Merger of Chicago’s IT, fleet and facilities departments slowed expense growth

​Findings

The consolidation of the City of Chicago’s Department of Information Technology (DoIT) and Department of Fleet and Facilities Management (2FM) into a single new Department of Assets, Information, and Services (AIS ), announced as a cost-cutting measure in Mayor Lori Lightfoot’s 2020 budget speech and continued in subsequent administration budgets, made only modest cuts to positions and appropriations for the department combined continued to increase. However, expense growth rates have been reduced in several important areas since the merger, including:

  • A reduction in year-over-year departmental spending growth in the post-merger years compared to the combined departments’ pre-merger spending growth rate

  • A reduction in the growth of departmental expenses below the overall growth rate of the city budget

  • A reduction in the annual growth rate of spending on major credit categories, including salaried positions and independent contractors

This report is strictly budgetary, based on publicly available city budget data, and does not examine operational changes or impacts. Viewed solely through an appropriations lens, the merger of DoIT and 2FM has so far been a modest success, slowing — but not reversing — the rate of growth in departmental spending.

Based on the available data, the Better Government Association policy team concludes that the DoIT/2FM merger has successfully met its stated budget goal and offers a potential model for other departments with staff positions and job categories. assignment that overlap considerably.

Background

As part of her inaugural budget for fiscal year 2020, Mayor Lori Lightfoot combined the Department of Information Technology (DoIT) and the much larger Department of Fleet and Facilities Management (2FM) into one new Department of Assets, Information and Services (AIS).

The mayor’s announcement of the merger on October 9, 2019 included a projection of savings of $1 million, with “additional efficiencies and savings over time.” To assess the mayor’s claim and the budget impacts of the administrative change, the Better Government Association’s policy team surveyed city budgets from 2017 to 2022, comparing the three years before the merger to the three years of budget data available. after the merger.

Analysis

At first glance, the projected $1 million does not appear to be actual negative growth or budget cuts. The combined appropriations for DoIT and 2FM in the 2019 budget were $428.9 million, while the 2020 budget contained $435.8 million in appropriations for the new AIS.

However, the overall growth rate has slowed slightly – in the three years prior to the merger, 2FM/AIS budgets grew at a combined average of 5.9% per year, while in the three years after, the AIS budget has increased at an average rate. 5.7% per year. This decrease in the growth rate translated into savings of approximately $5.3 million over the three budget years following the merger.

Since 2020, the growth rate of the AIS budget has also been slower than the growth rate of city budgets as a whole, reversing an upward trend from the years before the merger.

Modification of specific appropriations

The merger should not be credited with all post-merger departmental savings. Prior to the merger, most of the year-over-year growth occurred on the 2FM side of the ledger, with relatively stable DoIT credits:

2FM’s pre-merger budget included broad categories unique to that department and unrelated to the DoIT’s function, such as multi-million dollar rental equipment and services, vehicles, and street lighting categories. Substantial reductions and savings in these categories accounted for almost all of the post-merger savings in AIS budgets. While commendable, these savings represent ongoing operational changes by 2FM and are unrelated to the merger.

However, the consolidation of credit categories shared by the two departments prior to their merger clearly slowed post-merger growth trends. Across these 19 credit-splitting categories, the average annual growth rate decreased from 15.2% pre-merger to 5.2% post-merger, including reductions in the growth of the three main credit-splitting categories: professional services and technical, software maintenance and licensing, and equipment repair and maintenance.

In gross dollar terms, departmental appropriations still increased significantly, but the rate of growth has slowed, and it has slowed most dramatically in the shared appropriation categories used by the two departments prior to amalgamation.

Positions and salaries

As with most municipal services, the largest appropriation category in the AIS and DoIT/2FM budgets prior to the merger is wages and salaries. Growth in the wages and salaries category fluctuated significantly from year to year before and after the merger, but the average annual growth rate fell from 2.2% before the merger to just 0.2% after. fusion :

Prior to the merger, DoIT credits included 50 unique personnel titles, 11 of which also appeared on 2FM credits. The personnel of these 11 titles remained the same in the first year following the merger, with all overlapping positions retained. In 2021 and 2022, the total number of overlapping positions decreased slightly. A small number of positions were renamed or replaced with similar titles which, for the purposes of this analysis, were not counted as eliminated positions.

Among the job changes, only a few clear efficiencies from consolidation emerge, in which positions have been eliminated and not replaced with a similar or overlapping title:

  • Two “assistant to the commissioner” positions have been eliminated
  • A position of “project coordinator” has been abolished
  • Three “staff assistant” posts have been eliminated

Although relatively small in a department of more than 1,000 employees, the elimination of six positions is nonetheless an achievement of the merger’s efficiency objective and, from the 2022 budget, represents a cost saving. about $400,000 in annual salaries. The position of director of information services was moved to the mayor’s office for a year and eliminated entirely in the 2021 budget, indirectly eliminating another $160,000 position that was previously part of DoIT appropriations.

conclusion

The merger of DoIT and 2FM into AIS was announced with an initial goal of $1 million in savings, with unspecified efficiency savings to follow.

Based on the spending trends of the two parent departments prior to the merger, the SIA appears to have exceeded its original target of $1 million. During its three years as a combined department, AIS appropriated approximately $1.8 million less per year, on average, than DoIT/2FM would have had at their pre-Secondary growth rate. merger.

While the overall change in departmental spending trends is relatively small (from an average annual growth of 5.9% pre-merger to 5.7% post-merger), the growth rate has slowed much more spectacular in the specific credit categories shared by the pre-merger departments (going from an average annual growth of 15.2% before the merger to 5.2% after the merger).

Since the merger, six redundant positions have been eliminated from AIS budgets, along with the position of Executive Director of Information Services originally moved to the Mayor’s office. Payroll expenses for the new service fluctuated from year to year, but overall they remained virtually unchanged, with an average annual growth of only 0.2% after the merger.

From a strictly budgetary perspective, the merger of DoIT and 2FM into AIS has exerted downward pressure on relevant spending trends and can be said to have achieved more efficiency than the earlier two-department model.

Comments are closed.