Annual Financial Analysis

Annual Financial Analysis 2016

City of Chicago

Disclaimer

The City of Chicago ("City") is pleased to present this Annual Financial Analysis (“AFA”). The purpose of this site is to provide general information about the history and future of major components of the City’s overall finances and City budget. There is no assurance that the information contained on this site does not contain typographical or other errors which may have occurred.

Please keep in mind that information presented on this site only speaks as of the date it was posted or, if such information is dated, as of its date. The City may or may not update any information on this site.

This site includes forward-looking statements based on current beliefs and expectations about future events. Those events are uncertain; their outcome may differ from current expectations which may in turn significantly affect expected results.

Where information is presented that has come from sources other than the City, the City presents that information only for convenience. The City does not undertake to verify any of that information.

If you choose to print all or portions of the AFA, some or all information may be missing or incomplete.

The AFA has not been prepared to give information for making decisions on buying or selling securities and should not be relied upon by investors in making investment decisions. With respect to any bonds, notes, or other debt obligations of the City, please refer for information only to the City’s ordinances and notifications of sale and the related disclosure documents, if any, or continuing disclosure filings, if any, for such bonds, notes, or other debt obligations.

The information in this site is provided "as is" without warranty of any kind. Neither the City nor any of its agencies nor any of its officers or employees shall be held liable for any use of the information described and/or contained in this site.

Executive Summary

Mayor Rahm Emanuel’s Executive Order No. 2011-7 directs the City of Chicago’s Office of Budget and Management to issue, each year, a long-term financial analysis that provides a framework for the development of the City’s annual budget and guides the City’s financial and operational decisions.

The City’s Annual Financial Analysis is completed based on the critical understanding that in order to protect the health and safety of all Chicagoans, strengthen neighborhoods, maintain infrastructure and public spaces, and to foster a vibrant local economy, the City must be in strong financial health. And to secure and maintain its fiscal health, the City must plan for the future with a clear view of the past.

The 2016 Annual Financial Analysis takes an informed and long-term approach to financial planning, evaluating the City’s past revenues, expenditures, policies, and programs in light of conditions driving the broader economy and other factors impacting the City’s future finances.

In previous years, the City printed hard copies of the Annual Financial Analysis in addition to posting the document online. This year, the document is fully online. The history and future of each major component of the City’s overall finances is discussed in detail throughout this website, including graphics and tables that allow the user to interact with revenue and expenditure figures.

Letter from the Mayor

Revenue

This section describes the revenue sources associated with the City’s corporate fund, property tax levy, special revenue funds, enterprise funds, pension funds, and capital program.

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Expenditure

This section provides detail on the historical expenditures for the various operating funds. The information is discussed in terms of personnel and non-personnel costs and in terms of the functional categories of expenditures.

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Forecast

This section provides projected revenues and expenditures for 2016 and discusses the anticipated corporate fund budget gap for the upcoming 2017 budget. It also examines three different scenarios for 2018 and 2019 – a ‘base outlook’, a ‘positive outlook’, and a ‘negative outlook’ – each presenting a forecast based on potential future revenues and expenditures.

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Pensions

This section provides an in-depth discussion of the pension liabilities of the City’s four pension funds, legislative changes to the pension system, and the impact on City finances.

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Debt

This section examines the City’s total outstanding debt, including general obligation bonds, revenue bonds, and short-term debt instruments. It also outlines the City’s debt service payments over the past 10 years and future payments.

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TIF

This section details revenues from the City’s tax increment financing program and the manner in which those funds have been spent over the past ten years.

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Reserves

This section details the City's reserve funds (water rate stablilization, sewer rate stabilization) and a series of reserve funds established in connection with the long-term lease of City assests.

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