On day two of budget hearings, alderman heard details on how the 311 system would be privatized, one commissioner said city departments were ordered to make 10% across-the-board cuts, Clerk Susana Mendoza wants to create a special parking pass for Realtors, and Treasurer Kurt Summers is hoping to make money from idle cash.

Morning Attendance: Joe Moreno (1), Brian Hopkins (2), Leslie Hairston (5), Gregory Mitchell (7), Michelle Harris (8), Sue Sadlowski Garza (10), Patrick Daley Thompson (11), Marty Quinn (13), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Willie Cochran (20), Howard Brookins (21), Ricardo Munoz (22), Jason Ervin (28), Ariel Reboyras (30), Milly Santiago (31), Deb Mell (33), Carrie Austin (34), Emma Mitts (37), Nicholas Sposato (38), Anthony Napolitano (41), Brendan Reilly (42), Michele Smith (43), Tom Tunney (44), John Arena (45), James Cappleman (46), Harry Osterman (48), Joe Moore (49) 

CITY CLERK – With a statewide campaign for Comptroller around the corner, City Clerk Susana Mendoza touted her efforts to cut waste in her office by reducing overtime spending and streamlining vehicle sticker sales. The Clerk’s Office has a $10M budget and generates about $122M in revenue to the city through vehicle sticker sales. Since the City implemented year-round vehicle sticker sales this year, City Clerk locations saw an 85% reduction in wait times, according to Mendoza’s testimony.

Overtime in the City Clerk’s Council Division, the office that handles legislation and the City Council’s Journals of the Proceedings, is down 75% since Mendoza took office in 2010.

Clerk Mendoza said the department is bringing in an independent contractor to help find more efficiencies to work toward a paperless system. “Anything we can do to make our office more digital, I think is going to save a significant amount of money, and make our entire process much more streamlined.” 

Budget Chairman Carrie Austin (34), Vice Chairman Jason Ervin (28), and Vice Mayor Brendan Reilly (42) took turns leading the morning hearing, which mostly consisted of aldermen showering Mendoza with praise. Somewhat peeved, Reilly reminded his peers to stay on topic, “Let’s try and keep our comments and questions focused now on the budget request itself. I think we have done a good job praising staff. Sorry, we have other departments to be with today.”

One innovation: An ordinance Mendoza introduced to create a special vehicle sticker for Realtors that would let them park in any residential zoned parking spot during business hours (9:00 a.m.-9:00 p.m.). Mendoza estimates the new sticker would bring in an additional $900,000 annually.

Ald. Roderick Sawyer (6) suggested aldermen get a similar sticker, because they too have the same dilemma: going to community meetings in an area with permit parking. Ald. Anthony Napolitano (41) suggested the program be expanded to include construction contractors too, because they are “getting ticketed like crazy” when they park outside work sites.

Mendoza said that while she is open to expanding the program down the line to include other occupations, her office needs to see how much demand the Realtor program will net, should the City Council approve it. “We don’t want to take up too much, without having any indication of what the popularity of the program is going to be.”

Mendoza also endorsed lifting the parking ban on noncommercial pickup trucks, after aldermen told her about complaints from residents who aren’t allowed to park their pickup trucks in front of their homes. “no one tells you when you buy a pickup truck that you can’t park it on any Chicago street,” Mendoza said, expressing a willingness to work with any aldermen that wants to make that happen.

And there was no shortage of new licensing proposals at the City Clerk budget hearing. Ald. Harry Osterman (48) went so far to suggest implementing a registration and licensing program for bicycles, and Ald. Raymond Lopez (15) floated the idea of creating a license for pets. Ald. Tom Tunney (44) asked about the feasibility of having a Ventra-style machine to sell city stickers, because his office has a full-time employee at the ward office in charge of selling City stickers. Mendoza reminded him residents can buy the stickers online, but Ald. Tunney said he gets a lot of complaints from residents who didn’t realize buying guest parking passes online meant waiting 9 business days for delivery.

CITY TREASURER – The City’s operating portfolio, also known as working capital, contains $3B dollars, enough to keep the City running for approximately three months, according to City Treasurer Kurt Summers. Until recently, the money had been sitting in a fund untouched, losing out on the opportunity to generate increased returns, he said. “It’s like cash sitting under a mattress,” Summers explained, before outlining his plan to invest two thirds of that money, which he estimates would net the City $14-$30M in annual returns.

Summers says national standards and rating agency requirements calls for Chicago to only have enough cash on hand to keep the City running for 45 days, or approximately $1B. “We are going to manage our cash better, more efficiently, more responsibly,”

The 2016 appropriation for the City Treasurer’s office increased significantly, from $2.58M to $4.9M, and calls for 8 new positions. All of those new hires will be auditors, which are sorely needed, according Summers. “Today, we don’t have a single regulatory compliance function in this office.” Summers told the Council that all of the trades to date haven’t gone through a regulatory compliance check. “That’s a risk on a $6B dollar investment portfolio.” It was also revealed that the Deputy City Treasurer makes more money than Summers.

By altering the funding structure for his office, Summers cut the general fund allocation by 30% (from $2.36M to $1.66M), supplementing most of that revenue with funds from the O’Hare Airport Fund (from approximately $76,000 to $1.128M). Summers said this change will “put an end to taxpayers subsidizing enterprise funds”, as the corporate fund generates revenue through tax dollars while the O’Hare fund gets its revenue from airport fees. 

The City Treasurer’s office is in charge of paying all credit card transactions at City-owned locations. For example, if a person parks at O’Hare Airport and pays the parking fee with a credit card, the Treasurer’s office eats the credit card fee. By the end of 2015, Summers projects his office will pay out $16.9M dollars in fees for $920M in credit card transactions, or a rate of about 2%.

But the real eye-opener was the confusion aldermen had about the different responsibilities between the Treasurer’s Office and the Department of Finance. When a few aldermen asked Summers about the City’s bonds and debt, Summers said those topics are better suited for City’s Chief Financial Officer, Carole Brown. After having to explain that a few times, Budget Chairman Austin snapped at aldermen, telling them that they should have directed those questions to Brown when she testified before the Council Monday.

And while Treasurer Summers may have ambitious plans for his office, like significantly increasing investments in local neighborhoods through small business loans and financial education programs, he didn’t have much time to convey those initiatives during the hour and a half hearing. Not only did Budget Chairman Austin tell him to skip his open testimony because it was “45 pages and too long”, she rushed him several times throughout the hearing, and even complained that listening to his testimony was “like watching paint dry”. (For the record, Summers’ testimony was 5 pages, but it was part of a packet with a lot of supplemental information detailing his initiatives).

Other Highlights from Summers’ testimony:

  • As of September 21, the City has $629M in its reserves
  • The Treasurer monitors 1,521 different fund accounts; Summers found that 408 are dormant as of last quarter (which means little to no activity since January 2014)
  • The City has $389.6M in unused bond proceeds sitting in accounts dated 2010 or older. Summers says this money should be used to supplement the capital program.
  • 293 fund accounts have have a balance of $0.
  • The City will have $77.6M dollars in total investment income across the funds by 2016 ($30-40M more than the previous years).
  • The Treasurer’s Office earned $32.2M as of August, and is on target to earn $50.8M by the end of the year.
  • The 33 year-old Treasury System Summers’ office currently uses is so old that that it was implemented “three mayors ago.”

Afternoon Attendance – Joe Moreno (1), Brian Hopkins (2), Leslie Hairston (5), Gregory Mitchell (7), Michelle Harris (8), Sue Sadlowski Garza (10), Patrick Daley Thompson (11), Raymond Lopez (15), David Moore (17), Derrick Curtis (18), Willie Cochran (20), Howard Brookins (21), Ricardo Munoz (22), Jason Ervin (28), Milly Santiago (31), Deb Mell (33), Carrie Austin (34), Carlos Ramirez-Rosa (35), Emma Mitts (37), Nicholas Sposato (38), Anthony Napolitano (41), Brendan Reilly (42), Michele Smith (43), John Arena (45), James Cappleman (46), Ameya Pawar (47), Harry Osterman (48), Joe Moore (49)

INNOVATION AND TECHNOLOGY – On day two of budget briefings, aldermen seemed to be agreeing that the 311 system needs to change. Brenna Berman, Chief Information Officer and Commissioner of the Department of Innovation and Technology (DoIT), backed up Monday’s testimony from Budget Director Alex Holt,who said the City’s 311 system was outdated and would take $25 to $30 million to replace.

DoIT made major cuts in this year’s budget as part of the Mayor’s request for efficiencies in his administration. Berman says the Department saved $3.9 million in part by shutting down an old contract related to the city’s nearly phased-out mainframe, streamlining telecom management, consolidating licensing costs, and applying efficient systems across departments. Read her full hearing statement.

Ald. Sue Sadlowski-Garza (10) and Ald. Milly Santiago (31) asked why inputting 311 requests online sometimes took as long as 7 minutes to complete. The system’s just old, Berman said. “Chicago was the first city to launch a robust 311 system in 1999,” she explained. “It’s kind of like dog years, that’s an ancient system. It’s old. And it is just time to replace it.”

When asked what a 311 alternative would look like, Berman pointed to Philadelphia, Houston, and New York, who have taken a page out of the corporate book–they’re using customer relationship management (CRM) systems like Salesforce and Oracle to manage city services. Slow 311 logging online might also be because of ward office locations, she said. Some lack access to internet speeds sufficient for City work. Berman said several offices are currently in the process of getting network upgrades.

Ald. Brendan Reilly (42) also asked when the City will be in the position to switch to zero-based budgeting software, where every function is analyzed for needs and costs from a “zero base”, rather than comparing costs to the previous year. Berman said Budget Director Alex Holt is pushing to switch over, but it would have to be weighed against other technology investments the City needs over the next 1 to 2 years.

HUMAN RELATIONS– Providing a window into city budgeting, Commissioner Mona Noriega testified that the Commission on Human Resources was “one of many” City departments asked to make 10% cuts ahead of FY2016, but Noriega claimed the reduction will not impacted turnaround time on investigations. Questioning for Noriega lasted just over half an hour, with most spent on Noriega updating aldermen on the enforcement of the recent Ban the Box Ordinance. Starting January 1, 2015, Chicago expanded Illinois law restricting employers from using an applicant’s criminal background information to discriminate early in the job application process. The ordinance is aimed at giving former prisoners a fair chance at employment.

“We have no statistics because we have no complaints,” Noriega said, explaining the Department focuses more on spreading the word about Illinois state law and the Chicago ordinance through Chambers of Commerce, mailings, and newsletters. “Every place that we go we talk about it, and we try to get visuals out there as well. The outcomes are that we have more people who know about it, but I would always suspect that we could do more.”

Ald. Jason Ervin’s (29) questioning of Noriega bumped up against his 10 minute time limit, asking about housing and other discrimination that might not be quantified. “I think there are many employers that are discriminating and I don’t think it’s limited to Ban the Box,” she said, talking about the work to be done. There have been 206 complaints of discrimination so far this year, Noriega says. The largest category is employment discrimination, the next is public accommodations, and the third is housing. There have been 51 hate crimes reported this year, which like Ban the Box violations, Noriega says are likely underreported.