Press Releases
July 26, 2011
Contact: Nick Kaleba 312-222-1000 / 773-458-0958


Unions present $242 million in savings to Mayor

Report identifies waste, efficiency improvements and fair competition for contracts to help solve looming budget deficit

Chicago, IL —

Union leaders representing workers at the City of Chicago presented Mayor Rahm Emanuel with a report outlining ways to improve efficiency, limit pricey contracts and eliminate waste to save taxpayers $242 million in the City budget. The report was generated by the Coalition of Unionized Public Employees (COUPE), a group representing less than one-third of the city workforce, and helps the City fill more than one-third of the projected budget deficit for 2012.

“We have presented Mayor Emanuel with these ideas in the spirit of cooperation and partnership,” said Jorge Ramirez, President of the Chicago Federation of Labor.  “The Mayor asked for labor’s ideas and our partnership and the city’s union leadership has risen to the challenge.  These are common sense ideas that will help the city correct a major budget crisis it faces for the coming year.”

The savings identified in the report are broken down into three major categories: saving money by introducing real competition; right-sizing government by eliminating unneeded mid-level management; and instituting more efficient management of city government.

“City workers and their union representatives played a key role in developing the ideas in this report,” said Tom Villanova, President of the Chicago and Cook County Building Trades Council.  “Some of these are new ideas.  Some of them have been ignored in the past.  But Mayor Emanuel has an opportunity to correct inefficiencies and waste that taxpayers can no longer afford.  This report is an indication that we are willing to act as a partner in that effort.”

The union coalition took the unprecedented step of hiring Public Works, LLC, a nationally-known budget and policy research firm for its technical assistance and expertise. The report was produced using information provided by the City and available publicly on its website. 

The largest area of cost savings comes from areas of efficiency where the City and the unions can work together to provide high-quality services at a lower cost.  Some of these ideas include:

  • Use flexible schedules to deploy workers more efficiently, utilizing four 10-hour days to reduce the time for set-up and dismantling equipment at a job site and reducing the cost of equipment rentals.  In 2005, multiple unions agreed to such schedules but the City departments have yet to take advantage of the potential cost savings.
  • Establish apprenticeship and seasonal trainee programs to allow for crews performing certain services to hire apprentices to work alongside skilled journeymen while learning a craft under a safe work environment. 
  • Coordinate heavy-duty equipment rental needs across departments to utilize idle equipment and eliminate wasteful contracts.

Based on a limited review of City departments, the report identified $65 million in savings.  A comprehensive performance review would be able to save an additional $100 million, bringing the total to $165 million or 5 percent of the $3.3 billion Corporate Fund. 

The union report questions contracts with private vendors where city workforce costs are considerably lower.  Addressing the $400 million annually the City spends on service contracts, the unions use hard examples to show city workers can do most jobs for less than private contractors because their wages and benefit packages are lower and their rates are not padded for profit.  In the recent past, city workers were able to save more than $1.4 million in the Department of Aviation by winning bids for work at O’Hare Airport. 

However, there are far too many contracts that go to private vendors rather than city employees—who are also Chicago residents and taxpayers—even when they can do the work for less.  City workers showed they can perform the support and management of the CLEAR system in the Office of Management and Communications at a savings of $734,000 to taxpayers.

The unions call for an end to non-competitive contracts, requiring the City to prove privatizing a service is in the best interest of taxpayers. Taking a better approach to awarding contracts would achieve $40 million in savings.

Finally, many City departments have an imbalance where fewer workers are actually doing the work and an excessive number of supervisors and managers are overseeing the work.  For example, in the Department of Family and Support Services, there are 203 supervisory positions to 334 frontline workers for a ratio of 1 manager to 1.6 workers.

The optimal ratio accepted across the country is anywhere from 10-to-1 to 15-to-1.

Before getting rid of people who work on the frontlines providing services to residents, the City should look closely at areas where this ratio is unbalanced and inefficient. If Chicago raised the frontline-to-supervisor ratio by just one across City government, it would save taxpayers an estimated $37.5 million.

The report draws on the experiences and ideas of frontline workers with ideas to make departments run more efficiently, as well as adopted practices in other cities and states across the country. 

“We are committed to working with Mayor Emanuel and hope he is equally committed to working with City employees to save taxpayers money,” said Ramirez and Villanova.

READ THE REPORT HERE

Print