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City: Departments have overachieved  at cutting their costs

AlexandrHolt Mayor Rahm Emanuel May | Brian Jackson~Sun-Times

Alexandra Holt and Mayor Rahm Emanuel, in May | Brian Jackson~Sun-Times

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Updated: January 20, 2012 8:12AM

Mayor Rahm Emanuel’s administration will announce Monday its cost-cutting has been more effective than projected: $83 million or $8 million more than the $75 million Emanuel targeted when he took office.

Emanuel told department heads when he took office in May that he wanted them to cut all non-essential contracts for city services by 6 percent.

He expected a few of them to come in and complain that it could not be done. None did. So instead of just $17.5 million in savings over what was budgeted, that brought in $23.8 million, Budget Director Alexandra Holt told the Sun-Times Saturday.

The city saved $600,000 by getting rid of cars for senior management.

“For people who don’t need a car for city business, such as myself — in past years I might have been eligible for the Shared Lease program,” Holt said. “There aren’t really going to be any budget emergencies I have to go racing to.”

Had fuel prices not been higher than expected, the city could have saved an additional $500,000 in vehicle costs, she said.

The largest share of savings — $34 million — comes from shrewder use of federal and state grants to reimburse the city for costs on certain programs, she said.

The savings come without many heads rolling. Empty positions went unfilled and were cut from the budget. A few senior staffers were let go, and the number of downtown traffic aides was cut from 72 to 24. Many of those 48 aides who lost their jobs were able to reapply for other jobs in city government.

The city has merged some departments and hired more lawyers to handle cases in-house instead of paying the higher rates at private firms.

“It’s a significant amount of money,” Civic Federation President Laurence Msall said when told of the numbers. “It’s a tribute to the seriousness with which his department heads . . . took his dictate to reduce spending.”

But it’s not time to hoist the “Mission Accomplished” banner just yet, Msall cautioned.

“The city is still in a financial crisis,” Msall said. “It still has a structural deficit. We estimated that at $650 million, and we think about two-thirds of that is eliminated in 2012. And there is still the ticking time bomb of under-funded pensions. But clearly Mayor Emanuel and his team are moving the city in a positive direction with this.”

Emanuel is on vacation, but he issued this statement to tout the better-than-projected savings:

“We have not only followed through on a promise, we have exceeded it,” Emanuel said. “That’s because our first responsibility is to the taxpayers of Chicago, and every day we are finding new ways to be more efficient with the way we do business.”

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