Council Bluster re: CFO, City Leases, Parking Meter Deal, and TIF Information in the City of Chicago Finance Committee Meeting of June 1, 2009

Yesterday I testified at the Chicago City Council on behalf of an ordinance that would require the city Comptroller to publish documents relating to the financial performance of leases over $10 million (parking meters, Skyway, Midway, etc.). The ordinance passed out of the Finance Committee, which is a good thing.

While waiting to testify, I saw a bunch of stuff:

• The meeting started with Burke asking us to "rise and bow our heads" for the two police officers who are in the hospital ("one at Stroger and one at Christ Advocate") from incidents over night. Sad stuff
• The first thing on the agenda was something about domestic partners in City government. Frankly I didn't catch exactly what this was about, but Ald. Tom Tunney said that there were only about 100 registered domestic partnerships. He indicated that some of these partnerships were among opposite-sex partners. He and the Chairman had an exchange related to that for a while. Burke kept saying, "you mean heterosexuals who happen to live togeth--" and Tunney drew him back to more neutral language. Pretty entertaining
• Ald. Margaret Laurino and Ald. Gene Schulter introduced an ordinance that would have representatives of Nationwide Retirement Solutions-- the company that manages the City workers' deferred compensation plan-- come to the Finance Committee twice a year and report to them
• Then some people from Nationwide were called to the hotseat, along with the City Comptroller. They note that they have $2.2 billion of City employee money under management and take a "10 basis point" bump out of it, for $2.2 million per year
• They say that the fund was at $2.5 billion at its peak, and the reason why the funds are performing so well is that so many City employees have chosen the slow-growth 4% return choice. Smart!
• Under some tough questioning from Ald. Burnett, we discover that the company is profitable. Also, they apparently have 5 employees devoted to the City-- 4 are African-American and one is Latino
• They were lambasted by Ald. Ray Suarez for not employing enough Latinos (i.e. perhaps not complying with City ordinance). The Nationwide people insisted that they were in compliance, but then the Alderman started counting employees and noting the races and gender of each employee they had working on City business
• Suarez asks the guy what his profit margin is. The guy thinks for a minute and says something like, "um, 15 percent". Suarez does a spit-take and notes, "your employees must be low-paid" (based on his calculations of the number of employees they have). We never get a straight answer re: number of employees, because they also do Cook County work, and we don't know how much the County pays them, but all of the alderman seem certain they know exactly what Nationwide's budget is, based on their 10 minutes of thinking about it
• Schulter gets to the heart of the matter of this meeting by asking who these guys report to. Apparently they answer quarterly to the "Deferred Compensation Committee", which is made up of the CFO, the Comptroller, and the Director of Human Resources. All of these people are in the Executive Branch of City government
• In a happier note, they indicate that they had "667,000 hits" to their Web site last year, so they must be popular. Laurino says that maybe everyone was going there to switch their distributions because the market was blowing up
• At one point, Finance Committee Chair Ed Burke listed each of Nationwide's subcontractors, and checking off the nationalities of the majority owners. Blackwell Consulting for IT (African-American, no money spent with them in the last year), and the Kaleidoscope Group for diversity training (minority, didn't really catch ethnicity, $1.2 million spent last year), MG Printing (no expenditures last year), Blackstone (Asian owned, marketing services, $34,000 spent last year), and Holland (African American owned, unknown services). NOTE: I may have some things wrong here-- I will fix when/ if I see the transcript. It was a mad dash of subcontractor ethnicity and dollar frenzy
• The $1.2 million diversity training leading to one Latino employee pretty much made Suarez leap from his leather seat, metaphorically
• Next up was an ordinance from Ald. Tom Allen looking for a 30-day review period prior to the lease or sale of city assets. They all talk about how the genesis of this was the famous fire drill they all went through to approve the parking meter lease in two days
• On the hot seat this time was City of Chicago Chief Financial Officer Gene Saffold, who replaced Paul Volpe (the guy who cut the parking meter deal and was then appointed Daley's Chief of Staff
• Saffold's point was that as CFO, he needs the ability to privately take bids without things becoming public. He says these leases take over a year to complete and he would work closely with the Council. Apparently that had not happened before. Saffold, in the day's understatement, says that "perhaps the process could be tightened".
• Ald. Burke reminds the complaining Aldermen that "any two members can defer the report" and stop a lease with parliamentary measures. Seems like a veiled burn to let them know that they could have stopped the parking meter lease if they had the guts
• Ald. Bernie Stone-- a man who is not young-- goes even further and gets in a pretty good zinger by saying that it takes a majority to pass an ordinance out of committee. He says, "Are we children? Do we need hard and fast rules (like this one re: 30 days)?"
• However, in a pretty good retort that reminded me of those Cracked Magazine "Shut Ups" of my youth, Ald. Leslie Hairston reminds her colleague from the 50th Ward that there were people who voted against the sale at the time and they were "overruled" and basically told to be quiet
• Ald. Scott Waguespack, another no vote, asks Saffold what he thinks about the amount of information the Council was given for the parking meter vote. Saffold pulls out his "I wasn't here" card and Waguespack asks him if maybe somebody in the office filled him in with enough info that he might be able to give an opinion. That didn't really go anywhere, as he reiterated his process-tightening initiative
• Ald. Manny Flores calls for some third-party analysis of the bids (from someone other than the executive branch and the firms working on the executive's behalf). Saffold says that if the lease was worth more, "there would have been higher bids", which of course assumes that the free market was the only force influencing the bidding
• Toward that end, Ald. Ed Smith gets pretty aggressive in asking for the names of firms working on the bids. Saffold mentions Katten Muchin, William Blair and some others. Smith says he would have liked to have seen an analysis-- the "upsides and downsides" of the bids, "because we are getting beat to death on this parking deal" from constituents
• From the floor, Ald. Allen changes the notification from 30 days to 15 days, and it passes out of committee
• Next up is Christine Raguso, Acting Commissioner of the Department of Community Development, the CFO again, and the Comptroller. They try to show some charts and hand-outs explaining the status of TIF money and the Alderman complain mightily that none of it makes any sense or represents reality
• Ald. Fredrenna Lyle, for instance, looks at a line item that she says is misleading. It looks like there is money available in a specific TIF in her ward, but in fact, "they raped my TIF for schools". Not sure what that's all about, but it sounds like there's a story there. During a previous lull, Ald. Burke wished Ald. Lyle a happy birthday today
• Ald. Richard Mell stays seated but indicates that the paper handout in front of him "is confusing". It seems that Aldermen have the same trouble that other citizens do in understanding what's up with TIF money
• Next up was the city lease notice ordinance. After a slight change by co-sponsor Ald. Rey Colon, I was called up by the Chairman. I made a very brief statement in support. The oridinance was passed before I could take my seat

This parking meter lease trouble is not over, not by a long shot.

Comments

[Steven Vance]

Thanks for testifying!

[jsb]

Could you report on every Council session from now on?