City in Georgia that oursources its government

[tomato can]

It doesn't work that way. In this instance it appears Chicago, because of its problems desperately needed money and sold off one of its assets. In order to receive more than a billion they had to lease their parking out for a long, long, time. The people leasing it would have went for less years but Chicago needed more money, thus a 75 year lease. This is nothing but liberalism gone wrong.

 

Yes they were in need of money because they were running budget defecits. They could have easily raised the parking rates modestly and paid down those defecits over the course of a few years but people are always yelling, kicking, & screaming that we need to cut the public pay roll, we have to many public employees. It's the public employees maintaing the park garages and meters, ect. It was done rather cheap by the public employees because fees were rather small. Now that they have privatized it, look at what it cost to park!

Edited June 25, 2012 by tomato can

[3rdnlng]

One Company Tom. I copy & pasted the article below.... your thoughts????

 

 

 

Morgan Stanley paid Chicago $563 million for the rights to lease Chicago’s downtown parking garages. The $563 million the city received from the 99 year downtown parking garage lease is nearly half of the $1.15 billion dollars Chicago received from the 75 year parking meter lease. Compared to the parking meter lease, Mayor Daley bestowed Morgan Stanley with an additional 24 years to collect parking garage revenue from Chicago drivers who have little or no other parking options if they want to park downtown. Financial experts and citizens complain that the 75 year parking meter lease is too long, but the parking garage lease is worse, Mayor Daley leased the downtown parking garages for a length of time that is one-third longer (99 years) than the parking meter lease (75 years).

 

The parking garage lease makes car owners vulnerable to price gouging. At least with the Chicago Skyway and the parking meter leases, Mayor Daley put the rates to drive on the tollway or park on public streets into the Skyway and parking meter contracts. Mayor Daley’s parking garage contract did not include a garage parking fee schedule, which means Morgan Stanley can charge what it wants for you to park in a downtown lot. Furthermore, Morgan Stanley can legally buy additional parking lots not owned by the city to create a parking monopoly. The terms of the downtown parking garage lease is the reason why it cost you $27.00 to park your car in a parking garage formerly operated by the city. When Mayor Daley sold off the rights to the Chicago Skyway, parking garages, and parking meters, Daley’s concern was his political future. Mayor Daley failed to consider neither the future of subsequent Chicago mayors nor the long-term fiscal security of Chicago. Mayor Daley sold off Chicago’s parking garages to payoff the debt he created in building Millennium Park. Mayor Daley has since spent Chicago parking meter, and Skyway lease money to pay other debts and bills to keep Chicago running during his tenure as mayor. Within five years Mayor Daley has spent nearly all of the $3.6 billion dollars that he received in upfront money from the toll road, parking meter and parking garage leases. For the next 94 years Chicago will not receive so much as a dime from people who pay to drive on the Chicago Skyway or park in a Morgan Stanley operated parking garage. For the next 73 years Chicago will not receive any cash each time a driver pays for street parking. Mayor Daley leveraged Chicago’s financial future so he could have more money to spend. Mayor Daley opting to turn Chicago assets into instant cash has put the city in a deep financial hole that will last 90 or more years.

 

 

Do you understand what you are saying? Chicago, because they were in economic trouble sold off their "money making" services to live another day. Now what are they going to do? Chicago and Illinois have a history of corruption. Even your new mayor recognizes that and is trying to do something about it. I'm eating too much popcorn watching guys like Rahm and Cuomo having a coming to Jesus moment.

[tomato can]

Do you understand what you are saying? Chicago, because they were in economic trouble sold off their "money making" services to live another day. Now what are they going to do? Chicago and Illinois have a history of corruption. Even your new mayor recognizes that and is trying to do something about it. I'm eating too much popcorn watching guys like Rahm and Cuomo having a coming to Jesus moment.

 

 

Do you understand what I am saying? Yes we had some tough economic times. The cities debt was more than sustainable. All they had to do was raise the parking fees modestly and use the revenue to may down the budget defecit. Privatizing the parking garages & meters, & the Chicago Skyway has screwed the people.

 

Yeah Chicago & Illinois have a history of coruption. The company that is Chicago Parking Meters LLC are a bunch of crooks also. According to the most recent filings, partnerships assembled by Morgan Stanley have a 50.1 percent stake in the parking company through capital provided by entities like the Teacher Retirement System of Texas, the Victorian Fund Management Corporation of Australia and Danish pension fund company PKA. The other 49.9 percent belongs to a company almost evenly divided between Allianz and Tannadice Investments LLC. Tannadice is a “wholly owned subsidiary of the Abu Dhabi Investment Authority, which is a public institution wholly owned by the Government of the Emirate of Abu Dhabi,” according to city records. Another fund of the Abu Dhabi government owns an additional 3 percent stake through one of the Morgan partnerships.

[3rdnlng]

Do you understand what I am saying? Yes we had some tough economic times. The cities debt was more than sustainable. All they had to do was raise the parking fees modestly and use the revenue to may down the budget defecit. Privatizing the parking garages & meters, & the Chicago Skyway has screwed the people.

 

Yeah Chicago & Illinois have a history of coruption. The company that is Chicago Parking Meters LLC are a bunch of crooks also. According to the most recent filings, partnerships assembled by Morgan Stanley have a 50.1 percent stake in the parking company through capital provided by entities like the Teacher Retirement System of Texas, the Victorian Fund Management Corporation of Australia and Danish pension fund company PKA. The other 49.9 percent belongs to a company almost evenly divided between Allianz and Tannadice Investments LLC. Tannadice is a “wholly owned subsidiary of the Abu Dhabi Investment Authority, which is a public institution wholly owned by the Government of the Emirate of Abu Dhabi,” according to city records. Another fund of the Abu Dhabi government owns an additional 3 percent stake through one of the Morgan partnerships.

 

So, you are saying Chicago, f'd up and should get a pass? Trust me, they sold off an actual asset to cover their union/politicians scheme of washing each others backs? You guys should be in an uproar.

[tomato can]

So, you are saying Chicago, f'd up and should get a pass? Trust me, they sold off an actual asset to cover their union/politicians scheme of washing each others backs? You guys should be in an uproar.

 

 

 

I disagree. They hired private contractors to build Millenuim Park, knock down a bunch of project buildings, put in a bunch of flower boxes along Lake Shore Drive, & other projects to make the City look nice. They over spent on these projects and ended up running up a bunch of defecits. It had NOTHING, ZILCH, ZERO to do with the unions. The minute they would have raised fees to pay for these defecits all you would have heard was cut the public pay roll! They make to much money and are bankrupting the city, yet they had nothing to do with these projects. So they brokered some crooked deal with Morgan Stanley (crooks) to privitize those things, got rid of the public employees that worked there and stuck it to the people in the proccess!

Edited June 25, 2012 by tomato can

[Dante]

That is so retarded it's funny. What the !@#$ was the city government thinking?

I would say someone in that government is making a lot of money of this as well.

[Jim in Anchorage]

I find it interesting that some here seem to think a parking meter is a city "service". Poor city had to pay people to go out and collect all that free cash!

[tomato can]

I would say someone in that government is making a lot of money of this as well.

 

 

They sure are. It's all a bunch of BS! They hired a bunch of private contractors (politically connected) to do all these projects to make the city look nice. The cost overruns were enormous. Then the budget deficits came to light and they quickly shifted the focus onto the public employee's. People right away started screaming bloody murder that the public employees make to much money and the benefits are to generous. I will be the first to say pension reforms are needed to close loop holes because they are unsustainable and the employees should kick in for health care cost. Outside of that the public employees didn't cause this mess, its politicians and their private contractor buddies that run up these out of control deficits. They were smart enough to shift the focus to the public employees pay and benefits. Behind the scenes they brokered a crooked deal to privatize the parking garages, meters, the skyway for billions to pay down the deficits. The people that cried cut the public pay roll got their wish but with the wool pulled over their eyes. Those workers are now gone. The rates to park and use the skyway have soared to outrageous levels, and these jokers made out like a bunch of fat cats!

 

I find it interesting that some here seem to think a parking meter is a city "service". Poor city had to pay people to go out and collect all that free cash!

 

 

And your point is? When the city controlled the meter it was $6 a day to park, now that it's privatized it $6.25 and hour!

Edited June 25, 2012 by tomato can

[Jim in Anchorage]

How about if it was $0 a hour to park on a publicly owned street? Tell me where the parking meter money goes. Collecting the money? Maintaining the meters? Real Gov. service there.

[3rdnlng]

I disagree. They hired private contractors to build Millenuim Park, knock down a bunch of project buildings, put in a bunch of flower boxes along Lake Shore Drive, & other projects to make the City look nice. They over spent on these projects and ended up running up a bunch of defecits. It had NOTHING, ZILCH, ZERO to do with the unions. The minute they would have raised fees to pay for these defecits all you would have heard was cut the public pay roll! They make to much money and are bankrupting the city, yet they had nothing to do with these projects. So they brokered some crooked deal with Morgan Stanley (crooks) to privitize those things, got rid of the public employees that worked there and stuck it to the people in the proccess!

 

The reason they are in trouble in the first place is because of the collusion the public sector unions and government practice. We went over this in another thread titled "Hiring/Firing Public Workers". One of the root causes (and overwhelmingly the biggest) of cities and states is the cost of the public sector worker and retiree. They brokered the deal because they needed money. The biggest reason they needed money is the large burden they placed on themselves with paying off the unions. You can throw out all the canards and anecdotes you want but the root cause is what I've stated.

 

Edit: I just heard Stuart Varney say that the states have over 4 trillion in unfunded pension liabilities. That's just the states. Some municipal employees belong to a state run pension programs and some don't. So the problem goes much deeper.

Edited June 25, 2012 by 3rdnlng

[KD in CA]

I'm no liberal. More of a moderate. You are saying people are being taxed to death, well I copy & pasted the article below. What do you call this? Capitalism

 

What do I call that? I call that more government incompetence and/or corruption. Unless I missed something, that article is about nothing more than a contract dispuse. If in fact the city signed an agreement that requires payments as outlined below, shouldn't you be more concerned about WHY the city would have signed such an agreement?? I fail to see where your infered indictment of capitalism applies.

[ExiledInIllinois]

I find it interesting that some here seem to think a parking meter is a city "service". Poor city had to pay people to go out and collect all that free cash!

 

The money system indirectly creates order on the roads. What other system besides collecting cash will keep good order? Honor system for parking? I am not against charging... The cost can't be too much to stymie growth, but not too little to create disorder.

 

Urban enivros depend on a cash pool to keep the things running... Who's gonna kick in the funds if we are all riding bikes, gaming the system.

 

Think collectively, not individually.

 

How about if it was $0 a hour to park on a publicly owned street? Tell me where the parking meter money goes. Collecting the money? Maintaining the meters? Real Gov. service there.

 

 

In a big crowded city? Human nature would get the best of people and create disorder. Sorta like "tragedy of commons." The commons would get overrun by people abusing the system. In a strong urban enviro, you'd have all kinds of problems.

 

It all has to be a balancing act. That is where gov't is the only one to look out for the interest of all. SHOULD. Not saying it happens, but it should. Private interests can't be trusted to self-regulate when it comes to the common good.

[tomato can]

The reason they are in trouble in the first place is because of the collusion the public sector unions and government practice. We went over this in another thread titled "Hiring/Firing Public Workers". One of the root causes (and overwhelmingly the biggest) of cities and states is the cost of the public sector worker and retiree. They brokered the deal because they needed money. The biggest reason they needed money is the large burden they placed on themselves with paying off the unions. You can throw out all the canards and anecdotes you want but the root cause is what I've stated.

 

Edit: I just heard Stuart Varney say that the states have over 4 trillion in unfunded pension liabilities. That's just the states. Some municipal employees belong to a state run pension programs and some don't. So the problem goes much deeper.

 

 

That is just not true! The city takes in enough revuenue to cover the costs of its public employees. Chicago ran into problems when the pols started hiring their private contractor buddies to beautifying the city! The cost overruns were outrageous! What don't you get about that?

 

 

I watch Fox News as well. Stuart Varney is a smart man but only told us half the story. He did tell us why they are so unfunded. In today's Chicago Suntimes there is an article by a Government Watch Dog agency on the unfunded pension liabilities. The next paragraph is some of what I read in the Watch Dogs report. It's not to hard to comprehend why we are in this mess. The pols stopped funding there share and took the money and spent it hiring private contractor buddies to do work around the city. It was one scandal after the other. The Hired Truck Scandal here in Chicago was unreal. All the trucks were private contractors that were hired to haul away debris from projects around the city and when there was nothing to haul the trucks sat idle while being paid. All the truck owners were connected to some pol that handed them this sweet heart deal. All the sudden its the public employees fault?

 

Chicago’s pension crisis has ballooned to $27.4 billion—a six-fold increase since 2001—because of inadequate employer contributions, declining investment income and a shrinking base of active employees, a taxpayers’ watchdog group has concluded. The Civic Federation’s report on the sorry state of the Chicago area’s 10 public employee pension funds underscores the need for Mayor Rahm Emanuel and union leaders to come together on a solution and for the Illinois General Assembly to approve it when lawmakers finally get around to solving the state’s $83 billion problem.

 

The 10 pension funds had an average funding level of 56.2 percent in 2010, down from 88 percent in 2001. The firefighters pension fund is in the worst shape, with assets to cover just 32.4 percent of future liabilities. The laborers pension fund is in the best financial condition at 73.8 percent.

 

Government employees did their part, by contributing the required portion of their paychecks to their future pensions. But the government contribution fell $1.2 billion short of the $2.1 billion required to cover costs and reduce a portion of unfunded liabilities over a 30-year time-frame, the report concludes. To reach an “actuarily sound level,” government agencies should have made contributions equal to 27.8 percent of payroll in 2010. Instead, the employer contribution was 12.6 percent.In 2010, the 10 funds had 1.23 active employees for every retiree, down from a 1.70 radio in 2001. The laborers, CTA, Park District, Forest Preserve District and Metropolitan Water Reclamation District all had more beneficiaries than active employees in 2010. Chicago Federation of Labor President Jorge Ramirez said he doesn’t need another report to tell him who is to blame for the city’s pension crisis. The city stopped making payments into the funds under Mayor Daley, exacerbating the problem. The only people who’ve paid into the city pension funds are the workers. They’re the only ones living up to their obligations,” Ramirez said.

 

What do I call that? I call that more government incompetence and/or corruption. Unless I missed something, that article is about nothing more than a contract dispuse. If in fact the city signed an agreement that requires payments as outlined below, shouldn't you be more concerned about WHY the city would have signed such an agreement?? I fail to see where your infered indictment of capitalism applies.

 

 

Yes it was corruption amongst other things. I know why they signed the deal. I have said it numerous times. The city ran up a bunch of deficits hiring private contractors to do work around the city. Cost overruns were outrageous. They needed the money. The pols were smart they shifted the focus to the public pay roll and many citizens wanted the public pay roll slashed. You neeed public severants to maintain the parking garages, parking meters, & the Chicago Skyway. The privatized those entities and fired the workers. The deal to privatize was crony capitalism! It went from $6 a day to park to $6.50 and hour

[3rdnlng]

That is just not true! The city takes in enough revuenue to cover the costs of its public employees. Chicago ran into problems when the pols started hiring their private contractor buddies to beautifying the city! The cost overruns were outrageous! What don't you get about that?

 

 

I watch Fox News as well. Stuart Varney is a smart man but only told us half the story. He did tell us why they are so unfunded. In today's Chicago Suntimes there is an article by a Government Watch Dog agency on the unfunded pension liabilities. The next paragraph is some of what I read in the Watch Dogs report. It's not to hard to comprehend why we are in this mess. The pols stopped funding there share and took the money and spent it hiring private contractor buddies to do work around the city. It was one scandal after the other. The Hired Truck Scandal here in Chicago was unreal. All the trucks were private contractors that were hired to haul away debris from projects around the city and when there was nothing to haul the trucks sat idle while being paid. All the truck owners were connected to some pol that handed them this sweet heart deal. All the sudden its the public employees fault?

 

Chicago’s pension crisis has ballooned to $27.4 billion—a six-fold increase since 2001—because of inadequate employer contributions, declining investment income and a shrinking base of active employees, a taxpayers’ watchdog group has concluded. The Civic Federation’s report on the sorry state of the Chicago area’s 10 public employee pension funds underscores the need for Mayor Rahm Emanuel and union leaders to come together on a solution and for the Illinois General Assembly to approve it when lawmakers finally get around to solving the state’s $83 billion problem.

 

The 10 pension funds had an average funding level of 56.2 percent in 2010, down from 88 percent in 2001. The firefighters pension fund is in the worst shape, with assets to cover just 32.4 percent of future liabilities. The laborers pension fund is in the best financial condition at 73.8 percent.

 

Government employees did their part, by contributing the required portion of their paychecks to their future pensions. But the government contribution fell $1.2 billion short of the $2.1 billion required to cover costs and reduce a portion of unfunded liabilities over a 30-year time-frame, the report concludes. To reach an “actuarily sound level,” government agencies should have made contributions equal to 27.8 percent of payroll in 2010. Instead, the employer contribution was 12.6 percent.In 2010, the 10 funds had 1.23 active employees for every retiree, down from a 1.70 radio in 2001. The laborers, CTA, Park District, Forest Preserve District and Metropolitan Water Reclamation District all had more beneficiaries than active employees in 2010. Chicago Federation of Labor President Jorge Ramirez said he doesn’t need another report to tell him who is to blame for the city’s pension crisis. The city stopped making payments into the funds under Mayor Daley, exacerbating the problem. The only people who’ve paid into the city pension funds are the workers. They’re the only ones living up to their obligations,” Ramirez said.

 

 

 

 

Yes it was corruption amongst other things. I know why they signed the deal. I have said it numerous times. The city ran up a bunch of deficits hiring private contractors to do work around the city. Cost overruns were outrageous. They needed the money. The pols were smart they shifted the focus to the public pay roll and many citizens wanted the public pay roll slashed. You neeed public severants to maintain the parking garages, parking meters, & the Chicago Skyway. The privatized those entities and fired the workers. The deal to privatize was crony capitalism! It went from $6 a day to park to $6.50 and hour

 

 

I'm not about to say that privatising is any better if corruption within the government is going to be involved. Face it, Chicago is as corrupt a city as there is. Why did they sell their parking collection rights?

[tomato can]

I'm not about to say that privatising is any better if corruption within the government is going to be involved. Face it, Chicago is as corrupt a city as there is. Why did they sell their parking collection rights?

 

 

Privatising basic city services like them are never better for the people even if corruption is not involved. Once a private company takes over something like that the one goal in mind is to make money and lots of it. It always ends up costing the people a great deal more. I'm not denying that Chicago has corruption and plenty of it. Corruption is corruption where is here, there, or some place else. I copy & pasted an article below. We have some good reporters that work for the local newspapers & they try hard to get to the truth, oftens times its after the horse has left the barn. I bolded a few important things in the article. By the way I have enjoyed the discussion. I am just trying to get you to see that the Police showed up to work and did their best to fight crime, the fire fighters fought the fire, the teachers did their best to teach the kids, the garabe man picked up the trash, the street sweeper cleaned the streets, ect. Majority of the workers showed up put in an honest days work, paid their taxes, & paid their share into the pension fund. The pols looted the money from every avenue they could and quickly made it appear as if it was the work force baknrupting the city.

 

 

 

By Jason Grotto, Chicago Tribune reporter

 

6:35 AM CDT, May 2, 2012

 

Advertisement

 

Two years into his reign as Chicago's longest-serving mayor, Richard M. Daley took advantage of the state's convoluted pension system to significantly increase his potential payout while saving $400,000 in contributions, a Tribune/WGN-TV investigation has found.

 

Daley, a former state senator, made it happen by briefly rejoining the legislative pension plan in 1991. He stayed there just one month before returning to Chicago's municipal pension fund, but the switches made him eligible for benefits worth 85 percent of his mayoral salary — a better rate than all other city employees receive.

 

He was just 49 years old at the time. Even if Daley had never won another election, he could have started collecting a public pension at age 55 of $97,750 a year. Without the steps he took, his public pension benefits at that age would have been worth just $20,686.

 

Of course, Daley went on to win five more elections, remaining ensconced on the fifth floor of City Hall for the next two decades. When he retired last May, his pension benefits had grown to $183,778 a year — about $50,000 more than he would have otherwise received.

 

Daley declined to be interviewed for this story. His spokeswoman, Jacquelyn Heard, wrote in an email: "I can only assume that his pension was handled in the same manner that anyone's would be, given the length of service — nearly 40 years — in government."

The Tribune and WGN-TV already have detailed how Daley used the city's pension funds for political purposes. In 1991, the same year he secured his much larger pension, Daley's administration helped aldermen land a dramatic pension increase, providing them with benefits far exceeding those of the average city worker.

 

The same legislation, rushed through the General Assembly on the last day of the session, also gave private labor leaders public pensions based on their much higher union salaries. Under Daley's watch, former Chicago Federation of Labor President Dennis Gannon was given a one-day city job that allowed him to collect a public pension based on his $200,000 private union salary.

 

In 1995, when Daley wanted to fund his school reform package, his administration pushed legislation that allowed it to divert $1.5 billion from the Chicago Teachers' Pension Fund over a 15-year period.

 

All the while, Daley blessed benefit increases for city workers without ensuring that payments into the funds would cover the costs, a problem worsened by the economic downturn. Today, the combined unfunded liabilities of Chicago's four pension funds have grown to nearly $20 billion, which doesn't include the $6.8 billion shortfall at the teachers fund.

 

The city's pension debt is not only damaging Chicago's financial stability, but also breeding cynicism about government's ability to provide modest pensions to the people who teach the city's children, collect the garbage, run into burning buildings and keep the peace.

 

"When these plans are misused, there is a price that will be paid by taxpayers and other pension plan participants," wrote Keith Brainard, research director at the National Association of State Retirement Administrators, in an email after hearing of Daley's deal. "But there's another cost, possibly far greater than the financial cost. That cost is the erosion of public support for decent retirement benefits for employees of the state and local government."

 

Last week Mayor Rahm Emanuel wrote to legislative leaders in Springfield urging them to move forward on meaningful pension reform and outlined four principles the mayor would support, including increasing the retirement age and suspending automatic increases for pension benefits.

 

"If our pension system is not reformed, Chicago has two roads to take: We can watch each of our funds go bankrupt ... and be unable to pay the hardworking people who have paid into their retirement funds, or we will be forced to raise property taxes by $1.4 billion per year — triple what we now pay toward pension costs," Emanuel wrote to House Speaker Michael Madigan, Senate President John Cullerton and minority leaders Rep. Tom Cross and Sen. Christine Radogno.

 

In response to questions about a Tribune/WGN-TV story about aldermanic pension perks, Emanuel said Tuesday that broad reforms are needed. "What I don't want to see is that we ... take our eyes off the big change that is required."

 

Daley left an indelible mark on the city. But Chicago's pension crisis threatens to become part of that legacy, shaping the city's future as much as Millennium Park, the expansions of O'Hare International Airport and McCormick Place, or any of his other achievements as mayor.

 

His own public pension, meanwhile, will end up costing taxpayers all over the state. Records show that his contributions to the statewide General Assembly pension fund weren't nearly enough to cover the benefits he receives.

 

Generous laws

 

The roundabout way that Daley lined up his pension was made possible by a law sponsored in 1981 by then-state Sen. John D'Arco, D-Chicago, who was convicted on federal bribery charges in 1991 and 1995.

 

Under the law, members who had left the General Assembly but were participating in other Illinois public pension funds could rejoin the state legislative fund for up to four years as long as they did so by Jan. 1, 1992. At the time, the former members had to have at least eight years of service in the General Assembly Retirement System, known as GARS, to qualify.

 

Daley spent less than eight years in the state Legislature, having left office with more than two years remaining on his term to run for Cook County state's attorney in 1980. But that same year, he asked to purchase pension credits covering his unfinished term for about $6,000 in extra contributions, as allowed under Illinois' generous pension laws. The move gave him a total of 10 years of service.

 

"I am hereby notifying you that it is my intention to elect to make payment for the remaining 25 months in the term to which I was elected as Illinois State Senator for the 23rd Legislative District," Daley wrote to the General Assembly Retirement System in November 1980.

 

He didn't actually pay for those credits until September 1981, a month after D'Arco's provision was signed into law, according to state pension records.

 

Daley spent the next seven years as state's attorney before winning election in 1989 to complete the term of Mayor Harold Washington, who had died while in office.

 

In May 1991, a month after Daley was elected to his first full term as mayor, an official from the state retirement system contacted the county and municipal pension plans on his behalf, records show.

 

"We received an inquiry from Mayor Daley … requesting information as to the cost of transferring service from the County Employees' Annuity and Benefit Fund of Cook County" to the state legislative pension fund, said one of the letters from Rudy Kink, manager of the General Assembly pension fund at the time.

 

A month later, Kink wrote Daley to lay out his options. Daley could use D'Arco's law to rejoin GARS for one month. That, in turn, would allow him to transfer pension credits from the county and city to the legislative pension fund. After that, he could quit GARS and rejoin the municipal plan, which would allow him to base his GARS pension on his city salary.

 

"After you have contributed one year, or more, in the (municipal pension plan), and reach age 55, you could, thereafter, retire using the final salary as Mayor of Chicago and receive 85 percent, for the rest of your life," Kink wrote.

 

Within a month, Daley set the plan in motion. "I am enclosing my election to participate in GARS under Section 2-117.1," Daley wrote to Kink. "I will also write to you in July revoking my participation under section 2-117.1 effective, August 1, 1991."

 

$400,000 saved

 

The maneuvers not only boosted Daley's benefits but also saved him hundreds of thousands of dollars in pension contributions, records show.

 

Normally, when people transfer pension credit into a more lucrative plan, they have to pay in extra money to compensate for the increased benefits, according to pension fund experts interviewed by the Tribune. The terms of the transfer should also be based on their current salary.

 

Yet under another obscure state law, Daley was able to transfer his years of service with Cook County and the city of Chicago to the state legislative pension fund without making additional contributions.

 

That's because the transfer was based on his decade-old legislative salary of $17,500 — even though his pension would be calculated using his mayoral salary, then $115,000.

 

Had the costs of the transfer been based on Daley's actual pay, he would have been required to pay in about $540,000, according to a Tribune/WGN-TV analysis based on the state's formula for pension credit transfers.

 

Instead, he simply transferred the $128,000 he had accumulated in the city and county funds, saving more than $400,000 in contributions.

 

Daley eventually retired with a state pension based on his final mayoral salary of $216,210 — 12 times his old legislative pay.

 

The $183,778 in public pension benefits that Daley now receives is divided up between GARS and the municipal pension fund. Under the state's convoluted reciprocal system, the GARS plan pays the former mayor $117,629 a year, while the municipal pension plan pays him $66,149.

 

Yet Daley paid far more in pension contributions to the municipal pension plan than he did to the GARS plan.

 

After jumping back into the municipal plan from GARS in 1991, Daley contributed 8.5 percent of his pay, the base rate for city workers, for the remainder of his career. That worked out to about $307,000, including interest from investments. The city kicked in another $283,000 with investment returns.

 

Those amounts were enough to cover the benefits the plan is paying to Daley now. But the former mayor never contributed another penny to GARS, even though that fund pays him more than $117,000 a year.

 

Today, the GARS pension plan, which taxpayers all over the state pay into, has a funding level of just 21.2 percent and unfunded liabilities of $235 million. Because Daley's shortfall makes up part of that deficit, state taxpayers will end up footing the bill for the pension of Chicago's longest-serving mayor.

 

"There is no public policy justification or taxpayer interest in allowing people once they left the General Assembly to come back and re-enter the General Assembly pension," said Laurence Msall, president of the nonpartisan Civic Federation. "This is an example of why the state Legislature needs to wake up and stop treating the pension system as if it's their personal piggy bank."

 

WGN-TV producer Marsha Bartel, WGN-TV reporter Mark Suppelsa and Tribune reporters Hal Dardick and Ray Long contributed to this report.

[Rob's House]

Let me see if I get this straight. Someone in the Chicago government with enought authority to sign off on $billion deals locked the city into a 75 year ironclad contract that !@#$s the community, and this is somehow an endorsement of the government sector?

[ExiledInIllinois]

Let me see if I get this straight. Someone in the Chicago government with enought authority to sign off on $billion deals locked the city into a 75 year ironclad contract that !@#$s the community, and this is somehow an endorsement of the government sector?

 

And the private sector takes it greedily while back biting the hand that feeds them.

 

I agree we as citizens are all !@#$ed!

[tomato can]

Let me see if I get this straight. Someone in the Chicago government with enought authority to sign off on $billion deals locked the city into a 75 year ironclad contract that !@#$s the community, and this is somehow an endorsement of the government sector?

 

 

It's an indictment on the pols! The government worker ( policeman, fireman, teacher, garbage man, ect) showed up and put in an honest days work! Paid their taxes & paid their share into the pension fund. The pols looted the money from every avenue and then made it appears as if the public pay roll was the cause of the deficits. The tax payers seen the deficits and screamed cut the public pay roll but they got the wool pulled over their eyes. They got rid of the workers and privatized the services in an ironclad contract and now the people are taking it up the pooper

[Rob's House]

And the private sector takes it greedily while back biting the hand that feeds them.

 

I agree we as citizens are all !@#$ed!

The difference is, the private sector requires the help of the government in order to impose its will upon the public. The governmnet has no such constraint.

Edited June 26, 2012 by Rob's House

[ExiledInIllinois]

The difference is, the private sector requires the help of the government in order to impose its will upon the public. The governmnet has no such constraint.

 

 

Cry me a river. Why should the gov't have constraint? They are above the mundane, cannibal existence of the private sector. They SHOULD be working for the common good, NOT private profit. SHOULD is a key word here. You are trying to equalize the two sectors. You can't do this, they operate ethically and under the law differently.