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

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”.

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."

LICENSE APPEAL COMMISSION

Day 9 of the City Council Budget hearings kicked off with a quick, 20 minute hearing with the License Appeal Commission. With few questions asked and a small pool of aldermen present in the Chambers, Commission Chairman Dennis Michael Fleming gave a brief breakdown of cases heard over the past year, how fees are collected, and his annual salary.

Submitted written testimony.

Attendance: Chairman Carrie Austin (34), Vice Chairman Jason Ervin (28), Leslie Hairston (5), Patrick Daley Thompson (11), Raymond Lopez (15), Michael Zalewski (23), Ariel Reboyras (30), Scott Waguespack (32), Gilbert Villegas (36), Anthony Napolitano (41), James Cappleman (46) 

The Commission hears appeals from businesses and individuals seeking a review of decisions of the Department of Business Affairs and Consumer Protection and the Local Liquor Control Commission. Fifty-two appeals were filed last year: 83% of those cases were applicant cases related to denied liquor licenses, the rest were disciplinary. The Commission has one full time position. Chairman Fleming said he works an average of 12 hours a week with an hourly rate of $125.

DEPARTMENT OF FAMILY AND SUPPORT SERVICES 

Questions about mental health programs for the City’s homeless population and suggestions on how DFSS could cut waste by changing how it allocates resources to delegate agencies took the brunt of the roughly two hour DFSS hearing with newly appointed Commissioner Lisa Morrison Butler. Having only assumed the office 50 days ago–a point she made repeatedly–Butler had several members of the DFSS staff back her testimony with data and background when asked statistic-related questions or about specific programs DFSS oversees.   

Attendance: Chairman Carrie Austin (34), Vice Chairman Jason Ervin (28), Pat Dowell (3), Leslie Hairston (5), Gregory Mitchell (7), Michelle Harris (8), Anthony Beale (9), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Matt O’Shea (19), Rick Munoz (22), Michael Zalewski (23), Michael Scott, Jr. (24), Walter Burnett (27), Chris Taliaferro (29), Ariel Reboyras (30), Milly Santiago (31), Scott Waguespack (32), Deb Mell (33), Carlos Ramirez-Rosa (35), Gilbert Villegas (36), Emma Mitts (37), Nick Sposato (38), Anthony Napolitano (41), Brendan Reilly (42), Michele Smith (43), John Arena (45) James Cappleman (46), Harry Osterman (48), Deb Silverstein (50). 

Submitted written testimony.

Several aldermen asked why there isn’t more coordination between DFSS and the Public Health Department when it comes to mental health programs geared towards the city’s homeless population. 

A frustrated Ald. Ariel Reboyras (30) pounded his fists on the desk to lament the lack of programming and suggested DFSS and the City’s Health Department pool their resources. “This will alleviate the problems we have in jails,” Reboyras explained. He recalled an incident “four or five years ago” where he had to personally help a homeless man in his ward find shelter because resources were scarce. He said he bought the man a bottle of vodka, shared a drink on the street because, as Ald. Reboyras said “ if you can’t help him, you might as well join him”, and eventually helped the man find shelter at the local YMCA. “These are little things that no one knows the alderman does.” 

According to the City's last “point-in-time” count, there are approximately 6,700 individuals living on city streets or in city shelters;19.4% of those counted suffer from mental illness, 22.7% suffer from substance abuse. 

When Ald. Michele Smith (43) asked Butler to detail some of the main obstacles to find shelter for those who don’t suffer from either ailment, and if Single-Room Occupancy units might help mitigate those obstacles, Butler deferred the question to a member of her staff. Deputy Commissioner Alisa Rodriguez said, “to some extent,” saying affordability is more important.     

Butler said she is trying to collaborate with other city departments to make sure funding is spent efficiently. She said she has already had two meetings with Health Commissioner Julie Morita, adding that implementing new programs geared towards the City’s homeless population take time, because a relationship of “trust” between government agencies and the homeless take time. “They don’t have to go into shelter and they don’t have to take the services,” Butler explained. Unlike New York City, Chicago doesn’t have a court mandated right to shelter; all programs geared towards the City’s homeless population are on a voluntary basis.

As for ways DFSS could cut spending, Ald. Scott Waguespack (32) pointed to a Chicago Jobs Council survey that found DFSS had spent $350,000 in fees associated with the single-ride Ventra cards delegate agencies hand out to to help low-income job seekers get to interviews or students traveling to school. Calling the fees paid to Ventra owner Cubic “inappropriate”, Ald. Waguespack asked that DFSS look into the issue. “I don’t think anyone realized this was going on except Ventra seeing their bottom line increase to our detriment.”

DFSS Managing Deputy David Wells told Waguespack the department could work better with CTA as well as CPS to see if there is a way to “alleviate” that issue.

Another vocal member of the Progressive Caucus, Ald. John Arena (45) said he didn’t understand why DFSS needs its own Human Resources team when the City already has a Department of Human Resources. He brought up a similar issue during the Department of Public Health hearing. Going line-by-line listing the titles for the HR division within DFSS, Ald. Arena said the $500,000 appropriation didn’t make sense. ”I’m seeing redundancies here and within the Department of Health and that’s troubling to me. We are asking for the largest property tax increase and we’re not looking at our budgets and departments to say, ‘Where can we reduce redundancy?’”

Reminding Ald. Arena that she is new to the job, Butler said she didn’t have an immediate answer for him, and will have a better update on how the department can be more efficient after she works with an independent consulting agency, The Civic Consulting Alliance.

Other figures revealed in testimony:

• DFSS provides direct assistance to more than 300,000 Chicagoans annually through a citywide network of more than 300 community-based delegate agencies.

• The 2016 DFSS allocation is $348 million, representing a 4.7% increase over the 2015 allocation

• $170 million dollars will be invested in Head Start, Early Head Start and Child Care programs, including $15 million as part of the Early Head Start Child Care Partnership Grant

• DFSS is rolling out a P-3 Grant Pilot Program for teen mothers and their children. The initiative will provide mothers with training, job opportunities, and the ability to finish their high school degrees.

• 24,679 Chicago youth participated in the City’s employment initiative, One Summer Chicago (OSC), representing a 70% increase from 2011. DFSS wants to expand the program to 25,000 in 2016.

• $61,252,572 will be allocated to homeless programs, expanding the Mayor’s Plan 2.0 to End Homelessness.

• By the end of 2015, DFSS expects to open the City’s first domestic violence shelter in more than ten years. The two-story shelter will have 40 beds and the capacity to serve more than 100 families in 2016.

DEPARTMENT OF TRANSPORTATION

A lengthy, and at times, contentious hearing with the Chicago Department of Transportation focused a significant amount of time on a budget item close to aldermen’s hearts: menu money and the rising cost of infrastructure improvements throughout the city. CDOT is asking for $576 million in this year’s budget: about $28 million more than last year. Commissioner Rebekah Scheinfeld fielded questions and praise for more than three hours Thursday.

Submitted written testimony.

Attendance: Chair: Carrie Austin (34), Joe Moreno (1), Pat Dowell (3), Leslie Hairston (5), Roderick Sawyer (6), Gregory Mitchell (7), Michelle Harris (8), Sue Sadlowski Garza (10), Patrick Daley Thompson (11), George Cardenas (12), Marty Quinn (13), Ed Burke (14), Raymond Lopez (15), David Moore (17), Matt O’Shea (19), Howard Brookins (21), Ricardo Munoz (22), Michael Scott Jr (24), Walter Burnett Jr. (27), Jason Ervin (28), Chris Taliaferro (29), Ariel Reboyras (30), Scott Waguespack (32), Deb Mell (33), Carlos Ramirez Rosa (35), Gilbert Villegas (36), Nicholas Sposato (38), Anthony Napolitano (41), Brendan Reilly (42), Tom Tunney (44), John Arena (45), James Cappleman (46), Ameya Pawar (47), Harry Osterman (48), Deb Silverstein (50) 

A small argument broke out between Ald. Brendan Reilly (42), and Ald. Ariel Reboyras (30) and Ald. Joe Moreno (1). Throughout budget hearings, Reilly has pressed commissioners to justify a budget increase over the previous year, and asked them to detail increased expenses and additional positions. He devoted his full 10 minutes of question time to asking about overtime pay, why aldermen should pay for Americans with Disabilities Act compliant ramps when it’s in CDOT’s budget, and new positions added.

“Where in the line item is funding for the Active Transportation Alliance?” Reilly asked. The Alliance advocates for greater access to, and use of, public transportation, biking, and walking. CDOT pays the Alliance a consulting fee using a portion of federal grants dedicated to safety, Scheinfeld said. 

“They’re an advocacy organization as much as they are an education organization,” Reilly pushed back, saying there should be a delineation. “There are some members of this Council who are targeted by these folks in their advocacy when a bike lane is resisted or changes are proposed… I don’t believe tax dollars should be used to subsidize political activity, period.”

“What does this have to do with CDOT?” Ald. Reboyras said off-mic, “They do wonderful work.” Reboyras serves on the Alliance Board of Directors. 

“Maybe you could speak during your time, Alderman Reboyras,” Reilly retorted.

Ald. Joe Moreno (1) also voiced his support for the Alliance to the whole chamber, off-mic.

“Great. Good for you, Joe,” Reilly replied.

Chairman Carrie Austin reprimanded the group, “No outbursts.”

By the end of the exchange, Reilly’s 10 minutes were up, and several aldermen went to Reboyras’ desk to speak with him. 

Ald. Tom Tunney (44) wrangled with Scheinfeld over quality control on CDOT projects involving private contractors, who Tunney says sometimes screw up and have to do the job twice. He pointed to bad concrete pours and pothole fills. “This comes up all the time. Who is watching these privates on behalf of the taxpayer, and making sure that you’re in there once, you’re doing the job right, and move on?” Tunney asked.

Public way inspectors and CDOT’s permit office have oversight, Scheinfeld says, and the department aims to “minimize disruption,” but she didn’t discuss how screw-ups were punished. Contractors have to re-do projects if it’s done incorrectly but only within the warranty period, she added. Tunney used the rest of his allotted time to drive the point home, and suggested they meet after the hearing to figure out how to fine contractors for mistakes outside the warranty period.   

The maligned, now revamped Chicago Infrastructure Trust 2.0 was also a talking point. In September, Mayor Rahm Emanuel announced the ambitious “Chicago Smart Lighting Project”, a plan to overhaul the City’s lighting without using taxpayer money. Ald Marty Quinn (13) asked whether it could save aldermen menu money. Aldermen can easily spend hundreds of thousands of dollars in menu money lighting a park or single block. The Trust has put out an RFI (Request for Information) on the project, due in November. Scheinfeld said even before the announcement, CDOT was getting unsolicited pitches from businesses.   

Scheinfeld says the department wants to find out what other revenue sources lighting upgrades could support. “Street lights are essentially real estate,” she said upgrading all the city’s light infrastructure would take a huge investment. 

Ald. Harry Osterman (48) took a shine to the idea of private, branded funding for lighting improvements. “I think that the lighting we’ve put in the last four years has probably done as much for crime reduction as a lot of other efforts, but it kills us with the menu,” he said, supporting allowing companies to pay to brand municipal assets to money for infrastructure updates. “If it’s Whole Foods or Ikea or GE Lighting and they have their sign on there, I don’t care, and I don’t think my constituents care… if we get the light there, I would be welcome to be a pilot.” 

More on how aldermen have spent menu money in our previous report.

Ald. George Cardenas (12) echoed Osterman’s sentiment, saying dealing with CDOT is “very emotional” and says he has 3 states of emotion: Negative Ned, Positive Polly, and Flip Flop Freddy. He says he often begins an infrastructure project thinking CDOT won’t make it happen, then believes it will, then can’t actually pick projects from the menu because they’re too expensive. “Shopping with CDOT is like shopping at a Bloomingdale's, you like what you see, but you can’t afford it… I know inflation is not the problem. I know stagflation is not the problem, but our dollars are worth half of what they were 8 years ago.”

The $1.3 million allocation for each alderman “doesn’t buy anything anymore,” Cardenas said, adding he won’t finish lighting McKinley Park before he retires. Scheinfeld says CDOT always tries to help aldermen stretch their dollars as far as possible, sympathizes with cost hikes, and says rising menu prices are updated based on actual costs. 

Funding is also a problem for the expansion of Divvy, which Scheinfeld couldn’t give a conclusive timeline on for full expansion to the whole city. While aldermen are thrilled with the program’s growth over the past 2 years, others are clamoring for more. Ald. Matt O’Shea (19), whose ward is on the far South West Side, hasn’t seen Divvy reach his ward yet. Neighboring Ald. Anthony Beale (9) also asked about South Side expansion. Sheinfeld said they’re working on finding more federal funding, and want to reach every edge of the city. 

Other figures revealed in testimony:

• $5 million total is allocated for the Shared Sidewalk program for the next couple years, Scheinfeld said. Residents chip in $4 per square foot for sidewalk repairs, seniors even less, and CDOT covers the rest. Ald. O’Shea (19) said signups in his ward topped out in early January last year.

• The department expects to have 163 vacancies going into next year–fewer than listed in the budget.

• CDOT will spend $3.1 million on bike lanes, totaling up 100 miles of the lanes across Chicago by the end of fall.

• The budget office estimated CDOT had the highest absenteeism rate of the City’s big departments - 8.8%. Scheinfeld expects $2.5 million in savings from reduced absenteeism.

• 40% of Chicagoans commute to work on bikes or by public transportation.

Questions surrounding the Chicago Police Department’s hiring practices, especially how it relates to minority hiring and the use of psychological evaluations, dominated the two hour hearing with Human Resources Commissioner Soo Choi.

Budget Vice Chair Jason Ervin (28) suggested CPD do away with the psychological exam, noting a “historic problem” of a disproportionate number of African Americans scoring poorly on the tests, despite receiving high marks on the written exam.

“We have heard the concern for a number of years,” Commissioner Choi said.

CPD hires an independent contractor to administer its written and psychological tests. But according to Ald. Willie Cochran (20), the contract is 20 years old.

“They have been providing that same test, over, and over and over again, no revisions or no changes in that,” Ald. Cochran explained. “Our society has changed and it doesn't suit well for us having not looked at other tools and instruments that are out there.”

But the Department of Human Resources has no authority over the RFP process. It’s a point Commissioner Choi made repeatedly, even as she agreed with the aldermen’s concerns. “Taking a look at the psychological exam is certainly warranted, and I believe that the [police] superintendent has also expressed that same desire.”

Former police officer Ald. Anthony Napolitano (41) suggested the test be done in-house with a scantron sheet. But Commissioner Choi said that kind of testing is “a complicated process” that requires “an appropriate entity to develop and administer the exam”.

In preparation for the upcoming Police Officer exam next February, the Human Resources Department is working with CPD and David Axelrod’s former public affairs firm, ASGK, on developing a recruiting and outreach campaign focused on increasing the number of minority applicants. The last time the CPD administered the test in 2013, more than 14,500 people sat for the exam and 12,713 made it to the eligibility list. That’s a significant increase from the 2010 recruitment pool of 8,621. Choi said the city would like to see those numbers grow.

South and West Side aldermen used the Department of Planning and Development hearing to demand more housing and economic development in their underserved wards.

Morning attendance: Pat Dowell (3), Will Burns (4), Leslie Hairston (5), Roderick Sawyer (6), Gregory Mitchell (7), Michelle Harris (8), Anthony Beale (9), Sue Sadlowski Garza (10), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Ricardo Munoz (22), Michael Zalewski (23), Michael Scott Jr. (24), Danny Solis (25), Roberto Maldonado (26), Walter Burnett Jr. (27), Jason Ervin (28), Chris Taliaferro (29), Ariel Reboyras (30), Milly Santiago (31), Scott Waguespack (32), Deb Mell (33), Carrie Austin (34), Carlos Ramirez-Rosa (35), Gilbert Villegas (36), Emma Mitts (37), Nicholas Sposato (38), Marge Laurino (39), Pat O'Connor (40), Anthony Napolitano (41), Michele Smith (43), John Arena (45), James Cappleman (46), Debra Silverstein (50)

“I want to share my frustration with the department over the last 16 years and not getting anything tangible,” South Shore Ald. Leslie Hairston (5) opined, noting that while developers were “stepping over each other” to build in the City’s more affluent neighborhoods, she “can’t even get a phone call back” from developers. Hairston has spent the last two years trying to get a supermarket chain to open a store in the South Shore after the neighborhood’s only grocery store went out of business.

“Without the muscle of the City and the Mayor, this [kind of development] isn’t going to happen in our communities,” Hairston told newly appointed DPD Commissioner David Reifman.

Yesterday’s hearing was the first time aldermen had a chance to publicly speak to Reifman. He was recruited by the Mayor from global law firm DLA Piper in August to replace Andrew Mooney, who retired.

Due to time constraints, Reifman didn’t get a chance to read his statement, but we have uploaded a copy.

Raising similar concerns about the inequity of development in the City, Ald. Pat Dowell (3) told Reifman it was his and the Mayor’s responsibility to “use the power of the office” to look beyond the central business district when they are courting businesses and developers to relocate to Chicago. And Far West Side Ald. Chris Taliaferro (29) said his Austin neighborhood is in desperate need of housing, as he continues to see an exodus of businesses and residents to the suburbs.   

Downtown aldermen Brendan Reilly (42) and Walter Burnett, Jr (27) had concerns of their own. Recalling a time when DPD was mostly focused on neighborhood development, Ald. Reilly said he and the Mayor worked “really hard to promote development downtown,” and expressed concern that the new Affordable Requirements Ordinance (ARO) would stifle that growth.

The reforms to the ARO the City Council passed last year increase the number of required affordable housing units. 10% of units built on land sold by the City are required to be affordable; 20% if financial assistance is provided. Developers also have the option of paying an in-lieu fee per required unit depending on where it’s built. For downtown and high-income areas, the price ratchets up this month.

“I’m already seeing an impact on residential proposals in the central business district,” Ald. Reilly told Commissioner Reifman. “Meaning, that due to slimmer margins, some of these projects are falling out of queue because they simply can’t get financing.”  

“Do you have any insights for us, whether the ARO needs to be further tweaked, changed to address that sensitivity?” Reilly asked, adding that he knows of 6 projects that won’t move forward because they won’t make the October 13th filing deadline, which is when the new requirements take effect. But Reifman said it was too early to talk revisions and suggested another conversation down the line, “I think overall that ordinance achieves a balance for what we need as a City.”

Like Ald. Reilly, Ald. Burnett has seen a significant number of high-density, mixed-use residential developments break ground in his ward, which includes the recently-designated landmark, Fulton Market. He was mostly concerned about the growing backlash from residents who oppose large scale development. “It’s just getting crazy with the NIMBYs,” Burnett said, suggesting DPD commission a video touting the benefits increased density has on keeping housing prices low by growing the City’s housing stock.

TIF reform was a recurring discussion topic, with aldermen repeating many of the same points throughout the hearing. Ald. Michael Scott, Jr. (24) and Ald. Burnett suggested DPD allocate more TIF dollars to employment programs and business development.

“When we voted for these TIFs [...] we told folks the TIF money would be used to get jobs in our community. Not just for companies to be retrained and all of that stuff,” Burnett said.

Suggesting DPD was the wrong department to oversee TIF money, Burnett floated the idea of having the Department of Family and Supportive Services in charge of the neighborhood funds because “they are giving people jobs.” Burnett said he’s considering drafting an ordinance explicitly detailing what projects TIF money can be spent on.

On day two of budget hearings, alderman heard details on how the 311 system would be privatized, one commissioner said city departments were ordered to make 10% across-the-board cuts, Clerk Susana Mendoza wants to create a special parking pass for Realtors, and Treasurer Kurt Summers is hoping to make money from idle cash.

Morning Attendance: Joe Moreno (1), Brian Hopkins (2), Leslie Hairston (5), Gregory Mitchell (7), Michelle Harris (8), Sue Sadlowski Garza (10), Patrick Daley Thompson (11), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Willie Cochran (20), Howard Brookins (21), Ricardo Munoz (22), Jason Ervin (28), Ariel Reboyras (30), Milly Santiago (31), Deb Mell (33), Carrie Austin (34), Emma Mitts (37), Nicholas Sposato (38), Anthony Napolitano (41), Brendan Reilly (42), Michele Smith (43), Tom Tunney (44), John Arena (45), James Cappleman (46), Harry Osterman (48), Joe Moore (49) 

CITY CLERK – With a statewide campaign for Comptroller around the corner, City Clerk Susana Mendoza touted her efforts to cut waste in her office by reducing overtime spending and streamlining vehicle sticker sales. The Clerk’s Office has a $10M budget and generates about $122M in revenue to the city through vehicle sticker sales. Since the City implemented year-round vehicle sticker sales this year, City Clerk locations saw an 85% reduction in wait times, according to Mendoza’s testimony.

Overtime in the City Clerk’s Council Division, the office that handles legislation and the City Council’s Journals of the Proceedings, is down 75% since Mendoza took office in 2010.



Clerk Mendoza said the department is bringing in an independent contractor to help find more efficiencies to work toward a paperless system. “Anything we can do to make our office more digital, I think is going to save a significant amount of money, and make our entire process much more streamlined.” 

Budget Chairman Carrie Austin (34), Vice Chairman Jason Ervin (28), and Vice Mayor Brendan Reilly (42) took turns leading the morning hearing, which mostly consisted of aldermen showering Mendoza with praise. Somewhat peeved, Reilly reminded his peers to stay on topic, “Let’s try and keep our comments and questions focused now on the budget request itself. I think we have done a good job praising staff. Sorry, we have other departments to be with today.”

One innovation: An ordinance Mendoza introduced to create a special vehicle sticker for Realtors that would let them park in any residential zoned parking spot during business hours (9:00 a.m.-9:00 p.m.). Mendoza estimates the new sticker would bring in an additional $900,000 annually.

Ald. Roderick Sawyer (6) suggested aldermen get a similar sticker, because they too have the same dilemma: going to community meetings in an area with permit parking. Ald. Anthony Napolitano (41) suggested the program be expanded to include construction contractors too, because they are “getting ticketed like crazy” when they park outside work sites.

Mendoza said that while she is open to expanding the program down the line to include other occupations, her office needs to see how much demand the Realtor program will net, should the City Council approve it. “We don’t want to take up too much, without having any indication of what the popularity of the program is going to be.”

Mendoza also endorsed lifting the parking ban on noncommercial pickup trucks, after aldermen told her about complaints from residents who aren’t allowed to park their pickup trucks in front of their homes. “no one tells you when you buy a pickup truck that you can’t park it on any Chicago street,” Mendoza said, expressing a willingness to work with any aldermen that wants to make that happen.

And there was no shortage of new licensing proposals at the City Clerk budget hearing. Ald. Harry Osterman (48) went so far to suggest implementing a registration and licensing program for bicycles, and Ald. Raymond Lopez (15) floated the idea of creating a license for pets. Ald. Tom Tunney (44) asked about the feasibility of having a Ventra-style machine to sell city stickers, because his office has a full-time employee at the ward office in charge of selling City stickers. Mendoza reminded him residents can buy the stickers online, but Ald. Tunney said he gets a lot of complaints from residents who didn’t realize buying guest parking passes online meant waiting 9 business days for delivery.

 

CITY TREASURER – The City’s operating portfolio, also known as working capital, contains $3B dollars, enough to keep the City running for approximately three months, according to City Treasurer Kurt Summers. Until recently, the money had been sitting in a fund untouched, losing out on the opportunity to generate increased returns, he said. “It’s like cash sitting under a mattress,” Summers explained, before outlining his plan to invest two thirds of that money, which he estimates would net the City $14-$30M in annual returns.

Summers says national standards and rating agency requirements calls for Chicago to only have enough cash on hand to keep the City running for 45 days, or approximately $1B. “We are going to manage our cash better, more efficiently, more responsibly,”

The 2016 appropriation for the City Treasurer’s office increased significantly, from $2.58M to $4.9M, and calls for 8 new positions. All of those new hires will be auditors, which are sorely needed, according Summers. “Today, we don’t have a single regulatory compliance function in this office.” Summers told the Council that all of the trades to date haven’t gone through a regulatory compliance check. “That’s a risk on a $6B dollar investment portfolio.” It was also revealed that the Deputy City Treasurer makes more money than Summers.

By altering the funding structure for his office, Summers cut the general fund allocation by 30% (from $2.36M to $1.66M), supplementing most of that revenue with funds from the O’Hare Airport Fund (from approximately $76,000 to $1.128M). Summers said this change will "put an end to taxpayers subsidizing enterprise funds", as the corporate fund generates revenue through tax dollars while the O'Hare fund gets its revenue from airport fees. 

The City Treasurer’s office is in charge of paying all credit card transactions at City-owned locations. For example, if a person parks at O’Hare Airport and pays the parking fee with a credit card, the Treasurer’s office eats the credit card fee. By the end of 2015, Summers projects his office will pay out $16.9M dollars in fees for $920M in credit card transactions, or a rate of about 2%.

But the real eye-opener was the confusion aldermen had about the different responsibilities between the Treasurer’s Office and the Department of Finance. When a few aldermen asked Summers about the City’s bonds and debt, Summers said those topics are better suited for City’s Chief Financial Officer, Carole Brown. After having to explain that a few times, Budget Chairman Austin snapped at aldermen, telling them that they should have directed those questions to Brown when she testified before the Council Monday.

And while Treasurer Summers may have ambitious plans for his office, like significantly increasing investments in local neighborhoods through small business loans and financial education programs, he didn’t have much time to convey those initiatives during the hour and a half hearing. Not only did Budget Chairman Austin tell him to skip his open testimony because it was “45 pages and too long", she rushed him several times throughout the hearing, and even complained that listening to his testimony was "like watching paint dry". (For the record, Summers’ testimony was 5 pages, but it was part of a packet with a lot of supplemental information detailing his initiatives).

Other Highlights from Summers’ testimony:

• As of September 21, the City has $629M in its reserves


• The Treasurer monitors 1,521 different fund accounts; Summers found that 408 are dormant as of last quarter (which means little to no activity since January 2014)


• The City has $389.6M in unused bond proceeds sitting in accounts dated 2010 or older. Summers says this money should be used to supplement the capital program.


• 293 fund accounts have have a balance of $0.


• The City will have $77.6M dollars in total investment income across the funds by 2016 ($30-40M more than the previous years).


• The Treasurer’s Office earned $32.2M as of August, and is on target to earn $50.8M by the end of the year.


• The 33 year-old Treasury System Summers' office currently uses is so old that that it was implemented "three mayors ago."

Afternoon Attendance - Joe Moreno (1), Brian Hopkins (2), Leslie Hairston (5), Gregory Mitchell (7), Michelle Harris (8), Sue Sadlowski Garza (10), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Willie Cochran (20), Howard Brookins (21), Ricardo Munoz (22), Jason Ervin (28), Milly Santiago (31), Deb Mell (33), Carrie Austin (34), Carlos Ramirez-Rosa (35), Emma Mitts (37), Nicholas Sposato (38), Anthony Napolitano (41), Brendan Reilly (42), Michele Smith (43), John Arena (45), James Cappleman (46), Ameya Pawar (47), Harry Osterman (48), Joe Moore (49)

INNOVATION AND TECHNOLOGY – On day two of budget briefings, aldermen seemed to be agreeing that the 311 system needs to change. Brenna Berman, Chief Information Officer and Commissioner of the Department of Innovation and Technology (DoIT), backed up Monday’s testimony from Budget Director Alex Holt,who said the City’s 311 system was outdated and would take $25 to $30 million to replace.

DoIT made major cuts in this year’s budget as part of the Mayor’s request for efficiencies in his administration. Berman says the Department saved $3.9 million in part by shutting down an old contract related to the city’s nearly phased-out mainframe, streamlining telecom management, consolidating licensing costs, and applying efficient systems across departments. Read her full hearing statement.

Ald. Sue Sadlowski-Garza (10) and Ald. Milly Santiago (31) asked why inputting 311 requests online sometimes took as long as 7 minutes to complete. The system’s just old, Berman said. “Chicago was the first city to launch a robust 311 system in 1999,” she explained. “It’s kind of like dog years, that’s an ancient system. It’s old. And it is just time to replace it.”

When asked what a 311 alternative would look like, Berman pointed to Philadelphia, Houston, and New York, who have taken a page out of the corporate book–they’re using customer relationship management (CRM) systems like Salesforce and Oracle to manage city services. Slow 311 logging online might also be because of ward office locations, she said. Some lack access to internet speeds sufficient for City work. Berman said several offices are currently in the process of getting network upgrades.

Ald. Brendan Reilly (42) also asked when the City will be in the position to switch to zero-based budgeting software, where every function is analyzed for needs and costs from a “zero base”, rather than comparing costs to the previous year. Berman said Budget Director Alex Holt is pushing to switch over, but it would have to be weighed against other technology investments the City needs over the next 1 to 2 years.

HUMAN RELATIONS– Providing a window into city budgeting, Commissioner Mona Noriega testified that the Commission on Human Resources was "one of many" City departments asked to make 10% cuts ahead of FY2016, but Noriega claimed the reduction will not impacted turnaround time on investigations. Questioning for Noriega lasted just over half an hour, with most spent on Noriega updating aldermen on the enforcement of the recent Ban the Box Ordinance. Starting January 1, 2015, Chicago expanded Illinois law restricting employers from using an applicant’s criminal background information to discriminate early in the job application process. The ordinance is aimed at giving former prisoners a fair chance at employment.

“We have no statistics because we have no complaints,” Noriega said, explaining the Department focuses more on spreading the word about Illinois state law and the Chicago ordinance through Chambers of Commerce, mailings, and newsletters. “Every place that we go we talk about it, and we try to get visuals out there as well. The outcomes are that we have more people who know about it, but I would always suspect that we could do more.”

Ald. Jason Ervin’s (29) questioning of Noriega bumped up against his 10 minute time limit, asking about housing and other discrimination that might not be quantified. “I think there are many employers that are discriminating and I don’t think it’s limited to Ban the Box,” she said, talking about the work to be done. There have been 206 complaints of discrimination so far this year, Noriega says. The largest category is employment discrimination, the next is public accommodations, and the third is housing. There have been 51 hate crimes reported this year, which like Ban the Box violations, Noriega says are likely underreported.

Mayor Rahm Emanuel’s property tax hike will likely continue to go up after 2018 and may not be enough to cover pension costs, the garbage fee could be amended over time, and the Chicago Police Department will again spend $100M on police overtime, according to testimony from Budget Director Alex Holt Monday. She fielded a marathon of questions from aldermen on the first day of budget hearings in Council Chambers, sitting in the hot seat for most of the six hour hearing alongside Chief Financial Officer Carole Brown and Comptroller Dan Widawsky.

Budget Chairman Carrie Austin (34) and Vice Chairman Jason Ervin (28) took turns leading the hearing, which started a little after 10:00 a.m. and concluded around 5:30 p.m.

Each alderman was allocated 10 minutes for questions, and spoke in order of seniority. It will likely be one of the best-attended budget hearings of the coming weeks. Only Ald. Will Burns (4), Ald. Ed Burke (14), Ald. Derrick Curtis (18), Ald. Emma Mitts (37), and Ald. Deb Silverstein (50) did not make an appearance. Ald. Curtis’ former campaign manager, Scott Biszewski, said Curtis got married over the weekend.

Holt, who fielded the most questions, had to sometimes answer the same ones multiple times, as aldermen came and left the chambers throughout the day. She rarely paused to refer to documentation and recited most figures and estimates from memory.

The most frequently discussed topics:

PROPERTY TAX HIKE – The proposed property tax hike will not be sunsetted or rolled back, and will need to go up after 2018, according to CFO Brown. Answering questions about a potential, sunset or rollback, Brown said proposed property tax hike will remain in place until the City’s pensions receive the "actuarially required contributions". In other words, because the new tax would be devoted to payment of police and fire pensions, pension payments would need to match the schedule set in SB777, the pension payment extension bill awaiting Gov. Bruce Rauner's signature. If the costs of payments were to go up at some point in the future, for instance because of a growing number of retirees or increased benefits, the payments would have to go up as well.



Holt also acknowledged that if SB777 is not enacted, and SB1922, which stretches out laborer and municipal worker pensions, is not approved by the Illinois supreme court, the proposed increase will not be enough. "We're going to need Plan B," she said. "We're going to have to come up with some sort of alternative."

“We’re moving forward with a budget that largely does not need support from Springfield,” Holt said, with the exception of the passage of SB777. Without it, the City’s pension obligation will jump from $328M to $550M. Holt, like Mayor Emanuel, believes the Governor will sign the bill, which has passed in both chambers of the state legislature.

Each alderman was provided a property tax breakdown for their individual ward, detailing how many homes would see a bigger property tax bill next year, and which homes would qualify for the exemption. Several aldermen asked why they didn’t get a citywide breakdown instead. A representative from the Mayor’s office circulated this citywide property tax worksheet to reporters later that afternoon.

Ald. Anthony Napolitano (41) asked what he could tell his constituents, many of whom are police and firefighters relying on a pension, about what will happen to their tax rate after 2018. 

Brown says the rate will keep climbing, but not as rapidly. “In 2020, we start paying at the actuarially required contribution, and so it’s a smaller increase, but they still increase. The City would not be in the position to roll back the property tax increase, but what we’re hoping is by doing these gradual ramps that the impact of an increase in the out years would not be as severe as it could be.” After 2018, the rise is “just based on investment returns and wage growth” Holt said, and becomes more “manageable.”   

Some aldermen worried whether 2015 property assessments might lead to a “double hit” for homeowners. Ald. Harry Osterman (48) said he wouldn’t want to approve a budget without a clearer picture from the Cook County Assessor, and Ald. Michele Smith (43) read from a prepared statement about a resident whose assessment jumped 77%. A rise in property value doesn’t necessarily mean an equal hike in taxes, Holt said, and property values are rising across the board.

When asked about the feasibility of a property tax rebate, should Springfield shoot down the Mayor’s exemption, Holt said any rebate program would force the city to find additional revenue to pay for checks to homeowners. The City would need to find an extra $15M to fund a rebate program for Chicagoans that make $35,000, and $40M to fund a rebate program for homeowners whose property is valued at $250,000 or less.

GARBAGE FEE - Mayor Emanuel’s proposed $9.50 a month garbage fee for homeowners is just a starting point, according to Budget Director Alex Holt, in response to persistent questioning over the fairness and enforcement from many Black and Latino Caucus aldermen.

The Department of Streets and Sanitation based the fee structure on the number of homes that rely on city run garbage collection, not the number of bins at each household. Streets and San doesn’t have an official bin count. “There is potential inequity there,” Holt said, adding that the city will keep the door open for a volume- or cart-based fee structure down the line. “That is going to take us some time to look at that and think about the structure to think about the implementation, and also to make sure that we are doing that in a way where we don’t have people incentivized to throw their garbage in the alleys or to put their garbage in their neighbor’s carts,” Holt said. 

South Side Ald. Anthony Beale (9) was one of the most vocal opponents of the proposed garbage fee, criticizing the city for moving forward on the plan without knowing the number of bins across the city. He asked why the City couldn’t fold the garbage fee into the property tax bill. Holt noted half of the City’s residents pay for private collection, which costs significantly more than that mayor’s proposed fee. “I hope we go through the amendment process, and you look to amend this, and put this garbage proposal right in the garbage,” Beale said.

The garbage pickup fee is one of few actionable items the city can take to raise revenue, Holt reminded aldermen throughout the day. The City chose to add the fee to the water bill, because roughly 96% of Chicagoans pay their water bill, Widawsky says. Ald. Leslie Hairston (5), the only person to vote against an end to free garbage pickup for residential buildings with four or more units, suggested those buildings be included in the $9.50 a month fee instead of hiring a private company to haul their garbage. In July, the City Council ended free pickup for multi-unit buildings in response to a 2014 Inspector General report that found the Department of Streets and Sanitation was wasting $3.3 million collecting trash from buildings that were no longer exempt under the city’s grandfather clause.

Aldermen continued to question Holt on garbage pickup as the meeting extended into the evening. Ald. Joe Moreno (1) suggested the city look to a pay-as-you-throw system, which Inspector General Joe Ferguson estimated could generate $125M in a 2011 report.

TIF REVENUE - TIF surpluses aren’t the answer to fund pension obligations, Holt told several aldermen who wondered if those funds could pay for pensions in lieu of the garbage and property tax fee.

“There’s a lot of conversation about TIF being the savior of our financial future, but for most neighborhoods, TIF is a source of community investment,” Holt said. Of $1.38B in TIF revenue collected in 2014, $1.24B was committed to capital projects, she said. 

The city projects a $113M TIF surplus for next year. $97M will come from freezing and sweeping the surplus revenue from four of the seven of the largest TIFs, all of which are located in the central business district. This means revenue collected but not committed to existing, planned or emergency infrastructure projects will be split between the City and the school district. Those four TIFs are Canal Congress, Chicago Kingsberry, Jefferson Roosevelt, and River West. The other three central TIFs–LaSalle Central, River South and Roosevelt Canal–didn’t report a surplus for next year, but will be included in the TIF sweep the following year.

Ald. Danny Solis (25) asked how much the city expects to recoup from expiring TIFs over the next four years. Holt said from now until 2019, the City expects to collect $2M in revenue from expired TIFs, with projections growing significantly after 2019 ($8M in 2020, $9M in 2021, and $17M in 2022). Those numbers are based on property values, and are subject to change.

PUBLIC SAFETY -  Police overtime will cost the City an additional $100M this year, Holt told Ald. Anthony Beale, who asked if CPD was stretching its overtime payment for the second year in a row. 

“Are we still paying $100M in [police] overtime?” Ald. Beale asked Holt. “Yes, [CPD’s] overtime projection for the end of the year is approximately $100M, $60M of which, roughly, is the regular overtime, extension of tour of duty, and court overtime.” The remaining $40M is associated with the City’s Expanded Anti-Violence Initiative, which concentrates police in high crime neighborhoods.

“Do you think that is an efficient way of running the police department knowing that murders and up and crime is up, but we’re still paying $40M in overtime?” Beale asked. While she said she couldn’t comment on police strategies, she could say from a budget perspective, the city can buy more policing hours with overtime than straight time. $10M in police overtime provides about 150,000 hours of police time, while straight time nets 90,000 hours. 

Ald. Nicholas Sposato (36), a former firefighter, and Ald. Chris Taliaferro (29), a former police officer, expressed skepticism about Mayor Emanuel’s proposal to move more than 300 cops off desk duty and on to the streets. Sposato equated the move to putting a housecat on the street, calling it, “the biggest bunch of crap I’ve ever seen.” Taliaferro called the proposed move, “smoke and mirrors.”

“I’ve seen that over the years, and many end up back inside. It’s not an actual number getting on the street,” Taliaferro said. “Unfortunately, it can be to the detriment of our community,” but said he would save his reservations for the budget hearing on police scheduled for October 6.

311 PRIVATIZATION - While many aldermen have fixated on $1M in savings estimated from outsourcing the City’s 311 system, replacing it would cost between $25 and $30 million dollars, Holt told aldermen Monday. That estimate prompted the City to look at whether outsourcing would be more cost-effective. The proposal came as a surprise to many aldermen, some of whom found out about it the night before the Mayor’s budget announcement. Comparisons to the maligned parking meter deal came soon after.

Ald. Scott Waguespack (32) made a point Monday to ask whether 311 outsourcing would fall under scrutiny of  a privatization ordinance championed by Ald. Roderick Sawyer (6) and Mayor Emanuel, which has not yet been called up in committee. The ordinance would require the city to make a clear case for why a proposed privatization would benefit the city, provide sufficient time for public debate before moving forward and establish an accountability and transparency framework. Holt told him she expected 311 privatization would be subject to the ordinance, but framed the proposal as a jumping off point for reform, and not a done deal. There are 72 call center and management employees at 311 still in the budget as of January 1. “We might not be looking at full outsourcing,” Holt said. Limited outsourcing or no outsourcing at all are both possibilities. “We’re interested in finding out what the options might be.”

Aldermen from different caucuses voiced opposition to the possible outsourcing, including Brian Hopkins (2), Chris Taliaferro (29), Pat Dowell (3), Leslie Hairston(5), and Scott Waguespack (32).

RIDESHARING FEES - Rideshare companies like Uber and Lyft can start picking up passengers from O’Hare and Midway airports starting January 1 if Council passes the Mayor’s proposed changes, Holt says. But aldermen like Ald. Pat Dowell (3), said Council should work to “level the playing field” between cab and rideshare drivers before then, by subjecting rideshare drivers to some of the same fees, standards, and licensing requirements cab drivers currently have to follow. Ald. Susan Sadlowski Garza (10) told Holt, “When you open up the airport to them in January, this is going to be a disaster for taxi drivers.”

The mayor’s proposal gets rid of ground transportation tax that taxis currently pay, subjecting cab and rideshare drivers a .50 per ride charge instead. Of that proposed $0.50 surcharge, $0.10 would go towards the wheelchair accessible fund, and $0.40 would go towards the city’s corporate fund. The proposal would also charge rideshare a bigger pickup and drop-off fee at airports than cabs currently pay, and would reduce the medallion transfer tax, Holt says.

Ald. Anthony Beale (9), chair of the Transportation Committee, said medallions “are pretty much useless” at this point, and suggested Holt work with the Law Department on a new proposal to get more revenue and “truly level the playing field.” He has favored a $1 surcharge on all rides with Lyft and Uber.

Among the dozens of Mayoral appointments to the City’s boards and commissions announced at yesterday’s City Council meeting we heard a familiar name: Ray Suarez. Mayor Emanuel introduced an ordinance appointing the former 31st Ward alderman to the Illinois International Port District Board, the policy making body for the city’s port and harbor. The nine member body issues construction permits and regulates the district’s facilities and waterways. Suarez would finish the unexpired term of Rev. Lynette R. Santiago, Co-pastor of the Christian Fellowship Flock Church, who resigned.

Unlike most city boards and commissions, the job comes with an annual salary of $20,000. Since the appointment requires approval from Ald. Anthony Beale’s (9) Committee on Transportation and Public Way, Suarez will have to make a trip to City Hall to get confirmed by his former peers.

Ward offices across the city have received hundreds of calls from constituents opposed to Ald. George Cardenas' (12) proposed penny-an-ounce tax on sugary drinks. The calls to aldermanic offices were prompted by an autocall to city households, which then give call recipients an opportunity to be transferred to their local alderman's office.

The Illinois Beverage Association’s Executive Director, Jim Soreng, confirmed that it engineered the astroturf lobbying. “It’s a city-wide effort in response to Ald. Cardenas’ proposal,” Soreng told Aldertrack. While he wouldn’t say which wards the group targeted, he did say robocalls were made to registered voters.

But unlike most robocalls, which consist of a recorded message, these calls immediately direct the recipient to the ward office after the call’s message completed. IBA would not provide the audio or script of the call, but ward offices Aldertrack contacted said most calls routed to them opposed the tax.

At least eleven wards reported receiving the calls, and we found that Latino, low-income and border wards were hit especially hard.

Kevin Lamm, chief of staff for Ald. Milly Santiago (31) says the their office received more than 150 calls on the issue in the past few weeks. Staff from the 11th, 15th, 17th, 18th, 20th, 22nd and 41st Wards all confirmed receiving waves of calls in the last month. And yesterday, a representative of the Chicago Coalition Against Beverage Taxes, visited Ald. Rick Munoz’s (22) ward office to drop off literature.

Earlier this week, Cardenas told Aldertrack he won’t pursue his plan in the City Council, because he's worried it could open the City up to a costly lawsuit. He said he and the Mayor agree it would be better for Springfield to pass the tax instead.

Forty-two aldermen signed on to Ald. Roderick Sawyer’s (6) resolution calling for a moratorium on new charter schools in Chicago. Given CPS’ financial woes, Ald. Sawyer said he doesn’t think it is in the City’s best interest to approve any of the 22 new charter school proposals currently awaiting consideration by the Chicago Board of Education. “Just a few years after CPS closed 50 public, neighborhood schools, and with our school system facing a continued funding crisis, the last thing we need is 22 new, privately managed charter schools added to the pool,” Ald. Sawyer was quoted saying in a press release.

The resolution was referred to the Committee on Education and Child Development, chaired by Ald. Will Burns (4), one of the eight aldermen not signed on as a co-sponsor. The other seven aldermen are: Ed Burke (14), who recently expressed interest in having a Noble Charter School in his ward; Willie Cochran (20); Walter Burnett (27), an outspoken charter school supporter; Carrie Austin (34), who was absent at yesterday’s meeting; Emma Mitts (37), who ran a tough campaign against a Chicago Teacher’s Union backed candidate; Michelle Smith (43); and Joe Moore (49).

Members of the City Council’s Black and Latino Caucuses are more concerned with the Mayor’s plan to slap a $9.50 monthly garbage fee on homeowners’ water bills than the proposed property tax hike plan, according to sources present at closed-door Caucus meetings yesterday.

Our sources say that at the Black Caucus meeting, aldermen were less concerned with the property tax hike, because most of their constituents are renters, or would fall under Mayor Emanuel’s proposed exemption for homes valued $250,000 and less. 

We were also told members of the Latino Caucus aren't thrilled with the garbage fee either, mainly because it would be added to a homeowner’s water bill instead of their property tax bill. By including the garbage fee on the water bill, the city can enforce the fee by shutting off the water if a homeowner refuses to pay.

And several members of the Paul Douglas Alliance, who met before the full Council meeting Thursday, signed on as co-sponsors to Ald. Joe Moreno’s property tax rebate plan, because they see it as a Plan B should the Mayor’s exemption plan fail in Springfield. 

But Mayor Rahm Emanuel doesn't think the two rebate plans introduced in Council yesterday will help much. When reporters asked the Mayor why he would rely on Springfield's help to get a property tax exemption instead of backing one of the aldermanic rebate plans, Mayor Emanuel said rebates add additional bureaucracy and still require a full payment up front, rather than the immediate discount an exemption offers.

Ald. Brian Hopkins (2) wants a new permit for all moving and delivery vehicles in the City. The fee structure would be broken down into two categories. A permit to park and load merchandise anywhere in the city would cost $20 a day, $20 a month, and $1,000 a year. A permit for vehicles that park outside the City’s central business district would cost $4 a day, $20 a month, $200 a year.

An ordinance introduced by City Clerk Susana Mendoza would offer a new all-zone parking pass for Realtors. The special city sticker would give licensed Realtors the ability to park in any residential parking zone during business hours (9 a.m.-9 p.m.). They would still be barred from parking near a sports stadium on game days or other special events. Realtors living in Chicago could get an annual sticker for $500. Those who commute into the city would have to pay an additional $200. In order to qualify for the pass, an applicant can’t have any outstanding debt owed to the city. 

On the cost saving side, Ald. Carlos Ramirez-Rosa (35) introduced an ordinance calling for a pay cut for City employees making $100,000 or more a year, contingent on the approval of Mayor Emanuel’s proposed property tax increase. According to the example provided in the ordinance, if there is a 0.8% property tax increase, an employee making an annual salary of $100,000 would see a $8,000 reduction in pay. When we tweeted out the ordinance, Finance Committee Legislative Analyst Chris Lentino, tweeted back: “Aldermanic salary dictated by State Law. Aldermen can opt to reduce salary by Municipal Law on individual basis, though” and referred Rosa to Municipal Code (65 ILCS 20/21-7) "...and his salary shall not be increased or diminished during his term of office." Aldermanic salaries for FY 2015 range between $105,939 and $117,333.

We compiled a list of some non-routine ordinances that will likely be voted on by the full Council today. The Mayor’s Tax Increment Financing surplus ordinance was discussed in Finance Committee this week, but Chairman Ed Burke held it in Committee after hearing a flurry of concerns from fellow aldermen.

Mayoral Ordinances

• Expanded Transit Oriented Development Guidelines: One of the biggest changes to the original proposal has to do with on-site parking requirements. Any developer building within a fourth of a mile (1,320 ft) of a CTA station and a half of a mile (2,640 ft) of a Metra station would need need to apply for a special use permit from the Zoning Board of Appeals if they want to completely eliminate on-site parking from their development plans. A 50% parking reduction is already allowed under the proposed ordinance. [Meeting Recap]

• Modifying City Treasury Investment Policies: According Treasurer Kurt Summers, this ordinance provides more transparency and accountability to the city’s investment policy by setting a minimum credit quality standard of Aa1 or better for the City’s investment portfolio. It also requires quarterly reports on the city’s investment portfolio to the City Council. (more details)

Aldermanic Ordinances

• New Mobile Food Vendor's License:  This is Ald. Roberto Maldonado’s (26) ordinance to bring mobile food vendors “out of the shadows” by establishing a $350 license to sell prepared food like tamales, elotes, and hot dogs on City streets. At the License & Consumer Protection Committee meeting, Ted Dabrowski of the Illinois Policy Institute estimated there are already 1500 food carts operating in the city selling 50,000 meals a year.  Between revenue from the $350 license fee vendors would pay, sales and income tax, and the penetration of food carts within the city going forward, Dabrowski says this change “could generate $2 to $8 million for the city.” [Meeting Recap]

• Wine Sales on the Chicago Riverwalk: Ald. Brendan Reilly (42) wants to make it legal for vendors to sell sealed, 750mL bottles of wine along the downtown Riverwalk during normal business hours (11am to 9pm), but since it is still illegal to consume alcohol along the Riverwalk, retailers can’t provide a corkscrew or drinking container with the purchase. [Meeting Recap]

Bond Issuances

• General Obligation Bonds (Max $500 million): The bonds will help restructure and pay down the city’s debt and reimburse the corporate fund for money taken out to pay previous debt. The bonds will have terms ending January 1, 2057.  Approximately $225 million will go toward restructuring purposes and the balance would be issued for savings.*

• Chicago O’Hare Airport Revenue Bonds (Max $2 billion): The bonds will help finance the O’Hare Modernization Program and other general airport repairs. The bonds are expected to be issued in October will be paid back from the O’Hare Fund.*

• Second Lien Wastewater Transmission Revenue Bonds: The original ordinance authorized $125 million to terminate the associated swaps. The substitute introduced in Committee adds a request for approval of $100 million in Illinois Environmental Protection Agency (IEPA) loans and $350 million dollars in inducement authority. IEPA loans are federal grants provided to states for sewer improvement projects.

*There was a divided vote on the bond ordinances at the 9/21 Finance Committee meeting. Aldermen Willie Cochran (20), Pat Dowell (3), Scott Waguespack (32), John Arena (45), and Gregory Mitchell (7) voted against the O’Hare and Chicago General Obligation bonds, but the ordinance passed.

Zoning

• New Viceroy Hotel, Gold Coast (2nd Ward): The Viceroy Hotel Groupwants to demolish the vacant Cedar Hotel in the Gold Coast so it can build an 18-story building with 180 hotel rooms, a restaurant on the ground floor, and an open green space on a 12,000 sq. ft. site. [Meeting Preview]

• 53-Story Office Tower, Loop (42nd Ward): Tishman Speyer is looking to turn the surface parking lot and surrounding vacant land along 130 N. Franklin St. into an angular, glass office high rise. Plans include ground floor commercial retail, a restaurant, a minimum of 140 on-site parking spaces and a large outdoor plaza.  [Meeting Preview]

• Half Acre Brewery Beer Garden, Ravenswood (40th Ward): The beer distributer plans to build a 35,000 sq. ft. brewery with an adjoining tasting room and full service kitchen on the first floor, and office space on the second floor of the existing property adjacent to the Rosehill Cemetery. [Meeting Preview]  

• Parkway East Project, Lakeview (44th Ward):  Boston-based Broder Diversey, LLC wants to build an 11-story residential tower near Diversey Harbor, with 56 dwelling units and commercial retail at the base. This is the big housing development next to Yakzies Bar. [Meeting Preview]

• New Whole Foods, Lakeview (44th Ward) The new location on 3201 N. Ashland Ave. is part of a large expansion plan the company unveiled last year to open 11 new stores across the US and Canada. Ashland Belmont, LLCwill construct a 79,500 sq. ft. store with 305 parking spots. [Meeting Preview]

• Residential town on former Ed Debevic’s Diner site (42nd Ward):  Robert Stone and Jeffrey Himmel are part of a joint venture to build a residential complex at the site of the Ed Debevic’s 50’s themed restaurant in River North. Plans include a 22-story residential tower with 253 units and neighboring two-story commercial building to the west.  [Meeting Preview]

• Proposed 6-story Mixed-Use Building Next to New 606 Trail (32nd Ward) Centrum Partners’ plans include commercial retail and a refurbished Aldi’s Supermarket at the base, with 95 residential units spread among the top four floors. The approximately 59,000 sq ft site will also include a 60 car surface parking lot for shoppers and a 62 car basement garage for residents. [Meeting Recap]

• Proposed Apartment-Office Space Complex in Ravenswood (47th Ward) Hayes Properties will rehabilitate a nearly one hundred year-old, four-story brick building on 4801 N. Ravenswood Ave. into a mixed-use apartment and office building. Plans include 36 residential units, a little over 90,000 sq. ft. of office space, and enough parking for 69 cars. [Meeting Recap]

• Proposed Fulton Market Office Building (27th Ward ) The applicant, SRI-ASW Green Owner, LLC and 219 Partners, LLC, an entity controlled by Shapack Partners’ founding principal Jeff Shapack, want to designate three properties as Business Planned Development. Developers plan to build a one story (5,100 sq ft) commercial building, restore existing buildings, and add a new 11 story office building with a rooftop penthouse and deck. The new office building will have ground floor retail, parking for 59 cars on the 2-5 floors, and loft-style offices on the remaining top floors. [Meeting Recap]

Intergovernmental Agreements

• Read Dunning Park Expansion (38th Ward): The agreement between the City and the Chicago Park District transfers 7.5 acres of adjacent city owned land for $1 to the Park District to help with the $3 million expansion plan. The Park will have a turf field for sports, 93 parking spots and a walking path that encircles the park. Construction is scheduled to be completed by next summer. [Meeting Recap]

• Hadiya Pendelton Park Expansion (3rd Ward): The agreement transfers the adjacent City-owned vacant land at 4323-4329 S. Calumet Ave to the Park District, so they can turn the former Buckthorn playlot to a two acre park. [Meeting Recap]

• Policing at CHA Buildings: “This is an expense neutral type of agreement that has been in place for an extended period of time,” Vice Chairman Jason Ervin explained at the Budget Committee meeting. “Ultimately, this is essentially CHA paying the City of Chicago for services it is rendering on the city’s behalf.” This agreement dates back to 1999, when CHA disbanded its police department. [Meeting Recap]

• Environmental Studies on CHA-owned Land: Deputy Commissioner for the Department of Fleet and Facility Management Kimberly Worthington said this agreement lets the city conduct federally-required environmental reviews of CHA projects funded by federal grants to ensure they are compliant with soil, contamination, noise and historic preservation guidelines. Under the agreement, CHA will provide $75,000 upfront to the City. The agreement expires in 5 years, but can be renewed upon mutual agreement. [Meeting Recap]

• Authorizing TIF funds for improvements at CPS schools: Agreements include Marine Leadership Academy at Ames School, Walter Payton College Preparatory High School, Franklin Fine Arts Elementary School, Cather Elementary School, Franklin Fine Arts Elementary School, and Budlong Elementary School.

Sale of City Owned Land/Lease Agreements

• Sale of Former Marconi Elementary School (28th Ward): United for Better Living Inc. submitted the highest bid ($100,000) for the site of now-closed 6,200 square foot, 55 year-old Marconi Elementary School in West Garfield Park. United for Better Living is affiliated with Allison United Foundation for Better Living, a non-profit founded by the late Corinthians Temple Church of God in Christ (COGIC) Bishop Bennie Allison. [Meeting Recap]

• Lease Agreement for J. Michael Fitzgerald Apartments (39th Ward): The ordinance approves a 75 year ground lease agreement between the City and Fort Lauderdale-based Elderly Housing Development & Operations Corporation (EHDOC) to help with the development of the J. Michael Fitzgerald Apartments, an affordable housing development for seniors located within the North Park Village Nature Center.  [Meeting Recap]

Miscellaneous

• Collective Bargaining Agreement: The Committee on Workforce Development approved a contract for 17 police communications operators in the City’s Office of Emergency Management and Communication. The term of the agreement is from July 1, 2012 to June 30, 2017, with a 1.25% raise for each of the first three years and a 1.5% raise for that last two years [Meeting Recap]

• Four class 6(b) Tax incentives: The Committee on Economic, Capital and Technology Development approved roughly $3.3M in property tax breaks over a twelve year period for Chicago-based companies looking to expand on dilapidated industrial sites. The class 6(b) real estate tax incentive is intended to reduce vacant industrial real estate in Cook County by providing businesses with a lower tax rate if they commit to rehabbing existing buildings or constructing new industrial property. These are the companies: Economy Packing Company (23rd Ward), REWL Venture, LLC (27th Ward), Wichita Packing Company (27th Ward), Primrose Candy Company (36th Ward). [Press Release] [Meeting Recap]

Appointments & Reappointments

• John T Hooker as the new Chairman of the Chicago Housing Authority Board of Commissioners. The retired ComEd executive received a lot of support from the members of the Committee on Housing and Real Estate when he testified at his confirmation hearing earlier this month. [Meeting Recap]

• Community Development Commission: Cornelius D. Griggs, Gwendolyn L. Butler, Celena Roldan Moreno, Philip A. Alphonse. Moreno is the wife of Ald. Joe Moreno (1) and he will likely invoke Rule 14 when it comes up for a vote.  [Meeting Recap]

• Chicago Police Board: John Simpson, Claudia Venezuela; Reappointment of William F. Conlon [Meeting Recap]

• Commission on Chicago Landmarks: Gabriel Ignacio Dziekiewicz, Carmen A. Rossi, Juan G. Moreno; Reappointment of James M. Houlihan, Rafael M. Leon, Mary Ann Smith, Richard L. Tolliver and Ernest C. Wong [Meeting Recap]

• Chicago Plan Commission: Laura L. Flores, Sarah E. Lyons, Juan Linares; Reappointment of  Doris Holleb, who was appointed to the Commission in 1986 by Mayor Harold Washington. She is the longest serving member on the Plan Commission. [Meeting Recap]

• Zoning Board of Appeals: Blake P. Sercye; Reappointment of Sol A. Flores and Jonathan T. Swain [Meeting Recap]

• Board of Examiners of Mason Contractors: Reappointment of Henry M. Leahy and Luciano Padilla, Jr.

• Human Resources Board: Karen M. Coppa [Meeting Recap]

• The Chicago Low-income Housing Trust Fund: LaToya M. Dixon, Elise Doody Jones, Bishop Horace Smith, M.D., Jennifer Welch; Reappointment of Sol A. Flores, Levoi K. Brown, Malcolm Bush, Wayne L. Gordon, Thomas J. McNulty, and Kristin K. Nance. [Meeting Recap]

• Chicago Community Land Trust Board: Eva M. Brown, Michelle Morales; Reappointment of Patricia Abrams, Joel Bookman, Timothy Hughes, Edward H. Jacob, Guacolda E. Reyes, William W. Towns, Jeffrey Wright, and Marva E. Williams. [Meeting Recap]

Former 33rd Ward aldermanic candidate Tim Meegan and a dozen members of his new independent political organization, 33rd Ward Working Families, showed up Tuesday night at Ald. Deb Mell’s (33) new ward office open house on Irving Park Road. According to Nick Burt, a member of Meegan’s new organization, the group wanted to talk to Ald. Mell about some local policy issues like affordable housing, a charter school moratorium, and the city budget, but were instead welcomed by four police officers. Mell strongly denied that the police officers were called, and were instead already at the event.

Burt alerted Aldertrack about the meeting after we mentioned in Tuesday’s newsletter that we spotted Meegan in one of the open house pictures Mell posted to her Facebook page.

It was the first time the 33rd Ward Working Families reached out to Ald. Mell, since they created the group after losing the election, says Burt. Asked if Mell’s staff recognized Meegan, Burt said “probably,” but noted none of their members had any identifying markers.

But Ald. Mell says she didn’t call the cops when the group showed up. She says the police, all of whom she knew from the ward’s CAPS meetings, were already at the event, and had walked into the office to say goodbye to the Alderman around the same time as Meegan and his group showed up. “There is no way I would ever call the police on a constituent,” Mell told Aldertrack.

Ald. George Cardenas (12) told Aldertrack yesterday that he won't put his controversial penny-per-ounce tax on sugary drinks up for a vote in the City Council and will instead look to Springfield to pass the tax. 

Cardenas says he and the Mayor have agreed it would be better to get Springfield to pass the tax than push it through the City Council, which could expose the City to a costly lawsuit from the beverage industry. “Can we go forward with [the tax plan]? Yeah. Can it be challenged in Court? Yeah,” he said.

A similar proposal to add a penny-per-ounce tax on sugary drinks has already been introduced in Springfield. But Cardenas said the sweetened beverage plan will be part be a "whole laundry list" of tax proposals that would need state approval, such as a congestion pricing tax and a profession services tax, according to Cardenas.

“Chicago is thriving, but the fiscal challenges before us are significant,” Mayor Rahm Emanuel told a packed City Council Chamber as he began his fifth budget address that includes a $544 million property tax increase to be phased in over four years.

[Full Speech – Full Budget Document]

The proposed $7.84 billion budget will “finally begin to reflect the true annual cost of operating the City,” the Mayor assured aldermen, as most of them focused on printed copies of his speech instead of looking at Emanuel as he made his remarks.

A press release from the Mayor Monday laid out much of what to expect yesterday, but there were still a few surprises, including a plan to privatize the City’s 311 call system, adding $1 million in savings. However, the expected items mentioned in the speech were:

• $170 million in savings and reforms, like putting street sweeping on a grid system saving $3 million, reducing non-personnel costs by $21 million and healthcare savings totaling $40 million.

• $60 million from a $9.50 monthly garbage collection fee.

• $60 million from rideshare and taxi fees.

• $1 million from a tax on e-cigarettes.

Posing the almost unimaginable scenario of police and fire cuts, and reducing garbage collection from once a week to twice a month, Emanuel socked Council with his property tax increase.

The Mayor’s budget calls for a phased-in property tax increase starting with an additional $318 million this year, $109 million in 2016, $53 million in 2017, and $63 million in 2018. All of the additional revenue will fund the City’s police and fire pension obligations.

The Mayor’s budget anticipates the FY2016 property tax levy will bring in a total of $1.26 billion, with the largest share of that money, 36%, earmarked for the Policemen's Annuity and Benefit Fund (PABF). 15% of the levy will go toward the Firemen’s Annuity and Benefit Fund (FABF).  

The 2016 proposed budget recommends a total $978.3 million contribution to the city's four pension funds, more than doubling last year’s contribution of $421.1 million. The pension payment will be funded with $786 million in revenue from property tax bills and $192.3 million from other sources.

The pension payments are based on an amended timeline that has yet to be approved by Springfield. 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 Pension is only 26% funded with a $11.73 billion unfunded pension liability, and the Firemen’s Pension is only 23% funded with a $4.513 billion unfunded liability, according to the City’s 2015 Annual Financial Analysis.

The Mayor’s proposed legislation in Springfield, SB777, would stretch pension payments through 2020, in addition to pushing the 90% funding requirement to 2055. Although it has passed the Illinois House and Senate, it has not been sent to the Governor for consideration, as Rauner has not indicated if he will sign it or not. If enacted, the proposed pension payments in the Mayor’s budget would remain the same. If it fails, the city would be forced to make a bigger payment next year and even bigger ones in the future.  

The Mayor is pushing to expand the property tax exemption for homeowners whose properties are valued at $250,000 or less. The plan needs approval from Springfield, and Mayor Emanuel noted in his budget address that Illinois Speaker Mike Madiganand Senate President John Cullerton both agreed to move the legislation forward with hearings on the plan scheduled for later this week.

Finally, on debt, the city is doing a bit less than previous years. While next year’s proposed budget appropriates $593.5 million to pay down general obligation debt, last year, the city spent $623.9 million to pay down general obligation debt.

The City Council will hold hearings on the Mayor’s budget plan through October before a scheduled vote on October 28th.

Chicago homeowners living below 400% of the federal poverty level would be eligible for a property tax rebate under a proposal unveiled by the Council Progressive Caucus Monday afternoon at City Hall. The third property tax exemption or rebate program proposed this year, it joins plans offered by Mayor Rahm Emanuel and Ald. Joe Moreno (1) earlier this month.

In order to qualify for the rebate, a family of four would have to have a gross annual salary of $97,000, a family of two would have to report an annual salary of $63,000, and a single homeowner would have to have an annual salary of $47,000.

Ald. Carlos Ramirez-Rosa (35), the lead sponsor of the tax relief plan, says the rebate would provide relief for homeowners living in communities whose property values have significantly increased over the past few years.

“You would be protected, regardless of the value of your home,” said Rosa using the example of an elderly homeowner living off a monthly Social Security check. Seniors in a rapidly gentrifying neighborhoods shouldn’t have to pay more in property taxes, he said.

Under the proposal authored by Ramirez-Rosa, Ald. Scott Waguespack (32) and Ald. John Arena (45), the City’s Chief Financial Officer would develop an application and process for homeowners to apply for the rebate. The homeowner would apply for an application to participate in the program with the Tax Assistance Center within the City’s Budget Office. The ordinance includes a two-year sunset clause, so the city can amend the program based on participation.

The Progressive Caucus’s plan is based on an earlier property tax rebate program Mayor Richard M. Daley implemented in 2010. When challenged by reporters at yesterday's presser that the Daley plan had a low participation rate, Waguespack said Daley’s plan was “hardly publicized” and the rebate came in the form of a cash card. It would be up to local aldermen to make sure homeowners are aware of the rebate, he said.

In addition to announcing the rebate program, Ald. Arena said the City should do more to crack down on what he said was “hundreds of thousands of dollars” in lost property tax revenue from the City’s central business districts. Accusing businesses of hiring expensive lawyers to fight property tax bills, and thus forcing homeowners to pick up the tab, Ald. Arena suggested the City’s Law Department increase the number of lawyers it has on hand to address property tax rebates submitted by city businesses.

The Progressive Caucus’ plan, as well as Ald. Joe Moreno’s (1) rebate plan for household incomes below $100,000, will be introduced at Thursday’s full City Council meeting. In a press release yesterday afternoon, the Mayor said he plans to seek an increase of existing property tax exemptions through legislation in Springfield.

It was a quick budget meeting with Vice Chairman Jason Ervin (28) taking over the reins from Budget Chairman Carrie Austin, who has reportedly been sick for some time. The committee approved two intergovernmental agreements with the CHA: one for additional police services, and another for conducting federally mandated environmental reviews.

Aldermen in attendance (committee members in bold): Vice Chairman Jason Ervin (28), Roderick Sawyer (6), Michelle Harris (8), Anthony Beale (9), Raymond Lopez (15), David Moore (17), Willie Cochran (20), Michael Zalewski(23), Michael Scott Jr. (24), Roberto Maldonado (26), Walter Burnett Jr. (27), Ariel Reboyras (30), Milly Santiago (31), Scott Waguespack (32), Emma Mitts (37), Brendan Reilly (42)

Ryan Elligan, attorney for the Chicago Police Department, provided a brief overview of the proposed intergovernmental agreement between the Chicago Housing Authority and the City’s Police Department. This agreement has been going on since 1999, the year CHA disbanded its police department, according to Elligan.

But Ald. David Moore (17), a former CHA employee, said he didn’t think it was appropriate for the committee to approve the agreement without being given a breakdown of cost.

“There are no figures here or anything like that,” Ald. Moore explained. “I am trying to see the cost for the past ten years, and if that amount has gone down. We tore buildings down, so the cost of policing should have gone down.”

“This is an expense neutral type of agreement that has been in place for an extended period of time,” Vice Chairman Jason Ervin responded. “Ultimately, this is essentially CHA paying the City of Chicago for services it is rendering on the city’s behalf.”

Ervin said delaying approval of the agreement wouldn’t be in the “best interest of public safety” and Ald. Moore could get the numbers from the police department through the Committee later that week.

This prompted Ald. Brendan Reilly (42) to defend Ald. Moore’s request, asking that the committee get the information through the chair by the end of the day. Ervin said they wouldn’t be getting those numbers until Thursday, the earliest, when the agreement must be approved by the full City Council.

Elligan was however able to provide some details, noting that CHA’s agreement with the police department is capped at $8 million this year, up from the average annual cost of $6 million, which has been the standard benchmark payment for the past decade. According to Elligan, CPD has diverted policing from the old high rise public housing buildings to the low and midrise buildings still in existence. The $2 million increase is not a result of more police officers at CHA buildings, as that number has actually declined, according to Elligan. It’s the gradual increase of police salaries that are contributing to the added costs.  

Kimberly Worthington, Deputy Commissioner for the Department of Fleet and Facility Management (FFM), testified on behalf of the second intergovernmental agreement the Budget Committee approved. Worthington said City Council approval was needed, so the city could conduct federally-required environmental reviews of CHA projects funded by federal grants to ensure they are compliant with soil, contamination, noise and historic preservation guidelines. Under the agreement, CHA will provide a $75,000 upfront payment to the City. The agreement expires in 5 years, but can be renewed upon mutual agreement.