Warren: Emanuel Report Sticks ‘Velvet Shiv’ in Daley’s Back

Rahm Emanuel on Friday delivered a glossy, 54-page, multi-colored and graphics-filled improvised explosive device that blows to bits a variety of assumptions about “The City that Works.”

If there was a scintilla of doubt about qualms he possesses about the government he’s inherited from a respected patron, former Mayor Richard M. Daley, they are dispelled on virtually every page of the dryly-titled “Annual Financial Analysis 2011” and in comments made to reporters at City Hall.

(Scroll down to read the complete budget report.)

Time and again, he reiterated that he won’t seek further taxes from citizens “who’ve been nickeled and dimed to pay more for a system that has not been restructured,” he said. He soon added, “There are a lot of inefficiencies and poor delivery of services.”

If one improbably had not caught Emanuel’s drift during his campaign and initial weeks in office, only a just-landed, illiterate Martian might now miss it if perusing a report whose very professional design and typeface make it the equivalent of a superficially alluring velvet shiv—-one stuck into the back of the predecessor Daley Administration.

Whether it was its macro 10-year financial retrospective or detailing of the city’s current debt, reserve funds, pension load or dire capital improvement necessities, it’s what the French might call a tour d’horizon, or general survey, of a mess.

It argues that the city has been spending far beyond its means for 10 years and avoided tough, needed choices by relying on one-time fixes, like sales and leases of assets, and too much borrowing.

“It’s a system that’s structurally imbalanced,” Emanuel told reporters in a succinct summation of his more comprehensive accounting of a massive disjoint between the cost of services and declining revenues.

The day’s headline will probably be about the $635.7 million gap in the 2012 City of Chicago budget. But scrutiny of the report underscores a raft of potential other notable, if depressing, realities, such as a large number of key tax categories heading south. For example, the real property transfer tax collections peaked at $242.3 million in 2006 but went down to $81.3 million last year and, Emanuel projects, will be another 16 percent lower this year.

For sure, there are more upbeat disclosures such as a de facto doubling since 2001 of revenues from fines, forfeitures and penalties, such a parking and red-light camera tickets. Those were at $258.8 million in 2010 and, as many citizens might painfully surmise, are expected to increase due to improved technology.

Emanuel was loath to go over many budgetary specifics on Friday after earlier briefing City Council members on his report. But the many practical, real-world challenges he confronts in making tough decisions about priorities are clear and include a debt-heavy mass transit system in desperate need for funds just for repairs to decaying rail tracks. Just imagine this assertion from the mayor: The CTA is $7 billion behind in capital improvements (as you may have noticed as your train slows to a crawl).

And for those whose eyes glaze over when confronted with any figures other than a baseball box score, the report’s bar charts are easy-to-read if unsettling when it comes to matters like our stratospheric long-term debt. Deep in the report is this matter-of-fact line:

“The City’s debt level has increased steadily over the past 10 years, reaching a high in 2011 of approximately $19 billion.”

It goes on to indicate that much of the debt’s been used to fund capital projects citywide but also for “working capital” expenses including maintaining medians, irrigation and planting, as well as retroactive salary and pension payments to cops and firefighters.

The bottom line:

“This pattern of increasing long-term debt load is not financially sustainable,” with the city’s debt service projected to rise through 2014 even if not a single dollar of new long-term debt is issued.

Emanuel’s strategic challenge in his first year includes convincing a cynical and dubious citizenry that there are real problems and that he’s done what he can to eradicate waste and inefficiency. He must prepare them for what he calls “the moment of truth” as far as what we can do with and what he must do without.

If he could somehow get a fair number of folks to put down the television clicker for an hour, and instead read his most memorable published work to date, he might just convince a few that the system he inherited needs to be blown up.