Annual Financial Analysis
Primer on City's Finances

Primer on City's Finances

This section provides a quick primer on the financial structure of the City of Chicago.

The City organizes its budget by funds, each of which is accounted for separately, and this website is organized in line with that fund structure. Each fund has a specific set of revenue sources, which support a specific set of City services and functions. The following is a brief description of the purposes and funding sources for each type of City fund.

Corporate Fund

The corporate fund is the City’s general operating fund and supports many essential City services and activities, such as police and fire protection, trash and recycling collection, and public health programs. Corporate fund revenues come primarily from a variety of local and intergovernmental taxes, fees, and fines.

Special Revenue Funds

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, snow removal, the library system, emergency management, and special events and tourism promotion.

Enterprise Funds

The City’s enterprise funds include the water fund, the sewer fund, and a separate fund for each of the City’s major airports. These funds are self-supporting, in that each fund derives its revenue from charges and associated user fees.

Grant Funds

Grant funds come primarily from the state and federal governments, and make up a significant and recurring source of revenue for the City. These funds are used to support a range of City services, including community development, youth services, and infrastructure improvement.

Property Tax Funds

The City receives property tax revenue through its levy and through its TIF program. The City uses revenue from its property tax levy to pay its pension contributions and debt service obligations, as well as to fund the library system. TIF revenue is utilized for projects in designated TIF districts.

Capital Funds

Capital improvements to the City’s infrastructure and facilities are primarily funded with the proceeds of bond issuances and state and federal grant funds.

Reserve Funds

Reserve funds, such as those established in connection with the long-term lease of City assets, function as an economic safety net to mitigate current and future risks such as unexpected contingencies, emergencies, and revenue shortfalls. These funds are not included in the City’s annual operating budget.