By: Mark Glennon*

“We have more than sufficient cash on hand, and we prepared for a potential economic downturn as part of the projections we released last year for our 2020 budget.” That’s from Mayor Lori Lightfoot’s speech to the City of Chicago Thursday evening.

Is it true? We’ve been trying to assess Chicago’s cash situation for several weeks. If you try as we have you will be frustrated.

The primary source for that information should be the office of the City Treasurer, Melissa Conyears-Ervin. That office is custodian and manager of all cash and investments for the city. It’s responsible for maintaining all records and accounts associated with the city’s operating funds and escrow accounts. The treasurer is also chief investment officer for the city and responsible for managing its investment portfolio.

Chicago Treasurer Melissa Conyears-Ervin

Their site is worthless respecting those functions and anything about liquidity. Sure, you will find information about financial empowerment, ESG – social justice — investing, the Community Catalyst Fund and the like, but anything such as a list of investments or summary of some kind?

Nothing.

You should expect to find at least something like the Illinois Treasurer has always published, showing total cash on hand and how it is invested, which is updated monthly. But go to the “Financial Transparency” tab on the Chicago Treasurer’s site and there’s not a single piece of financial information.

Is anybody even home at the office of the Chicago Treasurer? I emailed the office two weeks ago – before the Coronavirus slowdown — for information or where to look and received no response.

Nor will you find much of use on the sites for Chicago’s Office of Management and Budget or investor relations. Surely the tab for “Liquidity” on the investor relations site would have something on the current cash situation, right? Sorry, the last document there is from 2018.

Yes, you can find documents like the city’s last financial statements – the CAFR – but it is for 2018. Too old.  And there’s the last Budget Overview – but it’s from last fall and provides nothing useful about the city’s current cash situation.

About the only information you will find addressing Chicago’s current lquidity is in Yvette Shields’ recent article in The Bond Buyer. It’s no doubt accurate, but it’s written to address the concerns of bond owners which are very, very different from those of service recipients and taxpayers.

We are not going to try now to assess exactly how dire Chicago’s situation is because, aside from not yet having the information we need, the situation is so fluid and deteriorating so rapidly. Almost all the city’s revenue sources are getting slammed, as is happening around the country. Suffice it to say that, unless the economy’s near standstill ends very soon, the situation will be extraordinarily serious, and Chicago won’t be alone.

We suspect Lightfoot’s real hope, which some other Illinois politicians have said privately, was tipped off in this line from her Thursday speech: “This is a B-sized problem, meaning something that can only be solved with billions in needed stimulus support from the federal government.”

A federal bailout, in other words.

Good luck with that. We will be writing more on that and putting all our effort into getting the information we can to assess the effect of the crisis on Chicago, the state and its other municipalities.

*Mark Glennon is founder of Wirepoints.

 

 

 

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Poor Taxpayer
7 months ago

No Pension should pay more than SS. Not a penny more.
Right now Illinois will be broke before the year is out. They will only be able to write bad checks.
Save Illinois take a pension pay cut and keep it coming or being the Greedy cop, teacher or firemen and destroy the state. There is no money to pay the pensions. DOA

James
7 months ago
Reply to  Poor Taxpayer

Thank God, you don’t need any damn economic studies, probably no education of any note in those topics, no help from professors or even adisors to make such pronouncements. What we need is yet another man who is a stable genious and has great gut instincts as well. Obviously you are such a man–our hero! Thanks for the great solution nobody else has even considered.

debtsor
7 months ago
Reply to  James

Thanks for making it official that you have Trump Derangement Syndrome. Go take your terminal disease elsewhere, like Capitol Fax or something.

James
7 months ago
Reply to  debtsor

Now, now, up your mother told you to play nice, didn’t she? We don’t all have to agree. Someone whose name I can’t recall is credited with saying when all people think alike no one thinks very much. That seems to apply here very often. Everyone agrees to some stupid comment and it becomes the group’s “truth.” I love to tweak dim-witted right wingers,

debtsor
7 months ago
Reply to  James

“I love to tweak dim-witted right wingers,”

News flash, you’re not tweaking anyone. Your TDS affects your logic, rationality and ability to think clearly. You’re not accomplishing what you think you’re accomplishing. And you’ll never be any good at trolling with TDS plaquing up your neurons. You’re just embarrassing yourself. You have delusions of ‘tweaking right wingers’.

7 months ago

Thanks for this. I did assume that somewhere there’d be a document backing the Mayor’s assertion. The Treasurer’s site does include an “Investment Policy” section which describes 18 types of “authorized investments” which the City may make. Most seem reasonable but one could certainly imagine some being scary depending on interpretation. For instance, dollar-denominated foreign sovereign bonds, or bonds of local governments within Illinois, which were rated at least A- at the time of purchase, and may have a maturity up to 30 years. Also Israel Bonds, or corporate bonds (any Boeing in there?) as long as they were well-rated… Read more »

Harry L Olden
7 months ago

There can be no doubt that the Democratic Party that has been raping the people of Chicago and spreading their disease of corruption throughout the entire State of Illinois for decades is once again lying to the gullible citizens that continually elect these criminals into office. Idiots have created this monster…learn to live with what you create.

Poor Taxpayer
7 months ago

Either Kiss your A$$ Good Bye or Kiss Illinois Good Bye.
Choice is yours, better make a smart one for your families sake.

s and p 500
7 months ago

We’ve basically been hit with something equivalent to an outer space invasion, so no, we’re not prepared and the fact that the feds told Puerto Rico and Detroit to get lost isn’t promising. But they’re limiting purchases of paper towels and canned foods at Target so that’s something.

mqyl
7 months ago

“This is a B-sized problem, meaning something that can only be solved with billions in needed stimulus support from the federal government.”

Maybe if Chicago hadn’t mismanaged its finances for so many years, this would be an M-sized problem instead.

Tom Paine's Ghost
7 months ago

All of Chicago’s cash-in-hand has been put to work: Momma dollar and Daddy dollar are sitting in a wire in-out basket and have been locked into a vault to make baby dollars.

debtsor
7 months ago

The cash situation at city hall ALWAYS involves letter sized white envelopes stuffed with $$$, hand delivered on a regular basis. It’s the Chicago Way!

joe blow
7 months ago

Did you check the couch cushions at city hall?

also this statement by LL ““We have more than sufficient cash on hand, and we prepared for a potential economic downturn as part of the projections we released last year for our 2020 budget.”

is a complete and total lie, and you know it, no politician on earth modeled a budget for this kind of economic catastrophe!

NB-Chicago
7 months ago

Fake news—illinois dem machine style. Dont want to put us chumbalones in a panic ( anymore than we already are)

Susan
7 months ago

Here is an opportunity for citizens to use quarantine time productively: go through every local public unit of government consent agenda of expenditures line by line, determine legitimacy of each payment. Extraordinary powers are being seized by small governments. The least citizens can do is document and analyze every action and especially expenditure. Who is getting public money/contracts, who is denied money, what if any relationships exist between grantors and recipients? Document, document, document. During this crisis there is nothing we can do but afterward there can be analysis of anything improper . Vigilance of government behavior can provide a… Read more »

Riverbender
7 months ago
Reply to  Susan

Pretty overly optimistic view there…not criticizing but expecting Illinois voters to read and interpret, while correct, is far beyond their capabilities in my estimation.

Mike Williams
7 months ago

Mark, thanks anyway for trying. Next assignment….Loch Ness.

Freddy
7 months ago
Reply to  Mike Williams

I think Loch Ness is in my basement hiding behind my 2 rolls of toilet paper. Could be a mouse.

Bob Out of Here
7 months ago
Reply to  Freddy

Don’t understand this obsession over hoarding toilet paper. This is the Corona virus, not the White Castle virus.