Committee on Budget and Government Operations
Chicago City Council
Finance
Politics
Chicago, IL 60602 (Directions)
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Reporting
Edited and summarized by the Chicago - IL Documenters Team
Note-taking by
Parker Valentine
City budget shortfall and debt refinancing, Mobile health unit, Urban Security Initiative
Live reporting by
Mary Catherine Ryan
City budget shortfall and debt refinancing, Mobile health unit, Urban Security Initiative
Cate Ryan
@marycateryan
Good morning, people in front of computers and those on a random mid-morning bike ride! I'll be live-tweeting the Chicago City Council Meeting on Budget and Government Operations at 10am! That's in 10 minutes so best hurry back. @CHIdocumenters
09:50 AM Apr 14, 2021 CDT
The meeting's livestream is available here for you to follow in real time or later on: livestream.com/accounts/28669…
Agenda: file:///Users/marycatherineryan/Downloads/Agenda%20(1).pdf https://t.co/4puAVL8aoX
Agenda: file:///Users/marycatherineryan/Downloads/Agenda%20(1).pdf https://t.co/4puAVL8aoX
The committee is voting on a mobile health integrated unit in Chicago. What and how does this impact community?
SHORT ANSWER: At a higher level, mobile health units are an emerging service. Some of the professionals that participate in these units: EMTs, paramedics, doctors, etc.
SHORT ANSWER: At a higher level, mobile health units are an emerging service. Some of the professionals that participate in these units: EMTs, paramedics, doctors, etc.
Some of these units are designed to treat outpatients and others focus on telehealth. So many ways to treat a community...
It will be interesting to note where the unit is going in Chicago and what it will be used for.
This committee stays true to its name--Budget and Government Relations." It approves and unleashes funds for projects.
The meeting started at 10:05a. Quorum affirmed by Chairperson Pat Dowell.
Public commentary begins with Black Heroes Matter (BHM) @BHMatter Kirmel Williams (uncertain of the spelling of your name...apologies).
Williams would like to highlight the 3 @BHMatter main points:
1. a city holiday implemented for John Baptiste DuSable*, not just an observation day.
2. the construction of a 25' (minimum) monument, preferably in Grant Park
1. a city holiday implemented for John Baptiste DuSable*, not just an observation day.
2. the construction of a 25' (minimum) monument, preferably in Grant Park
3. the change in name of the outer drive, or Lakeshore Drive, to Jean Baptiste DuSable Drive
*typo above: John should read Jean
*typo above: John should read Jean
Williams strong encourages the city's transportation committee to take these 3 tenets into account during their vote next week.
Efram Martin, another resident, with a great oratory presence asks, and kindly encourages, the renaming of Lakeshore Drive. And, @BHMatter's Marilyn May offers April as a month of "growth and renewal." She asks the city to continue that theme and rename Lakeshore Drive.
For those of you unfamiliar with DuSable, there is a museum dedicated to the "Founder of Chicago" on the South Side. DuSable was a French Mariner who was educated in France. His mother was a slave of African descent and he was noted as the 1st non-Indigenous settler in Chicago.
A quick approval of the March 2021 monthly 45 report by Alderman Austin...
We move to approve and hear more on Fund 925 within the Office of Public Safety Admin. Deputy Budget Director Latoya Vaughn will give these budget details. Latoya's experience outside of her 3-minute presentation is below. linkedin.com/in/latoya-vaug…
Latoya presents the grants, totaling 400K. First grant, 300K, is for the Dept of Assets and Information Services. This dept. requests new federal grant funds in the amt of 300K to benefit the Urban Initiative Program.
The funds would come directly from the Department of Homeland Security and would be used by the Urban Initiative Program (in Chgo) to protect physical systems that the Dept of Assets and Information Services relies on + protect water going to 125 Chgo communities.
The Chicago Dept of Fire requested 100K in grant funds from the Medical Home Network to support mobile healthcare units. The funds will be used for vehicles and technology. Community paramedics physically travel to city residents to provide in-home assessments, evals, + vaccines
Let's allow community, especially those inflicted with asthma, hypertension, + pollution, to see these services. Ald. Austin approves these grant items.
Susie Park (Budget Director), Reshma Soni (Comptroller), and Jennie Bennett CFO) are up next to give a meaty view of revenues and expenditures.
Typically, there are some visuals when it comes to heavy financial data. I don't see any yet so let's sink into this slowly...together, of course...
Our city's budget experienced a 2020 shortfall of $800M, which was saved by federal funds and short term borrowing. The federal funds certainly saved jobs (aka personnel costs).
Regaining Twitter strength again! Thank you, internet! ++++
Our city's budget experienced a 2020 shortfall of $800M, which was saved by federal funds and short term borrowing. The federal funds certainly saved jobs (aka personnel costs).
Our city's budget experienced a 2020 shortfall of $800M, which was saved by federal funds and short term borrowing. The federal funds certainly saved jobs (aka personnel costs).
The 2021 budget shortfall was (1.2 BILLION) largely from lost revenues nearing $800K.
Suzie wants to review revenue based on cash received. That doesn't mean revenue and cash are earned in the same month or same period. Let's just say revenue based on a 2020 completed contract are earned in 2020, but that contractor doesn't get paid (aka cash) til 2021.
In 2021, the following revenues are performing well when compared to the city's budgeted revenue category: transaction tax, charters for service, income tax, municipal parking, etc. No major actual vs budgeted revenue variances for 2021 noted.
Expenditures: It seems typical that city governments spend the 1st quarter of the current year closing out expenses from the prior year.
Through Feb 2021, close to 75% of the city's expense categories are for salary and personnel costs. It's unknown when the original work was completed by internal and external workers - OR - which chunk is attributed to 2020. Based on Susie Park's stmt, most exp are from 2020.
Susie takes a break from expenditures to discuss federal revenue sources. Chicago, as part of the $1.9 trillion package is estimated to receive about $1.9 billion in 2 tranches (i.e. 2 pieces).
Funds can be used to replace lost revenue due to COVID, costs incurred related to COVID, water, sewer, + broadband. Cannot be used for pension funds.
Public health, transportation, airports, and state level programs will also receive attention
For context, we learn that the city didn't recover from the housing bust until 2012. Even then, it's complex on how one defines recovery.
In 2008, housing bust prime, the city lost $316M in revenue and the federal govt provided us $340M. But, we also had to keep spending during those 4+ years. It used Skyway and parking deck monies to make up deficits. https://t.co/jodYuMM4Ax
It sounds like Chicago received more support than just the original $340M in 2009 from the federal government. Those figures were not given during this meeting.
In 2015, the city raised property taxes and raised $543M from the hike to pay pensions and balance the budget.
Chicago is turning to a "scoop-in-toss" financial strategy that was phased on when Mayor Rahm Emanuel held office.
The city will take older debt and refinance it at a lower interest rate. Ideally, the entity, or city, saves on interest. A longer payback period is arranged.
At the same time, the city borrows more than it needs via a revolving line of credit or some other debt instrument. Here is a very simple version of the city's scoop-and-toss plan. bitly.ws/cJxi
CFO Jennie Bennett answers questions from the committee and reinforces the financial position.
Ald. Michele Smith asks for total Chicago borrowed and how we anticipate those federal funds will be utilized.
CFO Jennie Bennett confirms that approx ($465M) and ($500M) from '20 and '21 budget deficits could be covered by the federal stimulus. However, that will be determined over the next 6+ months.
Right now, we know the city borrowed approx $465M - either via a line of credit or a public-offered note - for '20 shortfall. We have to pay that back.
The $500M to cover the 2021 budget shortfall was covered via a scoop-and-toss financing solution per Jennie Bennett. Also needs to be repaid
Ald. Michele Smith and CFO Jennie Bennett talk about the fact that the city will see billion of dollars in lost revenues. Already, we saw $1.7B in lost revenue from '20-'21. What will '22 look like?
How we spend our funds is dependent on how much we actually receive. Chicago is also crossing its fingers on receiving separate monies from an infrastructure bill.
Alderman Ervin moves through the same budget questions, which leads me to believe there should be budget training and extra time devoted to preparing prior to a major budget meeting. Perhaps one alderman could aggregate all the budget questions ahead of time. Ahhh, dreams.
We learn a few things from the Ald Ervin questions.
1. The Chicago financial team hopes for fiscal recovery at the end of '22 or '23. (wow)
2. None of the federal CARES Act funds were designated for revenue replacement. They were all designated for expenditures.
1. The Chicago financial team hopes for fiscal recovery at the end of '22 or '23. (wow)
2. None of the federal CARES Act funds were designated for revenue replacement. They were all designated for expenditures.
3. The city's financial team is leveraging every possible grant and resource.
4. No vax costs are included in the city's 2021 budget. Those costs are being covered by federal (CARES) funds, @fema, public health, etc.
We do have advice from other aldermen that, bc of Mayor Daley, it took us about 12 years to revive from serious borrowing and "get to revenue neutral."
Alderman Patrick D. Thompson questions + CFO Jennie Bennett unveils how much interest we have already paid on our debt. CFO Bennett says we've started to pay interest of 2% on the amount Chicago borrowed.
Unsure if we drew on the whole amount from 2020, which was ~$465M. ???
Bennett says city is "looking to cancel the scoop-and-loss from 2021." The interest would be wild and debilitating. For example, $1B @ 4% cost of capital for 30 yrs = extreme. That's the example she gives. I'll have to look into the interest costs post-tweet sesh.
Bennett does confirm something I had questioned earlier in the live tweets. The city DID draw on the JP Morgan Chase revolver.
This revolver has a 1-year term, but can be cancelled after 6 months. It also has an extension clause giving us the opp to extend beyond the 1-year term. This line of credit will cost us approx $4M in interest.
@AldMattMartin comes wholly prepared with questions re: the increase in transaction tax revenue, the police overtime expenditures, and domestic violence spending (not to mention the moral obligations to quell this area).
The transaction tax was driven by the computer lease transactions. Computer lease taxes were favorable in 2020 and the finance team raised those taxes to 9% in 2021.
Wish we could see how this transaction tax revenue looked in relation to the revenue deficits. And, what % is transaction tax revenue in relation to the city's other revenue buckets? @AldMattMartin
Police overtime spending, per Susie Park, was 9.9M in Jan and Feb 2021. Chicago spent 16M last year on police OT. @nvkheer
Matt Martin closes with a very serious stat: 2400% increase in domestic violence attacks and an incr in domestic hotline calls. How will we trace this morbid stat?
@AldermanLaSpata asks how we can engage alderman and the public in the spending of the American Rescue Plan Act (ARP). If you're unfamiliar, here is an ARP summary. news.yahoo.com/what-the-covid…
@AldermanLaSpata mentions that the estimated amt Chicago will receive is "about 45% of our corporate fund." What does this corporate fund involve and what is its source? (Thanks in advance, @AldermanLaSpata, for reading).
We have a nice breakdown of the CARES funding. Sometimes it takes a 2-hour meeting to really come full circle on items.
CARES, 67M,
11M allocated to businesses, rental assistance, etc
57M, NOT YET USED
20M vax efforts
25M ongoing response costs bc we never know when
@fema will run out
12M neighborhood recovery
11M allocated to businesses, rental assistance, etc
57M, NOT YET USED
20M vax efforts
25M ongoing response costs bc we never know when
@fema will run out
12M neighborhood recovery
Ald Burke wants to know why his copy of the budget shows straight and police overtime to be 154.1M and, in fact, it is 153M. There was a note in the budget that said these budget numbers were unaudited and subject to change.
When, he asks, will these figures be changed in the budget? (I'm assuming we are talking about a 2021 budget). Maybe @navi or other budget peers at @CHIdocumenters could confirm. Or, we can go straight to the source, Ald Ed Burke.
That's it for this 2 hour typing fest. Thank you for reading and please ask any questions!
Corrections: I was informed by @BHMatter that our Black Heroes Matter org in Chicago (ie our public commentators) are not affiliated with this Twitter account. Thanks for the info! :)
And, when we spoke about Rahm Emanuel, his philosophy was to phase *out* the scoop-and-toss.
And, when we spoke about Rahm Emanuel, his philosophy was to phase *out* the scoop-and-toss.
Agency Information
Chicago City Council
The Chicago City Council is the legislative branch of the government of the City of Chicago and consists of the Mayor and Aldermen elected from each of the City’s fifty wards. Source
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