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Rahm Emanuel cutting budget by $75 mil.

On his first day office Mayor Rahm Emanuel announces $75 millisavings for current city budget Chicago Dept. Fleet Mgnt. 1658

On his first day in office, Mayor Rahm Emanuel announces $75 million in savings for the current city budget at the Chicago Dept. of Fleet Mgnt. 1658 north throop. | Brian Jackson~Sun-Times

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Updated: August 31, 2011 12:37AM

Mayor Emanuel on Tuesday ordered $75 million in cuts to former Mayor Daley’s final budget, an admittedly “symbolic” launch to the more difficult job of confronting Chicago’s $1.2 billion-a-year structural deficit.

“We are very pleased that his first day in office is focused on the city’s finances, because we believe that will be his greatest challenge,” said Civic Federation President Laurence Msall.

“We don’t look at this as mission accomplished. It’s the first step on a long journey to financial stability that is going to require even greater sacrifices, personnel reductions and prioritizing what services the city will continue to provide and which ones they can no longer afford.”

The $75 million in cuts target everything from city grants, vehicles and office leases to management payrolls, outside legal expenses and employees paid to stay home after being injured on the job.

“The symbolism of this is not lost on anybody. It’s Day One. $75 million is what I pledged,” Emanuel said during a news conference at the Department of Fleet Management, 1658 N. Throop.

“It is a blueprint for how we’re gonna deal with the larger, 10 percent reduction in the entire budget. It’s not gonna come from one place. … It will come from different areas. No one area will bear that burden.”

Daley’s final budget was precariously balanced by using parking meter reserves, debt refinancing and other one-shot revenues to hold the line on taxes.

Daley’s budget also assumes $32 million in savings generated by a full year of union concessions not yet negotiated. An agreement that calls for unpaid furlough days and that substitutes comp time for cash overtime expires June 30.

Asked Tuesday what demands he plans to make of union leaders, Emanuel threw the ball back in labor’s court.

“I’ve come up with up with $75 million in savings. I’ve asked them to come forward with ideas to hit that $16 million savings” for the next six months of concessions, Emanuel said.

“I know they want to get rid of the furlough days. [But] I have to reconcile a contract with labor that calls for something that ends June 30 with a budget that assumes something else. Labor will be my partner in finding that savings.”

Chicago Federation of Labor President Jorge Ramirez and Lou Phillips, business manager of Laborers Local 1001, could not be reached for comment.

Of the $75 million in cuts announced Tuesday, the biggest ticket item — $31.2 million — would come from reducing administrative costs tied to the $1.9 billion in grant money the city receives each year.

In some cases, overhead was too high, the mayor said. In other cases, Chicago taxpayers were forced to pick up the tab because the city was not aggressive enough in seeking multi-year grants.

Other cuts include:

$17.5 million by freezing spending on “non-essential” contracts.

$5.5 million by requiring department heads to reduce senior management payroll by 10 percent — either with pay cuts, layoffs or a combination of the two.

$5 million apiece by better coordinating construction projects and cutting back on leased and rental space.

$3.5 million by consolidating finance, procurement, personnel and technology functions in individual departments.

$3 million by reducing outside legal counsel, performing work in-house and asking law firms to do pro-bono work.

$2.3 million, in part by paying traffic control aides by the hour.

$1.5 million by reducing the number of vehicles the city owns and replacing older vehicles with more fuel-efficient ones.

◆ $500,000 by bringing 60 injured employees back to work in less physically-demanding jobs.

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