It’s a good thing Mayor Brandon Johnson established his own “working group” to find long-term solutions to Chicago’s pension crisis. The mountain is getting steeper to climb.

Chicago’s unfunded pension liability rose by 5.4% in 2022 — from $33.6 billion to $35.4 billion — after stock market losses suffered by the four city employee pension funds.

The Firefighters Pension Fund hovers closest to bankruptcy, with assets to cover just 18.8% of liabilities. That’s followed by Municipal Employees (20.7%), Police (21.5%) and Laborers (39.9%).

The certified annual financial report for 2022 by Deloitte & Touche says the “net pension liability due to the short-term impact of the global market volatility” on investment income was offset by a “growth in economically sensitive revenues as the city continued to recover” from the pandemic. Rebounding taxes on sales, transactions, restaurants and amusements led the way, thanks to more travel and tourism.

Chicago closed the books on 2022 with a total fund balance of $633.2 million, “primarily due to a continued recovery in revenues impacted by the COVID-19 pandemic and a decrease in one-time retroactive payments to public safety employees.” Of that total fund balance, $307.3 million was categorized as “unassigned” — not yet dedicated to a specific expense.

Shortly after taking office, Johnson persuaded Fraternal Order of Police President John Catanzara to wait for the Illinois General Assembly to eliminate a two-tier pension system for new and old police officers and firefighters with a promise to tackle the long-standing inequity in the fall.

Johnson then appointed his pension panel. Members include Catanzara and Pat Cleary, newly elected president of the Chicago Fire Fighters Union Local 2.

Like Catanzara, Cleary has argued his members “should only have a one-tier pension plan for all members” and that “a two-tier plan for our newer members with its salary cap and last eight-year requirement must be removed.”

Budget Director Annette Guzman said the revised pension liability is “a little bit higher” than expected, but “a number of pension investments saw losses over the last year, so it’s not that surprising. … There’s probably some additional funding that we can put toward pension liabilities and pension stabilization.”

Guzman was asked what Johnson’s working group could possibly recommend that hasn’t already been suggested by countless other mayoral commissions over the years.

“We’ve only had one meeting. And we have additional meetings coming up this month. So we’re gonna be putting our heads together,” Guzman said. “It’s just too early for me to say anything definitively right now.

“If you’re asking me conceptually, I think it’s important for the city to continue to make payments toward unfunded liability to continue to shore up the funded ratio of its pension funds. What that amount is in a given year, we’ve got to continue to, one, come up with additional revenue and also figure out how to put more of any salvage that we have at the end of every year toward that.”

Before leaving office, former Mayor Lori Lightfoot’s financial team branded the companion bills put on hold until fall “among the largest pension sweeteners in the history of Illinois” with an overall cost exceeding $3 billion through 2055.

One bill would increase benefits for Chicago firefighters hired after Jan. 1, 2011, when Illinois created a two-tiered pension system that reduced benefits for newly hired workers.

Specifically, it would make the annual cost of living adjustment for the most junior Chicago firefighters equal to the full annual increase in the consumer price index. That’s double the current cost of living adjustment, which is either half the consumer price index increase or 3%, whichever is lower.

The second bill would change the final average salary used in calculating Chicago firefighter pensions.

Guzman said the city is working with one “set of numbers” while the state “has another,” so first the two sides must “agree on the underlying facts and the numbers. That’s what we’re trying to get to right now.”

As always, the city audit is full of information about Chicago’s finances and economy. Some highlights:

• Chicago police made 41,449 “physical arrests” in 2022, up nearly 8% from 38,400 in 2021. In 2013, there were 143,618 physical arrests.

• Emergency responses by Chicago firefighters, emergency medical technicians and paramedics declined 6.5% — from 632,745 in 2021 to 591,229 in 2022. That’s compared to the nearly 7% increase a year ago. In 2016, there were 713,492 emergency fire calls.

• Total long-term obligations stand at $67.8 billion, up from $65.4 billion the year before.

• Chicago completed $114.7 million worth of infrastructure projects in 2022, including $79.9 million in street construction and resurfacing, $25.6 million in street lighting and mass transit projects, and $9.2 million in bridge and viaduct reconstruction. O’Hare Airport added $703.3 million in capital improvements. At Midway Airport, it was $12.1 million.

• Average daily water consumption rose 9.5%, reversing a more than decadelong decline tied to an increase in the number of Chicago households with water meters. Revenues generated by a 5% increase in water rates effective June 1 was offset by a 117.5% increase in “provision for doubtful accounts,” most more than a year old, characterized as “uncollectible.”

• Daily refuse collection declined — from 3.45 million tons per day in 2021 to 3.16 million tons in 2022.

• Operating revenue at O’Hare rose by 10%, or $114.2 million. That was due to increased terminal use charges and landing fees of $24.4 million, a $66.7 million increase in concession revenue and a $23.2 million hike in hotel revenue. The total number of “aircraft operations” at O’Hare — including cargo and general aviation — rose from 684,201 in 2021 to 711,561 last year. That’s still short of the 919,704 operations by domestic, international, cargo and general aviation carriers in 2019. The total number of passengers boarding planes at O’Hare rose from 26.9 million in 2021 to 34.1 million last year.

• At Midway, total operating revenues rose by $11.6 million due to a “significant increase in leisure passenger traffic and terminal rental revenues and concessions, primarily parking revenues.” Total aircraft operations stood at 214,427. That’s up from 185,956 the year before but still way down from the 253,519 high established in 2015.

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