Sections:

Article

Mayor announces he will declare a partial TIF 'surplus'... How much will go to the Board of Education and what the Board will do with it is unclear, although Rahm wants it to go for pensions for non-teacher CPS workers

Buried in more than 30 pages of various documents sent out by Chicago Mayor Rahm Emanuel's press office is a short note indicating that the mayor will declare a partial TIF surplus in response to pressure from various groups. One of the oddest things about the announcement (in addition to the fact that it is truly buried in a larger document) is that Emanuel claims that the declaration of the partial TIF surplus is in response to urgings by groups including the Civic Federation and aldermen, while ignoring the fact that the largest number of groups urging the TIF surplus (for more time than Rahm's been mayor) have been the city's unions, specifically the Chicago Teachers Union and the Service Employees International Union.

For the past six months, union members have protested, among other things urging the TIF surplus. Union members have also testified at every meeting of the Chicago Board of Education since Rahm Emanuel appointed his Board in June 2011, urging the Board members to sign the pledge to ask for TIF funds for the schools. (All refused, at the September 28 Board meeting, Board President David Vitale refused several times...).

Since Rahm Emanuel's Board of Education took office in June 2011, Chicago Teachers Union President Karen Lewis has been asking members of the Board of Education to ask the mayor to declare a TIF surplus so that the money could go to the schools. Above, Lewis speaking with the press after her remarks to the August 24, 2011 meeting of the Board. Substance photo by George N. Schmidt.The announcement came buried in a document sent to the press by the Mayor's Press Office entitled "A few facts about the Emanuel administration's 2012 Budget" (reprinted in its entirety below). The part about TIFs was the fourth entry in a list of stuff.

According to a City Hall press release dated October 12, 2011:

Declaring a TIF surplus

The Mayor's Office acknowledges the consensus around declaring a surplus to ensure taxpayer dollars are invested in the city rather than sitting in savings accounts. As the Mayor's staff develops performance metrics to target specific districts for surplus, they have been urged by aldermen, and budget watchdogs like the Civic Federation, the Inspector General and others to declare a surplus in 2012 and put those unencumbered funds to use for Chicagoans. In the short term, the City will take the TIF Task Force’s recommendation to conservatively declare a surplus of 20 percent of uncommitted funds while a more comprehensive, long-term evaluation system is put in place.

From "no deal" to a "done deal."

The question now is how many of those dollars will wind up at CPS.

The Chicago Tribune had reported the deal involving the TIF surplus as of 6:00 a.m. in their on line and print editions. The Sun-Times reports in its print edition that Rahm is going to ask that the TIF surplus go from the Board of Education for pension costs for non-teaching people.

A FEW FACTS ABOUT THE 2012 BUDGET (Chicago press release dated October 12, 2011):

A Few Facts About the Emanuel Administration’s 2012 Budget

Hotel Tax

A small increase of approximately $1.78 will put Chicago on an equal level with other major cities like Los Angeles and New York City and it will help increase revenue that supports tourism, not deters it. With the anticipated 5-7% increase in hotel occupancies due to the next year’s G8 and NATO summits, as well as several other major conventions and conferences in Chicago, the City does not foresee a decrease in tourism revenue as a result of this modest increase.

In 2010, Chicago hosted 39 million domestic and overseas visitors, including 28 million domestic leisure travelers, 10 million domestic business travelers and 1 million overseas visitors. The contribution to our local economy and the jobs created and maintained by their visit to our city is essential. In fact, the tourism industry supports 125,000 jobs in the city. To avoid eliminating any of the events that millions of people from around the world come to see, we will impose this small fee – one that will put us on par with Los Angeles and New York City – on those visitors who stay in Chicago’s hotels.

Congestion Fee

Traffic costs the region $7.3 billion a year – nearly double previous estimates – in lost time, fuel and environmental damages. Our streets are crowded, roads in need of repair and pollution created by drivers is unhealthy for Chicagoans. Suburban drivers who use city services and infrastructure need to help pay for the costs. The congestion fee is an incentive for drivers to take public transportation or pay more to park downtown. Evidence shows that a small increase in parking fees like this leads to a decline in the use of automobiles for transportation, which reduces congestion, pollution, and the need for road maintenance. The City will use revenue from the congestion fee to rebuild two of the busiest “L” stations in the downtown area and build a new bus rapid transit system in the downtown area. The Metropolitan Planning Council and Inspector General have endorsed congestion pricing.

Grid System for Garbage Collection

We owe it to our residents to deliver services in the most efficient and cost effective manner possible. Chicago’s ward-based garbage system is obsolete and other cities offer the same service at substantially less cost because it’s done on a grid. We are the only major city that is not on a grid system and it is unacceptable that collecting garbage in Chicago costs $110 more than it does in Los Angeles. A grid system will not eliminate superintendents who will continue to ensure quality service delivery for Chicagoans, and it will allow the city to use the achieved savings to potentially expand recycling across the city.

Declaring a TIF surplus

The Mayor's Office acknowledges the consensus around declaring a surplus to ensure taxpayer dollars are invested in the city rather than sitting in savings accounts. As the Mayor's staff develops performance metrics to target specific districts for surplus, they have been urged by aldermen, and budget watchdogs like the Civic Federation, the Inspector General and others to declare a surplus in 2012 and put those unencumbered funds to use for Chicagoans. In the short term, the City will take the TIF Task Force’s recommendation to conservatively declare a surplus of 20 percent of uncommitted funds while a more comprehensive, long-term evaluation system is put in place.

Reduction in Library Hours

While many other cities across the country are shuttering libraries in these tough economic times, Chicago will keep all of its libraries open by reducing service hours across the board. Despite reducing the weekly hours, all of the programs and services Chicagoans use at the libraries will remain intact.

Coordinating Public Safety

The Chicago Police Department has significantly reduced high-level bureaucracy through a reorganization of top-level staff that created a streamlined command staff structure that is more efficient, works smarter, and saved one million taxpayer dollars. The Department is going to do a similar consolidation at the district and area levels to ensure that we are getting the most out of every single officer, every single resource, and serving every single community and resident. Additionally the Fire Department Headquarters will merged with Police Department Headquarters to further strengthen the collaboration between these critical first responders. Having Fire and Police together will allow for daily interactions and coordinated planning that will help identify overlaps, and facilitate a more efficient division of administration responsibilities.

###




This e-mail, and any attachments thereto, is intended only for use by the addressee(s) named herein and may contain legally privileged and/or confidential information. If you are not the intended recipient of this e-mail (or the person responsible for delivering this document to the intended recipient), you are hereby notified that any dissemination, distribution, printing or copying of this e-mail, and any attachment thereto, is strictly prohibited. If you have received this e-mail in error, please respond to the individual sending the message, and permanently delete the original and any copy of any e-mail and printout thereof.



Comments:

October 13, 2011 at 10:52 PM

By: Jeff Burdick

Rahm Emanuel

Nice Rahm. $220 million in "no new taxes" that will come out of taxpayers pockets. Furloughs for average workers. Teachers expected to work longer day for less pay. You'd almost accept it all of the upper 1% didn't go mostly unscathed and the TIF slush fund sits there waiting to be given to unnecessary and unvoted upon for-profit projects pushed by political and corporate elites. And now Rahm is working to help CME -- which made $1 billion last year -- lower its Illinois tax burden (even after the city gave the CME $15 million last year in TIF dollars to renovate its own rental building). All you can do is laugh... at Rahm in this humorous YouTube video: http://www.youtube.com/watch?v=OBN5bxxq01I

October 14, 2011 at 6:41 PM

By: Bob Busch

End Of An Era

Another F Word

This word is critical in understanding what is could happen to your pension if

Both SB 512 and HB 3827 pass .Our word is:

Fiduciary

Black's Law Dictionary describes a fiduciary relationship as "one founded on trust or confidence reposed by one person in the integrity and fidelity of another." A fiduciary has a duty to act primarily for the client's benefit in matters connected with the undertaking and not for the fiduciary's own personal interest. Scrupulous good faith and candor are always required. Fiduciaries must always act in complete fairness and may not ever exert any influence or pressure, take selfish advantage, or deal with the client in such a way that it benefits themselves or prejudices the client. Business shrewdness, hard bargaining, and taking advantage of the forgetfulness or negligence of the client are totally prohibited by a fiduciary.

As fiduciaries, financial planners must make fair and complete disclosure of all material facts and must employ reasonable care to avoid misleading their clients. The utmost good faith is required in all their dealings. Simply put, fiduciaries must exhibit the highest form of trust, fidelity and confidence, and are expected to act in the best interest of their clients at all times.

The distinction between a financial planner with a fiduciary interest and a salesperson is crucial. A financial planner, under common law and by some statutes, is a fiduciary. A financial planner must always provide services and advice in the best interests of the client. Whereas salespeople may have their own motives and interests at heart and offer goods and services for a price, a fiduciary must serve the client, if necessary at the cost of the fiduciary's own interests.

It is generally believed that fiduciaries perform their trades for reasons other than money and feel a sense of responsibility that goes beyond simply making a living. To paraphrase Supreme Court Justice Brandeis: "It is an occupation which is pursued largely for others and not merely for oneself. It is an occupation in which the amount of financial return is not the accepted measure of success."

This is why we elect Pension Trustees as our fiduciaries .A new bill introduced

On October 5, 2011 will in effect eliminate this trust between teachers, and all

other Chicago employees, by creating new boards. This little paragraph buried

in the pension bill SB512 has the potential to wipe out all our pension assets:

"The participant shall not be deemed a fiduciary by reason of providing investment direction. A person who is a fiduciary, including the plan sponsor, shall not be liable for any loss resulting from the investment direction of the employee and shall not be deemed to have breached any fiduciary duty by acting in accordance with that direction. The retirement system, the Illinois State Board of Investment, and the employer do not guarantee any of the investments in the employee's account balances."

If my command of English is correct this will alter the fiduciary our pension

trustees, four will be appointed by the mayor three elected by us. It will in effect

remove the responsibilities and absolve them from any liability in case their actions

cause our pension fund to disintegrate.

Taken in total the passage of these bills will allow the mayor to transfer

ten billion dollars of current assists in The Teachers Pension fund into new

investments. A staggering transfer of wealth.

Add your own comment (all fields are necessary)

Substance readers:

You must give your first name and last name under "Name" when you post a comment at substancenews.net. We are not operating a blog and do not allow anonymous or pseudonymous comments. Our readers deserve to know who is commenting, just as they deserve to know the source of our news reports and analysis.

Please respect this, and also provide us with an accurate e-mail address.

Thank you,

The Editors of Substance

Your Name

Your Email

What's your comment about?

Your Comment

Please answer this to prove you're not a robot:

1 + 1 =