Annual City Review Shows Chicago On Track To Post-Pandemic Recovery – Chicago Sun-Times | Gmx Pharm

Four months ago, Mayor Lori Lightfoot declared that Chicago is poised for “the best economic recovery of any major city in the country, bar none,” no matter “what the naysayers say.”

Now the mayor has some hard numbers to back up the bold claim that laid the groundwork for her re-election bid.

The certified 2021 annual financial report shows that Chicago closed the books in 2021 with a total fund balance of $679.1 million, with $318.1 million of that categorized as “unallocated,” meaning it is not yet intended for a specific edition.

The audit attributes two main factors — revenue streams hit by the pandemic are beginning to recover, and federal COVID relief grants have been used to help cover some of the city’s expenses.

Despite the $319.6 million increase in these impacted revenue streams, which the audit described as “commercially sensitive revenue,” the percentage of unallocated revenue “compared to expenditure” remained stable, according to the report.

The rebound was evident at O’Hare International Airport, where operating income rose $239.5 million — 26.5%.

This was thanks to increased terminal use fees and landing fees of $176.1 million, a $49.2 million increase in concession revenue and a $14.2 million increase in hotel revenue, “as the airport began to recover from the pandemic”.

The total number of flights originating from or connecting through O’Hare increased from 15.35 million in 2020 to 26.9 million last year.

In 2019 – the last year before the pandemic – that number – the audit calls it “implementations” – was 42.2 million. The total number of passengers in 2021 was just over 54 million, up from 30.8 million last year, but a far cry from 2019’s 84.6 million.

Travelers at O’Hare International Airport in April 2021, the year the airport saw a surge in traffic following a sharp drop in 2020 during the coronavirus pandemic.

Midway’s total operating income increased $33.1 million, “primarily due to a significant increase in passenger traffic, terminal rental income and concessions.” Total aircraft operations stood at 185,956. That’s up from 150,198 in 2020, but still well below 2019’s 232,084.

Lightfoot is justifiably proud of having “climbed the ramp” to achieve actuarial funding for the pension funds of Chicago’s four city employees.

But the audit by accounting firm Deloitte & Touche LLP shows how badly Chicago still needs a long-term solution to its pension crisis.

That’s true even after Bally’s plan to build a $1.7 billion River West Casino — and a temporary casino at Medinah Temple — touted as a $200 million-a-year salvage for police and firefighter pensions was approved.

The city’s total pension liability is $33.6 billion. That’s $700 million more than at the end of 2019, when pension liabilities rose 5.6%.

The fire service pension fund remains the worst of the four, with assets covering just 20.9% of its liabilities. It is followed by the municipal employees’ pension fund (23.4%), the police (23.5%) and workers (45.9%).

With the mayoral election now a little over six months away, Lightfoot has made virtually no long-term progress on pensions.

Early on, Lightfoot floated a plan for a state takeover of Chicago’s four city employee pension plans, only to be gunned down in cold blood by the governor.

The governor then infinitely aggravated Chicago’s pension crisis by ignoring the mayor’s request to veto legislation that would increase pensions for thousands of Chicago firefighters. Lightfoot had argued it would burden beleaguered city taxpayers with continued property tax hikes and cripple the pension fund the closest thing to bankruptcy.

The mayor has also alternately touted a sales tax on services and a higher real estate transfer tax on high-end purchases as a solution to Chicago’s pension crisis, but neither plan has found favor in Springfield.

As always, the City Audit is packed with information about Chicago’s finances and local economy. These treats include:

• Total long-term commitments are $64.4 billion. Annual debt service rose from $688.5 million in 2012 to $1.01 billion last year.

• Chicago completed $240.3 million in infrastructure projects in 2021, including $188.3 million for highway construction and resurfacing, $13.5 million for street lighting and transit projects, and $38.5 million -Dollars for the reconstruction of bridges and viaducts.

• O’Hare added $776.2 million in capital increases. At Midway it was $17.1 million.

• Total long-term commitments were $64.4 billion. Outstanding general notes secured by property taxes fell nearly $1.1 billion in 2021.

• Chicago police officers made 38,400 “physical arrests” in 2021, down 26.6% from the previous year and 57% from 2019. In 2012, there were 145,390 physical arrests.

• Chicago’s $1.6 billion in property tax collection — which is now tied to annual increases of 5% or the cost of living, whichever is lower — almost doubled between 2012 and 2021.

• Amazon was Chicago’s top employer in 2021 with 27,050 or 2.17% of the city’s total workforce. They were followed by: Advocate Aurora Health (25,9660; Northwestern Memorial Health (24,053); the University of Chicago (20,781) and Wal-Mart (18,500).

• Chicago firefighters and paramedics treated 632,745 emergencies last year, an increase of nearly 7 percent over the previous year. In 2016 there were 713,492 fire calls.

• Average daily water use continued its steady decline, from 640,509 million gallons in 2020 to 595,302 million gallons in 2021, a seven percent decrease. Despite this, gross operating income for 2021 increased by $24.9 million, primarily due to a $20 million increase in water rates.

In May, senior mayoral assistants announced that Lightfoot’s pre-election budget included a revised deficit of $305.7 million — $561 million below previous estimates — thanks to withheld federal aid and an improving economy.

The remaining funds totaled $152.4 million. The improved revenue accounted for $250 million of that revised figure.

Lightfoot’s $16.7 billion budget sailed through the council, 35-15, thanks to an avalanche of federal stimulus funds that paved the way for an unprecedented 30% increase in city spending.

Lightfoot delayed the budget process by a month to coincide with the unveiling of her plan to spend federal aid.

She ended up using 68% of that, or $782.2 million, for revenue replacement.

This allowed the city’s corporate fund to repay a $450 million line of credit used to eliminate a pandemic-related deficit and $500 million to refinance city debt — sometimes called a “scoop-and-toss” — Loans denoted – delete, which would have been necessary without the federal generosity.

Still, it managed to set aside $1.2 billion for new investments by merging $563 million in federal money with the $660 million that is the installment of its 2022 capital plan.

Despite the political euphoria over the prospect of getting the budget underway in record time, Civic Federation President Laurence Msall warned that Chicago is far from over the hill.

Although the city has begun the long journey to 90 percent funding for its pension funds, Msall warned at the time that there was still no long-term source of funding from Springfield. The general assembly also did not follow the citizens’ association’s demand for a change in the state constitution to abolish the pension protection clause.

Msall also remained concerned about the mayor’s continued reliance on one-off revenues, the city’s mountain of debt, and her plan to refinance an additional $1.2 billion and use $232 million of the savings to pay four years of back payments for to fund Chicago police officers.

He was equally concerned about what will happen “when the federal ARP money goes away” — particularly if the $153 million in federal relief reserved for revenue replacement in 2023 isn’t enough.

“What’s Plan B if the city doesn’t bounce back from the aggressive and robust growth it’s hoping for? We need a plan B. If the economic disruption caused by the pandemic continues, will we try to raise taxes? Will we make structural changes? Will we cut?” he said.

“It probably has to be a combination of all of those. But if we don’t see a return, where business travel is coming back, where convention attendance is coming back [comes] back, the city will struggle to meet its debt obligations on many of the key investments that support these industries.”

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