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FINANCE and ADMINISTRATION Office of Budget

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FINANCE and ADMINISTRATION Office of Budget FINANCE AND ADMINISTRATION Office of Budget and Management 1 Department of Innovation and Technology 6 Department of Finance 8 Department of Revenue 11 Department of Administrative Hearings 13 Department of Law 16 Office of Compliance 35 Department of Human Resources 38 Department of Procurement Services 42 Department of General Services 45 Department of Fleet Management 47 CITY DEVELOPMENT Department of Housing and Economic Development 50 Department of Cultural Affairs and Special Events 57 COMMUNITY SERVICES Department of Public Health 59 Commission on Human Relations 63 Mayor’s Office for People with Disabilities 67 Department of Family and Support Services 70 Chicago Public Library 75 311 79 PUBLIC SAFETY Police Board 81 Independent Police Review Authority 86 Police Department 88 Office of Emergency Management and Communication 96 Fire Department 99 REGULATORY Office of the Inspector General 101 Department of Buildings 102 Department of Business Affairs and Consumer Protection 105 Department of Environment 113 Commission on Animal Care and Control 116 Board of Ethics 118 INFRASTRUCTURE SERVICES Department of Streets and Sanitation 122 Chicago Department of Transportation 126 PUBLIC SERVICE ENTERPRISE Department of Water Management 129 Department of Aviation 136 OFFICE OF BUDGET AND MANAGEMENT The office of Budget and Management (OBM) develops and administers the City of Chicago’s annual budget. The budget includes operating expenses for core government functions, as well as federal, state and other public and private grants, and bond funding for infrastructure improvements. OBM also houses the Chicago Tax Assistance Center, manages several budget related system applications and supervises compensation transactions to ensure compliance with the budget. In 2010, OBM also assumed greater responsibility for overseeing the allocation of Tax Increment Financing funds and cost recovery. The office’s chief accomplishment in 2010 was producing a 2011 budget that closed a projected budget gap of $654.8 million -the largest in Chicago’s history- and passed by a vote of 43-7. Cuts to the 2010 Spending Plan To prepare for the 2011 budget, OBM took management steps to strategically make cuts throughout the year, as well as worked with departments and other stakeholders to develop management efficiencies and spending reductions for potential inclusion in the 2011 Budget. Savings announced throughout the year: ¯ On February 11, 2010, OBM announced a continuation of the hiring freeze and an across the board reduction in non-personnel expenses of 6 percent. ¯ In April 2010, the Chicago Police Department officers were awarded a new contract through arbitration which included a 10% wage increase over a 5 year period, less than the 16% the City had previously offered prior to the economic downturn and less than the 19% that the FOP had demanded. ¯ In April 2010, $13 million in savings was announced that included $8 million in savings by locking in natural gas prices, $2.8 million in debt service savings by using Build America Bonds, reduction in rented vehicles for $1.7 million, $200,000 in fuel savings, a custodial service reduction for $100,000 and a cell phone and parking audit for a total of $100,000. ¯ In June 2010, the City announced additional efforts to streamline back office processes at the Police Department to increase the number of police officers moving from behind desks to field duties. Based on a joint review between the Police Department, the Office of Budget and Management and the Civic Consulting Alliance, 44 additional officers were moved back to the street. ¯ In June 2010, the City announced several steps aimed at increasing City revenues and making government function more efficiently, including a pilot to outsource hiring, a plan to allow temporary sponsorship of bridge houses and auctioning 50 taxicab medallions. ¯ In August 2010, the City announced a series of privatization initiatives to determine whether the private sector could provide particular services more cheaply or better than City government. ¯ In September 2010, the Mayor announced three department mergers. OBM worked to reflect these mergers in the 2011 budget proposal. 1 ¯ In October 2010, Mayor Daley presented a balanced 2011 budget to City Council which eliminated the expected $654.8 million deficit through expense reductions, management initiatives and the strategic use of reserves and other financial strategies. Generating Budget Ideas In 2010, OBM solicited budget ideas from OBM staff, Aldermen, private-sector banking and finance professionals, department heads, business leaders, employees and the public to help address the anticipated 2011 budget gap. ¯ Throughout the year, the Budget Director requested budget ideas from City Council, offering to meet with all Alderman (we met with 38 of 50 Aldermen). Some of the suggestions Aldermen made that were also reflected in the budget include changes to the red light camera program, reducing consultant costs, reducing printing costs, auditing cell phones, reducing rented and owned vehicles, some privatized fleet maintenance, reductions in special events, department consolidations and streamlining inspections. ¯ In March, the Chief Financial Officer and the Budget Director met with more than 90 bankers, financial advisors and municipal finance experts. The bankers had many ideas primarily focused on privatizations, taxes, fees, debt management and restructuring and other financial solutions. ¯ In April, the Budget Office met with all departments and asked for their suggestions for budget cuts. Many of their ideas were implemented throughout the year or with the 2011 Budget including further custodial reductions, maximizing bulk rate use, lease savings, reduction in funding for New Homes for Chicago and selling off MRRF equipment. ¯ In June, the Mayor hosted a meeting with business leaders to discuss ideas to address the budget gap. Some of the ideas that were pursued include using the executive-on-loan program, using technology to improve management, outsourcing functions and continuing to pursue cost recovery. ¯ On July 16 2010, the Budget Director requested budget ideas from City employees and established an email address to receive these ideas. The Budget Office received 580 suggestions from more than 160 employees. Of the suggestions, the City already had implemented 93 of them, 12 were for sister agencies, four required state authority, 177 were determined to not be feasible. OBM considered and reviewed the remainder. ¯ In mid-September, OBM conducted a series of three public hearings on the preliminary 2011 budget. The annual hearings are designed to solicit feedback from Chicago residents regarding the needs in their communities, and how they may be reflected in next year’s city budget. ¯ Throughout the year, OBM staff reviewed these ideas, conducted needed research needed and talked to the relevant stakeholders to determine whether an idea could be implemented and to validate the savings revenue opportunity. Making a Budget Recommendation The work outlined above culminated in the Mayor’s Budget Recommendation that was introduced to City Council on October 13, 2010. This recommendation closed the gap by including spending reductions, maximizing reimbursements, acknowledging modest revenue growth, employing strategic financial options, restructuring debt, declaring a TIF surplus and borrowing from the long term reserve. 2 Budget Documents As part of the annual budget process, OBM produces a number of publications including the Mayor’s Budget Recommendations. All of the documents are produced in-house with assistance from the Graphics and Reproduction Center: ¯ The Preliminary Budget is a document developed in July of each year which projects revenues and expenditures through the rest of the year and makes estimates for the following budget year. ¯ The Budget Overview and Revenue Estimates book is a primer to the City’s proposed budget. It provides a discussion from the Mayor and budget director, a summary and highlights of the proposed budget, a profile of Chicago’s financial health, demographics, an explanation of how the City creates the budget and a glossary of terms. ¯ The Budget Recommendations document is the actual line-item budget proposed by the Mayor to the City Council for approval. Once approved by City Council, this becomes the Annual Appropriation Ordinance document. ¯ The Program and Budget Summary document describes each City department, commission or officeas well as the programs each of them oversee. It details the purpose of each department, key facts, information about the size and scope of its operations and services and lists the number of personnel dedicated to each program. The document also contains key performance management statistics, as well as discussion about recent accomplishments, strategic issues or performance objectives. ¯ The Action Plan is an implementation plan to address Chicago’s affordable housing and community development needs for the next fiscal year. It is prepared as part of the Consolidated Plan of the U.S. Department of Housing and Urban Development (HUD), which aims to foster stronger communities by coordinating programs and resources among all levels of government, as well as between the private and public sectors. ¯ The Guide to the Budget is a newly created pamphlet that helps Chicagoans better understand the City budget and the budgeting process. It includes an annual timeline of budget-planning events as well as an explanation and examples of
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