EXECUTIVE SUMMARY...EXECUTIVE SUMMARY C O OK C OUNT YFI S C A L YE A R 2 01 8 • 1 TRENDS AFFECTING FISCAL PLANNING In recent years, Cook County has pushed to restructure and …

INTRODUCTION Cook County government provides vital services for 5.2 million residents of northeastern Illinois, including the city of

Chicago, surrounding suburbs and unincorporated areas of Cook County. These services include:

n A system of public hospitals and ambulatory clinics

n Protection of persons and property services that include policing, corrections, and administration of justice through the Circuit Court System

n Property valuation and administration of property taxes for the County and all underlying municipalities, townships, school districts and other jurisdictions

n Economic development activities, including transportation infrastructure development and maintenance

n Election administration and vital records management

n Finance, administration and other central governmental service

For Fiscal Year 2018 the Executive Budget Recommendation proposes a $5.36B spending plan, which is driven by a

number of policy goals to enhance the County’s services:

n Improve public health outcomes by expanding Medicaid coverage and investing in outpatient services to ensure vital health care access for the most vulnerable residents of the County.

n Foster a justice system that focuses on reducing recidivism and pretrial detention by investing in violence prevention programs, electronic monitoring, I-bonds, probationary and pretrial services.

n Provide economic development opportunities for impoverished communities in suburban Cook County through job trainings programs, public infrastructure funding and affordable housing

n Invest in highway and transportation infrastructure to ensure the County maintains its competitiveness as the Midwest’s key distribution and logistics hub

n Modernize delivery of County services by investing in technology infrastructure that will streamline operations across agencies and allow residents to interact with County government electronically

n Promote a long-term plan for fiscal sustainability to address legacy liabilities and preserve essential public safety and public health services by reducing County government’s real estate footprint, sustain reductions in workforce, meticulous management of health benefit costs and elimination of redundant programs.

EXECUTIVE SUMMARY

C O O K C O U N T Y F I S C A L Y E A R 2 0 1 8 • 1

TRENDS AFFECTING FISCAL PLANNING In recent years, Cook County has pushed to restructure and modernize services to moderate costs while improving services. Used as a baseline to plan for the FY2018 budget, a preliminary forecast prepared in June 2017 identified a $97.6 million gap between revenues and expenditures. In July 2017, the State of Illinois finally passed a budget after almost 2 years, which had additional negative impacts to the County totaling $17.6 million for FY 2018. This additional negative impact increased the budgetary gap to $115.2 million for FY2018. This projection assumed a flat operating tax allocation for the Cook County Health and Hospitals System of $111.5 million; included the full year impact of labor costs increases given in 2017 as part of the 2012-2017 labor agreements; increased debt service by $10 million to fund the capital program; increased expenditures on technology and system maintenance, reserve for claims and health benefits increases.

Although the County has a diverse revenue base, expenditures rise over time due to inflationary pressures (with medical trends for health benefits, annual cost increases on specialty medications and technology contracts, and several other categories of expenditures traditionally growing faster than general inflation across the nation) whereas natural growth in revenues struggle to keep pace. A number of critical revenue sources are declining over time or growing at rates below general inflation. This makes structurally balancing the budget difficult and necessitates difficult decisions. Additionally, the Property Tax levy has not historically kept pace with inflation, and accordingly the value of the gross property tax levy will continue to decline net of inflation. General Fund revenues are expected to grow by $76 million entirely driven by a $127 million increase associated with the full year implementation of the Sweetened Beverage Tax. Absent this tax, year-over-year revenues available to the General Fund toward general operations would decline by $51 million in FY2018.

The County anticipates a continued decline in overall revenues and inflationary growth in expenditures in coming years and is taking steps toward long-term fiscal responsibility and preserving critical public safety and health services. Full Time Equivalent (FTE) positions are budgeted to decrease by 254 or an additional 1% in the General Fund in FY2018 versus FY2017. Added to previous reductions, the County’s overall workforce will be 10.3% smaller since 2010.

FY17 Projected Revenues Amount %

Declining $305,046,298 12.4%Failing to keep pace with inflation

$757,297,422 30.7%

Growing with economy $1,125,589,990 45.6%

OtherGrowth/Decline patterns

$278,928,878 11.3%

Grand Total* $2,466,862,588 100.0%

-$40

-$35

-$30

-$25

-$20

-$15

-$10

-$5

$0

$5

$10

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

Millions

County Treasurer Clerk of Circuit Court Cigare�e Tax Sheriff

FY17 Projected Revenues Amount %

Declining $305,046,298 12.4%Failing to keep pace with inflation

$757,297,422 30.7%

Growing with economy $1,125,589,990 45.6%

OtherGrowth/Decline patterns

$278,928,878 11.3%

Grand Total* $2,466,862,588 100.0%

-$40

-$35

-$30

-$25

-$20

-$15

-$10

-$5

$0

$5

$10

FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20

Millions

County Treasurer Clerk of Circuit Court Cigare�e Tax Sheriff


E X E C U T I V E B U D G E T R E C O M M E N D A T I O N V O L U M E 1E X E C U T I V E S U M M A R Y

FISCAL YEAR 2018 COOK COUNTY BUDGET OVERVIEWCook County receives operating revenues from several sources, primarily through Property Taxes, Fees, Sales and other Non-Property Taxes, Grants, and dedicated Special Purpose Fund revenues. Each of these revenue sources is detailed in the Revenue Estimates section. Revenues are allocated to the County’s five service areas of health care, public safety, property and taxation, economic development, and finance and administration. Operating expenses such as building utility payments and technology maintenance costs are categorized as fixed charges. Finally, bond and interest payments and the County’s pension expenses are also major operating expenditures. The charts below detail the proposed FY2018 revenue sources and the proposed allocation of the revenues.

25,613.1

23,984.9

23,659.4

23,168.9

23,649.7 23,705.8

23,439.2

23,233.4

22,979.1

21,500

22,000

22,500

23,000

23,500

24,000

24,500

25,000

25,500

26,000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Full-

Tim

e Eq

uiva

lent

sAll Funds Total Full-Time Equivalents Since 2010


E X E C U T I V E B U D G E T R E C O M M E N D A T I O N V O L U M E 1 E X E C U T I V E S U M M A R Y

Where The Dollars Come From

*Includes Tax Increment Financing Surplus Total (In Millions): 5,346.6

Finance and Administration, $305.5

Healthcare, $2,110.1

Public Saftey, $1,636.1

Property and Taxation, $135.8

Economic

Development,

$125.6

Fixed Charges & Others, $1,033.4

Where The Dollars Go

Total (In Millions): $5,346.6

Cook County’s operations are funded primarily through the General Fund and the Health Enterprise Fund. The General Fund contains two basic funds: Corporate and Public Safety. The Corporate Fund includes those departments that perform admin-istrative and management functions, economic development, as well as certain services provided directly to the public under the Offices of the President and the Property and Taxation offices. The Public Safety Fund includes judicial and law enforcement agencies, and the Health Enterprise Fund contains departments related to the provision of public healthcare.

In addition to the General Fund and Health Enterprise Fund, the County utilizes special purpose funds that have dedicated revenues, generally fees, earmarked for a specific purpose. Significant special purpose funds include: GIS Fee Fund, Law Library, and several automation funds that affect different County agencies. Together, the General Fund, Health Enterprise Fund, grants, and special purpose funds are referred to as the operating budget.

Cook County’s total FY2018 operating budget is $4.9 billion, an increase of $512 million or 11.6% from FY2017. This is primarily due to higher health care claims costs associated with the projected CountyCare program membership increases. Additionally, despite a 254 decrease in positions, spending increases year-over-year due to a continued movement of capital equipment purchases into the General Fund versus the County’s historic practice of debt funding such purchases, along with the compounding impact of the FY2017 approved increases from the final year of a five-year collective bargaining agreement that called for negotiated wage increases.

To avoid potential confusion, the distinction between the operating and total budget should be emphasized. The operating budget of $4.9 million is the total budget less appropriations for a separate Capital Budget of $476.5 million. Capital Budget appropriations are funded primarily by the proceeds from County bond issues, operating funds (pay-as-you-go) and Motor Fuel Tax revenues received from the State of Illinois. The service life of capital improvements is delivered over a period longer than the fiscal year and results in the County obtaining a capital asset.

The Health Fund increases by 29% overall, driven primarily by the increased membership in CountyCare to a monthly average of 225,000 members from roughly 140,000 in FY2017, because of the State of Illinois’ realignment of the managed care program. The local taxpayer operating tax allocation to the Health Fund decrease by $1.5 million or 1.4% from 2017, continuing a trend that started in President Preckwinkle’s first 2011 budget and Health Fund operating tax allocation have declined by 77.4% since 2010, while still providing over half of a billion dollars in uncompensated care.



63 61 61 65 71 80 83 103

214 193 191 110 93 41 29 7

-

50

100

150

200

250

300

2011 2012 2013 2014 2015 2016 2017 2018

Direct Operating Tax Allocationin millions

Tax Allocation for Hospital and Ambulatory

Tax Allocation for Public Health and Correctional Health

$502.0 $543.0 $561.0

$342.0 $370.0

$450.0 $503.0

$553.0

$0.0

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

2011 2012 2013 2014 2015 2016 2017 2018

Uncompensated Care provided by CCHHS

STATE BUDGET IMPACTThe State of Illinois finally passed a budget in July 2017 after 2 years. Although, it is expected that the state will finally beginn to catch up on its outstanding payables, as of July it owed the County $186 million in revenue for Medicaid fees, reimburse-ments for grants and adult probation related services. In addition, the state began charging a 2% administrative fee for collecting the County’s Home Rule Sales Tax, resulting in a negative impact of $15 million annually. Since the State’s fiscal year ends June 30th, 2018, the County will continue to monitor developments for the State’s FY2019 budget and is committed to making adjustments if necessary during our FY2018, which ends on November 30, 2018.



FY2018 Preliminary Gap, 115.3

General FundExpenditures,

1,980.9

Health Fund Revenues,1,642.8

Health FundExpenditures,

1,701.4

General FundRevenues,1,924.2

PersonnelExpenditureReductions,

30Management Initiatives, 5.50 GF Revenue Increases, 9.20

HealthRevenueIncrease,58.60

GF Organic Revenue Growth, 12.00

Closing the 2018 Budget Gap (in Millions)

CLOSING THE PRELIMINARY GAPThrough collaboration between the Board of Commissioners, County elected officials and employees; the 2018 Budget Recommendation incorporates cost reductions, revenue growth, and management initiatives which will continue to bolster the stability of the County’s finances. In order to come to a balanced budget recommendation, the County faced difficult choices that balance the services we provide to County residents, foremost of all the safety of the public, the mandates of the agencies, and the ability to provide a fiscally sound and financially stable government.

EXPENDITURE REDUCTIONSA total of $35.5 million in cost reductions are included in the FY2018 Budget Recommendation. These are mainly comprised of $18 million in position eliminations and $10.8 million in health benefits related costs savings by continued management of dependent eligibility, enhanced generic pharmaceutical utilization and preferred formulary program related rebates. An additional, $3 million in savings are expected from closure of a center at the Juvenile Temporary Detention Center as the youth population continues to decline and $2.5 million in savings from program elimination and real estate consolidations.

REVENUES THAT EXCEEDED PRELIMINARY ESTIMATESThe health fund revenue is expected to grow by $58.6 million because of increased CountyCare membership growth from 140,000 per month in FY2017 to 225,000 in FY2018. This increase comes through strategic acquisitions and realignment of the State of Illinois’ managed care program. Additionally, in recent years the County’s Department of Revenue has increased its enforcement efforts to maximize compliance of the County’s Home Rule Taxes, resulting in an additional $10 million projected revenue because of these initiatives. Beyond that the County expects an additional $9.2 million mainly through increased reimbursements for probation officer salaries and one-time settlements.



Revenue and Other FundingType General Fund Health Enterprise

Fund Special Purpose Fund Grants Capital Programs Election Fund Debt Service Fund Annuity & Benefits Total All Funds

Property Taxes* $185.4 $82.8 $43.0 $280.4 $167.9 $759.6

Sales Tax $779.2 $779.2

Fees $217.7 $1,943.1 $75.2 $2,236.0

Non Property Taxes $678.7 $27.2 $1.9 $707.7

IntergovernmentalRevenues** $41.5 $2.1 $43.6

Miscellaneous Revenues $34.7 $33.0 $67.7

Other Funding Sources $11.0 $11.0

Grants $224.8 $224.8

Debt Proceeds $342.5 $342.5

Motor Fuel Tax $43.3 $87.7 $131.0

Personal Property Replacement Tax (PPRT) $43.5 $43.5

Revenue Total: $1,948.2 $2,053.1 $153.3 $224.8 $432.3 $43.0 $280.4 $211.4 $5,346.6

Control Officer General Fund Health Enterprise Fund Special Purpose Fund Grants Capital Programs Election Fund Debt Service Fund Annuity & Benefits Total All Funds

Health and Hospital System $2,047.7 $10.0 $17.2 $2,075.0

Offices Under the President $217.9 $62.3 $146.7 $426.8

Cook County Board of Commissioners $8.3 $8.3

Assessor $27.5 $3.0 $30.5

Board of Review $11.5 $11.5

Board of Election Commissioners $17.7 $17.7

Chief Judge $264.2 $11.3 $3.3 $278.9

Clerk of the Circuit Court $105.6 $18.3 $2.8 $126.7

County Clerk $11.2 $1.6 $1.0 $25.3 $39.1

Recorder of Deeds $7.1 $5.4 $12.5

Sherriff $625.4 $2.1 $14.2 $641.7

States Attorney $123.3 $1.8 $26.8 $151.8

Treasurer $1.1 $11.5 $12.7

Land Bank Authority $17.9 $2.7 $20.5

Independent Inspector General $2.1 $2.1

Public Administrator $1.4 $1.4

Fixed Charges** $521.1 $280.4 $211.4 $1,012.9

Capital Equipment Plan $20.5 $5.4 $4.6 $6.1 $83.4 $120.0

Capital Improvement Plan $1.5 $258.3 $259.8

Highway Improvement Plan $3.6 $2.6 $90.5 $96.7

Expenditure Total: $1,948.2 $2,053.1 $153.3 $224.8 $432.3 $43.0 $280.4 $211.4 $5,346.6

Fiscal Year 2018 Summary of Activities by Fund Type

Revenues and Other Funding

Expenditures

FISCAL YEAR 2018 BUDGET POLICY GOALS The FY2018 budget facilitates the primary policy goals of Cook County in the areas of fiscal responsibility, innovative leader-ship, transparency and accountability, and improved services. These include stabilizing the County’s finances, reforming the county’s criminal justice system, invest in highway and transportation infrastructure, modernize Cook County Government through technology investments, and transforming the public health system to increase its focus on more effective and patient friendly inpatient care.



FISCAL RESPONSIBILITYThe FY2018 budget recommendation continues to emphasize long-term fiscal sustainability while preserving crucial public health and safety services. The County will continue to address its primary long-term challenges in this budget: legacy debt service, the Pension Fund’s shortfall, and infrastructure funding.

The County has sought to limit the issuance of long-term debt, and has reduced bonded debt outstanding by 10.3% since 2011. This focus on reducing bonded indebtedness has been coupled with a focus on advocating for comprehensive pension reform, providing the public and Board of Commissioners with a long-term capital budget and debt forecast, and a long-range transportation plan, the County’s first since 1940. This approach was necessitated by the significant debt burden the County faced upon President Preckwinkle assuming office, as well as the Pension Fund’s unfunded accrued actuarial liability of $5.9 billion, or net pension liability of $15.3 billion based on recently adopted accounting standards. In the FY2018 Executive Budget Recommendation, the County continues to incorporate its long-term sustainable plans to address each of these challenges and promote fiscal stability for Cook County government and the services it provides to County residents.

The County began consolidating two County warehouses during 2017 that will create an estimated annual operating savings of $1.46 million in future years. The plan will reduce the County’s footprint by 495,000 square feet, the equivalent of nine acres or almost seven football fields, by FY2018 as the County will shutter one of three current warehouses. Beyond that, the demolition of three jail divisions remains on track along with consolidation of clinical and administrative space at the Health campus. This plan is expected to result in a 1 million square foot reduction by the end of 2018.

Since 2011, annual revenue from leasing space at the Dunne Building (69 W. Washington) has increased by $2 million by leasing the 4th, 34th and 35th floors. In FY2018 the County projects to receive $6.8 million in lease revenues in 2018, an increase of 121% since 2013 by leasing out excess space.

18.80

19.00

19.20

19.40

19.60

19.80

20.00

20.20

FY14 FY15 FY16 FY17 FY18

Reduction in Square Footage

INNOVATIVE LEADERSHIPPublic Safety Reforms:The Public Safety Fund includes the Sheriff’s Office, the States Attorney’s Office, the Public Defender’s Office, the Office of the Chief Judge, the Clerk of the Circuit Court and the Juvenile Temporary Detention Center (JTDC), and comprises 34% of the total budget. In FY2018, the Executive Recommendation for Public Safety Fund portion of the General Fund is $1.38 billion. Several investments were made in this area to achieve compliance with mandates, meet the needs presented by legislative requirements and to improve public safety and access to justice.



The County is also working with the Office of the Chief Judge to reduce its footprint at the Juvenile Temporary Detention Center (JTDC). The center has a functional capacity of 382 youths in 9 centers and at one point the population was over 400 youths. Since 2004, there has been a sustained reduction in the average daily population due to various reforms:

n Legislation limiting the automatic transfers of youth to adult court

n Juvenile Detention Alternative Initiative (JDAI)

n Weekend detention hearing with an improved screening tool

With this sustained reduction, the JTDC can close a center, saving approx. $3 million annually. With Cook County at an inflec-tion point in criminal justice, this fiscally responsible budget continues to prevent destructive cuts that could endanger current reform efforts while supporting our criminal justice system. It also enables the County to double its investment in community-based anti-violence efforts, with over $14 million in community based grants provided since 2014.

6,000

6,500

7,000

7,500

8,000

8,500

9,000

9,500

10,000

10,500

Jan-

12

Mar

-12

May

-12

Jul-1

2

Sep-

12

Nov

-12

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep-

13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep-

14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep-

15

Nov

-15

Jan-

16

Mar

-16

May

-16

Jul-1

6

Sep-

16

Nov

-16

Jan-

17

Mar

-17

May

-17

Jul-1

7

CCDOC Divisional Population

Population

20%386 463 28 9 77 386 77375 450 28 9 75 375 75363 436 28 9 73 363 73352 423 28 9 71 352 71341 409 28 9 68 341 68330 396 28 9 66 330 66318 382 28 9 64 318 64307 369 27 9 62 307 62296 355 26 9 59 296 59285 342 25 8 57 285 57

Population

# of Staffed PODs

# of Staffed Centers

477

443427

402 406

372

325

292

258270

308326

292

239

200

250

300

350

400

450

500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017(Sept)

Juvenile Temporary Detention CenterAverage Daily Population

JTDC Capacity



Highway and Transportation Investments:The FY2018 budget continues to promote investments in highway and transportation infrastructure to ensure the County maintains its competitiveness as the Midwest’s key distribution and logistics hub. In 2017 the Department of Highway and Transportation allocated $100 million in infrastructure improvements and is planning to invest an additional $387M over the next five years. This became possible by the County taking the important step of stopping its decades old practice of Motor Fuel Tax diversion for allowable public safety purposes and reinstating it for highway and transportation needs in 2016.

TRANSPARENCY AND ACCOUNTABILITYTechnology has the power to reshape Cook County Government, breaking silos and streamlining how County business gets done. We are closing the gap created by the historic neglect of IT and the new systems bring innovative improvements in our core mission of health care, justice, and economic development. Through technology, we will secure our data and infrastructure against assaults both natural and malicious. In 2017 Cook County was named 5th of the Top 10 Digital Counties with a popula-tion of one million or more residents by the Center of Digital Government.

The majority of Cook County’s data still resides in hardcopy stored in warehouses. While in recent years the County’s operations were improved through leveraging digital tools, many of these operations still follow practices and procedures designed for the age of typewriters and filing cabinets. The County has made great progress in the last seven years, but we have vast potential for further improvement. We have moved from digital as an afterthought to digital as a primary concern, which was no small feat, but now we must continue the journey to digital by default.

The Public Safety agencies continue their technological transformation. The Clerk of Circuit Court recently awarded a $36 million contract for a new Case Management System which will replace a 40-year mainframe system, with the project’s first phase for electronic filing for civil cases planned in FY2018. The Public Defender’s Office is implementing its new case manage-ment system, eDefender. It will allow for electronic tracking of case assignments. New cases will be created in the system through an automated feed of data from the court which passes through the County’s Enterprise Service Bus. The Integrated Justice system, based on the County’s Enterprise Service Bus (Service Bus) platform, was launched in 2017 with its first data exchange between the Clerk of Circuit Court and State’s Attorney’s Offices. This new integration technology connects the public safety agencies by translating and routing shared data between the agencies. In FY2018 several new exchanges will be added, most notably the exchange between the Sheriff ’s Office and the Illinois Department of Corrections (IDOC). Each new exchange will improve communications between the justice and public safety agencies ensuring quality, accuracy, accessibility and time-liness of criminal history information while also helping to address the policy problem of communication errors with real-world consequences for those in the criminal justice system. In FY2018, Cook County will meet its primary objective to reduce the number of failures to appear in court with the implementation of an Automated Court Reminder System (ACRS). Cook County trial defendants will have the ability to self-register via a secured web portal and receive reminders of their individual court dates. The Service Bus and web portal will interface with the County Interactive Voice Response (IVR) to perform automated robo-calls and alert the defendant of their upcoming trial dates.

In FY2018, the Integrated Property Tax System will go live for the Cook County Assessor’s Office, a culmination of a landmark collaboration effort between the County’s property and taxation agencies. In addition to creating an improved central data-base of the County’s 1.8 million land parcels and all of the related data behind each parcel from five different County agencies, the Integrated Property Tax System will also provide more streamlined ways of processing land services across agencies. Similarly, the final phase of the Integrated Revenue system will be completed, adding the remaining tax types. Beyond that,

C O O K C O U N T Y F I S C A L Y E A R 2 0 1 8 • 1 0


several ongoing Enterprise application projects will be augmented with new functionality. The Enterprise Resource Planning (ERP) system will launch, adding HR, Payroll, Benefits, Inventory, Contract Management, Self-Service, Mobile Supply Chain, and Performance Management features to that Countywide system to effectively manage Finance and Human Resources business processes. In early 2018, all employees will be utilizing the Cook County Time (CCT) biometric Time and Attendance system, which is improving both leave and schedule management while reducing the potential for fraud and time loss.

IMPROVED SERVICESThe Cook County Health and Hospitals System (CCHHS) will continue efforts related to the managed care program known as CountyCare, a healthcare option made possible by the Affordable Care Act. Prior to the program’s implementation, approxi-mately 63% of patients served by CCHHS were not insured and limited in their ability to pay for medical treatment; data through August 2017 indicates that the self-pay population has declined to 39% of total CCHHS patients in 2017. Membership projections for 2018 forecast 225,000 CountyCare members per month up from 140,000 members in 2017. The CountyCare program is expected to generate more than $1,205 million in revenue, which is used to pay claims costs for member care. In addition to caring for CountyCare patients, CCHHS continues to increase its contracts with managed care health plans and commercial insurers to further drive new reimbursement to the system.

63%48% 40% 35% 34% 39%

37%52% 60% 65% 66% 61%

0%10%20%30%40%50%60%70%80%90%

100%

2012 2013 2014 2015 2016 2017

Insurance Status of CCHHS Patients

Uninsured/ self pay Insured



CCHHS will continue to expand the integration of behavioral health services into primary care in order to reduce unneces-sary and costly emergency room visits, invest in new and existing clinical services and facilities, bolster the Patient Support Center to improve patient experience and utilization of services, develop more comprehensive care coordination services at the provider level through enhanced pre-registration, and improve standardized data and reporting capabilities. The Health and Hospitals System is also increasing nursing staffing to improve quality and the patient experience while also reducing overtime.

COOK COUNTY LONG-TERM REVENUE AND EXPENSE FORECASTPursuant to Executive Order 2012-01, Cook County prepares a long-term financial forecast to support responsible long-term planning. The County’s $4.9 billion operating budget helps support vital public safety, public health and property tax related services for its residents. Although the County has a diverse revenue base, expenditures rise over time due to inflationary pressures (with medical trends for health benefits and several other categories of expenditures growing faster than general inflation) whereas natural growth in revenues struggle to keep pace. A number of critical revenue sources are declining over time or growing at rates below general inflation. This makes structurally balancing the budget difficult and necessi-tates difficult decisions.

Importantly, 94% of the FY2018 budget solutions are structural changes that when combined with the Sweetened Beverage Tax passed as part of 2017 budget, will eliminate the deficit through 2020 and continue to reduce the deficit beyond that. These are in addition to the structural changes that were implemented in the FY2017 budget. Although 51% of the changes came in the way of new revenue increases from the increased CountyCare membership for FY2018, they also included over $35.5 million in expenditure reductions as well as other management initiatives

Traditionally, the County solves for existing budgetary gaps with changes that flow into future years, as over 90% of those changes are structural in nature. However, despite those efforts, deficits continue to remain in out years, since several of the County’s revenue streams decline or fail to keep up with inflation on a year-over-year basis. To help address this issue, the County Board approved the Sweetened Beverage Tax as part of the FY2017 budget, that not only solved the budgetary gap for FY2017, without damaging cuts to its Public Safety apparatus; but also allowed the County to address its traditional structural deficit through 2020. Without this revenue, the County would have a $200.6 million deficit in 2018 that would materially impact the Public Safety mandate at a critical juncture in our community. Without the Sweetened Beverage Tax revenue, the County’s long-term forecast would be as follows:



Beyond 2020, we expect cost reductions through operational improvements and efficiencies gained from our strategic investments in technology, as well as revenue forecast revisions to address the expanding structural deficit shown in 2021 and 2022 in the accompanying charts. Though the County is required by statute to present a balanced budget annually, the forecast provides a critical tool in evaluating the long-term fiscal challenges the County faces. This forecast examines the County’s General Fund and Health Enterprise Fund only, as special purpose funds are inherently self-balancing. The Health Fund will still receive a tax allocation in the 2018 budget and is therefore included in the forecast analysis.

METHODOLOGY In projecting each of the revenue sources, the County took into consideration economic drivers like inflation and GDP growth, operating initiatives and regulatory factors that may affect collection of those revenues. This resulted in revenue specific models, which included single and multiple linear regressions that projected a growth or decline rate in each revenue category. Similarly, expenses were analyzed as falling into three primary categories, (i) those expenses that grow at or around the rate of inflation; (ii) employee healthcare related costs that traditionally grow at a medical inflation rate that exceeds the general rate of inflation; and (iii) CountyCare purchased services from third party healthcare providers, which are a function of enrollment projections. The first category includes salaries, supplies, utilities and other non-personnel costs related to the Health System; the majority of which were projected using a 1.96% growth rate, which is the average rate of inflation (CPI-U) over the last 10 years plus 0.36% growth in salaries related to step increases. The healthcare costs were further divided into medical insurance projected using a 5.5% growth rate, and pharmacy related costs projected using a 10% growth rate. The final category was projected as a function of projections for CountyCare revenues and related expenses for which moderate growth is assumed until 2022.

PROPERTY TAX PROJECTIONSIn comparison to FY2017 levels, the forecast continues to show a decline in net Property Tax revenues available for opera-tions due to increasing legacy debt service payments, which are projected to rise from $277M in FY2017 to $292M in FY2022. Legacy debt service payments will rise due to substantial borrowings in prior years, and will be coupled with an impact of new borrowings to fund the County’s Capital investment needs. Furthermore, the Property Tax levy has not historically kept

$1.1

$1.3

$1.5

$1.7

$1.9

$2.1

$2.3

2014 2015 2016 2017 2018 2019 2020 2021 2022

Bill

ions

General Fund-Net Surplus/(Deficit) Projection ($B)

Revenue Expense

-194-136-201 -241 -296



pace with inflation, as the County has not raised its base levy since 1994 and accordingly the value of the gross property tax levy will continue to decline on a real basis, net of inflation. Notably, the County will continue to push for pension reform legislation with the Illinois General Assembly. However, any possible changes to the statutory payments associated with the County Annuity and Benefit fund have not been incorporated in this forecast. Though for the purpose of this model the fore-casters assume that the County will continue to make additional appropriations using the same methodology used in the 2018 Budget recommendation. No representations are being made that these appropriations will continue in this manner, nor should any parties rely on this forecast.

SALES TAX PROJECTIONSThe FY2018 Cook County gross sales tax estimate is $779.2 million and is distributed between the Public Safety Fund and Corporate Fund, with approximately $353.4 million dedicated to a supplemental appropriation for an additional payment to the Pension Fund. The Sales tax faces the structural trend of retail sales migrating online from brick and mortar stores. Sales tax is not applied to online sales consistently as it depends on where the sale originates from, which in many instances would be outside the County. Additionally, as part of its FY2018 budget, the State of Illinois began withholding 2% in sales tax revenue, which they collect on the County’s behalf, for administration costs. Beyond that, in 2018 we are assuming a mild recession as economic data has shown that since World War II, roughly every decade there is a recession, with the last one being in 2008.

COUNTYCARE PROJECTIONSFY2017 was the fourth full year of the implementation of CountyCare, which resulted from Medicaid Expansion as part of the Affordable Care Act (ACA), which has expanded from just adults to families, seniors and persons with disabilities. The Cook County Health and Hospitals System (CCHHS) receives a per member per month (PMPM) payment for each member enrolled in CountyCare. In FY2018, CCHHS estimates the composite PMPM to be $625 for the Affordable Care Act (ACA) population, $156 for the Family Health Plan (FHP) population, and $1,272 for the Integrated Care Program (ICP) population. ACA adult members, roughly 33% of CountyCare’s membership, is at a 95% Federal match. In FY2018, CCHHS expects to retain 75,000 average monthly members in CountyCare for ACA adults, with additional family health plan and senior/disabled populations also participating in the program. Total membership for CountyCare is projected to increase to 225,000 in 2018, due to stra-tegic acquisitions and realignment by the State of the managed care program. The Health System is forecasting an increase in membership that will offset some of the decline experienced from the federal match reductions. The Health System also continues to improve efforts to capture a greater share of the CountyCare revenues by driving the membership to increase use of the system’s healthcare facilities.

A number of other significant revenue sources continue to decline. However, the Cigarette Tax continues to be bolstered by the Department of Revenue’s enforcement actions even as underlying sales continue to fall as smoking cessation programs make their intended impact. Similarly, despite aggressive enforcements that has slightly increased Fuel Tax in 2018, over the long term it continues to fall, while non-Medicaid patient insurance coverage continues to decline in the Health System. Due to the revenue declines outlined above, overall revenue will exhibit a mild long-term secular decline.

EXPENDITURES PROJECTIONThe majority of the expenses including salaries, supplies and utilities are expected to grow at 1.96%, which is the average rate of inflation (CPI-U) over the last 10 years. Health insurance and Pharmacy benefits also are expected to grow at medical



inflation rates, which significantly outpace general inflation (5.5% for health insurance and 10% for pharmacy costs). Despite the high growth rate experienced in medical and pharmacy related costs, the overall County healthcare benefit expendi-tures are going down year over year by approximately $1.7M in 2018 mainly due to management initiatives undertaken to more effectively control health care costs and negotiated benefit concessions with County unions. However, overall trends in health-related costs will continue to rise faster than the growth rate of County revenues.

As the County makes substantial investments in technology, the ongoing portion of those costs for example, software and hardware infrastructure maintenance, are expected to grow at 4%. While the majority of the County’s non-personnel related expenses are expected to grow at inflation, the Health system’s non- personnel expenses are expected to grow at a 1% rate, due to their enhanced focus on a self-delivery model.

FISCAL FORECASTThe charts below depict what the County anticipates in overall revenue and expenditures in coming years with the Sweetened Beverage Tax. Accordingly, the forecast model projects a balanced budget through 2019 with moderate deficits in out years. The County will continue to focus on structural, recurring initiatives to balance future year budgets in order to improve the long-term fiscal outlook.

$1.1

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$1.9

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2014 2015 2016 2017 2018 2019 2020 2021 2022

Bill

ions

General Fund-Net Surplus/(Deficit) Projection ($B)

Revenue Expense

000 -47 -104

$1.1

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$1.9

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$2.3

2014 2015 2016 2017 2018 2019 2020 2021 2022

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ions

Health Fund-Net Surplus/(Deficit) Projection ($B)

Revenue Expense

0 0 0 -39 -38



General Fund - Projected Annual Revenues and Expenses, by Source

Actual/Projection Dept. Estimate FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Property Tax - Tax Levy 311,131,218 201,310,756 188,852,350 178,382,633 178,382,633 176,770,000 163,790,000 167,460,000 168,760,000Property Tax - TIF Surplus 2,666,265 6,715,296 10,607,415 11,012,188 7,000,000 7,170,000 7,350,000 7,530,000 7,720,000

313,797,483 208,026,052 199,459,765 189,394,821 185,382,633 183,940,000 171,140,000 174,990,000 176,480,000

Non Property TaxesSales Tax ¹ 333,455,361 346,771,478 643,831,866 814,710,000 779,200,000 792,900,000 809,200,000 825,800,000 842,800,000Use tax 73,344,296 80,991,543 82,510,276 80,048,645 77,000,000 77,000,000 77,000,000 77,000,000 77,000,000Off Track Betting Commission 1,326,863 1,783,185 1,644,122 1,262,683 1,150,000 1,120,000 1,060,000 1,000,000 1,000,000Gaming 8,453,396 8,508,058 8,552,368 8,586,646 8,550,000 8,770,000 8,820,000 8,870,000 8,870,000Retail Sale of Motor Vehicles 3,061,674 3,634,741 3,200,000 3,222,606 3,000,000 3,080,000 3,050,000 3,020,000 2,990,000Retailer's Occupation Tax 2,828,396 2,747,398 2,826,671 2,880,000 2,450,000 2,490,000 2,490,000 2,490,000 2,490,000Wheel Tax 3,836,749 3,720,806 4,100,000 3,863,553 4,100,000 4,130,000 4,170,000 4,210,000 4,210,000State Income Tax 11,963,348 13,384,885 12,677,951 12,200,000 10,500,000 11,760,000 12,040,000 12,320,000 12,610,000Alcoholic Beverage Tax 35,760,729 36,616,131 37,298,565 36,993,301 37,000,000 38,040,000 39,110,000 39,570,000 40,030,000Gas Tax/Diesel 89,659,844 90,591,948 97,889,174 98,197,615 92,000,000 92,000,000 91,100,000 90,210,000 89,330,000Cigarette Tax 4,579,975 121,921,559 129,587,025 122,463,225 123,500,000 116,900,000 112,700,000 108,600,000 104,600,000Other Tobacco Products 1,576,615 6,219,272 8,139,947 7,561,384 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000Firearms Tax 444,672 426,590 1,242,669 1,708,040 1,650,000 1,650,000 1,650,000 1,650,000 1,650,000Hotel Accomodations 19,617,985 31,796,956 31,750,000 32,690,000 33,650,000 33,650,000 33,650,000Gambling Machine Tax 522,903 987,923 2,193,810 2,037,797 2,100,000 2,160,000 2,230,000 2,290,000 2,360,000Sweetened Beverage Tax 0 0 0 30,626,104 173,445,368 171,620,000 169,820,000 168,040,000 166,280,000Non Retailer Transactions 9,285,927 15,289,970 22,956,187 20,462,037 17,750,000 18,280,000 18,810,000 19,360,000 19,920,000Amusement tax 27,791,345 33,860,195 37,253,279 38,532,290 36,250,000 38,710,000 41,340,000 44,140,000 47,140,000Parking Lot/Garage Operations 44,808,128 46,712,293 48,764,692 47,984,445 49,000,000 50,910,000 52,900,000 52,900,000 52,900,000Non-Titled Use Tax 0 0 0 0 0 0 0 0 0Total Non Property Taxes 652,700,221 814,167,975 1,164,286,587 1,365,137,327 1,457,895,368 1,471,710,000 1,488,640,000 1,502,620,000 1,517,330,000

FeesCounty Treasurer 80,510,200 90,677,013 72,142,890 56,640,771 60,000,000 60,000,000 60,000,000 58,250,000 56,550,000County Clerk 9,986,333 10,120,275 10,580,111 10,942,553 10,610,000 11,430,000 11,430,000 11,430,000 11,430,000Recorder of Deeds 35,947,286 40,078,645 41,772,022 35,375,507 32,900,000 36,330,000 37,390,000 38,480,000 39,610,000Recorder of Deeds Audit 0 113,745 53,871 151,031 175,000 175,000 175,000 175,000 175,000Clerk of Circuit Court Municipal District 1 26,988,054 21,460,801 18,440,375 19,525,354 19,500,000 15,100,000 14,000,000 12,900,000 12,900,000 Municipal District 2-6 20,799,542 21,926,093 19,546,572 20,721,309 21,000,000 18,800,000 18,500,000 18,200,000 18,200,000 Law and Juvenile Divisions 10,368,738 10,684,463 10,125,387 10,148,338 10,000,000 9,800,000 9,700,000 9,500,000 9,500,000 County Division 3,635,526 3,806,249 4,503,385 4,784,933 4,800,000 4,700,000 4,700,000 4,800,000 4,800,000 Chancery, Domestic Relations 11,950,345 11,156,650 11,558,232 11,625,996 11,500,000 10,600,000 10,300,000 9,900,000 9,900,000 Probate Division 1,740,266 1,821,963 1,745,928 1,761,375 1,780,000 1,700,000 1,700,000 1,700,000 1,700,000 Criminal Division 312,080 344,434 321,388 320,000 320,000 320,000 320,000 Accounting Division 2,720,060 4,135,371 4,157,397 3,036,424 2,200,000 3,000,000 3,000,000 3,000,000 3,000,000Sheriff 23,321,700 21,943,773 20,476,946 18,226,300 17,830,108 17,320,000 16,460,000 16,459,000 16,459,000State's Attorney 1,861,607 1,688,347 1,533,209 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000 1,600,000Building & Zoning 3,673,233 4,400,449 3,137,912 3,503,128 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000Environmental Control 5,126,418 4,673,961 5,137,941 4,700,000 4,740,000 4,920,000 5,100,000 5,100,000 5,100,000County Assessor 67,044 67,747 58,683 56,760 56,760 60,000 60,000 60,000 60,000Assessor Tax Fraud 238,697 1,756,934 1,343,525 0 0 0 0 0 0Highway Permits 935,199 1,501,258 1,256,956 1,123,286 1,300,000 1,120,000 1,120,000 1,120,000 1,120,000Public Administrator 798,559 750,068 758,670 900,000 900,000 900,000 900,000 900,000 900,000Liquor Licenses 365,904 348,935 319,131 305,508 305,000 310,000 310,000 310,000 310,000Public Guardian 2,638,121 2,625,635 2,983,178 2,895,695 2,900,000 3,030,000 3,100,000 3,170,000 3,250,000Medical Examiner 1,054,581 1,276,312 1,279,716 1,359,844 1,930,000 2,060,000 2,060,000 2,060,000 2,060,000Court Services fee 9,063,448 8,231,200 7,742,037 7,440,885 6,895,314 6,180,000 5,730,000 5,310,000 4,930,000Cable TV Franchise 1,278,586 1,195,470 1,143,151 1,151,003 1,100,000 1,000,000 1,000,000 1,000,000 1,000,000Other Fees 53,953 277,214 233,939 190,727 200,000 200,000 200,000 200,000 200,000Total Fees 255,435,480 267,063,005 242,352,552 218,166,727 217,722,182 214,155,000 212,355,000 209,444,000 208,574,000

Intergovernmental RevenuesState Criminal Alien Assist.(SCAAP) 1,298,659 1,350,766 1,257,508 1,337,774 0 1,360,000 1,380,000 1,390,000 1,410,000Probation Off, Juv. CT & JTDC 21,623,559 42,756,732 42,536,679 39,967,570 41,189,267 41,190,000 41,190,000 41,190,000 41,190,000Salaries of State's Attorney 195,784 195,792 195,792 195,784 195,784 200,000 200,000 200,000 200,000Salaries of Public Defender 122,945 124,666 124,666 131,320 127,160 130,000 130,000 131,000 132,000Forest Preserve Reimbursement 0 0 0 1,790,377 0 0 0 0 0Total Intergovernmental 23,240,947 44,427,956 44,114,645 43,422,825 41,512,211 42,880,000 42,900,000 42,911,000 42,932,000

Miscellaneous RevenuesInvestment Income 105,000 260,619 332,796 756,447 800,000 800,000 800,000 800,000 800,000Estate of Heirs 500,000 0 0 0 0 0 0 0 0Telephone Commissions 2,837,628 3,356,293 3,284,233 2,870,290 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000Real Estate and Rental Income 5,976,277 5,905,004 7,264,962 8,075,409 7,972,500 7,970,000 7,970,000 7,970,000 7,970,000Other Reimbursements/Transfers 5,085,020 4,956,157 5,584,082 14,456,823 24,948,362 24,950,000 24,950,000 24,950,000 24,950,000Total Miscellaneous Revenues 14,503,925 14,478,073 16,466,073 26,158,969 34,720,862 34,720,000 34,720,000 34,720,000 34,720,000

Other RevenuesMotor Fuel Tax 74,500,000 64,500,000 54,500,000 0 0 0 0 0 0Indirect Costs 9,511,455 9,518,543 8,796,716 11,402,353 10,982,367 10,980,000 10,980,000 10,980,000 10,980,000 Total other 84,011,455 74,018,543 63,296,716 11,402,353 10,982,367 10,980,000 10,980,000 10,980,000 10,980,000

Total Revenue 1,343,689,511 1,422,181,604 1,729,976,338 1,853,683,022 1,948,215,623 1,958,385,000 1,960,735,000 1,975,665,000 1,991,016,000Change Year over Year 7.2% 5.1% 0.5% 0.1% 0.8% 0.8%

¹ Reflects rate reductions for first 4 months of FY14; rate increases for last 8 months of FY16, and first 4 months of FY17.

Actual Projection



General Fund ExpensesActual/Projection Appropriation

FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22Health Ins (501610) 184,636,999 155,114,480 149,680,660 149,548,530 145,107,601 153,090,000 161,510,000 170,390,000 179,760,000Pharmacy (501715) 35,863,375 41,853,826 46,635,616 48,917,588 53,810,000 59,190,000 65,110,000 71,620,000Dental/Vision (501640/501690) 7,034,716 7,034,716 7,220,620 7,691,982 7,880,000 8,080,000 8,280,000 8,490,000Payroll (501010) 919,221,456 952,849,095 989,738,109 978,998,934 1,065,036,305 1,051,120,000 1,056,270,000 1,059,700,000 1,061,390,000Pay-Go Capital 15,000,000 72,860,000 62,765,000 2,660,000 0 0New Bond Issuance Debt Service 4,500,000 16,407,821 17,420,000 43,752,000 51,093,000 77,725,000Comm. & IS Maint.(520150/540130) 31,474,464 31,474,464 52,296,811 49,422,582 51,400,000 53,460,000 55,600,000 57,820,000Contingent Pension Appropriations 270,526,000 349,300,000 353,436,000 367,550,000 378,364,000 410,937,000 432,237,000All Other Expense 260,433,230 244,760,171 249,558,269 189,335,744 193,350,000 197,449,000 201,635,000 205,910,000Total 1,402,418,356 1,442,769,359 1,735,067,945 1,853,058,780 1,948,215,623 1,958,385,000 1,960,735,000 2,022,745,000 2,094,952,000Compensation (Payroll, Health, Pharmacy) Growth -0.5% 7.1% -0.1% 1.5% 1.4% 1.4%Overall Expense Growth Year over Year 6.8% 5.1% 0.5% 0.1% 3.2% 3.6%

Total Revenue 1,343,689,511 1,422,181,604 1,729,976,338 1,853,683,022 1,948,215,623 1,958,385,000 1,960,735,000 1,975,665,000 1,991,016,000

Total Expenses ² 1,402,418,356 1,442,769,359 1,735,067,945 1,853,058,780 1,948,215,623 1,958,385,000 1,960,735,000 2,022,745,000 2,094,952,000

Surplus/(Deficit) -58,728,845 -20,587,755 -5,091,607 624,242 0 0 0 -47,080,000 -103,936,000

² FY14-16 expenditures from Comptroller's Trial Balances. FY17 projected by departments and DBMS. FY18: Budgeted Appropriation. FY19-22: 5.5 % CAGR for health insurance, 10% for pharmacy; Comm & IS at 4%; 1.96% for Additional Pension Funding; payroll reflects the current union proposals plus .36% average salary growth; all other include 2.12% CPI-U 20 year growth rate.

Actual Projection

Cook County Health & Hospital System - Projected Annual Revenues and Expenses, by Source

Actual/Projection Est./Appropriation FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

CCHHS FeesPatient fees (Medicare, Other) 280,772,465 347,318,111 290,436,109 373,012,407 460,000,000 502,000,000 521,000,000 498,000,000 513,000,000CCHHS BIPA 101,300,000 138,668,750 137,435,000 132,337,500 132,300,000 132,338,000 132,338,000 132,338,000 132,338,000Medicaid DSH 169,680,018 157,709,645 157,278,312 156,700,000 134,700,000 113,900,000 96,815,000 82,292,750 69,948,838Managed Care 727,722,979 859,295,613 868,162,903 807,362,319 1,205,100,000 1,241,150,000 1,278,384,500 1,316,736,035 1,356,238,116CCHHS Misc., CCDPH 20,387,105 8,005,811 8,118,594 7,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000Total fees 1,299,862,567 1,510,997,930 1,461,430,918 1,476,412,226 1,943,100,000 2,000,388,000 2,039,537,500 2,040,366,785 2,082,524,954

Property Tax - Tax Levy 38,924,897 149,756,021 121,235,196 87,863,880 82,845,368 83,130,992 84,412,556 87,444,212 90,541,430Sales Tax - - - Cigarette Tax 126,725,126 13,081,290 - 3,404,439 0 0 0 0 0Other Tobacco Products 5,194,095 667,311 - Sweetened Beverage Tax - - - 11,609,958 27,154,632 26,869,000 26,587,000 26,309,000 26,032,000Indirect CostsFirearms Tax 444,672 426,590 - - - - - - - County Tax Allocation 171,288,790 163,931,212 121,235,196 102,878,277 110,000,000 109,999,992 110,997,000 113,749,000 116,572,000

Total Expenses 2

Health Ins (501610) 75,377,095 60,480,354 55,181,743 72,286,531 58,793,198 62,000,000 65,400,000 69,000,000 72,800,000Pharmacy (501715) 16,195,923 20,949,950 20,812,782 21,158,720 23,300,000 25,600,000 28,200,000 31,000,000Dental/Vision (501640/501690) 2,997,077 2,983,622 3,267,561 3,350,000 3,430,000 3,520,000 3,610,000CountyCare (896) 489,401,621 568,560,247 645,873,302 547,783,028 984,900,000 985,000,000 985,100,000 999,902,000 1,014,920,500Payroll (501010) 447,504,863 465,657,552 523,120,704 520,297,120 592,430,760 617,605,000 634,388,000 647,076,000 660,018,000Comm. & IS Maint.(520150/540130) 67,569,242 72,713,590 66,803,259 68,800,000 70,900,000 73,000,000 75,200,000All Other Expense 326,637,016 354,804,117 325,746,503 349,945,000 365,662,000 372,791,600 379,810,892 Total Health 1,370,808,744 1,525,621,970 1,642,329,034 1,591,680,790 2,053,100,000 2,110,000,000 2,150,480,000 2,193,489,600 2,237,359,392Overall Expense Growth Year over Year -3.1% 29.0% 2.8% 1.9% 2.0% 2.0%

Total Revenue 1,471,151,357 1,674,929,142 1,582,666,114 1,579,290,503 2,053,100,000 2,110,387,992 2,150,537,056 2,154,119,997 2,199,098,384

Total Expenses 1,370,808,744 1,525,621,970 1,642,329,034 1,591,680,790 2,053,100,000 2,110,000,000 2,150,480,000 2,193,490,000 2,237,360,000

Surplus/(Deficit) 100,342,613 149,307,172 -59,662,920 -12,390,287 0 387,992 57,056 -39,370,003 -38,261,616

² FY14-16 expenditures from Comptroller's Trial Balances. FY17 projected per DBMS. 18: Budgeted Appropriation. FY19-22: projected by CCHHS

Actual Projection

All Fund Total Surplus(Deficit)

Actual/Projection Est./Appropriation FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22

Total Revenue 2,814,840,868 3,097,110,746 3,312,642,452 3,432,973,525 4,001,315,623 4,068,770,000 4,111,270,000 4,129,780,000 4,190,110,000

Total Expenses 2,773,227,100 2,968,391,329 3,377,396,979 3,444,739,570 4,001,315,623 4,068,385,000 4,111,215,000 4,216,235,000 4,332,312,000

Surplus/(Deficit) 41,613,768 128,719,417 -64,754,527 -11,766,045 0 385,000 55,000 -86,455,000 -142,202,000

Actual Projection



PERFORMANCE MANAGEMENT The County is working to create a culture of data driven decision making through the Set Targets, Achieve Results (STAR) program. The STAR Performance Management Program is a collaborative effort of the Board of Commissioners, Agencies, employees, and residents. All offices and agencies of the County report progress toward stated goals through an open-data web portal-- https://performance.cookcountyil.gov.

The STAR Program publishes performance reports on the website quarterly, allowing the public to access current perfor-mance data in an open data format. The County measures and reports on progress toward critical measures in each of the County’s major functional areas. The system-wide goals for public safety, healthcare, economic development, and finance and administration highlight the top outcomes that the systems are working toward delivering.

In addition, Article X of the County code was amended in 2016 to direct departments and agencies to create a program inventory defined in the ordinance as “a comprehensive listing of services organized into administrative units focused on particular objectives, and a comprehensive listing of all services offered for each Cook County Agency or Department to both external and internal users and that will help provide a better understanding of Cook County governmental services to Cook County residents, employees and elected officials.”

Based on this program inventory, a Performance Based Management and Budgeting Annual Report was produced for the first time in 2017 which tracked efficiency, outcome and output performance metrics for every County program.

PUBLIC SAFETY: The County has set and achieved a goal of reducing reliance on pretrial detention in the adult criminal court system. The elected officials in the public safety offices meet quarterly on policy changes and operational improvements to improve bond court and pretrial services. Since the start of the project, non-cash orders to release at central bond court, the Leighton Criminal Courthouse, have increased while cash bond amounts have declined. The resulting increased release of defendants at and after bond court has generated a reduction in the jail population, to approximately 7,300 detainees from over 10,000. The County is expanding the Public Safety Assessment (PSA) to misdemeanor offenses, to further facilitate reducing unnecessary detention of individuals with minor, low risk offenses.

The County is also committed to reduce the number of youth involved with the juvenile justice system and detained at the Juvenile Temporary Detention Center, by investing in community-based programs (county’s grants) to help prevent violence and recidivism, and to promote restorative justice practices. The county has also been advocating for various juvenile justice reform initiatives. For instance, the Justice Advisory Council successfully advocated for Public Act 99-0258 to limit the automatic transfers (AT) of youth to adult court, which took effect January 1, 2016. Thanks to this effort, compared to FY2015, the FY2016 average daily AT population (109) at the JTDC reduced by 17%. As of September 2017, the JTDC houses as few as 42 AT youth on average. The reduction of AT population contributed to the shorter overall average length of stay and smaller average daily population (326 in FY2015; 292 in FY2016 and 239 YTD), creating an opportunity for the County to right-size the facility.



COOK COUNTY HEALTH AND HOSPITALS SYSTEM (CCHHS): CCHHS continues its transition and expansion of the managed care model of health care delivery. The number of patients enrolled in the County’s managed care network, CountyCare is projected to be 225,000 per month in 2018. As the Health System moves to expand the managed care model, they are working to improve scheduling and access to their clinic network through extended hours and improved preauthorization efforts.

The Health System is also focused on improving the patient experience at the County’s two hospitals by improving staff communication and customer focus in an effort to make the Health System the provider of choice. Finally, the number of visits at the hospital system’s ambulatory clinic network is projected to exceed the FY2017 year-end target by over 48,000 visits, while Stroger Hospital visits are expected to exceed the FY2017 target by over 8,400 visits.

ECONOMIC DEVELOPMENT:Growing the Economy n Chicago Regional Growth Corporation – leadership role in the formation and launch of the corporation designed to spur economic growth and grow jobs in the region.

n Chicago Metro Metal Consortium (CMMC) – manages regional initiative that unites over 80 partners and offers manufacturers resources to grow their businesses.

n Calumet Manufacturing Industry Sector Partnership - employer driven initiative that engages manufacturers to respond to industry identified needs.

Investing in Communitiesn Affordable Housing – designed for seniors, veterans and those with disabilities. Estimated

n $4 Million in HOME dollars to be invested in 2018. Will also look for ways to use CDBG-DR (Community Development Block Grant- Disaster Resilience) funds for affordable housing, where applicable. Simultaneously, we are working to leverage these funds and increase amount available to invest in and promote more affordable housing, from private and not for profit resources. We also support the Housing Authority of Cook County (HACC) in development of critical assets.

n Infrastructure and Capital Investments - Community Development Block Grant Program (CDBG) funding supports a variety of community development activities primarily for the benefit of low- and moderate-incomes persons. The 2017 allocation is $9,801,929, to be distributed for Capital Improvements, Public Services and the South Suburban Economic Growth Initiative.

n The 2017 allocation for Emergency Solutions Grant (ESG) funding is $833,221. Sixteen projects are recommended for funding. ESG funding supports a variety of shelter and service activities to aid homeless persons.

n Zoning Board of Appeals – assists the public in considering all rezoning appeals pertaining to land uses in the unincorporated areas.



Supporting Businessesn Tax incentive program – provides tools to assist businesses moving to Cook County or expanding and reducing property taxes.

n Industrial Growth Zones – designed to help businesses “cut red tape” and move projects forward in designated parts of Cook County.

n Built in Cook Loan Fund - Loan pool using entitlement dollars for industrial/commercial and manufacturing companies. Supporting Communities

n South Suburban Economic Growth Initiative - designed to catalyze investment, redevelopment and grow jobs in the South Suburbs.

n On-line permitting program, managed by Building and Zoning allows businesses and residents in the unincorporated areas of Cook County receive permits in a faster, streamlined manner.

Supporting Communitiesn South Suburban Economic Growth Initiative - designed to catalyze investment, redevelopment and grow jobs in the South Suburbs.

n On-line permitting program, managed by Building and Zoning allows businesses and residents in the unincorporated areas of Cook County receive permits in a faster, streamlined manner.

The Bureau of Economic Development continues to play a leadership role in the formation and launch of the Chicago Regional Growth Corporation, designed to further the economic growth of the region. The Bureau also manages the Chicago Metro Metal Consortium (CMMC) which unites over 80 partners and offers manufacturers resources to grow their business through collaboration, networking, market intelligence and promotion of the region as a leading center for manufacturing. In addition, the Bureau provides key support to the Calumet Manufacturing Industry Sector Partnership, an unprecedented employer driven initiative that engages manufacturers to respond to industry identified needs. Lastly, the Bureau manages the South Suburban Economic Growth Initiative designed to catalyze investment and redevelopment of the South Suburbs.

PROPERTY AND TAXATION:The County has successfully issued the second installment of the property tax bills on time for six years in a row after issuing them late for over three decades. By sending out tax bills on time, the municipalities, school districts, townships and other jurisdictions within Cook County are able to get critical funding on time for their respective budgetary needs; reducing the need for costly borrowing for operating funds. The property and tax elected offices continue to meet quarterly to automate the process and build upon the progress that has been made.

REPORTING:For the Offices under the President, the Performance Management Office (PMO) holds weekly performance management sessions led by the Chief of Staff and attended by County Bureau Chiefs and Bureau of Finance Department Heads. The PMO facilitated 54 STAR review performance management sessions in FY2017 with all participating departments presenting at least twice. The sessions allowed departments to work through zero based budgeting exercises and report out on



efficiency, output and outcome metrics, many of which were created and tracked for the first time. The PMO continued to enhance its data reporting and analysis using the functionality of Quick Score, our performance management data software demonstrating progress on efforts to reform the operations of County’s finance and administration functions.

In addition to the reporting responsibilities, the Performance Management Office works with agencies to refine measures, train mid-level managers on how to integrate data into their day-to-day decision making and perform process improvement evaluations, so targeted operational objectives are achieved. In 2018, the Performance Management Office will continue the process of aligning measures with programs and costs and executing interfaces with the new Oracle based finance and budgeting information systems (Enterprise Resource Planning) to ensure accurate data is entered directly into the perfor-mance management software Quick Score. This process will also be used to further facilitate departments’ understanding of program based budgeting, performance based budgeting as well as the use of “zero based budgeting” practices the County Board mandated by ordinance in 2015.

Zero based budgeting is a tool in producing program based budgets which, along with performance based budgeting represents a break from the traditional use of incremental budgeting. With incremental budgeting departmental managers justify only variances versus past years based on the assumption that the “baseline” is automatically approved. By contrast, a program based budget requires that a budget request be re-evaluated by the outputs, efficiencies and outputs of its services, as well as zero based budgeting principles such as the breakdown of expense activities into meaningfully identifi-able unit costs. This involves, as a start, calculating the actual current cost of a department’s activities services by the cost per unit (for Facilities Management an example would be “operating cost per square foot of building.”) From there services are grouped into programs and a budget per program is created.

President Preckwinkle and the Board of Commissioners supported an ordinance to increase Countywide fiscal responsi-bility, transparency and accountability through increased information reporting. The new measure is aimed at improving the delivery of public services and internal management by establishing new requirements for County departments, agen-cies, separately elected officials, appointed officials and the Cook County Health and Hospitals System to report information.

Under the new ordinance, each County department and agency is now be required to submit highly detailed information with its budget request to the President and Budget Director. This new performance management information includes an organizational chart where all employment positions requested are accounted for; a Program Inventory including an alloca-tion of all requested budgetary costs and all requested employment positions to provide greater detail on County services and programs to residents; and data including Outcome Metrics, Output Metrics and Efficiency Metrics.



Finance & Administration Reporting Office2015

Actual2016

Actual2017 Q3

YTD Actual2017 Q3

YTD TargetVariance

2018Target

Number of Departments Tracking Above Current Budget Overall Budget 10 21 22 20 10% 10Revenue Collected from all Home Rule Taxes (excluding Tobacco Tax) (Millions) Revenue $322 $368 $185 $250 -26% $300Revenue Collected from Tobacco Tax (Millions) Revenue $138 $131 $62 $100 -38% $125Paid Sick Leave per Employee in Offices Under the President in Hours Per Month Human Resources 6 6 6 5 20% 5Average Hiring Cycle Time Human Resources 85 95 95 90 6% 90Percent of Procurements Completed on Target Procurement 36% 43% 30% 70% -40% 70%Invoice Payment Cycle Time Comptroller 54 56 36 30 20% 30

Public Safety Reporting Office2015

Actual2016

Actual2017 Q3

YTD Actual2017 Q3

YTD TargetVariance

2018Target

Average Daily Population - Adult (CCDOC Divisional Population) Justice Advisory Council 7,947 7,418 7,080 7,100 0% 7,100Percent of Orders at Central Bond Court Resulting in I-Bonds or Electronic Monitoring Justice Advisory Council 48% 44% 41% 50% -9% 50%Average Daily Population - Youth (Juvenile Temporary Detention Center) Justice Advisory Council 327 283 239 275 -13% 275Adult Transfer Population held at JTDC Justice Advisory Council 133 91 32 32 0% 26

Healthcare2015

Actual2016

Actual2017 Q2

YTD Actual2017 Q2

YTD TargetVariance

2018Target

Number County Care Enrollees Managed Care 165,949 145,463 140,707 142,500 -1% 225,000Venous Thromboembolism (VTE) Prevention (%) Stroger Hospital 89% 85% 82% 99% -17% 99%Surgery Begins at the Scheduled Time (%) Stroger Hospital 50% 54% 73% 80% -7% 80%Willing to Recommend Hospital (%) Stroger Hospital 69% 72% 83% 85% -2% 85%Venous Thromboembolism (VTE) Prevention (%) Provident Hospital 97% 91% 93% 99% -6% 99%Surgery Begins at the Scheduled Time (%) Provident Hospital 62% 81% 85% 80% 5% 85%Willing to Recommend Hospital (%) Provident Hospital 69% 82% 55% 85% -30% 85%Percent Moving Through the Clinic Visit ACHN 63% 64% 69% 75% -6% 75%Percent of Ease Getting Clinic on the Phone ACHN 62% 61% 62% 75% -13% 75%Average Hiring Cycle Time CCHHS 140 120 106 95 12% 90

Economic Development Reporting Office2015

Actual2016

Actual2017 Q3

YTD Actual2017 Q3

YTD TargetVariance

2018Target

Number of Affordable Housing Units Supported Planning & Development 194 350 670 638 5% 500Number of Jobs Supported Planning & Development 2,100 3,835 366 625 -41% 2,500

Property & Taxation Reporting Office2014 Tax

Year2015 Tax

Year2016 Tax

YearTY 2016 Target

VarianceTY 2017 Target

Date Second Installment Tax Bills are Mailed Countywide 7/1/2015 6/30/2016 6/30/2017 7/1/2017 0% 7/1/2018Valuation Time for Assessment Process Assessor 310 330 334 341 -2% 336Date to Complete Complaint Session Board of Review 4/15/2015 4/14/2016 4/12/2017 4/19/2017 0% 4/20/2018Percent Property Tax Parcels Paid On-Time Treasurer 78% 86% 87% 87% 0% 87%

FUND BALANCE STATEMENT It is Cook County’s policy to maintain a prudent level of financial resources to protect against reducing service levels or raising taxes and fees due to temporary cyclical revenue shortfalls or unpredicted one-time expenditures. The County recognizes that financial reserve funds provide the flexibility to respond to unexpected circumstances that may help the County achieve long-term fiscal objectives.

USE OF FUND BALANCEShould an unforeseen economic or other event beset the County, should this event warrant the use of fund balance and should this use of fund balance cause it to dip below the targeted level, the County will take steps to both ensure expendi-tures, to the extent possible, are adjusted to reflect the new economic reality and develop a plan to replenish the General Fund’s fund balance that will be incorporated in budget development over the next one to three years as necessary to return the balance to its targeted level.

FUND BALANCE TARGET Cook County’s financial reserve policy is to maintain an unassigned fund balance in the General Fund of no less than one month, with a targeted goal to not to exceed two months, of the prior year’s audited General Fund operating expenditures. The table on the following page illustrates projected changes in fund balances for the Operating Funds.



Fund Balance by TypeFY16 Actual

BalanceFY17

Sources/UsesFY18 Estimated Sources/Uses

FY18 End of Year Projection

General Fund Unassigned 130.4 (14.9) - 115.5 Health Fund Unassigned (4,194.2) (497.8) - (4,692.0) Total Operating (4,063.8) (512.7) - (4,576.5)

Special Purpose Funds 52.46 66.95 (56.6) 62.82

BUDGET PROCESSCook County prepares an annual budget that provides a spending plan for the next fiscal year. The County produces a balanced budget, as required by the State of Illinois’ Counties Code, which accounts for the County’s estimated revenue and intended spending. The budgetary basis of accounting is a combination of cash plus encumbrances and accrual basis for property taxes. The County’s Comprehensive Annual Financial Report (CAFR) is prepared in accordance with generally accepted accounting principles using the accrual basis of accounting for the government-wide financial statements and the modified accrual basis of accounting for the governmental fund financial statements. The Health Enterprise Fund’s annual budget is also prepared on a cash plus encumbrances basis, while their financial report is prepared using the accrual basis.

The budget process begins in early summer when departments inform the Department of Budget and Management Services (DBMS) of their expected personnel and non-personnel needs for the next year. DBMS prepares revenue estimates and analyzes other resources available to accurately forecast the fiscal outlook for the coming year.

DBMS prepares the preliminary budget forecast based on the departmental request and estimated collected revenues. The preliminary forecast is required to be filed with the President’s Office by June 30 of each year. The forecast is provided to the Cook County Board of Commissioners and made available for County residents. This year, the County presented its preliminary budget forecast on June 22, 2017. Pursuant to Executive Order 2012- 01, the President holds a preliminary budget hearing to allow residents to express their opinions concerning items within the proposed budget. After receiving input from residents, the President of the County Board and DBMS work with each department to develop a final executive recommendation.

The executive budget, as recommended by the President, is submitted to the County Board’s Committee on Finance, which in turn holds hearings with each department. The Finance Committee holds public hearings at four sites throughout the County to hear resident comments regarding the budget. The County Board considers the budget carefully and may submit amendments that have a net zero impact to the overall County operating budget.

HOW TO READ THE BUDGET:The Cook County FY2018 Budget is both a policy document and communication tool that allocates the various sources of County revenue to their assigned expenditure uses. The Budget presents and explains the County’s policy and operational priorities, departmental functions, performance management targets and goal progress and trends and factors affecting fiscal planning. The County’s Budget includes forecasts of economic and financial conditions, current and planned long-term debt financing, and both look-backs and projections of revenues and expenditures for all County operations – all essential elements for accurate financial reporting and sound fiscal management of taxpayer resources.



This section is a guide for understanding the various sections of the three-volume budget that communicates the policy and spending priorities of the Cook County Government.

The Budget is designed to conform to the best practices and standards published by both the National Advisory Council on State and Local Budgeting and the Government Finance Officers’ Association.

The FY2018 Budget is divided into three volumes:n Volume 1 presents the Executive Summary, Revenue Estimates, Proposed Expenditures, Grants, Capital Budget, Budget Resolution, Policies and Appendices.

n The Executive Summary provides a high-level overview of the contents of the Budget as well as of the budgeting process. This section provides charts and graphs that allow the Cook County resident to chart the reductions in both Cook County Health and Hospitals System tax allocation and County-wide full-time equivalent positions over the last few years. The guide also explains the combination of cost reductions, revenues and management initiatives that work in conjunction to close the preliminary budget gap.

n The Revenue Estimate provides an overview of the major funds that comprise the County’s fund accounting system. It provides detail into the seven major County revenue sources: (1) property taxes, (2) fees, (3) sales tax, (4) other non-property taxes, (5) intergovernmental revenues, (6) miscellaneous revenues, and (7) other financing sources. Beyond this, the Revenue Estimate presents tables that allow the reader to compare current, future and historic tax levies and transportation funding arrangements.

n Proposed Expenditures presents appropriations by type, fund and department. It also details summaries of Full Time Equivalent positions by fund and by control officer. These tables allow the reader to understand the breakout of appropriation among personal services, contractual services, supplies and materials, operations and maintenance, rental and leasing, capital outlay and contingency and special purpose as well as among program areas like finance and administration, healthcare, public safety, etc.

n Grants presents an overview of the grant funds the County is expected to receive for the fiscal year from federal, state, and private agencies for a variety of direct and indirect services provided by the County.

n Capital Programs presents the Capital Budget, including the Capital Improvement Program, and Capital Equipment and Transportation and Highway spending.

n The Resolution is sponsored by the President of the Board of Commissioners and provides for the Annual Appropriations for the upcoming fiscal year and for the closing of accounts under the prior year’s Annual Appropriation.

n The Policies section provides a framework for the efficient and fiscally responsible management of County operations.

n Appendices provide readers with further information about the principle functions of the County, a glossary of terms, departmental directory and a chart of accounts for the current fiscal year.

n Volume 2 presents a deeper dive into departmental appropriations, including their missions, mandates and key activities for both Offices Under the President, all separately elected officials and Cook County Health and Hospitals System.

n Volume 3 presents the County’s job classification and compensation schedule for both unionized and non-unionized employees.



WE WANT TO HEAR FROM YOUWhat are your ideas for improving county services?

What are your ideas for making county government more efficient?How can we improve the budget process for next year?

For more information and to share your ideas, visit our website:http://www.cookcountyil.gov/budget

COOK COUNTY BUDGET CALENDAR MAY/JUNEDepartments submit preliminary revenue and expense estimates to the Department of Budget and Management Services (DBMS). The agencies specifically summarize issues, request specific funding levels, and justify staffing requests.

JUNEDBMS prepares the preliminary budget forecast based on the requests submitted by the departments and the revenue the County expects will be collected. The preliminary budget forecast is filed with the President’s Office by June 30.

JULY The President holds a public hearing on the Preliminary Budget, allowing the public to provide feedback during the devel-opment of the Executive Budget Recommendation.

SEPTEMBERResidents and departments provide input during the final development of the County budget. The President and DBMS work to balance department requests with available resources.

OCTOBERThe President submits the Executive Budget Recommendation to the Committee on Finance of Cook County.

OCTOBER — NOVEMBERThe proposed budget is made available for public review at various locations throughout the County. Public hearings are conducted during which the Committee on Finance considers testimony from service providers, program staff, and the general public. After the hearings have been completed and any amendments inserted, the Board of Commissioners approves and adopts the Appropriation Bill, which authorizes funding and staffing levels for each department.

DECEMBERThe fiscal year begins. The Appropriation Ordinance is implemented on December 1.

ONGOINGQuarterly allotments are implemented and monthly expenditure and revenue reports are reviewed to ensure the resources allocated through the Appropriation Ordinance are managed. In accordance with the STAR Performance Management program, offices report data about how well programs are functioning and services are being provided to ensure high quality services are provided with the resources collected.



Documents

EXECUTIVE SUMMARY...EXECUTIVE SUMMARY C O OK C OUNT YFI S C A L YE A R 2 01 8 • 1 TRENDS AFFECTING FISCAL PLANNING In recent years, Cook County has pushed to restructure and …