Mayor Emanuel says city?s budget deficit cut in half

BY FRAN SPIELMAN City Hall Reporter fspielman@suntimes.com July 30, 2012 12:40PM

Updated: July 30, 2012 2:27PM

Mayor Rahm Emanuel said Monday his aggressive cost-cutting efforts have cut the city?s structural deficit in half, but, ?Our work is not done.?

One day before releasing the city?s preliminary 2013 budget, Emanuel gave reporters a preview that could somewhat weaken the city?s case for cost-cutting concessions from police officers and firefighters, whose contracts expired June 30.

?It will show that, what could have been a deficit?.north of $700 [million]?we?ve cut it in half from a structural standpoint,? the mayor said at an unrelated jobs announcement.

?That?s through the hard decisions we made, the tough decisions to re-invent, re-think how we as a government operate, but our work is not done. While we?ve done that and I?m proud of that, we?re only one year into a process of?really changing it.?

For example, Emanuel said he?s counting on saving $15 million-to-$20 million this year alone by phasing in the switch from a ward-by-ward to a grid system for collecting the city?s household garbage.

?Ultimately, I want to see $60 million [a-year]. Why? Because we?re gonna go from an old political system collecting garbage by the ward map to one by the way FedEx and UPS work by efficiencies,? the mayor said.

?We can take $15 million-to-$20 million of cost out of a system that was done by politics ? not by what?s responsible and respectful of the taxpayers? dollars. That?s another example of a reform we?ve brought to the budget that?s gonna bring taxpayer savings and money. And because of those type of savings, you?re gonna see that?not from a one off time, but permanent structurally saving.?

One year ago, Emanuel vowed to make the tough choices Chicago had avoided for a decade?without raising taxes, cutting police or using one-time revenues ? to erase a $635.7 million budget shortfall that, he claimed, would rise to $790 million by 2014.

His $6.3 billion 2012 was subsequently balance with $220 million in taxes, fines and fees, 385 layoffs on Jan. 1 and 150 more on June 30.

The mayor?s first budget doubled water and sewer rates over the next four years and locked in annual cost of living increases after that. It raised city sticker fees by $10-to-$15, also followed by annual inflationary increases.

By an impressive, 50-to-0 vote, the City Council also agreed to raise the city the city?s hotel tax, imposed a $2-a-weekday hike in parking taxes ? billed as a congestion fee, even though it?s confined neither to rush periods nor congested downtown and River North areas ? and hiked a laundry list of criminal, nuisance and parking fines.

Despite neighborhood concern about the perception of public safety, aldermen even signed off on the mayor?s plan to close three district police stations, the first station closings in more than 50 years, and closed out 1,252 police vacancies to save $82 million.

Earlier this month, the Chicago Sun-Times reported that year-end audits showed that Emanuel had closed the books on 2011 with $310 million in the bank, $167 million more than the year before, but added $465 million to the mountain of debt piled on Chicago taxpayers.

The healthy unreserved cash balance was generated by Emanuel?s aggressive cost-cutting efforts. It was a marked turn-around from the precarious financial condition the city was in during the close of former Mayor Richard M. Daley?s 22-year reign.

Daley postponed Chicago?s day of reckoning?and set Emanuel up for a fall?by balancing his final budget with $330 million in Skyway and parking meters reserves and other short-term fixes. That left just $76 million remaining from the 75-year, $1.15 billion deal that privatized Chicago parking meters.

Chicago ended 2009 with a paltry unallocated balance of just $2.7 million. Experts recommend a cash cushion of at least $200 million for a budget the size of Chicago?s, according to the Civic Federation.

The new borrowing brings Chicago?s total long-term debt to just over $27 billion. That?s $10,000 for every one of the city?s nearly 2.7 million residents. More than a decade ago, the debt load was $9.6 billion or $3,338-per-resident.

Still unclear is what impact Chicago?s improving financial condition will have on the laundry list of cost-cutting concessions Emanuel is seeking from Chicago firefighters.

They take aim at such treasured union perks as: holiday and duty availability pay; clothing allowance; pay grades; premium pay; non-duty lay-up coverage; the physical fitness incentive and the seven percent premium paid to cross-trained firefighter paramedics.

The mayor?s plan does not include closing fire stations. But, it would alter the minimum manning requirement that triggered the bitter 1980 firefighters strike.

The current contract requires that every piece of fire apparatus be staffed by at least five employees. Emanuel?s plan calls for all ?double houses? that include both engines and trucks to be staffed by nine firefighters instead of 10.

There would be only one ?vacancy order? per year ? in June. Rookie probation would double, from nine months to 18 months.

Tom Ryan, president of Chicago Firefighters Union Local 2, has characterized the cost-cutting contract concessions the mayor is seeking from firefighters as ?horrendous,? ?insulting? and ?ridiculous.?

Source: http://www.suntimes.com/14100244-418/mayor-emanuel-says-citys-budget-deficit-cut-in-half.html

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