Progress Illinois

The Windy City edition of the New York Times debuted today, featuring an article on the controversial parking meter lease from veteran City Hall reporter Dan Mihalopoulos, now with the Chicago News Cooperative.

In his report, Mihalopoulos digs into the books of Chicago Parking Meters LLC, the private company that now controls the city's meters under a 75-year, $1.15 billion deal with the city. He found -- not surprisingly -- that the company's profits are growing steadily, generating $1.1 million per week, thanks to the higher rates they instituted after taking over the system.  With more gradual increases on the way, the company is projected to collect $46.9 million this year and $79.5 million in 2010.

The most candid remark in Mihalopoulos' piece came from Ald. Rey Colon (35th Ward), who was one of five aldermen to vote against the 2008 ordinance approving the parking meter deal:

Another of the naysayers on the Council, Rey Colon, said this week that the parking meter company’s own numbers showed that aldermen should have raised parking charges and kept the money that the increases would have generated.

“At this rate, it was a great deal for the parking meter company,” he said. “I don’t know if it was a good deal for the city. We should have just bit the bullet and done it ourselves.”

Mayor Daley and some of the aldermen who supported the deal like to make the argument that the city could not have "bit the bullet and done it ourselves" for political reasons.  They further argue that their chosen path -- offloading the responsibility for the system to a private company (who then raises the rates) in return for an immediate windfall -- was a safer approach.  But was it? 

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The Chicago City Council held its full monthly meeting yesterday.  We've got some of the highlights:

Budget Priorities Take A Beating

All eyes have been on Mayor Daley's 2010 spending plan as of late, which relies on $370 million from the city's asset-sale proceeds to help balance next year's $6.14 billion budget. Despite this windfall, the safety net is still going to take a hit.  During the public portion of yesterday's meeting, several social service providers testified in favor of restoring the cuts to substance abuse and mental health funding. As regular readers may recall, the city's 12 mental health clinics will lose an additional $3 million in state funding this year because of the Daley administration's own incompetence at implementing a new $16 million billing system.

In response, Ald. Joe Moore (49th Ward) voiced support for rescinding the cuts and blasted Daley's "property tax relief" gimmick -- a plan introduced yesterday to pull $35 million from a reserve fund created by the parking meter lease to refund some taxpayers between $50 and $100 on their bills. "What impact is that going to have on those homeowners lives? It's very negligible," Moore said. "I think you're going to get a lot more bang for your buck by helping the mentally ill lead productive lives through counseling and other support services."  Listen:

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Ald. Moore isn't the only one slamming Daley's meager property tax rebate.

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A Chicago alderman objecting to the creation of a new tax increment financing (TIF) district in his ward? 

It's not something you hear about every day.  But Brendan Reilly (42nd Ward) is reportedly pushing back against some East Loop property owners who want to see their area -- in the heart of downtown -- become eligible for TIF subsidies.  From Crain's Real Estate Daily:

“Owner reinvestment and market forces should ultimately decide ‘winners’ and ‘losers,’ not TIF subsidies,” Mr. Reilly said in a release. “The East Loop TIF proposal appears to provide a competitive advantage to those properties within the proposed TIF boundary. The intent of TIF was never to place surrounding properties (directly outside of the district, of similar age and class) at a leasing disadvantage. This proposal would very likely have exactly that effect.” [....]

“I do not agree that the needs within the proposed boundary come close to meeting the threshold level of obsolescence or deterioration the Illinois statute was designed to address,” Mr. Reilly wrote in a latter to Matthew Amato, a Jones Lang LaSalle Inc. executive who is general manager of the Aon Center. 

As we've repeatedly noted, while TIF was originally devised as an economic development tool for blighted neighborhoods, Mayor Daley has consistently overlooked that original purpose in order to create new TIF districts in affluent areas and throughout Chicago’s downtown.  The TIF network -- whose subsidies he directly controls -- now comprises nearly a third of the city's surface area and, on average, redirects $500 million away from local taxing bodies each year.  Moreover, Daley's unilateral ability to approve projects within the individual districts gives him massive power over individual alderman.

Kudos to Ald. Reilly for recognizing that more downtown TIF districts is not what this city needs.

Mayor Daley appears to be feeling the pressure to come clean about his plans to spend the city's $1 billion tax increment financing (TIF) surplus.  As regular readers know, the city's unprecedented budget shortfall has opened the door to some long-overdue questions about why the public funds ($495 million in 2009 to be exact) siphoned off the tax rolls each year aren't folded into the public budgeting process. On Friday, Daley went on the offense, citing a recently-renovated bridge as an example of how the TIF system isn't shadowy at all, but rather an expansive public works campaign that's unfolding in plain sight. From the Tribune's report:

Aldermen who want greater control over how tax increment financing funds are used in their wards are "beating the heck out of us" without appreciating how the money has improved their neighborhoods, Daley said at an event to mark repairs on the Cherry Avenue bridge connecting North Avenue to Goose Island. The bridge renovation was funded in part using $3.75 million collected from a special taxing district in the area, where property tax collections were frozen to help finance infrastructure repairs [...]

"Some of the aldermen are questioning it. That's why they're not here today, to be very simple. Because they don't think it should be used for this purpose," Daley said.

For the past year, we've been following the TIF debate very closely and have yet to hear an alderman protest the use of the funds on a public works project. What's come under fire is the fact that the money is being doled out in secret -- and often in the form of corporate welfare --  at a time when public services have been slashed and property owners taxed to the hilt.

Moreover, most aldermen probably aren't so fond of how the mayor uses his control of the TIF honey pot to keep them in line.

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Amid reports about Wal-Mart's renewed effort to move back into Chicago, editorial boards and local media figures resorted to a familiar refrain: that people in low-income communities should simply be grateful for any new jobs.  Ald. Howard Brookins Jr. (21st Ward) has also pushed the argument that Wal-Mart's poverty wages are perfectly sufficient, despite the fact that he is one of several aldermen who refused to take unpaid furlough days from his $110,000 (part-time) job, claiming at the time: "I can't afford it." The hypocrisy is staggering.  But don't hold your breath waiting for the local media call him out on it.

Just as the debate resumes over whether to allow Wal-Mart to expand in the city, the Grassroots Collaborative has released an analysis (PDF) of newspaper coverage during the thick of the historic big box living wage fight back in 2006.  They found that the coverage largely excluded the perspective of  people directly impacted by a potential Wal-Mart expansion: politicians and business leaders made up 75 percent of the 380 quotes identified in the study, while community groups and residents had only a 6 percent say.  More from the report:

The most frequent frames to characterize the Living Wage debate focused on its potential negative effects. Other common frames discussed the ordinance as a political power-play between city and labor leaders. These frames would leave readers with the impression that the living wage was an idea manufactured and pushed exclusively by union leaders, unsupported by or unimportant to ordinary working people and met with unified predictions of economic doom from the business community and city officials.

As we've pointed out before, the living wage fight isn't is about families' financial security and good public policy.

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This past spring, a new $16 million system implemented by the Chicago Department of Public Health (CDPH) turned out to be so flawed that patient mental health bills weren’t submitted to the state for six months in 2008. This so-called "glitch" led to a loss of more than $1million in state funding and almost resulted in the closure down four clinics on the city's South Side.  Back in July we took Daley administration officials at their word when they said that the problems were fixed.

Big mistake.

During the ongoing city budget hearings yesterday, it was revealed that the system is still not working properly. Outgoing CDPH chief Terry Mason told aldermen that fixing the $16 million Cerner system -- which was supposed to represent an upgrade -- remains "an active process."

To his credit, Ald. Rick Munoz (22nd Ward) pressed him on the matter: "You're saying that after 18 months you're unable to work out technical glitches that prevent us from billing the state?" "That is correct," Mason responded.

Budget Committee Chair Ald. Carrie Austin (34th Ward) assured Munoz that the Cerner system would be fixed within "months."

"Months?" Munoz asked.  Austin replied that she couldn't offer a "specific date."

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Is accountability so sparse in the Chicago Police Department that even a recommendation by the superintendent isn't enough to get an officer fired by the Chicago Police Board? Based on the latest research (PDF) by the non-profit Chicago Justice Project (CJP), it seems so. Here's what the organization examined in their report:

[T]he Chicago Justice Project (CJP) examined ten years of the Board’s decisions in cases for which the Superintendent of the Chicago Police Department sought the termination of either sworn officers or civilian employees. We included the cases involving civilian employees for comparison purposes. Our study covered 310 cases over the course of a ten-year period starting in January 1999 and ending in December 2008.

Over this period, CJP identified 248 instances in which the superintendent recommended that a particular officer get the ax.  The mayoral-appointed board, however, only fired only a fraction (37 percent) of these cops. In most of the remaining 63 percent of cases, the board didn't retain the officer in question on the grounds that they were unfairly accused. Rather, they agreed with the superintendent's conclusion, but chose to handed out less severe punishments, such as suspension.

The big mystery is exactly how the ten-member board arrived at those decisions.

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With his public opinion at an all-time low and questions circling about his "creative" city financing, Chicago Mayor Richard Daley is making the media rounds -- sitting down with both WLS' Bill Cameron and WBEZ's Eight Forty-Eight in recent days. Not surprisingly, Daley is trying to blunt criticism that his shadowy tax increment financing (TIF) system has become a major drag on the city's finances, contributing to this year's historic $520 million shortfall. Instead of coming clean on the public funds that he's skimmed off the tax rolls, Daley is making more bogus claims to divert attention from his "glorified slush fund." Here's some excerpts from his conversation with WBEZ's Allison Cuddy, along with our responses:

DALEY: Most TIF funds don't generate any money. Most TIF funds are used for schools, parks, libraries, ex-offender programs, job training, economic development to keep jobs here. And I'll go over each TIF to show you that.

CUDDY: But you generate about a half-a billion in TIF funds per year.

DALEY: Not quite. No, I don't think so.

CUDDY: And you have about a billion in cash.

DALEY: No I don't think so. I don't think it's that high. Most of it's pledged already for a school, a park, a library. Most of it's pledged for economic development in depressed areas to bring back jobs or to keep jobs there.

The mayor doesn't "think" that his TIF network siphons off around a half-million dollars per year?  In 2008 alone, the TIF system siphoned $552 million off the tax rolls, based on annual reports signed by Daley himself. Cook County Clerk David Orr also tracks the numbers and reports that $555 million was diverted in 2007.

And what about the surplus Cuddy cites?

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Is Northwest Side Ald. Tom Allen (38th Ward) emerging as the Chicago City Council's leading tax increment financing (TIF) watchdog? Since Mayor Daley began to detail just how bad the city's finances have become, Allen has been one of the most vocal critics of the mayor's decision not to crack open his $1 billion "piggy bank" to ease the financial crisis. The Sun-Times' Fran Spielman caught his latest remarks during a budget hearing yesterday:

It was opening day of City Council budget hearings, and Chicago aldermen were loaded for bear [...]

They railed about the mayor’s plan to spend all but $730 million of the combined, $3 billion in Chicago Skyway and parking meter proceeds while allowing tax-increment-financing (TIF) districts to siphon $540 million-a-year away from the city’s property tax base.

“We should re-name it the ‘Over-tax fund’ — OTF. How can we with a straight face tell the citizens of Chicago that, ‘We have $1.1 billion of your money stuffed under our mattress, but don’t worry. We’re gonna give you $35 million in [property tax] relief?’ ’’ said Ald. Tom Allen (38th).

City officials have tried to quash the suggestion; for instance, CBS 2 reported their response this week that TIF funds are off limits and can't be tapped for general operating expenses. Perhaps if more local reporters understood how TIF districts operate, they wouldn't be so quick to take the bait.

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A week after Mayor Daley unveiled his bad news budget -- which relies on skimming $370 million from asset reserve funds to help plug a $520 million deficit -- aldermen began hearings on the city's finances this morning. Over the past five years, Chicago has collected upwards of $3 billion for privatizing several major public assets: specifically, the parking meters, downtown garages, and Skyway.  But due to the bad economy and the resulting drop in revenues, the Daley administration has tapped all but $730 million of the reserve funds.  But rather than own up to the fact he has been using these privatization deals as a crutch, the mayor has instead indicated that he is open to hawking additional public assets. "Everything is on the table," he told the Tribune editorial board last week, including the water and sewer systems.

On FOX Chicago Sunday this week, Ald. Scott Waguespack (32nd Ward) warned that if Daley is allowed to ram through another parking meter-style deal, the city would be "in big trouble." Moreover, he pointed out that the ongoing privatization talk is emblematic of a bigger problem. "[The city] needs a new influx of ideas and policies," he told co-hosts Jack Conaty and Dane Placko. "The old way of doing things no longer works." Watch it:

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