CCAC Hears From Susana Mendoza

CCAC would like to thank Collete English Dixon, Executive Director, and Marshall Bennett, Institute of Real Estate, Roosevelt University, for hosting the November 13th CCAC Luncheon. The keynote speaker was newly re-elected Illinois State Comptroller, Susana Mendoza. The Office of the Illinois Comptroller is doing everything it can to help the State of Illinois. That means crafting smart, bipartisan fiscal policy, paying down a historic bill backlog and increasing transparency and accountability in partnership with the General Assembly. Comptroller Mendoza discussed her record of success during challenging financial times and her strategic vision for the Office of the Comptroller.

In 2016, Susana Mendoza was sworn in as Comptroller during the worst fiscal year of the State. The budget crisis lasted 736 days with a $16.7 billion-dollar bill backlog that shook the State to the core. The destruction from that has been sobering. According to Mendoza, “public universities and community colleges enrolled 72,196 fewer students, cut 7,490 jobs and the State lost $948.7 million dollars in generated economic output. In addition, social service agencies were forced to cut their services, lay off staff, and even shut down entirely, following a 38% drop in state grant contracts with nonprofits from 2015-2016.” Mendoza continued and warned that this information is shocking, “Late payment interest penalties linked to the budget impasse period (the 2.5 years, 736 days), totaled a record of $1.14 billion dollars, which is more than the combined late payment interest penalties over the past 18 years, and 4 governors (2 of which were Democratic and 2 were Republican). The damage was done and it will take us years to recover.”

Since the first day Mendoza took office, she was determined to put an end to the impasse, to refinance a large portion of the State’s debt and get Illinois back on the road to recovery. Mendoza advocated diligently for the legislature to come to an agreement on the budget. She pushed Governor Rauner to refinance a portion of the State’s bill backlog, roughly $6 billion dollars of it, through a bond sale that will ultimately save taxpayers between $4-6 billion dollars in what would have been guaranteed late payment interest penalties. Between the long delays in paying the bills, and lack of basic transparency measures, the State has recently become a model of how not to run a business.

(L:R) Kelly O'Brien, Executive Director, CCAC; Greg Hummel, Partner, Bryan Cave Leighton Paisner and CCAC Board Chairman; Susana Mendoza, Illinois State Comptroller; and Collete English Dixon, Executive Director, Marshall Bennett Insititute of Real Estate, Roosevelt University.

Quickly after taking office, Mendoza learned that the Comptroller was only seeing about half of the State’s liabilities.  She learned that legislators had to work with year-old reports when preparing and voting on state budgets and that the bill back log was around $14 billion dollars. Responding to this, Mendoza pushed for the Debt Transparency Act. “For the first time, this allowed the Comptroller’s office to see the estimated backlog of unpaid bills and late payment interest penalties that were sitting at the agency level. This is the largest transparency reform in the history of the State of Illinois when it comes to our finances. It is so absurd that we didn’t already have this in place.”

Legislation was passed for Mendoza to have the financial information from the Debt Transparency Act received on a monthly basis, but, Governor Rauner vetoed the legislation, citing that it would be too burdensome for the agencies to report to Mendoza with their financials every month. After Mendoza spoke to every legislator and made the case of how its going to help them do their job better, they were able to convince every member of the House and override the Governor’s veto, something which had never happened in the history of the state of Illinois. “For the first time in Illinois history, a sitting Governor was overridden unanimously in the House of Representatives. In the Senate, we came close to overriding unanimously. In the end, there were 3 Senator’s, all part of the Governor’s leadership team, that were against the veto override,” Mendoza continued, “The law took effect in January and it’s been like clockwork. We have published nine reports to date and there have yet to be any issues with agencies. In 2018, for the first time ever in the history of the State of Illinois, legislators have up to date information as they put together their budget.” 

This is the first bill of which the Comptroller’s office is calling its “Transparency Revolution.” The Office sponsored legislation titled, the Truth and Hiring Bill, to stop the practice of Governors offshoring their staff onto other agencies. According to Mendoza, “from the history of the State of Illinois, this process started when Governors introduced their own budgets. They were paying for governor’s staff employees with other agency’s budgets.” Mendoza continued, “All we’re asking is that you report the number of employees needed in your office because you’re taking critical dollars from agencies with critical needs. Moving forward, for the first time, Governor-elect JB Pritzker will now have to report his budget and number of employees, truthfully, and make the case of why all employees are needed.

The next bill enacted was the Lender Transparency Act, which is to inform the public of who is making a profit off of the State’s financial dysfunction. “This issue of transparency is very important because taxpayers deserve to know how their money is being spent. People would ask, “Why are we stopping government for 736 days? Our response is, “Well, follow the money and ask who is benefitting off of the State’s financial dysfunction. That’s a really important question to ask. We deserve an answer and will be finding out the nature of who’s behind these deals,” Mendoza stated.

The Comptroller’s office partnered with State Treasurer Michael Frerichs to sponsor new legislation that allowed the State to tap into underutilized liquidity in the State’s portfolio, in order to smooth out the background of the payments and refinance more of the debt at a lower interest rate. “We still have outstanding bills and instead of going to the market, we were able to get legislation passed into law that allows the treasurer to utilize some of his liquidity, where he can only invest in 24-hour instruments that don’t give a rate of return. There is roughly $2 billion dollars in liquidity that the Treasurer Department isn’t making any money on. The Treasurer Department will lend the Comptroller’s Office money and their 3.5% interest payment will go back into the treasury instead of Wall Street. As long as we’re able to make the debt service payments, it’s a good deal and saves taxpayer money,” Mendoza explained.

Mendoza has a history of undertaking technology projects and completing them on time and within budget. In her previous role as City Clerk, she made the goal of turning the Clerk’s office into one of the most technologically advanced offices in the nation. Mendoza upgraded and streamlined their technology systems, added online services to purchase city stickers, and provided better general service. In that same vein, Mendoza expressed that she would like the Comptroller’s office to be viewed as the “best government source for predictive modeling and for numbers that can be trusted.” She stated, “This is the type of office that can be looked at not only for administration and cutting checks, but a trusted source of numbers that can be used to craft and influence policy down the road. This office tells the story of how people have been impacted both good and bad.” Mendoza continued, “the way we do that is to purchase state-of-the-art accounting and payroll systems that will allow us to explore predictive modeling and become shapers of policy instead of reactors as a policy.”

The technology component in the Comptroller’s office can really make access to information much faster which means better savings. “Today, we still have challenges. Regarding the bill backlog, I’m pleased to say we cut it from $16.7 billion to $6.8 billion. The worst of the budget crisis has passed; however, we still have tough times ahead. In the next two-to-three years there could be a recession coming. Our current budget is a consensus budget which is very different than a balanced budget. The consensus budget is what we needed to do to keep moving and pay some of the bills,” Mendoza stated.  

Considering these challenges, what’s the fiscal future of Illinois? Mendoza shared, “It is what we decide to make it. We must take on the tough challenges that are up ahead, be realistic about passing budgets, think about sustainable revenue and action, and not waste time.” 

Concluding her remarks, Mendoza expressed her concern for Illinois to continue to be a state that works for the Midwest. She continued, “The business community is really central to Illinois. Chicago is the economic engine of our State and we want to make sure that we continue to grow this area that we’re in now.” Commenting on CCAC’s upcoming Chicago Central City Strategy Roundtable, Mendoza stated, “we must leverage the relationship and the strength that we have from our amazing business community downtown to help the neighborhoods. I think Mayor Emanuel did an awesome job focusing on making Chicago into a global city, but the neighborhoods haven’t necessarily felt that. We can be partners and making sure that what’s happening in the downtown area is being reflected in the neighborhoods. Hopefully with the new Governor, we can start a new slate. With a new capital plan, which is going to be important to craft infrastructure plans and spending money on job creation, we can show that we’re all in this together to put Illinois first.” 

UPDATE:
On November 14, one day after the CCAC lunch, Susana Mendoza announced her candidacy for Chicago City Mayor with a video that can be found by clicking HERE.

November 13th CCAC Luncheon audience

(L:R) Louisa Keefe, Director of Constituent Affairs, Office of the Comptroller, Illinois State Comptroller; Kelly O'Brien, Executive Director, CCAC; Mark Walbrun, Vice President, Practice Leader-Rail & Transit, Mott MacDonald; Susana Mendoza, Comptroller, State of Illinois; Carmen Caldero, President, CPC & Associates; Alejandro Stochetti, Design Director, Adrian Smith+Gordon Gill Architecture; and Bola Delano, Deputy Director, Constituent Affairs, Office of the Comptroller.

Roosevelt University

The Chicago Central Area Committee is leading the preparation of a proposed new strategy for Chicago’s Central City. It will take the form of a Central City Investment Framework. This will be a rapid, focused initiative over 6 months intended to focus attention on locations where an integrated approach can leverage greater investment. This is also an opportunity to address how Central City growth can be linked to neighborhoods and set a clear path for enhancements that can benefit all of Chicago. 

Please join us on Wednesday, December 5th, from 8:00 am - 12:00 pm at Roosevelt University, for the Chicago Central City Strategy Roundtable that will discuss connectivity, economic development, and growth in the City as an investment framework.

Please RSVP by e-mailing Kelly O'Brien, kobrien@ccac.org.

It's Holiday Time!

Join us for the CCAC end of year meeting and Holiday Reception on Tuesday, December 11, 2018 at the office of Bryan Cave Leighton Paisner LLP, 161 N. Clark Street, Suite 4300, Chicago, IL 60601. Doors will open at 5:00 pm.

All CCAC Members and Young Leaders are invited to attend.

The Habitat Company Celebrates East Park Apartments with a Ribbon Cutting Ceremony

Members from The Habitat Company at the East Park Apartments Ribbon Cutting Ceremony

Mayor Rahm Emanuel, City of Chicago and The Habitat Company members

On November 15, 2018, The Habitat Company celebrated its multi-million dollar, year-long renovation of East Park Apartments with a ceremonial ribbon cutting. In partnership with the City of Chicago, Chicago Housing Authority, GMA Construction Group, and the Illinois Housing Development Authority, The Habitat Company celebrated this new milestone in affordable housing initiatives for the City. The 13-month renovation of a 153-unit single room occupancy in Chicago's East Garfield Park neighborhood has been retrofitted with LED lighting, high efficiency boilers, new in-unit heating and cooling and more.

“The completion of this project underscores Habitat’s commitment to the development and preservation of affordable housing throughout the city,” said Matt Fiascone, president of The Habitat Company. “With the number of licensed SROs in Chicago decreasing sharply in recent years, Habitat is working harder than ever to maintain this much-needed housing.”

“Today marks another important milestone in Chicago’s efforts to help redevelop the neighborhood, while creating and preserving affordable housing units for its residents," Mayor Emanuel said. “Through these partnerships, the city will continue to achieve its goal of maintaining a vibrant housing market that is open and accessible to everyone."

For more information, please visit, http://www.habitat.com/

School of the Art Institute of Chicago Holds Third Annual Corporate Luncheon

On November 14, 2018, the School of the Art Institute of Chicago (SAIC) hosted their Third Annual 2018 Corporate Partners Luncheon. The theme was understanding how fashion in this modern age is about how we look, feel, behave, and so much more from a diverse panel of faculty, alumni, and guest experts.

The 2018 Corporate Luncheon featured a panel discussion about the ever-changing impact, expectations, and innovations occurring in the fashion industry. Panelists explored the fashion industry’s response to advances and issues in environmental sustainability, health and wellness, social justice, and the impact of disruptive technologies and retail strategies on consumers and investors. 

Speakers included:

Congratulations to Cheryl Russell, Executive Director, Corporate, Foundation, Government and Civic Relations, and the leadership at SAIC for another successful luncheon.

For more information, please visit, http://www.saic.edu/support-saic/corporate-partners/luncheon

2018 CCAC River Sprint Updates

The CCAC Young Leaders 2018 Sprint focused on creating a vision for the development of multiple sites along the Chicago River.  The teams developed ideas inspired by equity, resiliency, and connectivity. In addition, the team also addressed job creation, real estate investment, transit connectivity, land use and open space planning, housing, and environmental improvement. 

The follow-up committee for the 2018 Sprint met and explored ideas on how to execute next steps. CCAC will post the final work product as well as the individual team's presentations on its website and plans to share this information with stakeholders within the City. CCAC remains committed to assisting decision makers by providing visions and input for development in the City. The exceptional talent, creativity and sound suggestions that are detailed in the team presentations can be used to positively impact our City.

2019 Monthly Meeting Calendar in Development

CCAC members meet on the 2nd Tuesday of each month. Please consider being a host. This is a unique opportunity to showcase your firm and allow members to see your office. If you are interested in hosting a monthly lunch meeting or have suggestions for programming, please contact Kelly O'Brien, 312-602-5148, kobrien@ccac.org.

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CCAC is active on social media including Twitter, LinkedIn, and Facebook. Please follow us on Twitter with our username @ChicagoCCAC or click the icon(s) below to be directed to our page. Please search for us on LinkedIn or Facebook under the name Chicago Central Area Committee!