Annual Financial Analysis
Special Revenue Funds Expenditures

Special Revenue Funds Expenditures

The City’s special revenue funds are used to account for revenue from specific sources that by law are designated to finance specific functions, such as road repair, the library system, emergency management, and special events and tourism promotion. The below lists each special revenue fund; click on the specific fund to review expenditures for the City’s special revenue funds.

Click here for the discussion on special revenue funds revenue history.

Vehicle Tax Fund

Vehicle tax fund expenditures are dependent on the amount, type, and cost of performing street repair and maintenance activities in a given year. Similar to the corporate fund, most expenditures from this fund are driven by personnel costs. The relative proportion of total spending on non-personnel activities and expense types in this fund has remained fairly consistent over the years.

Historic year-to-year variations in total expenditures also reflect the resources available to complete such work. For example, over-spending in 2007 resulted in a significant deficit being carried into 2008, reducing the resources available in that year, as is evident in the drop in spending in 2008. In recent years, the City has worked to stabilize this fund, keeping spending relatively constant and more closely in line with revenues.

Motor Fuel Tax Fund

Motor Fuel Tax (MFT) fund revenue supports eligible MFT expenses such as costs associated with streetlight energy, salt purchases for snow removal, and street pavement and bridge maintenance within the Chicago Department of Transportation. In addition, a portion of these funds are transferred to the CTA to support the Chicago transportation system.

Similar to the vehicle tax fund, year-to-year variations in total MFT fund expenditures reflect both annual needs and the resources available to complete projects.

Debt service on MFT revenue bonds, the proceeds of which funded the construction of road-related improvements, is also paid out of the MFT fund.

In 2013, the City pledged MFT revenue to the federal government for a low interest rate loan through the U.S. Department of Transportation’s Transportation Infrastructure Finance Innovation Act (TIFIA) program to fund the expansion of the Chicago Riverwalk. While MFT revenue is pledged as a source of Riverwalk debt service payments, revenue from concessions and tour boat operations have covered the loan payments. Beginning in 2014, revenue from fees charged to tour boat operators and, beginning in 2015, revenues related to vendors along the new Riverwalk, were dedicated to making TIFIA loan repayments.

Special Events and Hotel Operators’ Occupation Tax Fund

The special events and hotel operators’ occupation tax fund supports the promotion of tourism and cultural and recreational activities in Chicago. Expenditures from this fund reflect the City’s evolving approach to events and tourism promotion, as well as broader factors that have affected City spending generally. Major fluctuations in the amounts spent on special events and tourism-related activities can be tied to specific changes in City operations.

Special events and tourism expenditures decreased between 2010 and 2011 due to the transfer of the ten day Taste of Chicago festival to the Chicago Park District and the elimination of funding for the Chicago Convention and Tourism Bureau (CCTB), a non-City entity that had previously received City funding to conduct its activities. In 2012, a now five day Taste of Chicago festival returned to City operation and the CCTB was merged with the tourism portion of the Chicago Office of Tourism and Culture to form Choose Chicago, which focuses on promoting travel to Chicago. Choose Chicago receives City funding from the hotel operators occupation tax fund.

Unlike the corporate fund and certain other funds, the special events and hotel operators’ occupation tax fund is not driven by direct City employee personnel costs like salary and wages and benefits. Contractual services and other non-personnel costs associated with tourism promotion and event production drive a significant portion of overall expenditures each year. Revenues and expenditures from this fund are highly economically sensitive due to annual market conditions and broader tourism trends.

Library Funds

The City maintains a segregated fund to support the maintenance and operations of the Chicago Public Library system and its central, regional, and branch locations. Library fund expenditures have been affected by many of the general trends affecting overall City spending, as well as certain library-specific factors. As in the corporate fund, personnel costs make up the largest portion of library fund expenses. These costs have generally increased over the past ten years, due in part to salary increases under collective bargaining agreements and other benefits. Contractual services expenditures have remained relatively constant in recent years, and consist largely of property rental costs for library facilities that are not City-owned and property maintenance and building services expenses for the Harold Washington Library Center and branch libraries. The growth in 2016 costs in this fund are related to the payments on its line of credit, which helps to manage cash flow to this fund throughout the year. Due to the City’s credit rating, costs of this line have increased.

As the library fund expenses increased in recent years, the corporate subsidy to the fund increased from $7.5 million in 2015 to $18.3 million in 2016 and $19.0 million in 2017.

Emergency Communication Fund

The City’s 911 operations as well as anti-terrorism and emergency preparedness coordination and activities are one of the primary responsibilities of the Office of Emergency Management and Communication (OEMC). The 911 operations and related emergency preparedness activities within OEMC are not fully funded by the emergency communication fund, even following the surcharge increase in 2014. The City collected $123.6 million in revenue from the 911 surcharge in 2016, which covered the majority of the costs associated with providing 911 related services. The remaining operation costs are supported by federal and state grants as well as a corporate fund subsidy. Starting in 2018, 911 surcharge revenues will also subsidize the purchase and implementation of a new 911 system for the city.

Garbage Fee Fund

As part of the 2016 budget, the City established a $9.50 flat monthly fee for each residential unit for garbage collection services provided to residences throughout Chicago. The City spends approximately $244 million a year to collect garbage at over 600,000 residential households. The 2016 garbage fee revenue covered $54.4 million of total garbage collection costs for 2016. The remaining expenses were paid by the corporate budget

Affordable Housing Opportunity Fund

Reforms put in place in 2015 to the Affordable Requirements Ordinance (ARO) help to create more resources for affordable housing and increases affordable housing built on-site as part of market-rate developments. To date, AHOF funds have allowed the City to allocate nearly $40 million for rental subsidies and investment for 4,000 affordable rental units through the Chicago Low Income Housing Trust Fund. The Fund also aims to commit nearly $80 million for the creation or preservation of over 3,000 affordable units in multi-family affordable housing developments across the City.

Neighborhood Opportunity Bonus

Eighty percent of the revenue from the Neighborhood Opportunity Bonus (NOB) is dedicated towards the Neighborhood Opportunity Fund (NOF) for the commercial development and job creation in neighborhoods where the need is the greatest; 10.0 percent of funding goes toward the Landmarks Fund to improve and maintain landmarks throughout the city. An additional 10.0 percent of funds go towards the Local Improvement Fund for local infrastructure improvements within one mile of the contributing development. In 2017, the NOF has issued grants of $3.2 million to 32 grantees across the South, Southwest and West sides of the City