Cook County Board Mid-Year Budget Hearings - Day 1

Cook County Board Finance Committee Mid-Year Budget Hearing
July 29, 2024

Bureau of Finance Overview

• A bond ratings upgrade for the County was announced for the third time in 3 years. 
• Total FY 2024 budget is $9.26 B. 
• The FY 2024 the General Fund is expected to end the year with a $142M net favorable variance.
• For the preliminary look for FY 2025, the projected budget gap is currently $218M.  That gap will be eliminated by the time the President submits the proposed Executive Budget in October. 
• For the Health Enterprise Fund, a $224.6M positive variance at the end of this fiscal year is expected due to higher County Care enrollment membership, patient fees, improved collection strategies and increased patient volume. Patient fee revenue increased by $22M due to increased Medicare reimbursement rates and improved follow-up on payment rejections. The 2025 budget  forecast is balanced. Membership in CountyCare is expected to stabilize.
• Cook County Deputy Chief Financial Officer  Dean Constantinou noted a $1.18M increase in sales tax revenue (1.8%). Rising interest rates allows investment income to be 20% above expected and are projected to stabilize for 2025.  After 2025, expenses are expected to grow higher than revenues. In response to a question about mitigating the results of investments that are variable, Constantinou stated that they do revenue forecasting and look for alternative investment revenue, and that it would make sense to look at less sensitive investments.
• Cook County received $1B in community outreach and recovery funds from the federal ARPA. CFO Tanya Anthony reported 74% have been obligated to date with 34% of those expended. Anthony stated they are working  to ensure all monies are obligated by the end of the year which is the federal deadline.. Anthony also stated they have capacity to make changes if plans are not working.  If deadlines or benchmarks for obligations are not being met, the County contacts programs to determine what is to happen, what contingency plans exist, and what controls already have been approved to put more money if need is indicated. In response to a question from Com. Anaya, CFO Anthony stated they feel comfortable with the support received from the hired consultant to help administer the ARPA grants.
• Anthony provided a review of the AARPA Fiscal Sustainability Framework to continue projects into the future; its components are policy alignment, fiscal sustainability (long term), program evaluations, and community engagement.  A sustainability model has been developed to continue funding selected programs after 2026 when the ARPA monies run out. Com Lowry asked how funding would be secured for programs. Part of the answer is that grant optimization research is being done. It is expected that some projects will be absorbed into the County budget. The County has already begun putting excess dollars from prior years into a special fund to help continue some projects.Com. Daley stated several times that Commissioners need to remember funding requests will be coming to them in the future. In response to a question about what proposed programs could not be funded, CFO Anthony stated the focus is on what can be sustained, proceeding with that.

Lynetta Haynes Turner, Office of President, Chief of Staff 

• Haynes-Turner stated FY 2024 continues the road to economic recovery, the budget has a manageable deficit, and was done without increasing residential property taxes.
• The challenge for the Bureau of Human Resources to fill vacancies continues and is reflective of the situation nationwide, but there is progress with filling openings in Cook County. 
• She stated $382M in medical debt was eliminated, impacting 220,000 Cook County residents in County Care. She also stated a centralized data system was being developed for property tax information to be shared across all county agencies; it is on track for all participating offices to be off the main frame and on this system by end of 2024. Regarding questions on property taxes, Turner stated Commissioners were welcome to ask many stakeholders to help address the many issues around them.  Com Daley stated leaders in Springfield must come together on this. 

Commissioners Question for Offices of the President

• A frequent question from various Commissioners concerned the hiring process—how many vacancies were there, how long is the hiring cycle.   The departments and Offices reported that their vacancies have reduced over the year.
• Commissioner Degnen recommended that the Office of Innovation hire at least 3 trained Industrial Engineers to address process improvement.  She believes their specific training would be helpful. The department use to have 3 and now only has 1.   Lynetta Haynes Turner said that the departments keep many metrics that they don’t report to the dashboard.  
• Commissioner Degnen asked the Bureau of Technology what the status was for the Tyler installation.   They are behind.  They hoped to be testing end to end but are still testing in each department separately.  They still hope to test end to end by the end of this fiscal year.   The testing does not include BOR.   They will continue to use an interface.
• Commissioner Gainer asked the Finance bureau to put together a dashboard that would consolidate revenue and expenses, that would be helpful to the Commissioners to know the financial status of the County.
• Commissioner Lowry addressed the continuation of some ARPA projects such as Guaranteed Income which he sees as being very beneficial.   The University of Chicago is conducting a study of that program to   track its benefits.
• Commissioner Gordon asked how is the Finance office monitoring “non-profit gang banging”-when groups get money but then don’t provide any accounting of their efforts. There are  grant monitoring teams.  The Office also tries  to have all the grantees work together in a community and hold each other accountable.   
• Comm. Gordon also questioned the Transportation Department about the large deficit the regions public transit agencies have.  Sis Killian said that President Preckwinkle believes an integrated system would be best and they are looking at various coordination options.
• Commissioner Quezada asked the Technology Department how they are preparing for AI.  There are working groups addressing how it can be used in operations and how private data can be protected.

Office of the Public Administration

• No discussion

Cook County Assessor
     The conversation focused on how property taxes could be reduced in Cook County and what help could be given home owners.  Assessor Kaegi’s office is providing information to various agencies and groups and to individual residents about the eligibility for various exemptions and how to apply. His office sends a list to Commissioners of people in their district that are eligible for exemptions but have not applied.   He is working with the State to make the senior freeze auto renew.   He cautioned that the expansion of exemptions pushes the tax burden onto other residents.
He has three proposals to help people pay their   property tax.  All require action by the State Legislature.

1. Illinois should fund again the  Circuit Breaker program. It would provide grants to eligible seniors and persons with disabilities to help them reduce the costs of property taxes, license plate renewals and rides on public transit.  The State stopped funding the program in 2013.
2. The State should streamline the process for the homeowner exemption.
3. TIF regulations should be changed to allow TIF excess funds to go to home owners for tax relief.

Commissioner Degnen said Cook County should be looking at ways to decrease expenses in general and decrease the dependency on property taxes to fund government.
Commissioner Quezada said that a third party should be hired to examine who is accurate in their valuations—the Assessor or the Board of Review. Mr. Kaegi said that such a contract is currently going through the procurement process.  It would hire the International Association of Assessment Officers to evaluate the last 4 years.

Land Bank Authority

• The Commissioners were complementary of the Office.   It has  brought in 500 developers to build in underserved areas.

Clerk of the Circuit Court

• Commissioner Aguilar asked about the complaints that there are not enough court clerks and that impedes trials.   The Clerk has instituted new personnel policies that collapse titles and cross train clerks so that they can service different courts.  They also have improved hiring and have 530 court clerks for 357 court rooms.

Observers - Carolyn Cosentino and Kathi Graffam