Brothers and Sisters,

I am asking for your support to represent our shared interest, securing our pension fund, by voting for me as an active trustee of the pension fund.  I share your concern that our dangerously underfunded pension fund is being neglected.  Our concerns are not misplaced, and I am disappointed by the deafening silence of some of the veteran trustees on the pension board and the Local 2 leadership. My concerns are based on my experience in municipal finance and what I saw as a trustee on the pension board.  A review of Chicago’s financials should concern anyone that is relying on our pension fund for retirement.  And just like Chicago’s comptroller has to prepare an annual budget, I’ve had to do that for my municipal clients.  I quantify and forecast the limited revenue sources just like Chicago does – from property taxes, sales tax, state income tax to motor fuel tax, ambulance billing fees, marijuana sales and federal grant money.  As a municipal finance professional, I also have a strong understanding of Chicago’s expense structure – from labor agreements, health care, and capital spending to debt service and pension payments.

My concern, and what I think should be all our concern, is that the city won’t sustain the required increased payments to our pension.  The days of providing bloated contracts to connected developers, attorneys, and campaign contributors needs to end.  The city has borrowed way beyond its means; it has employed the fiscally irresponsible practice of “scoop and toss,” tossing current debt out to future generations to pay.  My primary goal as a trustee is to make certain that when the city makes decisions on what must be cut due to the lack of revenue, it isn’t our pension fund that is shortchanged yet again.  I made the unpopular decision to litigate against the city for adequate funding for our pension fund during my first term as a pension fund trustee.  I assure you I am again prepared to propose litigation against the city if they fail to make adequate payments going forward.  It is unfortunate that some of the active trustees that we elect did not have the courage to support litigation against the city.

When Chicago proposed additional TIF funds that continue to siphon off the property tax revenues meant for essential services and pension fund payments, our interests should have been aligned with a strategy of vigorously opposing TIF funds rather than going along with the program of expanding them.  Chicago’s TIF programs have benefited connected developers more than act as an effective development tool for our neighborhoods.  Our collective voices have failed to engage in the process to prevent continued TIF abuse.

When the Daley administration imprudently leased away the city’s critical infrastructure rather than address serious fiscal issues, Local 2 looked the other way as financial institutions purchased our roads, parking lots, and parking meter revenue streams.  Again, another missed opportunity to speak up and address structural weaknesses facing our retirement security.

When Rahm Emmanuel, who Local 2 endorsed, proposed floating up to $10 Billion in pension obligation bonds, our collective voices were silent.  Rahm Emanuel’s proposal had almost perfect timing, interest rates were very low, and it coincided with the beginning of a huge rally in the equity markets.  In hindsight the proposal would have helped secure funding that would have generated substantial investment returns.  Local 2 was silent, our collective voices should have offered support for the proposal.

When the federal government responded to the pandemic crisis with billions of dollars transferred to the city through the American Rescue Plan Act (ARPA), our collective voices failed to speak up for our fair share.  The US Treasury transferred these funds with very little stipulation attached, allowing Chicago to spend the money as it saw fit.  Chicago developed a plan to spend the funds “through an extensive process of community engagement, consultation and analysis.”  The US Treasury Department recommended utilizing some money for premium pay to key frontline workers during the pandemic.  If there was ever an opportunity for our newest members to be justly paid for acting as front line EMTs, rather than waiting 54 months, this was the opportunity.  Again, another failed opportunity to engage.

When the Civic Committee of the Commercial Club of Chicago proposed a 10-year personal and corporate income tax to fully fund the State’s pension liabilities, no one representing our membership stood up and supported the proposal.  Keep in mind, the Civic Committee is the organization that helped spearhead the opposition to Governor Pritzker’s progressive income tax amendment.  The Civic Committee’s concern was that the politicians would not be fiscally prudent with unchecked revenue resources.  However, the Civic Committee stated it would support taxes earmarked specifically for pension liabilities.  Where were our collective voices supporting this proposal?

When Moody’s threatened to drop the city’s debt to junk status, our collective concern was indifference.  In response, Chicago created a separate, bankrupt remote corporation, which housed the sales tax revenue Chicago received from the State.  Essentially, bondholders told Chicago “We don’t trust you with your finances.”  In order for Chicago to borrow money at competitive rates it had to put sales tax revenue in a bankrupt remote corporation.  Going forward this revenue couldn’t be used to fund our pensions or provide contract enhancements because Chicago wasn’t even allowed to access the funds.

We can’t ignore these issues; they must be addressed.  We must stand up to defend our retirement security and demand adequate city resources to properly fund our pensions.  I promise you I will continue to be that voice.  Our collective voices need to be heard.

Equally important is the administration of our pension fund.  I will not participate and will adamantly speak out against politically motivated votes for pension benefits.  It is an insult that Local 2’s political motivations against individuals would ever present itself in the actions of the pension board.  I would never withhold a vote for benefits for any member due to political pressure from Local 2 or the city.

I am not afraid to stand up alone and speak the truth, no matter how uncomfortable it can be.  I do not seek or ask for other’s endorsement.  My opinion is mine and it is up to me to defend it and speak it.  I am not a go along type of person just to avoid conflict.  I am not the city’s choice for this position, and I am proud of my independence and the opposition it has created.  The Local 2 leadership should not be offended that I proposed eliminating the $1 Million we annually send to our International until they straighten out their own pension crisis.  And Local 2 shouldn’t be offended that I propose our union quit contributing to political candidates that ignore us.  Local 2 should not be offended with facts and common sense.  If you want to hear an educated alternative view that is grounded in fact, experience, and independent thought, I think I am your best choice.

Ballots will be mailed to your home no later than September 18th and will be counted on October 22nd.  Your completed ballot should be mailed back by October 15th to ensure it is counted.  I appreciate your support.  Stay safe!  Be engaged!   

Tim McPhillips

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