[Chicago’s] Chief Financial Officer Lois Scott reminded council members that absent significant changes to pension plans, the city will be forced to drastically cut services, raise taxes or do both to close a funding gap that could reach $700 million in just a few years, aldermen said. …
… Lawmakers are looking to fix the state’s woefully underfunded pension system, but the city also needs changes from Springfield to repair its retirement funds.
… Absent a city pension overhaul, the fund for retired city firefighters would become insolvent in nine years, according to a city report issued two years ago. The police pension would go broke four years later. Funds for city laborers and municipal workers would be broke by 2030via Chicago Tribune.
These numbers are all wrong. These pension claim they’re going to earn 8% on their money year after year. That simply has not happened in a decade and they are tens-of-millions of dollars behind where they claimed they would be be even two years ago.
Kudos to my friend Anthony Curran who suggested we start a Pension Death Watch. I think it’s a great idea.
Mayor Rahm Emanuel’s plan to have five financing giants bankroll $1.7 billion in Chicago infrastructure projects ran into opposition Monday from aldermen concerned about “hidden fees” and long-term leasing of city assets.
During closed-door briefings with aldermen, sources said Chief Financial Officer Lois Scott stuck to the script and talked only about the $225 million in energy retrofits to government buildings expected to generate $20 million in energy savings used to repay investors.
That wasn’t good enough for Ald. Bob Fioretti (2nd). He’s demanding to know what other projects Emanuel wants to finance with the Infrastructure Trust, how those projects will be chosen and what, if any, user fees may be imposed to make certain that investors get their money back with interest.
via Chicago Sun-Times.
Two things about this little power play:
- Ald. Fioretti is exactly right. I’ve written in the past about how no one at City Hall can calculate a ROI or time value of money. Sad that not one elected official seems to every taken a single semester of economics or finance.
- Rahm brought this on himself. Ald. Fioretti would have been pretty happy just being alderman of the 2nd Ward for some time. But Rahm wasn’t happy about Bob wanting to run for Mayor and therefore had to be punished. So if you take a look at the new ward maps, Fioretti’s house is placed all by itself in a ward the bulk of which is miles away. It’s a joke.
The Machine is at it again. Trying to grind it’s way into your pocket with back-room deals between the city and undisclosed entities.
We get exactly what we vote for. We voted for this, we deserve it.