Mayor Rahm Emanuel closed the books on 2016 with $153.7 million in cash on hand — up $60.7 million from the year before — but the pension crisis that has already triggered an avalanche of tax increases got worse, a city audit showed Wednesday.
Chicago’s general obligation debt backed by property taxes now stands at nearly $9.9 billion. That’s $3,680.02 for each of the city’s 2.69 million residents.
The debt is lower than the $10.2 billion in 2015 when the city started terminating swap agreements and converting variable rate debt to fixed rate bonds payable over the next 20 to 40 years.
Counting “overlapping debt,” the total owed is $23.17 billion.
Earlier this week, Emanuel noted he has now identified dedicated funding sources for all four city employee pension funds after overriding a series of vetoes by Gov. Bruce Rauner.
But the comprehensive annual financial report by the accounting firm of Deloitte & Touche LLP shows how far Chicago still has to go.
That’s even after hitting Chicago taxpayers with $838 million in property tax increases for police, fire and teacher pensions; a 29.5 percent tax on water and sewer bills to save the Municipal Employees pension fund and a 56 percent increase in the monthly tax tacked on to telephone bills – on cell phones and land lines – for the Laborers Pension fund.
The city’s “net deficit” increased by $3.6 billion in 2016 — to $27.4 billion — thanks to an increase in pension liability tied to “assumptions and plan changes.”
The Municipal Employees pension fund, the city’s largest, is in the worst shape, with assets to cover just 19 percent of its $23.3 billion in liabilities. That’s down from 20.3 percent the year before.
The firefighters pension fund is close behind, at 21.6 percent and $5.1 billion in liabilities. That’s followed by the police pension fund with assets to cover just 21.9 percent its $13.1 billion in liabilities.
All of the funds were in a worse position on Dec. 31, 2016 than they were the year before.
“The deficit doesn’t mean the city doesn’t have resources available to pay its bills next year. Rather, it is a result of having long-term commitments that are greater than available resources,” the report states.
“Specifically, the city does not include in past annual budgets full amounts needed to finance future liabilities arising from personal, property, pollution and casualty claims ($942.6 million) and Municipal, Laborers, Police and Fire net pension liabilities and post-employments benefits ($31.7 billion). The city will include those amounts in future years’ budgets as they come due.”
The report shows that revenue from all government activities were $6.74 billion in 2016, up $347.9 million over the year before almost entirely because of a 9.1 percent increase in tax revenue.
Water and sewer fund revenues were both down slightly because of the conversion from non-metered to metered accounts.
Increases in landing fees, terminal rental rates and concession revenues drove total operating revenues up at both O’Hare (12.1 percent) and Midway (3.4 percent) airports.
Chicago’s tax-increment-financing districts had a total balance of $1.4 billion, but all those were “restricted,” auditors said.
That’s even though Emanuel used an $87.5 million TIF surplus to stave off another teachers’ strike.