2011 city of chicago overview and revenue estimates

C i t y o f C h i c a g o

BUDGET 2011

Richard M. DaleyMayor

OVERVIEW AND REVENUE ESTIMATES

The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to City of Chicago, Illinois for their Annual Budget beginning January 01, 2010. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communications device.

This award is valid for a period of one year only. We believe our current budget continues to conform to program requirements, and we are submitting it to GFOA to determine its eligibility for another award.

January 1, 2010

OVERVIEW AND REVENUE ESTIMATES

BUDGET 2011

C i t y o f C h i c a g o

2 0 1 1 O v e r v i e w a n d R e v e n u e E s t i m a t e s

I

Dear Chicago Residents:

We are in a time of austerity, as the worst national recession in over seventy years continues to impact people, business and every level of government, in Chicago and across the nation.

With those challenges in mind, I propose a 2011 balanced budget that better manages our resources while meeting the needs of Chicagoans and protecting taxpayers.

While our revenues have finally started to increase, they are rising very slowly. It will take several more years for them to return to pre-recession levels.

The fact is that Chicago has experienced a $1 billion decrease in revenues since the recession began, nearly all of which in revenue streams that are most economically sensitive – real estate transfer, sales and income taxes.

But had we not worked for years to better manage government, control costs and transform our economy, the recession would have been far worse in Chicago.

When I took office in 1989, Chicago was a rust belt city that many people had written off. But together we transformed our economy, so that today, Chicago is among the top tier of cities competing for the jobs of the 21st century.

At the same time, we have also worked to manage government more efficiently and control spending to protect taxpayers. We have done this with one goal in mind – to create a government that is smaller in size, but greater in performance.

Since I’ve been Mayor, we’ve cut spending by nearly $3 billion, including almost a half billion dollars since 2009 alone, while still providing important city services. We will end next year with 6,600 fewer non-public safety employees than when I took office.

We have reshaped government and reduced overlap by consolidating departments. Under the 2011 budget there will be 10 fewer departments than when I took office.

To fund government we’ve raised property taxes as the last resort – by an average of less than 1.3 percent a year since I’ve been Mayor, far lower than the rate of inflation.

Because people and businesses are hurting, I will not propose any increase in taxes, fines or fees in 2011, including property taxes. This will be the third year in a row that we haven’t raised property taxes.

We have implemented management improvements including renegotiating contracts, implementing hiring freezes, reducing overtime, leveraging

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II

technology, requiring furlough days for employees and cutting spending across the board.

We will continue our freeze on non-safety hiring, which has been in effect since 2008, as well as cut more positions. We will also continue to require all non-union employees, starting with me, to take furlough days and unpaid holidays, and are counting on the unions serving the City to again agree to take part.

Even as we hold the line on spending in most areas, we continue to address the most immediate and pressing problem facing many of our neighborhoods – violence on our streets and in our homes.

In 2011, we will put more police officers on street duty, hire new police recruits, and reinvent the CAPS program to more fully engage Chicagoans to make our communities safer.

We will create a new small business fund to provide loans for start ups, expansions and day-to-day operations.

We will continue to invest to improve Chicago’s infrastructure to improve quality of life and make our neighborhoods ready to create jobs and opportunity and welcome new businesses.

I believe Chicago is better off today that it was on that spring morning 21 years ago when I first took the oath of office. Together, we’ve brought Chicago into the 21st century, beyond our greatest expectations.

But, we can’t coast on our accomplishments. There is still more to be done, and together, we can keep Chicago moving forward.

Sincerely,

Mayor Richard M. Daley


III

Message from Mayor Richard M. Daley I

List of Tables and Charts IV

2011 Proposed Budget

Chicago Facts and Financial Profile

38

2011 Proposed Budget Analyses

How Chicago Budgets

Budget Detail

Budget Glossary


IV

CONTINUED


V

CONTINUED

BUDGET 2011

2011 PROPOSED BUDGET

O v e r v i e w a n d R e v e n u e E s t i m a t e s


2

CONTINUED


CONTINUED


Visit www.cityofchicago.org • Call 311 City Services

4

Skywaylong-termreserve.This$500millionreserverepresentsmorethan15percentoftheCity’sgeneralfundinthebudget,abovetherecommendedamountbytheGovernmentFinanceOfficersAssociation.

MAINTAININGFUNDINGTOIMPROVEQUALITYOFLIFEFORHOMEOWNERS,BUSINESSES,ANDTHOSEMOSTINNEED

Overafour-yearperiodwhichstartedin2010,theCityofChicagoplanstoinvest$100millionfromtheparkingmetertransactionthroughtheParkingMeterHumanInfrastructureFund.

This$100millionfundishelpingimprovethequalityoflifeforChicagohomeowners,businesses,andthoseresidentsmostinneed,particularlythoseseverelyimpactedbythenationaleconomicrecession.

2011marksthesecondyearfortheParkingMeterHumanInfrastructureFund.ThefundwasmeanttocontinuesupporttocriticalhumaninfrastructureprogramsthathadpreviouslybeenfundedbytheChicagoSkywayHumanInfrastructureFundfrom2005through2009.

Atotalof$21.65millionfromtheParkingMeterHumanInfrastructureFundwillbeallocatedinthe2011budget,including:

$8.4millionfortheChicagoTechprogram•toprovidetechnologytrainingforrecentlylaid-offworkers;

$2millionforhome-deliveredmealsto•seniors;

$1.6millioninmulti-familyaffordable•housingloans;

$1.5millionforout-of-schoolandafter-•schoolprogramsforyouth;

$1.3millionfortheLow-IncomeHousing•TrustFund;

$1millionforanewprogramtohelpsmall•businessesobtainloans;

$1millioninfundingforayouthjobs•program;

$1milliontoprovidejob-trainingprograms•forex-offenders;

$750,000 forour Share theWarmth•programwhichhelpsneedyfamiliespaytheirheatingbills;

$700,000innewfundingforhomeless•shelterbeds;

$700,000forourPlantoEndHomelessness,•whichprovidestransitionassistanceforthoseinneed;

$600,000 to maintain funding for•emergencyhomerepairs;

$400,000tomaintainfundingtoprovide•homemodificationsforindividualswithdisabilities;

$250,000tosupplementtheCity’sjob•trainingprogramforadultanddislocatedworkers;

$250,000toprovideemergencyfoodboxes•forneedyfamilies;and

$200,000 innewfundingtoprovide•casemanagementfordomesticviolencevictims.

CONCLUSION

Chicagowillcontinuetofacetheseeconomicchallengesfornextseveralyears,andwewillbetestedtocontinuetoprovidethequalityservicesourresidentsneedanddeserve.

UndertheleadershipofMayorDaley,the2011budgetproposal is a responsibleplan thatprotectstaxpayersandimprovesthemanagementofgovernment,andtakestheneededstepstocontinuemovingthisgreatCityforward,eveninthemostdifficultoftimes.

direCtor’S diSCuSSion CONTiNued


5

EXPENDITURE REDUCTIONS $96.9 MILLION

MAXIMIZING REIMBURSEMENTS $98.0 MILLION

MODEST GROWTH IN REVENUES $91.3 MILLION

STRATEGIC FINANCIAL OPTIONS $68.2 MILLION

DEBT RESTRUCTURING $142.0 MILLION

TIF SURPLUS $38.5 MILLION

USE OF ASSET LEASE FUNDS $119.9 MILLION


6

TABLE 1

Corporate Fund

All Local Funds


7

Utility Taxes14.7%

Sales Tax15.2%

Income Tax9.5%

Proceeds & Transfers10.5%

Borrow from ParkingMeter Long term reserve

3.7%

Advance Parking MeterMid term

1.0%

Reimbursements10.7%

Other Local Taxes17.2%

Unreserved Fund Balance0.3%

Non Tax Revenue17.2%

Property Tax13.5%

Income Taxes6.8%

Sales Taxes8.5%

Utility Taxes7.8%

13.5%

Aviation18.2%

Sewer & Water11.4%

Fines, Forfeitures andPenalties

4.2%

Other Resources29.6%

CONTINUED

CHART 1

CHART 2


8

General Services2.8%

Streets and Sanitation5.7% Fire

14.8%

EmergencyManagement andCommunication

2.7%

Police39.8%

Fleet Management2.5%

Finance General19.7%

Transportation2.3%

All other Departments9.7%

CHART 4

Finance &Ad i i i

Legislative &Elections

0.7%

City Development1.0% Community Services

1.8%Public Safety

31.4%

Administration7.8%

Regulatory0.9%

InfrastructureServices

6.0%

Public ServiceEnterprises

10.0%Pension Funds

7.4%

Debt Service21.0%

Benefits & Other11.9%

CONTINUED

CHART 3


9

KEEPING OUR NEIGHBORHOODS SAFE AND OUR CITY SECURE


CONTINUED

KEEPING OUR NEIGHBORHOODS SAFE AND OUR CITY SECURE


CONTINUED

IMPROVING EDUCATION, PROTECTING OUR CHILDREN


CONTINUED

STRENGTHENING CHICAGO’S ECONOMY, CREATING JOBS AND NEIGHBORHOOD OPPORTUNITIES


CONTINUED

IMPROVING OUR CITY’S INFRASTRUCTURE AND ENHANCING NEIGHBORHOOD QUALITY OF LIFE


IMPROVING OUR CITY’S INFRASTRUCTURE AND ENHANCING NEIGHBORHOOD QUALITY OF LIFE


CONTINUED

KEEPING OUR NEIGHBORHOODS AFFORDABLE AND PROTECTING THOSE MOST IN NEED

2 0 1 1 O v e r v i e w a n d R e v e n u e E s t i m a t e s CONTINUED

KEEPING OUR NEIGHBORHOODS AFFORDABLE AND PROTECTING THOSE MOST IN NEED


CONTINUED

BETTER MANAGING GOVERNMENT, PROTECTING TAXPAYERS

BUDGET 2011

CHICAGO FACTS ANDFINANCIAL PROFILE



22

Chicago is a world-class city with unsurpassed beauty, drawing visitors from around the nation and the globe. Located on the shores of Lake Michigan in the heart of the Midwest, Chicago is home to world-championship sports teams, an internationally acclaimed symphony orchestra, renowned architecture and much more.

The third largest city in the United States, Chicago is located in Cook County, Illinois and is comprised of 228 square miles, is 26 miles long and is 579 feet above sea level.

With world-famous museums, lakefront parks and vibrant ethnic neighborhoods, Chicago offers something for everyone and a quality of life unparalleled by any other major metropolitan area.

Population by Race 2,850,502White 1,327,777Black or African American 946,127American Indian and Alaskan Native 8,886Asian 150,116Native Hawaiian and Other Pacific Islander 297Some Other Race 371,557Two or More Races 45,742

Population by Hispanic or Latino Origin Not Hispanic or Latino 72.7%Hispanic or Latino 27.3%

Households 1,072,886Median Household Income (Estimate) $45,734Families Below Poverty Level 18.0%Unemployment Rate (June) 11.4%

Gender Male 1,390,027Female 1,460,475

Age Children under age five 211,264Older Adults (age 65 and older) 290,886Median Age 32.9

Demographics Chicago’s 2.7 million people live in 77 ethnically diverse neighborhoods in more than one million households. The City is comprised of 50 wards and has 1.5 million registered voters.

Government A mayor and 50-person City Council govern the City and work to provide residents, businesses and visitors quality municipal services. Elected officials serve four-year terms.

Infrastructure The City maintains approximately 200,000 street lights, 81,000 alley lights and 2,880 signaled intersections. There are 45 moveable bridges, 139 viaducts and 19 pedestrian underpasses.

More than 43.4 million people per month ride the Chicago Transit Authority, the second largest public transportation system in the United States. More than 81 million people travel to and from Chicago’s airports in 2009. Visitors and residents alike enjoy 570 parks and more than 315 miles of bike paths.

Economy Chicago is a national manufacturing and transpor-tation hub and is home to some of the world’s largest corporations. The area’s top employers include city, state and county governments, univer-sities, airports and banks.

Chicago hosted 45.6 million domestic and overseas visitors in 2008, including 32.4 million domestic leisure travelers, 11.7 million domestic business travelers and 1.3 million overseas visitors. These visitors contributed more than $11.8 billion to Chicago’s economy.

Sources: US Census Bureau, World Business Chicago, Chicago Convention and Tourism Bureau and Regional Transit Authority Northeastern Illinois. Unemployment figure is not seasonally adjusted. Claritas Inc. 2009 Estimates


CONTINUED

QUALITY OF LIFE

500 in the metropolitan area

libraries and more than 70 neighborhood libraries

TOP THREE ANNUAL EVENTSEvent 2009 Attendance Date

Taste of Chicago 3,350,000 late June/early July

Air and Water Show 2,200,000 mid August

Blues Festival 640,000 early June

COST OF LIVING INDEX

New York (Manhattan) 217.2San Francisco 162.9Los Angeles 141.6 Washington, D.C 138.6Boston 130.9Philadelphia 123.9 Chicago 113.2Miami 109.8U.S. Average 100.0 Source: ACCRA Cost of Living Index, 2009 Annual Average; World Business

Chicago

CLIMATE2009 Average Daily Temperature—Fahrenheit

High Low January 23.9 7.8 July 78.4 60.4

2009 Annual Precipitation in Inches 42.62009 Annual Snowfall in Inches 51.0

Source: National Oceanic and Atmospheric AdministrationSource: World Business Chicago, Chicago Convention and Tourism Bureau, Chicago Park District


24

OHARE

AUSTIN

SOUTH DEERING

ASHBURN

NEW CITY

ROSELAND

HEGEWISCH

DUNNING

WEST TOWN

BEVERLY

NEAR WEST SIDE

RIVERDALE

CHATHAM

LAKE VIEW

WEST RIDGE

LOOP

NORWOOD PARK

PORTAGE PARK

UPTOWN

GARFIELD RIDGE

SOUTH LAWNDALE

IRVING PARK

CLEARING

WEST LAWN

WEST PULLMAN

CHICAGO LAWN

FOREST GLEN

LOGAN SQUARE

MORGAN PARK

BELMONT CRAGIN

LINCOLN PARK

HUMBOLDT PARK

SOUTH SHORE

AUBURN GRESHAMSOUTH CHICAGO

NORTH PARK

GAGE PARK

AVONDALE

NORTH LAWNDALE

WOODLAWN

DOUGLAS

LOWER WEST SIDE

HYDE PARK

ALBANY PARK

EAST SIDE

EN

GLE

WO

OD

PULLMAN

BRIGHTON PARK

WE

ST

EN

GLE

WO

OD

BRIDGEPORT

NEAR NORTH SIDE

LINCOLN SQUARE

EDGEWATER

JEFFERSON PARK

NORTH CENTER

MOUNT GREENWOOD

GREATER GRAND

CROSSING

ROGERS PARK

WASHINGTON HEIGHTS

ARCHER HEIGHTS

HE

RM

OS

A

NEARSOUTH

SIDE

KENWOOD

CALUMET HEIGHTS

AVALON PARK

EASTGARFIELD

PARK

MCKINLEY PARK

GRAND BOULEVARD

ED

ISO

N P

AR

K

WEST ELSDON

WASHINGTON PARK

MONTCLARE

OAKLAND

WESTGARFIELD

PARK

BUR

NS

IDE

AR

MO

UR

SQ

UA

RE

FU

LLE

R P

AR

K

CITY OF CHICAGOCOMMUNITY AREAS

CITY OF CHICAGORICHARD M. DALEY

MAYOR

SEPTEMBER 2006

N


25

0%

5%

10%

15%

20%

25%

30%

35%

40%

<18 18-24 25-44 45-64 65+

% o

f Tot

al H

ouse

hold

Pop

ulat

ion

Chicago

Illinois

U.S.

Age Category

CHICAGO’S ECONOMY

The overall economic environment affects City government in both revenues and expenses. The health of the economy determines how much revenue the City collects from economically sensitive sources such as sales, income, real estate transfer, hotel and amusement taxes. The economy also affects the services the City provides in several ways. Inflation increases the amount the City has to pay for its purchases. Further, city residents tend to rely on certain City services more during challenging economic times. Chicago’s economy is, therefore, dependent on the national and state economies within which it functions.

DEMOGRAPHICS

Chicago’s population and labor force are relatively stable. The U.S. Census Bureau reports that the City’s population was 3,005,000 in 1980. It fell to 2,783,000 in 1990 and rebounded to 2,896,000 in 2000. In 2009, the estimate was slightly lower at 2,850,502.

The Census Bureau estimated 1.5 million Chicago residents in the labor force in 2009, slightly higher than the estimate of 1.35 million in 2000. In 2009, the percentage of Chicago’s population over age 16 that was in the labor force was 66.4 percent. This is slightly lower than State of Illinois’ rate of 67.0 percent and above the national rate of 65.3 percent.

AGE DISTRIBUTION

The U.S. Census Bureau reports that the age distribution of Chicagoans is much like that of Illinois and the nation as a whole. For example, approximately 23.4 percent of Chicago residents are under the age of 18 and 10.5 percent are between the ages of 18 and 24, very close to the national figures. However, at 33.6 percent, Chicago’s share of residents between the ages of 25 to 44 is higher than that of both Illinois (27.4 percent) and the United States (27.1 percent). Conversely, Chicago’s share of residents ages 45 and older is lower than Illinois and the United States.

AGE DISTRIBUTION, 2009

CHART 5


26

CONTINUED

Chicago’s age distribution in 2009 also closely matched its peer cities: New York, Los Angeles, Houston and Philadelphia. By contrast, San Francisco and Boston are both smaller cities where the cost of living and housing is high, relative to the rest of the country. San Francisco’s percentage of residents over age 25 is much higher

than Chicago – 78.2 percent versus 66.0 percent. Only 14.4 percent of San Francisco’s population is under 18, compared with 23.4 percent in Chicago. A higher concentration of 18 to 24 year-olds in Boston reflects the number of colleges and universities in the area.

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

% o

f Tot

al H

ouse

hold

Pop

ulat

ion

Chicago

New York City

Los Angeles

Houston

Philadelphia

San Francisco

Boston

0%<18 18-24 25-44 45-64 65+

Age Category

AGE DISTRIBUTION, LARGE AND SELECTED CITIES, 2009

UNEMPLOYMENT RATE

T h e C i t y o f C h i c a g o ’ s a n n u a l a v e r a g e unemployment rate, tracked by the U.S. Bureau of Labor Statistics, decreased from 8.3 percent in 2002 to 5.3 percent in 2006, then rose to 10.9 percent in 2009. During the same period, the State of Illinois’ unemployment rate fell from 6.5 percent in 2002

to 4.6 percent in 2006, and rose to 10.1 percent in 2009. Chicago’s June 2010 unemployment rate was 11.4 percent, compared to 10.6 percent for the State of Illinois and 9.6 percent nationally. (All rates are not seasonally adjusted.)

CHART 6


27

CONTINUED

Chicago, 11.4%

New York City, 9.5%

Los Angeles, 13.5%

H t 8 5%

Philadelphia, 11.9%

10%

12%

14%

16%00 0 0

Houston, 8.5%

0%

2%

4%

6%

8%

2001 2002 2003 2004 2005 2006 2007 2008 2009 Jun 10

Chicago New York City Los Angeles Houston Philadelphia

UNEMPLOYMENT RATES FOR LARGE CITIES, 2001–MID 2010

Simi lar to other major c i t ies , Ch icago’ s unemployment rate is higher than the nation’s rate. In 2006, the gap between Chicago’s unemployment rate and the nation’s was only 0.8 percent. This gap increased to 2.1 percent at the end of June, 2009 and decreased to 0.9 percent at the end of June, 2010. Generally, the gap between local and national rates is wider during recessions and smaller during periods of economic growth.

Chicago’s June 2010 unemployment rate at 11.4 percent was slightly lower than that of Los Angeles at 13.5 percent and Philadelphia’s at 11.9 percent. New York City and Houston were lower than Chicago at 9.5 percent and 8.5 percent, respectively. Among nearby cities, St. Louis and Milwaukee had unemployment rates similar to Chicago at 11.6 percent and 11.0 percent, respectively, while Detroit was much higher at 23.7 percent.

CHART 7

ANNUAL AVERAGE UNEMPLOYMENT RATES, 2002 TO 2009TABLE 2

Year Chicago Illinois U.S. Difference (Chicago – U.S.)

2002 8.3% 6.5% 5.9% 2.4%

2003 8.1% 6.7% 6.1% 2.0%

2004 7.5% 6.2% 5.6% 1.9%

2005 7.1% 5.8% 5.0% 2.1%

2006 5.3% 4.6% 4.5% 0.8%

2007 5.7% 5.1% 4.6% 1.2%

2008 7.0% 6.4% 5.9% 1.1%

2009 10.9% 10.1% 10.1% 0.8%

Rates not seasonally adjusted


28

CONTINUED

ECONOMIC DIVERSITY

Chicago’s economy is well-diversified, based on data from the U.S. Census Bureau. In fact, of the major industry categories, Chicago is within 2.0 percent of the national share of every one except construction and retail trade, where Chicago is 3.0 percent below, and professional and business services, where Chicago is 4.0 percent above. This also means that, with suitable caution, it is reasonable to look at the directions of national economic forecasts and project them onto the local situation.

EMPLOYMENT BY INDUSTRY, 2009

TABLE 3In

Industry Type Chicago Illinois U.S.

Agriculture 0% 1% 2%

Construction 4% 5% 7%

Manufacturing 9% 13% 10%

Wholesale Trade 2% 3% 3%

Retail Trade 9% 11% 12%

Transportation, Warehousing, Utilities

6% 6% 5%

Information 3% 2% 2%

Finance, Insurance, Real Estate, Rental and Leasing

9% 8% 7%

Professional and Business Services

15% 11% 11%

Education, Health Care, Social Services

23% 22% 23%

Leisure and Hospitality

11% 9% 9%

Other Services 5% 5% 5%

Public Administration 4% 4% 5%


29

CONTINUED

INCOME

Chicago’s median household income was $45,734 in 2009, about 8.9 percent less than the United States and 15.3 percent less than Illinois as a whole. The average (or mean) household income for Chicago was $68,826, similar to that of the nation at $68,914 and 6.2 percent less than Illinois as a whole. It is to be expected that Chicago’s income figures would be lower than the national or statewide levels, reflecting the higher concentration of poverty typical of most large cities.

Comparing the income distribution of Chicago to the nation and to Illinois demonstrates that Chicago has proportionately more households with income under $10,000 and fewer with incomes between $50,000 and $150,000. At other income levels, such as low to lower-middle income and upper income, Chicago’s population is close to the national and Illinois percentages.

$-

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

U.S. Illinois Chicago

Median Mean

ANNUAL HOUSEHOLD INCOME, 2009

CHART 8


POVERTY

As a large city, one area where Chicago differs markedly from the state and the nation as a whole, but not from its peers, is in the share of its population living in poverty. Serving the needs of this population is a significant part of Chicago’s budget. In poor economic times, the number of people in poverty grows, increasing the number of people who depend on the City for basic services, even as City revenues may not keep pace.

CONTINUED

POVERTY RATES, 2009

Area Families Individuals

United States 14.3% 10.5%

Illinois 13.3% 9.9%

Chicago 21.6% 18.0%

New York City 18.7% 15.8%

Los Angeles 19.8% 16.1%

Houston 20.6% 17.5%

Philadelphia 25.0% 19.9%

TABLE 4

0%

2%

4%

6%

8%

10%

12%

14%

U.S.

Illinois

Chicago

0%

<$10000

$10K

14999

$15K

19999

$20K

24999

$25K

29999

$30K

34999

$35K

39999

$40K

44999

$45K

49999

$50K

59999

$60K

74999

$75K

99999

$100K

124999

$125K

149999

$150K

199999

$200K+

HOUSEHOLD INCOME DISTRIBUTION, 2009

CHART 9


CONTINUED

ECONOMICALLY SENSITIVE REVENUES, 1989–2011 FORECASTED

CHART 10A

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

YE

2011

F

Mill

ions

CURRENT DOLLARS 1989 DOLLARS

Current $Trend line 1989 $ Trend Line

REVENUES SENSITIVE TO THE ECONOMY

It is useful to consider the types of revenue sources that support the City’s corporate fund: stable sources that grow with the underlying transactions and economically sensitive sources that track the economy.

Stable sources are generally of a fixed-rate nature and do not experience large fluctuations in response to the economy or price changes. Per-unit taxes, licenses/permits and fines are examples of such sources. Due to the widespread nature of the recent recession and its ripple effect through multiple sectors of the economy, even these stable sources have experienced declines.

Economically sensitive sources include sales, income, real estate transfer, hotel and amusement taxes. As the chart below reflects, these revenue sources historically have grown over time with the economy. However, these sources are not immune to economic down cycles such as that experienced in the 1991-1992 recession, the 2000-2002 period following the bursting of the dot-com bubble and the attacks of September 11, 2001, and most recently, the 2007-2009 recession.

Although the recent recession officially ended in June 2009, it dealt a devastating blow to economically sensitive revenues that may take years to rebuild.

In fiscal year 2011, economically sensitive revenues are projected to generate $1,006.5 million, or 30.9 percent out of total corporate fund revenues of $3.26 billion. This is a sharp decline from pre-recession years when economically sensitive revenues made up approximately 40 percent of corporate fund revenue. These revenues are expected to generate $250 million less than the amount generated in 2007.

Through 2011, economically sensitive revenues are expected to experience a total loss that exceeds $1 billion due to the recession and its aftermath.

Approximately half of this will be the result of losses in the real estate transfer tax, a casualty of the battered real estate market that witnessed approximately 25 percent declines in the number of home sales and the median sales price.

Income taxes will make up almost a third of the losses, reflecting a weakened labor market struggling with the doubling of the unemployment rate and an economy that is not fostering hiring at a level to produce significant growth.


CONTINUED

Sales taxes account for nearly $200 million of the losses as household wealth has deteriorated and consumer sentiment is apprehensive, at best, and remains at depressed levels compared with prior recoveries.

The hotel tax will make up $28 million of the losses reflecting double digit declines in the hotel occupancy rate and average room rate. Recent indicators suggest that there is some basis for optimism for the hotel industry, but it is against economic headwinds that may dampen potential growth.

The amusement tax has been able to sustain some growth, but not at the same rate experienced prior to the recession. The success of Chicago’s sport teams may be credited with this lone highlight.

In fact, the annual Sporting News list of Best Sports Cities ranked Chicago the best sports town in the U.S. for 2010 predominantly due to the Blackhawks championship. Other businesses within the hospitality industry have not been as “recession-proof.”

Overall, even with the economy on the road to recovery, the City will continue to address increased expenses at 2011 levels with economically sensitive revenues performing at 2004 levels.

Real Estate

Hotel & Amusement$135

$

$1,000

$1,200

$1,400

$m

illio

ns

Sales$497

Income*$264

Transaction$65

$0

$200

$400

$600

$800

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Revised 2011 Recs

*Reflects income tax activity months (not adjusted for the State’s delay in distribution)

ECONOMICALLY SENSITIVE REVENUES, 2000–2011, CORPORATE FUND SHARE

CHART 10B


CONTINUED

NATIONAL AND STATE FORECASTS

During the past three years, the United States has undergone the worst financial crisis in modern history. Of the 13 recessions that have occurred since the Great Depression, none has been as damaging in terms of the length, breadth and depth as this one. Furthermore, this has been a world-wide recession, similar to the 1930s and unlike anything since.

The crisis began in the financial sector, most notably in the market for securities backed by residential mortgages, and became the result of the rapid deflation of a very large asset bubble. It has since spread through most sectors of the economy triggering a decline in the nation’s gross domestic product, a loss of more than eight million jobs, a doubling of the unemployment rate and an erosion of household wealth and consumer confidence. The ranks of the working-age poor climbed to the highest level since the 1960s, leaving one in seven Americans in poverty.

This is in contrast to most postwar recessions which were considered normal business cycle corrections. The 2000-2002 dot-com bust might have precipitated a recession similar to this, but the world’s governments had enough financial

flexibility to respond and head that off, or at least to delay it. But, with national deficits and debts much higher and short-term interest rates near zero, that flexibility no longer exists. From that perspective, the very slow and uncertain recovery is less surprising.

The current economic downturn will take a long time to fully understand. Nonetheless, forecasts for the current national and state picture agree on a number of points.

The U.S. recession started in December 2007 and ended in June 2009. In affirming the official end of the recession, the National Bureau of Economic Research did not conclude that the economy had returned to operating at normal capacity, only that the recession ended and a recovery began in June 2009.

However, this recovery has been anemic, far slower than many expected and slower than the pattern of virtually all post-war recessions. The phrase “growth recession” has been used to describe it, meaning the aggregate ecomony is growing but per capita economic activity is stable or shrinking. In other words, growth in GDP that is less than necessary to keep up with population growth. The phrase also suggests little or no change in employment, certainly not enough growth in employment to keep up with population. In fact,


economists estimate that at least 100,000 net new jobs must be created each month just to keep pace with growth in the labor market.

The Federal government has attempted several economic stimulus programs, the biggest of which was the American Recovery and Reinvestment Act of 2009. While the long-term effects of this program are not yet known, it is clear that there were some short-term positive outcomes. The Cash for Clunkers and Homebuyer’s Assistance Programs appear to have created some momentum, but it is not clear whether this generated net positive gains or merely shifted demand and economic activity forward in time. The hoped-for multiplier of more than a dollar of economic activity for each dollar spent, has been elusive, as businesses and individuals have tried to use any extra money to work down their debts.

Looking ahead, as the nation attempts to climb out of the economic trough, it is evident that troubles linger. Confusing and often contradictory economic data have left the public uneasy over the potential for a double-dip recession, serving only to perpetuate the problem.

The collapse of the real estate market is expected to continue to weigh on the economy as declines in home values, foreclosures and lack of credit availability keep the market out of equilibrium.

Based on a recent survey, it was estimated that more than two-in-ten, or 21 percent, of all homeowners are “underwater,” meaning they currently owe more on their home loans than they could sell their house for in today’s market. Almost one-fourth of all homes sold in Illinois during the second quarter of 2010 were foreclosures. As long as this continues, median prices will remain below average, sales inventory, currently at a 12.5 month supply, will remain above average and the real estate market will remain soft.

Corporate profits recovered somewhat in late 2009 and early 2010, relatively speaking, fueling a stronger stock market from March 2009 until June 2010. However, it appears that much of this profitability has been due to aggressively reducing costs, including reducing workforces and inventories. It has generally not been due to strong demand, and the cost savings having largely been achieved, there is skepticism whether profits can continue to grow strongly.

Employment is expected to recover very slowly. This is a consensus of all the economic forecasts reviewed. Unemployment is a lagging indicator, which means that it moves several months after changes in the underlying economy. Employers tend to be reluctant to reduce their workforces at the outset of a slumping economy and also

CONTINUED


reluctant to increase their workforces when the economy starts to get better. For instance, the recovery from the comparatively mild 2000-2003 recession was characterized as a “jobless recovery.” Forecasters predict the unemployment rate to remain above 9 percent through 2011.

Personal consumption spending is recovering slowly, and it may be several years before it reaches pre-recession levels. Frugality in spending and borrowing habits are the new norm as concern persists that it could take several years for home values and family finances to recover.

Additional concerns expressed by various forecasters include uncertainty about the federal tax code after 2010; impending federal deficits, which are projected to result in the doubling of federal debt in the next few years; the potential for increased inflation; the weakening of the dollar; and uncertainty regarding large government initiatives which may have significant fiscal and economic consequences, such as those concerning health care.

The Illinois economy moves in lockstep with the national economy. Illinois is fortunate in that its economy is quite diverse, and it has not suffered the extreme problems of states such as Nevada, Arizona and Florida. Nonetheless, given the continued weak employment forecast, as well as continued likelihood of consumer hesitancy to spend, the State of Illinois is anticipating only very modest growth in its revenues.

In addition, the state is currently contending with a $13 billion budget deficit that has triggered a downgrade in its debt rating and will require severe reductions in service and/or increases in revenues to fully address. This is certain to have a spill-over effect on local governments.

In summary, the national and state outlook remains uncertain and there is little reason for strong optimism in 2011, or for the next few years. For the foreseeable future, it is anticipated that economic activity will remain below pre-recession levels.

CONTINUED


LOCAL OUTLOOK

The local economy mirrors the national economy but with a general lag in the trend. It is anticipated that City revenues will experience only marginal growth against recession years’ revenues and the need to fund basic services will outpace the resources available to do so.

The City of Chicago is not alone in contending with the economic fallout. According to the National League of Cities’ annual report on cities’ fiscal conditions, financial officers report the largest spending cuts and loss of revenue in the 25-year history of the survey and 87 percent of city finance officers report their cities are worse off financially than in 2009.

Financial pressures continue to force cities to make tough decisions, including scaling back workforces, reducing services, and canceling capital infrastructure projects. According to the U.S. Department of Labor, local governments cut 76,000 jobs in September 2010, the largest cut by local governments in 28 years.

The current outlook for the City reflects the expectation that due to the depth of the decline experienced by the local economy during the

recession, it is not expected to regain solid ground in the near future and it may be years before economic recovery is fully realized. The projected performance in specific revenue sources is discussed in greater detail in the Revenue Analysis section, but there are general areas of concern presumed in the projections that are likely to affect City resources during the remainder of 2010 and into 2011.

Chief among these concerns is the employment picture. The City’s unemployment rate for June 2010 was 11.4 percent (not seasonally adjusted) and is not anticipated to return to the pre-recession level of 5.8 percent for some time. Employment levels not only have a direct impact on income taxes, but also play a significant role in the performance of other revenues that rely on a public perception of strength in the economy to flourish, such as revenues related to real estate, business, recreation, tourism and consumption.

With the exception of some potential commercial transactions, the real estate market will remain soft. The number and median prices of home sales in the City will continue to recover very slowly. Boom cycle activity experienced from 2003-2007 that elevated real estate transfer taxes and construction-related revenue to unprecedented

CONTINUED


growth will not return as the real estate market trudges through the current bust cycle.

Consumer confidence will remain apprehensive and result in limited consumer spending that focuses on necessities.

The actions of the federal and state government will also play a role on the local economy. It is not yet clear how the expiration of federal stimulus funding will impact the local economy. In addition, the state’s financial situation, which has already manifested in the delay in distributions to local governments, will continue to be problematic. Any action to alleviate the state’s situation is certain to impact the local economy.

This chapter relies on information from the following sources:

State of Illinois Fiscal Year 2011 Budget, Economic Outlook and Revenue Forecast

Illinois Commission on Government Forecasting and Accountability, 2010 Monthly Briefings

Federal Reserve Board Beige Books for the Seventh District-Chicago, 2010

Federal Reserve Board of Governors, Current Economic Conditions by Federal Reserve District, August 2010

New York Federal Reserve Bank, U.S. Economy and Financial Markets, September 2010

Philadelphia Federal Reserve Bank: Business Outlook Survey, September 2010; Survey of Professional Forecasters, 3rd Quarter 2010; The Livingston Survey, June 2010; Aruoba-Diebold-Scotti Business Conditions Index, 3rd Quarter 2010; and State Leading Indexes, July 2010

Chicago Federal Reserve Bank: Chicago Fed Midwest Manufacturing Index (CFMMI), Aug. 26, 2010 and Chicago Fed National Activity Index (CFNAI), Aug. 23, 2010

Regional Economics Applications Laboratory, Institute of Government and Public Affairs, University of Illinois: Housing Price Forecast: Illinois and Chicago MSA, 2010 Monthly Reports

Pew Research Center report “How the Great Recession Has Changed Life in America,” June 2010

National League of Cities: “City Fiscal Conditions in 2010,” October 2010

The Kiplinger Letter

Sporting News Magazine

UCLA, Press Release for report “The Uncertain Economy,” September 2010

U.S. Department of Commerce, Bureau of the Census web site: www.census.gov, American Community Survey tables

U.S. Department of Labor, Bureau of Labor Statistics web site: www.bls.gov

CONTINUED


DEBT AND CREDIT OUTLOOK

The City’s overall financial position has benefitted from its diligent management of resources and strategic long-term decisions. The City continues to make significant expenditure and personnel reductions and implement additional creative management practices to operate more efficiently and effectively in difficult financial times.

As of August 2010, the City’s bond ratings remain high. Fitch has assigned a rating of “AA” and Moody’s Investors Service has assigned a rating of “Aa3”. The Standard & Poor’s rating of “AA-” remains the highest rating the City has received from S&P since 1978.

These high ratings affect the City and its taxpayers in a few important ways. The City can sell its bonds at lower interest rates, so taxpayers save and provide additional funds for neighborhood improvements. The ratings also allow the City to be more flexible to respond to other funding needs.

GENERAL OBLIGATION DEBT

As of August 2010, the City’s net direct long-term general obligation debt, which includes all general obligation debt except tender notes and commercial paper, totaled $6.952 billion or $2,400.67 on a per capita basis. This equates to 2.17 percent of the total estimated fair cash value of property located within the City.

The City will use $374.8 million of the property tax levy for the purpose of paying general obligation debt service (excluding tender notes, commercial paper and bonds paid from other sources in 2010). An additional $36.6 million will is required for the City College Bond Redemption and Interest Fund.

General obligation debt can be used for any lawful uses permitted by ordinance. Long-term debt will be used to finance municipal facilities, improvement projects and certain equipment where it is appropriate to spread the cost over more than one budget year. In so doing, the City recognizes that future taxpayers, who will benefit from the investment, will pay a share of its cost. Short-term debt is appropriate for some capital equipment purchases and to satisfy the City’s cash flow needs.

General obligation debt service is payable from any moneys, revenues, receipts, income, assets or funds of the City legally available for such purpose. Revenues for enterprise and other revenue bonds must exceed debt service by the legally required coverage ratios based on the applicable trust indentures.

Fitch Ratings AA AA AA

Moody’s Investors Service Aa3 Aa3 Aa3

Standard & Poor's AA- AA- AA-

2008Rating

2009Rating

2010 Rating

BUDGET 2011

2011 PROPOSED BUDGET ANALYSES

2011

PRO

POSE

D B

UD

GET

AN

AYSE

SO v e r v i e w a n d R e v e n u e E s t i m a t e s


2010Year-End Estimate

2011Proposed Budget

%Change

Corporate Fund $3,098.3 $3,260.2 5.2%

Special Revenue Funds 419.6 445.7 6.2%

Pension Funds 458.9 456.1 (0.6%)

Debt Service Funds 595.6 585.0 (1.8%)

Enterprise Funds 1,812.4 1,822.6 0.6%

Total Resources $6,384.8 $6,569.6 2.9%

Less Proceeds of Debt (70.4) (70.4)

Less Internal Transfer (346.9) (344.4)

Net Appropriation $5,967.4 $6,154.8 3.1%

REVENUE OVERVIEW

The 2011 proposed appropriation for all local City funds is $6.15 billion, an increase of 0.8 percent from the 2010 appropriation and 3.1 percent from the 2010 year-end estimate.

The 2010 year-end revenue estimate and 2011 proposed budget for each governmental fund

type are summarized in the above table. Proceeds of debt issues transferred between funds and reimbursements or internal transfers between funds are deducted from the total resources to more accurately reflect the City appropriation. Each fund and its respective revenue sources are discussed in detail in the pages that follow.

APPROPRIATION SUMMARY

$ MillionsTABLE 5


40

PROPERTY TAX LEVY

The City of Chicago is one of seven taxing districts reflected on City residents’ bills. According to the most recent report released by the Cook County Clerk’s Office, the 2008 total property tax extension is $3.90 billion across all taxing districts within the City of Chicago, of which 21.4 percent is allocated to the City of Chicago.

The City operates under a self-imposed property tax cap which allows the levy to increase only by the rate of inflation or five percent, whichever is less. The 2011 proposed budget does not increase the City’s property tax levy.

PENSIONS AND DEBT SERVICE

In 2011, 43.0 percent of the City’s general levy, or $343.0 million, will be used to fund pension contributions for City employees. State law mandates that the City contribute an amount to each pension fund based upon payroll contributions made by employees.

In 2011, the City’s long-term debt obligations will require $370.5 million or 46.5 percent from the property tax levy to retire existing debt service related to the City’s Capital Improvement program.

LIBRARIES

The 2008 budget separated the library levy from the aggregate City of Chicago levy and provided for $83.4 million in funding for the Chicago Public Library system. In 2011, the proposed budget holds constant the library levy at $83.4 million, or 10.5 percent of the total levy. This funding supports the operations of the libraries as well as debt service on library general obligation debt.

CORPORATE

After all pension, debt service and library funding obligations have been met, the corporate fund receives the remainder of the property tax levy. The 2011 budget reflects that no property taxes will be available for the corporate fund for the seventh consecutive year.


Board of Education and School Finance

Authority53.8%

City Colleges3.2%

Cook County8.6%

Forest Preserve1.1%

Metropolitan Water Reclamation District

5.2%

City of Chicago21.4%

Park District6.7%

Municipal Employees' Annuity and Benefit

Fund15.2%

Laborers' and Retirement Board

Employees' Annuity and Benefit Fund

1.5%

Policemen's Annuity and Benefit Fund

18.0%

Firemen's Annuity and Benefit Fund

8.3%

Long Term Debt46.5%

Chicago Public Library*10.5%

CONTINUED

* This includes $5.7 million designated for the Municipal Employees Annuity and Benefit Fund.

2008 PROPERTY TAX EXTENSION

2011 PROPOSED PROPERTY TAX LEVY

$3.90 BILLION (WITHIN CITY OF CHICAGO ONLY)CHART 11

$796.9 MILLIONCHART 12


42

CORPORATE FUND

The corporate fund is the City’s general operating fund. It supports public safety, health, transportation, streets and sanitation and other City operations and services.

Total available resources to the corporate fund include revenues generated during the year and

any unreserved fund balance from the prior year. Due to the dramatic impact of the recent national recession, the City’s revenues are not expected to meet the costs of providing City services. Therefore, in addition to various cost saving measures, the 2011 budget proposes the strategic use of reserves, debt restructuring and declaration of a tax increment financing surplus to continue to maintain essential City services.

CORPORATE FUND SUMMARY$ MILLIONSTABLE 6

Tax Revenue

Utility Taxes and Fees $481.3 $479.8 $475.9 $479.5

Transaction Taxes 179.6 172.7 180.5 175.9

Transportation Taxes 155.9 155.7 148.4 149.6

Recreation Taxes 154.0 154.8 156.0 155.1

Business Taxes 79.6 78.1 78.9 77.0

Sales and Use Taxes 476.6 460.4 487.7 496.6

Income Tax & PPRT 251.8 210.3 232.5 309.9

Other Intergovernmental 5.1 5.7 4.9 4.9

Total Tax Revenue $1,783.8 $1,717.4 $1,764.8 $1,848.7

Non-Tax Revenue

Licenses and Permits $100.5 $105.7 $95.2 $95.4

Fines, Forfeitures and Penalties 252.5 262.9 258.4 254.4

Charges for Services 87.5 77.8 84.9 97.2

Municipal Parking 9.1 6.0 6.8 6.8

Leases, Rentals and Sales 10.7 19.4 15.6 16.5

Reimbursement, Interest & Other 317.5 303.3 296.8 437.4

Total Non-Tax Revenue $777.8 $775.2 $757.6 $907.6

Proceeds and Transfers In $474.6 $687.2 $573.3 $494.6

Total Revenue to the Corporate Fund $3,036.3 $3,179.7 $3,095.7 $3,250.9

Prior Year Unreserved Fund Balance $1.5 $0.0 $2.7 $9.4

Total Corporate Fund Resources $3,037.7 $3,179.7 $3,098.3 $3,260.2

2009Actual

2010Budget

2010Year End Estimates

2011Proposed

Budget


CONTINUED

CORPORATE FUND SUMMARY

As discussed in the section on the Economy’s Effect on Chicago’s Budget, the recession that began in December 2007 officially ended in June 2009, but it dealt a devastating blow to economically sensitive revenues that may take years to rebuild. After 18 months of declines, some revenue streams are slowly starting to turn to the positive. This moderate growth is expected to continue, but it is against a deep falloff, during which revenues plummeted to 2004 levels. It is anticipated that City revenues will experience only marginal growth against recession years’ revenues and the need to fund basic services will easily outpace the resources available to do so.

The 2011 proposed budget projects corporate fund resources will total $3.3 billion, an increase of 2.5 percent from the 2010 budget and 5.2 percent from the 2010 year-end estimate. The budget anticipates the strategic use of reserves, debt restructuring and declaration of a tax increment financing surplus to mitigate the falloff from the economic decline. (Detailed discussions on these options are included in sections that follow.)

REVENUE SOURCES FOR THE CORPORATE FUND

As shown in the corporate fund summary table, the corporate fund is comprised of both tax revenue and non-tax revenue. Following is a discussion on the noteworthy elements that affect the corporate fund 2011 projections.

TAX REVENUE

Corporate fund tax revenue consists of local tax revenue and intergovernmental tax revenue. Local tax revenue includes utility, transaction, transportation, recreation and business taxes. Intergovernmental tax revenue includes the City’s share of the Illinois sales and use tax, income tax, personal property replacement tax and municipal

auto rental tax. The 2011 proposed budget projects tax revenue to grow by $83.9 million from the 2010 year-end estimate and comprise 56.7 percent of the corporate fund revenue.

UTILITY TAXES AND FEES

Utility taxes and fees include taxes on electricity, natural gas and telecommunications, as well as fees received from companies for the right to operate within the City of Chicago. Utility taxes and fees are expected to generate $479.5 million in 2011, accounting for 25.9 percent of total tax revenue and 14.7 percent of total corporate fund revenue.

The electricity use tax and the electricity infras-tructure maintenance fee (IMF) are imposed on the number of kilowatt hours of electricity used. Electricity-related collections are highly dependent on weather conditions and electricity rates. During 2010, summer temperatures were higher than average, with ComEd estimating that residential customers used 55 to 65 percent more energy to cool their homes compared to last year, one of the coolest summers on record. The 2011 projection assumes historical electricity consumption.

The natural gas utility tax and the natural gas use tax are imposed on natural gas consumption. The natural gas utility tax is an 8.0 percent tax imposed on the sale of natural gas and the natural gas use tax is a 6.3 cents per-therm tax imposed on entities that do not pay the utility tax. Natural gas tax collections are highly dependent on weather conditions and natural gas prices. Gas prices during 2008 were historically high, with rates as high as 149.9 cents per therm. During 2009, gas charges declined by 48 percent to 55.1 cents to per therm and have remained in this range throughout 2010 with a year-to-date average of 53.9 cents per therm. The 2011 projection assumes only minimal growth in gas charges at historical consumption levels.


44

CONTINUED

ELECTRICITY/INFRASTRUCTURE MAINTENANCE FEE

NATURAL GAS AND GAS USE TAX

2005 TO 2011 PROJECTEDCHART 13


$0

$50

$100

$150

$200

$250

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

Electricity IMF

Electricity Use

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

Natural Gas Use

Natural Gas Utility


45

CONTINUED

Telecommunications tax collections, which have demonstrated strong growth in recent years in the wireless sector that have offset the falloff in the landline sector, are now manifesting an industry-wide decline. The 2010 year-end estimate and 2011 projection assumes this will persist and accounts for the resolution of various outstanding overpayment credits.

The cable television franchise fee is imposed on businesses that operate cable television systems in Chicago. The 2011 projection assumes no growth will occur in this revenue source.

TRANSACTION TAXES

Transaction taxes include taxes on the transfer of real estate, the lease or rental of personal property and the short-term lease of motor vehicles within the City of Chicago. Transaction taxes are expected to generate $175.9 million in 2011, accounting for 9.5 percent of total tax revenue and 5.4 percent of corporate fund revenue.

In the years leading up to the recession, real estate transfer tax collections reached record levels. During the boom period from 2004 through 2007, collections totaled $190.8 million, $236.3 million, $242.3 million and $205.8 million respectively. The collapse of the real estate market swept the nation into a bust cycle that drove down these collections

to only a quarter of the amount collected at its height. Based on year-to-date trends, 2010 year-end collections are expected to decline by nearly $171 million from 2006 peak collections, generating the lowest annual collections since 1997. This is despite low interest rates and the Federal Home Buyer Tax Credit stimulus program in effect for most of the year. Through 2011, real estate transaction tax revenues are expected to experience a total loss of more than $500 million due to the recession and its aftermath.

The real estate market is expected to remain soft for the foreseeable future. Opportunistic buyers may generate some momentum, particularly in the commercial market, as was the case this year with the sale of the office building at 300 N. LaSalle, a record sale on a per-square foot basis and the city’s biggest real estate transaction since 2004.

In the residential market, foreclosures, tight lending and an overabundance of property on the market will keep growth constrained. The 2011 projection assumes a 8 percent decline from 2009 year-end estimates.

Personal property lease transaction tax applies to the lease or rental of personal property. Collections during 2010 have suffered due to the recessionary economy’s impact on personal consumption and tourism. The 2011 projection assumes only minimal growth from the 2010 year-end estimate.


46

CONTINUED

TELECOMMUNICATIONS TAX

CABLE FRANCHISE FEE



$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

$0

$5

$10

$15

$20

$25

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


47

CONTINUED

REAL ESTATE TRANSFER TAX

PERSONAL PROPERTY LEASE TAX



$0

$50

$100

$150

$200

$250

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

$0

$20

$40

$60

$80

$100

$120

$140

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


48

CONTINUED

TRANSPORTATION TAXES

Transportation taxes include those on parking transactions, vehicle fuel purchases and the provision of ground transportation for hire within the City of Chicago. Transportation taxes are expected to generate $149.6 million in 2011, accounting for 8.1 percent of total tax revenue and 4.6 percent of total corporate fund revenue.

Parking tax collections have continued to suffer through 2010 as a result of the recession’s impact on various industries that are tied to parking activity, including retail and tourism. In addition, the overall decline in business and employment is manifesting in a reduced need for office space as evidenced by current downtown office vacancy rates. The 2011 projection assumes only minimal year-over-year growth.

Vehicle fuel tax collections have remained depressed. During 2008, historically high gas prices at an annual average of $3.78 per gallon reduced collections considerably as consumers and airlines implemented fuel conservation strategies. Although gas prices since that time have moderated and are currently averaging $3.02 per gallon, collections have not rebounded. This is due in part to the economic downturn, but it is also believed that the downward trend may be the new norm as consumers have placed more emphasis on fuel efficiency. The 2011 projection assumes only slight growth in this revenue source.

Ground transportation tax collections are expected to remain level in 2011. The majority of these collections are from taxicab drivers who pay a flat rate of $78 per month. It is assumed that this taxpayer base will remain constant.

PARKING TAX2005 TO 2011 PROJECTEDCHART 19

$0

$20

$40

$60

$80

$100

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


CONTINUED

VEHICLE FUEL TAX

GROUND TRANSPORTATION TAX



$0

$10

$20

$30

$40

$50

$60

$70

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

$0

$1

$2

$3

$4

$5

$6

$7

$8

$9

$10

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


50

CONTINUED

RECREATION TAXES

Recreation taxes include taxes on amusements, auto amusement devices, mooring (docking) of boats, liquor purchases, cigarette purchases, non-alcoholic beverage purchases and off-track betting within the City of Chicago. Recreation taxes are expected to generate $155.1 million in 2011, accounting for 8.4 percent of total tax revenue and 4.8 percent of total corporate fund revenue.

Amusement tax collections have been able to sustain growth through the recession. From die-hard fans to newfound fans, Chicago has lived up to the distinction bestowed upon it in Sporting News Magazine’s annual list of Best Sports Cities as the best sports city in the U.S. for 2010.

A highlight that will remain with the City for years to come was the Stanley Cup Championship win by the Chicago Blackhawks and the related celebrations that lifted a recession-weary city out of the doldrums.

Unfortunately, other businesses within the hospitality industry have not been as “recession-proof” as evidenced by the decline in live theater

attendance. The 2011 projection assumes 3 percent growth from the 2010 year-end estimate excluding post season activity.

The liquor tax is based on the number of gallons of alcoholic beverages purchased with the rate varying depending on the alcohol-by-volume content of the beverage. The 2011 revenue projection assumes level consumption from the 2010 estimate.

Cigarette tax collections have fallen year-over-year as purchase activity has declined in response to the smoking bans and tax rate increases passed by the various taxing jurisdictions in recent years. With no changes anticipated in the coming year, the 2011 projection assumes flat consumption from 2010.

Non-alcoholic beverage tax collections are expected to grow slightly in 2010 due an expansion in the state’s definition of soft drinks to include some previously exempt purchases effective September 2009 and to remain flat in 2011.


AMUSEMENT TAX


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

LIQUOR TAX2005 TO 2011 PROJECTEDCHART 23

$0

$5

$10

$15

$20

$25

$30

$35

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

CONTINUED


52

CONTINUED

CIGARETTE TAX


$0

$5

$10

$15

$20

$25

$30

$35

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

NON-ALCOHOLIC BEVERAGE TAXES2005 TO 2011 PROJECTEDCHART 25

$0

$2

$4

$6

$8

$10

$12

$14

$16

$18

$20

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


CONTINUED

BUSINESS TAXES

Business taxes include taxes on the lease of hotel accommodations, the employment of more than fifty employees and the sale of fire insurance within the City of Chicago. Business taxes are expected to generate $77.0 million in 2011, accounting for 4.2 percent of total tax revenue and 2.4 percent of total corporate fund revenue.

Hotel accommodations tax collections are beginning to experience some year-over-year growth after 18 months of declines brought on by the recession’s impact on tourism, business travel and convention attendance. According to hotel statistics maintained by the Convention and Tourism Bureau, year-over-year average occupancy rates are up 2.7 percentage points and average room rates are down 2.4 percent, but have been

in the positive for the most recent months. Hotel industry analysts are forecasting that momentum will continue to build during the remainder of 2010 which will lead to the beginning of a turnaround in 2011. Hotel tax collections for the 2010 year-end and 2011 projection account for these forecasts but assume only 1.5 percent growth and still below historical collections.

Employers’ expense tax collections are expected to decline predominantly due to legislative actions fostered by the City in 2010 and proposed for 2011 to encourage job creation by local employers.

In 2010, an amendment was passed to 1) relieve businesses with no obligation for the tax in the tax year ending June 30, 2009 of an obligation for the tax in the tax years ending June 30, 2010 or June 30, 2011; and 2) cap the amount of liability for the tax to insure that no employer’s obligation

$0

$10

$20

$30

$40

$50

$60

$70

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

HOTEL ACCOMMODATIONS TAX2005 TO 2011 PROJECTEDCHART 26


54

CONTINUED

EMPLOYERS’ EXPENSE TAX


$0

$5

$10

$15

$20

$25

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

for the tax would increase in the tax years ending June 30, 2010 or June 30, 2011.

In 2011, the City proposes an amendment to reduce the number of taxable employees for which businesses are currently liable through a change in the definition of a taxable employee. Currently, one element for which an employee is

considered taxable is that the employee must earn $900 per quarter. Under this change, an employee must earn $4,300 per quarter. The salary of $4,300 equates to current Illinois minimum wage ($8.25 per hour) at 40 hours per week so that only full-time employees are considered taxable.


55

CONTINUED

SALES AND USE TAXES

Sales and use tax revenue is generated from the Chicago Home Rule Occupation and Use taxes (HROT) and the Illinois Municipal Retailer Occupation and Use taxes (MROT). Occupation taxes are assessed on the retailer and collected from the purchaser at the point of sale, while use taxes are imposed on the privilege of using certain types of personal property within the City.

Effective July 1, 2010, general merchandise purchases in Chicago are subject to a combined sales tax rate of 9.75 percent, of which the City receives the 1.25 percent HROT and 1.0 percent MROT. The remainder is attributed to the State of Illinois, the Regional Transportation Authority and Cook County as detailed in the chart on the next page.

The City of Chicago imposes the HROT on the retail sale of tangible personal property excluding most sales of food, medicine and medical appliances. The tax is collected and enforced by the Illinois Department of Revenue. Additional components of the HROT include the nontitled use tax, titled use tax and restaurant tax, all of which are collected and enforced by the Chicago Department of Revenue. As listed, the HROT amount is net of $26.7 million of debt service obligations in 2011.

The State of Illinois also collects and enforces the MROT on behalf of municipalities. Its tax base differs from the HROT in that it includes qualifying food and drugs.

Sales and use taxes are expected to generate $496.6 million in 2011, accounting for 26.9 percent of total tax revenue and 15.2 percent of total corporate fund revenue.

From 2004 to 2007, sales and use tax base receipts grew approximately 7.8 percent on average per year. In the Fall of 2008, the point at which most economists agree the economy fell off a cliff, sales

tax receipts began a year-over-year decline of 8.9 percent per month on average that would carry on for the next 17 months.

During 2010, a slow growth trend has emerged that has mirrored national indices on consumer confidence and consumer sentiment of fluctuating consumer attitudes. While this growth has been welcome news, it is against a very depressed base and still well below pre-recession levels. Through 2011, sales tax revenues are expected to experience a total loss of nearly $200 million due to the recession and its aftermath.

It is unlikely that a resurgence in consumer spending is on the horizon. Household wealth has deteriorated and expectations about labor market conditions leave consumers feeling apprehensive, at best. Overall, sales and use taxes are expected to grow by less than 2 percent in 2011.


56

City of Chicago HROT1.25%

Municipal ROT1.00%

State of Illinois ROT5.00%

RTA1.00%

RTA/County ROT0.25%

Cook County HROT1.25%

CONTINUED

SALES TAXES

SALES TAXES


9.75% SALES TAX BREAKDOWNCHART 29

$0

$100

$200

$300

$400

$500

$600

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

State Sales Tax/ROT

City Sales Tax/HROT


57

CONTINUED

INCOME TAX

Income taxes include the State of Illinois Income Tax and the Personal Property Replacement Tax (PPRT), both of which are distributed to the City of Chicago based on defined formulas. Income taxes are expected to generate $418.1 million in gross collections in 2011, of which $309.9 million is designated for the corporate fund, accounting for 16.8 percent of total tax revenue and 9.5 percent of total corporate fund revenue.

Income taxes have been hard hit by a weakened labor market struggling with the doubling of the unemployment rate and the shrinking of corporate profits.

Compounding the problem, the State of Illinois’ fiscal crisis has lead to a delay in distributions to local governments. In 2009, the City was unable to recognize two distributions totaling $32.3 million because funds were not released by the state in a timely manner. During 2010, as many as 148 days have elapsed from the date the state authorizes the distribution to the date the funds are ultimately released to the City; prior to 2009, this took 23 days on average.

The City is working with the State to ensure all outstanding distributions are received by the end of fiscal year 2011.

On an activity basis (without regard to distribution delays), in the Fall of 2008, income tax and PPRT receipts began a year-over-year decline of 14.1 percent per month on average that would carry on for the next 20 months.

During 2010, these receipts began to turn to the positive as news came out that unemployment in Illinois dropped for the first time in more than three years and corporate profits began to show some life. Still, employment remains weak. The City’s unemployment rate for June 2010 was 11.4 percent (not seasonally adjusted) and is not anticipated to return to the pre-recession level of 5.8 percent for some time. Through 2011, income tax revenues are expected to experience a total loss of nearly $340 million due to the recession and its aftermath.

Overall, gross tax collections for the income tax and PPRT on an activity basis (without regard to distribution delays) are expected to grow by 6.2 percent in 2011, with most of the growth on the corporate income tax side.


58

INCOME TAXES2005 TO 2011 PROJECTEDCHART 30

$0

$50

$100

$150

$200

$250

$300

$350

$400

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

Personal Prop Replacement Tax(Corporate Share) State Income Tax

CONTINUED


CONTINUED

NON-TAX REVENUE

Non-tax revenue consists of revenue from licenses and permits; fines, forfeitures and penalties; various charges for services; municipal parking; leases, rentals and sales; internal service earnings; interest and other revenue. The 2011 proposed budget projects non-tax revenue to grow by $150 million from the 2010 year-end estimate and comprise 27.8 percent of the corporate fund revenue.

LICENSES AND PERMITS

Licenses and permits include alcohol dealer licenses, business licenses, building permits and various other permits. Licenses and permits are expected to generate $95.4 million in 2011, accounting for 10.5 percent of total non-tax revenue and 2.9 percent of total corporate fund revenue.

Business license revenue has declined due to the recession as well as legislative changes by the City intended to assist businesses and spur economic activity during the downturn.

Construction activity in Chicago experienced a severe decline as a result of the recession. Activity is expected to remain well below peak levels for the immediate future as the real estate market stabilizes and therefore, revenue from building permits and construction related permits will not experience growth.

FINES, FORFEITURES & PENALTIES

Fines, forfeitures and penalties include parking tickets, red-light camera tickets and other administrative hearings and court related fines. Fines, forfeitures and penalties are expected to generate $254.4 million in 2011, accounting for 28 percent of total non-tax revenue and 7.8 percent of total corporate fund revenue.

The 2011 projection for fines, forfeitures and penalties represents a 1.5 percent decline from the 2010 year-end estimate which accounts for no additional red light installations and a decline in ticket issuance at existing cameras with safer motorist behavior.


60

CONTINUED

LICENSES AND PERMITS

FINES, FORFEITURES AND PENALTIES



$0

$20

$40

$60

$80

$100

$120

$140

$160

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

$0

$50

$100

$150

$200

$250

$300

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


CONTINUED

OTHER NON-TAX REVENUES

CHARGES FOR SERVICES

Charges for services include revenues generated from such activities as inspections, public information requests, safety charges, other miscellaneous charges and current expenses reimbursements. Charges for services are projected to generate $97.2 million in 2011, accounting for 10.7 percent of total non-tax revenue and 3.0 percent of total corporate fund revenue.

The 2010 year-end estimate and 2011 projection for charges for services account for agreements currently in effect for safety reimbursements and assume inspection related activity in line with historical levels. In 2011, the recommended budget anticipates an increased reimbursement from the Chicago Public Schools for safety-related services provided by the Chicago Police Department.

MUNICIPAL PARKING

Municipal parking includes revenues generated from parking meters (prior to the concession of the City’s parking meter and parking lot operations) and various parking permits.

Municipal parking revenue is expected to generate $6.8 million in 2011, accounting for 0.7 percent of total non-tax revenue and 0.2 percent of total corporate fund revenue.

In 2011, no parking meter revenue will be realized in this category. The remainder of the revenue is made up of various parking permits which are expected to remain level with 2010.

LEASES, RENTALS AND SALES

Leases, rentals and sales include revenues generated from the sale of City-owned land, impounded vehicles and other personal property. Leases, rentals and sales are expected to generate

$16.5 million in 2011, accounting for 1.8 percent of total non-tax revenue and 0.5 percent of 2011 corporate fund revenue.

Land sales, which continue to fall below peak levels due to the downturn in the real estate market, account for $8.8 million of this category. This includes revenue anticipated from the reduction in City office space needs in the DePaul Center.

The sale of materials, which has been impacted by sharp declines in the global demand for recyclable materials, will decline in 2011 due to the City’s efforts to privatize recycling.

INTERNAL SERVICE EARNINGS

This category represents transfers to the corporate fund for central services (police, fire, streets and sanitation, and others) provided to other City funds.

The corporate fund receives reimbursements for specific and identifiable projects as delineated in Appendix A of the 2011 Budget Recommendations. The 2011 projection for Internal Service Earnings is $349.6 million, accounting for 38.5 percent of total non-tax revenue and 10.7 percent of total corporate fund revenue.

OTHER REVENUE

This category represents revenue that does not fall within other defined categories and is generally made up of non-recurring revenue sources.

Other revenues is projected to generate $84.7 million in 2011, accounting for 9.3 percent of total non-tax revenue and 2.6 percent of total corporate fund revenue. The 2011 budget anticipates $38.5 million in proceeds due to the declaration of surplus across multiple Tax Increment Financing districts.


62

CONTINUED

PROCEEDS AND TRANSFERS-IN

Proceeds and Transfers-in includes transfers into the corporate fund from other City funds and proceeds from short-term borrowing. Transfers-in represent movement of resources into the corporate fund from reserves and other non-recurring revenue sources. Proceeds represent short-term borrowing in anticipation of debt restructuring and other debt refunding.

LONG-TERM RESERVES

The City established a $500 million long-term reserve with the lease of the City’s Skyway in 2005 and a $400 million long-term reserve with the concession of the parking meter operations in 2009.

Realizing the importance of maintaining reserves, the 2011 budget preserves the $500 million Skyway long-term reserve. This $500 million reserve represents over 15 percent of the City’s general fund in the 2011 budget, above the recommended

amount by the Government Finance Officers Association.

The dramatic impact of the recent national recession on the City’s revenues requires a reliance on the City’s long-term reserves. The 2010 budget included a temporary partial use of $250 million of the parking meter long-term reserve (Parking Meter Revenue Replacement Fund). However, due to significant expense savings and revenues exceeding the original budget projections, the amount of long-term reserves needed for 2010 operations will decreased by $60 million to $190 million.

While the national recession commencing in 2007 officially ended in June of 2009, the impact of this 18 month recession – the longest since the end of World War II – continues to dramatically reduce City revenues. Since the peak year of 2007, the City has lost $1.03 billion in economically sensitive revenues, including the $297.1 million reduction from the peak projected for 2011.

2011 RECOMMENDATIONS: LONG AND MID-TERM RESERVES $ MILLIONSTABLE 7

2009 2010 2011 Estimated Balance on 12/31/2011

Budget Actual Budget Revised BudgetSkywayLong-term reserve $ - $ - $ - $ - $ - $ 500Long-term annual annuity 25 25 25 25 15

Mid-term annuity 50 50 50 50 50

Total $ 75 $ 75 $ 75 $ 75 $ 65

Parking Meter

Long-term reserve $ - $ - $ 250 $ 190 $ 120 $ 54Long-term annual annuity 20 20 20 20 20 Mid-term annuity 50 50 150 100 83

Budget Stabilization “Rainy Day” 218 218 102 102 -

Total $ 288 $ 288 $ 522 $ 412 $ 223

Parking Meter Human Infrastructure Fund $ 22

Grand Total $ 576


CONTINUED

Because these important revenue sources to the City remain sluggish and well below 2007 levels, the corporate fund will continue to rely on the use of long-term reserves in 2011 to fund essential City services. The 2011 budget recommends drawing $119.9 million from the parking meter long-term reserve fund, leaving an estimated balance of $54.0 million on December 31, 2011.

In total, $75.9 million of parking meter reserves is estimated for December 31, 2011. This represents the $54.0 million in from the long-term reserve and the $21.9 million estimated balance in the parking meter human infrastructure fund.

MID-TERM RESERVES

Both the Skyway and parking meter transactions established mid-term reserves and as scheduled, $50 million will transfer into the corporate fund

from the Skyway mid-term reserve and $50 million from the parking meter mid-term reserve in 2011. The 2010 budget called for the advancement from the originally scheduled parking meter mid-term reserve of $100 million from 2012 into 2010. However, due to significant expense savings and revenues exceeding the original budget projections, the 2011 budget recommendations reflect moving one-half of the $100 million from 2010 to 2011.

OTHER PROCEEDS AND TRANSFERS-IN

General obligation debt restructuring will provide for $91.9 million in resources available in 2011. An additional $55 million of proceeds is anticipated as the result of other financial initiatives, including the monetizing and/or restructuring of other financial transactions.

2008$(108.10)

2009$(308.60)

20 0

$(400.00)

$(200.00)

$

2010$(317.55)

2011$(297.15)

$(1,200.00)

$(1,000.00)

$(800.00)

$(600.00)

$1.03 billion

ECONOMICALLY SENSITIVE REVENUES

$1.03 BILLION LOST SINCE 2007 PEAK YEAR $ MILLIONS (BASED ON ACTIVITY MONTHS)CHART 33


64

SPECIAL REVENUE FUNDS

Special revenue funds are used to account for revenue from specific taxes and other sources that by law are designated to finance particular functions. The 2011 proposed budget projects special revenue fund resources of $445.7 million, an increase of 6.2 percent over the 2010 year-end estimate.

VEHICLE TAX FUND

The vehicle tax fund is used for City street repair and maintenance. Vehicle tax fund revenue is primarily generated through the sale of vehicle stickers. This revenue source is expected to generate $104.4 million in 2011.

The vehicle tax fund will also receive revenue from impoundment fees, abandoned auto towing fees, pavement cut fees, commercial refuse container fees and reimbursements from other local, state and federal funds for maintenance of the public way (detailed in Appendix B of the 2010 Budget Recommendations).

Total resources available to the vehicle tax fund are projected to be $143.7 million in 2011.

MOTOR FUEL TAX FUND

The motor fuel tax fund is another source of revenue for City street repair and maintenance. The state imposes a 19 cent tax per gallon of gas of which the City receives a distributive share based on its population. In addition to this regular distribution, the City anticipates additional funding from the state as part of the Illinois Jobs Now! program. Announced in September 2010, the state intends to make a $100 million capital investment in local transportation needs, of which the City is estimated to receive approximately $12.5 million in 2010 and additional funding in five subsequent installments. Total resources available to the motor fuel tax fund are projected to be $66.2 million in 2011.

LIBRARY FUNDS

The City maintains Chicago Public Library funds for maintenance and operations and for buildings and sites. Including proceeds of debt supported by the separate Chicago Public Library Property Tax Levy, interest income, facility rental revenue, fines, and prior-year unreserved balance, the total resources available to the library funds are projected to be $95.3 million in 2011 which includes a corporate fund subsidy of $15.7 million.

2009Actual

2010Budget

2010Year EndEstimate

2011Proposed

Budget

Vehicle Tax Fund $133.4 $147.6 $139.5 $143.7

Motor Fuel Tax Fund 40.0 74.1 49.1 66.2

Library Funds 91.8 93.9 94.8 95.3

Emergency Communication Fund 75.9 76.5 72.6 71.8

Hotel Tax Fund* 23.5 23.1 23.0 36.6

Special Events Fund* 16.5 19.8 12.4 0.0

CTA Real Estate Transfer Tax Fund 25.4 22.8 28.2 26.1

TIF Administration Fund - - 0.0 5.9

Total $406.4 $457.8 $419.6 $445.7

SPECIAL REVENUE FUNDS$ MILLIONSTABLE 8

*The 2011 budget proposes to merge the Hotel Tax and Special Events Funds

CONTINUED


65

CONTINUED

VEHICLE TAX FUND

MOTOR FUEL TAX FUND



$0

$20

$40

$60

$80

$100

$120

$140

$160

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions


66

CONTINUED

EMERGENCY COMMUNICATIONS FUND

The emergency communications fund finances expenditures related to the maintenance and operation of the City’s emergency communications and 911 Center. It is funded through the collection of the emergency telephone system (911) surcharge on all billed subscribers of telecommunications services within the City. The surcharge is levied at a rate of $2.50 per month per landline and wireless connection. In 2011, the 911 surcharge is projected to generate $94.2 million. This revenue supports both the emergency communication bond redemption fund and the emergency communications fund. After funding debt service of $22.3 million, the emergency communications fund will reimburse the corporate fund for the Office of Emergency Management and Communications’ operating costs.

SPECIAL EVENTS AND HOTEL TAX FUND

The special events and hotel tax fund supports the promotion of tourism in Chicago. It is funded primarily by the municipal hotel occupation tax. Historically two separate funds, the 2011 budget

proposes to merge the Special Events and Municipal Hotel Tax funds.

Similar to the corporate fund hotel accommodations tax, municipal hotel occupation tax collections are beginning to experience some year-over-year growth after several months of declines brought on by the recession’s impact on tourism, business travel and convention attendance. According to hotel statistics maintained by the Convention and Tourism Bureau, year-over-year average occupancy rates are up 2.7 percentage points and average room rates are down 2.4 percent, but have been in the positive for the most recent months.

Hotel industry analysts are forecasting that momentum wil l continue to build during the remainder of 2010 which will lead to the beginning of a turnaround in 2011. Municipal hotel tax collections for the 2010 year-end and

2011 projection account for these forecasts but assume only 1.5 percent growth and still below historical collections.

Proceeds from food and beverage ticket sales, vendor fees and external corporate sponsorship at City-sponsored events are projected to generate $16.5 million in 2011.

Other revenues that support this fund include revenues from the street furniture program and ice rink rentals which are expected to remain level. Total resources available to the special events and hotel tax fund are projected to be $36.6 million in 2011.

CTA REAL ESTATE TRANSFER TAX FUND

The CTA Real Estate Transfer Tax Fund supports public transportation in the City. On April 1, 2008, a supplemental real estate transfer tax became effective for the purpose of providing financial assistance to the Chicago Transit Authority (CTA).

As discussed in the corporate fund City real estate transfer tax section, real estate activity is expected to remain constrained in 2011.

Total available resources to the CTA real estate transfer tax fund are projected to be $26.1 million in 2011.

TAX INCREMENT FINANCING ADMINSTRATION FUND

In order to be in compliance with state law, the 2011 budget includes a new Tax Increment Finance Administration Fund. In 2011, $5.9 million of administrative expenses incurred by the City will be reimbursed through Tax Increment Financing administrative reimbursement.


67

CONTINUED

EMERGENCY COMMUNICATIONS FUND

SPECIAL EVENTS AND MUNICIPAL HOTEL TAX FUND



$0

$100

$200

$300

$400

$500

$600

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

State Sales Tax/ROT

City Sales Tax/HROT

$0

$10

$20

$30

$40

$50

$60

2005 2006 2007 2008 2009 2010 Estimated

2011Projected

Mill

ions

Special Events Fund - 356

Special Events and Municipal Hotel Operators'Occupation Tax Fund - 355


68

CITY PENSION CONTRIBUTIONSTABLE 9

PENSION FUNDS

The City currently contributes to four pension funds as required by the Illinois Compiled Statutes. The funds provide retirement, death and disability benefits to covered employees. The four funds are: The Municipal Employees’ Annuity and Benefit Fund, Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund, the Policemen’s Annuity and Benefit Fund, and the Firemen’s Annuity and Benefit Fund. In addition, certain employees of the Chicago Board of Education also participate in the municipal fund, for which the City is required to satisfy employer contributions through separate property tax levy and personal property tax replacement revenues.

Prior to issuing the annual preliminary budget, the City requests from pension fund actuaries a determination on the contribution that the City is required to incorporate within budget recommendations. The following table illustrates the City’s contribution.

Actuary analysis concluded that a total of $456.1 million will be required to meet the City’s legally required employer contributions in 2011. This obligation will be financed with $348.7 million in property tax collections and $107.4 million in personal property replacement tax collections.

Municipal Employees’ Annuity and Benefit Fund

$129,038,000 X 1.25 = $161,297,000

Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund

$15,640,000 X 1.00 $15,640,000

Firemen’s Annuity and Benefit Fund2 $38,913,000 X 2.26 $87,944,000

Policemen’s Annuity and Benefit Fund $95,615,000 X 2.00 $191,229,000

Total Resources

1Multipliers are set in State statute. 2An additional $1.3 million is set aside for the fund apart from the contribution calculation due to State statute.

2009Member

Contributions

MultiplierProposed Budget1

2011City Contribution


DEBT SERVICE FUNDS

Debt service funds rely on property tax levies and certain other revenues that are used for the payment of principal and interest and the redemption of general obligation bond issues. Not including debt supported by other sources than the City’s property tax, the 2011 budget recommendations reflect a total appropriation of $411.4 million to service general obligation debt. This includes a property tax levy of $370.5 million. Capital debt service funding for the Library capital program will remain at $4.3 million.

General obligation debt can be used for any lawful uses permitted by ordinance. Long-term debt will be used to finance municipal facilities, projects and certain equipment where it is appropriate to spread the cost over more than one budget year. In so doing, the City recognizes that future taxpayers who will benefit from the investment will pay a share of its cost. Short-term debt is appropriate for some capital equipment purchases and to satisfy the cash flow needs of the City on an extremely limited basis.

Debt service accounts for 46.5 percent of the City’s property tax levy not including the library debt. As of August 2010, the City’s net direct long-term general obligation debt, which includes

all general obligation debt except tender notes and commercial paper, totaled $6.952 billion or $2,400.67 on a per capita basis. This equates to 2.17 percent of the total estimated fair cash value of property located within the City.

As of August 2010, the City’s bond ratings remain high. Fitch has assigned a rating of “AA” and Moody’s Investors Service has assigned a rating of “Aa3”. The Standard & Poor’s rating of “AA-” is the highest rating the City has received from S&P since 1978.

DAILY TENDER NOTES

The City issues short-term debt through daily tender notes to provide working capital for several operating funds. The 2011 tender notes are funded by the 2011 property tax levy. Proceeds from tender notes are distributed to the library operations funds.

OTHER DEBT SERVICE

Other debt service funds that do not rely on property taxes are the emergency communication bond fund and the sales tax bond redemption and interest fund.


70

ENTERPRISE FUNDS

Enterprise funds support the operation, main-tenance, and capital costs of the City’s water and sewer systems, and O’Hare and Midway International Airports. The 2011 proposed budget projects enterprise fund resources of $1.8 billion, an increase of 0.6 percent over the 2010 year-end estimate.

WATER FUND

The water fund is projected to have $493.1 million in total available resources in 2011, of which water fees are projected to generate $443 million, or 89.8 percent of total resources. An additional $28 million will be generated by transfers from other funds for work performed by the Department of Water Management. Miscellaneous resources account for $21 million and interest income is projected at $1.1 million.

SEWER FUND

The sewer fund is projected to have $209.3 million in total available resources in 2011, of which sewer fees are projected to generate $196.6 million, or

93.9 percent of total resources. In 2011, the sewer rate is set at 86 percent of water fees collected within the City. The remaining $12.7 million in resources is the result of transfers and other income.

O’HARE AND MIDWAY INTERNATIONAL AIRPORT FUNDS

In accordance with airport use agreements, the airport enterprise funds are supported by rental and landing fees charged to the airlines and by concessions and other revenues generated from airport activities. After taking into account all non-airline revenue sources, airline rates and charges are adjusted to generate sufficient revenue to operate the airports and to fund debt service requirements.

In 2011, total projected revenues from O’Hare and Midway operations, including concession and rental fees, airport rates and charges and other revenue sources, are projected to be $899.3 million for O’Hare and $220.9 million for Midway.

Water Fund $457.7 $499.9 $493.1 $493.1

Sewer Fund 189.3 211.5 209.3 209.3

Midway Airport Fund 176.0 210.0 217.5 220.9

O’Hare Airport Fund 715.7 879.0 892.5 899.3

Total Resources $1,538.8 $1,800.5 $1,812.4 $1,822.6

2009Actual

2010Budget

2010Year-End Estimate

2011Proposed

Budget

ENTERPRISE FUND APPROPRIATION SUMMARY$ MILLIONSTABLE 10


OVERVIEW

The proposed budget reflects expenditures for 2011 totaling $6.15 billion for all local funds. This is a less than a 1.0 percent increase over the 2010 appropriation.

The City’s budgeted expenditures presented in this Expenditures and Personnel section reflect the City’s corporate and other local funds. As part of an ongoing effort to increase transparency in government, the Tax Increment Financing fund is included as a local fund in the 2011 proposed budget. In addition to local funds, many of the City’s programs and services are also funded in part by grant funds which are discussed in the next section titled “Grants.”

City Departments are organized into functional groups defined and discussed later in this section.

These groups are Finance and Administration, Legislative and Elections, City Development, Community Services, Public Safety, Regulatory, Infrastructure Services and Public Service Enterprises. The City budget also contains a Finance General budget for citywide expenditures such as pension obligations, debt service and employee health care that is managed by the Office of Budget and Management and the Department of Finance.

Of the proposed 2011 budget, Finance General and Public Safety represent 44.3 percent and 29.4 percent of the overall budget respectively. Public Safety costs represent 57.6 percent of the corporate fund budget, and together with an estimated $323.6 million share of health care costs in Finance General, these departments represent 67.5 percent of the proposed corporate fund budget.

PUBLIC SAFETY SHARE OF THE 2011 PROPOSED CORPORATE FUND BUDGET

All OtherDepartments

32.5%

Public Safety *67.5%

*Includes estimated share of employee benefits

CHART 38


72

CONTINUED

The next largest categories are Public Service Enterprises, Finance and Administration and Infrastructure Services with 9.4 percent, 7.3 percent and 5.6 percent of projected 2011 costs respectively. City Development and Community Services together represent 2.6 percent of the 2011 proposed budget for local funds. However, these departments are funded primarily by grants and receive only a small portion of funding from corporate and other local funds.

The City’s personnel costs represent the most significant portion of its budget needs. For Chicago, more than 83 percent of corporate funds are budgeted for personnel costs, which include salaries, health care, overtime pay, Medicare payments, workers’ compensation, vacation and unemployment compensation. Collective

bargaining agreements with unions determine the majority of these costs. The 2011 proposed budget reduces the number of full-time positions across all local funds by 0.7 percent, or 234 budgeted positions eliminated across funds.

While the proposed 2011 budget decreases the position count, the cost of the workforce increases each year in wages, benefits and pension costs. The majority of the City’s workforce is covered by collective bargaining agreements which will represent 29,859 of the local funds full time positions, or 90.7 percent of the City’s total positions. The City has agreements with collective bargaining units for the proposed budget year and rates for union covered employees are based on those contractual agreements.

Finance and Administration $500.8 $481.7 -3.8%

Legislative and Elections 38.8 45.0 16.2%

City Development 68.5 58.3 -14.8%

Community Services 116.8 109.3 -6.4%

Public Safety 1,837.4 1,929.5 5.0%

Regulatory 63.6 55.1 -13.3%

Infrastructure Services 377.1 367.4 -2.6%

Public Service Enterprises 609.0 616.0 1.2%

General Financing Requirements 2,881.7 2,907.3 0.9%

Total - All Functions Before Reimbursements $6,493.6 $6,569.6 1.2%

Deduct Reimbursements Between Funds (317.0) (344.4) -

Deduct Proceeds of Debt (70.4) (70.4) -

Net Total Appropriations $6,106.1 $6,154.8 0.8%

2010Budget

2011Proposed Budget

%Change

PROPOSED BUDGET BY FUNCTION$ MILLIONSTABLE 11


The 2011 proposed budget anticipates funding contractual increases for outstanding union contracts within the Finance General budget. In addition, the City’s agreements with bargaining units represented by Coalition of Union Public Employees (COUPE) and Unit II (civilian public safety) to reduce personnel cost through reduced work weeks, unpaid holidays and replacing some overtime with compensatory time will continue into 2011.

Health care costs represent $408.7 million or 12.5 percent of the proposed 2011 corporate expenditures. Each year, the City must absorb

the added costs of employee health care. To control this expenditure growth while supporting healthy lifestyles among its employees, the City aggressively negotiates with health care plan providers and offers wellness and disease management programs. In 2011, budgeted health care costs for City employees and its annuitants are $502.4 million net of contributions across all local funds.

LOCAL FUNDS POSITION COUNT 10-YEAR HISTORYCHART 39

38,802

37,918

37,127

35,881 35,870 35,867 35,730

35,000

36,000

37,000

38,000

39,000

40,000

33,62133,156 32,922

29,000

30,000

31,000

32,000

33,000

34,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CONTINUED


74

CONTINUED

Finance and Administration 2,509 2,502 (7)

Legislative and Elections 358 358 -

City Development 140 231 91

Community Services 1,163 1,169 6

Public Safety 22,044 21,850 (194)

Regulatory 716 627 (89)

Infrastructure Services 2,806 2,768 (38)

Public Service Enterprises 3,420 3,417 (3)

Total - All Functions 33,156 32,922 (234)

2010Budget

2011Proposed Budget

2010-2011Change

POSITION COUNTS BY FUNCTIONTABLE 12

UNION VS. NON-UNION POSITIONSCHART 40

Non Union9.3%

Union90.7%


75

EMPLOYEE HEALTH CARE BUDGETS – ALL LOCAL FUNDS$ MILLIONSCHART 41

$411.7

$465.3

$502.4

$400 0

$450.0

$500.0

$550.0

Mill

ions

/ /

$367.4 $374.9$361.8

$374.4 $378.1

$150.0

$200.0

$250.0

$300.0

$350.0

$400.0

2004 2005 2006 2007 2008 2009 2010 2011 Recs


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2011 PROPOSED EXPENDITURES

City departments are strategically organized into eight functional categories. The functional units include: Finance and Administration, Legislative and Elections, City Development, Community Services, Public Safety, Regulatory, Infrastructure Services and Public Service Enterprises.

The Program and Budget Summary book contains program descriptions, performance data and budget allocation by program for each City department contained in these budget recommendations. Please refer to the Program and Budget Summary for more detailed information on each City department.

The fol lowing is a br ief overview of the proposed expenditures organized by functional categories.

FINANCE AND ADMINISTRATION

The departments within the Finance and Administration category manage the City’s finances, human resources, legal functions and day-to-day government operations. These departments manage the City’s $6.15 billion budget and ensure that funds are allocated appropriately to achieve the City’s objectives and maximize value for taxpayers. The Finance and Administration departments are critical to ensure that the City can provide direct services to citizens in a timely and cost-effective manner.

The departments within this category are responsible for the managing the City’s hiring needs, technology resources, facilities and vehicles. Trades people complete approximately 140,000 work orders annually to maintain and enhance public buildings and more than 120,000 work orders to maintain the City’s vehicle fleet, including police cars.

The 2011 budget for Finance and Administration reflects the City’s commitment to efficiently manage resources while continuing to provide necessary services to both the City and Chicago residents.

The departments that comprise the Finance and Administration category include:

Technology

Comptroller

In total, the proposed budget recommends funding the Finance and Administrative departments at $481.7 million, a decrease of $19.1 million or 3.8 percent, from the 2010 budget. The number of positions recommended for these departments will decrease by seven from 2,509 to 2,502 in the 2011 proposed budget.

Significant changes in the recommended budgets of Finance and Administrative departments include:

The Department of Innovation and Technology’s proposed budget reflects an increase of 4.6 percent, or $1.1 million above the 2010 appropriation

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which is related to annual maintenance costs for technology projects that have completed development in 2010. These projects were focused on changing processes in areas that will improve the City’s service to residents and businesses while also increasing revenue collection.

The Office of the City Clerk’s proposed budget reflects a slight decrease of 1.1 percent, or approximately $100,000 below the 2010 appropriation as a result of non-personnel decreases. In addition to non-personnel reductions, the Office of the City Clerk will eliminate two vacant positions in the proposed 2011 budget.

The Department of Revenue’s proposed budget reflects an increase of 4.3 percent, or $2.2 million above the 2010 appropriation due to higher non-personnel costs related to contractual increases. Although the overall budget will increase, the department reduced its position count by eliminating seven non-revenue generating vacancies.

The Office of Compliance’s proposed budget reflects an increase across local funds of 4.5 percent, or approximately $150,000 above the 2010 appropriation. This increase is primarily due to an increase in non-personnel costs across local funds to support the Supplier Diversity program, which

was previously referred to as Certification and Compliance. The proposed budget also includes a net reduction of four positions as a result of two reorganizations. The first proposed reorganization transfers the responsibility for Diversity and Equal Employment Opportunity, along with six positions, from the Office of Compliance to the Department of Human Resources. The second proposed reorganization completes the transfer of employee training programs from the Department of Human Resources to the Office of Compliance. The transition of training responsibilities began in 2010 and will be completed this year with the transfer of two additional positions. The two positions will work in the workforce compliance division, which provides educational guidance and training to City managers, employees, vendors and delegate agencies.

The proposed budget for the Department of Human Resources reflects a decrease of $1.4 million, or 18.9 percent from the 2010 appropriation. The decrease is primarily attributable to the personnel reductions through the elimination of 10 vacant positions. The department’s budget also reflects personnel changes as a result of proposing to realign department responsibilities. As discussed above, the proposed budget includes transferring responsibility for employee training programs to


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the Office of Compliance and moving responsibility for Diversity and Equal Employment Opportunity from the Office of Compliance to the Department of Human Resources. In addition, the Labor Relations division will move from the Department of Human Resources to the Department of Law in proposed budget.

The Department of General Services’ proposed 2011 budget reflects a decrease of $22.5 million or 10.3 percent primarily attributable to reductions in non-personnel expenses. The department’s proposed non-personnel reductions include a savings of $16.1 million as a result of locking-in lower natural gas prices, $5.2 million from lower contracted electricity costs, $1.9 million due to lease reductions and $700,000 in contractual office and building services. The budget also includes the proposed consolidation of the Graphics and Reproduction Center (GRC) into the Department of General Services which will transfer 32 positions valued at $1.8 million and non-personnel items totaling $1.2 million into the department. The personnel increase from the GRC positions is offset by a reduction of 25 vacancies, resulting in a net increase of seven positions over the 2010 appropriation.

The Department of Fleet Management’s proposed 2011 budget reflects an increase of approximately $360,000, or 0.3 percent from the 2010 appropriation. The department’s budget increase is primarily due to non-personnel costs related to the aviation fund. The department’s personnel budget, however, will decrease as a result of eliminating eight vacant positions.

The proposed budget for the Department of Procurement Services reflects a decrease of $470,000, or 7.6 percent, attributable to both personnel and non-personnel reductions. The department’s proposed personnel budget reflects a reduction of four positions, due to the elimination of vacancies.

LEGISLATIVE AND ELECTIONS

The departments that comprise the Legislative and Elections category include:

the Legislative Reference Bureau

In total, the proposed budget recommends funding the Legislative and Elections departments at $45.0 million, an increase of $6.3 million, or 16.2 percent from the 2010 budget. The number of positions recommended for the Legislative and Elections departments will remain unchanged at 358 positions.

The Board of Election Commissioners’ proposed budget requires a 47.3 percent increase, or $6.2 million above the 2010 appropriation to support the Municipal General Election scheduled in 2011. During the 2011 calendar year, the Board of Election Commissioners will conduct a Municipal General Election in the City of Chicago for the offices of Mayor, City Clerk, City Treasurer and Aldermen and Municipal Runoff and supplementary Aldermanic elections if necessary. The majority of the proposed increase is attributable to additional seasonal staffing resources needed to conduct the Election.

CITY DEVELOPMENT

The C i t y Deve lopment categor y inc lude s departments overseeing community, economic and cultural development in Chicago. City Development depar tments work with Chicago residents , community groups, business and civic leaders, as well as state and federal agencies to promote economic development.

The City has a variety of strategies to encourage and guide future economic development. One important mechanism is Tax Increment Financing


(T IF ), which util izes public investment to encourage private investment. For each dollar of public investment, the City anticipates five dollars of private investment in TIF areas. Through the City’s incentive to invest in otherwise blighted neighborhoods, TIF projects have proven successful in improving neighborhoods.

The City also leverages public and private dollars to achieve its Five-Year Affordable Housing Plan. Both the Downtown Density Bonus and the Chicago Partnership for Affordable Neighborhoods are examples of how the City uses the private development market to achieve the goal of having enough affordable housing for all Chicagoans.

Cultural development, tourism and local special events have a significant effect on the City’s economy and enhance Chicago’s quality of life. The City’s lakefront festivals draw more than 10 million people annually and attendance at the SummerDance festival has nearly doubled in the past three years. The City also provides grants to more than 300 local artists and non-profit organizations annually and develops and implements public art programs.

The Depar tments that comprise the Cit y Development category include:

Development

Events

In total, the proposed budget recommends funding the City Development departments at $58.3 million, a reduction of $10.1 million, or 14.8 percent, from the 2010 budget. The budget decrease is primarily due to the elimination or reduction of programs within the newly merged Deparment of Housing and Economic Development, as well as the shift of Parking Meter Human Infrastructure funds from the corporate fund to its own appropriated fund.

The tot a l budgeted pos i t ions for the se departments will increase by 92, which is largely due to the inclusion of many of the responsibilities of the former Department of Zoning and Land Use Planning into the new department. The position count increase is also attributable to including 30 Tax Increment Finance funded positions in the local funds budget.

The newly formed Department of Housing and Economic Development was created by merging most of the former Department of Zoning and Land Use Planning with the Department of Community Development to streamline and bring efficiencies to the development process in order to attract and facilitate these projects that benefit the City’s economy. Zoning ordinance administration, planning and land use policy, landmarks , sustainable development and mapping functions from the former Department of Zoning and Land Use Policy will move to the newly created department. The newly created department will be responsible for the City’s economic development activities.

The Department of Cultural Affairs and Special Events is a newly merged department comprised of the merger of the former Department of Cultural Affairs with the Mayor’s Office of Special Events. The new department will realize efficiencies and synergies in planning, producing, and assisting arts and entertainment programs in the City. The 2011 budget for this department includes a reduction in positions and a reduction in the non-personnel budgets compared to the 2010 budget of the combined departments. The reductions represent cost-saving measures identified between the programs and functions of the two legacy departments. Despite the proposed position and budget reductions, the department will maintain free and beneficial, family-friendly and cultural arts programs in 2011.


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COMMUNITY SERVICES

The City of Chicago is committed to serving its families and communities and providing for those most in need. To achieve these goals, the departments within this category often partner with delegate agencies that provide community-based programming and assistive services. The success of these departments is often measured in long-term outcomes such as the health of newborns, a child’s readiness to begin school or a family’s ability to be self sufficient.

The City expects to serve approximately 110,000 patients at its health clinics in 2010. These are primarily people who do not have private insurance or the means to procure health care. Through its Fast Tracks Clinics, the department will provide an estimated 7,500 immunizations. This year, the food safety inspectors (Sanitarians) will conduct 15,000 inspections of food establishments for health code compliance.

The City delivers meals to nearly 10,000 needy seniors. A current total of 16 senior satellite and regional centers provide a place for seniors to congregate, learn and recreate. Two new centers will open in 2011.

The City annually handles approximately 25,000 calls for information and referral services for

people with disabilities. Additionally, 400 people with disabilities were served by the Independent Living Program.

In Chicago, more than 17,500 children are served by Head Start and an additional 600 are enrolled in Early Head Start. The City provides after school programming for nearly 19,000 students, helps approximately 4,000 students with a broad range of job-readiness programs and places nearly 18,000 youth in summer jobs.

Six community service centers will serve more than 70,000 families in 2011. In 2010, the City expects to provide more than 40,000 people with emergency shelter throughout the year and to handle more than 5,000 requests for crisis intervention. The City responds to these needs immediately and, based on the need for ongoing assistance, works with families to help them attain long-term self sufficiency. The proposed budget continues funding for domestic violence programs, veterans resources, the Plan to End Homelessness and ex-offender re-entry initiatives.

The Chicago Public Library continues to host inspiring programs to support all Chicago residents in their enjoyment of reading and pursuit of lifelong learning. The 51,000 children who participated in the 2010 summer reading program, “Art is Artageous”, read an average of 25 books.


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In 2011, annual circulation is expected to exceed 9.0 million materials. In addition to free reading programs, Chicago Public Library continues to offer free one-hour Internet sessions to the public. In 2011, it expects to offer 2.9 million sessions, equal to their 2010 projected total. In addition to the various on-line subscription databases, Sony Reader compatible eBooks and an audio book catalog accessible to iPod users continues to be offered. In order to better serve the one million persons who visit a library building each month, the Chicago Public Library will monitor the progress of the self check-out stations initiated in 2010 for books at select branches.

The departments that comprise the Community Services category include:

Services

Disabilities

In total, the 2011 proposed budget recommends funding the Community Services departments at $109.3 million, a decrease of $7.4 million or 6.4 percent, from the 2010 budget. Despite this

decrease, the number of budgeted positions in the departments will increase by six. A major change from the 2010 budget is that the Parking Meter Human Infrastructure funds will be budgeted outside of the corporate fund and in a separate Parking Meter Fund. Many of the departments in the Community Services category will experience decreases based on the shift of these funds.

The Department of Public Health’s proposed budget reflects a continued effort to generate efficiencies and control costs. The department eliminated five vacant positions, which will have a minimal impact on the department’s current service levels. The position reductions were off-set by small increases to necessary non-personnel items such as increased technology costs. The changes in the 2011 budget will not affect the ability of the department to service its clients, but rather will provide the City’s overall budget with slight relief while continuing to provide its community health programs.

The Department of Family and Support Services supports coordinated services designed to assist Chicago’s most vulnerable residents, and provides assistance to families on their pathway to self-sufficiency, especially through this current economic crisis. The department is comprised of human services, senior services, children and youth services, workforce development services,


82

domestic violence programs and the City’s Plan to End Homelessness. Because these services are all under one unified department, numerous ef f iciencies and improvements to service delivery through program integration and the maximization of funding sources have occurred. There is virtually no change to the proposed 2011 budget as the $7.8 million reduction is primarily attributable to the shift of the Parking Meter funds from the corporate fund to a separately appropriated fund.

The Chicago Public Library proposed 2011 budget reflects an increase of $1.1 million or 2.1 percent. This proposed increase is attributable to both personnel and non-personnel costs. The department’s proposed budget reflects an increase of 13 positions due to the anticipated opening of four libraries branches in 2011. Capital funds will allow the opening of Dunning, Greater Grand Crossing, Little Village, and West Humboldt Park library branches. The overall non-personnel increase is attributed to data hardware, telephone maintenance and rental equipment and services.

The Commission on Human Relations proposed 2011 budget reflects a slight decrease, which reflects the department’s contribution to the City’s overall cost-cutting measures. While the position count stayed level, there were non-personnel expense reductions that will not impact programs or services.

The proposed budget for the Mayor’s Office for People with Disabilities will decrease by $650,000 or 38.4 percent. The reduction is primarily due to transfer of the HomeMod program to the Parking Meter Fund and the elimination of two vacancies from the corporate fund budget. Other smaller reductions include the transfer of the Youth Employment program costs to a grant fund, and the elimination of AccessChicago from the 2011 budget. The free, one-day AccessChicago Expo will not take place in 2011, but will return in 2012.

PUBLIC SAFETY

The City’s Public Safety departments further Mayor Daley’s mission to make our neighborhoods safe and our City secure. The City handles approximately 5.0 million calls annually for emergency service, 90 percent of which are answered within two rings. The average dispatch time for police calls in which a resident or police officer is in imminent danger is only 4.4 minutes, while the average response time for Emergency Medical Services is just 3.8 minutes.

The City receives more than 4.5 million calls annually for non-emergency (311) services. Chicago is recognized as a national leader in analyzing requests from the public and using the information to improve City services and programs.

The departments that comprise the Public Safety category include:

Communications

In total, the proposed budget reflects funding the Public Safety departments at $1.9 billion, reflecting an increase of $92.1 million or 5.0 percent, from the 2010 budget. The proposed budget reflects a decrease 194 civilian public safety positions.

The 2011 proposed budget for the Chicago Police Department reflects an increase of $73.2 million, which is a 5.9 percent increase from the 2010 appropriation. This increase is tied directly to the interest arbitration award for the police unions which dictated a cumulative 10 percent wage increase for the five-year period of July 1, 2007 through June 30, 2012.

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The Police Department’s budget reflects 189 fewer positions, 42 from layoffs, 17 reassigned to OEMC and 130 vacancies eliminated. These reductions will not impact the number of sworn officers budgeted, which remains unchanged. In addition, more than 300 able bodied officers have been moved from administrative duties back to neighborhood patrols.

The 2011 budget proposal for the Office of Emergency Management and Communications (OEMC) reflects an increase of $9.1 million or 10.5 percent, primarily attributable to moving the Chicago Police Department information service section to OEMC as part of information technology consolidation. This move seeks to leverage technology decisions across all public safety agencies and reduce overall costs. Despite

the addition of the 17 positions from the Police Information Service Division, OEMC’s budget reflects a net loss of four positions through vacancy reductions.

The proposed budget for the Chicago Fire Department will increase by $9.6 million or 1.9 percent from the 2010 appropriation. The increase is due to personnel cost, contractual obligations, and aligning the Injury on Duty budget with actual costs. The proposed budget reflects seven fewer uniform exempt positions as a result of management efficiencies which are balanced by an increase in seven uniform strength positions. As a result, the Fire Department’s sworn count will

remain unchanged for 2011.

SWORN PUBLIC SAFETY POSITIONS VS. CIVILIAN: 2002-2011

CHART 42

17,000

18,000

19,000

20,000

21,000# of Civilian Positions Citywide Local Funds

# of Budgeted Positions Sworn (Public Safety)

12,000

13,000

14,000

15,000

16,000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011


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REGULATORY

The departments within this category are responsible for the day-to-day enforcement of City ordinances, as well as compliance with local, state and federal laws. Much of the enforcement activity takes place through routine inspections or inspections conducted as a result of a complaint. The City inspects approximately 300,000 buildings annually. The largest portion, approximately 105,000, represents annual compliance inspections. Another 77,000 inspections are conducted as part of the permitting process. The City reviews more than 39,000 construction permit applications annually. Approximately 8,000 of these applications require a standard plan review.

The City’s regulatory enforcement activities serve to protect public health and safety and protect consumers. The City conducts approximately 20,000 taxicab safety inspections annually and over 124,000 annual retail inspections, investigations and tests. The City responds to approximately 64,000 service requests about animal-related safety matters and receives and cares for more than 21,000 animals each year at the City’s animal care facility. The Commission on Animal Care and Control protects residents and animals, including strays and victims of inhumane treatment.

The City has achieved an 86 percent compliance rate through its tobacco sales compliance program and a 96 percent compliance rate on sales of alcohol to minors. The City successfully enforces the ordinance forbidding illegal dumping of materials which has resulted in responsible parties cleaning up waste in the amount of $4.0 million in 2009 and an expected $6.0 million by the end of 2010.

The departments that comprise the Regulatory category include:

Consumer Protection

In total, the proposed budget recommends funding the Regulatory departments at $55.1 million, a 13.3 percent decrease from the 2010 appropriation. The 2011 proposed budget for this group of departments reflects a reduction of 89 positions. The majority of the decrease is due to the proposed merging of the Department of Zoning and Land Use Planning with the Department of Community Development to create the Department of Housing and Economic Development.

The Department of Business Affairs and Consumer Protection’s (BACP) proposed budget will decrease by $1 million or 6.8 percent, due to both personnel and non-personnel expense reductions. In addition to eliminating three non-revenue generating vacancies, BACP’s budget reflects a reduction of $525,000 that had been funded in 2010 for Small Business Development. This program was designed to provide access to capital and technical support to small businesses with start up funds from the 2010 budget. The program included a small business loan loss pool that allowed microlenders and community banks to expand underwriting criteria for small business loans. It also included a technical assistance training component that provided training to City and delegate agency staff to provide more in-depth technical assistance for small businesses poised to expand and grow. Given this approach, the business community will benefit from the original funding for several years.

The Department of Buildings’ proposed budget reflects an increase of $700,000 or 2.7 percent. The increase is due to moving the Developer


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Services permit review costs to the department’s 2011 anticipated expenditures. In prior years, this expense was budgeted as a reduction in the department’s permit revenues. Another change in the proposed 2011 budget is moving the seven zoning investigators from the former department of Zoning and Land Use Planning to the Department of Buildings. Despite the additional personnel, the Department of Building’s position count reflects a net reduction of 13 positions in local funds which is the result of eliminating three vacancies and transferring additional positions to grant funds.

The proposed budget for the Office of the Inspector General remains level with the revised 2010 appropriation. The revised 2010 appropriation transferred responsibility for monitoring of the City’s hiring and employment pursuant to Shakman Accord from the Office of Compliance to the Office of the Inspector General. As a result, the Office of the Inspector General is now responsible for ensuring compliance with the law and court-imposed protocols for the removal of all vestiges of patronage and favoritism in hiring and employment actions in City government.

INFRASTRUCTURE SERVICES

The departments that comprise the Infrastructure Services category include:

Sanitation

In total, the proposed budget recommends funding the Infrastructure Services departments at $367.4 million, a decrease of $9.6 million, or 2.6 percent from the 2010 appropriation. The number of positions recommended for the Infrastructure Services departments will decrease by 38 positions, from 2,806 positions to 2,768.

The proposed 2011 budget for the Department of Streets and Sanitation’s reflects a 1.1

percent decrease, or $2.6 million from the 2010 appropriation. The proposed budget reflects a net decrease of 13 positions resulting from vacancy reductions. In addition to the personnel changes, the department’s proposed budget includes non-personnel reductions in several areas.

The Chicago Department of Transportation’s proposed 2011 budget recommendation reflects a decrease of $7.0 million or 5.2 percent across local funds when compared to 2010. The department’s 2011 budget includes a decrease of 25 positions which is the result of vacancy reductions within the department. In addition to personnel reductions, the budget includes non-personnel reductions due to reduced revenue from the Motor Fuel Tax fund.

PUBLIC SERVICE ENTERPRISE

The Public Service Enterprise departments are funded by user fees and include departments that operate the City’s airports, water supply and infrastructure.

The departments that comprise the Public Service Enterprise category include:

The City of Chicago operates O’Hare and Midway International Airports and includes the O’Hare Modernization Program which is a comprehensive initiative aimed at reconfiguring O’Hare’s runways. The program is critical to reducing airport delays and congestion and to the significant and widespread impact of O’Hare and on the regional economy.

The City supplies high-quality drinking water to all of Chicago and 125 suburban communities. In order to maintain its ability to deliver fresh water and remove wastewater, the City will construct or replace approximately 40 miles of water mains and eleven miles of sewer mains in 2011.


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In total, the proposed budget recommends funding the Public Service Enterprise departments at $616.0 million, a increase of $7.0 million or 1.2 percent, from the 2010 budget. The number of positions recommended for the Public Service Enterprise departments will decrease by three positions, from 3,420 positions to 3,417.

The Department of Aviation’s proposed 2011 budget will increase by 0.8 percent, or $3.0 million, due to contractual increases for a variety of services including security, waste disposal and the Airport Transit System.

The 2011 proposed budget for the Department of Water Management reflects an increase of $4.0 million or 1.6 percent, primarily due to personnel cost increases. The department’s 2011 proposed position count remains level with 2010.

GENERAL FINANCING REQUIREMENTS

General Financing Requirements, or Finance General, represent cross-departmental expenses that include employee benefits, contributions to employee pension funds and long-term debt payments. The Finance General proposed budget for 2011 increases by 0.9 percent or $25.6 million from the 2010 appropriation.

The proposed 2011 Finance General budget includes a $37.1 million, or 8.0 percent, increase in health care benefits for active employees and annuitants. The majority of this increase is in active employee health care costs which are projected to increase $19.9 million or 5.6 percent over the 2010, net of contributions. Annuitant health care costs are projected to increase by $17.3 million, or 15.8 percent over the 2010 appropriation, net of contribution. In addition to regular inflationary increases, each year the City bears a greater portion of health care costs that it shares with employees. Employee contributions are based on salaries and when health care costs rise faster

than salaries the City must make up the difference. The increase in employee health care costs also reflects certain changes to employee health care coverage mandated by the Patient Protection and Affordable Healthcare Act.

The City’s required contribution to employee pension funds are contained within Finance General. In 2011, $456.1 million is required to meet the City’s legally required employer contributions.

The City’ funding for civilian employees who are injured on duty is budgeted in Finance General across funds. These expenses include compensation for lost time as provided by State statute, associated medical costs, investigation and litigation costs, and settlements. This program, administered by the Committee on Finance, affects every department. The significant increase in funding, $24.5 million, is provided to ensure adequate resources are available to manage and resolve claims in a timely and economical manner. While this is an increase in funding for Fund 100 of $11.7 million, it is $2.0 million less compared to the 2009 actual expenditures

General obligation bonds that support the City’s Capital Improvement Program require a budget to retire the debt service obligations. The Finance General budget reflects a total of $585.0 million within the debt service funds to support general obligation debt and short term tender notes. Debt service payments on special revenue or enterprise fund supported capital projects are budgeted for within the enterprise funds Finance General.


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Federal Programs not

Including ARRA$1,276.4 $1,616.3 $1,526.0 $(90.3) (5.6)%

Federal AARA Stimulus

Program462.9 555.0 365.2 (189.8) (34.2)%

State Government

Agencies189.6 318.6 173.8 (144.8) (45.4)%

Public and Private

Agencies26.6 24.3 30.2 6.0 24.7%

Federal Community

Development Block

Grant Program Income

4.5 3.3 5.2 1.9 57.6%

Other Grant Program

Income11.4 18.6 20.5 2.0 10.8%

Total $1,971.3 $2,536.0 $2,121.0 $(415.0) (16.4)%

Grantor/Type2010

YE Estimate2010

Appropriation2011 Estimate

2011 Appropriation

-2010 Estimate $

Change

2011 Appropriation

-2010 Estimate %

Change

The City receives grant funds from federal and state agencies, foundations and other private entities for specific purposes that support ongoing services, programs and capital improvements. The annual amount of appropriated grant funds varies with the availability of grants to meet City needs.

In 2010, the City estimated receiving grant revenue of $2.5 billion. This amount includes an estimated $555.0 million in American Reinvestment and Recovery Act (ARRA) stimulus funding that was approved in February of 2009 by President Obama. ARRA funds are one time grants from 2009 to 2012 to be used as supplemental appropriations for job preservation and creation, infrastructure investment, energy efficiency and science,

assistance to the unemployed and state and local fiscal stabilization. Since the announcement of ARRA, grant opportunities have increased in 2010 and the City has made it a priority to seek this grant support where available. The actual 2010 grant revenue received from the estimated appropriation was $2.0 billion, of which $462.9 million was from ARRA funds.

In 2011, the City estimates receiving $2.1 billion in grant revenue, which is a 5.6 percent decrease in Federal funds; a 45.4 percent decrease in State funds; an increase of 24.7 percent in private funds; and an increase of 17.8 percent in program income. It also reflects a 34.0 percent decrease in stimulus funds. The overall grant revenue is expected to decrease by 16.4 percent.

2011 ESTIMATE OF GRANT REVENUE–SUMMARY$ MILLIONSTABLE 13


88

Grant funds are received on various fiscal year time periods, and many grants awarded to the City are for multiple years. One example is the ARRA funding which spans from 2009 to 2012. The majority of carryover funds listed in the budget is from multi-year grants, the estimated grant carryover for 2011 is $673.3 million representing 31.7 percent of the total grant revenue.

This section summarizes grant fund changes from the 2010 appropriation to the 2011 recommendation with department groupings from the previous Expenditure and Personnel section. The details about the Community Development Block Grant (CDBG) program which represents $93.1 million of the 2011 recommendation for grant funded programs, can be found in the 2011 Final Action Plan.

Grantor/Type2010

Appropriation2011

EstimateChange

Finance and Administration 51 54 3

City Development 104 103 (1)

Community Services 1,432 1,404 (28)

Public Safety 122 125 3

Regulatory 112 125 13

Total 1,821 1,811 (10)

GRANT POSITIONS SUMMARYTABLE 14

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FINANCE AND ADMINISTRATION

The primary recipients of grant funding in the Finance and Administration category are the Office of Budget and Management, Department of Innovation and Technology, Department of Finance, Department of Law and Department of General Services. The departments within this section are not departments that typically received grant funding; however in 2011 these departments are expected to receive $120.1 million in grant funds. Of this, $11.1 million are non-ARRA funds, which are projected to have level funding in 2011.

The 2011 estimates also include $7.5 million in ARRA carryover funding for energy efficient upgrades and lighting retrofits that will be managed by the Department of General Services. In addition, the Department of Innovation and Technology will receive $16.0 million from the Federal Government’s $7.2 billion in broadband-related grant opportunities. The two funded Smart Chicago projects - Sustainable Broadband Adoption and Public Computer Centers - will expand computer access, technology training and broadband adoption across Chicago.

CITY DEVELOPMENT

The City Development category includes the Department of Housing and Economic Development and the Department of Cultural Affairs and Special Events. The departments within this category anticipate an estimated $303.5 million in grant funding for 2011, of which $218.1 million are funds from the previous fiscal year.

The Department of Housing and Economic Development expects the Neighborhood Stabilization Programs (NSP) I and II to carryover $98.2 million along with the recently received $16.0 million in NSP III funds for a total of $114.2 million in 2011. The goal of the NSP I, II,

III are to stabilize neighborhoods by bringing vacant foreclosed homes into compliance with the municipal code and occupied as quickly as possible in target areas. The funds will be used for acquisition, rehabilitation and disposition of vacant, foreclosed residential properties. The City expects to assist up to 2,500 units over the next 3 to 5 years.

In addition, the Department of Housing and Economic Development anticipates receiving $1.5 million in estimated carryover funding in the Community Development Block Grant - Recovery (CDBG-R) for the Troubled Buildings Initiative Distressed Condominium Program. The funds will be used to facilitate the acquisition, rehabilitation and recovery of distressed condominium buildings identified via the Trouble Buildings Initiative multi-family program.

The 2011 recommendation also includes $89.1 million for the Department of Housing and Economic Development HOME Investment Partnerships Program, which provides financial assistance to affordable housing developers, homebuyers and community-based organizations.

COMMUNITY SERVICES

The Community Services category consists of the Department of Family and Support Services, Chicago Department of Public Health, Department of Human Relations, Chicago Public Library and the Mayor’s Office for People with Disabilities (MOPD). This 2011 budget recommendation estimates that this category will receive $595.9 million dollars in 2011 which includes $111.8 million in 2010 carryover funding. The grant funding estimates for Community Services in 2011 include:

$21.5 million for the Area Plan on Aging, which provides advocacy and support for seniors through several initiatives including: Intake and Assessment Prevention in Long-

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Term Care Facilities , Elder Abuse and Neglect Program and Elder Abuse Criminal Justice Training Program.

$30.0 million in ARRA carryover for the Homele s snes s P revent ion and Rap id Re-housing Program which will continue to help support:

households who are currently housed but at immediate risk of homelessness;

households who are currently living in a homeless shelter or interim housing programs into permanent housing; and

Services to provide services specific to housing retention to households receiving short-term or medium-term financial assistance.

$22.5 million in Community Service Block Grant funding to target poverty and homelessness.

$143.3 million in Head Start, Early Head Start and ARRA Head Start program funding to reach Infant-Toddler, Pre-School Aged Children and School-Aged Children and their families with quality child care, pre-school and other

supportive services. The 2011 Head Start grant award provides continuing full and part day Early Head Start and Head Start services to eligible Chicago children ages 0 - 5.

$24.9 million in Workforce Investment Act funding for adult, dislocated workers and summer youth employment training and placement services.

$46.1 million for Employment Related Child Care program, which provides childcare to eligible families for children ages six weeks to twelve years.

$28.7 million for the Ryan White HIV CARE Act (Title I) to provide a comprehensive array of services to persons living with AIDS in the Chicago Eligible Metropolitan Area. Special emphasis is given to minority populations through the Minority AIDS Initiative.

$8.6 million for Public Health Emergency Preparedness, to develop staff and systems that are ready to detect, investigate and respond to bioterrorist incidents. Includes development of a network of health professionals available to respond when needed and creation of communication channels to provide accurate information to the public.


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PUBLIC SAFETY

The Office of Emergency Management and Communications, Chicago Police Department, and the Chicago Fire Department comprise the Public Safety category. The total estimated grant funding for Public Safety in 2011 is $294.7 million which reflects $210.9 million in carryover funding. Some of the primary grants include:

$27.6 million for the Chicago Police Department Byrne Justice Assistance Programs to improve safety and investigative capacity through the replacement of equipment and purchase of vehicles.

$12.0 million for the Chicago Police Department COPS Hiring program to hire of 50 additional sworn officers.

$30.3 million from the Transit Security Grant to support projects through the Chicago Transit Authority including the Explosives Detection Canine program, Visible Intermodal Prevention, the Response Team and training program.

$6.3 million in federal funding from the Assistance to Firefighters Grant, which provides 1 year of financial assistance to local fire departments with the objective to protect citizens and firefighters against the effects of fire and fire-related incidents. $131.0 million in support for the Urban Areas Security Initiative (USAI), of which $91.0 million is carryover. The funds will be put towards Urban Area’s Strategy and Preparedness Plan to prevent, protect, respond and recover from any disaster or emergency situation.

REGULATORY

The Regulatory departments are the Department of Environment, Department of Buildings, Business Affairs and Consumer Protection and Animal Care and Control. The Department of Environment is the primary recipient of grant funding in this group. The departments in this group are expected to receive level or reduced grant funding in 2011. The expected grant funding for this category in 2011 is $59.7 million. Department of Environment will carryover approximately $19.9 million dollars of ARRA funding into 2011. Grant funding activities for the this section include:

$1.0 million for the Weatherization Innovation Pilot Program to encourage innovation in the delivery of weatherization services to low income households.

$1.0 million for the Chicago Area Plug-in Electric Vehicle Support Project that will be responsible for developing and implementing an initial charging infrastructure for the Chicagoland region.

$13.0 million for the Chicago Area Alternative Fuels Deployment grant — this is ARRA carryover funding that wil l al low the Department of Environment to implement the Chicago Area Alternative Fuel Deployment Project. This project proposes to deploy 554 alternative fuel hybrid vehicles and install 153 alternative fuel fueling electric vehicle charging stations throughout the Chicago region.


INFRASTRUCTURE SERVICES

Streets and Sanitation and Chicago Department of Transportation are the departments that comprise this category with 2011 projected grant funding at $511.3 million. The Infrastructure Services estimated budget reflects a $313.0 million decrease from 2010 appropriation. The biggest portion of the decrease is $55.2 million from the 2010 ARRA funding with the remainder of the decrease resulting from reduced State and other Federal grant funds. The 2011 activity in this category includes:

$20.8 million for High Priority/SAFETEA-LU (Legacy for Users) program which is a reauthorization of the Federal Transportation Bill for transit-related and street construction improvements.

$101.6 million for Congestion Mitigation Air Quality program, a federal program financing projects that will contribute to the attainment of national ambient air quality standards in designated non-attainment areas.

$60.7 million for Surface Transportation programs to resurface, reconstruct and rehabi l i tate the Federal-Aid Highway System.

$195.2 million for the Highway Bridge Program to fund bridge projects, such as Wacker Drive.

$5.0 million in carryover ARRA funds – Energy Efficiency and Conservation Block Grant to support energy efficient street lighting and traffic lighting projects.

PUBLIC SERVICE ENTERPRISE

The Public Service Enterprise category consists of the Department of Water Management and the Department of Aviation. The 2011 recommendation for grant funded programs in this category is $235.6 million which reflects a $30.2 million decrease from the 2010 appropriation. The Department of Aviation is the primary recipient of grant funding in this category with a 2011 projection of $235.5 million of which $68.5 million are carryover funding for Department of Aviation airport improvement programs.

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THE CAPITAL IMPROVEMENT PROGRAM AND ITS RELATIONSHIP TO THE ANNUAL APPROPRIATION

The Capital Improvement Program (CIP) is the City’s planned budget for the construction, improvement, maintenance and replacement of City-owned infrastructure and facilities that are critical to support and enhance neighborhoods, stimulate the economy and improve services. When appropriate, the CIP includes enhancements to improve efficiency or promote historic or cultural characteristics of communities. The CIP is published annually and is a five-year schedule of infrastructure projects and a spending “blueprint” based upon the most current revenue projections and project priorities.

Whereas the operating budget, set forth in the Annual Appropriation Ordinance, authorizes expenditures for one year that primari ly support delivery of essential services, the Capital Improvement Program (CIP) is a projection of costs for projects that yield physical assets.

Both the CIP and the Annual Appropriation Ordinance are policy documents that are used to plan and manage resources and both are influenced by the economy, federal and state budgets and budget policies, and the needs of Chicago citizens. The operating budget must authorize expenditures for debt service associated with capital project bonds and any additional operating and maintenance costs associated with municipal facilities that result from capital programs.

Because capital programs and priorities must be adjusted to respond to changing needs and demands, capital improvement planning is an ongoing process. New construction may be required and existing infrastructure requires periodic rehabilitation, replacement or other improvements to protect the City’s previous investments. The CIP is an outline of planned expenditures for capital projects over the next five years given available resources and is not intended to provide an all-inclusive inventory of the City’s capital needs.


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THE CAPITAL IMPROVEMENT PROGRAM PROCESS

The CIP process begins at the start of the City’s fiscal year and ends with the release of the CIP in early summer and the Annual Appropriation Ordinance process begins in the spring and ends when the ordinance goes into effect on January 1st, of the next fiscal year.

The CIP development process begins with departments submitting f ive-year capital improvement recommendations to the Office of Budget and Management (OBM) in the winter. OBM then prepares draft recommendations for discussion at public hearings in the spring. OBM then reviews the recommended plans and prepares a revised CIP based on available funding, and citizen and departmental recommendations and publishes the final CIP in the summer.

2010-2014 CAPITAL IMPROVEMENT PROGRAM OVERVIEW

The 2010-2014 CIP allocates $1.8 billion for 2010 and more than $8.5 billion for 2010 – 2014. CIP resources include general obligation bond issues, TIFs, private sources and special assessments such as the shared sidewalk program. Revenue bonds support Water, Sewer and Aviation improvements and state and federal funding contribute to transportation and municipal improvements. Major components of the 2010-2014 Capital Improvement Plan are:

NEIGHBORHOOD AND TRANSPORTATION INFRASTRUCTURE

In 2010, the neighborhood and transportation infrastructure sections of the CIP are financed, in part, with more than $97 million in neighborhood

capital improvement bonds. Projects in this category of capital improvement include resurfacing of residential streets, replacement of cracked and broken sidewalk and curb and gutter, and construction of assessable curb ramps. New residential lighting continues to be an important investment in the neighborhoods as it provides increased lighting levels and reduced tree branch interference while reducing maintenance costs and increasing reliability. All of these projects are considered the core of the annual neighborhood and transportation infrastructure sections of the capital program.

The 2010-2014 CIP is a plan that works hand-in-hand with other local agencies’ capital improvement plans to enhance the city’s neighborhoods. In 2010, we will continue the shoreline protection efforts to rebuild the city’s lake front shoreline. We will also continue to fund the popular Campus Parks Program to create neighborhood open spaces adjacent to our schools.

AVIATION AND O’HARE MODERNIZATION PROGRAM

The 2010-2014 CIP includes $767.2 million for 2010 and $4.2 billion over the plan’s five year period, for improvements at both Midway and O’Hare International airports, including the O’Hare Modernization Program. This funding will be generated by revenue bonds, passenger facility charges and Federal Airport Development Aid. These funds will provide for security improvements, airfield rehabilitation and residential and school sound insulation at both Midway and O’Hare as well as construction projects within the OMP.

When fully implemented, a modernized O’Hare Airport will more efficiently move people and goods, create additional growth opportunities for area businesses, and create new jobs throughout the region.


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SEWERS

The 2010-2014 CIP includes $207.9 million for 2010 and $839.5 million over the plan’s five year period for sewer system capital improvement program totals. The Department of Water Management is responsible for approximately 4,400 miles of sewers, 225,000 drainage structures and 148,000 manholes. In 2010 more than 12 miles of sewers will be reconstructed and over 40 miles of sewers are anticipated to be lined and rehabilitated. The sewer capital plan provides for the replacement of deteriorated or undersized sewers based upon physical inspection, maintenance and repair records, and hydraulic expansion. Construction costs are about $4million per mile for most sewers and substantially more for the sewers in the downtown area. The financing for the improvements comes from current and prior year revenue bonds and anticipated future year revenue bonds and the three year rate increase initiated in the 2008 budget support additional bonds for capital improvements.

WATER

The 2010-2014 CIP includes $191.3 million for 2010 and $1.4 billion over the plan’s five year period for improvements to capital assets in the Department of Water Management’s water system which included cribs, intake and distribution tunnels, two purification plants, 12 pumping stations, 4,230 miles of distribution and feeder mains and 162,000 water meters. The department’s capital plan is designed to improve water service and increase reliability. Specific activities include maintaining the City’s two purification plants, upgrading various pumping stations, increasing available water supply by installing new and replacing old grid mains and replacing unreliable meters to ensure proper accountability of water use. As with sewer projects, financing for water system improvements comes from revenue bonds whose continued financing is supported by the 2008 rate increases.

Bond funds $1,198.9 64% $5,862.5 68%

Federal funds 458.8 25% 1,114.1 13%

State funds 71.7 4% 342.1 4%

City funds 82.6 4% 898.8 10%

TIF funds 43.2 2% 52.7 1%

Other funds 14.4 1% 314.4 4%

Total $1,869.4 100% $8,584.6 100%

2010 2010-2014

CITY OF CHICAGO CAPITAL IMPROVEMENT PLANFUND RESOURCES$ Millions

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CHICAGO PUBLIC LIBRARY

The mission of the Library’s capital improvement program is to update branch library buildings through new construction, consolidation or renovation of existing facilities. The Library’s capital program is designed to minimize maintenance and rental costs, provide safe structurally sound and inviting facilities, and ensure that current and future service needs area met. The Chicago Public Library consists of the downtown Harold Washington Library Center, two regional libraries and 76 branch libraries. Two new branches will be opened in the fall of 2010, one of which is a replacement branch. In 2011another three libraries will be added to the system. As these additional branch location have a direct budget impact, the Library’s 2011 operating budget has been increased to cover additional personnel required.

For more information on the City’s 2010–2014 CIP, please refer to the Capital Improvement Program 2010–2014 book available for viewing at any branch of the Chicago Public Library or on-line through the OBM web site.

PROJECTED PROJECTS

Projected projects to be funded as part of the 2010 CIP include:

Reconstructing 12 miles of sewers and lining and rehabilitating an additional 40 miles;

Resurfacing more than 500 blocks of local streets;

Constructing 30 blocks of alleys and resurfacing 70 more;

Rep lac ing more than 120 b lock s o f sidewalks;

Installing 100 blocks of new residential street lighting;

Beginning or continuing construction of several major bridges: Wacker Drive at the Congress Interchange; Laramie Avenue Viaduct at Polk Street; Halsted Street over North Branch Canal and Lawrence Avenue over the Kennedy Expressway;

Installing new or upgraded traffic signals at 35 intersections;

Continued construction of West Humboldt Park, Greater Grand Crossing, Little Village and Dunning Branch Libraries; and

Completing construction of the 23rd District Police Station and extensive rehabilitation of Area 2, District 5 headquarters.

BUDGET 2011

HOW CHICAGO BUDGETS



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Each year, the City prepares its annual budget that accounts for the City’s revenue from taxes and other resources and a plan for what the City intends to spend over the course of the following year. In accordance with the State of Illinois Municipal Code, the City produces a balanced budget.

Beginning in the summer, City departments inform the Office of Budget and Management (OBM) of their needs for personnel and non-personnel expenses for the upcoming year. OBM prepares the Preliminary Budget based on requests submitted by the departments and funds the City expects will be available for these needs. By Executive Order, the Preliminary Budget is filed with the City Clerk on or before July 31st of each year. Copies are made available to the City Council and the general public.

The City conducts annual Preliminary Budget Hearings to allow citizens to express their opinions concerning items within the proposed budget.

After receiving input from Chicago residents, the Mayor and the Budget Director meet with Commissioners from the City departments to develop one final budget for the entire City government. When these steps are complete, the City compiles the Mayor’s proposed budget, which is then introduced to the City Council.

The City Council holds departmental and public hearings on the budget and may propose amendments to it.

Once the budget is approved by the City Council, it becomes the Appropriation Ordinance. The Appropriation Ordinance is implemented on January 1st of the following year.


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BUDGET DOCUMENTS

The City seeks to produce budget documents that satisfy the criteria established by the Government Finance Officers Association (GFOA) Distinguished Budget Program. The City’s budget documents this year include:

PRELIMINARY BUDGET

The Preliminary Budget contains information on the previous year’s revenues and expenditures based upon financial unaudited data. Released in late summer, it is a midyear analysis of the current year’s budget and an estimate of revenues and expenditures for the next fiscal year.

BUDGET OVERVIEW AND REVENUE ESTIMATES

The Budget Overview and Revenue Estimates provides a complete summary of the proposed budget and is written for a general audience. The Budget Overview and Revenue Estimates also contain detai led information on the City’s anticipated revenues, expenditures and positions.

BUDGET RECOMMENDATIONS

In accordance with Illinois State Law, on or before November 15th of each year, the Mayor submits the administration’s budget recommendation to the City Council. The Budget Recommendations contain the line-item detail for all local funds of the proposed budget.

PROGRAM AND BUDGET SUMMARY

The Program and Budget Summary is a companion publication to the Budget Recommendations and provides an overview of the City’s programs and services, as well as annual performance data. The performance data reflects monthly reporting by City departments, which in turn is the basis for regular accountability meetings between departments and City executives. Throughout the year, City officials make policy changes and

adjust resources in order to achieve performance goals. On an annual basis, performance data is used to make budgetary decisions for the coming year. The Program Budget and Summary provides the personnel and non-personnel costs for all City programs and lists all funding sources supporting each department and bureau.

DRAFT ACTION PLAN

The Draft Act ion Plan presents programs and resources that address key housing and community development needs identified by the City. The Draft Action Plan details a proposed comprehensive annual budget for the City’s Community Development Block Grant, Emergency Shelter Grant, Home Investment Partnership Grant and Housing Opportunities for Persons with AIDS Grant programs.

FINAL ACTION PLAN

The Final Action Plan is the City of Chicago’s approved annual budget for the City’s Community Development Block Grant, Emergency Shelter Grant, Home Investment Partnership Grant, and Housing Opportunities for Persons with AIDS Grant programs which is submitted to the U.S. Department of Housing and Urban Development for funding consideration. The final text incorporates public comments gathered during a 30-day comment period.

ANNUAL APPROPRIATION ORDINANCE

The Annual Appropriation Ordinance is the City of Chicago’s line-item budget, as passed by City Council.

CAPITAL IMPROVEMENT PROGRAM

The Capital Improvement Program book is a comprehensive list of capital improvements scheduled to occur in the City over the next five years. It is released annually in the summer.


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MARCH

Draft Capital Improvement Plan is released.

JUNE

Departments submit preliminary revenue and expense estimates to the Office of Budget and Management (OBM).

JULY

In accordance with the Municipal Code, the City files the proposed Preliminary Budget estimates with the City Clerk and presents them to City Council and the general public; The five-year Capital Improvement Plan book is released.

AUGUST/SEPTEMBER

The Mayor holds public hearings on the proposed Preliminary Budget that allow the public to provide input on the development of the City budget; OBM receives detailed budget requests from departments; OBM holds a series of hearings with each department.

With the public and department input, OBM works to balance department requests with available resources.

OCTOBER

The Mayor submits a proposed budget to City Council for review before November 15th in accordance with Illinois State Law. The budget is available for public review. The City Council conducts hearings on the budget, including at least one public hearing to gather comments

on the proposed programs and budgets recommended in the Draft Action Plan.

NOVEMBER/DECEMBER

Additions or changes to the proposed budget are considered; City Council must approve a balanced budget by December 31st. The Final Action Plan is submitted to the U.S. Department of Housing and Urban Development for funding consideration. Budget recommendations become the Annual Appropriation Ordinance.

JANUARY

The City’s Annual Appropriation Ordinance goes into effect.

THROUGHOUT THE YEAR

Throughout the year, OBM manages the resources provided through the Annual Appropriation Ordinance. On a weekly and monthly basis, the OBM reviews revenues and expenditures and any trends or events that may affect these. On a monthly basis, City departments provide information about how well City programs and services are performing to ensure that budget resources maximize taxpayer value.


INTRODUCTION

The City’s financial policies provide the basic framework for the fiscal management of the City. These policies are developed within the parameters of the established provisions of the City’s Municipal Code and the Illinois Municipal Code, and are intended to assist the City Council, the Office of Budget and Management, the Office of the City Treasurer, the Department of Finance and the Department of Revenue in evaluating current activities and proposals for future programs.

The policies adhere to the City’s commitment to maintain internal control, safeguard assets and meet fiduciary responsibilities. Reserve, capital, and debt management and fixed asset policies are included. These policies are reviewed and modified to accommodate changing circumstances and conditions.

FINANCIAL PLANNING POLICIES

The City adopts its annual budget in the context of a long-term financial outlook emphasizing high-quality municipal services.

The corporate fund’s long-term outlook considers assumptions for revenues, expenditures and changes to fund balance. The assumptions are evaluated each year as part of the budget development process.

All City expenditures are approved by City Council through the Annual Appropriation Ordinance.

BALANCED BUDGET

In accordance with the Illinois Municipal Code (065 ILCS 5/8-2-6), the City develops a balanced budget every year.

OPERATING POLICIES

Pursuant to the City’s Municipal Code (2-32-010, 2-32-03), the Department of Finance provides core fiscal functions and manages the disbursement of City funds. The City Comptroller is the fiscal agent of the City and exercises general supervision over all City officers charged with the receipt, collection or disbursement of City revenues and all funds required to be in the custody of the City Treasurer.

Pursuant to Municipal Code (2-32-060) revenue policies, the City Treasurer receives all monies belonging to the City. At the end of each month, the City Treasurer issues a sworn statement to the Comptroller showing the state of the treasury at the date of such account and the balance of the money in the treasury.

REVENUE POLICIES

The City maintains a diversified and stable revenue base to protect it from short-term fluctuations in any single revenue source. The City estimates its annual revenues by objective and analytical processes. Revenues are responsibly estimated and updated twice yearly. To support its revenue system, the City does the following:


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Revenue Diversification

A diversified and stable revenue system shelters the City from short-term fluctuations in any single revenue source.

User Fees and Charges

Periodically, the City recalculates the cost of selected activities currently supported by user fees and charges to identify the effect of inflation and other cost increases. The City sets fees and user charges for each enterprise fund, such as Water and Sewer, at a level that fully supports the total direct and indirect costs of operation. The City reviews the cost of services it provides for the potential implementation of user fees and charges on an annual basis.

GRANTS POLICIES

Pursuant to Executive Order 91-1, the City identifies and applies for federal, state, and private grants to support its initiatives and programs not paid for by taxes. The City’s grants management process requires that all grant applications, renewals and awards be approved to ensure that each grant supports the City’s mission and conforms to City policies and that grant funds are fully developed and expended according to grantor guidelines.

Grant budgets are established to include the City’s administrative costs for program operations including employee fringe benefits. Expected grants and cash donations are appropriated annually through the budget process, passed by the City Council and published in the City’s Annual Appropriation Ordinance.

OBM creates a quarterly report of grant activity citywide. Grant revenue is reported annually as Fund 925.

EXPENDITURE POLICIES

The City appropriates sufficient funds for operating expenditures necessary to maintain an established scope and quality of City services. The City continually examines its services in order

to reduce operating expenditures, and enhance the scope and quality of services it provides to taxpayers.

Personnel

Pursuant to Municipal Code (2-74-010), personnel expenditures reflect the minimum staffing needed to meet the social, economic and program needs of Chicago residents. To attract and retain employees, the City endeavors to maintain a compensation and benefit package competitive with the public and, when quantifiable, private services industries.


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The City adheres to the Employee Benefit and Compensation Plan which governs compensation administration and benefits for all City positions that are regulated by the Mayor and City Council.

Vendors

The City utilizes contracted vendors for the provision of the goods and services required to meet the needs of the people of Chicago. Contractors that can perform the required level of services at a lower cost and more efficiently and effectively than City personnel are used as necessary.

Most City contracts are awarded through competitive bidding processes. Contracts for goods and services with a value of more than $100,000 are awarded by competitive sealed bid after public advertisement. Contracts for goods and services with a value of less than or equal to $100,000 are considered “small orders” and are awarded through a simplified process of mailed or faxed bid solicitations, without public advertisement. Bids for contracts valued under $250,000 may be solicited by telephone when a good or service is necessary to meet a genuine emergency. Competitive procurements based on qualifications and pricing are used for professional services, such as engineering or accounting, and other instances in which the legislature has determined that the public interest is best served by not engaging in a bid process. Goods that can only be obtained from a single source may be purchased without a competitive process, but both the absence of other sources and the justification for the purchase must be fully documented.

The City also implements other policies through its contracts for goods and services. Pursuant to Municipal Code (2-92-430), the Department of Procurement Services establishes a goal of awarding at least 25 percent of the annual dollar value of all contracts to qualified minority-owned businesses and five percent of the annual

dollar value of all contracts to qualified women-owned businesses. In addition, pursuant to Municipal Code (2-92-610), City contractors and their subcontractors are required to pay a living wage to covered employees while contracted with the City. City construction contracts require the use of City residents for at least 50% of the workforce on a project, and require contractors to pay the prevailing wage established by the Illinois Department of Labor for their work. All vendors are required to disclose persons that own 7.5% or more of the business so that the City may enforce its decisions to bar non-responsible vendors from gaining City contracts.

CAPITAL DEBT MANAGEMENT

DEBT CAPACITY, ISSUANCE AND MANAGEMENT

The City issues debt to ensure future taxpayers, who will benefit from investment, will pay a share of its costs and will confine long-term borrowing and capital leases to capital improvements, projects or equipment that will not be financed from current resources.

Any capital project or equipment funded through the issuance of bonds is financed for a weighted average period not to exceed the life of the project or equipment. The City maintains strong communication about its financial condition with bond and credit rating institutions.

The City issues debt in a manner that complies with state and federal laws, existing bond covenants and prudent financial management.

OPERATING/CAPITAL EXPENDITURE ACCOUNTABILITY

Capital assets are defined as assets or a network of assets with an initial cost that exceeds $5,000 and with an estimated useful life in excess of one year for all capital. Existing capital equipment is replaced when needed to ensure the optimal


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productivity and safety of City employees and residents. Existing capital equipment associated with corporate fund operations depreciates by charges to the departments using the equipment. Expenditures for additional capital equipment are made only to maintain or enhance employee productivity, improve quality of service or expand scope of service.

INVESTMENT CASH MANAGEMENT

INVESTMENT POLICY

The City’s Investment Policy ensures that all funds provide the highest investment return using authorized instruments while meeting the City’s daily cash flow demands in conformity with the City’s Municipal Code. The Investment Policy ensures the safety of principal, while managing liquidity requirements of debt service and other financial obligations, providing the highest investment return using authorized investment instruments, and promoting economic development in the City.

City investments are undertaken in a manner that seeks to ensure the preservation of capital in the portfolio. To attain this objective, diversification is required to ensure that the City Treasurer prudently manages market, interest rate and credit risk. All investments are fully payable (both principal and interest) within ten years from the date of purchase. The investment portfolio is designed to obtain the highest available return, taking into account the City Treasurer’s investment risk constraints and cash flow needs. A variety of financial instruments and maturities, properly balanced, help to ensure liquidity and reduce risk or interest rate volatility and loss of principal. Diversifying investments and maturities avoids incurring unreasonable risks in the investment portfolio regarding specific security types, issuers or individual financial institutions.

The City’s Municipal Code authorizes the City Treasurer to invest funds in certain classes of securities. The City’s Investment Policy has been prepared in accordance with the Public Funds Investment Act (30 ILCS 235/2.5). The City will maintain an investment policy based on the Government Finance Officers Association Model Investment Policy.


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CASH MANAGEMENT

The Comptroller’s Office, the Office of Budget and Management, the Chief Financial Officer and the Office of the City Treasurer meet regularly to manage the City’s cash flow.

The Department of Revenue col lects and deposits all funds on a schedule which ensures cash availability. The Office of the City Treasurer invests funds to yield financial security, integrity and liquidity.

FINANCIAL RESERVE

The City develops a balanced budget every year. In the event of a surplus at the end of the year, the City budgets that surplus in the next year.

The City established a $500 million long-term reserves from the lease of the Chicago Skyway in 2005. The interest on this reserve is included as part of the City’s budget each year.

The City establishes and maintains operating reserves in its enterprise funds to pay for expenses caused by unforeseen emergencies or shortfalls caused by revenue declines.

RISK MANAGEMENT

The City operates a risk management program to minimize financial losses and protect residents and City employees. The program limits exposure to accidental and catastrophic losses, protects assets and assures continuity of operations.

FINANCIAL REPORTING

The City maintains a high standard of accounting practices in conformance with uniform financial reporting in Illinois and Generally Accepted Accounting Principals (GAAP) in the United States as promulgated by the Governmental Accounting Standards Board.

An Independent Certified Public Accounting firm performs a financial audit annually and an official opinion and annual financial report are published.

The Comprehensive Annual Financial Report (CAFR) presents the status of the City’s finances on a basis consistent with GAAP.

The City fully discloses information about its financial position by way of budget reports and audits.


The basis of budgeting refers to when revenues and expenditures are recognized in the City’s accounts.

Generally, the City prepares and presents the annual budget on a modified accrual basis of accounting, with the exception of property taxes. Modified accrual basis of accounting is an accounting method that measures the performance and position of a company or, in this case, a government agency, by recognizing revenue when earned as long as the revenue is collectible within the period or soon enough to be used to pay liabilities of the current period.

The City accounts for revenues as soon as the revenues are both measurable and available. Revenues are considered available when they are deemed collectible either during the account period or soon enough thereafter. Revenues are used to pay liabilities that apply to the account period.

The City records revenues from licenses and permits, charges for services and other miscellaneous revenues when the revenues are received in cash at the time of service. For budgeting, property taxes are considered revenue for the year in which they are levied.

Appropriations include both cash payments and encumbrances, or funds that are committed pursuant to a contract, that are related to the

fiscal year. Expenditures are generally recorded when an event or transaction occurs.

The City’s budgetary basis of accounting used for budgeting differs from the City’s actual GAAP basis reporting. The key differences are:

-tures, whereas the GAAP basis reflects encum-brances as reservations of fund balance.

long-term debt proceeds and operating

expenditures, an account that has been delin-quent for a period of at least ninety (90) days, and where collection is unlikely; however, doubtful account expenditures are reported under GAAP.

-plus as revenue, whereas GAAP records it as a portion of fund balance.

Appropriations are made at the line item and/or account level, and presented by fund and by City department. All annual appropriations lapse at year end if they remain unused and unencumbered. Encumbered appropriations are carried forward to the following year.

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BUDGET 2011

BUDGET DETAILS



SAMPLE TABLES

This section contains Revenue, Expenditure, Personnel and Grant tables that summarize the 2011 Budget Recommendations. The below diagrams clarify the table layouts. The Expenditure and Personnel table layouts are identical and, therefore, only an Expenditure table is included below.

HOW TO READ BUDGET DETAIL

REVENUE

Year-End BudgetEstimate Projection

($ millions) 2005 2006 2007 2008 2009 2010 2011

Public Utility Taxes & FeesElectricity Use 101.6$ 96.7$ 102.3$ 99.5$ 93.7$ 100.4$ 98.8$ Electricity IMF 92.8 89.4 94.6 92.2 86.9 92.9 91.2 Telecommunications 147.7 140.8 154.4 158.9 152.5 144.3 147.7 Natural Gas Utility 109.0 105.9 102.9 120.2 94.0 83.8 86.4 Natural Gas Use 25.1 26.1 27.4 33.0 32.8 32.4 33.5 Cable Television 15.9 16.7 19.3 21.0 21.4 22.0 22.0

Total - Public Utility Taxes & Fees 492.1$ 475.5$ 501.0$ 524.8$ 481.3$ 475.9$ 479.5$

Actual

Revenue Category

Current Year Estimate

Next Year Projection

Revenue Sources

Historical Collections

EXPENDITURES

2011 2010-2011($ millions) 2007 2008 2009 2010 Proposed % change

Finance and AdministrationOffice of the Mayor 6.54$ 7.56$ 6.70$ 6.24$ 6.13$ -1.7%Office of Budget & Management 2.68 2.69 2.07 1.85 2.08 12.1%Department of Innovation and Technology 15.42 15.14 14.06 24.32 25.44 4.6%City Clerk 9.33 9.64 9.94 9.17 9.06 -1.1%Department of Finance 15.31 16.11 15.71 14.58 14.78 1.4%City Treasurer 2.28 2.36 2.18 2.14 2.15 0.7%Department of Revenue 47.83 50.04 47.78 50.73 52.90 4.3%Department of Administrative Hearings 7.15 7.27 8.21 7.20 7.28 1.1%Department of Law 36.96 36.65 34.36 32.27 33.36 3.4%Office of Compliance - 2.49 2.88 3.31 3.46 4.5%Department of Human Resources 8.58 6.82 8.15 7.29 5.91 -18.9%Department of Procurement Services 9.77 9.39 8.21 6.20 5.73 -7.6%Department of General Services 187.64 203.53 204.28 218.40 195.86 -10.3%Department of Fleet Management 115.13 123.65 132.71 117.14 117.50 0.3%

Total - Finance and Administration 464.62$ 493.34$ 497.24$ 500.84$ 481.67$ -3.8%

AppropriationExpenditure Category

HistoricalAppropriations

Next Year Recommendation

Department Names

CurrentAppropriation

REVENUE

EXPENDITURES

GRANTS

($ millions)

2010Appropriation 2010 Actual

2011 New Grants #

Prior Year(s) Carryover

2011Projected

Total #

2010Appr. - 2011

Projected $ change

City DevelopmentDepartment of Cultural Affairs and Special Events * 4.8$ 3.2$ 5.4$ -$ 5.4$ 0.7$ Mayor's Office of Special Events 0.2 0.1 - - - (0.2) Department of Housing and Economic Development ** 323.0 333.6 79.9 218.2 298.1 (24.9) Total - City Development 327.9$ 337.0$ 85.4$ 218.2$ 303.5$ (24.4)$

Next YearEstimates

Current Year Actual to Appropriation

Expenditure Category

Department Names

GRANTS


REVENUETHE CORPORATE FUND

$ MILLIONSTABLE 16


2005 2006 2007 2008 2009 2010 2011

Public Utility Taxes & Fees Electricity Use 101.6$ 96.7$ 102.3$ 99.5$ 93.7$ 100.4$ 98.8$ Electricity IMF 92.8 89.4 94.6 92.2 86.9 92.9 91.2 Telecommunications 147.7 140.8 154.4 158.9 152.5 144.3 147.7 Natural Gas Utility 109.0 105.9 102.9 120.2 94.0 83.8 86.4 Natural Gas Use 25.1 26.1 27.4 33.0 32.8 32.4 33.5 Cable Television 15.9 16.7 19.3 21.0 21.4 22.0 22.0

Total - Public Utility Taxes & Fees 492.1$ 475.5$ 501.0$ 524.8$ 481.3$ 475.9$ 479.5$

City Sales Tax/HROTTotal - Home Rule Occupation Tax 220.6$ 266.3$ 265.4$ 243.5$ 224.9$ 229.8$ 233.5$

Transaction Taxes Real Property Transfer 236.3$ 242.3$ 205.8$ 119.5$ 61.9$ 70.9$ 65.3$ Personal Property Lease Transaction 82.5 90.2 92.1 119.3 112.2 104.1 105.2 Motor Vehicle Lessor Tax 6.3 6.5 6.9 6.3 5.6 5.4 5.5

Total - Transaction Taxes 325.2$ 339.0$ 304.7$ 245.1$ 179.6$ 180.5$ 175.9$

Transportation Taxes Parking Tax 81.7$ 83.6$ 88.1$ 85.3$ 93.1$ 92.0$ 92.8$ Vehicle Fuel Tax 61.0 60.3 58.1 54.9 53.9 47.4 47.8 Ground Transportation Tax 9.3 8.8 9.1 8.6 8.8 9.0 9.0

Total - Transportation Taxes 152.0$ 152.8$ 155.2$ 148.7$ 155.9$ 148.4$ 149.6$

Recreation Taxes Amusement Tax 53.1$ 57.5$ 68.8$ 69.0$ 79.1$ 82.7$ 81.8$ Auto Amusement Tax 1.4 1.3 1.3 1.1 1.2 1.2 1.2 Boat Mooring Tax 0.9 1.3 1.1 1.3 1.4 1.3 1.3 Liquor Tax 19.6 20.1 21.0 32.0 32.1 32.0 32.0 Municipal Cigarette Tax 27.5 32.9 28.4 24.3 21.0 18.7 18.7 Non-Alcoholic Beverage Tax 10.7 10.9 11.5 18.8 18.1 18.8 18.8 Off Track Betting 2.0 2.0 1.8 1.5 1.3 1.4 1.4

Total - Recreation Taxes 115.2$ 126.1$ 133.9$ 148.0$ 154.0$ 156.0$ 155.1$

Business Taxes Hotel Tax 46.3$ 59.7$ 61.9$ 64.3$ 50.1$ 52.1$ 52.9$ Employers' Expense Tax 22.7 22.9 23.6 23.9 23.9 22.0 19.6 Foreign Fire Insurance Tax 4.3 4.4 4.4 4.1 5.5 4.8 4.5

Total - Business Taxes 73.3$ 87.1$ 89.9$ 92.3$ 79.6$ 78.9$ 77.0$

TOTAL LOCAL TAXES 1,378.6$ 1,446.8$ 1,450.1$ 1,402.4$ 1,275.2$ 1,269.4$ 1,270.7$

Proceeds & Transfers In Skyway Long-Term Reserve Interest 25.0$ 25.0$ 25.0$ 25.0$ 25.0$ 25.0$ 15.0$ Skyway Mid-Term Reserve 50.0 50.0 50.0 50.0 50.0 50.0 50.0 Parking Meter Revenue Replacement Fund Interest - - - - - 20.0 20.0 Parking Meter Revenue Replacement Fund - - - - 20.0 190.0 119.9 Parking Meter Mid-Term Reserve - - - 100.0 50.0 100.0 82.8 Parking Meter Budget Stabilization Fund - - - - 217.6 102.4 - Proceeds & Transfers In-Other 58.3 40.1 79.5 84.2 111.9 85.9 206.9

TOTAL PROCEEDS & TRANSFERS IN 133.3$ 115.1$ 154.5$ 259.2$ 474.6$ 573.3$ 494.6$

Actual


REVENUE CONTINUED

THE CORPORATE FUND

$ MILLIONSTABLE 16


2005 2006 2007 2008 2009 2010 2011 Actual

Intergovernmental Revenue State Income Tax 212.9$ 232.3$ 253.5$ 268.8$ 201.0$ 201.7$ 267.9$ State Sales Tax/ROT 250.4 271.1 277.8 274.6 251.7 258.0 263.1 Personal Prop Replacement Tax (Corporate Share) 94.6 82.3 124.2 109.7 50.8 30.8 42.0 Municipal Auto Rental Tax 3.2 3.7 3.8 3.8 3.4 3.2 3.2 Reimbursements 2.1 2.8 3.4 2.3 1.7 1.7 1.7

TOTAL INTERGOVERNMENTAL 563.2$ 592.2$ 662.7$ 659.3$ 508.6$ 495.3$ 577.9$

Licenses & Permits Alcohol Dealers License 11.7$ 11.9$ 17.1$ 11.4$ 12.1$ 10.3$ 9.8$ Business Licenses 20.4 20.3 29.7 21.8 22.2 19.8 18.2 Building Permits 42.5 36.9 51.4 31.0 16.2 17.0 21.4 Other Permits and Certificates 39.4 42.2 42.4 43.4 42.7 40.7 39.1 Prior Period Fines 6.8 6.5 7.5 7.1 7.3 7.4 6.8

Total - Licenses & Permits 120.9$ 117.7$ 148.2$ 114.7$ 100.5$ 95.2$ 95.4$

Fines, Forfeitures & PenaltiesTotal - Fines 194.5$ 203.0$ 220.6$ 257.5$ 252.5$ 258.4$ 254.4$

Charges for Services Inspection 10.3$ 13.7$ 12.4$ 10.8$ 14.7 12.5$ 11.2$ Health 0.8 0.9 1.1 1.1 0.7 - - Information 1.0 1.1 0.8 0.8 0.8 0.8 0.8 Safety 36.4 60.0 56.1 43.8 50.3 51.7 65.5 Other Charges 7.8 7.4 12.6 13.2 11.6 11.5 11.4 Current Expenses 11.0 6.6 7.7 7.2 9.4 8.4 8.4

Total - Charges for Services 67.2$ 89.7$ 90.8$ 76.9$ 87.5$ 84.9$ 97.2$

Municipal ParkingTotal - Municipal Parking 23.2$ 26.5$ 28.1$ 28.8$ 9.1$ 6.8$ 6.8$

Leases, Rentals & Sales Sale of Land 23.5$ 2.7$ 12.4$ 0.3$ 0.8$ 7.5$ 8.8$ Vacation of Streets 5.8 5.2 3.0 4.7 1.8 0.5 0.5 Sale of Impounded Autos 0.2 0.2 0.1 0.2 0.1 0.2 0.2 Sale of Materials 0.9 1.0 2.0 3.1 2.1 1.5 1.1 Rentals and Leases 4.1 5.0 5.3 5.5 6.0 5.8 5.8

Total - Leases, Rentals & Sales 34.5$ 14.2$ 22.8$ 13.8$ 10.7$ 15.6$ 16.5$

Interest IncomeTotal - Interest Income 5.9$ 12.9$ 10.1$ 3.1$ 3.0$ 3.0$ 3.0$

Internal Service Earnings Enterprise Funds 109.6$ 115.3$ 118.3$ 117.9$ 128.2$ 128.4$ 133.8$ Special Revenue Funds 52.3 44.1 55.5 102.9 96.2 91.0 93.4 Intergovernmental Funds 38.8 31.2 43.2 32.7 27.7 30.3 88.7 Other Reimbursements 49.6 62.8 66.0 46.7 37.0 22.8 33.8

Total - Internal Service Earnings 250.2$ 253.4$ 283.0$ 300.2$ 289.1$ 272.6$ 349.6$

Other RevenueTotal - Other Revenue 25.9$ 12.6$ 19.1$ 19.1$ 25.4$ 21.2$ 84.7$

TOTAL NON-TAX REVENUE 722.4$ 730.0$ 822.6$ 814.0$ 777.8$ 757.6$ 907.6$

TOTAL CORPORATE FUND REVENUE 2,797.4$ 2,884.0$ 3,089.9$ 3,135.0$ 3,036.3$ 3,095.7$ 3,250.9$

Prior Year Unreserved Fund Balance 42.2$ 57.6$ 26.8$ 4.6$ 1.5$ 2.7$ 9.4$

TOTAL CORPORATE FUND RESOURCES 2,839.7$ 2,941.7$ 3,116.7$ 3,139.6$ 3,037.7$ 3,098.3$ 3,260.2$


REVENUE CONTINUED


$ MILLIONSTABLE 17


2005 2006 2007 2008 2009 2010 2011

Vehicle Tax Fund - 300 Vehicle Sticker Tax 96.7$ 95.1$ 97.8$ 98.7$ 105.7$ 104.4$ 104.4$ Impoundment Fees 13.3 16.1 16.4 13.5 10.8 11.0 11.0 Abandoned Auto Towing 0.2 0.1 0.1 0.1 0.0 0.0 0.0 Sale of Impounded Autos 6.1 5.2 5.7 7.5 2.5 4.1 4.1 Pavement Cut Fees 3.6 5.0 3.1 4.6 3.7 4.1 3.1 Commercial Refuse Container Fee - - - - 6.9 6.9 6.9 Other Resources 22.9 19.9 19.9 28.5 17.3 16.5 16.6

Total Fund Revenue 142.8$ 141.4$ 142.9$ 152.8$ 146.9$ 147.0$ 146.0$ Prior Year Unreserved Fund Balance (5.7) (10.7) (10.8) (33.8) (13.5) (7.5) (2.3) Total Fund Resources 137.1$ 130.8$ 132.1$ 119.0$ 133.4$ 139.5$ 143.7$

Motor Fuel Tax Fund - 310 Motor Fuel Tax Distribution 84.5$ 83.3$ 83.0$ 75.8$ 74.2$ 73.0$ 73.3$ Proceeds of Debt - - - - - - 5.6 Interest and Other 0.4 0.4 - 0.1 1.5 12.6 6.2

Total Fund Revenue 85.0$ 83.7$ 83.0$ 75.9$ 75.6$ 85.6$ 85.2$ Prior Year Unreserved Fund Balance (1.3) 4.6 (12.3) (15.6) (35.6) (36.5) (19.0) Total Fund Resources 83.7$ 88.2$ 70.7$ 60.3$ 40.0$ 49.1$ 66.2$

Special Service Area Number One Maintenance - 326 Property Tax Levy 1.1$ 1.1$ 0.9$ -$ -$ -$ -$ Transfer from Corporate Fund 0.9 0.9 0.9 - - - -

-$ Total Fund Revenue 2.0$ 2.0$ 1.8$ -$ -$ -$ -$

Total Fund Resources 2.0$ 2.0$ 1.8$ -$ -$ -$ -$

Library Funds: Buildings and Sites - 342, Maintenance and Operation - 346 Proceeds of Debt 50.8$ 33.0$ 27.9$ 70.4$ 70.4$ 70.4$ 70.4$ Corporate Fund Subsidy 17.0 30.5 42.5 16.0 13.8 15.7 15.7 Rental of Facilities 0.2 0.2 0.2 0.2 0.4 0.5 0.5 Interest 1.1 0.7 0.5 0.8 0.1 0.1 0.1 Fines 1.3 1.5 1.6 1.8 2.6 2.9 2.9 Skyway Proceeds 5.0 5.0 - - - - - Transfers In 1.1 1.1 3.3 2.8 - - - Other Revenue 0.0 0.0 0.1 0.0 1.0 0.0 0.0

Total Fund Revenue 76.6$ 72.1$ 76.1$ 92.0$ 88.3$ 89.6$ 89.6$ Prior Year Unreserved Fund Balance 4.7 6.1 (2.1) (2.4) 3.5 5.2 5.7 Total Fund Resources 81.28$ 78.1$ 74.0$ 89.5$ 91.8$ 94.8$ 95.3$

Emergency Communication Fund - 353 Telephone Surcharge 31.9$ 25.1$ 29.8$ 82.8$ 75.8$ 73.1$ 71.8$

Total Fund Revenue 31.9$ 25.1$ 29.8$ 82.8$ 75.8$ 73.1$ 71.8$ Prior Year Unreserved Fund Balance (5.5) (1.3) (1.2) 0.3 0.2 (0.5) - Total Fund Resources 26.4$ 23.8$ 28.6$ 83.2$ 75.9$ 72.6$ 71.8$

Actual


REVENUE CONTINUED


$ MILLIONSTABLE 17


2005 2006 2007 2008 2009 2010 2011 Actual

Special Events and Municipal Hotel Operators' Occupation Tax Fund - 355 Hotel Operator's Tax 13.8$ 16.7$ 17.7$ 18.4$ 14.0$ 14.6$ 14.8$ Recreation Fees and Charges - - - - - - 16.5 Rental and Charges - 0.4 - - - 0.8 0.8 Proceeds of Debt 7.1 6.8 7.0 1.0 2.5 2.5 2.5 Interest and Other 1.4 0.4 7.3 7.4 6.5 6.5

Total Fund Revenue 22.3$ 23.9$ 25.1$ 26.8$ 23.8$ 24.4$ 41.1$ Prior Year Unreserved Fund Balance 0.2 0.0 1.5 (0.9) (0.4) (1.5) (4.5) Total Fund Resources 22.5$ 23.9$ 26.6$ 25.8$ 23.5$ 23.0$ 36.6$

Special Events Fund - 356 Recreation Fees and Charges 21.3$ 21.8$ 22.5$ 23.3$ 19.5$ 17.5$ -$ Interest 0.1 0.2 0.1 0.1 0.0 0.0 -

Total Fund Revenue 21.4$ 22.0$ 22.6$ 23.4$ 19.5$ 17.5$ -$ Prior Year Unreserved Fund Balance (0.4) 0.4 (1.0) (0.5) (3.1) (5.2) - Total Fund Resources 21.0$ 22.4$ 21.6$ 22.9$ 16.5$ 12.4$ -$

City Relief Fund - 660 Proceeds of Debt 17.0$ 12.6$ 3.6$ 0.8$ -$ -$ Transfer in - - - 9.2 - -

Total Fund Revenue 17.0$ 12.6$ 3.6$ 10.0$ -$ -$ -$ Prior Year Unreserved Fund Balance (7.3) (4.3) (5.6) (10.3) - - Total Fund Resources 9.7$ 8.3$ (2.0)$ (0.3)$ -$ -$ -$

CTA Real Property Transfer Tax Fund - 0B09Real Property Transfer Tax-CTA Portion -$ -$ -$ 30.4$ 25.4$ 28.4$ 26.1$

Total Fund Revenue -$ -$ -$ 30.4$ 25.4$ 28.4$ 26.1$ Prior Year Unreserved Fund Balance - - - - (0.0) (0.2) - Total Fund Resources -$ -$ -$ 30.4$ 25.4$ 28.2$ 26.1$

Tax Increment Financing Administration Fund - 0B21TIF Administrative Reimbursement -$ -$ -$ -$ -$ -$ 5.9$

Total Fund Revenue -$ -$ -$ -$ -$ -$ 5.9$ Prior Year Unreserved Fund Balance - - - - - - - Total Fund Resources -$ -$ -$ -$ -$ -$ 5.9$

TOTAL SPECIAL REVENUE 398.9$ 382.8$ 384.9$ 494.1$ 455.3$ 465.7$ 465.8$

TOTAL SPECIAL REVENUE RESOURCES 383.7$ 377.5$ 353.4$ 430.9$ 406.4$ 419.6$ 445.7$


REVENUE CONTINUED

PENSION FUNDS

$ MILLIONSTABLE 18


2005 2006 2007 2008 2009 2010 2011

Municipal Employees' Annuity and Benefit Fund - 681 Property Tax Levy 131.3$ 127.6$ 125.7$ 124.4$ 126.7$ 126.8$ 121.3$ Personal Prop Replacement Tax 22.2 22.4 22.3 21.3 30.3 36.2 34.3 Library Property Tax Levy - - 5.7 5.7 5.7 Interest 0.4 0.8 0.5 0.4 - - - Proceeds of Debt 10.0 - - 2.5 0.0 - -

Total Fund Revenue 163.9$ 150.8$ 148.5$ 148.7$ 162.7$ 168.7$ 161.3$

Laborers' and Retirement Board Employees' Annuity and Benefit Fund - Property Tax Levy -$ -$ -$ 0.6$ 9.5$ 13.7$ 11.8$ Personal Prop Replacement Tax - - - - 4.0 4.5 3.9 Proceeds of Debt - - - 15.5 - - -

Total Fund Revenue -$ -$ -$ 16.1$ 13.4$ 18.2$ 15.6$

Policemen's Annuity and Benefit Fund - 683 Property Tax Levy 125.8$ 128.1$ 125.3$ 136.8$ 135.2$ 140.2$ 143.8$ Personal Prop Replacement Tax 18.6 26.5 22.1 24.9 40.9 46.3 47.4 Interest - - 0.5 0.5 0.1 - - Proceeds of Debt 20.0 - - 12.2 - - -


Firemen's Annuity and Benefit Fund - 684 Property Tax Levy 53.8$ 74.8$ 63.7$ 63.8$ 63.4$ 64.3$ 66.1$ Personal Prop Replacement Tax 5.8 16.6 11.3 10.6 20.8 21.2 21.8 Interest - - 0.2 0.2 0.0 - - Proceeds of Debt - - - - - - -


TOTAL PENSION FUNDS 387.9$ 396.9$ 371.6$ 413.7$ 436.6$ 458.9$ 456.1$

Actual


REVENUE CONTINUED

DEBT SERVICE FUNDS

$ MILLIONSTABLE 19


2005 2006 2007 2008 2009 2010 2011

Sales Tax Bond Redemption and Interest Fund - 505 Home Rule Retailers Occupation Tax 26.3$ 19.2$ 25.5$ 28.8$ 26.0$ 26.0$ 26.7$ Interest and Other - 0.4 0.6 0.1 96.7 - -

Total Fund Revenue 26.3$ 19.6$ 26.1$ 28.9$ 122.7$ 26.0$ 26.7$ Prior Year Unreserved Fund Balance - (0.5) (0.9) (0.3) - (0.8) - Total Fund Resources 26.3$ 19.1$ 25.2$ 28.6$ 122.7$ 25.2$ 26.7$

Equipment Note Redemption and Interest Fund - 509 Property Tax Levy 11.4$ 12.4$ -$ -$ -$ -$ -$ Transfer In 1.7 1.8 1.8 - - - - Other Revenue - - -

Total Fund Revenue 13.1$ 14.2$ 1.8$ -$ -$ -$ -$ Prior Year Unreserved Fund Balance - 1.8 - - - Total Fund Resources 13.1$ 15.9$ 1.8$ -$ -$ -$ -$

General Obligation Bond Redemption and Interest Fund - 510 Property Tax Levy 307.2$ 311.4$ 290.9$ 338.4$ 364.1$ 368.4$ 370.5$ Transfer In - - - - - 33.0 - Other Revenue 9.3 9.3 2.1 18.0 65.0 29.3 38.1

Total Fund Revenue 316.5$ 320.6$ 293.0$ 356.4$ 429.1$ 430.7$ 408.6$ Prior Year Unreserved Fund Balance 18.5 9.0 - 13.9 - 3.0 13.0 Total Fund Resources 335.0$ 329.6$ 293.0$ 370.2$ 429.1$ 433.7$ 421.6$

Daily Tender Note Redemption and Interest Fund - 512 Property Tax Levy 16.2$ 12.7$ 3.9$ -$ -$ -$ -$ Transfers In & Interest - - - - - - -

Total Fund Revenue 16.2$ 12.7$ 3.9$ -$ -$ -$ -$ Prior Year Unreserved Fund Balance - - - - - - Total Fund Resources 16.2$ 12.7$ 3.9$ -$ -$ -$ -$

Library Bond Redemption and Interest Fund - 516Property Tax Levy -$ -$ -$ -$ 6.0$ 4.3$ 4.3$

Total Fund Revenue -$ -$ -$ -$ 6.0$ 4.3$ 4.3$ Prior Year Unreserved Fund Balance - - - - 0.3 - - Total Fund Resources -$ -$ -$ -$ 6.3$ 4.3$ 4.3$

Actual


REVENUE CONTINUED

DEBT SERVICE FUNDS

$ MILLIONSTABLE 19


2005 2006 2007 2008 2009 2010 2011 Actual

Library Daily Tender Note Redemption and Interest Fund - 521Property Tax Levy 53.4$ 34.7$ 31.7$ 26.1$ 70.3$ 73.4$ 73.4$

Total Fund Revenue 53.4$ 34.7$ 31.7$ 26.1$ 70.3$ 73.4$ 73.4$ Prior Year Unreserved Fund Balance 1.1 3.3 4.5 - - - Total Fund Resources 53.4$ 35.8$ 35.0$ 30.7$ 70.3$ 73.4$ 73.4$

Emergency Communication Bond Redemption and Interest Fund - 525Telephone Surcharge & Interest 9.1$ 22.3$ 23.3$ 22.3$ 22.1$ 22.3$ 22.3$

Total Fund Revenue 9.1$ 22.3$ 23.3$ 22.3$ 22.1$ 22.3$ 22.3$ Prior Year Unreserved Fund Balance 13.2 1.0 1.0 0.0 0.0 - Total Fund Resources 22.3$ 23.4$ 24.4$ 22.3$ 22.2$ 22.3$ 22.3$

City College Bond Redemption and Interest Fund - 549Property Tax Levy 5.7$ 5.7$ 6.4$ 34.9$ 36.3$ 36.6$ 36.6$

Total Fund Revenue 5.7$ 5.7$ 6.4$ 34.9$ 36.3$ 36.6$ 36.6$ Prior Year Unreserved Fund Balance - - 0.5 - 1.9 - - Total Fund Resources 5.7$ 5.7$ 6.9$ 34.9$ 38.2$ 36.6$ 36.6$

TOTAL DEBT SERVICE FUND REVENUE 440.4$ 429.9$ 386.2$ 468.6$ 686.5$ 593.4$ 572.0$

TOTAL DEBT SERVICE FUND RESOURCES 472.1$ 442.3$ 390.2$ 486.8$ 688.8$ 595.6$ 585.0$


REVENUE CONTINUED

ENTERPRISE

$ MILLIONSTABLE 20


2005 2006 2007 2008 2009 2010 2011

Water Fund - 200 Water Fees 333.7$ 317.2$ 317.7$ 358.1$ 397.0$ 443.0$ 443.0$ Transfer In 16.3 28.8 35.3 42.3 38.3 28.0 28.0 Miscellaneous and Other 10.6 26.9 23.0 25.7 21.5 21.0 21.0 Interest Earnings 4.9 3.0 2.7 0.5 1.0 1.1 1.1


Sewer Fund - 314 Sewer Fees 141.3$ 134.3$ 132.4$ 158.7$ 173.9$ 196.6$ 196.6$ Transfer-In 14.7 12.1 11.0 8.7 14.1 10.8 10.8 Miscellaneous & Other 1.9 1.3 1.9 1.9


Midway Airport Fund - 610 Rates, Charges and Other 152.6$ 160.5$ 183.4$ 186.8$ 176.0$ 217.5$ 220.9$


O'Hare Airport Fund - 740 Rates, Charges and Other 621.8$ 672.0$ 766.5$ 825.9$ 715.7$ 892.5$ 899.3$


TOTAL ENTERPRISE FUNDS 1,295.8$ 1,354.8$ 1,472.0$ 1,608.6$ 1,538.8$ 1,812.4$ 1,822.6$

Actual


APPROPRIATION BY FUNCTION AND ORGANIZATIONAL UNIT

ALL LOCAL FUNDS$ MILLIONSTABLE 21

2011 2011-20102006 2007 2008 2009 2010 Proposed % change

Finance and AdministrationOffice of the Mayor 6.3$ 6.5$ 7.6$ 6.7$ 6.2$ 6.1$ -1.7%Office of Budget & Management 2.8 2.7 2.7 2.1 1.9 2.1 12.1%Department of Innovation & Technology 15.1 15.4 15.1 14.1 24.3 25.4 4.6%City Clerk 9.4 9.3 9.6 9.9 9.2 9.1 -1.1%Department of Finance 15.2 15.3 16.1 15.7 14.6 14.8 1.4%City Treasurer 2.2 2.3 2.4 2.2 2.1 2.2 0.7%Department of Revenue 46.4 47.8 50.0 47.8 50.7 52.9 4.3%Department of Administrative Hearings 6.6 7.2 7.3 8.2 7.2 7.3 1.1%Department of Law 34.6 37.0 36.7 34.4 32.3 33.4 3.4%Office of Compliance - - 2.5 2.9 3.3 3.5 4.5%Department of Human Resources 8.5 8.6 6.8 8.2 7.3 5.9 -18.9%Department of Procurement Services 9.6 9.8 9.4 8.2 6.2 5.7 -7.6%Department of General Services 177.0 187.6 203.5 204.3 218.4 195.9 -10.3%Department of Fleet Management 108.0 115.1 123.7 132.7 117.1 117.5 0.3%

Total - Finance and Administration 441.8$ 464.6$ 493.3$ 497.2$ 500.8$ 481.7$ -3.8%

Legislative and ElectionsCity Council 16.9$ 17.5$ 19.7$ 20.4$ 19.6$ 19.6$ 0.0%City Council Committees 5.4 5.6 5.6 5.8 5.7 5.7 -0.1%Legislative Inspector General - - - - - 0.1 -City Council Legislative Reference Bureau 0.4 0.4 0.4 0.4 0.4 0.4 0.0%Board of Election Commissioners 13.3 19.0 14.1 10.5 13.1 19.2 47.3%

Total - Legislative and Elections 36.0$ 42.5$ 39.9$ 37.2$ 38.8$ 45.0$ 16.2%

Appropriation

City DevelopmentDepartment of Planning & Development 14.4$ 19.4$ 18.2$ -$ -$ -$ -Mayor's Office of Workforce Development - 5.7 5.4 - - - -Department of Housing 15.4 31.4 32.3 - - - -Department of Community Development - - - 36.8 31.3 - -100.0%Department of Housing and Economic Development * - - - - - 26.1 -Department of Cultural Affairs 12.2 14.1 14.7 13.7 12.5 - -100.0%Department of Cultural Affairs and Special Events ** - - - - - 32.3 -Mayor's Office of Special Events 26.3 27.0 28.8 28.2 24.7 - -100.0%

Total - City Development 68.3$ 97.6$ 99.5$ 78.7$ 68.5$ 58.3$ -14.8%

Community ServicesDepartment of Public Health 36.9$ 45.9$ 45.3$ 37.8$ 33.9$ 33.8$ -0.2%Commission on Human Relations 2.2 2.2 2.3 2.1 2.0 1.9 -2.4%Chicago Department of Senior Services 3.0 6.6 7.1 - - - -Mayor's Office for People with Disabilities 1.6 1.8 1.8 1.6 1.7 1.1 -38.4%Department of Family & Support Services - - - 20.3 25.2 17.4 -31.0%Department of Children & Youth Services 3.2 4.2 4.9 - - - -Department of Human Services 7.2 8.1 8.7 - - - -Chicago Public Library 50.5 53.5 54.9 54.6 54.1 55.2 2.1%

Total - Community Services 104.6$ 122.3$ 124.9$ 116.4$ 116.8$ 109.3$ -6.4%

* The 2011 recommended budget combines the Departments of Community Development and Zoning and Land Use Planning into the Department of Housing and Economic Development ** The 2011 recommended budget merges the Department of Cultural Affairs and the Mayor's Office of Special Events into the Department of Cultural Affairs and Special Events


CONTINUED

APPROPRIATION BY FUNCTION AND ORGANIZATIONAL UNIT

ALL LOCAL FUNDS$ MILLIONSTABLE 21

2011 2011-20102006 2007 2008 2009 2010 Proposed % change

Appropriation

Public SafetyPolice Board 0.4$ 0.4$ 0.5$ 0.5$ 0.4$ 0.4$ -4.6%Independent Police Review Authority - - 5.8 6.9 7.4 7.5 1.7%Chicago Police Department 1,215.3 1,248.7 1,234.6 1,236.5 1,243.0 1,316.2 5.9%Office of Emergency Management & Communication 87.4 95.6 98.7 99.2 86.8 95.9 10.5%Chicago Fire Department 454.4 474.7 489.7 487.5 499.8 509.4 1.9%

Total - Public Safety 1,757.5$ 1,819.4$ 1,829.2$ 1,830.5$ 1,837.4$ 1,929.5$ 5.0%

RegulatoryOffice of Inspector General 3.7$ 5.4$ 5.5$ 5.9$ 6.0$ 6.0$ 0.1%Department of Zoning & Land Use Planning * - - - 6.4 6.4 - -100.0%Department of Zoning 2.2 2.5 2.7 - - - -Department of Buildings 24.6 22.3 31.6 27.3 26.0 26.7 2.7%Department of Construction & Permits 8.9 8.9 - - - - -Department of Business Affairs & Consumer Protection - - - 16.2 15.3 14.3 -6.8%Department of Consumer Services 9.8 9.5 9.8 - - - -Department of Environment 3.9 4.8 5.7 4.9 4.6 3.5 -24.3%Commission on Animal Care & Control 4.7 4.7 4.9 4.6 4.5 3.9 -13.4%Department of Business Affairs & Licensing 8.9 8.4 9.0 - - - -License Appeal Commission 0.2 0.2 0.2 0.2 0.2 0.2 0.4%Board of Ethics 0.8 0.8 0.8 0.6 0.6 0.6 6.4%

Total - Regulatory 67.7$ 67.6$ 70.2$ 66.1$ 63.6$ 55.1$ -13.3%

Infrastructure ServicesDepartment of Streets and Sanitation 355.4$ 357.3$ 362.8$ 303.1$ 243.5$ 240.9$ -1.1%Chicago Department of Transportation 98.7 98.9 99.8 89.9 133.5 126.5 -5.2%

Total - Infrastructure Services 454.0$ 456.2$ 462.6$ 393.0$ 377.1$ 367.4$ -2.6%

Public Service EnterpriseOffice of the O'Hare Modernization Program 4.2$ 4.3$ 4.5$ 5.2$ -$ -$ -Department of Aviation 296.8 307.4 319.1 351.6 360.5 363.5 0.8%Department of Water Management 237.7 232.7 244.5 263.9 248.5 252.6 1.6%

Total - Public Service Enterprises 538.61$ 544.31$ 568.17$ 620.70$ 609.00$ 616.01$ 1.2%

General Financing RequirementsPension Funds 398.0$ 421.7$ 457.0$ 454.9$ 458.9$ 456.1$ -0.6%Loss in Collection of Taxes 18.9 16.5 19.7 19.3 19.3 19.4 0.4%Finance General 1,675.0 1,933.9 2,135.6 2,224.4 2,403.5 2,431.8 1.2%

Total - General Financing Req. 2,091.9$ 2,372.1$ 2,612.3$ 2,698.5$ 2,881.7$ 2,907.3$ 0.9%

Total - All Functions 5,560.4$ 5,986.5$ 6,300.0$ 6,338.3$ 6,493.6$ 6,569.6$ 1.2%Deduct Reimbursements Between Funds (268.2) (285.5) (311.3) (302.2) (317.0) (344.4)Deduct Proceeds of Debt (45.1) (31.7) (70.4) (70.4) (70.4) (70.4)Net Grand Total 5,247.1 5,669.3 5,918.3 5,965.7 6,106.1 6,154.8 0.8%

* The 2011 recommended budget combines the Departments of Community Development and Zoning and Land Use Planning into the Department of Housing and Economic Development


Represents Full Time Positions only. Refer to Program and Budget Summary book for Full Time Equivalent (FTE) positions.

POSITIONS BY FUNCTION AND ORGANIZATIONAL UNIT

ALL LOCAL FUNDS$ MILLIONSTABLE 22 2011 2011-2010

2006 2007 2008 2009 2010 Proposed change

Finance and AdministrationOffice of the Mayor 78 78 85 78 78 78 - Office of Budget & Management 33 29 30 21 21 24 3 Department of Innovation & Technology 91 92 90 71 80 80 - City Clerk 129 125 124 119 108 106 (2) Department of Finance 214 215 212 186 180 182 2 City Treasurer 23 23 23 22 21 22 1 Department of Revenue 385 385 375 328 352 345 (7) Department of Administrative Hearings 50 50 50 46 44 43 (1) Department of Law 408 415 405 354 346 362 16 Office of Compliance - - 31 35 36 32 (4) Department of Human Resources 121 122 108 97 89 79 (10) Department of Procurement Services 147 136 131 103 80 76 (4) Department of General Services 439 431 423 355 393 400 7 Department of Fleet Management 821 817 839 747 681 673 (8)

Total - Finance and Administration 2,939 2,918 2,926 2,562 2,509 2,502 (7)

Legislative and ElectionsCity Council 234 234 234 233 234 234 - Board of Election Commissioners 137 137 136 124 124 124 -

Total - Legislative and Elections 371 371 370 357 358 358 -

City DevelopmentDepartment of Planning & Development 88 129 113 - - - - Mayor's Office of Workforce Development - 2 2 - - - - Department of Housing 4 10 8 - - - - Department of Community Development - - - 56 52 - (52) Department of Housing and Economic Development * - - - - - 145 145 Department of Cultural Affairs 50 50 46 37 37 - (37) Department of Cultural Affairs and Special Events ** - - - - - 86 86 Mayor's Office of Special Events 71 71 68 52 51 - (51)

Total - City Development 213 262 237 145 140 231 91

Community ServicesDepartment of Public Health 444 443 428 296 271 266 (5) Commission on Human Relations 32 31 31 25 24 24 - Chicago Department of Senior Services 26 26 28 - - - - Mayor's Office for People with Disabilities 15 15 17 16 14 12 (2) Department of Family & Support Services - - - 33 28 28 - Department of Children & Youth Services - - 1 - - - - Department of Human Services 5 5 11 - - - - Chicago Public Library 987 985 987 825 826 839 13

Total - Community Services 1,509 1,505 1,503 1,195 1,163 1,169 6

* The 2011 recommended budget combines the Departments of Community Development and Zoning and Land Use Planning into the Department of Housing and Economic Development ** The 2011 recommended budget merges the Department of Cultural Affairs and the Mayor's Office of Special Events into the Department of Cultural Affairs and Special Events

Appropriation


CONTINUED

Represents Full Time Positions only. Refer to Program and Budget Summary book for Full Time Equivalent (FTE) positions.

POSITIONS BY FUNCTION AND ORGANIZATIONAL UNIT

ALL LOCAL FUNDS$ MILLIONSTABLE 22 2011 2011-2010

2006 2007 2008 2009 2010 Proposed changeAppropriation

Public SafetyPolice Board 2 2 2 2 2 2 - Independent Police Review Authority - - 97 97 97 97 - Chicago Police Department 16,176 16,216 16,109 15,854 15,764 15,575 (189) Office of Emergency Management & Communication 1,083 1,093 1,116 1,001 1,005 1,001 (4) Chicago Fire Department 5,154 5,194 5,193 5,184 5,176 5,175 (1)

Total - Public Safety 22,415 22,505 22,517 22,138 22,044 21,850 (194)

RegulatoryOffice of Inspector General 51 61 65 65 71 71 - Department of Zoning & Land Use Planning * - - - 74 73 - (73) Department of Zoning 41 41 46 - - - - Department of Buildings 320 278 376 271 271 258 (13) Department of Construction & Permits 107 104 - - - - - Department of Business Affairs & Consumer Protection - - - 193 190 187 (3) Department of Consumer Services 141 137 131 - - - - Department of Environment 51 51 51 36 35 33 (2) Commission on Animal Care & Control 86 85 86 75 68 70 2 Department of Business Affairs & Licensing 109 109 107 - - - - License Appeal Commission 2 2 2 1 1 1 - Board of Ethics 11 11 9 7 7 7 -

Total - Regulatory 919 879 873 722 716 627 (89)

Infrastructure ServicesDepartment of Streets and Sanitation 2,857 2,912 2,916 2,455 2,012 1,999 (13) Chicago Department of Transportation 716 683 673 563 794 769 (25)

Total Infrastructure Services 3,573 3,595 3,589 3,018 2,806 2,768 (38)

Public Service EnterpriseOffice of the O'Hare Modernization Program 55 55 55 54 - - - Department of Aviation 1,366 1,343 1,282 1,222 1,285 1,282 (3) Department of Water Management 2,510 2,434 2,378 2,208 2,135 2,135 -

Total - Public Service Enterprises 3,931 3,832 3,715 3,484 3,420 3,417 (3)

Grand Total (Local Funds) 35,870 35,867 35,730 33,621 33,156 32,922 (234)

* The 2011 recommended budget combines the Departments of Community Development and Zoning and Land Use Planning into the Department of Housing and Economic Development


GRANT FUNDS BY FUNCTION

$ MILLIONSTABLE 23

2010Appropriation

2010Actual

2011 New Grants


2011Proposed

Total

2010 - 2011 total $ change

Finance and AdministrationOffice of the Mayor -$ -$ -$ -$ -$ -$ Office of Budget & Management 7.1 7.8 5.2 0.8 6.0 (1.2) Department of Business & Information Srvcs 106.5 18.3 83.8 18.3 102.0 (4.5) City Clerk - - - - - - Department of Finance 1.4 1.4 1.4 - 1.4 0.0 City Treasurer 0.2 - - - - (0.2) Department of Revenue - - - - - - Department of Administrative Hearings - - - - - - Office of Compliance 0.3 0.3 0.2 - 0.2 (0.0) Department of Law 1.5 1.5 1.7 - 1.7 0.1 Department of Human Resources - - - - - - Department of Procurement Services - - - - - - Department of General Services 11.7 9.3 1.3 7.5 8.8 (2.9) Department of Fleet Management - - - - - -

- Total - Finance and Administration 128.8$ 38.7$ 93.6$ 26.5$ 120.1$ (8.7)$

Legislative and ElectionsCity Council -$ -$ -$ -$ -$ -$ City Council Committees - - - - - - City Council Legislative Reference Bureau - - - - - - Board of Election Commissioners - - - - - -

Total - Legislative and Elections -$ -$ -$ -$ -$ -$

City DevelopmentDepartment of Cultural Affairs and Special Events * 4.8$ 3.2$ 5.4$ -$ 5.4$ 0.7$ Mayor's Office of Special Events 0.2 0.1 - - - (0.2) Department of Housing and Economic Development ** 323.0 333.6 79.9 218.2 298.1 (24.9)

Total - City Development 327.9$ 337.0$ 85.4$ 218.2$ 303.5$ (24.4)$

Community ServicesDepartment of Public Health 157.9$ 144.2$ 138.0$ 15.6$ 153.6$ (4.3)$ Commission on Human Relations 1.2 1.2 1.3 - 1.3 0.0 Mayor's Office for People with Disabilities 4.1 3.4 3.5 0.3 3.9 (0.2) Department of Family And Support Services 467.6 456.1 323.2 94.8 418.0 (49.6) Chicago Public Library 20.4 8.9 18.1 1.0 19.2 (1.3)

Total - Community Services 651.3$ 614.0$ 484.1$ 111.8$ 595.9$ (55.3)$


CONTINUED

2010Appropriation

2010Actual

2011 New Grants


2011Proposed

Total

2010 - 2011 total $ change

Public SafetyPolice Board -$ -$ -$ -$ -$ -$ Chicago Police Department 110.0 108.4 23.8 71.9 95.7 (14.4) Office of Emergency Management & Communication 216.9 168.9 54.7 127.0 181.7 (35.2) Chicago Fire Department 8.0 12.8 5.3 12.1 17.4 9.4

Total - Public Safety 334.9$ 290.1$ 83.7$ 211.0$ 294.7$ (40.2)$

RegulatoryOffice of Inspector General -$ -$ -$ -$ -$ -$ Department of Zoning and Land Use Planning ** 4.2 2.7 - - - (4.2) Department of Buildings 5.7 5.7 7.7 - 7.7 2.0 Department of Construction & Permits - - - - - - Department of Business Affairs and Consumer Protection 1.4 1.1 0.8 0.2 1.0 (0.4) Department of Consumer Services - - - - - - Department of Environment 50.0 48.6 18.9 31.9 50.8 0.8 Commission on Animal Care & Control 0.2 0.2 0.3 - 0.3 0.1 Mayor's License Commission & Liquor Control - - - - - - Department of Business Affairs & Licensing - - - - - - License Appeal Commission - - - - - - Board of Ethics - - - - - - Office of Cable Communications - - - - - -

Total - Regulatory 61.3$ 58.3$ 27.6$ 32.1$ 59.7$ (1.6)$

Infrastructure ServicesDepartment of Streets & Sanitation 2.00$ 2.00$ -$ -$ -$ (2.00)$ Chicago Department of Transportation 824.4 516.8 506.3 5.0 511.3 (313.1)

Total - Infrastructure Services 826.4$ 518.8$ 506.3$ 5.0$ 511.3$ (315.1)$

Public Service EnterpriseOffice of the O'Hare Modernization Program -$ -$ -$ -$ -$ -$ Department of Aviation 204.7 113.9 167.0 68.5 235.5 30.8 Department of Water Management 0.7 0.7 - 0.1 0.1 (0.6)

Total - Public Service Enterprises 205.4$ 114.6$ 167.0$ 68.7$ 235.7$ 30.2$

Total - All Functions 2,536.0$ 1,971.3$ 1,447.7$ 673.3$ 2,121.0$ (415.1)$

** The 2011 recommended budget combines the Departments of Community Development and Zoning and Land Use Planning into the Department of Housing and Economic Development

GRANT FUNDS BY FUNCTION

$ MILLIONS TABLE 23

BUDGET 2011

BUDGET GLOSSARY



Accrual Accounting: An accounting method that measures the performance and position of an organization by recognizing economic events regardless of when cash transactions happen.

Amusement Tax: A tax imposed upon the patrons of any amusement within the City of Chicago including sporting events, theater productions and a variety of other entertainment activities. The tax rate is 5% of the fee paid to witness in-person live theatrical, live musical or other live cultural performances that take place in a venue whose maximum capacity is more than 750 persons. For all other types of amusement, the tax rate is 9% of the fee paid for the privilege to enter, to witness, to view or to participate in such amusement. The tax does not apply to the admission fees to witness in person live theatrical, live musical or other live cultural performances that take place in a venue whose maximum capacity is not more than 750 persons. Authorization: Municipal Code 4-156-020.

Appropriation: An amount of money in the budget, authorized by the Mayor and the City Council, for expenditures by departments for specific purposes. Appropriations are made by account group within each department and fund.

Assessed Valuation: The product of the market value of property within the boundaries of the City of Chicago and the assessment level. Effective for the 2009 tax year, the assessed value of a residential property represents 10% of its market value; the assessed value of a commercial or industrial property represents 25% of market value. Authorization: Cook County 10/25 ordinance.

Automatic Amusement Device Tax: A tax imposed on each automatic amusement device or machine used within the City of Chicago for gain or profit. The tax rate is $150 per non-gambling machine and $225 per gambling machine annually. Authorization: Municipal Code 4-156-160.

Basis of Accounting: The method used to recognize increases and decreases in financial resources.


Basis of Budgeting: The method used to determine when revenue and expenditures are recognized for budgetary purposes.

Boat Mooring Tax: A tax imposed on the mooring or docking of any watercraft for a fee in or on a harbor, river or other body of water within the corporate limits or jurisdiction of the City. The tax rate is 7% of the mooring or docking fee. Authorization: 3-16-030.

Bottled Water Tax: A tax imposed on the retail sale of bottled water in the city of Chicago. The tax rate is $0.05 per bottle. Authorization: Municipal Code 3-43-030.

Cable Franchise Fee: A franchise fee imposed on the privilege of operating cable television systems within the public ways of the City of Chicago. The fee is 5% of annual gross revenues. Authorization: Municipal Code 4-280-170.

Capital Budget: The current year spending for capital projects.

Capital Improvement Plan: A multi-year projection of the government’s capital needs. The City’s capital improvement plan is produced yearly, and outlines capital projects for five years.

Cash Accounting: The opposite of accrual accounting, cash accounting recognizes transactions only when cash is received or paid out.

Charges for Service: Charges levied for services provided by the City of Chicago that are not covered by general tax revenue. Such services include building inspections, information and safety services.

Cigarette Tax: A tax of $.034 per cigarette ($0.68 per pack of twenty) is imposed upon all cigarettes possessed for sale within the City of Chicago. The tax is paid by the purchase of tax stamps from the City of Chicago Department of Revenue. Wholesale cigarette dealers are responsible for purchasing and affixing tax stamps to each package of cigarettes prior to delivery to the retail cigarette dealer. Retail cigarette dealers pass the tax on to the ultimate consumers. Authorization: Municipal Code 3-42-020.

CIP: Capital Improvement Program

Commercial Paper: Short-term, unsecured, discounted, and negotiable notes sold by one company to another in order to satisfy immediate cash needs.

Corporate Fund (General Fund): A fund used to account for resources other than those accounted for in other funds. The Corporate Fund finances many diverse activities such as police and fire protection, trash collection and disposal, and health programs.

Debt Policies: A financial management tool for government entities authorized to issue debt (bonds, leases or short-term notes).

Debt Service Funds: Debt Service Funds are used to account for the accumulation of resources for, and the payment of, long-term debt and related costs. Revenue bonds issued for enterprise funds and debt for special taxing districts are not included in debt service funds.

Doubtful Account: An account balance that has been delinquent for a period of at least ninety (90) days, and where collection is unlikely.

CONTINUED


Electricity Infrastructure Maintenance Fee (IMF): A fee authorized by state legislation as part of the electricity deregulation that is imposed on electricity deliverers to compensate the City of Chicago for the privilege of using the public rights-of-way. The IMF rate varies based on the number of kilowatt-hours delivered to each purchaser. Authorization: Municipal Code 3-54-030.

Electricity Use Tax: A tax imposed on the privilege of using or consuming electricity acquired in a purchase at retail and used or consumed within the corporate limits of the City. The tax rate varies based on the number of kilowatt-hours used or consumed. Authorization: Municipal Code 3-53-020.

Emergency Telephone System Surcharge: A surcharge imposed on all billed subscribers of telecommunications services within the corporate limits of the City for the purpose of funding a portion of the maintenance and operation of the City’s emergency 9-1-1 systems. The surcharge rate is $2.50 per network connection and wireless telephone number per month. Authorization: Municipal Code 3-64-030 and 7-50-020.

Employers’ Expense Tax: A tax imposed on employers who employ 50 or more full-time employees who perform 50% or more of their work within the City of Chicago. The tax rate is $4 per employee per month. Authorization: Municipal Code 3-20-030.

Encumbrances: Contractual commitments to be performed by a third party.

Enterprise Funds: Funds establ ished by a government to account for acquisition, operation, and maintenance of government services such as water, sewers and the airports. These funds are typically self-supporting in that they derive revenue from user charges.

Fines, Forfeitures, and Penalties: Fines and any associated penalties levied for violations of the Municipal Code. The primary source of this type of revenue is from parking tickets. Also included in this category are red light fines, moving violations, sanitation code violations, and housing court fines.

Foreign Fire Insurance Tax: A tax imposed on any business not incorporated in the State of Illinois that is engaged in selling fire insurance in the City of Chicago. The tax is paid for the maintenance, use, and benefit of the Chicago Fire Department. The tax rate is 2% of the gross receipts received for premiums. Authorization: Municipal Code 4-308-020.

FY: Fiscal Year.

GAAP: Generally Accepted Accounting Principles.

General Fund: See Corporate Fund.

GO Bonds: General Obligation bonds.

Ground Transportation Tax: A tax imposed on the occupation of providing ground transportation to passengers for hire in the City of Chicago. The tax rate is $78 per month for each taxicab, $3.50 per day for each non-taxicab vehicle with a seating capacity of 10 or fewer passengers, $6 per day for each non-taxicab vehicle with a seating capacity of 11 to 24 passengers, and $9 per day for each non-taxicab vehicle with a capacity of more than 24 passengers. Authorization: Municipal Code 3-46-030.

Home Rule Municipal Retailers’ Occupation Tax: A tax imposed on the occupation of selling tangible personal property, other than property titled or registered with the State of Illinois, which is sold at retail in the City of Chicago. The tax rate is 1.25% of the gross receipts from such sales. Grocery food and prescription and nonprescription

CONTINUED


medicines are generally exempt from the tax. The tax is administered and collected by the Illinois Department of Revenue and disbursed monthly to the City. Authorization: Municipal Code 3-40-030.

Hotel Accommodations Tax: A tax imposed on the rental or lease of hotel accommodations in the City of Chicago. The tax rate is 3.5% of the gross rental or leasing charge. Authorization: Municipal Code 3-24-030.

Illinois Retailers’ Occupation Tax: A tax imposed on the occupation of selling tangible personal property at retail in Illinois. The tax rate is 6.25% of the selling price. The tax is administered and collected by the Illinois Department of Revenue. Sixteen percent of the tax (1% of the 6.25%) is distributed to municipalities monthly. Authorization: 35 Illinois Compiled Statutes (ILCS) 120/2-10.

Illinois Use Tax: A tax imposed on the use of tangible personal property purchased outside Illinois but used in the State. The tax rate is 6.25% of the selling price. The tax is administered and collected by the Illinois Department of Revenue. Sixteen percent of the tax (1% of the 6.25%) is distributed to municipalities. The City receives 20% of the 1% portion allocated to municipalities. Authorization: 35 ILCS 105/1.

Income Tax: A tax imposed by the State of Illinois on the privilege of earning or receiving income in Illinois. The tax rate is 4.8% of net income for corporations and 3% of net income for individuals, trusts and estates. Of the net income tax receipts after refund, 1/10 is diverted to the Local Government Distributive Fund that is distributed to municipalities based on population. Authorization: 35 ILCS 5/201; 30 ILCS 115/1, 115/2.

Internal Service Earning: A reimbursement to the Corporate Fund for services that are to be paid from other City Funds. Certain internal service earnings are allocated using cost accounting methods;

others are reimbursed using intergovernmental purchase orders.

Lease Transaction Tax: See Personal Property Lease Transaction Tax

Licenses and Permits: Licenses and permits are required for the operation of business activity in the City of Chicago. Authorization: Municipal Code Chapter 4-4.

Liquor Tax: A tax imposed on the retail sale of alcoholic beverages in the City of Chicago. Each wholesale dealer who sells to a retail dealer located in the City of Chicago collects the tax and any such retail alcoholic beverage dealer in turn collects the tax from the retail purchaser. The tax rate is $0.29 per gallon of beer, $0.36 per gallon for alcoholic liquor containing 14% or less of alcohol by volume, $0.89 per gallon for liquor containing more than 14% and less than 20% of alcohol by volume, and $2.68 per gallon for liquor containing 20% or more of alcohol by volume. Authorization: Municipal Code 3-44-030.

Modified Accrual Basis of Accounting: Under the modified accrual basis of accounting, revenues are recognized when they become measurable and available. Expenditures are recognized when the liability is incurred.

Motor Fuel Tax: A tax imposed by the State of Illinois on the sale of motor fuel within the state. The tax rate is $0.19 per gallon of gasoline. A portion of the revenue is distributed to municipalities and townships based on a statewide allocation formula and population. Authorization: 35 ILCS 505/2, 505/8.

Motor Vehicle Lessor Tax: A tax imposed on the privilege of leasing motor vehicles in the City of Chicago to a lessee on a daily or weekly basis. The lessor is allowed to pass this tax along to his lessees as a separate charge on his rental bills or invoices. The tax is $2.75 per vehicle per rental period. Authorization: Municipal Code 3-48-030.

CONTINUED


Municipal Automobile Renting Occupation Tax: A tax imposed on occupation of renting automobiles in the City of Chicago. The tax rate is 1% of the rental price. The tax is administered and collected by the Illinois Department of Revenue and distributed to the City monthly. Authorization: Municipal Code 3-40-490, -500.

Municipal Automobile Renting Use Tax: A tax imposed on the privilege of using, in the City of Chicago, automobiles which are rented from companies outside of Illinois, and which are titled or registered with the State of Illinois. The tax rate is 1% of the rental price. The tax is administered and collected by the Illinois Department of Revenue and distributed to the City monthly. Authorization: Municipal Code 3-60-030, -040.

Municipal Hotel Operators’ Occupation Tax: A tax authorized by state legislation and imposed on the occupation of renting hotel accommodations in the City of Chicago. The tax rate is 1% of gross receipts. The tax is administered and collected by the Illinois Department of Revenue and distributed monthly to the City for the purpose of promoting tourism and conventions. Authorization: Municipal Code 3-40-470.

Municipal Parking: A category of revenues that currently includes revenue generated by various parking permits. Historical collections reflected in this category also include parking meter revenues generated prior to the long term lease of the City’s parking meter operation in 2009.

Natural Gas Use Tax: A tax imposed on the privilege of using or consuming in the City of Chicago gas that is purchased in a sale at retail from sellers not subject to the Natural Gas Utility Tax. The tax rate is $0.063 per therm. Authorization: Municipal Code 3-41-030.

Natural Gas Utility Tax: A tax imposed on the occupation of distributing, supplying, furnishing, or selling gas for use or consumption within the City of Chicago. The tax rate is 8% of gross receipts. Authorization: Municipal Code 3-40-040.

Off-Track Betting Tax and Admission Fee: A tax imposed on the pari-mutuel handle (total amount wagered) generated by off-track betting parlors within the City of Chicago. The tax rate is 1% of the total pari-mutuel handle. In addition, an admission charge of $1 is levied on the patrons. Authorization: 230 ILCS 5/26(h)(10.1), 5/27(f); Municipal Code 4-156-125.

Parking Tax: A tax imposed on the privilege of parking a motor vehicle in any parking lot or garage in the City of Chicago. The tax rate varies based on the payment frequency and parking charge. The tax imposed on a daily parker is $1 if the charge is greater than $2 but less than $5; $1.75 if the charge is $5 or more but less than $12; and $3 if the charge is $12 or more. The tax imposed on weekly parkers is $5 if the charge is greater than $10 but less than $25; $8.75 if the charge is $25 or more but less than $60; and $15, if the charge or fee is $60 or more. The tax imposed on monthly parkers is $20 if the charge is greater than $40 but less than $100; $35 if the charge is $100 or more but less than $240; and $60 if the charge is $240 or more. There is no tax for parking charges that do not exceed $2 for daily parkers, $10 for weekly parkers, or $40 for monthly parkers. Authorization: Municipal Code 4-236-020.

Pension Trust Funds: The City’s employees are covered under four contributory defined benefit retirement plans established by state statute and administered by independent pension boards. These plans are the Municipal Employees’ Annuity and Benefit Fund, the Laborers’ and Retirement Board Employees’ Annuity and Benefit Fund, the Policemen’s Annuity and Benefit Fund, and the Firemen’s Annuity and Benefit Fund. Each

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independent pension board has authority to invest the assets of its respective plan subject to the limitations set forth in 40 ILCS 5/1-113. The City makes payments to the Pension Trust Fund from its property tax collections as required by state statute.

Per capita: A concept that incorporates ability-to-pay per community resident. Typically, a wealthier community with a high per capita income level can manage a larger debt burden than an impoverished community with a low per capita income level.

Personal Property Lease Transaction Tax: A tax imposed on the lease, rental or use of rented personal property in the City of Chicago. The tax rate is 8% of the lease or rental price. Authorization: Municipal Code 3-32-030.

Personal Property Replacement Tax—Income Taxes: A state income tax on corporations and partnerships, trusts and subchapter S corporations that was created to replace the personal property tax. The tax rate is 2.5% for corporations and 1.5% for partnerships, trusts and subchapter S corporations. The tax allocation formula is based on the 1976 distribution of the repealed personal property tax. Authorization: 35 ILCS 5/201(c), (d); 30 ILCS 115/12.

Personal Property Replacement Tax—Invested Capital Taxes: State invested capital taxes imposed on public utilities were created to replace the personal property tax. The tax rate is 0.8%. The tax allocation formula is based on the 1976 distribution of the repealed personal property tax. Authorization: 35 ILCS 610/2a.1, 615/2a.1, 620/2a.1, 625/2a.1; 30 ILCS 115/12.

Proceeds of Debt: Proceeds of debt are generated from the sale of bonds or notes. Tender notes are issued in anticipation of property tax collections. The proceeds from tender notes, which are equal to the net property tax levy, are distributed to the

Corporate Fund and the two library funds.

Property Tax: A tax levied on the equalized assessed valuation of real property in the City of Chicago. Cook County collects the tax with assistance from the Illinois Department of Revenue. Authorization for the City’s property tax levy occurs through bond ordinances and property tax levy ordinances in connection with the annual appropriation ordinances.

Real Property Transfer Tax: A tax imposed on privilege of transferring title to, or beneficial interest in, real property located in the City of Chicago. The tax rate is $3.75 per $500 of transfer price, or fraction thereof, of the real property or the beneficial interest in real property and is paid by the transferee. Authorization: Municipal Code 3-33-030.

Real Property Transfer Tax - CTA Portion: A supplemental tax on the transfer of real property in the City of Chicago for the purpose of providing financial assistance to the Chicago Transit Authority. The transfer rate is $1.50 per $500 of the transfer price or fraction thereof and is paid by the transferor. Authorization: Municipal Code 3-33-030.

Restaurant and Other Places for Eating Tax: A tax imposed on each place for eating located in the City of Chicago. The tax rate is 0.25% of the selling price of all food and beverages sold at retail by the place for eating. Authorization: Municipal Code 3-30-030.

Simplified Telecommunications Tax: A tax imposed on the privilege of originating or receiving intrastate or interstate telecommunications within the City of Chicago. The tax rate is 7% of the gross charge for telecommunications purchased at retail. Authorization: Municipal Code 3-73-030.

Soft Drink Taxes: A tax imposed on the occupation of selling retail soft drinks other than fountain

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soft drinks in the City of Chicago. The rate of tax is 3% of gross receipts. The tax is administered and collected by the Illinois Department of Revenue and distributed to the City monthly. In addition, a tax is imposed on the occupation of selling fountain soft drinks at retail in the City. The tax rate is 9% of the cost price of the soft drink syrup or concentrate. Authorization: Municipal Code 3-45-040, -060.

Special Revenue Fund: A fund established by a government to account for the operations of a specific activity and revenue generated from carrying out this activity. Special Revenue Funds are used to account for the proceeds of specific revenue sources other than special assessments, expendable trusts, or major capital projects requiring separate accounting because of legal or regulatory provisions or administrative action.

Transfers-in: The residual funding available to transfer into the Corporate Fund once obligations have been met within other fund sources.

Te lecommunicat ions Tax : See S impl i f ied Telecommunications Tax

Use Tax for Nontitled Personal Property: A tax imposed on the privilege of using in the City of Chicago nontitled tangible personal property which is purchased at retail from a retailer located outside the City. The tax rate is 1% of the property’s selling price. Authorization: Municipal Code 3-27-030.

Use Tax for Titled Personal Property: A tax imposed on the privilege of using in the City of Chicago titled personal property that is purchased at retail from a retailer located outside the City and titled or registered in the City. The tax rate is 1.25% of the property’s selling price. The Illinois Department of Revenue administers and collects the tax on behalf of the City when titled personal property is purchased from a retailer in Cook, DuPage, Lake, Kane, McHenry or Will counties. Authorization: Municipal Code 3-28-030.

Vacation of Streets and Alleys: The transfer of ownership of City of Chicago owned streets and alleys to private parties. The price is determined by fair market value.

Vehicle Fuel Tax: A tax imposed on the privilege of using vehicle fuel purchased or used within the Chicago City limits. The tax rate is $0.05 per gallon. Authorization: Municipal Code 3-52-020.

Vehicle Sticker Fee: See Wheel Tax License

Wheel Tax License: An annual fee imposed on the privilege of operating a motor vehicle within the City of Chicago that is owned by a resident of the City of Chicago. The fee is $75 for smaller passenger automobiles and $120 for larger passenger automobiles. The fee varies for other classifications.

C i t y o f C h i c a g oRICHARD M. DALEY, MAYOR

O f f i c e o f B u d g e t a n d M a n a g e m e n tEUGENE L. MUNIN, BUDGET DIRECTOR

2011 city of chicago overview and revenue estimates

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