For two weeks of budget hearings aldermen publicly grilled city commissioners and department officials on line items, programs, and overtime, often running from morning to night. Aldertrack monitored aldermanic attendance at each budget hearing, starting with the best attended meeting, the all-day overview with Budget Director Alexandra Holt, Chief Financial Officer Carol Brown, and City Comptroller Dan Widawsky, to the final hearing on Friday October 9.

These attendance totals are based on the amount of hearings alderman attended for each individual agency, not total days they were present. And since it is common for aldermen to walk in and out of the chambers during meetings, Aldertrack, which attended every meeting, marked aldermen present if they showed up at some point in the meeting, even if it only for a few minutes. Here's our spreadsheet for a breakdown of attendance by hearing.

As Budget Vice Chair, Jason Ervin (28) attended every meeting. He took over whenever Chairman Carrie Austin (34) took a break. While some Council watchers expected Austin to break early because of her lengthy hospitalization last month, she chaired a large chunk of hearings and often stayed until the end of the day.

Aldermen with the best attendance (Top 10)

• Ald. Leslie Hairston (5) - attended 28/32 meetings

• Ald. David Moore (17) - attended 27/32 meetings

• Ald. Raymond Lopez (15) attended 27/32 meetings

• Ald. Anthony Napolitano (41) attended 26/32 meetings

• Budget Chairman Carrie Austin (34) attended 26/32 meetings

• Ald. Scott Waguespack (32) attended 26/32 meetings

• Ald. Patrick Daley Thompson (11) attended 26/32 meetings

• Ald. Nick Sposato (38) attended 25/32 meetings

• Ald. Ariel Reboyras (30) attended 25/32 meetings

• Ald. Michael Scott, Jr. (24) attended 24/32 meetings

In addition to the first budget hearing, where 90% of the Council was present, the budget hearing for the Police Department and the Department of Streets and Sanitation had at least 40 aldermen present. The 9:00 a.m. morning meetings tended to have the lowest attendance rate and shortest meeting times.

We reached out to every alderman who had attendance on the lower end for comment. Most didn’t respond. Aldermen who did respond were quick to point out it’s common to send a staffer in their place, to have private conversations with commissioners offline, or in the case of committee chairs, to listen to a speaker that live broadcasts what happens in the chamber to their office. “Just because we aren’t down there doesn’t mean we aren’t listening,” Ald. Walter Burnett (27) told us. We noted him present at 15 of 32 meetings.

Christian Ficara, a staffer for Ald. Brian Hopkins (2), said he often sat in place for Hopkins, whose wife gave birth to a baby boy on Sep. 29. “While Alderman Hopkins was tending to the birth of his first child, myself, and at times a second member of our staff were present during the hearings. We would update the alderman on a daily basis, and he was in contact with commissioners by phone if he had questions regarding their testimony. Obviously, he did attend hearings when time permitted to be away from his wife and newborn son.”

Ald. Derrick Curtis (18), another new alderman, also missed hearings for family reasons. He was on his honeymoon for most of the budget hearings. Ald. Deb Silverstein (50) wasn’t present certain days due to the Jewish holiday of Sukkot (Sep. 27-Oct. 4). “I’m a very observant Jew,” she told Aldertrack, “I don’t even drive during it.” She added that the Mayor knew and she had staff present every day.

Ald. Matt O’Shea (19) had one or two staffers at meetings in his place when he couldn’t attend. He also attended the International Council of Shopping Centers convention

Ald. Toni Foulkes (16) was affirmed 16th Ward Democratic Committeewoman, by a vote of the Cook County Democratic Party's Central Committee on Friday. She replaces the late Ald. JoAnn Thompson, who passed in February. Foulkes appointment means the process to replace the late State Rep. Esther Golar can go on. The deadline for an appointment is Wednesday, October 21. Ald. Raymond Lopez (15) who leads up the District Committee to select a replacement, reports he is still working to set a meeting date. Learn more about Ald. Foulkes on Clout.Wiki.

Zoning Chairman Danny Solis (25) and Finance Chairman Ed Burke (14) were two of the biggest fundraisers on the City Council last month, each reporting over a $100,000 to the various campaign funds they oversee. We also noticed an uptick in fundraising in the 43rd Ward soon after Lucy Moog announced her bid for the Ward’s Democratic Committeeman position currently held by Ald. Michele Smith(43). We detail those contributions and more in our September contribution report.

Large Transactions

The $53,900 transfer from the Laborers' Political League Education Fund to House Speaker Mike Madigan’s 13th Ward Democratic Ward Organizationrepresents the largest infusion of cash to any aldermanic, city official, or ward organization for September. The 13th Ward Org also received a $25,000 transfer from UA Political Education Committee, a group representing plumbers and pipefitters.

Coming in close was the $18,210 contribution from the Chicago Teacher’s Union to Ald. Susan Sadlowski Garza’s (9) candidate committee, Friends of Susan Sadlowski Garza, on September 24th. The day after reporting the contribution, Ald. Garza reported returning the funds because the amount exceeded the legal maximum allowed.

The third largest contribution was a transfer of funds between two aldermen. On September 23rd, Ald. Danny Solis (25) loaned $15,000 from his candidate committee to Ald. Joe Moreno (1). Earlier this summer, Ald. Moreno transferred$10,000 from his candidate committee to Solis.

Ald. Roberto Maldonado (26) received $10,000 from contemporary home building firm Dream Develops of Chicago, Inc. on September 17th. The firm doesn’t have any current or future developments in Ald. Maldonado’s ward, which encompases Humbolt Park, but donated to him in January of 2015 and August of 2014.

The Progressive Caucus’ political action committee also raked in big bucks in September, garnering $10,000 from AFSCME and $1,500 from SEIU Illinois a week later. That brings total donations from SEIU to date up to $64,000.  

Biggest Fundraisers

Finance Chairman Ed Burke (14) continues to surpass his peers when it comes to fundraising. He reported $55,500 in donations to his personal campaign committee, Friends of Edward M Burke, $37,530 in contributions to his political action committee, The Burnham Committee, and $19,500 to the his ward organization, 14th Ward Regular Democratic Org. That’s a grand total of $112,530 for September.

Three employees of Unison Consulting, Inc., an aviation consulting firm that provides finance services for the O’Hare Modernization Program, donated to Ald. Burke’s personal campaign fund on September 3rd. Unison Consultants Yovette L. Drake and Gregory V. Chappell each donated $1,500, while Anthony Drake gave $2,000.

Burke, one of the few aldermen who didn’t sign on to a resolution calling for a moratorium on new charter schools, also got a $1,000 donation from INCS Action PAC (The Illinois Network of Charter Schools).

Zoning Chairman Danny Solis (25) reported more than 50 donations totaling $125,700 to the 25th Ward Regular Democratic Organization, which he oversees as ward committeeman. That’s compared to the $16,300 from a handful of donations made to his personal campaign fund, Citizens for Danny Solis.

Three individual contributions to the 25th Ward organization came from employees with Vivify Construction, a property management company based out of Melrose Park, IL. Vivify is an affiliate of Michigan Avenue Real Estate Group, the developer behind the two luxury apartments currently being constructed in the West Loop. The Jackson Throop Place and Madison Throop Place developments are a pair of adjacent loft-style, luxury apartment buildings. Milica Jovanovic, an accountant with Vivify, donated $5,000; Brian Loftin, a builder for Vivify, donated $5,000, and Stephen Muhn, a Project Executive with Vivify, donated $5,000. Another cluster of contributions came from two contractors with Astro Insulation, James Fox ($1,000) and John Stack ($1,000). Bridgeport-based Pacific Mall LLC also made a $5,400 contribution to the 25th Ward Organization.

The 43rd Ward Democratic Ward Organization, operated by 43rd Ward Committeeman and alderman Michele Smith, was a another big fundraiser, reporting $33,688 in contributions. Steve Fifield of Fifield Construction donated $5,000, so did Universal Security Corp, which has handled security at President Obama's campaign headquarters, election night for Rahm Emanuel, the NATO Summit in 2012, and O'Hare. The co-founder of SkinnyPop, Pam Netzky, also chipped in $5,000.

The beefed up fundraising could be a response to Lincoln Park resident and former congressional aide Lucy Moog’s bid to challenge Smith in the upcoming Committeeman race. According to Crain's, Lucy and her husband, Matt Moog, lived in the same, three-story D.C. flat as Mayor Emanuel and his wife.

Lucy Moog kick-started her campaign with $59,100 in reported donations, but a little under half that amount comes from $25,000 loan she made to herself on September 30th. Some of her notable donors include Gary Sumers, who retired as chief operating officer for the New York investment firm, Blackstone Group and his wife,Rachel Diane. As did James Sumers, an executive with United. Each maxed out their contribution at $5,400. Sidney N. Herman, a lawyer with the corporate law firm Bartlit Beck Herman Palenchar & Scott LLP, also donated the maximum.

Other Notable Contributions

• Jay Michael, managing director of Flats Chicago, donated $5,400 to Susana A. Mendoza, he’s known for his sometimes controversial real estate development in Uptown and Edgewater.
• Former 2nd Ward Aldermanic Candidate Alyx Pattison may have lost the runoff to Brian Hopkins, but she is still raising money. According to Pattison’s latest quarterly report, she owes $16,876.60 to political consulting firm, The Strategy Group.  Pattison reported three $5,000 donations in September from Mary Myers, a realtor based in California, and two individuals with Arizona addresses, George Myers and David J. Mowry.
• While Ald. Milly Santiago (31) and 31st Ward Committeeman/Cook County Assessor Joe Berrios reported a significant amount of contributions in August, Santiago’s committee reported just $6,000 for September, and Berrios’ had a $2,000 transfer and a $2,000 donation to the 31st Ward Democratic Organization.
• Chicago’s 27th Ward Republican Committee transferred $4,383 to 43rd Ward Republicans. Chris Cleveland, chair of the Chicago Republican Party, is running for Republican ward committeeman, and collecting petition signatures.

Yesterday the Mayor directly introduced a series of revenue ordinances: a set of new fees such as the garbage fee, new regulations relating to fee and license management, the motor fuels tax levy, and four property tax levies for 2016, 2017, 2018 and a supplemental for 2015. Below is a breakdown of what we found in reviewing those ordinances yesterday.

Property Tax Levies: As previously announced, the Emanuel Administration introduced a supplemental property tax levy increase for 2015 (property levies are collected the year following their announcement) of $326,803,000. For 2016, another property tax levy increase is piled on another $109,519,000. In 2014, the Chicago property tax levy was $859,509,000. That means by 2016, the Chicago property tax levy will be increased by 50.7%.

The administration promise that the property tax increases will be linked to the SB777 required Police & Fire Pension Fund payments is also why the administration introduced property tax levies for 2017 and 2018 of $703,307,000 and $766,737,000 respectively, which the Emanuel Administration previously billed as $52M and $63M increases with each year.

If you’re trying to follow the math, those two levy increases are actually decreases from 2015 and 2016, right? But, the way the Emanuel administration works it out is by assuming the city won’t need additional property taxes for other city operations–that it will tack on about the same $645.5M levy it did in 2016 and 2015.

That means in 2017 and 2018 the city will have to maintain totally level funding, unless other fees are added or service cuts are made to make the grade – and assuming the pension funds won’t require additional levies to ensure actuarially required funding.

Cloud Tax: The so-called “cloud tax,” a clarification of the city’s “Personal Property Lease Transaction Tax” issued earlier this year, has two big changes from previously reports. First, it includes a new, slightly lower tax rate of 5.25% for computing services that, “input, modify, or retrieve data or information that is supplied by the customer” (emphasis ours). Other items will still be taxed at the original 9% proposed amount. Second, the tax is clearly meant to cover everything cloud-related, including consumer products like Microsoft’s Office365, which is explicitly mentioned as an example in a Budget Office briefing sheet.

That 9% "amusement tax" rate also applies to streaming services like Netflix, Hulu, and Spotify.

A Budget office briefing says the city expects, “lease tax revenue expected to exceed $40 million in 2016,” but conversations with trade associations and lobbyists yesterday lead us to believe that estimate to be much too low. For instance, imagine 50,000 Chicagoans subscribe to Apple Music at $14/month. That’s $8.4M a year. At a 9% rate, that comes out to $756,000. Now add in Pandora, Hulu, Office365, XboxLive, Netflix…  on the consumer side alone. For businesses, imagine Lexus, Bloomberg and CoStar Terminals, some running $10,000/mo each. What about medical billing systems?

$40M will likely be low-end estimate, assuming compliance is not a problem. The city is waiving taxes, penalties, and interest owed from this tax before 2015, to assist with that compliance.

For comparison, city budget officials say Austin, Texas charges 6.6% across the board for cloud software, infrastructure, and databases. Seattle charges 9.6% for cloud software and databases.

Startups, or “small new businesses” that use and lease cloud storage and tech won’t be required to collect or pay the tax. To qualify, their gross sales or receipts for the most recent full calendar year prior to the annual tax year must be under $25 million, and the business must be younger than 60 months.

Garbage Fee: The details of the plan are mostly as has been reported here and elsewhere:

1. Fees will be collected as part of the water and sewer bill.

2. Property owners are responsible for payment, not tenants.

3. Fees apply to buildings with four or fewer dwelling units.

4. The fee is $9.50 per month, per unit.

5. Seniors who receive the Senior Citizen Assessment Freeze Homestead Exemption receive a 50% credit on the fee.

6. A late fee of 1.25% per month for fees later than 24 calendar days.

7. Property owners with fees overdue more than 24 calendar days may have their water turned off, but not in the winter.

8. A refuse full payment certificate is required for property transfers. The certificate has a $50 application fee.

Motor Fuel Levy - Cuts To Bridges And Snow Removal: Revenue from this fund is $31M less than last year, resulting in $22M in cuts to city vehicle fleet maintenance, $10M in cuts to bridge and pavement maintenance and a $5M cut to the city’s snow removal budget.

E-cigarettes: As expected, each wholesale liquid nicotine product dealer who sells to a retailers in the City will be required to collect a $1.25 tax for each e-cigarette cartridge and $0.25 for each milliliter of liquid to fill the cartridge. According to testimony during the public hearing portion of yesterday’s Council meeting, $500,000 collected from that tax will go toward capital funding for School Based Health Centers. Those centers are expected to provide care to 3,000 students. All proceeds, interest, and penalties from this tax will be deposited in the City’s corporate fund.

Building Permit Fee Hikes: As also expected, building permit fees are going up, many are doubling. These are the first hikes the city has implemented since 1999, and are expected to raise $13 million next year. Amendments to the building permit rubric show the City is doubling the costs of review per square foot area of work for some new construction, and adding anywhere from a nickel to a quarter to the cost per square foot for alterations, renovations, repairs, and additions. New costs per square foot range from $0.18 to $0.82, depending on the type of building and construction classification.

Flat fees are rising across the board, too. The cost for a permit to install an escalator, for example, is climbing from $200 to $300. The only type of flat fees left untouched are permits for billboards - which range in cost from $50 to $1000.

The Mayor’s office says this is part of a broader effort to update the Department of Buildings. Reforms will reduce the time it takes to issue building permits by an average of one week, a budget briefing document from the Mayor’s office says.

But the hike will also hit big construction projects harder -- those permit fees will increase 60% on average next year. Single family home construction permit fees will go up 12% to 25%, on average.

Fees for the issuance of permits, which defray the cost of reviewing building plans, are changing too. Instead of paying half the permit cost upfront, and the rest when the permit is issued, builders will have to pay a non-refundable $300 fee to the City of Chicago upfront. The rest of the cost will be paid when the permits are issued.

If the total fee to issue the permit is less than $300, the total cost will be due when plans are filed.

The City expects to make more than $44 million on building permits overall in 2016.

Parking Tax, Overweight Truck Permits And Driving Without Liability Insurance: The city’s parking tax code would be amended slightly to specify which small parking garages are exempt from the tax. Garages that house fewer than three cars are exempt, unless the owner operates more than three spaces in the City. The cost of permits for overweight trucks will go up starting June 1, 2016 and every year after by applying the previous year’s fees plus the rate of inflation based on the Consumer Price Index.

The vehicle insurance code has also been tweaked: anyone who doesn’t show proof of liability insurance to a cop when pulled over faces a fine of at least $500 but no more than $1,000 for first and second offenses, and $1,000 every time after. That fine can be reduced to $100 and the offender will be put under disposition of court supervision if they proves they did have insurance in court.

Rideshare And Taxi Rules: A number of new fees and rules would be created. Including:

1. Taxi licensees will pay an additional $20 a month fee, now $98 per month total.

2. Change in taxi fares: $2.75 (down from $3.25) for each new ride, and 25-cents (up from 20-cents) for each 1/9 mile. Plus, 50-cents per ride in fees to the ground transportation tax and wheelchair accessibility fund.

3. Taxicabs are permitted to charge “surge rates” for rides acquired through digital apps.

4. Rideshare services like Uber and Lyft will pay $5.80 for rides starting at O’Hare, Midway, Navy Pier and McCormick Place and 80-cents for every other new ride initiated. Another 20-cents per ride will be charged for the wheelchair accessibility fund.

5. For each ride to or from a designated “underserved area”, 50% of the tax will be credited. Up to 15% of all total rides each month.

6. A number of new taxi license fees and regulations for wheelchair accessibility.

City Management Ordinance: An omnibus ordinance with various changes to city rules and regulations, it includes:

1. City contract applicants will no longer have to disclose unpaid parking tickets

2. Changes to parking ticket adjudication rules

3. The Commissioner of Transportation can now create curb loading zones without Council approval

4. Higher fees for Central Business District driveway permits

5. Booted cars “shall” have all fees paid for, instead of “must”

6. The Traffic Administrator is directed to investigate “self-release” immobilization devices for booting cars

7. New installment payment plans for parking tickets

8. A debt relief program for the following unpaid fees collected before 2012:

   • tax collectors

   • tax assessment

   • property transfer tax

   • administrative hearing violations

   • vehicle violations

9. Increased fines for illegal cigarette sales and tougher rules on violators

10. Easier ways to demonstrate insured status for tattoo parlors, expediters and a host of other city-licensed businesses

11. Changes to law about non-standard sidewalks

12. Changes to snow removal law so businesses have more responsibilities

13. Newsracks can’t be placed within 5 feet of a bicycle rack or share station

14. More flexibility to Comm. of Fleet and Facilities Management to negotiate leases for Riverwalk concessions

15. Removal and addition of various parking meters

16. A management agreement for the new LoopLink bus shelters and outdoor advertiser JCDecaux

17. Total ban on animals for personal slaughter and consumption. No longer just sheep, goats, pigs, cows, poultry, rabbits, dogs and cats. Licensed establishments continue to be exempted, however.

18. Changes to rules for building fire clearance for alcohol distillers

Cook County Board President Toni Preckwinkle introduced what she characterized as a “challenging” $4 billion budget recommendation yesterday, calling for $39 million in cuts to the Cook County Health and Hospitals System, reducing 287 County jobs (including 51 layoffs), and a slight hike in amusement taxes for things like bowling, cable tv, and sports leagues.

“After a generation of kicking the can down the road, Preckwinkle is moving to put the County on firm financial footing for the future,” a press release from Preckwinkle’s office said. Paired with the sales tax hike the Board of Commissioners approved earlier this year, she says the $100 million in expenditure reductions and reforms, “will provide the financial support needed to begin addressing the Cook County Pension Fund’s $6.5 billion shortfall.”

87% of the County’s general fund goes to personnel-related expenses, Preckwinkle said in her remarks before commissioners while justifying layoffs, half come from her office, the other from Sheriff Tom Dart’s.

Other changes:

• The Sheriff’s Department’s Day Reporting Center and Graffiti Unit will both be cut.

• Contractual services through the Mortgage Foreclosure Mediation Program will be cut, but County employees in the Program will be retained.

• Three Cook County Jail divisions will be demolished.

• Three previously exempt amusement tax categories will be extended: participatory amusement, such as sporting leagues, the margin charged by ticket re-sellers, and in-home amusement, such as cable. All three are already collected by the City of Chicago.

• Extending the tobacco tax to include e-cigarettes and e-vapor products. Preckwinkle says a $0.20 per milliliter tax will bring in $1.5 million.

• A new Integrated Tax Processing System will be launched to “modernize the administration of Cook County home rule taxes.”

And as Mayor Emanuel defended his own FY 2016 budget to the press after yesterday’s City Council meeting, Preckwinkle was dousing cold water on it in a meeting with Crain’s editorial board. She told them the County’s outdated computer software is incapable of “neatly” dividing city and county properties and their tax rates. County Treasurer Maria Pappas backed her up, saying, “I'm 95 percent sure they can't do it."

Mayor Rahm Emanuel directly introduced to Council the official levy and revenue ordinances detailing how he plans to pay for his proposed $7.8 billion dollar budget at yesterday’s abbreviated City Council meeting (we provide a breakdown of those plans below). The public hearing that followed was much lengthier, approximately 40 people signed up to testify, but for most of the hearing, less than 10 aldermen were present. The Mayor left immediately after his press conference.  

With budget hearings taking up the bulk of the Council’s time over the past two weeks, and more closed door meetings to come before the City Council officially votes on the Mayor’s spending plan on October 28, there was only a handful of old business items to be approved, and most of it was routine.

The Council approved dozens of appointments to and budget requests from various Special Service Areas, ordinances transferring TIF funds for capital improvement projects at CPS schools, and Ald. Will Burns’ (4) resolution supporting the rights of adjunct faculty to unionize.

New Business

Save for the Mayor’s budget ordinances, there wasn’t much new business. Chairman Ed Burke (14), introduced an ordinance regulating so-called “party buses” in the City after a recent shooting in the University Village neighborhood that left three people injured. According Ald. Burke’s press release, “the driver did not keep a passenger roster or make sure passengers on the bus were legally old enough to drink alcohol.” The ordinance would require party bus operators make sure entities chartering the bus are licensed to sell alcohol, and there is a designated person to check IDs of all passengers on the bus. Ald. Anthony Napolitano (41), Ald. Chris Taliaferro (29), Ald. Ariel Reboyras (30), and Ald. Willie Cochran (20) are co-sponsors.

Ald. Matt O’Shea (19) introduced a resolution calling for a voluntary $1 service charge on the “nearly 100 million passengers flying into or out of Chicago.” Money from that service charge would go toward increasing police presence at and around the airports. Citing the City’s “unprecedented gang and gun violence crisis” and the “alarming rate of illegal guns on the street” in the preamble to the ordinance, Ald. O’Shea suggested the City tap into the $1.8 billion in revenue O’Hare and Midway airports generate.

And the Chicago Public Health Department, in conjunction with Ald. Burke, introduced a resolution calling on the Food and Drug Administration to reverse its decision to allow the use of opioid prescription drugs for pediatric patients. The ordinance cites a recent surge of prescription drug abuse in Chicago; between 2009 and 2011, Chicago saw an 11% increase in the number of opioid-related emergency room visits.  

Mayor’s Press Q&A

At his usual post-Council meeting press conference, Mayor Rahm Emanuel defended his unpopular revenue plans, a historic property tax increase and a new monthly garbage fee, in addition to fielding questions about the recent federal indictment of former Chicago Public Schools CEO Barbara Byrd-Bennett.

“I’m proud we are submitting this [budget] today,” Mayor Emanuel told the room before taking questions. Asked if he made any changes to his budget as a result of aldermanic objections, Emanuel responded, “The short answer...no.”

He said the budget is based on conversations already had with the unions, the Civic Federation, and aldermen. Those meetings go back “months,” the Mayor said, “and we included items discussed in those meetings.”

And even though he wasn’t asked about his plan to privatize the city’s 311 call system, a plan that garnered a significant amount of criticism from aldermen, Emanuel made a point to defend it, “I stand by what we’re proposing as it relates to 311 reforms, mainly because for the first time ever we have a lot of effectiveness in our neighborhood services.”

It would cost the city $40 million dollars to upgrade the system, the Mayor added. “We don’t have that.”  

As for the Byrd-Bennett indictment, Emanuel denied any connection with Gary Solomon, co-owner of SUPES Academy, who was at that moment entering a not guilty plea in federal court for his alleged involvement in the $23 million dollar kickback scheme with the no-bid contract CPS awarded his firm.

When asked to detail how he knew Solomon, where they met, if he knew Byrd-Bennett worked for his company, and why he wasn’t more involved in the contract selection process, Emanuel responded “there is no relationship between me and Solomon. Ever.”

“There is a long history of mayors getting involved in contracts,” Emanuel added. “I don’t get involved in contracts.”

Public Hearings

Approximately 40 witnesses submitted pink slips to testify on the Mayor’s budget. Civic Federation President Laurence Msall kicked off the public portion of the meeting by voicing his support for and urging the Council to approve the Mayor’s spending plan.

“We applaud the Mayor and his administration for the long overdue plan to address the city’s grossly underfunded public pension system,” Msall said in a short speech highlighting the findings of his lengthy 111 page budget analysis. He spent nearly two hours fielding questions from aldermen.

Calling the Mayor’s $1.2 billion dollar FY2016 property tax levy “painful but very necessary”, Msall advised the Council to support the mayor’s spending plan and “stabilize the city’s two worst funded pension plans.”

But he also warned that the Mayor’s budget relies on a lot of variables that could lead to bigger cuts in the future, “We are concerned that even with this extraordinary property tax increase, the city has some expenses that may not be covered.”

If Chicago Public Schools’ liquidity crisis and the city’s ongoing structural deficit aren’t addressed, additional tax increases and service cuts will be needed, Msall said. If Springfield rejects Mayor Emanuel’s plan to extend the city’s pension payments, the city will have to pay an additional $220 million towards the Police and Fire pensions, Msall added. The courts also have yet to rule on the legality of the city’s decision to phase out its subsidy of retiree healthcare costs for its non-public safety unions. “If that should be struck down, the city faces additional hundreds of millions of costs for its health care retirement system,” Msall warned.

Aldermen used the time with Msall to ask for alternative proposals to the property tax hike. When Ald. Joe Moore (49) asked Msall to highlight potential cost savings and quick fixes for this year’s budget, Msall said the Council needs to take a hard look at the budget and find the “optimal number” and cost of city services.

“Those obviously are good recommendations, and they will take some time to fully implement, but is there anything you can identify that we can implement in the next two weeks?” Ald. Moore followed up.

Msall said cutting borrowing would be a good start, as the city’s outstanding debt is the biggest cost after its unfunded pension liability.  Msall also defended Mayor Emanuel’s plan to privatize 311, echoing the mayor’s argument that the cost of the updating the system would be a bigger burden than privatization.

Samples From Public Testimony

On the proposed privatization of the city’s two HIV clinics:

“The city’s HIV clinics are not sustainable in the post-Affordable Care Act landscape, and the transition of these clinics is the best long-term plan for HIV patients in Chicago. These funds will be used more effectively and efficiently by community based clinics… That support, however, is not without concerns. Our greatest concern is that if the city decides to transition medical services to other organizations, people with HIV could drop out of care… The service transition plan should include steps that ensure all current patients are successfully linked to a primary care medical home.” – Maximillian Boykin, AIDS Foundation of Chicago

On the proposed tax on e-cigarettes:

“The mayor’s plan to use $500,000 per year in e-cigarette tax revenue to open five new [school based] health centers is a smart investment in our city’s young people. We estimate that this plan will ensure over 3,000 more Chicago people have access to support they need to be healthy, safe, and ready to learn… Because the tax is intended to serve as a capital investment, we wouldn’t be concerned about the long-term viability [of revenue from the e-cigarette tax].” - Heidi Ortolaza-Alvear, EverThrive Illinois

On the proposed property tax hike and homeowners exemption:

“We don't even know yet the full impact of the tax increase, because all of the properties in the city have yet to be assessed. What we know so far is that assessments in southern Cook County have increased at an average rate of 30%... This policy is flawed and short-sighted. It's disingenuous to shine a light on what more the central business district can do without recognizing that same light illuminates the neighborhood businesses that will also be picking up the tab.”  – Tanya Triche, Illinois Retail Merchants Association  

“Estimates indicate that rents will increase more than $380 annually, or $32 a month over the next four years, because renters pay property taxes too. As you search for ways to alleviate the burden of property taxes on homeowners, we strongly urge you not to do so at the expense of Chicago’s renters… Instead, a rebate program targeting only the most severely impacted taxpayers would alleviate the harmful effects of a property tax shift. We support that kind of program.” – Michael J. Mini, Chicagoland Apartment Association

“Real estate property taxes in Chicago account for nearly 76% of large office buildings’ total operating expense… We’ve been told that if distributed evenly, there would be about a 12% increase in tax bills... The increase grows to nearly 17% and other non-partisan estimates are even higher: as much as 22%... For the tenant of a modest 20,000 square foot space in an average building, that’s an increase of over $25,000. It brings that tenant’s property tax bill to more than $177,000.” – Ron Tabaczynski, Building Owners and Managers Association of Chicago

“In addition to the large property tax in the 2016 budget, the hotel industry continues to be hurt badly by the lack of enforcement of the city’s vacation rental ordinance… The license fee in Chicago is $500. It’s good for two years. New York City’s license is $5,000... If you take all the units [Airbnb and other vacation rental companies] rent, $500 times 5,000 [units], that’s $2.5 million. Right off the bat.” – Marc Gordon, Illinois Hotel & Lodging Association

On the proposed privatization exploration of 311:

“It makes no sense to privatize what connects their residents to their government. It makes no sense to privatize 311 and put the nerve center of the city in the hands of a corporation whose number one goal and/or priority is to make a profit. It makes no sense to privatize and get rid of 311’s biggest asset, which would be experienced, knowledgeable workers who are committed to the City of Chicago.” – Louis Shuttlesworth, 311 operator

On Police Superintendent Garry McCarthy:

“I support and thank especially Alderman [Raymond] Lopez and the other City Council members who have called for the firing of Garry McCarthy… His military policing and racial profiling in some parts of the city is a threat to all parts of the city. This superintendent is part of the problem instead of the solution and it’s time for him to go.” – Evangel Yhwhnewbn, Chicago resident, 15th Ward

On proposed changes to rideshare pickup rules:

“I want to first of all, thank Mayor Emanuel for supporting the rideshare agenda… I’ve been driving for over two years. I’m 74 years old so I guess I’m a senior, and it’s a great job for seniors... I drive to the airport but it’s unfair to me that I have to come back without a ride… When you drive in from the airport, you see the big sign, ‘Welcome to Chicago.’ When a tourist arrives in Chicago, the first person he gets an opportunity to talk to is his transportation driver... I want to be the Wal-Mart greeter for Chicago.” – Jim Evans, UberX driver, 45th Ward

The full City Council meets today and Mayor Rahm Emanuel is expected to introduce the official revenue and levy ordinances for the FY 2016 budget. The ordinances will have specific language on the controversial cloud tax, the Mayor’s proposed monthly garbage fee and the phased-in property tax increase. There is also a public hearing scheduled for the end of tomorrow’s Council meeting. In years past, the hearing kicked off with testimony from Laurence Msall, of The Civic Federation, followed by public testimony from a few dozen public speakers.

The Finance Committee pushed through a nine page agenda in a little over an hour, with few questions or testimony (save for George Blakemore), approving all of the TIF amendments, Special Service Area (SSA) appointments, and 2016 tax levy and budget requests for all but one of the SSAs listed on the agenda.

Members Present: Chairman Ed Burke (14), Joe Moreno (1), Will Burns (4), Gregory Mitchell (7), Patrick Daley Thompson (11), Toni Foulkes (16), Matt O’Shea (19), Willie Cochran (20), Howard Brookins, Jr. (21), Rick Munoz (22), Roberto Maldonado (26), Walter Burnett, Jr. (27), Jason Ervin (28), Ariel Reboyras (30), Gilbert Villegas (36), Emma Mitts (37), Marge Laurino (38), Tom Tunney (44).
Non-members: Susan Sadlowski Garza (10)

Pension Fund Property Tax Levy Requests

Finance Chairman Ed Burke (14) however held up the 2016 property tax levy requests filed by four of the City’s pension funds, because Chief Financial Officer Carole Brown wasn’t on hand to speak on behalf of the ordinances. His staff assistant told Alderack Burke will directly introduce the property tax levy requests at today’s full City Council meeting.

Every year, as required by state law, the retirement boards for the City’s Police, Fire, Municipal, and Laborers’ pension funds submit a levy request to the City Council estimating the city’s share to the pension funds.

The retirement board for the Policemen's Annuity and Benefit Fund (PABF) is requesting a $675.8 million payment to the fund, approximately $211.8 million more than Mayor Emanuel budgeted for the Police pension fund payment in his 2016 budget proposal.

The retirement board for the Firemen’s Annuity and Pension Fund is requesting a $284 million payment from the city, or $76 million more than the Mayor budgeted for next year.

When Mayor Emanuel unveiled his budget proposal last month, he based the city’s share on an amended funding timeline that has yet to be approved by Springfield, SB777. Under current state law (Public Act 96-1495) the City’s Police and Fire pension plans must achieve a 90% funded ratio by the end of 2040. The Police Fund is only 26% funded with a $11.73 billion unfunded pension liability, and the Firemen’s Fund is only 23% funded with a $4.513 billion unfunded liability.

The Mayor’s proposed legislation in Springfield, SB777, would stretch pension payments through 2020, in addition to pushing the 90% funding requirement to 2055.

The Laborers’ and Municipal Employees’ contribution requests are closer in line with the Mayor’s budget request at $28.5 million and $277 million respectively, according to the Finance Committee agenda. Those levy requests aren’t available online yet, although they were supposed to be directly introduced at yesterday’s committee meeting.

Special Service Area Budgets  

The Committee approved, without discussion or public comment, all but one of the property tax levy and budget proposals for various Special Service Areas (SSAs) across the city. SSAs, also known as Business Improvement Districts, take a portion of the local property tax levy and use the funds to maintain and beautify streets, attract business, and provide security, among other things.

Chairman Burke said he would hold the tax levy and budget plan for Belmont/Central (SSA #2), but would allow discussion on the other SSA plans.

“Now just like the wedding ceremony when the preacher says speak now or forever hold your peace, if any of you have any objections to what’s going on at any of these Special Service Areas, now is your chance to express your opposition,” Burke said before going down the list for all the SSAs, with a total property tax levy request of $8.53 million. The Committee approved plans in the omnibus without any objections.

Invoking Rule 14, Chairman Burke abstained from voting on the budget requests for 63rd St. (SSA #3), Back of the Yards (SSA #10), Stockyards (SSA #13), and 59th Street (SSA#59). The service provider for 63rd St. and 59th Street, the Greater Southwest Development Corporation, is a client of Burke’s law firm, Klafter & Burke. The Back of The Yards Neighborhood Council oversees the other two SSAs, but their connection with Burke is unclear.

Chairman Burke also abstained from voting on a property tax incentive and a loan agreement to help fund an affordable housing project in the Washington Park community.

The property tax break was a Class L real estate tax incentive for Maromon Car Company’s showroom in the landmark Motor Row district. The tax break, which passed in committee by voice vote, would support the renovation of the iconic building on 2230 S. Michigan Ave. by saving the company $4.4 million in taxes over 12 years.

In addition, Chairman Burke abstained from voting on a loan agreement with PNC Bank for the St. Edmund's Meadows affordable housing development project in the Washington Park community (20th Ward).  

TIF Amendments

Department of Planning and Development Commissioners Lawrence Grisham and Mary Bonome took turns testifying on the Tax Increment Financing (TIF) amendments, all of which passed. This includes ordinances providing TIF assistance to pay for capital improvement projects at four Chicago Public Schools, and ordinances the Department of Planning and Development introduced to change the future land use maps for the Woodlawn and Cicero/Archer TIFs, expand the boundaries of the Belmont/Central and 119th/1-57 TIFs, and extend the life of the Sanitary Drainage and Ship Canal TIF. (Details provided in Tuesday’s newsletter).

Neither DPD Commissioner provided testimony on the Woodlawn TIF amendment. Similar to a zoning change amendment, the ordinance the Committee approved would change the land use plan for the TIF district, making it possible for the University of Chicago to build a new campus for their existing Woodlawn Charter School. The proposal consists of a three-story school building serving 6th through 12th graders and adjacent outdoor athletic field.

U of C is in the midst of purchasing 19 parcels of City owned land within the TIF district to build the school. A negotiated sale for that land was taken up later in the afternoon by the Community Development Commission. According to the DPD staff report provided at the CDC meeting, the City plans to sell the land appraised at $755,000 (approximately $4.93 per square foot) to the University for $1. Michelle Nolan, the author of the DPD report, described the sale as a “public-private partnership”.

Two appointments for the Community Development Commission (CDC) and several tax breaks for businesses moved quickly through the Committee on Economic, Capital, and Technology development Tuesday.

Attendance: Chair Howard Brookins, Jr. (22) Joe Moreno (1), Leslie Hairston (5), Patrick Daley Thompson (11), Toni Foulkes (16), Gregory Mitchell (17), Willie Cochran (20), Jason Ervin (28), Gilbert Villegas (36), Emma Mitts (37), Michele Smith (43), John Arena (45), Ameya Pawar (47)

Acting Department of Planning and Development Commissioner David Reifman and affordable housing developer Eileen Rhodes’ appointments to the CDC were approved by the committee in less than 10 minutes. Reifman has been working for DPD for a little over a month, and Rhodes has been working on affordable housing in the city’s South and West Sides as CEO of East Lake Management for more than 15 years. The Community Development Commission is a 15 member panel that issues recommendations on TIFs, redevelopment areas, and membership to Community Conservation Councils.

“I’ve worked in many communities on consensus building and working with different interests, stakeholders, and I think that skill set will serve me extremely well,” Reifman told the committee of his time in the private sector at the land use law firm DLA Piper, “I think it’s really the adaptability of that skill set and the experience with those issues that will give me the benefits of representing the City.”

Reifman’s appointment as DPD Commissioner is still awaiting approval in the Zoning Committee.

Ald. Leslie Hairston (5) praised Rhodes, whose company operates in Hairston’s South Side ward. “She has a good understanding of what it takes to develop in underserved communities and I think it’s a great addition to the CDC.”

“Thank you, Alderman. Go Cubs,” Rhodes said to Hairston, a Sox fan who wore an Arrieta jersey to meetings yesterday.

Ald. Emma Mitts (37) told Rhodes she hoped she could help cut through red tape to help underserved communities who haven’t yet bounced back from the recession. Rhodes agreed, saying she hoped to put TIFs to good use, “[At Eastlake,] we do as much as we can to help the fabric of the community instead of just building a house and leaving it because we understand that it’s not enough.”  

The committee also quickly approved a class 7(c) tax break for construction of a new Toyota/Scion dealership in the 40th Ward. A 7(c) tax break reduces the property tax assessment level to 10% for the first three years, 15% in the fourth year and 20% in the fifth year. The dealership is moving from its Edgewater location to expand in West Ridge–it would retain 120 jobs and add 25 new full time jobs.

The committee also approved the renewal of a 6(b) break for a commercial building that houses Comcast and the Illinois Department of Human Resources employees on the far South Side. The Class 6(b) tax classification lowers the Cook County tax rate for eligible projects over a 12-year period. The property owner, Rich Raffin, used the original tax break to expand its existing parking lot to accommodate a request from Comcast, who threatened to move operations to the south suburbs, according to Marilyn Engwall of the Department of Planning and Development. The extension of the break will save Raffin $279,000 and offset the costs of the $789,000 parking lot.

Committee members slowly trickled out of the meeting, until just six were left by the end. Those remaining voted in favor of a series of 6(b) tax breaks for construction of a $40 million package sorting and distribution facility for FedEx Ground operations on the Lower West Side and to support the shipping company’s recently built $10.8 million 55,000-square-foot warehouse in the Pilsen Industrial Corridor.

The Committee held one 6(b) tax incentive for Eli's Cheesecake Company at the request of the local alderman, Nick Sposato (38). Eli’s applied for a tax break for the proposed construction of a roughly 38,000 square foot manufacturing industrial facility at 4350 N. Normandy Ave and 6701 W. Forest Preserve Dr., the site of the existing Eli’s Cheesecake World.

Finance Committee’s nine page agenda has a significant number of Tax Increment Financing district-related ordinances, various appointments and reappointments to Special Service Areas (SSAs), and tax levy and budget requests for 21 SSAs.

The retirement boards of four of the City’s pension funds filed property tax levy requests for the 2016 levy that are significantly higher than the payment Mayor Emanuel proposed in his 2016 Budget.  

Pursuant to state law, the retirement boards are required to send yearly estimates of the City’s portion to the fund. But unlike the mayor’s proposed pension payment plan outlined in his budget request, which is based on an extended pension payment timeline outlined in Senate Bill 777, the estimates provided by the Police and Fire boards are based on the current funding ratio, which requires these pension funds receive a 90% funding ratio by 2040.

With a roughly $8 billion unfunded liability, the Policemen’s Annuity and Benefit Fund is requesting $675.8 million from the 2016 property tax levy. Mayor Emanuel proposed a $464 million payment for 2016. The Firemen's Annuity and Benefit Fund is requesting $284 million, a slight increase from the Mayor’s proposed $208 million payment for 2016.

The Laborers’ and Retirement Retirement Board Employees’ Annuity and Benefit Fund is requesting $28.5 million, while the Municipal Employees’ Annuity and Benefit Fund is requesting $277.7 million. Both of those funds are about the same Mayor budgeted for 2016 due to a new plan for those funds enacted by the state legislature in 2014. The levy requests for the Police and Fire pension funds are listed on Legistar, while the other two will be directly introduced at today’s meeting.

SSA Related Ordinances

Every year, SSAs must provide the City Council with an outline of proposed expenditures for the next fiscal year, in addition to requesting a percentage of the annual property tax levy to pay for improvements. Three of those SSAs are requesting a levy of over a million dollars.

Stockyards (SSA #13), is proposing a $1.3 million dollar budget, $1.18 million of which will come from local property taxes. Back of the Yards Neighborhood Council Executive Director Craig Chico filed the levy request. Chico is the brother of former mayoral candidate Gery Chico. The SSA’s biggest expenditure for 2016, roughly $500,000, will go towards public safety. Chico lists Securitas Security Services, USA as the independent security contractor.

The second largest SSA budget request, $1.2 million, was filed by Ghian Foreman, Executive Director of the Greater Southwest Development Corporation, for the 63rd Street SSA (#3). Foreman seeks a $1.1 million dollar property tax levy to fund next year’s budget, which allocates a significant amount of the 2016 budget for public safety ($305,900) and attraction ($300,950).

As for the 10 SSA appointments listed on the agenda, five are new appointments. This includes the appointment of Claretian Associates Executive Director Angela C. Hurlock to the Commercial Avenue Commission (SSA #5), Franklin Elementary Fine Arts Center Principal Margie D. Smagacz to the Old Town Commission (SSA #48), and Dever Elementary School Principal Rita O. Ortiz to the 59th Street Commission (SSA #59).
 

Proposed Amendments to 5 TIFs

Mayor Emanuel introduced five ordinances at the September City Council meeting to amend five TIF districts.

Woodlawn TIF - This ordinance amends the land use plan to allow for the planned development of the University of Chicago’s Woodlawn Charter School.

Cicero/Archer TIF - An amendment to reflect new residential and commercial development plans on seven parcels of land in Garfield Park.

The Belmont/Central and 119th/1-57 TIFs would be expanded under two ordinances the Mayor introduced. The former TIF will expand its borders to include an additional 136 acres of commercial properties and parks in the Belmont/Cragin and Portage Park neighborhoods. The latter TIF district will expand to include an additional 888 acres of commercial and residential properties located in the Morgan Park and Pullman Communities.

Sanitary Drainage and Ship Canal TIF - This South Lawndale TIF district will get extended for an additional 12 years under the ordinance introduced by the Mayor. Originally designated as a TIF in 1991 to support the redevelopment of the industrial corridor, it was scheduled to expire this year, but the new expiration date will be December 31, 2027.
 

Ordinances Authorizing TIF Funds for Capital Projects at Four CPS Schools

Approximately $4.4 million dollars from the Ewing Avenue Redevelopment TIF will fund capital improvement projects at Jane Addams Elementary School and Matthew Gallistel Elementary Language Academy.

Jane Addams Elementary, a neighborhood elementary school serving grades K-8, would receive $1.7 million dollars from the TIF to pay for the installation of new energy efficiency windows, masonry and structural upgrades. The school is located at 10810 S. Avenue H in the East Side neighborhood and has an enrollment of 822 students, 97% of which are Hispanic, and 86% of which are low income. While a majority of the funds will come from the Ewing Avenue Redevelopment TIF, the Ordinance also authorized the transfer of $600,000 in TIF funds from the neighboring TIF, the Lake Calumet Avenue Redevelopment Project.

Also located in the East Side neighborhood, Matthew Gallistel Elementary Language Academy, a K-8 school with 1,164 students, would get $2.7 million in TIF money for installation of a new roof, tuck pointing, air conditioning units and various floor, wall, ceiling and door repairs at the 100-year-old school building.  

$500,000 from the Woodlawn TIF will pay for recreational improvements at James Wadsworth Elementary, including new playgrounds, artificial turf, outdoor classrooms, walkways and plants. $27,000 from the 63rd/Ashland TIF will pay for a new playlot at the Charles W. Earle STEM Elementary School.

After meeting for more than two hours, the "District Committee" tasked with appointing a replacement for the late Rep. Esther Golar held no vote and decided to reconvene at a later date. The Committee, chaired by 15th Ward Ald. and Democratic Committeeman Raymond Lopez, will recess to accommodate the vacancy of 16th Ward Committeeman, the late JoAnn Thompson. 

According to Lopez's Facebook page, Genita Robinson, Dedrick Rent, Eric White, Eddie Daniels, Kenyatta "Nicole" Vaughn, Eddie Johnson, Keith Kysel, Sonya Harper, Michael Finney, and Glen Fulton are all candidates for consideration, though Fulton wasn't present last night. Lopez told Aldertrack the group, including Ald. Pat Dowell (3), Ald. Roderick Sawyer (6), and Cook County Comm. John Daley (who is also the 11th Ward Dem. Committeeman), spent the meeting talking to potential appointees. 

"I want to give the Democrats of the 16th Ward the opportunity to choose a committeeman in order to participate," Lopez wrote, "We have until October 21 to name a representative and will move the process accordingly."

Two names familiar to real estate development in Chicago–David Reifman and Eileen Rhodes–are getting appointments to the Community Development Commission, the 15 member panel that issues recommendations on TIFs, redevelopment areas, and membership to Community Conservation Councils.

Reifman was recently appointed commissioner for the Department of Planning and Development, and who specialized in zoning, land use planning, TIFs, historic preservation, and public-private partnerships at DLA Piper, according to the Mayor’s release on his appointment.

Rhodes is President of East Lake Management Group, which specializes in affordable housing development and management. Rhodes served as treasurer for First CD Victory PAC, according to Illinois Sunshine, and also donated personally to many aldermanic Black Caucus campaigns. First CD Victory was active in the 2007 elections, donating to aldermanic campaigns for Madeline Haithcock (2), Latasha Thomas (17), Berny Stone (50), Lona Lane, and Economic, Capital and Technology Development Committee Chair Howard Brookins (21) by leading developers who supported then-Mayor Richard M. Daley. Rhodes was also listed on United Communities of Chicago’s PAC, which was active in the 2011 elections.

The committee is also set to vote on a handful of class 6(b) certifications in the 9th, 25th, and 38th wards, and a class 7(c) certification for an auto dealership in West Ridge.

The Director of the Council Office of Financial Analysis, Ben Winick, released a simple, but chocked-full of data 15-page PowerPoint slide on the city's budget numbers discussed thus far. It's probably the easiest way to get a handle on what's under discussion.

The final day of the City Council budget hearings started with a quick 15 minute briefing with the Department of Administrative Hearings, a nearly two hour hearing with the Department of Water Management, an approximately 40 minute hearing with the Department of Procurement Services, and it wrapped with the City’s Law Department and a tearful thank you to Budget Chair Carrie Austin (34).

Since it was the last day after a long slog, Vice Chair Jason Ervin (28) was in no mood to stay longer than needed. When Ald. David Moore (17), who already irked aldermen throughout the past two weeks for his persistent questioning, said he would wait for round two to ask follow up questions during the Department of Water Management hearing, Ervin grumbled, "It's Friday, man." The day’s session wrapped before 3:00 p.m.

 

Budget Chair Carrie Austin Delivers Tearful Thanks;
Reveals She Was In Coma During Hospitalization

Ald. Carrie Austin broke down in tears at the end of Friday's hearing while thanking a small group of aldermen for prayers during her illness, telling them she was near death and in a coma for two weeks.  

Austin was absent from Council several weeks throughout September, but aldermen and staffers kept her heart surgery under wraps. The Sun-Times broke a story just before budget season began, saying Austin had endured a couple lengthy hospital stays and one surgery, and cast doubt on whether she’d be able to chair what promised to be a contentious few weeks of hearings: “It’s highly unlikely Austin will have the stamina to chair marathon hearings that can drag on into the evening. Nor can she be counted on to be the iron-fisted chairman she has been.”

But Austin’s iron fist took center stage at several budget hearings, including with Police Superintendent Garry McCarthy, and when keeping her fellow aldermen in line. Austin stayed late into the evening on several hearing days, sometimes sitting away from the podium or in the cloakroom while Budget Vice Chair Jason Ervintook over. She also became more active than usual on social media.

Ald. David Moore (17), who Austin had reprimanded a few times for asking too many questions and extending his time to second round questioning, brought her a big bouquet of flowers and thanked her on behalf of the full Council on the last day of budget hearings. “Chicago’s good and faithful servant, I appreciate you so much, and your colleagues as well. We appreciate you.”

“Still gonna be last,” she teased Moore, who ended up closing many hearing days with his extended questioning.

“Gosh, you had me crying when the Mayor did the Budget address, I’m gonna try not to do it this time.” She still cried.

Austin told aldermen she has a good bill of health, and two more doctor’s visits left. “I tore my aorta. I almost wasn’t here. But I’m grateful that God allowed me to be here. I was in the hospital 29 days. And in those 29 days that I was there, for the first two weeks I was unconscious, I was in a coma. Blood pressure went up over 300. The bottom number was 205, they couldn’t bring it down.”

Austin said after her hospital stay, she was home a week, but other aortic tears started near the bottom of her spine, requiring doctors at at Northwestern Memorial Hospital to put in three stents. “I’m doing pretty well unless it decides to go the other way, then it’ll be instant death. But if it happens, I’m ready to see the Lord, ‘cause I have served him all of my life.”

She told her colleagues, crying, that their prayers are what brought her back. “If I’ve offended anybody, I’m sorry. Charge it to my head and never to my heart, cause I love each and every one of y’all even though you make me sick and get on my nerves… But I do need to have a meeting with the newbies.” She sighed. Aldermen in the Chamber laughed.

“Flowers for a person while they yet live, while they can smell them, thank you. We made it through, and this meeting stands adjourned.” She got a standing ovation from those present.

ADMINISTRATIVE HEARINGS

With few aldermen on hand for the early Friday morning hearing with the Department’s Director Patricia Jackowiak, the quick 15 minute hearing was short on questions and heavy on accolades. Vice Chair Jason Ervin lead the meeting, with Budget Chairman Carrie Austin arriving later in the day.

Attendance: Vice Chair Jason Ervin (28), Pat Dowell (3), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Mike Zalewski (23), Ariel Reboyras (30), Gilbert Villegas (36), Marge Laurino (39)

Submitted written testimony.

The Department of Administrative Hearings is asking for a $8.18 million appropriation for next year, a 2.7% increase from last year’s $7.96M appropriation. The largest chunk of the budget, $3.03 million, will go toward vehicle hearings for parking, red light, automated speed camera, and booted vehicle violations.

Before concluding the meeting, Vice Chair Ervin said one thing that does concern him is the lack of salary increases for the judges the City hires to oversee hearings. “Being able to retain quality, qualified attorneys that act as administrative law judges is important,” Ervin said.

The Department hires and trains outside attorneys to decide cases and serve as Administrative Law Judges. The 2016 budget appropriation calls for a $2,760 salary increase for over last year for judges, totaling $94,740.

“Hopefully we can find resources to increase that, because the one concern I do have is retention. Most of the individuals that are there are knowledgeable. They’ve been there for awhile. They understand the process. They understand the communities. And that’s something we don’t want to lose.”

Highlights from written testimony:

• In 2014, Administrative Law Judges presided over 627,923 hearings.

• 1,555 low-income respondents received legal representation from independent attorneys when going before a judge at the Central Hearing Facility between 7/1/14- 6/30/15. It’s part of the non-profit legal aid service Coordinated Advice & Referral Program for Legal Services (CARPLS).

• The Department’s Telephone  Language Line Interpretation Service, commonly known as “Language Line”, saw a 90% increase in usage over 2009, with 33,512 minutes of interpretation service in 2014.

• By the end of 2015, DOAH anticipates it’ll conduct 10,000 more hearings than in 2014

 

WATER MANAGEMENT

Department of Water Management Commissioner Tom Powers faced another nuts and bolts heavy hearing, with aldermen focusing on local infrastructure projects and complaining about poorly done sidewalk restorations, the sluggish timeline of sewer repairs, and questions about water meters. Despite criticism, Powers says the department is on track to complete its 10-year Capital Plan the Mayor first unveiled in 2012.

Attendance: Vice Chair Jason Ervin (28), Pat Dowell (3), Roderick Sawyer (6), Greg Mitchell (7), Michelle Harris (8), Susan Sadlowski-Garza (9), Patrick Daley Thompson (11), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Howard Brookins, Jr. (21), Mike Zalewski (23), Michael Scott, Jr. (24), Chris Taliaferro (29), Ariel Reboyras (30), Milly Santiago (31), Scott Waguespack (32), Deb Mell (33), Gilbert Villegas (36), Nick Sposato (38), Marge Laurino (39), Brendan Reilly (42), Tom Tunney (44), Michelle Smith (43) John Arena (45), James Cappleman (46), Deb Silverstein (50)

Submitted written testimony.

Ald. Patrick Daley Thompson (11), a former Water Reclamation District Commissioner, came out of left field with an odd question about selling cat food. “At the water filtration plants, where we have the intake, there is a lot of fish, I guess, that come in there. What do we do with that? Do we sell that for cat food, or do we try to monetize that at all? Anything?”

Powers said it’s not just fish that get caught in the screens, there’s also trash and floating debris that gets grounded out and sent out for treatment.  “One man’s trash is another man’s treasure...and we could try to utilize some of that,” Ald. Thompson, said reluctantly.

Then there was Ald. Raymond Lopez (15), who wanted to know if it was possible for aldermen to get access to the keys to shut off fire hydrants that get opened illegally. But he was immediately shut down by Powers, who said “even the guy to my right won’t give a magnetic key to his mother.” Powers assured Ald. Lopez that the Department is using data to track open hydrants to find trouble spots.

Ald. Brendan Reilly (42) asked Powers to “hurry up” and finish the water main repairs in his ward because “the traffic really stinks”, while Ald. Tom Tunney (44) complained about poorly done sidewalk restorations following underground water improvements.

“You know how I am about sidewalks,” Ald. Tunney lamented. “I do not believe they are done with the same quality that I see when our City department is in there...Water’s [restorations] are crap.”

But the most critical line of questioning came from South Side Ald. David Moore(17), as he pressed Powers to explain water rate increases and overtime amounts.

“I understand we are investing an extraordinary amount into our water delivery infrastructure, and I commend you on implementing all of this work,” Ald. Moore said, reading from his notes. “But financially, this investment has placed a rather large burden on people.”

In 2012, as part of his plan to update the city's water infrastructure, Mayor Emanuel proposed a four-year increase in rates for the City's water and sewer funds. In 2011, households paid a rate of $2.01/1000 gallons. The rate jumped to $3.82 this year, the final year of the phase-in. After this year, water rate increases will be  tied to the consumer price index.

“Water rates have increased by 60% over four years. Is that correct?” Ald. Moore asked Powers.

“It is about 60%, just over 60%,” Powers responded.

“If so, how do we explain that to people when their paychecks have certainly not gone up. And now we’re asking them for even more money,” Ald. Moore said, pointing to the Mayor’s proposed property tax hike and garbage fee in this year’s budget. “What is your plan for the future? Is it to continue to raise rates?”

“Alderman, Alderman,” Vice Chairman Ervin interjected before Powers could respond. “The rates in place were set four years ago [...] So the rate [increase] is not really a topic at this point…that’s something that’s kind of past us. But knock yourself out.”

After Powers assured Ald. Moore they could speak more about water rates offline, Ald. Moore pivoted to another hot topic: overtime.

“Under what circumstances do you authorize overtime?” Ald. Moore asked.

Powers said the Department has different types of overtime: contractual obligations with collective bargaining agreements, emergencies, and infrastructure malfunctions.

“And then there are instances where we use overtime to actually save money. And that doesn’t sound like an accurate statement,” Powers said explaining that in the water treatment plants, “in house forces” can compete against contractors to keep work in house if they are cheaper.

Powers gave the example of a recent project the Department undertook to replace 40 transformers. The original contractor for the project quoted $5,000 per transformer. But by opting to use city employees and paying them overtime hours instead, the Department got the job done for $2,900.

“So we actually saved money in this overall project by working with our in house crews and having them bid on work as if they were a contractor,” Powers said.

In the 2016 budget, the Department is asking for $4 million in overtime for its Bureau of Water Supply, despite spending $9.5 million in overtime in 2014. When asked about the difference, Powers said “shift coverage” was the main driver in those overtime hours and his department is working with the Budget Office to “hire strategically” to alleviate the costs.

The Department’s Bureau of Operations and Distribution spent $8.5 million in overtime in 2014 and is requesting $3 million next year, Ald. Moore pointed out. Those overtime hours are directly related to weather, emergencies, water main breaks, and sewer repairs, Powers replied. Major snow storms also lead to overtime hours in that sub-department because DWM helps Streets and Sanitation with snow removal.

And on the issue of delinquent water payments suburban towns owe the City, the Department has worked out payment plans to recoup $30 million dollars from the Cities of Dolton, Robins, and Harvey.

Highlights from written testimony:

• DWM purifies an average of 800 million gallons of water a day at the Department’s Jardine and South Water Purification Plants.

• 2.7 million customers are served in Chicago and 2.76 million customers in 125 surrounding suburbs, representing 42% of the state’s population.

 

PROCUREMENT SERVICES

After waiving the reading of the opening statement, and a surprisingly smaller than expected number of minority hiring questions, Commissioner Jamie Rhee spent a little over an hour testifying before the Budget Committee, where she revealed an unusual statistic: the City has made nearly $14 million dollars selling “junk” online over the past four years.

Attendance: Chair Carrie Austin (34), Vice Chair Jason Ervin (28), Joe Moreno (1), Pat Dowell (3), Michelle Harris (8), Susan Sadlowski-Garza (9), Patrick Daley Thompson (11), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Howard Brookins, Jr. (21), Rick Munoz (22), Mike Zalewski (23), Michael Scott, Jr. (24), Chris Taliaferro (29), Milly Santiago (31), Scott Waguespack (32), Deb Mell (33), Gilbert Villegas (36), Nick Sposato (38), Marge Laurino (39), Brendan Reilly (42), Tom Tunney (44), Michelle Smith (43) John Arena (45), James Cappleman (46), Ameya Pawar (47), Deb Silverstein (50)

Submitted written testimony.

Since 2011, DPS has worked with other City departments to identify surplus or decommissioned items that can be auctioned online. Items range from smaller equipment like old typewriters, calculators, phones, obsolete copier toner, and dog cages, to bigger pieces like solar panels, and construction equipment.

“It is surprising, but there is a huge market for this,” Rhee explained. The Department has been hosting daily auctions online with buyers from all over the world bidding on the obsolete equipment. “The market is actually recycling them, and there is a very active market.”

In 2015 alone, DPS is on target to sell over $2 million dollars worth of obsolete items.

Most of the questions aldermen had for Commissioner Rhee focused on the bidding requirements and the average timeline for DPS’ business certification process.

Ald. Patrick Daley Thompson (11) asked about city residency requirements for local contracts. Commissioner Rhee said on all non-federally funded projects over $100,000, 50% of the hours worked must be done by city residents. But as soon as a single federal dollar touches a project, the City is barred from demanding local residency requirements.

Asked if there is an option to buy out of that, Rhee said no, because the requirements were set through city ordinance passed in May 2013. This year, DPS recouped $141,000 in penalties from businesses that failed to meet the requirements. Since projects tend to span several years, DPS regularly monitors hiring practices through the life of the project.

“If we only have a couple hundred thousand dollars worth of penalties–I don’t know what the penalties are--but it doesn’t seem like a lot,” Ald. Thompson said, suggesting the requirements be increased. Rhee said she was open to the idea.

On the business certification front, Ald. Raymond Lopez (15) asked if the certification timeline is too long, noting he has only three certified businesses in his ward, and was told by local contractors that they prefer to get certified by the County because the process is “half as long”.

“That is their feeling… I’m just relaying the message,” Lopez added.

But before Rhee answered his question, Chairman Austin interjected. “Not it doesn’t. Most of the time [businesses] are using that as an excuse to get pushed a little faster.”

“But then the question comes along with participation,” Ald. Lopez said. “When a number of businesses hear rumors and stories that the payment for contracts takes longer. And sometimes for businesses that are minority or disadvantaged or women owned, they don’t have the capital, resources, or cashflow to sustain themselves three-to-six months before their first payment. Is that something your department is looking to address so we don’t exclude [this] group?”

“Absolutely,” Rhee said the City has a “whole committee” looking at how DPS is processing payments to alleviate this issue.

The Department is asking for $7.859 million, a modest reduction from their 2015 allocation of $7.97 million.

 

LAW DEPARTMENT

The City’s Law Department had a relatively short hearing, but released a huge brag sheet at Friday’s hearing, the very last of budget testimony for this season. “I kind of apologize for that,” Corporation Counsel Steve Patton said before testifying for about 75 minutes. He released a six-part, 26 page written testimony that scratched the surface of all the different areas of City government the DOL touches.

Attendance: Joe Moreno (1), Brian Hopkins (2), Pat Dowell (3), Leslie Hairston (5), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Ricardo Munoz (22), Michael Scott Jr. (24), Jason Ervin (29), Milly Santiago (31), Scott Waguespack (32), Carrie Austin (34, Nicholas Sposato (38), Brendan Reilly (42)

The department has 436 budgeted full time positions for 2016, one less than last year. The largest group of employees, 83, work in Building and License enforcement. DOL’s budget of $36.9 million has barely budged since Patton started, a consistency he says is purposeful. Among Patton’s long written testimony were the department’s impact on real estate and building code enforcement, the Barack Obama Foundation’s decision to choose Chicago for its location, changes to workers compensation and union agreements, the City minimum wage, parking ticket enforcement, sale of vacant lots, and renegotiated credit agreements.

The first question out of the gate came from Vice Chair Jason Ervin (28), who asked about police settlement cases. Patton estimated police settlements cost taxpayers $16.5 million this year (one settlement alone, the shooting death of teenager LaQuan McDonald, cost the City $5 million). But he said that number could have been much higher, and DOL only settles when it has to. “The only time I will settle the case is where my lawyers convince me the outcome for taxpayers is likely to be far worse if we don’t settle… we can’t wish these lawsuits away.” The Law Department won 40 of the 49 police cases it tried. In those cases, plaintiffs sought more than $60 million in damages, but recovered only $6 million.

The City’s expecting to pay $30 million dollars for settlements alone this year. That’s a 48% reduction from 2014, and 62% from 2013. When you add judgements, the City will pay $55 million. That number is still down by 42% from 2014, and 47% from 2013.

But there’s still cutting to do, Patton says. “We’re not doing a victory lap on this.” DOL has been working to cut through a backlog of costly cases from the Daley Administration. Patton said City lawyers in the previous administration would wait until just before a court date to decide whether to settle, compounding costs. Patton’s ended that practice, but that doesn’t mean the city isn’t still being sued for things like police shootings.

Patton also fielded questions about money and enforcement around vacation rental sites like Airbnb. He said he can’t disclose numbers about taxes collected from those sites, but the collection is “substantial,” now that sites have created an infrastructure to collect payment from users.

Throughout budget proceedings, aldermen have expressed worry that more than a thousand vacation rentals are making money without paying for a vacation rental license from the city. Ald. Reilly (42) said only 200 of the 3000 listed Airbnb units are registered, and there’s a rumor the DOL is working secretly to negotiate a separate set of rules and regulations just for Airbnb. Patton said he had no knowledge of any dealings, but would look into it.  

Aldermen also asked for an update on the $5.5 million the city agreed to pay in reparations for victims of torture by Chicago Police Commander Jon Burge. Patton said the process has so far gone “surprisingly smoothly.” The time for victims to make claims has expired, and the Law Department is working through deciding whether claims are meritorious. Advocacy groups who litigated on behalf of victims have referred 44 claimants, which have all been reviewed. More than 50 new claimants have also come in from off the radar, Patton said, and are in the process of being reviewed. Daniel T. Coyne, a law professor at Kent College, is independently reviewing claims with law students, and sending them on to DOL.

Other facts revealed in testimony:

• When discussing staffing, Patton revealed some of DOL’s tax enforcement priorities: “We are putting a renewed focus on trying to extract all the value we can in enforcing property taxes, and in opposing commercial requests for property tax reductions.”

• DoL collected a record-breaking $171.3 million in overdue monies owed to the City in 2014. The Department expects to set more records, including a $10 million increase in overdue parking tickets.

• The City won 85% of police cases it tried in 2015. It won or obtained dismissal in 102 out of 207 cases resolved through August 2015.

• The City’s cut down on legal costs by at least $90 million since 2011 by deciding whether cases should go to trial or be settled earlier. DOL estimates the timely settlement of one case, Hunter (McDonald) v. City of Chicago, saved the City $4.5 million alone.

• DOL’s employment is one of few with majority female employees, roughly 60%, and an equal gender split amongst Department managers.

• The City’s conveyed more than 425 vacant parcels for a $1 to neighbors in Englewood, West Englewood, Woodlawn, Washington Park, Greater Grand Crossing, New City, Fuller Park, East Garfield Park and Greater Englewood since December 2014. The Law Department expects to close 90 more in Austin before the end of this year, and open up 300 lots in Pullman and Roseland soon.

• After the Moody’s downgrade, DoL attorneys worked “literally around the clock” to prevent 11 banks from demanding immediate repayment of more than $1.8 billion in outstanding credit agreements, and negotiated forbearance agreements instead. Patton said one lawyer was up 36 hours on the case. That allowed the city to convert $806 million in variable rate general obligation bonds and $112 million in sales tax revenue bonds within a month of Moody’s downgrade.

• In 2015, DoL has prosecuted more than 350 drug and gang house cases and more than 350 license cases, including 178 license revocations for businesses.

• DoL expects to file a total of 900 to 1,000 building demolition cases by the end of the year.

Expect most of your burning budget questions to get clarification at the full City Council meeting on Wednesday, October 14th, when the revenue and levy ordinances will be introduced by the Mayor’s Office. It’s also public comment day for the budget. Budget office spokeswoman Molly Poppe said that introduction will include clarification on the controversial cloud tax. We’ll be looking for possible changes in the property tax levy and any movement on 311 privatization.

The public hearing will be followed by a Budget Committee meeting on the 19th and a Finance Committee meeting on the 20th, Poppe says. The Budget Committee meets again to “defer and publish” on October 21. The text of the ordinance is published in the Council Journals of Proceedings, but not passed, held for a vote until the next meeting. Final consideration is acted on during the “Unfinished Business” portion of a full City Council meeting, scheduled for October 28.

There were 4 “no” votes on last year’s budget: Ald. Bob Fioretti (2), who was running against Rahm Emanuel for Mayor at the time; Ald. Toni Foulkes, who was then 15th Ward Alderman, and is now 16th; Ald. Scott Waguespack (32), and Ald. John Arena (45).