Chicago City Council

Ald. Colon On The Parking Meter Lease: "We Should Have Bit The Bullet"

Angela Caputo — Fri, 20 Nov 2009 12:09:34 -0800

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? As then-Inspector General David Hoffman noted in his report on the deal, it's not like the mayor and the city council dodged the bullet; indeed, they've have still taken a great deal of flack for the rising parking costs (not to mention the botched implementation). Furthermore, other cities have managed to hike rates and generate revenue for their operating budgets without experiencing some apocalyptic voter backlash. Some of them, such as San Francisco, are even using their meter system to experiment with innovative congestion controls. It'll be 75 years before we have a chance to do the same.

To add insult to injury, the proceeds of the deal are almost gone thanks to the city's gaping budget deficit, so taxpayers will soon have little to show for the lease. CPM, however, will make out just fine.

The question now is whether the City Council will learn from its mistake. So far, a mere 12 of the council's 50 members have signed on to Ald. Scott Waguespack's (32nd Ward) Asset Lease Taxpayer Protection Ordinance, which would require an “independent third-party valuation” on any future asset sales, including “a comparison of public retention and private leasing over the life cycle of the agreement." As Waguespack himself said recently, it's time to acknowledge that "the old way of doing things no longer works."

Yesterday At City Hall: Daley's Budget, Wal-Mart, DREAM Act, Police Transparency

Angela Caputo — Thu, 19 Nov 2009 13:12:16 -0800

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:

Internal mp3

Ald. Moore isn't the only one slamming Daley's meager property tax rebate. After combing through the budget proposal, the Civic Federation concluded (PDF) that, while the city should indeed pull $56.5 million from the parking meter human infrastructure fund for operating expenses, none of it should go to Daley's so-called property tax relief. Elsewhere in their report, the business-friendly think tank pushed for greater cuts and chided the mayor for dipping into the asset sale reserves, urging the City Council to enact certain safeguards.

The Federation also called out Daley's efforts to keeping the vast tax increment financing (TIF) budget hidden in the shadows, noting that there's no excuse for excluding "full financial information including expenses, revenues, fund balance and debt" from the annual budget.

Lyle Slams Proposed Wal-Mart Expansion

Later in the meeting, one of City Hall's most reliable critics of Wal-Mart's race to the bottom, Ald. Freddrenna Lyle (6th Ward), went toe-to-toe with Chicagoland Chamber of Commerce President Jerry Roper yesterday over the mega-retailer's push to open additional stores in Chicago. The common refrain from pro-business groups like the Chamber has been that the South Side is lucky to attract any new jobs in this economy and that the community is starved for low-cost retailers.

Lyle isn't so sure. "We have been taught as a people in the past 20 or 30 years that we're just consumers and all we should be looking for is the lowest price. But we're not just consumers," she said. "We're citizens, we're parents, and hopefully, we're taxpayers ... While I want the lowest price, I don't want to do it at a cost of impoverishing my neighbor." Listen:

Internal mp3

Lyle's remarks came after several other aldermen questioned Roper about Wal-Mart without bringing up the issue of wages.

Keeping The DREAM Act Alive

Yesterday, aldermen reaffirmed their support for Sen. Dick Durbin's DREAM Act by handily passing a resolution (by a 49 -1 vote) that calls on Congress to create a path to citizenship for young adults who've spent most of their lives in the U.S. The plight of Rigoberto Padilla -- an honor student from the University of Illinois at Chicago who is scheduled for deportation next month based on a misdemeanor DUI offense -- has become a prime example of the need for comprehensive immigration reform. With Congress poised to act next year, aldermen are calling on the U.S. Department of Homeland Security (DHS) to halt the deportation of students like Padilla who would be eligible for legal status under Durbin's measure. Alds. George Cardenas (12th Ward), Manny Flores (1st Ward), Ricardo Muñoz (22nd Ward), Danny Solis (25th Ward), and Toni Preckwinkle (4th Ward) took the lead on the resolution (Ald. Jim Balcer cast the sole "no" vote).

Here's what the Illinois Coalition for Immigrant and Refugee Rights (ICIRR) had to say following the roll call:

The plight of Rigo, a student at the University of Illinois at Chicago (UIC), illustrates what is wrong with current immigration laws. He came to Chicago at age 6, and has lived in Chicago most of his 21 years. During this time, Rigo has been deeply involved in the community, volunteering, studying, working and in general making Chicago a better place. Nevertheless, he is scheduled for deportation on December 16.

More than 400,000 immigrants have been deported in the past year, with damaging consequences for countless communities. Rigo is a great kid, an outstanding student, a hardworking young man with many aspirations and dreams to become better and to contribute more to this country, the country he calls home. The passage of this resolution is a symbolic action that sends a very powerful message to Immigration and Customs Enforcement (ICE) and DHS: we cannot allow more lives to be destroyed by an unfair, outdated immigration system that doesn’t reflect our values as a country of opportunity and fairness.

More Transparency From The Police Board?

The Chicago Justice Project (CJP) made a splash last month when it released a report questioning why the city's Police Review Board -- the last line of defense for police accountability -- is so reluctant to fire wayward police officers. Despite the police superintendent's own recommendation to cut certain officers loose, CJP found that the board inexplicably kept 63 percent of those officers on the payroll.

Ald. Bob Fioretti (2nd Ward) responded yesterday by introducing an ordinance that would require the board to better explain those decisions. The Sun-Times explains:

Fioretti is proposing that board members’ individual votes on officers’ disciplinary cases be posted within two business days on the Chicago Police Board’s Web site and stay online for at least two years. He also is proposing that all findings and decisions — including an explanation of the reasoning behind them and a rationale for dissenting votes — be posted online for two years, too.

Under Fioretti's measure, board members -- nearly half of whom skipped 30 percent or more of the monthly meetings -- would also see their annual stipends cut. Term limits would also be imposed so board members could only serve consecutive five-year terms. “CJP fully endorses these ordinance revisions,” writes executive director Tracy Siska.

Some TIF Sanity From Ald. Reilly

Josh Kalven — Wed, 18 Nov 2009 12:46:01 -0800

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.

Is This Daley's Idea Of TIF Transparency?

Angela Caputo — Tue, 17 Nov 2009 12:18:13 -0800

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. As the Reader's Ben Joravsky and Mick Dumke explained in their latest investigation, those who cross the mayor can often forget about getting a new school or other public works project in their ward:

By moving more necessary expenditures into the secret budget that he ultimately controls, the mayor also wields even more power over every public entity, from the City Council to the public schools to the Park District. At various times at least half a dozen aldermen have told us that mayoral aides pressure them on key votes—such as the ordinances for funding the Olympics or moving the Children's Museum to Grant Park—by either promising to give their wards more TIF dollars or threatening to take TIF dollars away.

When you consider the amount of power Daley derives from the TIF system, it's not surprising that he continues to make weak pledges regarding transparency, such as his latest promise to put together "a full list of all the examples" of TIF-funded projects. As Greg Hinz recently put it, the mayor needs to "cut the bull" and let the public and their representatives have a look before these public funds are spent.

Study Criticizes Top-Down Coverage Of Living Wage Debate

Angela Caputo — Fri, 13 Nov 2009 07:52:31 -0800

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. One advocate opposed to Wal-Mart's race to the bottom is the Illinois Hunger Coalition's Diane Doherty. "Too many of our people who are working are hungry," she told us earlier this fall. And as more working-poor people are tipped into government programs, such as food stamps (where enrollment continues to surge) or Medidcaid, taxpayers end up subsidizing Wal-Mart's stinginess.

The report goes on to point out: "A reasonable standard of accuracy also requires that journalists try to report the most important costs and benefits of the policy to advocates, opponents, policy makers and those affected." Let's hope that local mainstream journalists see this an instructive critique.

Full disclosure: The Grassroots Collaborative includes to SEIU Local 73 and SEIU Healthcare Illinois Indiana. Progress Illinois is sponsored by the SEIU Illinois State Council.

Daley's Mental Health Blunder Continues ...

Angela Caputo — Fri, 06 Nov 2009 09:39:25 -0800

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."

Indeed the Cerner set-up is so riddled with problems that staffers are now using a different technology (Custom Information Systems) to log daily billing forms, according to an internal CDPH memo cited by the Tribune and obtained by Progress Illinois:

Even before the city dropped the ball on the billing system, mental health services were in short supply. This is largely do to the Daley administration's gradual reduction of funding for the dozen mental health clinics that still exist throughout the city. We dug through some budget documents and found that in 2006, the city committed (PDF) $6.6 million in general revenue to staff the clinics. This year, the recommendation (PDF) has fallen to a mere $3.5 million.

Meanwhile, because of boneheaded billing problems, state reimbursements for the clinics is projected to fall in FY2011 to $4.2 million from $7.2 million this year, according to budget documents.That's $3 million out the window because of the faulty system.

The repercussions are already being felt. Mason testified that clinic staff is down to 108 from 216 and 4,000 patients have been dropped from the clinics' rolls this year. "What happens to people who need human services?" Munoz asked Mason at the hearing. "Who tracks that?"

The question was met with silence.

Chicago Police Board Lets Abusive Officers Slide

Angela Caputo — Tue, 03 Nov 2009 10:22:36 -0800

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. "They're the last link in the chain for police accountability and they're overturning decisions about officers who are violent," CJP executive director Tracy Siska tells us. "They're putting them back on the streets without an explanation."

Take the case of Officer Gerald Callahan, who former Superintendent Phil Cline recommended for termination (PDF) in 2006 after several altercations with his fellow officers. The board chose not to fire him and the two years later CPD found itself having to answer for his actions after he attacked a 61 year-old man at a Niles bar.

CJP says that by letting Callahan and other abusive officers off the hook, the board is putting the public in jeopardy. Indeed, these types of incidents routinely open the door to costly lawsuits; between 2000 and 2007 alone, taxpayers spent $172 million settling litigation related to police misconduct, some of which could have been avoided with proper oversight. Meanwhile, when it comes to civilian employees recommended for termination, the board hasn't flinched (73 percent were fired during the same ten-year period).

Encouragingly, some city officials -- including Ald. Toni Preckwinkle (4th Ward) -- pushed back at a hearing last Friday, as WBEZ reports:

PRECKWINKLE: It seems like an explanation, not just facts, of the decisions that they reach would be extraordinarily useful to the citizenry.

It appears that the lax police board (nearly half of the members missed between 20 and 34 percent of the monthly meetings) is about to get a wake-up call. Later this month, a handful of aldermen -- including Preckwinkle, Joe Moore (49th Ward), and Bob Fioretti (2nd Ward) -- will introduce an ordinance setting attendance standards and requiring the members to put their decisions in writing.

"We think if they have to provide a public rationale, they might be less likely to put violent offenders back on the beat," Siska says. "This is just one of dozens and dozens of boards that is not scrutinized. That needs to change."

Image used under a Creative Commons license by Flickr user caribb.

Daley Tries - And Fails - To Defend His TIF Empire

Angela Caputo — Mon, 02 Nov 2009 12:36:13 -0800

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? We were one of the first local outlets to report that the city's TIF network ended 2008 with $1 billion in unspecified "special revenue funds." Where did we get that figure? Why, from Daley's own Department of Community Development, who included the numbers in a document provided to the City Council.

As for Daley's assertion that most of the surplus is "pledged," that's more or less true. Indeed, the document also disclosed that the city planned to spend between $478 million and $643 million on new redevelopment projects in 2009. But this doesn't change a thing. Considering that the TIF network will likely siphon off another $500 million this year, it seems safe to say that it will once again end the year with a hefty surplus.

Oh, and about Daley's point that TIF funds are often used to build "a school, a park, a library," that's a problem as well, as the Reader's Whet Moser notes today.

CUDDY: But TIFs divert money from parks and schools, no?

DALEY: No it does not.

CUDDY: Because it freezes the property tax...

DALEY: No, no, no

CUDDY: ...And it goes into development funds

DALEY: No it doesn't because there's no growth of tax in those districts. If you look at those districts there's no growth of taxes. Otherwise it's decreasing. In a suburban area they TIF'd everything. It's amazing in a suburban area, to keep their small communities alive. This is to help depressed areas. Take the West Side of the city, take a drive there. They don't really create a lot of money in TIFs. You hope to grow it so you can bond money out. That's what you have to do.

CUDDY: To attract the development?

DALEY: Yes.

It's not surprising that Daley is trying to focus the attention on the use of TIF in "depressed areas." After all, the law enabling this economic development tool stipulates that it be used in "blighted" neighborhoods. But the mayor long ago abandoned that intent, instead opting to invest heavily in the Loop, throwing TIF dollars at deep-pocketed interests like United Airlines, the Mercantile Exchange, and insurance giant Willis Holdings. The city insists that this type of corporate welfare will ultimately boost the tax base. But there is no real oversight in place to test those theories. It basically amounts to blind faith.

DALEY: The only way to look at TIFs is to break down and look at what it's accomplished in each community. It's amazing. Otherwise, those things, affordable housing, the Kennedy King. That came from a TIF district to build the Kennedy King. It didn't come from the federal government.

CUDDY: That's a big accomplishment.

DALEY: Yes.

CUDDY: But you say that you'll give a full accountability. But they say, the Chicago Reader charged that there isn't enough transparency. The aldermen are saying it too. Why not show how much money is there, where it will go.

DALEY: Each district will find out. I think we'll find out. It should be.

CUDDY: But the whole big picture.

DALEY: Each district has that. Each district has that.

CUDDY: Will you go forward making that more transparent?

DALEY: Sure we will. Sure we will.

Even those willing to give Daley the benefit of the doubt about the positive affects of TIF, such as Crain's columnist Greg Hinz, are still telling him it's time to "cut the bull" and come clean on the program. Considering the increasing attention being paid to Chicago's huge TIF problem, "sure we will" is no longer a sufficient answer.

Image used under a Creative Commons license by Flickr user marcmonaghan.

Ald. Allen: We Should Rename TIF "The 'Over-Tax Fund’"

Angela Caputo — Thu, 29 Oct 2009 10:37:51 -0700

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. The fact that many gloss over is that the TIF funds represented diverted operating dollars. As such, the growing loss -- $552 million last year alone -- is putting strain on the taxing bodies' finances.

As we've pointed out before, if the Daley administration would get creative with TIF and begin retiring districts that go unused or have met their objectives, millions in surpluses could be released back into the general fund. Yet Daley has gone to great lengths to distort the intent of the law (reversing blight), instead using the cash to help deep-pocketed companies with political connections land millions for their high-end developments. Departed Tribune business columnist David Greising recently described the practice "a racket."

Then there's the issue of leveraging the existing TIF funds to jumpstart the local economy. In the same report we criticized above, CBS 2 picked up on a worthy use of TIF funds today that we've been writing about for months: building affordable housing. Instead of investing in such projects, the mayor has long squandered "affordable housing" money on sweetheart deals that benefit the wealthy and politically connected at the expense of people who are facing a severe affordable housing crisis. Those choices are also placing additional strain on the city's operating budget as $1.4 million more is now being spent on homeless shelters that are overwhelmed by families who can't find an affordable place to live.

So to Ald. Allen's latest complaint, we say: more like this, please.

Waguespack On Daley: "The Old Way Of Doing Things No Longer Works"

Angela Caputo — Wed, 28 Oct 2009 11:31:10 -0700

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:

WAGUESPACK: We have a structural problem in this city that needs to be changed. It's about policies and philosophies for the way we run the city. Those need to change [...]

If we do with the water system or the sewer system what we did with the parking meters, this city is in big trouble.

PLACKO: You talk about the need to rethink the way big cities, like Chicago, are run. Do you think Mayor Daley is the guy to do that?

WAGUESPACK: Based on the past few years, on the policies they've put in place, I'm not so sure. That's why we've put together some ordinances that create more transparency and slow down this process to sell off assets [...]

CONATY: Do you think if we revisit this in spring and this is all off the table, we're doing fine?

WAGUESPACK: No. We need some new policies and processes ... a new influx of ideas. The old way of doing things no longer works.

During the full conversation (which has not yet been posted to Fox Chicago's website), Conaty makes a great point about why the taxpayers should be leery of any future privatization pitches. "We're talking about having a city set a fair market value on assets that cannot foresee 12 to 18 months down the road," he said. That's exactly right. Earlier this year, Daley pledged that skimming $325 million from the $1.15 billion parking meter deal would be enough to balance the budget through 2012. Just eight months later, the fund has been virtually drained ($230 million remains). And there are no plans to replenish it. Waguespack also noted that while Chicago has a mere $225,000 in its cash reserve fund, while "other cities have millions of dollars, or hundreds of millions of dollars that they're tapping into."

Last week, the mayor glossed over one crucial element of the city's budget: the $1 billion tax increment financing (TIF) reserve on which he's sitting. With $552 million diverted into this shadow budget last year alone (21 percent of which would have gone to the city), it's no wonder that Chicago is yet again facing a deep budget deficit.

It's encouraging to see some light finally being shed on the mayor's piggy bank. Waguespack isn't alone in recognizing that "the old way of doing things no longer works."