body passed a budget without the mayor's consent right and we'd like to avoid that again this year
and the mayor and all of his rhetoric has said he wants to collaborate with this body
he has now spent well over six million dollars on Ernst and Young who seems to only have direct
conversations with his administration and select members of this body who are loyal to him
and the way I look at it that six point whatever million bucks we've spent on Ernst and Young
belongs to the city of Chicago, the people of Chicago, and the two bodies that govern it,
the executive and the city council. And it is frustrating to me that it seems Ernst & Young
is only made available to this body when there is a chaperone present, and then you are told what
you should or should not answer when we question you. That's problematic to me. And I'm saying this
for your benefit, Chairman, but really for the administration's benefit. You know, if I thought
that we were going to get
honest broker in Ernst & Young
for all this money and that they were
going to be transparent with us and
reveal to us all the homework done
with the administration behind closed
doors, I'd feel a lot better about this
relationship.
But that's not how this is working.
And if the mayor
is truly being genuine and wanting
us to help him solve an $880
million structural deficit,
one would think that he would make available
to us all of the resources that are available
to him. And that didn't
happen last year
and it isn't happening so far this year.
so far this year and so at the very beginning of this process I'm raising
this as a point to see if maybe we could try a different approach than last year
because that sure didn't work out well for the administration so is Ernst & Young
available to members of this body without babysitters you're not gonna
answer that I can answer it but I don't know that you want me to Ernst & Young
with all due respect I'm asking them but I would like part of my problem is you're
answering their questions. I would like to raise the fact that a year ago when Adam came in I
believe it was at the request of this body. Today you didn't ask you didn't ask to meet with EY.
That was something that that I brought so that you can have a conversation with him. Well thank
you so much for letting us have a conversation with a consultant we're paying. It shouldn't
require that. I think any member of this body should be able to meet with this consultant
because we paid them. The mayor didn't pay them. We did. We appropriate the money here. The mayor
does not appropriate money. So we paid them. But they're your consultant. I'll move on. I'm not
going to belabor this point, Chairman. We can go through this the next several months until we
maybe balance a budget. I wanted to make sure I understood some earlier comments that we were
talking about what's in scope and what's not in scope and we were talking about
trying to manage costs and I just want to make sure I'm clear that reducing
services or talking about reductions in headcount they those were not in scope
is that is that correct I think I heard that as an answer earlier I just want to
make sure I heard it right so I don't know how to answer your question directly
directly. Maybe OBM can tell you how to answer it. For which line of work are you referring to?
I'm just talking globally, looking at the budget. I understand that Ernst & Young was to identify
cost savings and operational efficiencies and ways to save money. But I thought I heard from
a previous questioner that reduction in services, so reducing services or potentially reducing
headcount those two things were were excluded from the scope of what ernst and young was asked
to work on am i is that did i hear that right yeah i i think you heard it correctly yeah i mean the
the organizational design work stream which is one of the work streams is focused very much
on looking at roles and responsibilities back office functions and opportunities to centralize
those functions.
It's not focused on headcount and things of that nature.
What percentage of the total city budget
is tied up in headcount personnel services?
90%.
90.
So the vast majority of our expenditures
are in those lines.
But you guys weren't asked to look at that, Ernst & Young.
But I'm trying to get to a bigger point here.
There's been this ongoing,
and it's more rhetoric in the paper than anything.
You know, does the city have a spending problem
or does it have a revenue problem?
And there's one school of thought
in this building on the fifth floor
that's really more of a revenue problem.
There's another school of thought
more down here in this chamber
that it's more of a spending problem.
If the vast majority of our money
is in personnel lines,
and that's something Ernst & Young
has been really asked kind of not to look at, that really does hamper our ability to
That really does hamper our ability to manage costs, don't you think?
If that's where the vast majority of our costs are housed in a budget.
There are a number of these lines of work that are associated with personnel costs.
Well, no, I get that.
But we just heard from Ernst & Young, they were told that's out of scope.
I'm just trying to understand what they were asked to look at and what they weren't.
And I think Michael Alderman Rodriguez said this earlier,
no one here is eager to reduce services no one here is eager to fire employees but if that's
where all the money is it's certainly something you have to take a look at and again i'm not
talking about eliminating departments or entire programs but since i got here in 07 with alderman
wagas back we're a couple of the longest serving here every year no matter who the mayor has been
we have raised issues related to the manager to direct report ratios and they are incredibly out
of whack with the private sectors so we're not picking on the current
administration we've been consistent but that falls under that that that bucket
not in scope and so I want to understand you know what are the things we are
analyzing and what are the things we aren't because separate from you know
reducing programs and headcount that's a legitimate issue this ratio and not
much has been done over the years certainly since i've been here to to change that ratio in a
meaningful way um but it seems like that's a pretty important area for us to be focused on
um i agree with you and and so you know maybe we weren't fully following the question but
may not be in scope to look at all right what positions should we remove but what is in scope
with this two-year analysis
two-year analysis is EY's looking at departments,
looking at their structure,
and looking at best practices.
So there will be that work that comes out of this
that shows, do we have too many layers
within this particular division?
Do we have too small of a span of control
within this team of managers that will come out of here that will come out of this work
it will be you know it will be the city of Chicago then to decide what we're going to do
about that but in the short term this is why we have this sort of targeted hiring freeze in place
in 2026 and we'll extend it again in 2027 so that we're essentially saying let's put these positions
on hold, because when we come out the other side of this, we're going to have some decisions to
make, and we want the flexibility, the most flexibility to make those decisions. So let's
not fill these positions right now. Now, I might have missed this. So here's a question for Ernst
and Young. If I remember last year, around this time, we were all getting to know you.
Ernst & Young does this kind of work
for other governmental bodies around the country, correct?
We do.
You do.
And obviously each jurisdiction has its own politics,
its own process, its own structure.
Have you had other clients around the country
that have asked you to approach this type of issue,
helping balance a budget,
from a different angle,
where they posit the problem is a...
the problem is a spending problem.
Have you ever been asked to really go hard
on proposing various scenarios
that would involve significant reductions
in expenditures by a large governmental body?
I'm talking about outside of the city of Chicago.
We have, yes.
And I'm not trying to get you in trouble
with your client here.
whoever that is, I'm trying to figure out.
So you're capable of doing these cost analyses
and make suggestions on how to right-size a department
or to better rationalize the manager-to-employee ratio?
That's work I assume you've done in other places
when you've been asked to?
Yes, ultimately, though, it's the client who makes the decision on.
I know.
Which is why I started my questioning with who's the client.
And again, I'm going to move on from that.
You know, Ernst & Young's own tax report
reported that last year's budget that passed
and was not vetoed
was going to bar any new lease tax increase
before January 1 of 2028.
You acknowledge that in your report.
So why is the administration asking you to assess
Raising it to 20%
I guess
I don't think he has any idea on that
Because he's not a part of that
Oh he's not
So that's a different group at E&Y
No E&Y has not been a part of that line of work at all
Oh
So the PPLT piece
And the others
That's solely OBM
It was just
It was just, so Ernst & Young hasn't worked on those proposals.
Those were your ideas?
Taking the PPLT from 15 to 20.
That didn't come from Ernst & Young.
That came from...
No, they're not working.
They did not work with us on closing our budget gap this year.
It's not in their scope of work.
Got it.
So that was OBM's idea, right?
Do you have anything else?
Yeah.
Okay.
Yes, I do.
um we talked about the non-profits and and what is the total amount of money we're sending out
the door to non-profit partners to help us administer various programs on the city's behalf
what's the total dollar amount i don't i don't have that if you all park it oh it's hundreds
of millions probably around 400 or four or five across all departments sure um and you had
mentioned, I think, just a little bit ago,
I think you were talking about family services
programs where you used to
be, where you'd have
multiple providers
that provide the same service
into a room to
learn best practices from one another, which sounds
good to me.
Why do we have so many providers
that do the same thing? Is it just a scale
thing? Is it... It's a community thing.
It's, you know,
one provider
is providing
services to this community you drive you know mile and a half and you're in a new community
and there's a different provider there this isn't this isn't like buying salt where you find one
vendor you get the best rate and you that's who you purchase from because it's not this isn't a
commodity well and again i certainly understand that with family services maybe i'm using a bad
services. Maybe I'm using a bad example, but there are all sorts of different programs and
services that we're using non-profit providers to help us with, aside from family services, correct?
Or is that the only one that we're sending money out the door to NGOs for?
Health as well. Lesser level MOPD. I'm just trying to get a sense of that,
because that's a bucket there's a lot of money going out the door and I know that someone's
auditing that and it sounds like there's accountability at a certain to a certain
degree with each of the departments that administers those monies but folks in this
body aren't so familiar with how many entities are out there receiving monies how much money
are they receiving and what are they doing with it are they doing it well how often do we dismiss
a non-profit service provider for failure to perform what are those metrics how do we decide
if someone's winning or losing.
That would be something that would be very helpful
for, I think, members of this body,
and I'm one of the longer-serving ones,
to better understand,
because at the end of the day, it's a lot of money.
And it's skirting around our union contracts.
These are private providers.
But again, if we're talking $400 or $500 million
and we're looking at a massive budget deficit,
you know saving a few million bucks here and there adds up um so could you speak to that at
a high level well typically for most i can't speak to all program models but the majority of them
the city sort of sets the rate um it's there's a cost of service we're not this isn't we don't
get bids we don't judge after an rfp comes in it's not looking at who has the best price
because that doesn't necessarily mean the best service.
It's about looking at their experience,
looking at how they have delivered this program model,
have delivered this program model success in the past in this particular area you know you
look at something like um the youth jobs program there's a there's a set rate per per
slot there um that that's determined okay and actually i'm glad you brought that one up
um and again we can get deep on these things during the budget hearings thank you because
we're just trying to focus on what we have here today about the efficiencies as it relates to the
and furthermore i think you may not have been here in the point where we talked about
the uh other um for lack of a term a maverick spending that was outside of dps um that we're
looking at oh you're here for that okay got you okay i was and i'm about done here chairman i i
just um i guess what i'm trying to get at and it's it's a bigger picture item so i think it
belongs in this hearing and not, we can get deep on it next week and the week after.
Are there a uniform set of metrics for a program that we are holding up against each of our
non-profit providers where we can determine pretty clearly whether they are performing
and excelling in their mission or not? And I guess how often are we finding that providers
aren't meeting the bar we've set for them? Are they dismissed? Are they disciplined? Are they
coached on how to improve i just don't understand how that process works having not worked in one of
those departments sure i think that you know i i can give you from my perspective but it's a few
years old now so probably good question for a department like family support services or or
cdph in the in the coming weeks but i can speak to when the rfps are put out there's
it's very clearly outlined what expectations are.
outlined what expectations are, what the deliverables need to be, and what they will be
measured by. And so ultimately that piece that's in the RFP then makes its way into each of these
contracts that gets executed. And then the department then tracks that throughout the life
of the contract to determine how, across all these agencies, who's performing as they should
and who's, you know, if there is an underperformer, that will then be identified through their
data analysis.
Could you, and his question is a fair question, and I think it's something that on a departmental
basis that has those types of procurements, we need to understand on a departmental basis as to
how that's handled. And if you could provide that, either the department could provide it
for as we come up over the course of the next two weeks, or you guys could summarize and bring all
of that together in one document. I'm probably surprised not one of your questions that you have
anyway, but I think it's a fair question to ask and understand the process by which
those organizations are evaluated to see if they should remain or if they should be
dismissed out of any further consideration for that particular grant. Anything else?
My last piece is on the real estate piece, which we had already talked about a little earlier on
a previous slide. And it's, honestly, it's specific to one property. And I mentioned-
You're talking about Foreigner Superior?
Foreigner Superior. Yeah. And I brought this up before. And I'm confused because
I don't remember if it was this administration year one or if it was Mayor Lightfoot in her last year or two in office, but that property was always...
or two in office, but that property was always on the block for us to sell.
And then we went and spent $11 million upgrading building systems
and modernizing, et cetera, et cetera.
That is clearly probably the most, if not, well,
top one or two most valuable parcels we have in our portfolio,
and we use it to house administrative hearings primarily,
where ironically we hemorrhage millions of dollars a year
by non-suiting and reducing fines and all of that.
So we've made a lot of bureaucrats very comfortable
in a building that's costing us a lot more money
in our processes.
I guess I'm trying to understand,
what was the rationale in taking that off the sale block
and then really pouring a bunch of extra money into it?
My understanding is CDPH is moving into that.
I'm sorry?
CDPH, I think, is moving personnel into that building.
Like all of it?
or just some it's not a really big building no i don't think it's all but i think that's
um you know some of the leases we're getting out of our cdph occupied right now so the goal is to
get out of those see the savings put them into a facility that we own no no i appreciate that
and i that's that's that's i i applaud that kind of effort yeah just some other information the
The system's also shared with 740 North Cedric next door.
It shares a roof and several systems like HVAC,
so it's hard to separate that property out, apparently.
It's the same building, isn't it?
More or less, yeah.
Okay.
But I think we had pegged the value of that parcel
at something like 13 or 14 million bucks.
And when we do eventually go to sell that parcel,
we're not going to get any credit for the 11 million bucks
in building systems we put on it, because that's a teardown.
So the question is, is the owned asset that we have,
would we be better off selling that asset and leasing somewhere else,
off selling that asset and leasing somewhere else or is there any other property that we have
that potentially that group of people could be in and still achieve um achieve that savings and also
selling of the assets so it's really a math problem as to what is the better financial
decision on placing people somewhere here there or wherever and as yeah and as a matter of policy
I support what OBM has been endeavoring to do,
which is to get us into more favorable leasing situations
or into properties that we own
where we have vacancy, right?
But those properties, I would say,
should be worth less money on the auction block.
We should be pouring city employees into buildings
that aren't as valuable to a private developer, right?
And certainly with our commercial real estate vacancies
downtown, especially, there's really good deals on rent. And so, you know, I guess in a long way,
I meant to basically say, why wouldn't we just take everybody at Superior and Sedgwick,
take them all out of that building and put them in one of these half-empty commercial buildings
down here where they're giving away office space and sell that thing for demo, rather than put
11 million bucks of building systems into it in the last 18 months and putting more employees in
there and it's again not a massive um expansive space it's pretty pretty tight i'm just trying
to understand the rationale i'm trying to there must be some cost benefit analysis that was done
and okay we're gonna save some money doing this or the only other insight i have is that you know
i think as part of that discussion with the city the decision was around it's too hard to relocate
the administrative hearings that are in that that building okay lawyers lawyers got feet you know
All right.
Well, that's all I've got then, Chairman.
I'll save my other fun stuff for next week.
Thank you.
Alderman Hall, followed by Alderman Moore.
Thank you so much, Mr. Chairman.
I wanted to specifically ask Erskine Young, a few questions going back to page 15 on the fines and fees,
trying to understand the graphic in itself and ask some questions along the way.
um first thing first what were the recommendations um as it pertains to the city's collection efforts
to parking tickets and water uh debt collections and things of that nature what were the previous
recommendations rendered by the report i don't think that we covered uncollected fees i think
this was looking at the level of of fees one more time i recall i don't believe it i don't believe
we focused on... They were going forward, not on
what was on the books. Got you. Were there any recommendations
though for the efficiency of collecting fees?
I don't recall any options on
that. I'd have to go back. They weren't tasked to look at the
process. It was more of, here are the fines and fees
that exist. Let's look at them compared to
comparable cities let's look at compared to the costs to deliver that service that the fee is
associated with that's that's the sort of line of work that they were looking at to determine
do we have this fine set at the appropriate rate gotcha so in the the graphic it's low opportunity
than high opportunity and so in the in the scale of things the tobacco retail that's in the middle
between low opportunity and high opportunity for adjusting in fee and fine slash is that how i'm
supposed to read the chart yes but also it's in the left quadrant because it because the rate that
But also it's in the left quadrant because the rate that the city assesses is higher
than the peer jurisdictions already.
Gotcha.
Okay.
And so the highest revenue raising opportunities are the ones in the circle?
On the top right, correct.
Gotcha.
And so the suggestion then is for us to then raise these fees that's within these circles
or explain that one more time?
To evaluate and decide what's appropriate for the city.
Gotcha.
Okay.
i just said that that was done early on in the process and we've acted on those all but one in
that upper quadrant or sort of partially in that upper quadrant we moved on a year ago and the only
one that we didn't was the sign permit and that was because when we looked at it to rate we'd have
to raise it to the highest level that would be seen across the country and we'd realize we'd
realize a hundred thousand dollars it just just wasn't just didn't make sense got you but every
every other one we've moved on we've taken the these this sort of analysis from ey and moved on
it and that's where we're seeing over 16 million dollars of additional revenue uh both this year
and future years got you so uh mr chairman correct me if i'm wrong asap on this then the
in the ey analysis or the charge for them uh when looking at in particular let's just say
for the sake of this conversation parking parking tickets we um didn't the debt collection from
those and other things of that nature what there's was there any an analysis was there an analysis
over what our collection numbers were over a span of time who are our vendors and a participant who
participated is that something now or something we should wait for next week for so that that
That's not in their purview.
I mean, again, they're looking at, hey, how much is Milwaukee charging?
I'm just using Milwaukee as an example versus what we're charging.
in Milwaukee as an example versus what we're charging and looking at that component of
it, how we're managing the process is not, was not a part of their charge.
Yes.
Okay, cool.
So to that end, thank you so much, Mr. Chairman.
So the analysis was more over comparing cities on where we can grow in fees and fines, not
the method of collection.
Okay, cool.
Thank you so much, Mr. Chairman.
That's all?
Okay.
Very well.
Audubon Moore?
Yes, Chairman.
Thank you so much.
I think my question just got answered based on what Alderman Hall asked, but I just want
to be clear.
So out of that analysis, it did not come to like, I'm trying to get at in terms of like
debt, whether water bill or anything else, that corporations or municipalities owe the
city of Chicago.
Do we have that separated out versus the residents of the city of Chicago?
Hello. So hold on. No, we hear you. We're just trying to understand what your question is in that respect.
OK, so I don't. What was part of the analysis saying we got X amount of debt outstanding for whatever it is, water bills, whatever.
Of that total amount, what amount is attributed to corporations and other municipalities versus Chicago, just Chicago residents?
No, that that was not part of what Ernst & Young's charge was.
They were looking at it going forward.
I get it. You don't have to repeat it.
That's why I said it was answering them.
Oh, OK. Very well.
I'll just have that answered in budget because I'm just trying to separate those two out.
Thank you so much.
That's all I had.
Okay.
Any others online with questions?
Any others online with questions?
Please raise your hand.
I just had one, just a couple of questions.
We had the range of this $530 to $1.4 billion in savings.
The time frame that you are looking at to achieve that is what and how far are we on the go to achieving that number two?
And is, in fact, the 530 or the 1.4 still the reasonable expectation that could be achieved given what you know a year later?
That's three questions, Kevin.
It's a multi-final question.
To the first part, the range and when those estimates could be realized, I think is the first part of your question.
And it differs by individual workstreams.
So some of those numbers were annual estimates, and some of those were accumulation.
And the reason that we presented the numbers that way is that some of the workstreams require a multi-year phasen, the fleet modernization, for instance.
You're not going to sell all of the city's cars and start on a new cycle to buy them,
but you're going to start getting on a process to manage your fleet more efficiently over a three-year time frame.
That's why that number was a three-year number.
The real estate was a cumulative 10-year number because that process takes time to put in place.
So it depends on the work stream in terms of when those numbers could be realized.
in terms of um of whether it's still achievable which i think was was part of your question
um the that depends on implementation from the city at the end of the day and um the city is
the city is choosing to accept and act on certain options and is choosing when not to act on certain
options. And so the extent of achieving these numbers as presented a year ago fully depends
on the city making decisions on the options it wants to implement and implementing them in the
way that we had presented in the report. I missed part of your question, I feel like.
No, you pretty much hit everything that I was trying to understand. So ultimately, we've got to make decisions on what it is that we want to implement from a cost and a revenue perspective.
You all are just saying, hey, here are the options, the menu of options. We can pick A, B, and X. How we choose to manage to do that essentially is what you all charge.
Are there any other, what you would consider to be low-hanging fruit that we have not implemented, or are there other items that we should be looking at that we haven't?
it's a loaded question but I I just I mean it's what well no I think that there's some I wonder
if there's like low-hanging fruit that we just may have missed however I mean and I and the part
of this is that we have to get to understand is that there's some policies decisions that
we could make that may not be very popular but will either save us money or increase revenue
right and that's where we as a collective have to say uh yes or no um also i'm trying to
understand if there's some things we talk about the centralization and or and or decentralization
or decentralization of certain decision-making,
and what impacts does that have on service delivery?
And let's use a case in point.
If we say no to the Department of Water
for doing individual procurements,
what does that have on service delivery?
And I don't think those items have been talked about
to the point that I think we understand.
We say, okay, we can consolidate all of these services
under one roof and save $8 million,
but well now it's going to take us two months longer to do something right and I think those
are the types of things that aren't necessarily being talked about but they do have an impact
either on potential savings and or service delivery and that's where I'm the all this
stuff on paper it makes sense but what does it mean operationally and that's what we're not seeing
And that's what I want to understand a little better based on some of these things that are being put on the table.
So your question is, is there still low-hanging fruit out there?
The question is, we talk about efficiency, but we don't talk about the results of efficiency.
We can talk about an income statement, but we don't talk about the quality of life or what does that mean to residents.
And I'm concerned that we can, we're getting half of the puzzle, right?
What does it mean?
What is the output?
Even though we understand that we may have a financial scenario, but what is the operational
scenario going to be?
It's the same thing as saying, hey, if we cut 12 laborers from pothole work, what does
that mean, operations?
Does that mean now is it eight days to get it filled that turns into 20 days?
What do those things mean? Because to have the conversation about efficiency without the operational understanding of it puts us as count.
understanding of it puts us as council members in a position of the unintended consequences that
we always find out about eight months later and then have to undo and correct something. I don't
want to do that. I want to understand if we make some decisions, what is the outcome of those
decisions? What is that going to be before we make that decision, not figuring it out after it's
done sure um so you know different for each line of work um for for say fleet you know it's really
in-house becoming more efficient the the hope there is that the outcome is actually better service
for our other departments that they have healthier fleets at their disposal that they
when a when a vehicle goes down they get it back sooner and they're less there's less uh vehicular
inconvenience in the future i think that's really what what that line of work is is trying to achieve
on top of we're not we're trying to avoid paying for leased vehicles that you know might sit around
three out of four days or you know figure out better ways of of allowing our departments to
have fleet at their disposal but not to a point where we're spending money on vehicles that just
are underutilized so I think in the area of fleet it's I certainly hope in a few years the outcome
is better service for our departments.
Real estate, it's really about,
I think there's an added benefit.
Obviously it's saving dollars,
getting out of space that we don't need to be in
that we don't need to be in because of underutilization elsewhere.
But EY has been very careful to look at what can we do to improve departments
the way they are laid out throughout the city.
You know, bringing departments that might be in three, four different places.
How do we bring them all together in one space so that they can work more collaboratively
across their department.
So it's not just,
let's get out of these leases
and figure out,
all right, CDPH,
you're getting out of here.
We're going to shove you over here.
It's taking it a step further to say,
all right, where else is CDPH?
Is there a way to bring them together
to improve their line of work?
Special events, recovery.
I think the impact
will really be determined
by what we, all of us, determine what's our threshold for charging events, which is going
to be different by the event type. So that's one where I think we need to be very deliberative
around decisions to make sure what we don't want is to have events just say, forget it,
and and pull out and you know we lose a community loses that event that they've had year in and
year out so that's that's something that that we do need to be very careful of and i know
that this body is has a lot of interest in ensuring that we balance between the two there
um you know fines and fees i think it's also that balance of we need to make sure
we're getting the revenue that the city needs to operate but also not going so
far where now people just don't pay that's not helping us
So there's a balance there.
Yeah, so I think...
No, I understand.
I just want you guys to think...
I mean, I used to do some of the work he does,
so there are actual things that go behind
the work that they're doing.
Yeah, my other question is about the, did you account for the potential of new costs with the efficiencies or loss of particular items?
And is that part of your overall cost scenario?
It is generally, yes.
The implementation cost.
Okay, very well.
All right, so we had Alderman Lopez and Alderman Walkerspeck last.
to anybody else anybody else anybody else going once twice okay you guys are go ahead go ahead
thank you chairman actually i just wanted to continue on with something that you referenced
just now um and use my words against me i will never use an urbanism against you no sir um
But I think that, and urbanism, yes, but I think what we've seen in the practical application of government is that question of theoretical efficiency versus operational performance, which is what you're referring to.
And I don't think that's unique to any department.
That's every department, to be perfectly honest with you right now.
And I guess the question that I would pose to both, and again, not sure if it's in the scope,
but it's something that should be discussed, especially over the next several days,
which is when you have savings or targets, how do we track the unintended consequences
consequences of whatever we're putting in and are we able to track the financial costs plus or minus
when those changes are made so for example c dot will outsource uh parts of the resurfacing program
because it's cheaper than in-house in theory however
However, if it turns out that it's not, do we keep track of what we anticipated that cost savings would be by putting out an RFP versus what the actual outlays are for any program that exceeds what we thought we were going to be saving?
and is that a quantifiable number that we can include in the back of our budget book that we
get not the actual budget but the second one because in the back of that for every for every
department it will say calls for service x y and z whatever they're doing but it doesn't necessarily
highlight the costs associated with that particular service and i know some departments do in fact
track that down to the penny but I think when we're also looking at some of those anticipated
savings we don't necessarily see if we hit the mark or not so is that something that is
either in something that could be included under the scope of EY's duties particularly as I'm
looking at some of the things that have been completed in your most recent report when you're
talking about is that is that savings or is that operational efficiency because the two
aren't necessarily they're not the same they're not the same and that's a that may be an answer
you don't want just fair game well i think well i think it's i think it may not be the answer we
want but it's the answer we're going to need because we don't really know if we're actually
we're actually meeting the marks or not or if what we're doing to your point chairman is actually
saving us money or time or actually increasing or decreasing service because if it's costing more to
do less and we don't realize it because we're adding more money but it's not getting the job
done then we need to be able to quantify that and find out where the problems are so it's like an
open-ended question whoever wants to take it yeah i could i could start um i think there are some
that are very clear-cut that some of these savings and efficiencies that are very clear-cut right we
get out of leases whether they be vehicles or or physical space the savings is very clear and
you know we i think 2fm will hear from the departments if if they are being negatively
impacted by a change and and then 2FM can work with them so you know I think that's something
that as these are implemented there'll be that ongoing dialogue between 2FM and the impact
departments to ensure that they're still able to do the job they need to do then there are others
that are probably a little harder to track
and still sticking with 2FM
as we implement enhanced telematics
with our vehicles that Adam talked about.
We'll see, we should see reductions
in wear and tear on our vehicles,
accidents, things like that,
that you know are a little harder harder to track not impossible to track but
it's not it's not like a clear we saved this much in the least cost
You can never predict, oh, we had 75 vehicular accidents this year.
How many would we have had had we not had this enhanced telematics?
We'll never know that.
So that's more difficult to measure, but you can get a general idea.
um you're hoping you're seeing trends move in that direction when you implement something like
that was service delivery part of ey scope okay alderman harris could you mute yourself
was service delivery in what in what aspect so again going back to some the departments and it
was in this book by the way just for reference um one of the things that i've always long been
talking about is the cost of delivering service so for example if we look at streets and sanitation
and i'm going to use this because it's the easiest one with regards to garbage carts
so we we can estimate how much it takes how much it costs us to deliver a new garbage cart to a
resident 55 cart man hours gas to deliver blah blah blah um are we able or were they chart were
Were they charged or are you able to create a cost per service delivery for any of the services that we provide?
That's one. And two, if we are, are we able to then track that as we see in private sector, where you can track that, whether it's on a daily, a weekly, a quarterly, a yearly, to see whether or not a particular service delivery.
and in this case, garbage carts, is costing more or less than what it was anticipated in
costing when the budget was created to see where the potential financial bottlenecks
may or may not have occurred.
So the best way I can answer that is one of the work streams was around service optimization,
but it was focused on the public safety structure of the city.
So it wasn't holistic across all options.
but in the context to directly answer guys yes we can do that type of analysis review and tracking
our scope was focused on service optimization and public safety so for instance make it a
tangible example for you the dispatching of als life support ambulances versus bls life support
ambulances there's a cost differential between who rides on the rigs and the deployment versus
how the calls are and so we found through our analysis 57 of the calls were responding for
bls type services as opposed to als advanced life support type services and so there's a mismatch
between the technicians and the types of rigs that are going out to respond to the calls and
you can reduce costs by shifting to bls type vehicles right that and then tracking that
that match between the services that are dispatched and in the in the service that
is provided so we can do that our analysis was focused on the public safety apparatus and
recommendations and that's all the individual tear sheets so is that so are you precluded from
expanding beyond public safety based on the contract that you're working under right now
it's not so so we that was part of the phase one analysis so the city did not engage us to
provide further services on service optimization so it's not in scope right now
And is that something that OBM intends to look for, or is that something that city council needs to request that the full scope?
city council needs to request that the full scope of city service is what we are reviewing to see
if we are effectively providing city services yeah it's currently it's not anticipated for fy 27
can it be across our entire enterprise yes we will need to find i can't even speculate how many
tens if not hundreds of millions of dollars to to do that full assessment and how many years that
would take but any obviously anything's possible well i would say we have at least three or four
departments and i'll i mean i could ask every department when they come up here and i probably
will and i'll probably be bringing this up on monday but i think that definitely you know
it's not just a matter of personnel this is a matter of service that we're providing and if
there are ways that we are not managing our costs and controlling when bottlenecks or when issues
erupt in that delivery that escalates costs and we have a habit of just simply adding more money
without understanding where these increases are coming from and I think that yes it will be some
work but I think every efficient private business that implements this has been profitable for years
and we have to get to that kind of model as well thank you well you I think you have to take into
account a couple of things uh in relation to that and you've got work rules you've got a series of
things that you got to think through uh in that conversation again it may be an answer that you
really don't want so uh but uh well i'm sure you you want to have that conversation next week next
couple of weeks we can so but the ultimate walk is back i'm sorry will you finish you know just
give me ey for a month we'll figure it out you're okay all right welcome back
thanks chairman uh just a couple of follow-up questions um
couple of follow-up questions um on the uh number five work stream from this past year's report
this was the benefits analysis um did the city implement any of the non-union recommendations
made by ernst and young uh for that report so for instance the adjustment of employee contributions
the integrity claim study, and the HMO stop-loss coverage,
those were valued at close to maybe $15 million or more.
Did we implement any of those recommendations
that did not require union,
I think they used the word cooperation, or negotiations?
Yeah, we did.
We implemented the increase to the non-union,
non-represented health insurance contributions that's the hmo yeah okay and the integrity
claim study i thought we had spoken about that in last year's budget and didn't go anywhere
maybe you can provide that through the chair because i know that one was it was on page
44 of the ey report last year and that was a four to nine million dollar savings that
was i believe in the first tier or the quick fix pocket i don't want to put you on the spot mr
chepnick but i thought it was one of the um if it was non-union work that we did not have to go to
the lmcc and have negotiated um changes in these items um but if you could provide that through
the chair that'd be helpful all right and then um when we look at the forecasted budget gap i think
it was 882.4 million for the main operating budget for 2020
million for the main operating budget for 2027 um which is a billion more than I think it was
uh well no it'd be a billion more if we continue down this path for the year after and the year
after that but um it was then adjusted to 652 is that correct um what percentage of the EY related
items that were implemented this past year or year to date
were applicable to that change in the adjusted budget gap either percentage or an amount yeah
let me look through the list here uh quickly i think i think it all applies yeah the 52.2 million
between all the work streams um well uh some of it like special events builds upon itself so
we had seven million in the fy26 budget and obviously that would carry through in the
following year so that when you're talking about like closing the gap i guess that you back that
out it's came from the ey work but it's not a gap closing measure because it was it had already
been realized a year earlier and will carry over but there's an additional 6.9 million
in special events cost recovery that is built in for fy27 that is new is gap closing okay so
there's 178 outstanding there that's sort of the difference so just 52 million
of that adjusted budget gap that number that went down was related to ey or did
directly or indirectly i don't think ey would claim they told us to do a hiring freeze
do a hiring freeze this targeted hiring freeze we've done the last two years um but it's because
of the work that they're doing with us that we think it's prudent to do okay and um on that
targeted hiring freeze for instance um i'm sure people have questions about that when budget comes
up but um i won't go down that path today um the last question for ey for mr chapanik um when you
look at all the other cities that you've done and i've read your reports um milwaukee houston
what percentage of your recommendations in the first year the quick fix items were typically
implemented in those other municipalities or is there a is there a general amount that you push
people to implement um or recommend that they implement not really push them because you can't
do that, but what do you typically see in the first year of post-report recommendations?
I don't have a number to respond to your question with. I will just say that generally our clients
are interested in implementing the options we're proposing or recommending in some instances,
And so there's a proclivity to try to do the things we lay out for them.
And part of that is through the process of iteration and working with our clients to try to figure out what is feasible, achievable, and executable.
But in all of those examples you noted and dozens of other ones, it's all about implementation.
That's really what it is to achieve the value that we're presenting.
and when you're when you're done with your work so um i'm assuming you'll be done at the end of
um well actually when would you be done with this um implementation well your recommendations
i think right now so the um right now the i think the most active work stream that's ongoing
active work stream that's ongoing and the budget director mentioned this is will be the organizational
analysis and i think that will go on for another year i think through the end of 2027 it's a little
over a year yeah still okay so you'll be that that on that particular work stream and then on the
fleet work stream there's another i think a few months left okay left on that um so as you wrap
As you wrap up the other sections, do you do a final report that you go back to the
city and say, here's what I recommend that you may have missed, or do you do any kind
of wrap-up or final analysis with the city at the end of that whole process, and it looks
like it'll be the end of 2027?
It's not usually a report because it's about implementation.
so the implementation plans will be delivered um and there's you know deliverables and progress
made along the way so it's not it's not really the intent is not to have another um document
the intent is to execute and implement and so i think the deliverable and the value will be in
execution of of those projects okay as opposed to an actual like another deliverable document
And you've been doing this for a few years, I'm assuming. Did you ever go back and look at what those cities did to implement your recommendations? Do you have, let's say internal, but do you kind of go back and say, well, I wish they would have done this differently or that?
and do you go are you requested to go back sometimes with new administrations to say
um you know we here's what we tried to do it didn't work do you have different
recommendations do you go back to some of those municipalities and try again
um i think it's been more focused our work has been more focused on execute
think it's been more focused our work has been more focused on executing and implementing and
supporting the implementation of of projects and then they're complete right i mean the goal is not
to you know have more probably the goal is to execute on the projects and the options we're
presenting okay all right well i appreciate your uh comments there and thank you for coming back
um if you're going to be around i think for the next year hopefully we'll see you a few more times
in front of the council and burn your ear off there a little bit all right thank you that was
in a nice way i mean thank you chairman okay well um i i definitely um know that this work
is going to be ongoing this is a uh this is a a journey and not a destination so we will
I'm sure
be in further conversation
chaperoned or unchaperoned
as one member called it
but I do
I know the work that you all do
is not simple
I know the decisions that we
will need to make too will not
be simple and will have
some impacts and again that's why
people elected us to make those
decisions specifically
I don't envy your position of bringing
us
What we need to hear, but we do need to hear it and we need to have these open conversations about decisions and what we can do to streamline costs.
All of the easy stuff, I assume, is done because otherwise we wouldn't be dealing with it.
So ultimately, we've got to make some decisions and let the chips fall where they may.
Any other questions?
You need items with all that being stated that could take motion to adjourn.
so move alderman lofans all in favor signify by saying aye
any opposed independent chairs eyes have it and we are adjourned