Nine months after vowing to trash the perks, Mayor Rahm Emanuel’s Department of Streets and Sanitation is still spending millions of dollars to provide free garbage collection to ineligible multi-unit residential buildings and to nonprofits whose garbage freebie was never authorized, the city’s inspector general concluded Wednesday.
Emanuel acknowledged that he hasn’t gotten around to making the change that Inspector General Joe Ferguson proposed last summer because he was too busy making even bigger changes to the way Chicago collects its garbage.
“First thing we did was take the old model . . . based on a political map and put it to a grid model. More efficient. Just like UPS and FedEx. And we restored recycling to every part of the city. The second thing we did is we eliminated over a period of time the $7 million . . . rebates we used to give the condos,” Emanuel said.
“You can’t skip over the major changes. Major changes means we had to take on major politics. I would never say our work is done. There’s a recommendation and we have more work to do.”
In 2000, the City Council formalized a policy that requires city crews to pick up garbage at single-family homes and all multi-unit buildings that include four or fewer units.
All other buildings were required to hire private scavenger services. But larger buildings receiving free garbage collection before that date were “grandfathered” in until the buildings were sold.
In June 2014, Ferguson set out to determine whether buildings benefiting from the free garbage-collection perk were still authorized to receive it. What he found was alarming at a time when Chicago desperately needs all the revenue it can get to solve its $20 billion pension crisis.
Ferguson concluded then that Chicago taxpayers were providing the freebie to 1,393 nonprofit properties, at an annual cost of $3.3 million, even though the City Council never authorized the perk.
The full list of nonprofits getting free garbage pickup can be downloaded here.
The inspector general further disclosed that the so-called “grandfather list” of 1,839 multi-unit buildings still receiving the garbage freebie at an annual cost of $3.27 million had not been updated for a six-year period ending in 2013.
As a result, Ferguson concluded that the list was “inaccurate” and that, over time, Chicago may have spent millions to provide free garbage collection to multi-unit dwellings that, by law, should have been hiring private commercial garbage-collection services at their own expense.
On Wednesday, Ferguson released a follow-up report that raised even more red flags.
It concluded that Streets and San has made “no changes” in response to the earlier report, in spite of the department’s earlier promise to develop an “annual self-certification and audit process” for grandfathered properties.
Ferguson said Wednesday he doesn’t buy Streets and San’s explanation that the promise was broken because there is a “possibility of legal action on the matter.”
“Sunsetting the grandfather clause should be seen as low-hanging fruit in the city’s efforts to chip away at the structural deficit looming for 2016,” Ferguson wrote, apparently referring to the city’s $300 million operating shortfall and to a state-mandated, $550 million payment to shore up police and fire pension funds.
“We urge the City Council to partner with [Streets and Sanitation] to address this anachronistic provision of taxpayer-funded services to a special class of multi-unit property owners.”
In its response to the new report, Streets and Sanitation officials argued that the department “has the authority” to provide free garbage pickup to not-for-profit organizations — at an annual cost of $3.3 million.
Ferguson countered that the perk is being provided “without any legal basis.”
“Government agencies have discretion to construe their authority, but within principled limits, which is not the case here,” he wrote.
The list of not-for-profit organizations provided free garbage pickups includes 22 offices of past and present Chicago aldermen: Anthony Beale, Ariel Reboyras, Carrie Austin, Deb Mell, Ed Burke, Emma Mitts, Freddrenna Lyle, Harry Osterman, James Cappleman, Joe Moore, Joe Moreno, Latasha Thomas, Leslie Hairston, Margaret Laurino, Marty Quinn, Michael Chandler, Michael Zalewski, Michelle Harris, Nick Sposato, Ray Suarez, Ricardo Munoz, Tom Tunney.
A key question is how some aldermen got on the freebie list, while other aldermen did not.
At least some of the offices may double as political offices for the local ward committeemen. Many aldermen hold both titles.
Mayor Rahm Emanuel’s administration “need look no further than the model they collaboratively implemented in 2013” to cut off the free water spigot to non-profits, Ferguson said.
“Such a model applied here would result in additional savings and efficiencies and stanch the bleeding of taxpayer resources for free garbage collection to organizations hand-picked without process, standards or public scrutiny,” Ferguson wrote.
When it comes to the garbage-collection freebie provided to 1,393 non-profits, the inspector general has recommended that the perk either be discontinued or authorized by the City Council using a needs-based standard similar to the revised policy in place for free water.
Emanuel campaigned on a promise to turn off the free water spigot to hospitals, churches, universities and other nonprofits to usher in an era of shared sacrifice needed to confront the city’s structural deficit.
To address aldermanic concerns about struggling parish churches, the mayor subsequently agreed to soften the blow — by offering a 60 percent water discount in 2012, 40 percent in 2013 and 20 percent in 2014 and beyond.
Emanuel also agreed to yet another compromise — by restoring free water to churches and nonprofits with assets under $1 million, despite warnings that the “cold-hearted” compromise would destroy a safety net of social services.
The free water issue had turned into a huge political headache for Chicago aldermen.