Mayor Daley, excited by the prospects his 2016 Chicago Olympics only nine years away, wanted to make sure there were no city workers on strike during the festivities. So in 2007 he forged ten-year contracts with what amounted to 90% of the City’s workforce. In fact, those contracts became pretty much the only legacy of the 2016 Olympics, and the Emanuel administration now finds itself in the middle of complex negotiations with scores of unions, large and small.
On May 17, Inspector General Joe Ferguson’s office published a report that audited each of the current collective bargaining agreements. The report pointed out places where outdated contractual provisions cost the city millions of dollars each year, and it called on the City’s negotiators to begin rolling back some of the most costly ones.
We begin with a highly-visible example, the Motor Truck Driver. In many cases, these workers drive trucks and vehicles that require special licensing and cannot be driven by regular citizens. But over the years the MTD’s responsibilities have shifted contractually.
“It’s not just that they are driving vehicles that other people can’t drive,” Ferguson explains. “They are driving regular vehicles that other people can drive, and that’s really where the essence of the savings identification came into play. There is a concept called traditional work that is embedded in each one of these trade’s contracts.”
“And traditional work says only these workers represented by this Union can do that work,” he continues. “So in the context of the motor truck drivers, and we don’t want to pick on the Teamsters, but it’s a low-hanging fruit situation, the scenario that we came across was a pick-up truck, a City driver, a teamster, sitting in the truck and reading the newspaper while a painter is painting a curb yellow, fire hydrant red, freshening up the paint. And we all see things like that every day. And what we see is a worker loafing, right?”
“And what we found was that Motor Truck Driver, that driver was doing exactly what he was supposed to do. He’s not allowed to get out of the truck and help the painter. The painter is not allowed to drive himself to the worksite. It’s enshrined in the contract in the notion of “traditional work”. Only members of the Painter’s Union can paint. Only members of the Teamsters can do the driving.”
Ferguson says his office compared this situation with the way the private sector handles the exact same scenario when the City hires private contractors for overflow situations. “And that’s where we saw an electrician, a painter could drive himself to a site and then do the work,” he explains. And this is no small financial matter.
“Two hundred motor truck drivers that the City doesn’t need to employ,” he asserts, “at a cost now of over $100,000 a year. Each. Meaning 20 to $25-million a year, a ten-year contract. Now you’re talking a quarter of a billion dollars, and that Olympics, the ten-year contracts we said that they exist nowhere else. They shouldn’t exist. It should be four-year cycles. The example that I like to give is that at the point in time that that contract all 37 of those trades contracts were approved by the City Council as ordinances in December of 2007, I-Phones didn’t exist. And so if you think about how much the world has changed, how much technology has changed, how much the way that we deliver services has changed over the course of ten years it’s extraordinary. We’ve tied our hands managerially to be able to innovate in the ways that allow us to deliver more for less.
And he concludes, “We’re in the fix that we are with our Union contracts because of simply an accretion of give-aways over time. Why? Because each round of negotiations starts from the existing contract and then we go from there. It’s costly to claw all this stuff back.”
And he draws a comparison between public and private-sector union contracts. “It looks to me like our public-sector unions conduct themselves in ways that private sector unions conduct themselves in this regard. The pot of money that’s available in the private sector – those are profits, and the objective is to get as much for the workers, your union members as you can, the greatest amount of profit, otherwise profit taking of the corporation.”
“We do a similar thing in the public sector,” he adds. “What seems to be missing is the public good, the public interest, because those aren’t profits. That’s taxpayer money. And so that we want more. If you want something from us you pay for it. What’s missing is actually the fiduciary duty that’s written into the City’s ethics ordinance that every worker has to the public, that’s not reflected in the outcomes of our Collective Bargaining Agreements. It’s just simply profit-taking behavior with taxpayer money and there needs to be some leavening of the public’s interests one, and some leavening of the notion that wherever the contract lands it should reflect the morality of the City. It should reflect good public policy and it should be sustainable. And that is sort of the big generational shift that we need to affect in this moment.”
One of the biggest drivers of budget excesses is the high level of compensatory time and overtime that’s accrued in some departments. Ferguson’s proud of the fact that his audits and reports help the City Council understand things in some very different ways.
“Inspectors General typically, their primary customer is the legislative branch engaging in active legislative oversight,” he begins. “And the Collective Bargaining Agreement Report was a moment where a lot of eyes were opened in the City Council, because here was this readily consumable product that allowed them to say, “Hey, wait a second. What’s going on here?”
“And at the time of our report there was about a $250-million sort of reserve obligation that the City had for comp time payouts, because a number of these Union contracts, the City is not in a position to limit the accretion, or the accumulation of comp time. And so it just builds and builds and builds, and it doesn’t get paid out on the basis of what your salary or wage was at the moment that you earned it. It gets paid out on the basis of the salary or the wage that you’re collecting when it gets paid out.”
But for many City workers, according to Ferguson, there are limits. “First of all, comp time needs to be approved and justified by the program managers and department heads, and there’s a limit on how much can accrue,” he explains. But when Ferguson released his report on police overtime a couple of months ago, it had immediate impact. “In the police realm there is no limit, and there really is no check on what it is that we’re actually doing there. You mentioned the City Council, it wasn’t just the Collective Bargaining Agreement Report, it was the CPD Overtime Report, where the scales fell off of the eyes and it was like wait a minute, what is going on here.”
“So, with respect to police overtime,” he tells us, “the issue there was controls, and sort of the integrity of the approval system. What we found there were tens of millions of dollars of either not properly approved, approved by peers rather than supervisors, reciprocal approvals, and that’s a pure administrative control issue, one. Two, 99% of the overtime that we looked at over a 2½-year period was missing justification or reason codes. So no one can look at exactly why, and when you see how much this actually costs us on an annual basis in Chicago the estimate is $170-million this year, approximately twice what was actually appropriated in the 2017 budget. It’s real money and it’s not just about money though; it’s about effective use of taxpayer resources, which if we tightened up those controls, it would probably mean that we have significant money sitting in our budget right now to pay for more officers to the extent that we need them. To pay for the reforms of the Police Department, which everyone is sort of fearing right now.
In conclusion, Ferguson says the job has exposed him to a certain truth about his adopted city. It seems we have a teensy love affair with Chicago’s crooked heritage. “We’re a little bit challenged culturally in our City in that we seem at some level in love with our narrative of corruption. It’s part of our history” he laments. “I didn’t grow up in Chicago, I grew up in Boston. Old machine-based northeast cities. The same sort of thing everywhere. We in Chicago, and I’ve been here for far more than half my life now and I’m no longer a young man, we love our narrative in ways that other cities don’t love that narrative, and that’s a distinguishing factor.”
So what stimulates a person to do this kind of work, that puts you at odds with big powerful people? “It’s sort of a combination of maybe faulty genetic switches, and to some degree socialization. And for me it was a little bit of a midlife crisis and I couldn’t afford a red sportscar.”