Cook County Board members made quick work of Wednesday’s agenda–deferring two major ordinances (an energy conservation contract and a jobs partnership agreement) and referring some other major items to committee (including one to call Assessor Joe Berrios in for questioning on his office’s operations, and a new bond issuance). In her post-Board press conference, President Preckwinkle also offered her take on the Berrios scrutiny, saying she was “a history teacher” and didn’t know the intricacies of the assessment system, but she and the Assessor were working to ensure it was fair.
Deferred: Energy Conservation Contracts and Chi-Cook Workforce Agreement
Multi-million dollar contract amendments for energy conservation: Commissioners deferred consideration of four contract increases totaling $8.1 million for monitoring and verification (M&V) of energy conservation measures around the county. The extra cost would pay for quarterly and annual analysis reports from the vendors–Johnson Controls and NORESCO. County officials say the conservation measures would pay for themselves over the 20-year term of the contracts, but commissioners were surprised to see an additional cost on top of an upfront $104 million investment they’d already approved.
The county’s Energy Manager, Jamie Meyers, said the savings from the energy efficient upgrades (more info here)–to things like lighting infrastructure, aging mechanical systems and temperature controls at county buildings–will pay for themselves. “By end of the 20 year contract, we will recoup savings as well as” the extra “measurement and verification” services commissioners were asked to approve Wednesday. “Each annual report is a guaranteed savings report.” Those M&V services are “the most cost-effective approach to provide quality control of project savings,” Director of Capital Planning Earl Manning said in a letter to commissioners.
But commissioners were puzzled at why the extra costs had to be approved on contracts already costing so much up front. “Didn’t we already pay for this?” Comm. Larry Suffredin (D-13) asked. “Wasn’t this part of the scope of work that we already approved?”
One of the $32 million contracts commissioners approved in June of 2015 did include “20 years of verification of savings from the energy conservation measures.” But the funding for that verification wasn’t included at the time, Manning said.
“We received a whole series of promises,” Comm. Bridget Gainer (D-10) said, recalling negotiations over the contracts in 2015 and 2012. She asked for a delay and a briefing, saying a month’s wait wouldn’t have much impact in the grand scheme of a 20-year contract.
Comm. Suffredin pointed out the Asset Management team had turned over since those contracts were negotiated, and wanted to understand whether anything had been lost in translation. “I don’t know if this is something the Inspector General needs to look at, but somebody needs to figure out how we got into this situation.”
“I concur,” Finance Chairman John Daley (D-11) said.
Property Tax Incentive Agreement with Chicago-Cook Workforce Partnership: Comm. Suffredin also backed a delay on an intergovernmental agreement with the Chicago Cook Workforce Partnership. The agreement stems from ordinances approved earlier this year that make the Workforce Partnership a “first source agency” for filling vacancies at businesses that receive property tax incentives with the help of the county’s Bureau of Economic Development.
Moving forward, tax incentive recipients who go through BED must enter into an agreement with the Chicago Cook Workforce Partnership for the term of the tax incentive, and “will work directly with the Partnership to fill job openings and vacancies for a period of at least seven business days from the date job vacancies are opened.”
Comm. Suffredin said he was “not impressed” with the Workforce Partnership, and the rule would only create barriers for job creators. “We begin to put obstacles in front of people who want to create jobs, and it was not very well formed… I’m not sure that they’re capable of suggesting employees for the kinds of technical jobs we hope to get,” Suffredin told The Daily Line. “We’re going to see if they can work it out.”
Chairman Daley also questioned how promised jobs were being tracked over the course of tax incentives. BED’s Michael Jasso said those who received incentives through his department had to report annually on their job retention, and the tax break amendment approved earlier this year also gives municipalities the power to ask the county to revoke those breaks if employers weren’t sticking to promises. (For more on the property tax incentive system, check out our most recent podcast.)
Two criminal justice contracts valued at $225,000: A one year, $97,500 contract was renewed for services from Carol Cramer Brooks, a Kalamazoo-based consultant who does training and development of job descriptions and performance evaluations at the Juvenile Temporary Detention Center. She was formerly a principal of the school based at the Kalamazoo County Juvenile Home. Her current contract with the county is worth $146,960, and JTDC officials say she visits the JTDC monthly to evaluate programs. A one year, $128,526 contract to Chicago-based consultant Sharon Grant was also approved. Grant connects the JTDC with community organizations and local agencies, including Chicago Public Schools, Chicago City Colleges, the Safer Foundation, the Chicago Police Department, the Coalition of African American Leader and the Union League Club.
Extra $6 million for IBM contract: A $6.8 million increase to the county’s five year, $66 million contract with IBM is needed, department heads said, for technology upgrades to help with the county and Forest Preserves’ budgeting, human resources processing and data. While the increase sounds staggering, the additional cost for the county’s big tech overhaul (known as the ERP) was within industry-typical norms. Comm. Sean Morrison (R-17) noted that Assessor Joe Berrios’ five month delay in getting on the county’s electronic timekeeping system led to a “quantitative cost of $3 million,” but that now “everyone’s pulling the same way.” Commissioners also approved a $530,000 increase and extension of a $17 million contract for technology hardware and hardware maintenance with System Solutions, Inc. out of Northbrook, Illinois for countywide offices.
Unfairness in assessments hearing: Commissioners introduced two resolutions calling for Assessor Joe Berrios to appear before the Finance Committee and explain his side of a Chicago Tribune investigation into his office’s assessment system. A group of five bipartisan commissioners (Daley, Garcia, Suffredin, Schneider, and Silvestri) appear focused on finding out whether Berrios’ office’s operations violated state law, or whether there were resources squandered. Their resolution notes that the board provides the Assessor “a budget for staff and resources to properly assess all properties”. Comm. Richard Boykin’s (D-1) resolution was focused on the impact of assessments on the poor. Chairman Daley said he hopes to have the hearing on July 18.
New bonds, refunding: The county is looking to take advantage of interest rates and refund a portion of its series 2006B bonds (currently outstanding in the aggregate principal amount of $129.86 million), and issue up to $165 million in new sales tax revenue bonds in part to pay for equipment and the construction of new Cook County Health and Hospitals facilities. Interim Chief Financial Officer Ammar Rizki says the county is mindful of potential impacts of a junk bond rating statewide if the state doesn’t reach a budget agreement.
That downgrade could ripple out, possibly moving the county’s current outlook from stable to negative, he said. The county is in talks with agencies and investors to “tell the county’s story,” he said. According to the county’s most recent CAFR, its underlying rating on its general obligation bonds is currently A2/AA-/A+ from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings, respectively, all with stable outlooks. “The County also has outstanding Sales Tax Revenue Bonds that are rated AAA by Standard & Poor’s.”
Fee increases at Medical Examiner’s Office: The ME’s office is increasing its storage fee from $50 per day to $500 per day, and upping its lab use fees from $100 per week to $250 per day, and its expert witness fees by $100 each (the highest is for the Chief Medical Examiner, a proposed $600 per hour. Cremation fees would more than double, from $100 to $250. If approved, the new rates would take effect on December 1, 2017.
President Preckwinkle’s Press Conference
President Preckwinkle again used her press availability after the Cook County Board meeting to point out the flaws and financial risks for the county and its residents as a result of changes to the Affordable Care Act (more on this in our story about the county’s budget forecast). She said she hoped the Senate bill recently rolled out was on its death bed.
On calls from commissioners for Assessor Joe Berrios to appear before the Cook County Board in response to the Chicago Tribune investigation into assessments: “I’m a history teacher, I know nothing about the instruments that are used to assess property. I’ve had a conversation with Assessor Berrios and he and I have agreed that we’ll look for a third party entity to look at our entire property tax system and try to determine how we can improve it. We are in conversations with folks right now about that.”
On the Illinois Retail Merchants Association filing seeking to halt the county’s sweetened beverage tax: “We’re committed to responsibly managing Cook County’s finances, making difficult decisions when and where necessary,” she said, reminding reporters that the budget is largely health and safety related, and the tax directly supports the budget in addition to improving health of county residents. She accused opponents of the tax of spreading “fear and misinformation,” even though county officials have “spent months meeting with these stakeholders.” She said the Department of Revenue has had over 30 meetings and calls with various stakeholders since January in preparation for the collection of this tax. While rules changes are now being criticized, “they were the result of conversations and requests from the soda industry and stakeholders.”
“The State’s Attorney is working with Department of Revenue to defend this suit, and we believe that the Illinois courts will, like the courts in Philadelphia, recognize and affirm the constitutionality of this tax,” Preckwinkle said. The judge assigned to the case, James McGing, was scheduled to hold a hearing on a temporary restraining order and preliminary injunction against the beverage tax, set to kick in on July 1. He recused himself. A new judge was selected Wednesday, and hearing is scheduled for Thursday at 2:30 p.m. in Room 2609 of the Daley Center.
On the three Chicago police officers indicted in the alleged cover up of the circumstances around Laquan McDonald’s shooting: “I’m pleased to know that the special prosecutor intends to hold other officers on the scene responsible for reports that were allegedly filed that corroborated Jason Van Dyke’s account of the event, which is quite contrary to the video. I hope that’s not the end of the indictments.” She told reporters she believes indictments should go further up the chain of command.