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2016 Budget Overview City of Chicago 2016 Budget Overview Mayor Rahm Emanuel The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to City of Chicago, Illinois for their Annual Budget beginning January 1, 2015. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device. 2016 Budget Overview Letter from the Mayor Dear Fellow Chicagoans, Four years ago, the City of Chicago faced an uncertain financial future. With a commitment to stabilize the City’s finances, we have made great progress by challenging the status quo. We have reduced the structural deficit to its lowest point since 2008, cutting it by two thirds. Instead of raiding the City’s rainy day fund as had been done in years past, we have placed money in our long term reserves in every budget. And, we have made city government smaller, all while working to serve our residents more effectively and efficiently. Our 2016 budget continues to build on our progress in charting a new course for Chicago’s future. While continuing to reform government, we have invested in after-school and early education opportunities, increased neighborhood services such as paving, tree trimming, and graffiti removal. We have launched transformative projects, such as the 606 trail and parks, the new Riverwalk, La Villita Park in Little Village, and the regional gymnastics and ice skating center in Morgan Park. We continue to invest in the education of our children, the safety of our streets, and the quality of life in our neighborhoods. The budget presented here continues on that path by further reducing the structural deficit through $170 million in savings, reforms and efficiencies. After passing this budget, we will have saved more than $600 million since taking office. However, all this progress is at risk if we do not address the City’s police and fire pension obligations. While our current council did not create our fiscal challenges, this council can be the one that fixes them. With this budget proposal, we will meet our obligations to ensure a secure retirement for our police officers and firefighters in a way that does not burden those who can least afford it. One thing we know for sure is that we cannot cut our way out of this crisis. Raising city property taxes is a last resort, which is why we did not increase them in my last four budgets. However, we must solve the pension challenges that threaten the progress our city has made and we must do it in a way that does not threaten the livability and safety of our city. There is hard work still ahead, but this budget addresses our largest financial challenges head on while moving forward as one Chicago. Mayor Rahm Emanuel 2016 Budget Overview Table of Contents This Budget Overview is a companion to the other documents that together comprise the City’s annual proposed operating budget, consisting of the 2016 Budget Recommendations, which contain the City’s proposed line-item bud- get, the 2016 Anticipated Grants Budget, and 2016 Draft Action Plan, which relates to federal entitlement grant funding. These documents are all available on the City’s website. All 2015 budget amounts include the 2015 supplemental appropriations as presented in the 2016 Budget Recommendations. Letter from the Mayor Proposed 2016 Budget: Key Reforms, Savings and Investments 9 Discussion of Proposed 2016 Budget Overview 21 Revenue Discussion 23 • Corporate Fund 23 • Special Revenue Funds 27 • Enterprise Funds 30 • Pension Funds 31 • Debt Service Funds 32 • Property Tax Levy 32 • Grant Funds 34 Expenditure and Workforce Discussion 35 • Personnel Costs 35 • Non-Personnel Costs 36 Capital Improvement Program 38 • Introduction and Relationship to Operating Budget 38 • 2016 Capital Improvement Program 38 • 2016 Tax Increment Financing Program 40 How Chicago Budgets • Budget Process 45 • Budget Documents 46 • Budget Calendar 47 • Basis of Budgeting 48 • Financial Policies 49 • City of Chicago Organizational Chart 50 Program and Budget Summaries by Department Departmental Budget Summaries (including benefits) 53 Finance and Administration 57 • Office of the Mayor 59 • Office of Budget and Management 60 • Department of Innovation and Technology 61 • Office of the City Clerk 63 • Department of Finance 64 • City Treasurer 67 • Department of Administrative Hearings 68 2016 Budget Overview Table of Contents (continued) • Department of Law 69 • Department of Human Resources 72 • Department of Procurement Services 73 • Department of Fleet and Facility Management 74 Infrastructure Services 77 • Department of Streets and Sanitation 78 • Department of Transportation 82 • Department of Aviation 87 • Department of Water Management 89 Public Safety 93 • Chicago Police Board 94 • Independent Police Review Authority 95 • Chicago Police Department 96 • Office of Emergency Management and Communications 97 • Chicago Fire Department 98 Community Services 99 • Department of Public Health 100 • Commission on Human Relations 102 • Mayor’s Office for People with Disabilities 103 • Department of Family and Support Services 104 • Chicago Public Library 106 City Development 107 • Department of Cultural Affairs and Special Events 108 • Department of Planning and Development 109 Regulatory 110 • Office of the Inspector General 111 • Department of Buildings 112 • Department of Business Affairs and Consumer Protection 114 • Commission on Animal Care and Control 116 • License Appeal Commission 117 • Board of Ethics 118 Legislative and Elections 119 • City Council 120 • Board of Election Commissioners 124 General Financing Requirements 125 Glossary Budget Detail • How to Read Budget Detail 131 • Revenue 132 • Expenditures 139 • Personnel 141 • Grants 145 Appendices • Appendix A - Chicago Facts and Demographics 157 • Appendix B - 2016 Property Tax Mechanics 165 • Appendix C - 2016 Capital Improvement Program 169 2016 Budget Overview Proposed 2016 Budget: Key Reforms, Savings and Investments 2016 Budget Overview Proposed 2016 Budget Budget Priorities are City Priorities pension obligations. An additional $318 million in 2015, $109 million in 2016, $53 million in 2017, and $63 million The City’s 2016 budget continues to make smart investments in 2018 will pay for the City’s obligation to the public safety in families, neighborhoods, infrastructure and public safety, pension funds in those years. By raising the property tax levy while balancing those investments with the City’s current to solely support growing pension obligations, the City will financial challenges. It includes supporting the construction of meet its commitment to our first responders with a secure and affordable housing units for seniors and investing an additional stable source of revenue. To ensure the property tax contained $1.5 million in afterschool programming for youth. It in this budget is progressive and fair, the City is seeking to achieves $28 million in annual operational savings for garbage significantly expand the homeowners’ exemption for those collection, and reduces the City’s structural deficit to its lowest families who can least afford a tax increase. since 2008. Every decision in this budget, from reform to revenue, ensures With every budget, Mayor Emanuel identifies all opportunities that the City meets its pension obligations without jeopardizing to reform government operations, achieve savings and eliminate the progress made over the last four years. The 2016 budget waste. An additional $170 million in savings, efficiencies protects vital investments in Chicago’s neighborhoods while and reforms are included in the 2016 budget. Overall, the putting Chicago on a path towards a stable and sustainable Mayor’s five budgets have saved more than $600 million. financial future. The savings and reforms have been achieved by eliminating positions, transforming the way the City collects garbage, making changes and reforms to healthcare, and consolidating Good Governance technology functions across departments to one central IT The City of Chicago continues to streamline the way it department. governs by cutting the operational deficit each year, from $655 million in 2011 to $233 million in 2016. While each budget focuses on reform, these savings and reforms alone are not enough to meet the City’s obligation Smarter, Leaner Government: In the 2016 budget, as in to fund pensions for police and fire personnel. Every previous budgets, Mayor Emanuel and the City Council dollar of the City’s property tax increase starting in 2015 is identify all opportunities to streamline government, cut specifically committed to fund the City’s police and fire waste, and enhance efficiencies across services. The 2016 9 2016 Budget Overview Summary of Proposed Budget (continued) savings and reforms include: refining grid garbage collection Rainy Day Fund: Four years ago, the City started to rebuild and redirecting those resources to tree trimming and rodent its reserves in order to enhance its long-term stability. Rather abatement; saving $3.9 million in IT costs; adding $22 than raiding the rainy day fund, Mayor Emanuel has added million from TIF reform to help close the budget gap; and to it annually. Since 2012, the City added $45 million into transitioning street sweeping to a grid based system for a the rainy day fund and will continue to build its reserves over savings of $3 million. The proposal also reflects changes the next four years. In 2016, the City will add $5 million to to employee and retiree healthcare which will provide $40 the rainy day fund. million in savings in 2016. In previous years and continuing into 2016, the City achieved savings by coordinating projects across infrastructure departments and utilities, consolidating technology functions across departments to one central IT department, terminating leases and relocating employees to City-owned space. Together, these changes make core service delivery more efficient and achieve real savings annually. At the same time, the numbers of government positions have been steadily decreasing over time. The City has identified 150 vacant positions to eliminate for 2016.
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