Money managers who invest retirement savings for 649 local police and fire pension funds in cities and towns across the state are mounting a fundraising effort to try and defeat Governor J.B. Pritzker’s proposal to consolidate their smaller funds into two combined funds.
According to an email leaked to WCIA, a former board member at the Illinois Public Pension Fund Association (IPPFA) is working to raise nearly half a million dollars to hire lobbyists to kill the pension proposal during the fall veto session at the statehouse.
“The retention of two or three lobbyist (sic) would be beneficial,” the email said, adding that the estimated “costs for a 12-month engagement would be approximately $480,000.”
Retired Addison police detective Dave Wall sent the fundraising email out to other IPPFA members and investment fund managers with a deadline for them to respond with a commitment to spend on lobbying by this Friday.
Unless the leaders slow it down, I’m kinda thinking they may not need any lobsters after veto session ends in less than a month.
* We’ve talked about this NPR Illinois poll before. It’s an online poll and it produced some surprisingly strong (32 percent) job approval numbers from Republicans for Gov. Pritzker. But, even if it’s in the ballpark, these are pretty strong numbers…
The results show 92 percent of Illinoisans support making mental health background checks more stringent. That’s about the same number as a similar survey from last year. Another 74 percent back the idea of banning assault weapons, a big jump from 2018. While there is a partisan split on that question, a majority of both Democrats and Republicans are in favor.
Meanwhile, 88 percent support requiring fingerprints to get a Firearms Owner’s Identification (FOID) card, and three out of four Illinoisans favor banning high capacity magazines. […]
Of the more than 1,000 people polled for the NPR Illinois UIS survey, over a quarter of those identified as being gun owners, which is in line with Illinois census data, and even a majority of gun owners say they support all of the proposals. That includes those who are located downstate, where gun rights are often a campaign issue.
The “strongly support” numbers are also pretty high, according to the poll. 54 percent strongly support banning high capacity magazines (64 percent total with just 15 percent strongly opposed), 55 percent strongly support an assault weapons ban (72 percent total with just 19 percent strongly opposed), 73 percent strongly support mental health background checks before purchases (92 percent total with 3 percent strongly opposed) and 69 percent strongly support making FOID applicants submit fingerprints (88 percent total with 6 percent strongly opposed).
Conventional wisdom is that the state of Illinois is on an irreversible road to decline, burdened with an aging population, rising taxes, staggering pension debt and residents fleeing to the borders.
That ain’t necessarily so, says a DePaul University economist. In a wonderfully contrary blog post on the website New Geography, which focuses on socioeconomic changes in in cities and other areas, he concludes that, despite its very real warts, the Land of Lincoln in many ways is still holding its own.
In the piece, William Sander, professor emeritus at DePaul’s Driehaus College of Business and Kellstadt Graduate School of Business, confesses right up front to the state’s economic woes.
Specifically, he notes, both the state and the Chicago metropolitan area have lost population lately, state gross domestic product growth has been 0.2 percentage points below the national average since 2010 and high school students have tended to move out of state for their freshman year of college.
Regarding population growth, it is important to point out that there has actually been negative domestic migration (more people leaving than entering) for most of the past century. At the same time, the state’s population doubled in size and the economy continued to grow. […]
While there has, in fact, been a net loss of college freshmen from Illinois to other states, there has not been a net loss of college students overall. One reason for this is that Illinois has a higher percentage of students in graduate and professional schools.
* The Question: Your “Move to Illinois” campaign slogans?
A program that offers cybersecurity expertise to the state’s 108 local election authorities in an effort to ensure election security will continue “indefinitely,” according to Illinois’ top elections official.
Illinois State Board of Elections Director Steve Sandvoss said his agency, in tandem with the Department of Innovation and Technology, will keep nine cyber navigators on the payroll to travel the state to help local election authorities with upgrading their cybersecurity infrastructure and practices.
Sandvoss told The Daily Line that the cyber navigators have completed the first phase of a multi-stage process. That first phase included identifying vulnerabilities in the systems of each of the state’s local election authorities. Some local elections agencies need more help than others, Sandvoss said.
“It’s a matter of working with those election authorities to address those vulnerabilities,” Sandvoss said. “And if they need money to do it, we have grant money that we got from the federal government. There’s an application process they can take advantage of to get money to pay for security upgrades that are needed.”
That $13.2 million [for cyber navigator programs] was Illinois’ share of $380 million Congress appropriated nationwide for election security in 2018. But now, as the 2020 elections approach, the U.S. House and Senate have been at loggerheads over how much to spend for additional election security.
The Democrat-controlled House has authorized $600 million, while the Republican-controlled Senate has agreed to just $250 million. […]
But Elizabeth Howard of the Brennan Center for Justice’s Democracy Program, said even the $600 million contained in the House plan wouldn’t be enough. She estimated the cost of securing the entire country’s election system at $2.2 billion.
That would encompass $750 million to replace “antiquated paperless voting machines” throughout the country, including $175 million in Illinois alone; $100 million for post-election audits over the next five years; $500 million for voter registration cybersecurity improvements; and $830 million to extend cyber navigator programs like the one in Illinois nationwide.
* Bernie’s column includes a story about Republican US Senate hopeful and Springfield surgeon Tom Tarter and also has the money wrapup…
The other candidates are former Lake County Sheriff MARK CURRAN; PEGGY HUBBARD of Belleville, who served in the Navy and worked for the IRS; and perennial candidate ROBERT MARSHALL, a radiologist from Burr Ridge.
Federal Election Commission reports show that Tarter, in the three-month period ending Sept. 30, raised more than $32,000 on top of the [$50,000] loan to himself, and had more than $74,000 on hand at the close of the period. Hubbard had raised more than $43,000 and had about $21,000 on hand. Curran loaned himself $10,000, raised a total of nearly $20,000 more, and ended the period with more than $23,000. Marshall, at the end of June, had less than $22,000.
Whoever wins the GOP nomination in March is expecting to face Democrat U.S. Sen. DICK DURBIN, of Springfield, who is seeking another six-year term. From July through September, Durbin raised more than $1 million and ended the period with $3.8 million in his campaign fund.
Curran is supposed to be the frontrunner. That’s what he told us anyway.
Two months before a 66-year-old man went on a deadly shooting spree at a condo building in Dunning, police responded to the same complex when the accused gunman allegedly assaulted the son of one of the victims of Saturday’s rampage.
The suspect, identified as Krysztof Marek, was charged Monday with five counts of first-degree murder, according to the Cook County state’s attorney’s office. He was denied bail during his initial court hearing.
Sergio Macias, who manages the building in the 6700 block of West Irving Park, said Marek allegedly punched Jolanta Topolska’s son in the face on Aug. 3. Macias noted that police were then summoned to the building. […]
Even before the incident in August, Marek’s strange behavior had unnerved some of his neighbors.
What can we do about a man who, according to a woman who lived nearby, was “always very friendly” until about six months ago “when he snapped”? A man who allegedly punched the son of one of the victims two and a half months ago, on Aug. 3?
Until recently, very little.
But Illinois now has a new “red flag” law, enacted in 2018, that gives neighbors and others a potentially effective tool. They can report the behavior to local police, who can check with state police to see if the person has a gun card. Then, based on further investigation, the police can petition to temporarily remove firearms from the home as long as that person is a danger to himself or herself — or to others. Family members also can petition to have guns temporarily removed.
Also under the new law, people who feel they have been unfairly targeted by others — and are really of no danger to themselves or anybody — can make their case to a judge that their firearms should not be taken from them.
Such an intervention, conceivably, could have prevented the shootings on Saturday.
Unfortunately, however, most people, including many police officers, are unaware of the new law. Illinois should amp up efforts to get the word out.
Attorney General Kwame Raoul is leading a statewide effort to do just that. Other agencies — local police departments, counseling organizations and others — should help.
* Buried near the very bottom of this Tribune story about the federal raid of the Lyons village hall is this little nugget…
The grand jury case number listed on the documents indicates the investigation began in early 2017.
…Adding… This could have been just a regular grand jury which began convening in 2017 and agreed to approve search warrants issued this year. It’s not clear what’s actually going on.
A Worth Township official who once served briefly as a state legislator and now moonlights as a sales consultant for a politically connected red-light camera contractor has been subpoenaed by federal authorities investigating the company’s activities.
John M. O’Sullivan, 51, of Oak Lawn, is Worth Township supervisor and previously served as the township’s Democratic committeeman.
O’Sullivan was chosen by Democratic party leaders in August 2010 to finish out the last four months of state Rep. Kevin Joyce’s unexpired term after Joyce resigned and moved to Florida. Sources said O’Sullivan is a close ally of the Joyce family, longtime political powerhouses in the 19th Ward.
At SafeSpeed, LLC, O’Sullivan’s job is finding municipalities that might want to hire the Chicago company to install and operate red light cameras in their communities – with the business and the towns splitting the revenues from tickets.
O’Sullivan went from being a driver and weekend disc jockey to state representative, township supervisor and Democratic committeeman, Cook County Forest Preserve District supervisor, and chief of staff to former Cook County Board member Ed Moody, now the recorder of deeds. O’Sullivan also is linked to a red-light camera company, SafeSpeed, that the feds are said to be eyeing.
O’Sullivan and Moody, along with Moody’s brother, Fred, have been the torque of Madigan’s political organization for decades. They were the guys standing on front stoops collecting signatures, bullying opponents, setting up political trades, electing Madigan’s House majority — putting in their time in exchange for perks down the road.
They got them. O’Sullivan replaced former state Rep. Kevin Joyce in 2010 in the Illinois House when Joyce moved to Florida. Conveniently, O’Sullivan was able to appoint himself to the seat with a weighted vote as a Democratic committeeman. This is Illinois, after all.
O’Sullivan later voted for the 2011 state income tax hike as a lame-duck representative. He then ended up, along with another short-term legislator, Michael Carberry, on Cook County’s payroll under President Toni Preckwinkle. […]
O’Sullivan has been around the block. He knows a lot. I’m guessing at this point, so do the feds. And now he’s been subpoenaed.
O’Sullivan is definitely in tight with the Moody brothers and worked a lot of Madigan campaigns through them, I’m told, but he’s most definitely on the outs with the 19th Ward these days. And, as far as his ties to Madigan, here’s what a longtime 19th Ward guy told me this week…
I’m guessing any communication between O’Sullivan and the Speaker goes through Marty Quinn first, and then through the Moodys. “The family has a lot of buffers.”
“My video gaming license was approved (in 2012) after a 24-month intensive investigation. All my business relationships were disclosed to investigators, and the relationships in question were explicitly discussed with multiple (Illinois Gaming Board) agents and investigators. As these business relationships were ongoing, they had been disclosed and further discussed at each annual review of my licenses over the last seven years,” Heidner testified. “I have no affiliation with the mafia at all.”
“I have never been arrested or indicted for any crime whatsoever. And no proof linking me to any criminal conspiracy, whether it’s called ‘Mafia,’ or ‘Cosa Nostra’ or whatever other name you wish to give, has ever been made public.”
I am absolutely not saying that Mr. Heidner was lying, mind you. I didn’t even know who the guy was until the other day. All I’m saying is there’s a reason why I made my interns watch Godfather 1 and 2 and Goodfellas.
New Berlin, a village with 1,500 people separated from the outskirts of Springfield by 12 miles of pale blue skies and sunlit cornstalks, still has many hallmarks of a small town. It hosts the county fair, with chili cookoffs, livestock exhibitions and country music stars drawing crowds during the long days of June. Tractors occasionally join traffic on the main thoroughfare, and freight trains rumble and screech along tracks that travel the length of town. And, of course, the people in New Berlin, like much of rural Illinois, are almost entirely white.
Unlike a lot of rural towns, though, New Berlin is growing, and its schools in particular, with nearly 5 percent annual growth, are booming. Its elementary school attendance has more than doubled since 2003. The growth in the higher grades has been slower, but still some of the highest in the metro area. […]
Students are surging into New Berlin schools, though, not because of the town’s rural charm, but because of its proximity to the suburban sprawl of southwest Springfield. As developers turn farmland into new homes, they are increasingly leaving the boundaries of Springfield’s core school district – District 186 – to do so. Even homes that are within the city limits of Springfield often don’t fall within the school district, because those boundaries aren’t the same. The decade-old, half-million-dollar houses in Springfield’s Centennial Park Place neighborhood, for example, barely fall inside the New Berlin school district.
The same thing is happening on nearly every side of Springfield; city residents, in fact, now go to seven school districts other than District 186. In the Chatham school district, more than a third of students have Springfield addresses.
We hope the mayor appreciates that by striking, any workforce declares a reset: A walkout liberates Lightfoot from proposals she already has made but which her employees have rejected. As any strike continues, the mayor is free to withdraw those proposals and offer a different package.
My unsolicited advice is don’t listen to the Tribune. Nobody’s gonna break the CTU and nobody wants a long walkout. The Tribune formula requires both.
Also, teachers aren’t the mayor’s employees. They work for the public school system.
Veteran statehouse journalist Charles Wheeler III read aloud an account Wednesday evening of state officials being concerned about Illinois underfunding its pension obligations.
That concern is a commonly voiced today in Springfield, but many in Wheeler’s audience at Eastern Illinois University were audibly surprised to learn that the account he read was from 1917.
“It’s not something new. It’s been a problem forever,” Wheeler said. […]
The guest speaker indicated that pensions were a major topic of discussion at the constitutional convention in 1970 that resulted in a new Illinois Constitution. […]
“[The delegates to the convention] knew what they were doing. The voters knew what they were doing, it was clearly explained,” Wheeler said of the pension protection clause. He added that this clause has since maintained that, “Benefits that are earned cannot be taken away.”
…Adding… Wow…
A 1916 committee was put together to study the public safety funds. one member noted that there were too many small funds writing that, "the insecurity of such small funds is so obvious as to require no comment“ https://t.co/hEdb2sl5oP
* Proponents of SB1852, the Sterigenics bill, described it as the toughest ethylene oxide regulation in the nation. Business groups claimed it was the toughest in the world. But the biz folks may have been blowing a bit of smoke…
Yet industry documents obtained by the Chicago Tribune show the state’s business community privately concluded the regulations are less stringent than they had feared.
Shortly after lawmakers close to the Pritzker administration unveiled their legislation during the spring, one of the state’s top business lobbyists assured colleagues it contained the “least concerning language to date,” according to notes from an April 30 meeting.
Donovan Griffith, director of governmental affairs at the Illinois Manufacturers Association, stressed that Pritzker and lawmakers had backed away from earlier versions fiercely opposed by business interests, according to a summary by another industry official at the meeting. Griffith’s presentation noted lawmakers had dropped plans to reconsider permits allowing companies to emit ethylene oxide. They also had scrapped what opponents considered “arbitrary emissions limits.”
The measure later approved unanimously by legislators and signed into law by Pritzker is largely identical to the draft Griffith described, a Tribune review found. Discovery of the lobbyist’s behind-the-scenes assessment comes as community groups demand a more aggressive response to elevated cancer risks faced by more than 67,000 Illinoisans living near facilities that use ethylene oxide.
Laws are never perfect and some are ridiculously weak. But bills won’t become laws without clearing two chambers and getting signed by the governor. And that means compromise.
With that being said, there’s an old saying about how there’s an inverse relationship to what a bill actually accomplishes and how many votes it gets. Bills with unanimous support often do little. That bill passed without a single dissenting vote.
A downstate grand jury has issued at least two more subpoenas to government agencies in the criminal investigation into the state’s mishandling of deadly Legionnaires’ disease outbreaks at an Illinois veterans’ home, WBEZ has learned.
The Illinois Department of Veterans’ Affairs, which oversees the Quincy home, and the Adams County Health Department both received criminal subpoenas from the grand jury in August, signaling the probe which began a year ago is not only active, but also may be intensifying.
But Democratic Attorney General Kwame Raoul’s office, which is investigating the outbreaks, asked a judge to order that the agencies keep the documents secret because their disclosure “would greatly impede the investigation.”
Downstate Adams County is where the state-run Quincy veterans’ home is located. That’s where 14 residents’ deaths and dozens of illnesses have been linked to multiple Legionnaires’ outbreaks since 2015.
Advance Illinois President Robin Steans said Illinois recently ranked 45th in the country for the amount of money the state spent per pupil on K-12 education.
“We fixed the formula and the state has been putting $350 million into the formula each of the last three years,” she said at a meeting at the City Club in Chicago. “That has bumped us up in a very short period of time to 24th in the country. That is a huge move in a very short period of time.” […]
The direct effect of that influx of money can be measured by the fact that before the formula was changed, 170 districts had less than 60 cents on the dollar of what they needed to adequately educate their students. Now the number has been cut to 34. […]
Despite progress on the funding front, the report underscored areas where education in Illinois is lagging. Steans said the state has a “significant” teacher shortage and the said the state ranks 45th in support for higher education when it ranked 19th just a decade ago. That creates affordability problems, which hurts enrollment.
The impasse just about killed off higher education in this state.
With the departure of former Gov. Bruce Rauner from the state’s political scene, the Illinois Republican Party is turning to grassroots fundraising to try to help make up for at least some of the loss of its biggest benefactor.
Tim Schneider, Rauner’s handpicked chairman of the state GOP, announced the formation of the “Lincoln Legion” with membership through recurring contributions ranging from $10 to $25 a month in exchange for “exclusive invites” to Republican events.
“For too long, ready and willing donors from the grassroots have been neglected,” Schneider said in an email to Republicans. “Not anymore. It’s time for a legion of patriotic Illinoisans to rise up and save our state.”
From the time Rauner announced his candidacy for governor in June 2014, he and his largely self-funded campaign directly gave the state GOP more than $36.8 million. That’s nearly two-thirds of the $58 million the state GOP collected over the same time period.
That story was published a couple of days ago. Since then, the ILGOP reported raising a little over $8,000 in individual contributions during the third quarter, including only $555 in small contributions. The party’s total quarterly take was just $36,405. Yeesh. It had $106,369.28 in the bank at the end of September.
* Speaker Madigan’s campaign fund had over $7.1 million in the bank after raising a little over a million dollars in the bank. But his legal fees are still piling up. Madigan spent $360,582 on lawyers in the third quarter (ten times the amount the ILGOP reported raising during the same quarter, FWIW). He’s spent more than $814,000 on lawyers since the first of the year and almost $1.5 million since the first of 2018.
* With nearly $1.2 million in the bank, U.S. Rep. Lauren Underwood has a healthy fundraising lead over potential Republican challengers: The top fundraiser among Republicans trying to win the right to challenge Underwood in November 2020 was state Sen. Jim Oberweis of Sugar Grove. Oberweis, unsuccessful in previous bids for Congress and the U.S. Senate, raised $329,493 and reported $551,578 in cash on hand. … Ted Gradel, an investor from Naperville who entered the contest in April, reported $496,000 in cash on hand to start October. Gradel raised nearly $264,000, including a $100,000 loan to his campaign. He had nearly $290,000 at the beginning of July and spent only $57,000 from July through October. Republican state Sen. Sue Rezin of Morris, who announced her candidacy for the GOP nomination in early July, reported raising more than $245,000 through September, including making a $100,000 loan to her campaign. She reported more than $226,000 to start October.
* Primary challenger Marie Newman outraises Rep. Dan Lipinski by nearly 2 to 1 in last quarter: Newman, seeking a primary rematch against Lipinski after losing her March 2018 bid against the Southwest Side and south suburban lawmaker by 2.2 percentage points, reported raising $351,326 in the three-month period. Lipinski reported raising $177,741. Still, the seven-term congressman from Western Springs held a slight advantage over Newman in terms of cash available to start October. Lipinski had $693,088 to Newman’s $514,237 in cash on hand. A third Democratic candidate, activist and former broadcaster Rush Darwish of Chicago, raised $272,779 in the three-month period including a $62,000 loan to his campaign. He reported $318,113 in cash on hand to start this month.
* In the 13th Congressional District, Congressman Rodney Davis reports $905,657 and Democratic primary challenger Betsy Dirksen Londrigan has $721,805.
Mayor Lori Lightfoot’s zoning rules for recreational marijuana sales in Chicago passed the City Council Wednesday morning in spite of concerns by African American aldermen that minorities won’t get a fair shake to get in on the lucrative business starting next year.
The zoning ordinance laying out where marijuana dispensaries would be allowed and prohibited throughout the city passed full City Council by a 40-10 vote.
This should never have been an issue in the first place. But, all’s well that ends well, I suppose.
The city council is a unicameral, officially non-partisan legislature and the mayor is the presiding officer. That’s one reason why mayors so often get their way. But it’s also why some mayors sometimes don’t quite fully get the far more complicated dynamics of the Illinois Statehouse, where there’s a bicameral legislature, each with two competing political parties and presiding officers who are not the governor.
The Chicago Park District and its employees reached a tentative contract agreement, averting what would have been the first strike for workers and would have shuttered facilities across the city, according to union officials.
The agreement reached late Tuesday and made public Wednesday means hundreds of Park District employees will not walk off the job this week even if the Chicago Teachers Union and support staff for public schools decide to strike. The Service Employees International Union Local 73, which represents about 80% of Park District employees across the city, didn’t initially release details of the new contract.
That’ll be a big relief to parents if the CTU strikes.
After hours, Village of Lyons releases unredacted federal search warrant and receipt list from September raid. Mentions of Vondra, “Heidner/gaming machines,” home security system for Getty, SafeSpeed and framed picture of Getty and Sen Munoz. (Sandoval name crossed out.) pic.twitter.com/gwp0e8Tgz9
The federal search warrant used at the Lyons village hall also showed the FBI’s interest in the Lyons Township Democratic Organization. The group’s leader is Steve Landek, who’s also the mayor of Bridgeview and a state senator. He did not return calls seeking comment.
Meanwhile, Landek, chairman of the Democratic Organization of Lyons Township and also the mayor of Bridgeview, said Wednesday that federal authorities have not contacted him in his capacity as a legislator, mayor or local party leader.
* The Sun-Times took a look at the unredacted Lyons and McCook search warrants and compared them to the Sen. Martin Sandoval search warrant. This is only a tiny taste of the full story, so go read the whole thing…
The Lyons records, released Tuesday night, mention Buckle Down Brewery, the Drake Oak Brook Resort and the Democratic Organization of Lyons Township.
Getty is listed as the agent for The Drake Oak Brook Resort LLC, according to Illinois Secretary of State records. He also holds annual fundraisers at the resort. […]
The Sandoval and McCook records also mention Bill Helm, who until recently was a high-ranking Chicago Department of Aviation official at the center of a lawsuit accusing him and other officials of injecting politics into the workplace at O’Hare Airport.
The Lyons and Sandoval records mention John Harris, former Gov. Rod Blagojevich’s convicted one-time chief of staff, as well as the politically connected red-light camera company SafeSpeed, LLC. They also mention asphalt magnate Michael Vondra.
Documents in McCook and Lyons mention Presidio Capital, whose “principal office” appears to be a postal box at a Hinsdale UPS store. It’s a development company run by Burr Ridge resident Omar Maani that’s built affordable housing in Cicero and Summit using taxpayer money funneled through the county government.
Maani is a SafeSpeed investor. The Sun-Times has twice reported on rumors that he is cooperating with the feds.
* I wondered the same thing last week when I was looking into Krneta. Turns out, you can ask Google Maps to blur the image of your house…
Things that make you go hmmm? Why is the @googlemaps photo blurred of the address listed for Renovation Associates in LaGrange Park. The owner, Sam Krneta was named in a just released FBI search warrant for the Village of McCook. He has not returned a call seeking an explanation pic.twitter.com/IJVXsGpORT
Among Krneta’s recent jobs was the 2018 renovation of the Alta Grill restaurant inside the McCook Athletic & Exposition Center facility, also known as The Max, records show.
Over the past decade, Krneta has donated tens of thousands of dollars to local politicians including Tobolski, Getty and state Senate President John Cullerton, campaign records show.
Krneta was convicted earlier this year of misdemeanor battery stemming from an incident at Tobolski’s August 2018 golf outing and fundraiser at the Gleneagles Country Club in Lemont, Cook County court records show.
A former manager at the Alta Grill accused Krneta of fondling her from behind and attempting to take her phone out of her back pocket, according to the court records. When she protested, Krneta allegedly grabbed the victim by the throat at the event and said, “I’m untouchable. I always get what I want,” the records show.
The [governor’s local first responder pension consolidation task force] estimated the costs of these changes at between $14 million and $19 million a year over five years. The estimated investment gains from consolidation are between $164 million and $500 million per year over five years.
But this is Illinois, and if I’ve learned anything in this job, it’s that estimated costs are almost always too low and estimated returns are almost always too high. I’ll believe those projections when I see them.
* Amanda Kass dug into the task force report and found it was a pretty light on details. As always when it comes to this particular Kass, you should read the whole thing. But here’s part of one section…
Consolidating assets has implications for actuarial assumptions, and assumptions play a vital role in determining a pension fund’s finances and municipalities’ annual payments. According to the Task Force, one of the benefits of consolidation is that it would, “Enhance uniformity in setting investment and other actuarial assumptions.” The report is thin on details about this aspect of consolidation, and it’s important to learn more about it to understand how municipalities will be impacted in both the short-term and long-term.
In determining the long-term finances of the pension systems, actuaries use an investment rate assumption. Right now each of the 600+ public safety funds have their own investment rate assumption, and the assumption rates vary from around 5% up to 8%. Moving to a single investment rate assumption will mean some funds’ assumptions will be lowered, while others will be increased.
Changing the investment rate assumption has an immediate and direct impact on unfunded liabilities. Increasing the assumption will decrease unfunded liabilities, while reducing the assumption increases unfunded liabilities. The Chicago Tribune highlighted that the biggest driver behind increases in Chicago’s unfunded pension liabilities in recent years has been actuarial assumption changes. Since municipalities’ annual pension payments are linked to the unfunded liabilities reducing the investment rate assumption increases the required contribution (and vice-versa). When the Teachers’ Retirement System lowered its investment rate assumption the state’s required pension contribution for one year increased by hundreds of millions of dollars. Lowering the investment rate assumption a quarter of a percentage point (from 6.75% to 6.5%) was estimated to increase municipalities’ contributions for representative public safety funds by between 16% and 22%
One issue is that there are transition costs to consolidating the assets. While the report acknowledges transition costs, no estimate was included. A 2012 report also evaluated the possibility of consolidating the public safety funds’ assets. That report discusses transition costs, and includes more detailed cost and saving estimates. Importantly, transition costs are immediate expenses, while savings occur over the long term. The analysis from 2012 found that under the most likely scenario, “it would take 11 years to break even and begin realizing any cost savings in excess of transition costs” from consolidating the assets of all public safety pension funds.
In 2012, the Gaming Board granted Heidner’s Gold Rush a license to operate video gambling machines. Two board members recently told the Tribune that Heidner’s ties to the Suspenzis would have been an obvious red flag, but they had no recollection of being informed of the real estate deals by the agency’s investigators.
“If that was brought to the board’s attention, it would have been a definite no,” said Maribeth Vander Weele, who served on the Gaming Board when Gold Rush’s license was approved without dissent.
“It certainly would have been a big factor,” said former Judge Aaron Jaffe, who was Gaming Board chairman at the time. “But I don’t recall hearing anything like that.”
He also swore that the Gaming Board knew of his relationships with Parkway Bank Chairman Rocco Suspenzi and convicted felon Dominic Buttitta, and had no problem with the ties when it awarded him a video gambling license in 2012. Heidner also acknowledged that he remains in business with the people “in question.”
“My video gaming license was approved (in 2012) after a 24-month intensive investigation. All my business relationships were disclosed to investigators, and the relationships in question were explicitly discussed with multiple (Illinois Gaming Board) agents and investigators. As these business relationships were ongoing, they had been disclosed and further discussed at each annual review of my licenses over the last seven years,” Heidner testified. “I have no affiliation with the mafia at all.”
What investigators knew about Heidner at the time remains secret because Illinois gambling statutes exempt gaming license applications from open records laws.
This can be resolved by opening up Heidner’s Gaming Board file. Let’s see who’s telling the truth.
To be clear, I’m not saying at all that Heidner should get a pass on the racino or on his video gaming license renewal that comes up next year. But if what he told the Racing Board yesterday was accurate, then some former Gaming Board members and perhaps some current board employees need to be held accountable.
* Crain’s on yesterday’s abrupt retirement of Exelon Utilities CEO Anne Pramaggiore…
A Sept. 23 federal search warrant identified, but did not name, four separate Exelon officials in a request for items “related to” them “and/or any issue supported by any of those businesses or individuals, including but not limited to rate increases.”
Exelon and ComEd disclosed Oct. 9 that they were a focus of the Sandoval probe and that Exelon had established a special committee made up of independent directors to oversee compliance with the federal investigation. Two days later, the search warrant was made public.
A short time before, on Oct. 4, ComEd disclosed in a Securities & Exchange Commission filing that Fidel Marquez, senior vice president at ComEd in charge of government affairs, had retired Oct. 2.
The terse wording in Exelon’s press release didn’t give a reason for Pramaggiore’s retirement. A spokesman declined to comment on whether it had anything to do with the probe.
The official retirement date for Marquez may have been October 2, but word has been going around for a while that he left weeks ago. His Statehouse lobbying credentials were canceled on September 30th.
In addition, the Illinois Senate was served with a search warrant late last month. The lengthy list of things authorities searched for included “items related to ComEd, Exelon, any employee, officer or representative of any of those businesses, Exelon Official A, Exelon Official B, Exelon Official C, Exelon Official D, and/or any issue supported by any of those businesses or individuals, including, but not limited to, rate increases.”
A source with knowledge of the investigation told the Tribune that Pramaggiore is one focus of the ongoing federal probe.
On Tuesday, Pramaggiore declined an interview request through a spokesman at a crisis communications firm. ComEd spokeswoman Jean Medina said she could not comment about Pramaggiore’s retirement beyond what was in a news release.
She is the Chair of the Board of Directors of the Federal Reserve Bank of Chicago, and serves on the Board of Directors for Motorola Solutions, Inc., Babcock and Wilcox Enterprises, the National Safety Council, and several civic and community organizations.
Political insiders say Gov. J.B. Pritzker was completely blindsided by Mayor Lori Lightfoot’s new proposal for a publicly-owned city and state Chicago casino and first read details of her plan in the newspaper.
“This strikes me as a uniquely amateur view of how governing functions,” one insider said.
I mean, doesn’t she already have enough on her plate? The CTU is about to strike, which is going to really complicate her relationships with elected Democrats. The Black Caucus is threatening to hold up the city’s legalized cannabis rollout. She has to unveil and then pass a very difficult budget soon.
I’m pretty sure the governor and his team want to be an ally. And yet, this stuff keeps happening.
State Sen. Terry Link, a key sponsor of the gambling bill, said he warned the mayor this fall during negotiations that the governor was not on board with a city-and-state-owned Chicago casino.
“I told them, ‘The governor is still opposed, so why do you keep bringing this in? Let’s focus on some different ways that we are working on. Let’s focus on that.’ And now the mayor comes out and makes this statement,” Link said. “I can’t figure it out.”
