chicago's $63 billion debt crisis

7/29/2019 Chicago's $63 billion debt crisis

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Additional resources: illinoispolicy.org

190 S. LaSalle St., Suite 1630, Chicago, IL 60603 | 312.346.5700 | 802 S. 2nd St., Springfeld, IL 62704 | 217.528.8800

ILLINOIS POLICY INSTITUTE

SPECIAL REPORT

The hidden bill:Chicago taxpayers and the looming crisis

BUDGET & TAX

SEPT. 12, 2013


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Contents

Executive Summary .............................................................................................................................................................................................. 3

Chicagos pension problems ........................................................................................................................................................................... 5

City of Chicago total debt: $48.9 billion ..................................................................................................................................................... 6

Pension debt: $36 billion .................................................................................................................................................................................... 7

Long-term debt: $12 billion ................................................................................................................................................................................ 9

Health insurance debt: $900 million .............................................................................................................................................................. 10

Chicago Public Schools total debt: $19.8 billion ................................................................................................................................. 11

Pension debt: $11.1 billion .............................................................................................................................................................................. 12

Long-term debt: $5.6 billion ............................................................................................................................................................................ 13

Health insurance debt: $3.1 billion ................................................................................................................................................................ 13

Chicagos pro-rata share of Chicago Transit Authority total debt: $4.8 billion ...................................................................... 14

Chicagos pro-rata share o the CTAs pension debt: $800 million ....................................................................................................... 15

Chicagos pro-rata share o the CTAs long-term debt: $4.0 billion ....................................................................................................... 16

Chicagos pro-rata share o the CTAs health insurance debt: $62 million surplus ............................................................................ 16

Chicago Park District total debt: $1.6 billion ............................................................................................................................. 17

Pension debt: $630 million .............................................................................................................................................................................. 18

Long-term debt: $900 million .......................................................................................................................................................................... 19

Health insurance debt: $40 million ................................................................................................................................................................ 19

Chicagos pro-rata share of Cook County and Cook County Forest Preserve total debt: $9.7 billion ......................... 20

Chicagos 2012 pro-rata share o Cook County pension debt: $6.6 billion ........................................................................................ 21

Chicagos pro-rata share o Cook County long-term debt: $2.1 billion ................................................................................................ 22

Chicagos pro-rata share o Cook County health insurance debt: $1 billion ....................................................................................... 23

Chicagos pro-rata share of Metropolitan Water Reclamation District total debt: $2.1 billion ....................................... 24

Chicagos 2012 pro-rata share o Cook County pension debt: $551 million ..................................................................................... 25

Chicagos pro-rata share o MWRD long-term debt: $1.4 billion ........................................................................................................... 26

Chicagos pro-rata share o MWRD health insurance debt: $177 million ............................................................................................ 27

Sources and methodology ............................................................................................................................................................................. 28

Endnotes ................................................................................................................................................................................................................ 31


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illinoispolicy.org | 3

Chicagos ofcial debt totals $63.2 billion*

All debt and obligations in billions Pensions Long-term debtRetiree health

insurance Total debt

Total debt andobligationsper capita

City o Chicago

City o Chicago - $12.0* $0.5 $12.4 $4,600

Fireman's Annuity and Beneft Fund $3.0 - $0.05 $3.1 $1,100

Chicago Police Pension Fund $6.9 - $0.2 $7.1 $2,600

Municipal Employees' Annuity and Beneft Fund $8.4 - $0.2 $8.6 $3,200

Laborers Pension and Welare Funds $1.0 - $0.04 $1.1 $400

Subtotal $19.4 $12.0 $0.9 $32.2 $11,900City o Chicagos sister governments

Chicago Public Schools $8.0 $5.6 $3.1 $16.7 $6,200

Chicago Transit Authority (pro-rata) $0.8 $4.0 -$0.06 $4.8 $1,800

Chicago Park District $0.4 $0.9 $0.04 $1.4 $500

Subtotal $9.2 $10.6 $3.1 $22.9 $8,400

Chicagos pro-rata share o Cook County governments

MWRD $0.6 $1.4 $0.2 $2.1 $800

Cook County and Forest Preserve $3.0 $2.1 $1.0 $6.0 $2,200

Subtotal $3.5 $3.5 $1.2 $8.1 $3,000Total debt and obligation burden or Chicago taxpayers $32.1 $26.1 $5.2 $63.2 $23,300

Source:City o Chicago; Chicago Public Schools; Chicago Transit Authority; Chicago Park District; Cook County; Cook County Forest Preserve;Civic Federation; Metropolitan Water Reclamation District; all associated pension unds; U.S. Census Bureau; Commission on Government Forecastingand Accountability.*Note:2012 data used where possible, most recent data available used otherwise. Numbers may not add due to rounding. City o Chicago long-term debtexcludes OHare and Midway bonds. Long-term debt rom all governments is rom 2011, with the exception o the city o Chicago, which is rom 2012. SeeSources and Methodology or more inormation.

The city o Chicago has long been regarded as an economicengine o the Midwest. It is home to some o the countryslargest industries and more than 30 o the nations Fortune500 companies. Chicago is accessible by road, rail and water,and is located in a state that boasts an abundance o naturalresources.

But decades o fscal mismanagement by governmentagencies in Chicago have put the metropolis at a crossroads.In July 2013, the city o Chicago released a grim budget reportthat showed that the city owed billions o dollars in debt andununded pension and health insurance liabilities.

But the city Chicago is not the only government agency thacity residents pay taxes to taxpayers also und the operationsChicago Public Schools, the Chicago Transit Authority, theChicago Park District and a large share o Cook County.

This is the frst report that adds together all the debts andliabilities o the major government units operating in Chicago

a necessary step in ully understanding how much debtChicago taxpayers are expected to shoulder.

All told, Chicago residents are ofcially on the hook or $63.2billion in government pensions, health insurance and other debtThis staggering fgure totals more than $23,000 per Chicagoresident, or more than $61,000 per household.

Executive summary


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Chicago debt totals $86.9 billion once adjusted by Moodys*

All debt and obligations in billions Pensions Long-term debtRetiree health

insurance Total debt

Total debt andobligationsper capita

City o Chicago $36.0 $12.0* $0.9 $48.9 $17,900

Chicagos sister governments (CTA pro-rata) $12.5 $10.6 $3.1 $26.2 $9,700

Cook County governments (Chicago's pro-rata

share, based on population)

$7.2 $3.5 $1.2 $11.8 $4,300

Total debt and obligation burdenor Chicago taxpayer $55.7 $26.1 $5.2 $86.9 $32,000

Source:Moodys Investors Service; city o Chicago; Chicago Public Schools; Chicago Transit Authority; Chicago Park District; Cook County; Cook CountyForest Preserve; Civic Federation; Metropolitan Water Reclamation District; all associated pension unds; U.S. Census Bureau; Commission on GovernmentForecasting and Accountability.*Note:Numbers may not add due to rounding. Moodys data unavailable or CTA, Forest Preserve and MWRD. Moodys estimates or Chicago and CookCounty municipal data are rom 2012; Moodys estimates or CPS and CPD are rom 2011. City o Chicago long-term debt excludes OHare and Midwaybonds. Long-term debt rom all governments is rom 2011, with the exception o the city o Chicago, which is rom 2012. Most recent available data used;see Sources and Methodology or more inormation.

Even these fgures grossly understate the severity o theproblem.

Thats because the ofcial pension liabilities are underestimated.Pension unds have long assumed unrealistically highinvestment returns, which make the unds look healthierthan they actually are. Moodys Investors Service nowcalculates ununded pension liabilities using more appropriatediscount rates.

New Moodys methodology reveals that Chicagos unundedpension liabilities are at least $23 billion higher than whatsofcially reported. Today, the systems have only 31 cents orevery dollar they should have to make necessary pensionpayouts in the uture.

That means Chicago taxpayers ace $86.9 billion in debt andununded liabilities under new Moodys methodology. Thats$32,000 per Chicago resident and more than $84,000 orevery Chicago household.

Chicago also aces the risk that subsidies rom the stateo Illinois which is nearing insolvency may be reducedor eliminated. The units o government that operate withinChicagos borders depend on billions o dollars in stateunds. Chicago Public Schools, or CPS, receives more than$1.8 billion in state education support, and Chicago TransitAuthority, or CTA, receives millions more.1 Any cuts in thoseunds will only increase the pressure on Chicagos fnances.

Chicagos fscal squeeze is already threatening the citysability to provide core services. CPS has laid o thousandso sta and closed nearly 50 schools,2 while the citys crimerate is among the highest in the nation. When taxpayers stopreceiving the services they are paying or, theyll leave. Chicagohas already lost nearly 200,000 people since the 2000 census

meaning there are ewer taxpayers let to pick up the citysgrowing debt. Taxpayers should be worried. Theyll need to seebig and bold reorms to know theyre not taken or granted.

Governments in the state, county and city o Chicago canchange course. It will take bold reorms to stabilize Chicagosfnances, protect the citys taxpayers and restore confdence inthe citys uture.

A necessary starting point is to fx the citys pension crisesChicago needs comprehensive pension reorm that ends theaccrual o defned beneft liabilities, protects what workershave already earned and empowers government workers with401(k)-style retirement plans. It must also cap the growing

debt burden and pay down existing debts in a responsiblemanner. Finally, each unit o government in Chicago musrein in spending and open up union contracts to renegotiateaordable levels o benefts and wages bringing labor costswhich are the key driver o the citys costs, in line with what itstaxpayers can aord.

Executive summary


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Ofcially reported ratios vs. ratios under Moodys new methodologyPension unding levels 2012 Percent

undedOfcial valuation

(year)Moodys valuation

level (year)

City o Chicago

Fireman's Annuity and Beneft Fund 25% -- --

Chicago Police Pension Fund 31% -- --

Municipal Employees' Annuity and Beneft Fund 38% -- --

Laborers Pension and Welare Funds 56% -- --

Subtotal 35% 35% (2012) 23% (2012)City o Chicagos sister governments

Chicago Public Schools 54% 60% (2011) 48% (2011)

Chicago Transit Authority 59% -- --

Chicago Park District 51% 58% (2011) 44% (2011)

Subtotal 54% --

Cook County governments

Metropolitan Water Reclamation Retirement Fund 50% -- --

Cook County Employees' and Ofcers' Annuity and Beneft Fund 58% 58% (2012) 39% (2012)

Forest Preserve District Employees' Annuity and Beneft Fund 63% -- --

Subtotal 57% -- --Source:Commission on Government Forecasting and Accountability ; Moodys Investors Service; city o Chicago; Chicago Public Schools; Chicago TransitAuthority; Chicago Park District; Cook County; Cook County Forest Preserve; Civic Federation; Metropolitan Water Reclamation District; all associatedpension unds.Note:Adjusted unding ratios calculated with equation [ assets/(assets+adjusted ununded pension liability)] Most recent available data used; see Sourcesand Methodology or more inormation. City o Chicago Moodys data is only provided in aggregate numbers or all our Chicago unds.

2012 Moody's Adjusted201220071998

84%

67%

43%

31%

Aggregate unding ratios have allensince 1998

Includes city o Chicago, CPS, CTA and CPD*

Source:Commission on Government Forecasting and Accountability;Moodys Investors Service; city o Chicago; Chicago Public Schools;Chicago Transit Authority; Chicago Park District; all associated pensionunds.Note:Moodys estimate or city o Chicago is rom 2012. Moodys estimatesor CPS and CPD are rom 2011. Moodys estimate or CTA is unavailable,so ofcial numbers used as conservative assumption. Funding ratio oundby dividing assets by the sum o assets and ununded pension liability. Doesnot include Cook County.

Chicagos quickly rising per capita debt is largely a result oshortalls in the pension unds. When added together, thecity o Chicago, Chicago Public Schools, Chicago TransitAuthority (adjusted based on service population) and Chicago

Police Department only have 31 cents or every dollar theyshould have today in order to make necessary pension payoutsin the uture.

Chicagos pension problems

These unding levels are conservative estimates becauseMoodys has not yet released its calculations or MetropolitanWater Reclamation District, Cook County Forest Preserve orChicago Transit Authority. Moodys has also not updated its

2011 calculation or Chicago Public Schools or Chicago ParkDistrict. Each unding ratio will decrease signifcantly under thenew discount rates.

Chicagos Pension problems


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City o Chicago total debt: $48.9 billion

The city o Chicago provides core services to the residentso Chicago, including services such as public saety andfre protection. The citys budget doesnt include public

transportation, education or park services, which are providedby its sister governments.

City o Chicago ofcial debt totals $49 billion(in billions)

Fiscal year 2007 2012 2012 Moodys adjusted

Long-term debt $8.9 $12.0* $12.0

Ununded health insurance liability $1.5 $0.9 $0.9

Ununded pension liability $9.0 $19.4 $36.0Total Debt $19.7 $32.2 $48.9

Source:Moodys Investors Service; city o Chicago and all associated pension unds; Commission onGovernment Forecasting and Accountability; Civic Federation*Note:Numbers may not add due to rounding. Most recent available data used; see Sources and Methodology or more inormation, long term debt excludesOHare and Midway bonds.

The city o Chicago has a $6 billion total budget $3 billiono which is used or general operating expenses.3 Chicagoemploys approximately 33,500 city workers, including police

ofcers, frefghters and municipal workers.4

In total, the city o Chicago has $49 billion in debt and unundedpension and health insurance liabilities.

Chicago debt and liabilities have grown rapidly in recent years.The citys total ofcial debt jumped to $32.3 billion in 2012rom $19.7 billion in 2007. That means the debt burden perhousehold jumped to more than $31,000 rom nearly $19,000.

Chicagos increasing debt triggered a rare triple-notch credit

downgrade in July o 2013 by Moodys Investors Service. Therationale or the downgrade was based on new methodologythat showed the citys pension debt nearly doubling to $36billion, pushing the total debt burden to $48.9 billion.

The citys increasing pension contributions will weigh heavilyon the budget in the next ew years. The citys 2013 AnnuaFinancial Analysis notes that even under the most optimisticprojections, the city will continue to experience a sizableoperating budget shortall or several years. Under the citysbest-case scenario, Chicagos $338.7 million budget gap wilnearly triple to $918 million by the end o 2016. But using lessrosy assumptions, the city could instead be looking at a $1.5billion budget hole.

While the uture budget gap is not actored into the total debtfgures, these projections help illustrate the true severity oChicagos fnancial crisis.

City o Chicago


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Year 2006 2007 2008 2009 2010 2011 2012

Firemens Annuity and Beneft Fund o Chicago $1.8 $1.8 $2.0 $2.2 $2.5 $2.8 $3.0Policemens Annuity and Beneft Fund o Chicago $3.9 $4.0 $4.4 $4.9 $5.5 $6.1 $6.9

Municipal Employees Annuity and Beneft Fund o Chicago $3.0 $3.1 $3.7 $4.5 $5.8 $6.7 $8.4

Chicago Laborers Pension and Welare Funds $0.1 $0.1 $0.2 $0.4 $0.5 $0.7 $1.0

Total ununded pension liability $8.8 $9.0 $10.3 $11.9 $14.3 $16.3 $19.4

Ofcial city o Chicagoununded pension liability totals $19.4 billion

(in billions)

Source:City o Chicago and all associated pension unds; Commission on Government Forecasting and AccountabilityNote:Numbers may not add due to rounding. Most recent available data used; see Sources and Methodology or more inormation

Pension debt: $36 billion

The city o Chicago runs our pension unds: fre, police,municipal and labor. 5 Their ofcial names are as ollows:

Firemens Annuity and Beneft Fund o Chicago

Policemens Annuity and Beneft Fund o Chicago

Municipal Employees Annuity and Beneft Fund o Chicago

Chicago Laborers Pension and Welare Funds

The city is responsible or unding these retirement unds andreporting their fnancial health. Across all our unds, the ofciashortall currently stands at $19.4 billion dollars.

City o Chicago


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City o Chicago pension shortalltotals $36 billion (in billions)

$19.4

$36.0

Official unfunded pension liablity Moodys adjusted unfunded pension liablity

Source:Moodys Investors Service; city o Chicago and all associated pen-sion unds; Commission on Government Forecasting and AccountabilityNote:Most recent available data used; see Sources and Methodology ormore inormation

City o Chicago pensions only23% unded

76%

61%

35%

23%

1998 official 2007 official 2012 official 2012 Moodys adjusted

Source:Moodys Investors Service; city o Chicago and all associatedpension unds; Commission on Government Forecasting and Accountability.Note:Funding ratios derived by dividing assets by assets plus unundedliability. Most recent available data used; see Sources and Methodology ormore inormation.

The $19.4 billion fgure grossly underestimates the pensionshortall. Thats because these unds assume unrealisticallyhigh investment returns generally around 8 percent. MoodysInvestors Service now calculates the ununded liability orthe Chicago unds using more realistic assumptions. UnderMoodys methodology, Chicagos total pension debt jumps to$36 billion.

Across Chicagos our pension unds, there are about 51,000active employees.6 With $36 billion in ununded liabilities,this means that there is approximately $700,000 in unundedpension liabilities or every active employee in the system.

A healthy pension und should be 100 percent unded, toensure it will meet its uture obligations. Chicagos 2012adjusted unding level was 23 percent.

City o Chicago


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Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Long-term debt $7,552 $8,079 $8,050 $8,529 $8,898 $9,197 $9,563 $10,616 $11,174 $11,964 $11,833Debt Service $495 $502 $575 $560 $724 $821 $658 $594 $702 $738 $914

City o Chicagos long-term debt and debt service

(in millions)

Source:City o Chicago Note: Numbers may not add due to rounding. Excludes OHare and Midway bonds.

Long-term debt: $12 billion

Some city o Chicago bonds are unded with property taxrevenue while others are unded with sales tax revenue andmotor uel taxes. Ater removing OHare and Midway revenuebonds (which are paid with user ees imposed on airlines),

Chicago holds approximately $12 billion in outstanding longterm debt a 57 percent increase since 2003.The city oChicago is scheduled to spend more than $900 million dollarsin debt service payments in 2013.

City o Chicago


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City o Chicago ununded health insurance liability

totals nearly $900 million (in millions)

Year 2007 2008 2009 2010 2011 2012

City o Chicago $1,063 $787 $533 $391 $471 $471

Police $179 $170 $165 $165 $166 $169

Municipal $218 $223 $224 $224 $163 $162

Labor $41 $42 $42 $41 $38 $39

Fire $47 $47 $48 $48 $47 $46

Total $1,548 $1,269 $1,012 $869 $885 $887

Source:City o Chicago and all associated pension undsNote:Numbers may not add due to rounding. Most recent available data used; see Sources and Methodology or more inormation. Diagonal lines through2012 city o Chicago indicates that actuarial valuation has not been released yet, so the 2011 number is used as an estimate.

Health insurance debt: $900 million

The city o Chicago operates our pension unds, each o whichprovide retiree health insurance benefts. As result o a legalsettlement between the city and government workers, the cityo Chicago is also required to provide supplemental health

insurance benefts on top o those oered by its our pensionunds. The city o Chicago has put aside virtually no money topay or these retiree health insurance benefts.

City o Chicago


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Chicago Public Schools ofcial debt totals $19.8 billion(in billions)

Fiscal year 2007 2012 Moodys adjusted*Long-term debt $4.5 $5.6 $5.6

Ununded health insurance $2.0 $3.1 $3.1

Ununded pension liability $2.9 $8.0 $11.1

Total debt $9.4 $16.7 $19.8Source:Moodys Investors Service; Chicago Public Schools and Chicago Teachers Pension Fund; Commission on Government Forecasting andAccountability; Civic Federation.Note:Numbers may not add due to rounding. Moodys has not released 2012 CPS adjusted pension liability, so Moodys 2011 fgure used as aconservative estimate. Moodys long-term debt data are rom 2011. Most recent available data used; see Sources and Methodology or more inormation.

Chicago Public Schools total debt: $19.8 billion

The Chicago Public School system, or CPS, is responsibleor 23,000 teachers and the education o more than 400,000students.7 CPS has an operating budget o more than $5

billion and expects to ace defcits in the range o $1 billion.8

Including long-term debt and ununded pension and healthinsurance liabilities, CPSs debt burden totals nearly $20billion.

Moodys recently acknowledged the severity o CPSs budgetwoes and downgraded the school systems $6.3 billion in

general obligation debt by one notch to A3 rom A2.9 CPSscredit rating now stands just our levels above junk bond status

Moodys downgrade was a result o the rating agencys

recalculation o CPSs 2011 pension debt. In 2011, CPSreported an ofcial pension debt o $6.8 billion dollars.10 Undeits new methodology, Moodys estimates CPSs pensiondebt is $4.3 billion higher than ofcial estimates totalingapproximately $11 billion.11

Chicago Public Schools


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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ununded pension liability $5 $385 $917 $1,714 $2,789 $3,088 $2,918 $3,134 $4,190 $5,402 $6,831 $8,012

Chicago Public Schoolsununded pension liabilities total $8 billion

(in millions)

Source:Chicago Public Schools; Chicago Teachers Pension Fund; Commission on Government Forecasting and AccountabilityNote:Most recent available data used; see Sources and Methodology or more inormation

Pension debt: $11.1 billion

The Chicago Teachers Pension Fund, or CTPF, serves asthe pension und or the Chicago Public Schools system.

The ofcial estimate or CPSs ununded pension liability isapproximately $8 billion, up rom $5 million in 2001.

Officialunfunded pension liability

Moodys adjustedunfunded pension liability

$6.8

$11.1

Chicago Public Schools 2011

ununded pension liability totals$11.1 billion(in billions)

Source:Moodys Investors Service; Chicago Public Schools; ChicagoTeachers Pension Fund; Commission on Government Forecasting andaccountability

Moodys Investors Service has not yet adjusted CPSsununded pension liability or 2012 under its new methodology,but there will be a substantial increase in pension debt oncethe adjustment is made.

The ofcial 2011 CPS ununded pension liability totals $6.8billion. But under Moodys new methodology, the 2011ununded pension liability jumps to $11.1 billion.

The CPS system currently has about 30,400 activeemployees.12 With an adjusted ununded pension liability o$11.1 billion, CPS has approximately $365,000 in unundedpension liabilities or every active employee in the system.

Chicago Public Schools 2011 pen-sions only 48% unded

Source:Moodys Investors Service; Chicago Public Schools; Chicago

Teachers Pension Fund; Commission on Government Forecasting andaccountability

97%

80%

60%

48%

1998 official 2007 official 2011 official 2011 Moodys adjusted

CPSs total ofcial pension unding level was at 97 percent in1998. Under new Moodys methodology, CPSs total undinglevel dropped to 48 percent in 2011. That means that CPS hasonly 48 cents out o every dollar it needs today to pay or itsuture liabilities.

CPS has maxed out its ability to pay or these pension liabilitieswith property taxes. CPS levied $2.1 billion in property taxes in2013.13 And it increased property taxes by $62 million to do so the maximum amount it could under the current property taxlaw.14 Because CPSs ability to urther increase property taxesis limited, it will have to look elsewhere or additional undsChicago mayor Rahm Emanuel also suggested increasingCPSs property tax limits, which would allow the city to pushtaxes even higher.15



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Long-term debt: $5.6 billion

In total, CPS has $5.6 billion in outstanding long-term debt.

Chicago Public Schools long-term debtand debt service have increased since 2007 (in millions)

Year 2007 2008 2009 2010 2011

Long-term debt $4,539 $4,697 $4,614 $5,266 $5,582

Debt service $341 $260 $301 $384 $347

Source: Civic Federation, Chicago Public Schools

Year 2007 2008 2009 2010 2011 2012

Ununded health insurance liabilities $1.97 $2.36 $2.62 $2.83 $3.04 $3.08

Health insurance debt: $3.1 billionCPSs health insurance benefts are paid out o the generalpension und. The systems ununded health insurance

liability is the largest in Chicago and has grown by 56 percensince 2007.

Source: Chicago Public Schools; Chicago Teachers Pension Fund



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Chicagos pro-rata share o Chicago Transit Authority total debt:$4.8 billion

The Chicago Transit Authority, or CTA, is a municipal corporationthat provides public transportation services to the residents

o Chicago and 35 suburbs.16

The CTA operates the nationssecond-largest public transportation system and is expected toacilitate more than hal a billion rides in 2013.17

The CTA has a 2013 operating budget o approximately $1.4billion more than $900 million o which is used to coverannual labor expenses.18

Chicago residents are not entirely responsible or CTAs long-term liabilities and debts. This is because CTA covers Chicago

and 35 non-Chicago suburbs. To adjust or Chicagos share, aldata in this section have been multiplied by 71 percent, which

is Chicagos population divided by CTAs service population.19

Chicagos share o the organizations total debt has increasedby almost $2 billion since 2007. Its share o CTAs long-termdebt and ununded pension and health insurance liabilities nowtotal $4.8 billion more than three times CTAs 2013 operatingbudget. Part o the growth in CTA debt is due to a $1.9 billionbond issue in 2008 the proceeds o which were used to undCTAs pension and health insurance liabilities.20

Chicagos pro-rata share o Chicago Transit Authority

ofcial debt totals $4.8 billion(in billions)

Fiscal year 2007 2012

Long-term debt $1.6 $4.0

Ununded health insurance liability $0.02 $-0.1

Ununded pension liability $1.1 $0.8

Total debt $2.8 $4.8

Source:Chicago Transit Authority; Retirement Plan or Chicago Transit Authority Employees; CTA Retiree Health Care Trust; Commission on GovernmentForecasting and Accountability; Civic Federation.

Note:Numbers may not add due to rounding. CTA has not yet released ofcial 2012 pension fgures, so 2012 COGFA projections used instead. 2012 long-term debt is rom 2011. Most recent data used; see Methodology and Sources or more inormation.

Chicago Transit Authority


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Chicagos pro-rata share o the CTAs pension debt: $800 million

The Retirement Plan or Chicago Transit Authority Employeesis the pension und controlled by the Chicago Transit Authority,or CTA, or its employees. This und currently is operating witha $1.1 billion ununded pension liability. Chicagos share o thisdebt is $814 million, based on service population.

CTA issued $1.9 billion in debt in 2008 to pay down its pension

and health insurance obligations.21 That move cut the pensiondebt by more than hal between 2007 and 2008. But thatsonly because CTA exchanged one type o debt or another.

Even ater the debt swap, Chicagos share o CTAs unundedpension liabilities continued to grow. Pension debt increasedto more than $800 million in 2011 rom approximately $450million in 2008. With more than 8,700 active employees, CTAnow holds nearly $130,000 in pension debt (unadjusted) orevery active CTA employee.22

Chicagos pro-rata share o the Chicago Transit Authoritysununded pension liabilities total $814 million

(in millions)

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ununded pension liability $489 $636 $800 $986 $1,096 $1,036 $1,129 $452 $463 $578 $814 $814

Moodys Investors Service has not yet adjusted CTAs pensiondebt using its new methodology, but there will be a substantialincrease in pension debt once the adjustment is made.

Source:Chicago Transit Authority; Retirement Plan or Chicago Transit Authority Employees; Commission on Government Forecasting and Accountability.Note:Diagonal line indicates that CTA has not yet released 2012 fgure, so 2012 COGFA projection used instead.

Chicago Transit Authoritys pensionunding levels have increased since

2007 due to bond sale

Source:Chicago Transit Authority; Retirement Plan or Chicago TransitAuthority Employees; Commission on Government Forecasting andAccountability.*Note:CTA has not yet released 2012 fgure, so 2012 COGFA projectionused instead.

77%

37%

59%*

1998 2007 2012



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Chicagos pro-rata share o the CTAs long-term debt: $4 billion

Chicagos share o CTAs long-term debt totals $4.0 billion, a145 percent increase since 2007.

Chicagos pro-rata share o Chicago Transit Authorityslong-term debt has more than doubled since 2007

(in millions)

Year 2007 2008 2009 2010 2011

Long term debt $1,647 $3,334 $3,285 $3,673 $4,028

Debt service $55 $73

Source:Civic FederationNote:Excludes Certifcates o Participation. 2007-2009 debt service data unavailable.

Chicagos pro-rata share o CTAs health insurance debt:$62 million surplus

CTA has almost entirely moved its health insuranceobligations to a separate retirement und as o 2008.23 This und was fnanced with debt and is currently operating a$62 million surplus.

Chicagos pro-rata share o the Chicago Transit Authoritys healthinsurance und is currently running a debt-unded surplus (in millions)

Year 2006 2007 2008 2009 2010 2011

Ununded health insurance liabilities $1,212 $16 $52 $77 -$59 -$62

Source:Chicago Transit Authority; Chicago Transit Authority Retiree Health Care Trust.Note:The $13 million letover health insurance defcit in the CTA has been subtracted rom the current surplus o the CTA Retiree Health Fund to obtainthe net surplus.



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Chicago Park District total debt: $1.6 billion

The Chicago Park District, or CPD, is responsible or overseeingmuseums, beaches, parks, pools and other attractions. CPDhas an annual operating budget o $410.9 million and employs

approximately 3,000 workers.24 CPDs debt burden totalsmore than $1.6 billion, including debt, health insurance andpension liabilities.

Chicago Park District ofcial debt totals $1.6 billion(in millions)

Fiscal year 2007 2012 Moodys adjusted*

Long-term debt $837 $944 $944

Ununded health insurance liability $47 $40 $40

Ununded pension liability $185 $426 $630

Total Debt $1,070 $1,410 $1,610

Source:Chicago Park District; Park Employees Annuity and Beneft Fund; Moodys Investors Service.Note:Numbers may not add due to rounding. Moodys has not released 2012 CPD adjusted pension liability, so 2011 fgure used as a conservativeestimate. Long-term debt data are rom 2011. Most recent-available data used. See Sources and Methodology or more inormation.

Chicago Park District


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Pension debt: $630 million

The Park Employees Annuity and Beneft Fund o Chicago isthe pension und CPD controls or its employees. The ofcialCPD pension shortall totals $426 million. But under Moodysmethodology, the districts total 2011 shortall jumps to $630million.25

CPD has nearly 3,000 active members in its pension plan.26

With an ununded pension liability o $630 million, this means

CDP has approximately $210,000 in ununded pension liabilitieor every active employee in the system.

Although Moodys has not yet calculated the park districtadjusted pension debt or 2012, the lower discount rates wresult in a substantial increase in the ununded pension liability

Year 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ununded pension liability $18 $28 $22 $41 $77 $128 $147 $173 $185 $209 $270 $314 $355 $426

Chicago Park Districts 2012 ofcial unundedpension liability totals $426 million

(in millions)

Source:Chicago Park District; Park Employees Annuity and Beneft Fund o Chicago

Chicago Park District 2011 ununded

pension liabilities total $630 million(in millions)

Source:Chicago Park District; Park Employees Annuity and Beneft Fundo Chicago; Moodys Investors Service.

Chicago Park Districts pensions

only 44% unded

Source:Chicago Park District; Park Employees Annuity and Beneft Fund oChicago, Moodys Investors Service.Note:Funded ratio derived by dividing assets by adjusted net pensionliability plus assets

$355

Official unfunded pension liability Moodys adjustedunfunded pension liability

$630

97%

76%

58%

44%

1998 official 2007 official 2011 official 2011Moodys adjusted



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Long-term debt: $900 million

Year 2008 2009 2010 2011

Long term debt $811 $805 $949 $944

Debt service $84 $83 $85 $87

In total, CPD has more than $900 million in outstanding longterm debt.

Chicago Park District long-term debt totals $944 million(in millions)

Source:Civic Federation, Chicago Park District.

Health insurance debt: $40 million

CPD pays or its health insurance obligations rom its general

und rather than rom its pension unds. The ununded health

insurance liability currently totals $40 million, a 15 percent

decrease since 2007.

Year 2007 2008 2009 2010 2011 2012

Ununded health insurance liabilities $47.2 $47.2 $45.8 $45.8 $40.0 $40.0

Chicago Park District health insurancedebt decreased by $7 million dollars*

(in millions)

Source:Chicago Park District* Note:Diagonal lines indicate that CAFR has not been released yet. However, because valuations are conducted on a two-year basis and the last one wasconducted in 2011, the 2012 fgure will likely be $40.0 once the CAFR is released.



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Chicagos pro-rata share o Cook County and Cook CountyForest Preserve total debt: $9.7 billion

Chicago is located within the borders o Cook County, thesecond most populous county in the United States.27 The

countys many responsibilities include incarceration, health andtransportation.

Although technically separate taxing bodies, both Cook Countyand the orest preserve are controlled by the same board ocommissioners.28 For that reason, their ununded pensionliabilities, ununded health insurance liabilities and long-termdebts are combined.

Cook County has an operating budget o about $2.5 billion andemploys more than 22,000 workers.29 The orest preserves

2013 operating budget, or corporate und budget, totaled$52.8 million.30

Together, Cook County and the orest preserve (henceorthreerred to as Cook County) have more than $11.5 billionin long-term debt and ununded pension and health insuranceliabilities.31 Because Chicago taxpayers make up 52 percent oCook Countys population, the burden on Chicago taxpayers isapproximated to be $6.0 billion,32 a number that jumps to $9.7billion when the pension liabilities are adjusted under Moodysnew methodology.

Chicagos pro-rata share o Cook County ofcial debt totals $9.7 billion

(in billions)

Fiscal year 2007 2012 2012 Moodys adjusted*

Long-term debt $1.7 $2.1 $2.1

Ununded health insurance liability $0.8 $1.0 $1.0

Ununded pension liability $0.7 $3.0 $6.6

Total Debt $3.2 $6.0 $9.7

Source:Cook County; County Employees and Ofcers Annuity and Beneft Fund o Cook County; Cook County Forest Preserve; Cook County.Note:Numbers may not add due to rounding. Long-term debt in the 2012 and 2012 Moodys adjusted categories is rom 2011. Most recent data used;

see Sources and Methodology or more inormation.

Cook County and Cook County Forest Preserve


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Chicagos pro-rata share o Cook County debt service paymentstotal $148 million (in millions)

Chicagos pro-rata share o Cook County long-term debt:$2.1 billion

Cook Countys 2011 long-term debt totaled $4 billion,Chicagos pro-rata share o which totaled nearly $2.1 billion,a 23 percent increase since 2007. Chicagos pro-rata share

Cook Countys debt service payments totaled more than $148million in 2011.

Year 2007 2008 2009 2010 2011

Forest Preserve $6 $7 $7 $6 $6

Cook County municipal $114 $110 $109 $99 $141

Total $120 $117 $116 $105 $148

Source:Civic FederationNote:Numbers may not add due to rounding.

Year 2007 2008 2009 2010 2011

Forest Preserve $68 $65 $61 $57 $53

Cook County municipal $1,613 $1,580 $1,735 $1,905 $2,008

Total $1,681 $1,645 $1,796 $1,962 $2,061

Chicagos pro-rata share o Cook County long-term debt totals $2.1 billion(in millions)

Source:Civic FederationNote:Numbers may not add due to rounding.



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Chicagos pro-rata share o Cook County health insurance debt:$1 billion

Chicagos pro-rata share o Cook Countys ununded healthinsurance liability totals $983 million, up rom $829 millionin 2007.

Year 2007 2008 2009 2010 2011 2012

Forest preserve $21 $19 $22 $22 $21 $24

Municipal employees $808 $753 $877 $897 $873 $960

Total $829 $772 $900 $920 $894 $983

Chicagos share o Cook Countys ununded health insuranceliability totals $983 million

(in millions)

Source:Cook County; Cook County Forest Preserve.Note:Numbers may not add due to rounding.



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Chicagos pro-rata share o Metropolitan Water ReclamationDistrict total debt: $2.1 billion

The Metropolitan Water Reclamation District, or MWRD, isa special-purpose district that operates as an independent

agency responsible or treating wastewater across Cook

County and the greater Chicago area. MWRD debt totalsapproximately $4 billion a 78 percent increase since 2007

The Chicago share o this debt is $2.1 billion.

Chicagos pro-rata share o MWRD ofcial debt totals $2.1 billion(in millions)

Fiscal year 2007 2012

Long-term debt $815 $1,399

Ununded health insurance liability $217 $177

Ununded pension liability $280 $551

Total Debt $1,325 $2,100

Source:Metropolitan Water Reclamation Authority; Metropolitan Water Reclamation Retirement FundNote:Numbers may not add due to rounding. 2012 long-term debt is rom 2011. Most recent available data used; see Sources and Methodology or moreinormation.

Metropolitan Water Reclamation District


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Chicagos 2012 pro-rata share o Cook County pension debt:$551 million

MWRD controls the Metropolitan Water Reclamation DistrictRetirement Fund or its employees. MWRD has an ofcialpension shortall totaling $1.1 billion, Chicagos share owhich, based on population, totals $551 million.36 Thismeans that MWRD, with about 1,900 active employees,

has approximately $570,000 in ununded pension liabilitiesor every active employee in the system (not adjusted oChicagos share).37 Although Moodys has not yet calculatedMWRDs true pension debt, the lower discount rates will resulin a substantial increase in the ununded pension liability.

Year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ununded pension liability $85 $86 $82 $99 $174 $193 $217 $251 $268 $280 $333 $396 $460 $522 $551

Chicagos pro-rata share o MWRD ununded pensionliability totals $551 million

(in millions)

Source:Metropolitan Water Reclamation Authority; Metropolitan Water Reclamation Retirement Fund



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Chicagos pro-rata share o MWRD long-term debt: $1.4 billion

MWRDs 2011 long-term debt totaled $2.7 billion, with debtservice payments o approximately $156 million. Chicagospro-rata share o MWRDs 2011 long-term debt totaled

$1.4 billion, a 60 percent increase since 2007. Chicagos pro-rata share o MWRDs debt service payments totaled $80million in 2011.

Chicagos 2011 pro-rata share o MWRD long-term debttotals nearly $1.4 billion

(in millions)

Year 2007 2008 2009 2010 2011

Long-term net debt $815 $777 $1,090 $1,166 $1,399

Debt service $83 $70 $70 $85 $81

Source: Metropolitan Water Reclamation District



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Chicagos pro-rata share o MWRD health insurance debt:$177 million

MWRD pays or its health insurance obligations rom itsgeneral und rather than rom its pension unds. MWRDs2011ununded health insurance liabilities totaled $340

million. Chicagos pro-rata share o MWRDs ununded healthinsurance liability totals $177 million.

Chicagos 2011 pro-rata share o MWRD unundedhealth insurance liability totals $177 million

Chicagos share based on population (in millions)

Year 2007 2008 2009 2010 2011 2012

Ununded health insurance liabilities $217 $249 $249 $249 $177 $177

Source:Metropolitan Water Reclamation DistrictNote:2012 data has not yet been released. 2011 was used as a proxy.



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Sources and methodology

Pensions

Data rom 1998 through 2011 are provided by the Commission on Government Forecasting and Accountability (COGFA), which

produces a Small Systems report on all Chicago-area unds.A report on the Financial Condition o the Chicago, Cook County and Illinois Municipal Retirement Fund Systems oIllinois, Commission on Government Forecasting and Accountability (December 2012), http://cga.ilga.gov/UploadFY2012SmallSystemsReport.pd

A report on the Financial Condition o the Chicago, Cook County and Illinois Municipal Retirement Fund Systems oIllinois, Commission on Government Forecasting and Accountability (November 2008), http://cga.ilga.gov/UploadFY2012SmallSystemsReport.pd

Data rom 2012 have been flled in using the individual 2012 CAFRs, Audited Reports or Actuarial Valuations or each und.

Chicago Firemens Annuity and Beneft Fund Audited Financial Report or the Year Ended December 31, 2012, AuditedFinancial Report or the Year Ended December 31, 2008, http://www.ab.org/FinancialInohtml.html

Policemens Annuity and Beneft Fund o Chicago Financial Statements and Supplementary Inormation or the YearsEnded December 31, 2012 and 2011 With Report o Independent Auditors, Component Unit Financial Statements Years

Ended December 31, 2007 and 2006,http://www.chipab.org/ChicagoPolicePension/Financials.html

Municipal Employees Annuity and Beneft Fund o Chicago Comprehensive Annual Financial Report For the Fiscal YeaEnded December 31st, 2012, Comprehensive Annual Financial Report For the Fiscal Year Ended December 31st, 2007,http://www.meab.org/publications.php

Laborers and Retirement Board Employees Annuity and Beneft Fund o Chicago Laborers and Retirement BoardEmployees Annuity and Beneft Fund o Chicago Actuarial Valuation Report For the Year Ending December 31, 2012 (Apri2013), Laborers and Retirement Board Employees Annuity and Beneft Fund o Chicago Actuarial Valuation Report For theYear Ending December 31, 2011 (April 2012), http://labchicago.org/fnancialreports

Chicago Teachers Pension Fund 117th Comprehensive Annual Financial Report For the Year Ended June 30, 2012,115th Comprehensive Annual Financial Report For The Year Ended June 30, 2010, http://www.ctp.org/general_inofnancial_lists.htm

The Retirement Plan or Chicago Transit Authority Employees Actuarial Valuation Report as o January 1, 2012 (Decembe2012), Actuarial Valuation as o January 1, 2007,http://www.ctaretirement.org/reports/

Park Employees Annuity and Beneft Fund o Chicago Comprehensive Financial Report o the Park Employees andRetirement Board Employees Annuity and Beneft Fund For the Fiscal Year Ended June 30, 2012, Comprehensive FinanciaReport o the Park Employees and Retirement Board Employees Annuity and Beneft Fund For the Fiscal Year Ended June 302008, http://www.chicagoparkpension.org/CAFR.html

Employees and Ofcers Annuity and Beneft Fund o Cook County Comprehensive Annual Financial Report For the YeaEnded December 31, 2012,http://www.cookcountypension.com/about_the_und/investments/fnancial_reports.aspx

Forest Preserve District Employees Annuity and Beneft Fund o Cook County - Comprehensive Annual Financial Repor

For the Year Ended December 31, 2012, http://www.cookcountypension.com/about_the_und/investments/fnancial_reportsaspx

Metropolitan Water Reclamation District Retirement Fund - Comprehensive Annual Financial Report For the Year EndedDecember 31, 2012, http://www.cookcountypension.com/about_the_und/investments/fnancial_reports.aspx

Moodys adjusted pension liabilities

City o Chicago - Moodys downgrades Chicago to A3 rom Aa3, aecting $8.2 billion o GO and sales tax debt; outlooknegative, Moodys Investors Service (2013), https://www.moodys.com/research/Moodys-downgrades-Chicago-to-A3-romAa3-aecting-82-billion--PR_278069
http://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://www.fabf.org/FinancialInfohtml.htmlhttp://www.chipabf.org/ChicagoPolicePension/Financials.htmlhttp://www.meabf.org/publications.phphttp://labfchicago.org/financialreportshttp://www.ctpf.org/general_info/financial_lists.htmhttp://www.ctpf.org/general_info/financial_lists.htmhttp://www.ctaretirement.org/reports/http://www.chicagoparkpension.org/CAFR.htmlhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttps://www.moodys.com/research/Moodys-downgrades-Chicago-to-A3-from-Aa3-affecting-82-billion--PR_278069https://www.moodys.com/research/Moodys-downgrades-Chicago-to-A3-from-Aa3-affecting-82-billion--PR_278069https://www.moodys.com/research/Moodys-downgrades-Chicago-to-A3-from-Aa3-affecting-82-billion--PR_278069https://www.moodys.com/research/Moodys-downgrades-Chicago-to-A3-from-Aa3-affecting-82-billion--PR_278069http://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.cookcountypension.com/about_the_fund/investments/financial_reports.aspxhttp://www.chicagoparkpension.org/CAFR.htmlhttp://www.ctaretirement.org/reports/http://www.ctpf.org/general_info/financial_lists.htmhttp://www.ctpf.org/general_info/financial_lists.htmhttp://labfchicago.org/financialreportshttp://www.meabf.org/publications.phphttp://www.chipabf.org/ChicagoPolicePension/Financials.htmlhttp://www.fabf.org/FinancialInfohtml.htmlhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdfhttp://cgfa.ilga.gov/Upload/FY2012SmallSystemsReport.pdf


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Chicago Public Schools Moodys assigns A3 rating and negative outlook, Moodys Investors Service (2013)

Chicago Park District Moodys downgrades Chicago Park District to A1 rom Aa2; outlook negative, Moodys InvestorsService (2013)

Long-term debt and debt service

City o Chicago Annual Financial Analysis 2013, City o Chicago (2013), https://www.cityochicago.org/content/dam/citydepts/obm/supp_ino/Budget%20Documents/2013AFA.PDF

Chicago Public Schools Chicago Public Schools FY 2013 Proposed Budget Analysis and Recommendations, CivicFederation (2012), http://www.civiced.org/CPSFY2013ProposedBudgetAnalysis

Chicago Public Schools (CPS) FY2009 Budget Book, Chicago Public Schools (2008), http://www.cps.edu/About_CPSFinancial_inormation/Pages/FYBudget2009.aspx

Chicago Public Schools Final Budget 2011-2012, Chicago Public Schools (2011), http://www.cps.edu/About_CPSFinancial_inormation/Documents/FY12FinalBudgetBook.pd

Chicago Transit Authority Chicago Transit Authority Presidents Proposed FY2013 Operating Budget: Analysis andRecommendations, Civic Federation (2012), http://www.civiced.org/civic-ederation/publications/CTA_FY2013budget

Chicago Park District Chicago Park District FY2013 Budget: Analysis and Recommendations, Civic Federation (2012)http://www.civiced.org/civic-ederation/publications/FY2013CPDbudget

Cook County Cook County FY2013 Executive Budget Recommendation: Analysis and Recommendations, Civic Federation(2012), http://www.civiced.org/civic-ederation/publications/CookCounty_FY2013BudgetAnalysis

Cook County Forest Preserve Forest Preserve District o Cook County FY2013 Budget Analysis, Civic Federation (2012)http://www.civiced.org/civic-ederation/publications/FY13ForestPreserveBudgetAnalysis

Metropolitan Water Reclamation District Metropolitan Water Reclamation District FY2013 Tentative Budget: Analysis andRecommendations, Civic Federation (2012), http://www.civiced.org/MWRD_FY2013analysis

Population

Chicago (city) Chicago (city), Illinois, US Census Bureau (2012) http://quickacts.census.gov/qd/states/17/1714000.htm

Cook County Cook County, IL, US Census Bureau (2012), http://quickacts.census.gov/qd/states/17/17031.html

Health insurance

Health insurance data or Fire; Police; Municipal; Labor; and Cook County and Forest Preserve are listed with pension data. Seethe Pension section or these reports. The ollowing unds list their health insurance data separately rom their pension data:

Chicago Park District Comprehensive Annual Financial Report For the year ended December 31, 2011, ComprehensiveAnnual Financial Report For the year ended December 31, 2008, http://www.chicagoparkdistrict.com/departments/fnancecomptroller/

Metropolitan Water Reclamation District Comprehensive Annual Financial Report o the Metropolitan Water ReclamationDistrict o Greater Chicago For the Year Ended December 31, 2012, Comprehensive Annual Financial Report o the

Metropolitan Water Reclamation District o Greater Chicago For the Year Ended December 31, 2008, https://www.mwrdorg/irj/portal/anonymous/AFReports

CTA Retiree Health Care Plan Financial Statements and Supplementary Inormation For the Years Ended December 312011 and 2010 With Report o Independent Auditors, http://www.ctaretirement.org/healthPlan/reports/

Comparability

CTA issues

The 2012 data or Chicago Transit Authority are incomplete as the actuarial valuation or 2012 has not been released. COGFAsprojections rom its Small Systems report are used in their place.
https://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttps://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttp://www.civicfed.org/CPSFY2013ProposedBudgetAnalysishttp://www.cps.edu/About_CPS/Financial_information/Pages/FYBudget2009.aspxhttp://www.cps.edu/About_CPS/Financial_information/Pages/FYBudget2009.aspxhttp://www.cps.edu/About_CPS/Financial_information/Documents/FY12FinalBudgetBook.pdfhttp://www.cps.edu/About_CPS/Financial_information/Documents/FY12FinalBudgetBook.pdfhttp://www.civicfed.org/civic-federation/publications/CTA_FY2013budgethttp://www.civicfed.org/civic-federation/publications/FY2013CPDbudgethttp://www.civicfed.org/civic-federation/publications/CookCounty_FY2013BudgetAnalysishttp://www.civicfed.org/civic-federation/publications/FY13ForestPreserveBudgetAnalysishttp://www.civicfed.org/MWRD_FY2013analysishttp://quickfacts.census.gov/qfd/states/17/1714000.htmlhttp://quickfacts.census.gov/qfd/states/17/17031.htmlhttp://www.chicagoparkdistrict.com/departments/finance/comptroller/http://www.chicagoparkdistrict.com/departments/finance/comptroller/https://www.mwrd.org/irj/portal/anonymous/AFReportshttps://www.mwrd.org/irj/portal/anonymous/AFReportshttp://www.ctaretirement.org/healthPlan/reports/http://www.ctaretirement.org/healthPlan/reports/https://www.mwrd.org/irj/portal/anonymous/AFReportshttps://www.mwrd.org/irj/portal/anonymous/AFReportshttp://www.chicagoparkdistrict.com/departments/finance/comptroller/http://www.chicagoparkdistrict.com/departments/finance/comptroller/http://quickfacts.census.gov/qfd/states/17/17031.htmlhttp://quickfacts.census.gov/qfd/states/17/1714000.htmlhttp://www.civicfed.org/MWRD_FY2013analysishttp://www.civicfed.org/civic-federation/publications/FY13ForestPreserveBudgetAnalysishttp://www.civicfed.org/civic-federation/publications/CookCounty_FY2013BudgetAnalysishttp://www.civicfed.org/civic-federation/publications/FY2013CPDbudgethttp://www.civicfed.org/civic-federation/publications/CTA_FY2013budgethttp://www.cps.edu/About_CPS/Financial_information/Documents/FY12FinalBudgetBook.pdfhttp://www.cps.edu/About_CPS/Financial_information/Documents/FY12FinalBudgetBook.pdfhttp://www.cps.edu/About_CPS/Financial_information/Pages/FYBudget2009.aspxhttp://www.cps.edu/About_CPS/Financial_information/Pages/FYBudget2009.aspxhttp://www.civicfed.org/CPSFY2013ProposedBudgetAnalysishttps://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttps://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDF


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Notes on pension data:

Moodys calculation

Most recent data used. Moodys total includes 2012 ANPL or Chicago ($36B), Chicagos share o Cook County ($6.6B)2011 ANPL or CPS ($11.1B), and 2011 ANPL or Park District ($630M). ANPL or CTA has not yet been released, so mosrecent unadjusted ununded liability (2012 COGFA projection) used.

Asset smoothing:

There are two methods o reporting asset values or pension plans. One is to use the current market value o the assets, and

the other is to smooth the values o the assets by averaging the assets o previous fscal years. Common practice in actuariavaluations, CAFRs, and other ofcial reports is to report the latter, smoothed asset values. The analysis in this report ollowsthis practice as well. All asset values or pension data in this report should be considered as the smoothed, or actuarial, assecount.

Long-term debt years

For most o the data in this report (with the exception o the city o Chicago), the most recent available long-term debt is rom2011. Consequently, long-term debt in this paper should be considered a conservative estimate or current long-term debt.

Units o government excluded rom the analysis

There are a our Chicago sister governments that were not included in this report due to their relatively small levels o debt andununded liabilities. These units o government include:

City Colleges o Chicago

Public Building Commission o Chicago

Chicago Housing Authority

Metropolitan Pier and Exposition Authority

The ununded pension liability or the Metropolitan Pier and Exposition Authority is only $3.9 million and the system is 95 percenunded.38 The ununded pension liability or the Chicago Housing Authority is only $43.7 million.39 The total debt is also relativelysmallthe Public Building Commission o Chicago reported $188.8 million in total outstanding debt as o 2012. 40 The CityColleges o Chicago have their debt and pensions controlled by the city o Chicago and the State Universities Retirement Systemrespectively.41 The City Colleges o Chicagos health insurance liabilities are the only component actually controlled by the unit ogovernment and the ununded health insurance liability total approximately 124 million.42

Cook County pro-rata methodology

Cook County includes many collar communities located outside o Chicago, which is why the city o Chicago isnt responsible oCook Countys entire debt burden. But with a large portion o Cook County residents living in Chicago, Cook Countys long-termliabilities are relevant to any discussion o Chicago residents long term liability.

To estimate Chicagos share o Cook Countys long-term liabilities, the analysis provided adjusted Chicagos share o CookCountys liabilities based on population. Approximately 52 percent o Cook County residents live in the city o Chicago. CookCountys long-term debt and liabilities were multiplied by 52 percent to calculate the Chicago share.43 Although its not a preecrepresentation, population is a good proxy or the share o debt in each region.

The 52 percent multiplier would dier i it was based o income. Based on Census data, the city o Chicago has approximately 48percent o the total personal income in Cook County.44 Regardless o method, Chicago residents are responsible or approximatelyhal o Cook Countys total long-term debt and liabilities.

Chicago Transit Authority methodology

Like Cook County, the Chicago Transit Authority services both the city o Chicago and surrounding suburbs. For that reason, thecity o Chicago is not solely responsible or the CTAs liabilities. To adjust or Chicagos share, all CTA data has been adjustedon a pro-rata basis by service population. The adjustment is 71%, calculated by dividing Chicagos population by the ChicagoTransit Authoritys service population.


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1 Revenue Overview, Chicago Public Schools (2013), http://www.cps.edu/fnance/FY14budget/pages/revenue.aspx

2 Associated Press, Chicago Public Schools to lay o 2,110 teachers, support sta, CBS News (2013), http://www.cbsnewscom/8301-201_162-57594485/chicago-public-schools-to-lay-o-2110-teachers-support-sta/

3 Annual Financial Analysis 2013, City o Chicago (2013), https://www.cityochicago.org/content/dam/city/depts/obm/supp_ino/Budget%20Documents/2013AFA.PDF

4 Ibid.

5 See individual reports or the Chicago Fire, Police, Labor, and Municipal unds in Sources and Methodology

6 Stats and acts, Chicago Public Schools (2013), http://www.cps.edu/about_cps/at-a-glance/pages/stats_and_acts.aspx

7 FY 2014 Budget Book, Chicago Public Schools (2013), http://www.cps.edu/fnance/FY14Budget/Documents/FY2014BudgetBook.pd

8 Moodys assigns A2 rating and negative outlook to The Chicago Board o Educations (IL) $403.98 million Unlimited TaxGeneral Obligation Reunding Bonds (Dedicated Revenues), Series 2013A, Moodys Investors Service (2013)

9 See Chicago Teachers Pension Fund under Pensions in Sources and Methodology10 Moodys assigns A2 rating and negative outlook to The Chicago Board o Educations (IL) $403.98 million Unlimited TaxGeneral Obligation Reunding Bonds (Dedicated Revenues), Series 2013A, Moodys Investors Service (2013)

11 117th Comprehensive Annual Financial Report For the Year Ended June 30th, 2012, Chicago Public Schools (2012),http://www.ctp.org/general_ino/fnancial_lists.htm

12 Chicago Public Schools FY 2013 Proposed Budget Analysis and Recommendations, Civic Federation (2012), http://www.civiced.org/CPSFY2013ProposedBudgetAnalysis

13 Ibid.

14 Bill Ruthhart, Emanuel not ruling out raising CPS property tax limits, Chicago Tribune (2013), http://articles.chicagotribune.com/2013-06-12/news/ct-met-emanuel-cps-taxes-0612-20130612_1_cps-ceo-barbara-byrd-bennett-tax-levy

15 Building a New CTA: Presidents 2013 Budget Recommendations, Chicago Transit Authority (2013), http://www.transitchicago.com/assets/1/fnance_budget/2013_Budget_Book_Final_20121120.pd

16 Ibid.

17 Ibid.

18 CTA Facts at a Glance, Chicago Transit Authority (2011), http://www.transitchicago.com/about/acts.aspx

19 Ibid.

20 Chicago Transit Authority Presidents Proposed FY2013 Operating Budget: Analysis and Recommendations, CivicFederation (2012), http://www.civiced.org/civic-ederation/publications/CTA_FY2013budget

21 Actuarial Valuation Report as o January 1, 2012, Chicago Transit Authority (2012), http://www.ctaretirement.org/reports/

22 Building a New CTA: Presidents 2013 Budget Recommendations, Chicago Transit Authority (2013), http://www.transitchicago.com/assets/1/fnance_budget/2013_Budget_Book_Final_20121120.pd

23 2013 Budget Summary, Chicago Park District (2013), http://www.chicagoparkdistrict.com/assets/1/23/2013_Budget_Summary_-_Adopted_Budget_-_test.pd

24 Moodys downgrades Chicago Park District to A1 rom Aa2; outlook negative, Chicago Public Schools (2013)

25 Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012, Park Employees and Retirement BoardEmployees Annuity and Beneft Fund, http://www.chicagoparkpension.org/FINAL_2012_CAFR.pd

26 Resident Population Estimates or the 100 Largest U.S. Counties Based on July 1, 2011 Population Estimates: April 1,2010 to July 1, 2011, US Census Bureau, http://www.census.gov/popest/data/counties/totals/2011/tables/CO-EST2011-07.csv

Endnotes
http://www.cps.edu/finance/FY14budget/pages/revenue.aspxhttp://www.cbsnews.com/8301-201_162-57594485/chicago-public-schools-to-lay-off-2110-teachers-support-staff/http://www.cbsnews.com/8301-201_162-57594485/chicago-public-schools-to-lay-off-2110-teachers-support-staff/https://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttps://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttp://www.cps.edu/about_cps/at-a-glance/pages/stats_and_facts.aspxhttp://www.cps.edu/finance/FY14Budget/Documents/FY2014BudgetBook.pdfhttp://www.cps.edu/finance/FY14Budget/Documents/FY2014BudgetBook.pdfhttp://www.ctpf.org/general_info/financial_lists.htmhttp://www.civicfed.org/CPSFY2013ProposedBudgetAnalysishttp://www.civicfed.org/CPSFY2013ProposedBudgetAnalysishttp://articles.chicagotribune.com/2013-06-12/news/ct-met-emanuel-cps-taxes-0612-20130612_1_cps-ceo-barbara-byrd-bennett-tax-levyhttp://articles.chicagotribune.com/2013-06-12/news/ct-met-emanuel-cps-taxes-0612-20130612_1_cps-ceo-barbara-byrd-bennett-tax-levyhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.transitchicago.com/about/facts.aspxhttp://www.civicfed.org/civic-federation/publications/CTA_FY2013budgethttp://www.ctaretirement.org/reports/http://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.chicagoparkdistrict.com/assets/1/23/2013_Budget_Summary_-_Adopted_Budget_-_test.pdfhttp://www.chicagoparkdistrict.com/assets/1/23/2013_Budget_Summary_-_Adopted_Budget_-_test.pdfhttp://www.chicagoparkpension.org/FINAL_2012_CAFR.pdfhttp://www.census.gov/popest/data/counties/totals/2011/tables/CO-EST2011-07.csvhttp://www.census.gov/popest/data/counties/totals/2011/tables/CO-EST2011-07.csvhttp://www.census.gov/popest/data/counties/totals/2011/tables/CO-EST2011-07.csvhttp://www.census.gov/popest/data/counties/totals/2011/tables/CO-EST2011-07.csvhttp://www.chicagoparkpension.org/FINAL_2012_CAFR.pdfhttp://www.chicagoparkdistrict.com/assets/1/23/2013_Budget_Summary_-_Adopted_Budget_-_test.pdfhttp://www.chicagoparkdistrict.com/assets/1/23/2013_Budget_Summary_-_Adopted_Budget_-_test.pdfhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.ctaretirement.org/reports/http://www.civicfed.org/civic-federation/publications/CTA_FY2013budgethttp://www.transitchicago.com/about/facts.aspxhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://www.transitchicago.com/assets/1/finance_budget/2013_Budget_Book_Final_20121120.pdfhttp://articles.chicagotribune.com/2013-06-12/news/ct-met-emanuel-cps-taxes-0612-20130612_1_cps-ceo-barbara-byrd-bennett-tax-levyhttp://articles.chicagotribune.com/2013-06-12/news/ct-met-emanuel-cps-taxes-0612-20130612_1_cps-ceo-barbara-byrd-bennett-tax-levyhttp://www.civicfed.org/CPSFY2013ProposedBudgetAnalysishttp://www.civicfed.org/CPSFY2013ProposedBudgetAnalysishttp://www.ctpf.org/general_info/financial_lists.htmhttp://www.cps.edu/finance/FY14Budget/Documents/FY2014BudgetBook.pdfhttp://www.cps.edu/finance/FY14Budget/Documents/FY2014BudgetBook.pdfhttp://www.cps.edu/about_cps/at-a-glance/pages/stats_and_facts.aspxhttps://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttps://www.cityofchicago.org/content/dam/city/depts/obm/supp_info/Budget%20Documents/2013AFA.PDFhttp://www.cbsnews.com/8301-201_162-57594485/chicago-public-schools-to-lay-off-2110-teachers-support-staff/http://www.cbsnews.com/8301-201_162-57594485/chicago-public-schools-to-lay-off-2110-teachers-support-staff/http://www.cps.edu/finance/FY14budget/pages/revenue.aspx


32/32

27 Separate so they can be Equal: The Case or Creating a Separate Board o Commissioners or the Forest Preserve Districto Cook County, Civic Federation (2012), http://www.civiced.org/civic-ederation/blog/separate-so-they-can-be-equal

28 Preliminary Budget Estimates FY 2014, Cook County (2013), http://home.cookcountyil.gov/budget/County Employees,Cook County (2013), http://www.cookcountygov.com/portal/server.pt/community/people/224/county_employees

29 2013 Forest Preserve o Cook County, Illinois Annual Appropriation Ordinance, Chicago Park District (2013), http://pdcc.com/downloads/2013-BUDGET-RECONMMENDATION-BOOK10162012-2.pd

30 See Cook County and Cook County Forest Preserve portions o the Sources and Methodology section

31

See Population section o Sources and Methodology32 Moodys downgrades Cook County, IL to A1; outlook remains negative, Moodys Investors Service (2013), https://www.moodys.com/research/Moodys-downgrades-Cook-County-IL-to-A1-outlook-remains-negative--PR_280403?WT.mc_id=@moodysratings

33 For inormation on how data was adjusted, see Sources and Methodology

34 Comprehensive Annual Financial Report For the Year Ended December 31, 2012, County Employees and OfcersAnnuity and Beneft Fund o Cook County (2013), http://www.cookcountypension.com/assets/1/AssetManager/CC%20CAFR%20FINAL%202012.pdComprehensive Annual Financial Report For the Year Ended December 31, 2012, ForestPreserve District Employees Annuity and Beneft Fund o Cook County (2013), http://www.cookcountypension.com/assets/1/AssetManager/2012%20FP%20CAFR%20FINAL.pd

35 For inormation on how data was adjusted, see Sources and Methodology

36 Comprehensive Annual Financial Report, Metropolitan Water Reclamation Retirement Fund (2012), http://mwrdr.org/media/52201/car_2012_v2.pd

37 Basic Financial Statements June 30, 2012 and 2011, Metropolitan Pier and Exposition Authority (2012), http://www.mpea.com/annual_report.html

38 Comprehensive Annual Financial Report For the Year Ended December 31, 2012, Chicago Housing Authority (2013),http://www.thecha.org/pages/fnancial_reports/2540.php

39 Comprehensive Annual Financial Report For the Years Ended December 31, 2012 And 2011, Public Building Commissiono Chicago, Illinois (2013), http://www.pbcchicago.com/content/about/fnancial_reports.asp

40 City Colleges o Chicago FY2014 Tentative Budget: Analysis and Recommendations, Civic Federation (2013), http://www.civiced.org/civic-ederation/publications/CityCollegesFY2014

41 Ibid.42 Chicago (city), Illinois, US Census Bureau (2013), http://quickacts.census.gov/qd/states/17/1714000.htmlCook County,Illinois, US Census Bureau (2013), http://quickacts.census.gov/qd/states/17/17031.htmlThe 52 percent statistic can beound by dividing the Chicago (city) 2012 population estimate by the Cook County 2012 population estimate.

43 Ibid. The 48 percent statistic can be ound through the ollowing equation

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