The final day of the City Council budget hearings started with a quick 15 minute briefing with the Department of Administrative Hearings, a nearly two hour hearing with the Department of Water Management, an approximately 40 minute hearing with the Department of Procurement Services, and it wrapped with the City’s Law Department and a tearful thank you to Budget Chair Carrie Austin (34).

Since it was the last day after a long slog, Vice Chair Jason Ervin (28) was in no mood to stay longer than needed. When Ald. David Moore (17), who already irked aldermen throughout the past two weeks for his persistent questioning, said he would wait for round two to ask follow up questions during the Department of Water Management hearing, Ervin grumbled, “It’s Friday, man.” The day’s session wrapped before 3:00 p.m.

 

Budget Chair Carrie Austin Delivers Tearful Thanks;
Reveals She Was In Coma During Hospitalization

Ald. Carrie Austin broke down in tears at the end of Friday’s hearing while thanking a small group of aldermen for prayers during her illness, telling them she was near death and in a coma for two weeks.  

Austin was absent from Council several weeks throughout September, but aldermen and staffers kept her heart surgery under wraps. The Sun-Times broke a story just before budget season began, saying Austin had endured a couple lengthy hospital stays and one surgery, and cast doubt on whether she’d be able to chair what promised to be a contentious few weeks of hearings: “It’s highly unlikely Austin will have the stamina to chair marathon hearings that can drag on into the evening. Nor can she be counted on to be the iron-fisted chairman she has been.”

But Austin’s iron fist took center stage at several budget hearings, including with Police Superintendent Garry McCarthy, and when keeping her fellow aldermen in line. Austin stayed late into the evening on several hearing days, sometimes sitting away from the podium or in the cloakroom while Budget Vice Chair Jason Ervintook over. She also became more active than usual on social media.

Ald. David Moore (17), who Austin had reprimanded a few times for asking too many questions and extending his time to second round questioning, brought her a big bouquet of flowers and thanked her on behalf of the full Council on the last day of budget hearings. “Chicago’s good and faithful servant, I appreciate you so much, and your colleagues as well. We appreciate you.”

“Still gonna be last,” she teased Moore, who ended up closing many hearing days with his extended questioning.

“Gosh, you had me crying when the Mayor did the Budget address, I’m gonna try not to do it this time.” She still cried.

Austin told aldermen she has a good bill of health, and two more doctor’s visits left. “I tore my aorta. I almost wasn’t here. But I’m grateful that God allowed me to be here. I was in the hospital 29 days. And in those 29 days that I was there, for the first two weeks I was unconscious, I was in a coma. Blood pressure went up over 300. The bottom number was 205, they couldn’t bring it down.”

Austin said after her hospital stay, she was home a week, but other aortic tears started near the bottom of her spine, requiring doctors at at Northwestern Memorial Hospital to put in three stents. “I’m doing pretty well unless it decides to go the other way, then it’ll be instant death. But if it happens, I’m ready to see the Lord, ‘cause I have served him all of my life.”

She told her colleagues, crying, that their prayers are what brought her back. “If I’ve offended anybody, I’m sorry. Charge it to my head and never to my heart, cause I love each and every one of y’all even though you make me sick and get on my nerves… But I do need to have a meeting with the newbies.” She sighed. Aldermen in the Chamber laughed.

“Flowers for a person while they yet live, while they can smell them, thank you. We made it through, and this meeting stands adjourned.” She got a standing ovation from those present.

ADMINISTRATIVE HEARINGS

With few aldermen on hand for the early Friday morning hearing with the Department’s Director Patricia Jackowiak, the quick 15 minute hearing was short on questions and heavy on accolades. Vice Chair Jason Ervin lead the meeting, with Budget Chairman Carrie Austin arriving later in the day.

Attendance: Vice Chair Jason Ervin (28), Pat Dowell (3), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Mike Zalewski (23), Ariel Reboyras (30), Gilbert Villegas (36), Marge Laurino (39)

Submitted written testimony.

The Department of Administrative Hearings is asking for a $8.18 million appropriation for next year, a 2.7% increase from last year’s $7.96M appropriation. The largest chunk of the budget, $3.03 million, will go toward vehicle hearings for parking, red light, automated speed camera, and booted vehicle violations.

Before concluding the meeting, Vice Chair Ervin said one thing that does concern him is the lack of salary increases for the judges the City hires to oversee hearings. “Being able to retain quality, qualified attorneys that act as administrative law judges is important,” Ervin said.

The Department hires and trains outside attorneys to decide cases and serve as Administrative Law Judges. The 2016 budget appropriation calls for a $2,760 salary increase for over last year for judges, totaling $94,740.

“Hopefully we can find resources to increase that, because the one concern I do have is retention. Most of the individuals that are there are knowledgeable. They’ve been there for awhile. They understand the process. They understand the communities. And that’s something we don’t want to lose.”

Highlights from written testimony:

  • In 2014, Administrative Law Judges presided over 627,923 hearings.

  • 1,555 low-income respondents received legal representation from independent attorneys when going before a judge at the Central Hearing Facility between 7/1/14- 6/30/15. It’s part of the non-profit legal aid service Coordinated Advice & Referral Program for Legal Services (CARPLS).

  • The Department’s Telephone  Language Line Interpretation Service, commonly known as “Language Line”, saw a 90% increase in usage over 2009, with 33,512 minutes of interpretation service in 2014.

  • By the end of 2015, DOAH anticipates it’ll conduct 10,000 more hearings than in 2014

 

WATER MANAGEMENT

Department of Water Management Commissioner Tom Powers faced another nuts and bolts heavy hearing, with aldermen focusing on local infrastructure projects and complaining about poorly done sidewalk restorations, the sluggish timeline of sewer repairs, and questions about water meters. Despite criticism, Powers says the department is on track to complete its 10-year Capital Plan the Mayor first unveiled in 2012.

Attendance: Vice Chair Jason Ervin (28), Pat Dowell (3), Roderick Sawyer (6), Greg Mitchell (7), Michelle Harris (8), Susan Sadlowski-Garza (9), Patrick Daley Thompson (11), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Howard Brookins, Jr. (21), Mike Zalewski (23), Michael Scott, Jr. (24), Chris Taliaferro (29), Ariel Reboyras (30), Milly Santiago (31), Scott Waguespack (32), Deb Mell (33), Gilbert Villegas (36), Nick Sposato (38), Marge Laurino (39), Brendan Reilly (42), Tom Tunney (44), Michelle Smith (43) John Arena (45), James Cappleman (46), Deb Silverstein (50)

Submitted written testimony.

Ald. Patrick Daley Thompson (11), a former Water Reclamation District Commissioner, came out of left field with an odd question about selling cat food. “At the water filtration plants, where we have the intake, there is a lot of fish, I guess, that come in there. What do we do with that? Do we sell that for cat food, or do we try to monetize that at all? Anything?”

Powers said it’s not just fish that get caught in the screens, there’s also trash and floating debris that gets grounded out and sent out for treatment.  “One man’s trash is another man’s treasure…and we could try to utilize some of that,” Ald. Thompson, said reluctantly.

Then there was Ald. Raymond Lopez (15), who wanted to know if it was possible for aldermen to get access to the keys to shut off fire hydrants that get opened illegally. But he was immediately shut down by Powers, who said “even the guy to my right won’t give a magnetic key to his mother.” Powers assured Ald. Lopez that the Department is using data to track open hydrants to find trouble spots.

Ald. Brendan Reilly (42) asked Powers to “hurry up” and finish the water main repairs in his ward because “the traffic really stinks”, while Ald. Tom Tunney (44) complained about poorly done sidewalk restorations following underground water improvements.

“You know how I am about sidewalks,” Ald. Tunney lamented. “I do not believe they are done with the same quality that I see when our City department is in there…Water’s [restorations] are crap.”

But the most critical line of questioning came from South Side Ald. David Moore(17), as he pressed Powers to explain water rate increases and overtime amounts.

“I understand we are investing an extraordinary amount into our water delivery infrastructure, and I commend you on implementing all of this work,” Ald. Moore said, reading from his notes. “But financially, this investment has placed a rather large burden on people.”

In 2012, as part of his plan to update the city’s water infrastructure, Mayor Emanuel proposed a four-year increase in rates for the City’s water and sewer funds. In 2011, households paid a rate of $2.01/1000 gallons. The rate jumped to $3.82 this year, the final year of the phase-in. After this year, water rate increases will be  tied to the consumer price index.

“Water rates have increased by 60% over four years. Is that correct?” Ald. Moore asked Powers.

“It is about 60%, just over 60%,” Powers responded.

“If so, how do we explain that to people when their paychecks have certainly not gone up. And now we’re asking them for even more money,” Ald. Moore said, pointing to the Mayor’s proposed property tax hike and garbage fee in this year’s budget. “What is your plan for the future? Is it to continue to raise rates?”

“Alderman, Alderman,” Vice Chairman Ervin interjected before Powers could respond. “The rates in place were set four years ago […] So the rate [increase] is not really a topic at this point…that’s something that’s kind of past us. But knock yourself out.”

After Powers assured Ald. Moore they could speak more about water rates offline, Ald. Moore pivoted to another hot topic: overtime.

“Under what circumstances do you authorize overtime?” Ald. Moore asked.

Powers said the Department has different types of overtime: contractual obligations with collective bargaining agreements, emergencies, and infrastructure malfunctions.

“And then there are instances where we use overtime to actually save money. And that doesn’t sound like an accurate statement,” Powers said explaining that in the water treatment plants, “in house forces” can compete against contractors to keep work in house if they are cheaper.

Powers gave the example of a recent project the Department undertook to replace 40 transformers. The original contractor for the project quoted $5,000 per transformer. But by opting to use city employees and paying them overtime hours instead, the Department got the job done for $2,900.

“So we actually saved money in this overall project by working with our in house crews and having them bid on work as if they were a contractor,” Powers said.

In the 2016 budget, the Department is asking for $4 million in overtime for its Bureau of Water Supply, despite spending $9.5 million in overtime in 2014. When asked about the difference, Powers said “shift coverage” was the main driver in those overtime hours and his department is working with the Budget Office to “hire strategically” to alleviate the costs.

The Department’s Bureau of Operations and Distribution spent $8.5 million in overtime in 2014 and is requesting $3 million next year, Ald. Moore pointed out. Those overtime hours are directly related to weather, emergencies, water main breaks, and sewer repairs, Powers replied. Major snow storms also lead to overtime hours in that sub-department because DWM helps Streets and Sanitation with snow removal.

And on the issue of delinquent water payments suburban towns owe the City, the Department has worked out payment plans to recoup $30 million dollars from the Cities of Dolton, Robins, and Harvey.

Highlights from written testimony:

  • DWM purifies an average of 800 million gallons of water a day at the Department’s Jardine and South Water Purification Plants.

  • 2.7 million customers are served in Chicago and 2.76 million customers in 125 surrounding suburbs, representing 42% of the state’s population.

 

PROCUREMENT SERVICES

After waiving the reading of the opening statement, and a surprisingly smaller than expected number of minority hiring questions, Commissioner Jamie Rhee spent a little over an hour testifying before the Budget Committee, where she revealed an unusual statistic: the City has made nearly $14 million dollars selling “junk” online over the past four years.

Attendance: Chair Carrie Austin (34), Vice Chair Jason Ervin (28), Joe Moreno (1), Pat Dowell (3), Michelle Harris (8), Susan Sadlowski-Garza (9), Patrick Daley Thompson (11), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Howard Brookins, Jr. (21), Rick Munoz (22), Mike Zalewski (23), Michael Scott, Jr. (24), Chris Taliaferro (29), Milly Santiago (31), Scott Waguespack (32), Deb Mell (33), Gilbert Villegas (36), Nick Sposato (38), Marge Laurino (39), Brendan Reilly (42), Tom Tunney (44), Michelle Smith (43) John Arena (45), James Cappleman (46), Ameya Pawar (47), Deb Silverstein (50)

Submitted written testimony.

Since 2011, DPS has worked with other City departments to identify surplus or decommissioned items that can be auctioned online. Items range from smaller equipment like old typewriters, calculators, phones, obsolete copier toner, and dog cages, to bigger pieces like solar panels, and construction equipment.

“It is surprising, but there is a huge market for this,” Rhee explained. The Department has been hosting daily auctions online with buyers from all over the world bidding on the obsolete equipment. “The market is actually recycling them, and there is a very active market.”

In 2015 alone, DPS is on target to sell over $2 million dollars worth of obsolete items.

Most of the questions aldermen had for Commissioner Rhee focused on the bidding requirements and the average timeline for DPS’ business certification process.

Ald. Patrick Daley Thompson (11) asked about city residency requirements for local contracts. Commissioner Rhee said on all non-federally funded projects over $100,000, 50% of the hours worked must be done by city residents. But as soon as a single federal dollar touches a project, the City is barred from demanding local residency requirements.

Asked if there is an option to buy out of that, Rhee said no, because the requirements were set through city ordinance passed in May 2013. This year, DPS recouped $141,000 in penalties from businesses that failed to meet the requirements. Since projects tend to span several years, DPS regularly monitors hiring practices through the life of the project.

“If we only have a couple hundred thousand dollars worth of penalties–I don’t know what the penalties are–but it doesn’t seem like a lot,” Ald. Thompson said, suggesting the requirements be increased. Rhee said she was open to the idea.

On the business certification front, Ald. Raymond Lopez (15) asked if the certification timeline is too long, noting he has only three certified businesses in his ward, and was told by local contractors that they prefer to get certified by the County because the process is “half as long”.

“That is their feeling… I’m just relaying the message,” Lopez added.

But before Rhee answered his question, Chairman Austin interjected. “Not it doesn’t. Most of the time [businesses] are using that as an excuse to get pushed a little faster.”

“But then the question comes along with participation,” Ald. Lopez said. “When a number of businesses hear rumors and stories that the payment for contracts takes longer. And sometimes for businesses that are minority or disadvantaged or women owned, they don’t have the capital, resources, or cashflow to sustain themselves three-to-six months before their first payment. Is that something your department is looking to address so we don’t exclude [this] group?”

“Absolutely,” Rhee said the City has a “whole committee” looking at how DPS is processing payments to alleviate this issue.

The Department is asking for $7.859 million, a modest reduction from their 2015 allocation of $7.97 million.

 

LAW DEPARTMENT

The City’s Law Department had a relatively short hearing, but released a huge brag sheet at Friday’s hearing, the very last of budget testimony for this season. “I kind of apologize for that,” Corporation Counsel Steve Patton said before testifying for about 75 minutes. He released a six-part, 26 page written testimony that scratched the surface of all the different areas of City government the DOL touches.

Attendance: Joe Moreno (1), Brian Hopkins (2), Pat Dowell (3), Leslie Hairston (5), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Matt O’Shea (19), Ricardo Munoz (22), Michael Scott Jr. (24), Jason Ervin (29), Milly Santiago (31), Scott Waguespack (32), Carrie Austin (34, Nicholas Sposato (38), Brendan Reilly (42)

The department has 436 budgeted full time positions for 2016, one less than last year. The largest group of employees, 83, work in Building and License enforcement. DOL’s budget of $36.9 million has barely budged since Patton started, a consistency he says is purposeful. Among Patton’s long written testimony were the department’s impact on real estate and building code enforcement, the Barack Obama Foundation’s decision to choose Chicago for its location, changes to workers compensation and union agreements, the City minimum wage, parking ticket enforcement, sale of vacant lots, and renegotiated credit agreements.

The first question out of the gate came from Vice Chair Jason Ervin (28), who asked about police settlement cases. Patton estimated police settlements cost taxpayers $16.5 million this year (one settlement alone, the shooting death of teenager LaQuan McDonald, cost the City $5 million). But he said that number could have been much higher, and DOL only settles when it has to. “The only time I will settle the case is where my lawyers convince me the outcome for taxpayers is likely to be far worse if we don’t settle… we can’t wish these lawsuits away.” The Law Department won 40 of the 49 police cases it tried. In those cases, plaintiffs sought more than $60 million in damages, but recovered only $6 million.

The City’s expecting to pay $30 million dollars for settlements alone this year. That’s a 48% reduction from 2014, and 62% from 2013. When you add judgements, the City will pay $55 million. That number is still down by 42% from 2014, and 47% from 2013.

But there’s still cutting to do, Patton says. “We’re not doing a victory lap on this.” DOL has been working to cut through a backlog of costly cases from the Daley Administration. Patton said City lawyers in the previous administration would wait until just before a court date to decide whether to settle, compounding costs. Patton’s ended that practice, but that doesn’t mean the city isn’t still being sued for things like police shootings.

Patton also fielded questions about money and enforcement around vacation rental sites like Airbnb. He said he can’t disclose numbers about taxes collected from those sites, but the collection is “substantial,” now that sites have created an infrastructure to collect payment from users.

Throughout budget proceedings, aldermen have expressed worry that more than a thousand vacation rentals are making money without paying for a vacation rental license from the city. Ald. Reilly (42) said only 200 of the 3000 listed Airbnb units are registered, and there’s a rumor the DOL is working secretly to negotiate a separate set of rules and regulations just for Airbnb. Patton said he had no knowledge of any dealings, but would look into it.  

Aldermen also asked for an update on the $5.5 million the city agreed to pay in reparations for victims of torture by Chicago Police Commander Jon Burge. Patton said the process has so far gone “surprisingly smoothly.” The time for victims to make claims has expired, and the Law Department is working through deciding whether claims are meritorious. Advocacy groups who litigated on behalf of victims have referred 44 claimants, which have all been reviewed. More than 50 new claimants have also come in from off the radar, Patton said, and are in the process of being reviewed. Daniel T. Coyne, a law professor at Kent College, is independently reviewing claims with law students, and sending them on to DOL.

Other facts revealed in testimony:

  • When discussing staffing, Patton revealed some of DOL’s tax enforcement priorities: “We are putting a renewed focus on trying to extract all the value we can in enforcing property taxes, and in opposing commercial requests for property tax reductions.”

  • DoL collected a record-breaking $171.3 million in overdue monies owed to the City in 2014. The Department expects to set more records, including a $10 million increase in overdue parking tickets.

  • The City won 85% of police cases it tried in 2015. It won or obtained dismissal in 102 out of 207 cases resolved through August 2015.

  • The City’s cut down on legal costs by at least $90 million since 2011 by deciding whether cases should go to trial or be settled earlier. DOL estimates the timely settlement of one case, Hunter (McDonald) v. City of Chicago, saved the City $4.5 million alone.

  • DOL’s employment is one of few with majority female employees, roughly 60%, and an equal gender split amongst Department managers.

  • The City’s conveyed more than 425 vacant parcels for a $1 to neighbors in Englewood, West Englewood, Woodlawn, Washington Park, Greater Grand Crossing, New City, Fuller Park, East Garfield Park and Greater Englewood since December 2014. The Law Department expects to close 90 more in Austin before the end of this year, and open up 300 lots in Pullman and Roseland soon.

  • After the Moody’s downgrade, DoL attorneys worked “literally around the clock” to prevent 11 banks from demanding immediate repayment of more than $1.8 billion in outstanding credit agreements, and negotiated forbearance agreements instead. Patton said one lawyer was up 36 hours on the case. That allowed the city to convert $806 million in variable rate general obligation bonds and $112 million in sales tax revenue bonds within a month of Moody’s downgrade.

  • In 2015, DoL has prosecuted more than 350 drug and gang house cases and more than 350 license cases, including 178 license revocations for businesses.

  • DoL expects to file a total of 900 to 1,000 building demolition cases by the end of the year.