Town Hall Powerpoint Presentation

Draft - Staff policy deliberation - Not for circulation

City of Chicago

2016 Budget Forum

Malcolm X College

Monday, August 31, 2015


Budget Forum Speakers

Mayor Rahm Emanuel

Juan Salgado, Moderator

Reverend Albert D. Tyson, III

City of Chicago Finance Team

Carole Brown, Chief Financial Officer

Alexandra Holt, Budget Director


City of Chicago Budget Facts

Fiscal Year: January 1 December 31

Legal Requirements Must be approved by December 31 Must be balancedrevenues must match spending

Size Over $8.9 billion budget for the City of Chicago in 2015

This budget provides services including: police officers, firefighters, snow removal operations, garbage and recycling collection, street paving, public libraries, airport operations, water and sewer maintenance, afterschool programs

Does not include Chicago Public Schools (CPS), Chicago Park District, Chicago Transit Authority (CTA), City Colleges, or Chicago Housing Authority (CHA) Combined budgets of the City of Chicago along with CPS, Chicago Park District, CTA, City Colleges and CHA totals almost $18 billion

3


Where the Money Comes From

4

2015 Budgeted Revenue

Grants 17%

Airline Fees 15%

Sewer & Water Fees 13%

Property Taxes 10%

Other Local Taxes

9%

Other Non-Tax Revenue

8%

Sales Taxes 8%

Other Resources 5%

Utility Taxes 5% Income Taxes

5%

Fines and Penalties 5%


Where the Money Goes

5

2015 Budgeted Expenditures

Police, Fire, 911 25.2%

Other 0.4%

Debt Service for Airports, Water and

Sewer System 10.0%

Employee Benefits 12.7%

Finance and Administration

6.8%

Airports 8.4%

Roads, Bridges, Graffiti Removal, etc.

10.4%

Water and Sewer 6.8% Community Services

6.4%

Economic Development

2.1%

Legislative and Elections

0.6%

Permitting, Inspections, Licensing

0.8%

Debt Service for Infrastructure

9.4%


Addressing the Challenges Ahead

6 Yearly Operating Budget Shortfall

($220.4)

($94.1)

($64.5)

($217.7)

($420.0)

($519.7)

($654.7) ($635.7)

($369.0)

($338.7)

($297.3)

($232.6)

($700)

($600)

($500)

($400)

($300)

($200)

($100)

$0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


Addressing the Challenges: Reforms Before Revenue for Every Budget

7

($5

2.1

)

($8

3.1

)

($4

14

.1)

($1

42

.3)

($2

41

.6)

($2

58

.5)

($1

68

.3)

($9

4.1

)

($6

4.5

)

($2

17

.7)

($4

20

.0)

($5

19

.7)

($5

71

.6)

($2

21

.6)

($2

26

.7)

($9

7.1

)

($3

8.8

) ($220.4)

($94.1) ($64.5)

($217.7)

($420.0)

($519.7)

($654.7) ($635.7)

($369.0)

($338.7)

($297.3)

($700)

($600)

($500)

($400)

($300)

($200)

($100)

$0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

One-Time Resources

Reform/Recurring Revenue

Gap


Addressing the Challenges: Reforms and Savings

8

2012 budget: $246 million




Starting with the 2012 budget, the City has used real structural reforms

and lasting savings to close operating shortfalls each year


Addressing the Challenges: Ending Bad Financial Practices

COMPLETED

Terminated all risky interest rate swaps to eliminate risk for taxpayers

Converted general obligation variable rate bond debt to fixed rate to reduce risk for taxpayers

Stopped raiding reserves to fund general city operations

IN PROGRESS

End practice of using debt restructuring to pay operating expenses by 2019

Increase use of operating funds to pay for legal settlements and judgments

Invest in Citys rainy day fund

Since 2012, the current administration has invested $45M in the Citys rainy day fund

9


Addressing the Challenges: Reforming Tax Increment Financing (TIFs)

TIF is a funding tool used by the City to promote public and private investments across Chicago including: roads, bridges, affordable housing, schools, parks and economic development

Currently 147 active TIF districts citywide, down from 162 active TIF districts in 2011

More than 95% of TIF commitments under the current administration has supported public projects, such as schools, transit, economic development projects, and affordable housing

Recent Reforms on TIFs:

Freeze new spending in downtown TIFs and sunset them when the current and committed projects are paid off

Making the Mayors TIF surplus permanent law; building on the $300 million in TIF surplus allocated to local governments since 2012

10


Growing Pension Payments and Legacy Debt

Despite the many savings and efficiency improvements and structural reforms, significant financial challenges remain both operating and legacy

Wages and benefit costs continue to grow

Pension payments and liabilities are growing

Legacy debt must be addressed

11


Addressing the Challenges this Fall

12

$232.6 million operating shortfall in 2016; lowest since 2008

$328 million additional contribution for 2015 public safety pension obligations

$93 million incremental increase in pension costs for all four pension funds in 2016

$100 million debt repayments to start ending practice of scoop and toss in 2016/restructuring debt obligations and pushing payment off in future years at a higher interest rate


Community Dialogue

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Town Hall Powerpoint Presentation

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