County seeking $200 mil. loan: Board members angry weeks after being told finances were fine

Chicago Sun-Times

July 8, 2006

By Steve Patterson

Twelve weeks ago, Cook County chief of staff James Whigham -- running the county's day-to-day operations -- flatly denied the county was in such dire financial straits that it would have to borrow money to make ends meet.

Friday, things changed.

For the first time in more than a decade, Cook County must borrow to help pay the bills.

According to an ordinance delivered to commissioners, they will be asked Wednesday to allow the county to seek a $200 million loan.

"We were arrogantly told everything was OK," Commissioner Mike Quigley said. "It wasn't."

The request from county chief financial officer Thomas Glaser outlines terms that call for the county to pay the loan back over 18 months, at 10 percent interest.

That will allow for "timely payment of general county expenses," Glaser's request says.

Multiple county contractors have been grumbling in recent months about delays in being paid.

Glaser's request cites delays in the county receiving its share of state funds for general county and hospital expenses.

If approved, the $200 million would represent about 6.6 percent of the county's $3 billion budget.

Titanic comparisons last month

County officials did not respond to requests for comment, but just last month, Glaser compared county finances to the Titanic, telling commissioners he sees "icebergs floating" and "I have my life preserver on."

The request to borrow funds comes three months after Crain's Chicago Business reported the county was asking local banks about a loan -- and Whigham scoffed at the report.

"Either [officials] didn't want to be totally candid with us or they didn't see it coming, which would be an even greater concern," said Commissioner Peter Silvestri. "Nothing good comes from this."

The request is likely to embolden a county board already feeling more independent in the wake of John Stroger's resignation last week as board president.

His resignation, effective July 31, prompted a flurry of filings by commissioners, demanding greater financial accountability -- most of it aimed at the county hospitals.

Last month, records showed the bureau of health was falling substantially short in revenues, driving projections of a county budget deficit to more than $88 million.

Copyright 2006, Chicago Sun-Times, Inc.

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