Chicago

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."

"A TIF Geek If There Ever Was One"

Josh Kalven — Fri, 20 Nov 2009 07:40:49 -0800

That's how the Reader's Ben Joravsky describes our own Angela Caputo in his latest article on Chicago's tax increment financing (TIF) network. And you can bet she's wearing that badge with pride.

Joravasky's piece also details how state legislators used a Freedom of Information Act (FOIA) bill to quietly extend the lifespan of four Chicago TIF districts by 12 years. With little to no debate, the bill was passed by both chambers in the final days of the regular session and signed by the governor in late August. Joravsky later notes that the projects to be subsidized by these districts during the extended period appear worthwhile, at least when compared with "some of the stuff the mayor comes up with, such as the recent $35 million handout to United Airlines." But the process of approving the extension should nonetheless raise eyebrows:

You'd hope that in these calamitous economic times, Governor Quinn, house speaker Michael Madigan, and senate president John Cullerton would feel compelled to hold hearings and engage in debate before effectively raising Chicagoans' property taxes. But you'd hope in vain.

Joravsky further writes about Cook County Clerk David Orr's new TIF search engine and gives some great instructions on how to research the amount of individual property taxes that go into Daley's slush fund. Read the whole thing here.

Activists Push For Better TIF Investment: "We Need This Housing"

Angela Caputo — Wed, 18 Nov 2009 08:14:37 -0800

A few months back, a coalition of community activists from across Chicago met at City Hall to call out the Daley administration for investing so few tax increment financing (TIF) dollars in affordable housing. After all, over the past decade, a mere 4 percent of the economic development money has gone towards such projects. That's despite the fact that home construction and the stabilization of housing stock can be key drivers in the rejuvenation of blighted communities. But instead of using substantial amounts of the money for these purposes, regular readers know that Mayor Daley has more often played favorites and doled out money to deep-pocketed corporations to subsidize their swank office renovations.

With the Sweet Home Chicago coalition at their back, Alds. Walter Burnett (27th Ward) and Manny Flores (1st Ward) have taken the lead in proposing that a larger chunk of the money -- 20 percent of TIF revenue collected each year -- is committed to affordable housing projects. These new and rehabbed developments would address the city's housing imbalance by setting aside apartments for low- and moderate-income families (earning $37,700 a year or less) who are priced out of decent housing in a growing number of Chicago communities.

Yesterday, the coalition of community groups gathered in in Uptown where they highlighted some of the blighted buildings that could benefit from greater TIF investment. "We need this housing," neighborhood housing activist Laverne Johnson said, pointing to her neighbors' sub-standard living conditions. "We are all suffering." Watch:

So far, five aldermen have signed on to the ordinance. Once it has 15 supporters, the measure will go to the full City Council. The Sweet Home Chicago organizers are working on drumming up more support in wards throughout the city. "Until you have pressure from the outside," co-sponsor Ald. Joe Moore (49th Ward) tells us, "the conversation won't happen."

Another Victory For Police Secrecy (But The Fight Goes On)

Angela Caputo — Thu, 12 Nov 2009 09:23:27 -0800

Chicago's police officers are the city's first line of defense and they deserve our thanks. That being said, they are also paid with taxpayer dollars and should be expected to withstand public scrutiny. Yet again and again, the Daley administration has worked to prevent reasonable attempts to create more accountability around the Chicago Police Department (CPD).

As a record number of citizen complaints have flooded the so-called Independent Police Review Authority (IPRA) in recent years, City Hall has fought a legal effort to uncover the names of officers who've received ten or more complaints. This week, the Seventh Circuit Court of Appeals sided with the Daley administration, denying a petition by journalist Jamie Kalven and 28 aldermen to lift the protective order placed on this list. Kalven and his lawyers are planning to appeal. Meanwhile, the aldermen continue to insist the names belong in the public sphere:

"The unwillingness of the Police Department to provide information to public officials about officers whose conduct may be questionable is a real problem," said Ad. Toni Preckwinkle (4th), a leader of the 28 aldermen. [...]

If the names remain secret, [Ald. Joe] Moore [49th Ward] said, "It makes it more difficult to root out officers who may be routinely violating the law. We, in the City Council, have a right to know so we can call upon the Police Department to explain why these officers have so many complaints. That's what public disclosure is all about.

While CPD would like the public to believe that there's an exhaustive review process, the department's own record of ferreting out abusive cops speaks for itself. As the Chicago Justice Project revealed (PDF) earlier this month, a firing recommendation by CPD's own superintendent rarely leads the Chicago Police Board (CPB) to terminate an officer.

As far as CJP's director Tracy Siska is concerned, the board does not do an adequate job explaining why they regularly approve more lenient punishments. "Our biggest recommendation is for increased transparency," he said Tuesday while appearing on WTTW's Chicago Tonight alongside board chairman Demetrius Carney. Watch it (full video here):

As host Carol Marin explains in the full WTTW segment, the police accountability process in Chicago is a long one. Once a complaint is filed, both an internal investigation and a subsequent IPRA study are launched. The police superintendent also gets a chance to weigh in before a final recommendation is passed along to the mayoral-appointed CPB.

The problem with the process is not the quantity but the apparent quality of the various reviews. By University of Chicago law professor Craig Futterman's count, less than one percent of Chicago police misconduct allegations are sustained by the department's internal investigations. That's far lower than the national average, which has led to suspicion that the city is deliberately sweeping misconduct under the rug.

By fiercely fighting efforts to open up the department to greater scrutiny, Daley is doing little to dispel that notion.

Full disclosure: Jamie Kalven is the father of PI editor Josh Kalven.

Over 90 Percent Of Daley's Property Taxes Go Towards TIF

Angela Caputo — Tue, 10 Nov 2009 11:54:49 -0800

Each fall, Cook County Clerk David Orr releases an annual tally of how much public money has been absorbed into Chicago's massive tax increment financing (TIF) system. Like clockwork, each new report reveals that hundreds of millions are whisked away from schools, parks, libraries, and other taxing bodies. The exact amount each taxpayers kicks into Mayor Daley's "glorified slush fund" has remained elusive, however, as now-Congressman Mike Quigley wrote in a Progress Illinois column last year:

The single worst aspect of the TIF system in Cook County is that taxpayers residing in the districts have no idea how much of their tax payments end up in TIF accounts. Indeed, while TIF is listed on every bill alongside the agencies receiving property taxes, the line always reads $0.00. This is due to a quirk in the way the County Clerk has historically calculated tax rates. But as a consequence, the taxpaying public is misinformed.

That changed yesterday, when Orr took a major step towards unlocking that part of the TIF mystery. Along with his tally for 2008, the Clerk's office has unveiled an online search engine that allows those who reside in TIF districts to find out (using their permanent index number) how much of their tax bill is being siphoned away.

For fun, we plugged in Mayor Daley's PIN number (17-22-109-027-0000) and found that a whopping 92 percent of his property taxes were redirected into the Near South TIF last year. By contrast, cash-strapped schools are getting a mere 3.9 percent of the Daley's property tax dollars. This goes to show how much strain the TIF system are putting on those local taxing bodies entrusted to deliver education and other public services.

We're not talking about pocket change, here. By Orr's count, the TIF network has collected upwards of $3.6 billion in taxpayer dollars since 1986. Meanwhile, neither the public nor the city's aldermen can gain a comprehensive look at this "shadow budget." By the clerk's count, $495 million was skimmed (PDF) during the 2008 tax year.* The clerk's latest report shows an 11 percent decline over during that period, largely attributable to the expiration of the huge Central Loop district. In its wake, the LaSalle Street district is the new ground zero for corporate welfare in Chicago, handing out goodies to the politically-connected. Soon that it will have some major buying power; in just its third year, the district pulled in a cool $26 million. Meanwhile, truly blighted areas -- which TIF is intended to help turn around -- aren't faring nearly as well. More from the Reader's Ben Joravsky:

As Orr's report makes clear, the neighborhoods receiving the most in blight-fighting TIF money are the wealthiest. For example, the Roseland/Michigan TIF on the far south side collected $834,203 in 2009. In contrast, the top TIF taker was the Near South TIF, just south of the Loop, which brought in $54.7 million. By the way, Mayor Daley happens to live in that TIF district [...]

So in the fight against blight in Chicago it's the wealthiest communities with the least amount of blight and the most political connections that get the goodies. Funny how that works.

Hopefully, media outlets and concerned citizens will being spreading the word about Orr's new tool. Generating interest in this arcane -- but extremely important -- issue depends on illustrating taxpayers' individual financial stake taxpayers have in the TIF system. Now we have a way to do just that.

* Regular readers may recall the $552 million figure that Robert Ginsburg, Ph.D. and Don Wiener, Ph.D. recently tallied up on behalf of SEIU's Illinois Council (which sponsors this website). Why the discrepancy? The $552 million sum is based on the city's TIF annual reports for 2008. The revenues disclosed in those reports are based on taxes collected during 2008, which in turn are pegged to property values during the 2007 calendar year. Orr's latest revenue figure, by contrast, is based on the tax bills sent out this fall, which are based on property values during 2008. Therefore, Ginsburg and Weiner's count includes the Central Loop revenue, while Orr's tally does not.

Round Two In The Fight Over Outsourcing Chicago Schools

Angela Caputo — Tue, 10 Nov 2009 10:44:41 -0800

With less than a week to go before the Chicago Board of Education votes on whether or not to authorize six new charter schools, Chicago Public Schools (CPS) held a round of public hearings last night. School reform advocates have long complained that CPS handpicks which charters will get the green light long before the hearings begin. And the opaque nature of the process generated a lot of criticism last year. As a result, officials are treading more lightly as they move forward this year.

Unlike in the previous years of Mayor Daley's Renaissance 2010 program, only a handful of new charters are being considered this time around. Still, CPS chief Ron Huberman is recommending that an additional 8,130 charters seats be made available next fall, according to an analysis by the Caucus of Rank and File Educators (CORE). Alexander Russo reports that the established private school operators appear to have a leg-up:

Just six new schools are being recommended for approval -- most of them add-on campuses of existing networks. Fourteen did a full application only to get rejected. Meanwhile, a slew of existing contract schools are vying for charterization thanks to the newly lifted charter cap.

Contract schools -- which are also privately-managed but allow teachers to join collective bargaining under the Chicago Teacher's Union -- began to spring up when CPS nears the cap on the charter schools (originally set at 30). Regular readers may recall that the General Assembly agreed to lift that cap last spring, effectively allowing the number of Chicago charters to double. Under that same legislation, lawmakers also agreed to allow these schools to hire non-certified teachers to fill 25 percent of their classrooms. Tim King, founder of the all-boys Urban Prep on the city's West Side, tells Catalyst that he's among those hoping to transition from contract to charter status this year so he will have the "same freedoms as charter schools" (i.e., the ability to hire non-traditional, uncertified staff). That has members of CORE -- a grassroots, pro-labor coalition -- justifiably upset. "These so-called reform efforts have nothing to do with reform," high school teacher and CORE spokesman Kenzo Shibata tells us. "They're just a way of busting our union."

Indeed, am influential report recently revealed that there is no evidence that Mayor Daley’s school “reform” program is actually improving district performance. Not only is academic achievement flat, but the Consortium for Chicago School Research reports that a vast majority of the elementary students uprooted between 2001 and 2006 were merely shuffled into other failing schools. No wonder CPS has been so secretive about the closing process.

Shibata describes the school board's vote on the latest charters as the first of a 12-round fight. The second round will come in January as more school closure recommendations are announced. That's when Chicago Democratic State Rep. Cynthia Soto's hard-fought battle to bring transparency and create clear criteria over the closure process will likely come to a head.

In the meantime, CORE is setting its sights on overturning a 1995 state law that gave Mayor Daley control of Chicago's schools in the first place. "Labor law doesn’t allow a company to close down a union plant and open up a non-union one across the street," teacher and CORE member Jackson Potter writes in a release, "but that’s exactly what Chicago Public Schools has done for the last six years without pause."

Stay tuned ...

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.

Chicago Hotels Workers Authorize Starwood Strike

Adam Doster — Thu, 29 Oct 2009 07:10:04 -0700

The Congress Hotel employees have been striking for over six years. In the coming days, a huge batch of their fellow Chicago hotel workers may join them.

At 8 p.m. last night, employees at five area hotels run by the Starwood Chain -- the Westin Michigan Avenue, the Sheraton Chicago Hotel and Towers, the W Lakeshore, the W, and the Tremont Hotel -- voted by an overwhelming majority to authorize a strike. The workers, represented by UNITE-HERE Local 1, are not walking out on the job just yet. But the vote gives union negotiators the green light to call a work stoppage or a boycott if contract negotiations don't progress, a major escalation in a campaign that's already featured a dramatic civil disobedience.

It's been eight weeks since UNITE-HERE's three-year contract covering workers at 30 downtown hotels expired and the two sides are still not close to reaching a compromise. Like their comrades at Hyatt -- one of the city's other big chains -- Starwood is claiming poverty, citing the recession as the reason they can't boost pay or benefits for its employees. Furthermore, in an attempt to cut costs, they are requesting that employees work 120 hours a month in order to qualify for health insurance, a move union officials say would disqualify almost half of their workers from coverage.

There's no doubt that the recession depressed tourism last year. But hotels seem to be on relatively sturdy financial ground; Starwood earned $40 million in profits this past quarter and $180 million over the first three quarters of 2009. And the industry rebounded nicely following the September 11 terrorist attacks, registering healthy growth between 2003-2007.

With the holiday season rapidly approaching, this is a decidedly bad time for hotels to suffer a walk-out. We'll be keeping tabs on the ongoing negotiations.

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."

Daley's Next Privatization Dance?

Angela Caputo — Fri, 23 Oct 2009 11:17:57 -0700

After his administration received unprecedented criticism for leasing off Chicago's parking meter system, one might think Mayor Daley would cool it on the privatization schemes. Instead, he appears to be looking for more public assets to sell off to the highest bidder. The Tribune reported yesterday that the same type of consultants who cooked up the parking meter deal (and profited off it) are now "tempting him" with "a menu of options." "It whets your appetite," Daley told the paper's editorial board, "the things they see that we don't see." He went on say, "Nothing is off the table ... Everything is always on the table."

So there it is. Daley and consultants re already working the numbers behind closed doors. The scenario sounds reminiscent of the 75-year parking meter lease project that was rammed through the City Council in just two days, costing taxpayers upwards of $1 billion in potential revenue losses.

Today, the Sun-Times Fran Spielman ticks through the possibilities, concluding that there are five "viable" options: Midway Airport, O'Hare Airport, trash collection, the water system, and the sewage system. The mayor has already attempted (unsuccessfully) to unload Midway. O'Hare is bogged down under loads of debt. Meanwhile, the City Council has already put the kibosh on the trash proposal. So it would seem that the water and sewer systems would be the most likely targets.

As Newstips' Curtis Black reported earlier this week, there's already evidence that both ideas are being actively explored by City Hall. On Wednesday, he Tribune asked the mayor if he'd put the city's water up for lease. Daley's response? He declined to answer "because it would stir up too much controversy."

"Taxpayers have a reason to be concerned," the Illinois Public Interest Research Group's (PIRG) Brian Imus tells us. "The type of backroom policymaking that led to the parking meter privatization debacle is the same type of governing that is responsible for the budget mess we face today."

If Daley is indeed eying water privatization, let's hope the City Council passes Ald. Scott Waguespack's (32nd Ward) Asset Lease Taxpayer Protection Ordinance before he gets much further. After all, Waguespack's measure would open up the privatization negotiations to independent review.

As the Trib sees it, the mayor "in denial" if he thinks more privatization is the key to putting the city on sound financial footing:

The unloading of assets -- this jettisoning of their ability to produce future revenues -- becomes self-defeating when the revenues are used for routine operations. As Ald. Scott Waguespack, 32nd, asked Wednesday, "If the parking meter money is depleted within five years, then what happens for the next 70 years of that contract?"

Here's what happens: Chicago won't have the meter revenue and won't have the meters. Same as the Skyway. How will your household fare if your long-range financial plan is a garage sale that never ends?

In agrarian societies, this short-sighted strategy is known as "eating your seed corn." After which, you starve.

Be sure to read Black's entire water privatization article here.