Tag Archives: BGA

Chicago Inspector General Releases 63 ‘Budget Options,’ Proposes $3 Billion in Savings for 2012

Different year. Different administration. Same story: the city of Chicago has a fiscal mess to clean up.

To that end, Inspector General Joseph Ferguson releases a “Budget Options Report” meant to “support efforts to balance the budget by arming the public and City officials with context, basic data, and analysis needed to inform the tough choices ahead.”

The report includes some 63 options that would purportedly save upwards of $3 billion. Here are a few examples highlighted by the IG’s office:

  • Reducing the ratio of managers to non-supervisory employees in City government to save more than $100,000,000 annually
  • Eliminating all Tax Increment Financing Districts to increase tax revenues to the City’s general fund by an estimated $100 million annually
  • Increasing the work week of all City employees to 40 hours to save approximately $40 million annually
  • Implement Congestion Pricing for vehicular traffic that is estimated to generate an additional annual revenues of $235 million

Here’s the statement from the IG’s office:

September 26, 2011

Focused on meeting its mandate of promoting efficiency and effectiveness in City government, the City of Chicago Office of Inspector General (IGO) today released its annual report of Budget Options for the City.

The IGO’s Budget Options report for the 2012 budget provides a total of 44 separate, stand-alone options to cut spending. This year’s report also includes 19 possible revenue generating options, including new or restructured taxes, tolls, and fees. In total, the 63 options detailed in the report provide background for nearly $3 billion in possible savings or new revenue for the City. Each option includes a brief overview of how proponents and opponents might argue each option, as well as a new section that notes important questions and discussion topics for the public and decision makers.

“In last year’s report, we provided data and analysis explaining that Chicago’s budget was fundamentally broken” said Inspector General Joseph Ferguson. “One year later, the situation remains difficult. The new Administration has candidly acknowledged the fiscal mess it inherited and has publicly committed itself to fixing it. This report is meant to support efforts to balance the budget by arming the public and City officials with context, basic data, and analysis needed to inform the tough choices ahead.”

The list of options is not meant to be an exhaustive one, and the inclusion of any option in this report is not, and should not be, construed as an endorsement by the IGO. The IGO intends to use public feedback and official responses to the report in order to provide periodic updates and corrections to this year’s report.

>> To view the online version of the budget options, which will include updates, and post your comments on the options go here.

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Filed under Fiscal Reform, Inspector General, Streamlining Government, TIFs

Daily Herald Op-Ed: Best Practices for Government Use of ‘P-Cards’

The BGA’s Policy & Government Affairs Coordinator, Emily Miller, shines a light on procurement cards, or p-cards, which are taxpayer-financed debit cards issued directly to government employees to make work-related purchases. P-cards are becoming increasingly pervasive and potentially problematic in Illinois government, and in connection with a recent BGA investigation, Miller offers in an Aug. 2 Daily Herald op-ed best practices for p-card usage:

Keeping Tabs on Taxpayer-Backed ‘P-Cards’

By Emily Miller, BGA Policy & Government Affairs Coordinator

Image/Creative Commons

We all know about credit cards and debit cards. Now, meet the “p-card.”

In recent years, use of the p-card — a procurement card issued directly by government to employees to make work-related purchases — has exploded. Nationwide, p-card spending jumped to $17.7 billion in 2006, compared with only $3 billion in 1996, according to the latest data.

Basically, a p-card acts as a taxpayer-financed debit card. The p-card draws funds for purchases directly from designated bank accounts, which are backed by the tax revenues of a school district, suburb or other public body. Only permissible items can be bought with a p-card.

Although the federal bureaucracy is leading the way in p-card distribution, many local governments in Illinois — including Grayslake Elementary District 46, which the Daily Herald and Better Government Association reported Monday — are now issuing them to employees.

This growing popularity is forcing many government providers to rethink how p-cards are being managed.

According to the General Accountability Office, the independent federal watchdog agency, p-card waste, fraud and abuse often come as a result of inadequate program operating procedures and ineffective program oversight.

Common examples include making personal purchases, using the p-card for unauthorized buys such as alcohol or nonessential goods and services, “gold-plated” expenses, subsequent theft of purchased goods, and use of the p-card for goods or services that should be subject to a bidding process.

Without oversight, the waste of taxpayer dollars is virtually unavoidable. To avoid problems, here are some suggested best practices for governing bodies:

  • Develop a comprehensive written p-card policy. This policy will outline what is and is not allowed and should also indicate who is allowed to hold a p-card. That list of employees should be limited to those who need to make purchases in the course of their daily job.
  • Detail disciplinary action. Each government entity should have a written p-card oversight plan that outlines both oversight and disciplinary actions necessary to rectify any misuse.
  • Limit p-card use. Permissible use of the p-card should be limited only to necessary government expenses under a certain dollar amount, though each public body should develop its own specific lists of permissible expenses based on its public duty.
  • Improve communication. Cardholders should be made aware of the policy through an interactive training program that goes beyond just reading and signing the p-card policy.
  • Finally, a mandatory and documented review by a supervisor or approving official, someone other than the cardholder, should occur for all purchases. Using a checklist, the supervisor or reviewing official should:
    • Review an itemized invoice showing everything that was purchased and what was paid for each item.
    • Ensure the purchase serves a legitimate government need specifically permitted in the p-card policy, not a personal or impermissible one.
    • Ensure a transaction has not been split into segments to avoid maximum purchase amounts, or to get around the competitive bidding process.
    • Monitor the items purchased to ensure no excessive or “gold plated” expenses were incurred.
    • Verify that the items ordered were actually received by the public body.
    • Promptly report and attempt to reconcile all financial discrepancies within a set timetable, and help to enforce disciplinary action where appropriate.

Without strong financial internal controls dictating both appropriate use and required oversight of the program, there is nothing to deter erroneous use of p-cards, or to promptly detect and eliminate misuse and abuse.

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Filed under Fiscal Reform, Procurement

POLL: Expand Illinois Gambling?

Image courtesy joelk75/Flickr

A bill to expand gambling in Illinois and authorize a Chicago casino was recently passed by the General Assembly. Now, Governor Pat Quinn must decide whether to sign the bill into law, kill it with a veto, or rewrite and change the legislation.

But BGA followers won’t have to wait for Quinn’s decision. You can weigh in on the gambling issue right now by taking the BGA Online Poll, which asks:

For more information, make sure to check out our Illinois Gaming Expansion Bill FAQ. And find out more about the June 29 BGA Forum on the proposal for a Chicago casino.

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Filed under Gaming, Polls

Country Club Hills should tee up some reforms

Credit card expenses and government salaries in south suburban Country Club Hills seem to be—and we’re putting it mildly—out of control.

This isn’t some oil-rich Middle East monarchy we’re talking about. Country Club Hills is a nice middle-class town where municipal debt is around $50 million and family income is typically below $60,000 a year.

It’s not the kind of place where the mayor and city manager—in addition to receiving six-figure salaries, and other perks—should be dropping $80,000 on food and drinks in a single year, using taxpayer-funded credit cards.

So aside from griping, what should we do about it?

For starters, in the opinion of the Better Government Association, city officials need to talk this out more—in a public, open meeting.

In so doing, the Country Club Hills mayor and aldermen (who recently forced more than a dozen job cuts, against the mayor’s wishes) should consider:

  • Eliminating all municipal credit cards and changing to a reimbursement system. In other words, you want to buy something? You pay for it, then get it reimbursed if it’s a legitimate expense. That’s how much of the business community operates. (The City Council recently voted to yank away some credit cards, but left the mayor with his.)
  • Stripping away all expense accounts for city officials. From what we can tell, the accounts that exist now are loosely monitored, and some expenditures don’t seem to have much if any value to the community. A clothing allowance? Please.
  • Instituting some controls on spending. Should taxpayers really be paying for booze on lake cruises, and chicken at Hooters?
  • Revisiting mayoral and aldermanic salaries and perks, which, by almost anyone’s standards, are overly generous.

Country Club Hills just went through a tough election in April, when the balance of power started shifting away from the mayor to the City Council, so we recognize that our proposed reforms could be politicized. But as a non-partisan civic group, that’s not our intent.

Even so, we’re hearing about other potential problems in this city of about 16,000, so we plan to keep our eyes on the community, and offer other suggestions as needed.

The bottom-line is this: residents, not politicians, should come first.

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Will Illinois State Lawmakers Accept Brunt of Pension Reform?

Minority Leader Tom Cross with Speaker Madigan

One of the public pension reforms being proposed in Springfield this week will have its biggest economic impact on lawmakers.

As the BGA Think Tank reported last week in “Who can Fix State’s Public Pension Crisis? Try H.G. Wells”, lawmakers, led in the Republican House by Minority Leader Tom Cross, are considering a plan requiring all current public employees to choose one of three options in regard to future retirement benefits. Employees can choose to enroll in the pension plan available to new employees, which offers a lower state contribution; they can enter a 401(k) plan; or they can keep their current benefits and contribute a significantly larger percentage of their pay to the pension fund.

It’s that final option that has had lawmakers and staff scrambling to crunch numbers in Springfield to determine just how much more employees would have to contribute.

Originally, the pension reform bill called for an increase in all employees’ contributions to 20 percent—an idea that failed to garner enough support to get either Democrats or Republicans to vote for it. So lawmakers and staff have been crunching numbers to determine how much of an increase in employee contributions to pensions would actually be required for each group of employees to make the pension system financially sound.

In our recent “Sticker Shock” investigation into Illinois public pensions, the BGA reported that many of the state’s best-known politicians are receiving in large annual pensions and that more than 10 percent have already been paid more than $1 million since retiring.

Now, according to the Capitol Fax Blog, the numbers have been released, and the actual increase in the percentage of pre-tax income that goes to pensions is largest for state legislators. According to the Blog, the General Assembly Retirement System employee contribution would increase from 11.5 percent to 24.89 percent.

Other public employees would see increases in their contributions, but none as significant as those aimed at lawmakers.

The proposal is far from a slam-dunk. Unions, who oppose the plan, point to the Illinois Constitution, which states that pension benefits for current members cannot be diminished. They are working hard under the dome and on the airwaves to fight against changing benefits for its members.

Even if a bill changing pensions for current employees passes and is signed by the governor, the American Federation of State, County, and Municipal Employees, which represents 75,000 public employees in Illinois, will likely file a lawsuit challenging its constitutionality.

While the proposal itself may not pass the legal and political muster it needs to succeed, amidst all the talk about budget slashing and shared sacrifice, it is refreshing to see lawmakers take a look at ways they can help share and alleviate the fiscal burden of our state.

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Filed under Pension Reform

Chicago Tribune Editorial: ‘Does Citizen Daley deserve a security detail?’

By Andy Shaw, BGA President & CEO

The following editorial by BGA President & CEO Andy Shaw appeared in the May 13 Chicago Tribune—read it here.

Mayor Richard Daley’s request for a security detail after he leaves office creates a golden opportunity for Mayor-elect Rahm Emanuel to demonstrate his approach to solving a problem that has fiscal, civic and public safety components.

Throw in the political and human dimensions for good measure and what you have is a microcosm of virtually every daunting challenge Emanuel will face in the coming months.

The security issue goes beyond Daley. Other recipients include the incoming mayor, the city clerk and treasurer; Ald. Ed Burke, chairman of the Finance Committee; and anyone else on an “as needed” basis.

Questions that have to be answered include: Continue reading

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Filed under Andy Shaw, Commentary

Kennedy Challenges BGA on Police Protection for Politicians

By Andy Shaw, BGA President & CEO

Christopher G. Kennedy (Photo/Facebook)

The following commentary was published this weekend in the Chicago Sun-Times. >> Click here to read Chris Kennedy’s letter to me about police bodyguard details for politicians.

Christopher Kennedy, president of the Merchandise Mart and U. of I. board chairman, is one of Chicago’s most prominent business and civic leaders. He also grew up with the unimaginable scars of two horrific family tragedies: The assassinations of his uncle, President John F. Kennedy, in 1963, and his father, Robert, during the 1968 Presidential campaign. Few people have a closer connection to the existential dangers of public service in the emotional and sometimes irrational world of politics and public service. So when Chris wrote me recently to weigh in on the controversy over the police bodyguard detail that’s been protecting Chicago alderman and Finance Committee chairman Ed Burke for several decades, I paid close attention.

“Now is the wrong time to decrease protection for public servants,” Kennedy wrote. “It is a time of budget cuts, layoffs, vendor consolidation and cuts to all services, all of which are enormously disruptive to people’s lives. These victims of the recession in general and government cuts in particular sometimes mischannel the anger caused by such disruption. At these times an elected official like Alderman Burke—who has long tenure, a committee chairmanship and a high-profile—is a potential focus for misplaced anger, hatred and revenge.”

The letter arrived a few days before a news report that one of Burke’s southwest side constituents had been arrested for leaving a threatening phone message at Burke’s ward office.

Let me put this in context: The Better Government Association filed a lawsuit against the Chicago Police Department earlier this year because CPD refused to provide us with financial and manpower details of Burke’s security detail. We’re not advocating for or against his police protection, and we’re not trying to jeopardize his safety, but we do believe the public has a right to know how many officers are assigned to the detail, and how much it costs taxpayers. We don’t need a day-by-day security breakdown—how many cops in how many cars—but we do believe that annualized statistics will give the public a sense of how police are being deployed and tax dollars spent at a time when both are in short supply.

CPD has refused to provide the information, despite repeated Freedom of Information Act requests, claiming it’s a private security matter, but we respectfully disagree. Annualized data won’t endanger Burke, but it will make it easier to decide if one of Chicago’s 50 aldermen deserves a 24-7 bodyguard detail wherever he goes.

Chris Kennedy seems to agree with the transparency argument, writing that “the FOIA process has provided a pretty good vehicle for increasing the amount of disclosure and transparency and as such is a good tool for the BGA.” He adds that “pursuing information is a worthy goal” before adding his personal view of the Burke situation.

Burke’s security detail has been a hot-button issue for years—the late mayor Harold Washington tried to scale it back in the 1980’s, when he and Burke were engaged in the pitched political battle known as “Council Wars.” Burke won the security showdown in 1986 when a Cook County judge blocked Washington’s cutback effort, and Mayor Daley, who has his own bodyguard detail, has never challenged Burke on the security issue. Mayor-elect Rahm Emanuel said publicly the Burke detail is probably unsupportable at a time when taxpayers and city workers are being asked to sacrifice, but Emanuel hasn’t said anything about downsizing his own security or reviewing the police protection the city clerk and treasurer receive.

As for the man who threatened Burke, he apologized, blaming the phone call on his medical problems, which include AIDS, depression and the abuse of both alcohol and prescription drugs. “I’ve never been in trouble with the law,” Timothy Hercog said. “I’m not a violent person. I’ve never hurt anyone.”

In his letter to me, Chris Kennedy says “one of the great byproducts of a strong BGA is the potential to lure high-quality candidates back into government service. Somehow we need to strike the right balance between cost-cutting and personal safety.”

We couldn’t agree more. We’re simply arguing for transparency—our right to know the basics so the right decisions can be made. As revered Supreme Court Justice Louis Brandeis said in 1913, “sunshine is the best disinfectant.” That’s still true nearly a century later, as we celebrate “Sunshine Week,” which recognizes the first step in assessing the performance of government is transparency. You can’t assess what you can’t see.

Chris Kennedy makes a strong case for protecting some elected officials. So in the spirit of Brandeis, transparency and “Sunshine Week,” CPD should release relevant information about the present so we can make an informed decision about the future.

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Filed under Andy Shaw, Commentary