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Emanuel Unveils Major Budget Cut On First Full Day

UPDATED 05/17/11 7:24 p.m.

CHICAGO (CBS) -- Making good on a campaign promise to cut the city budget, Mayor Rahm Emanuel on Tuesday outlined a plan to save $75 million in 2011 through a series of salary cuts for senior managers and other cost-saving measures.

"I don't want time wasted to get there," Emanuel said. "If everyone will give a little, no one will have to give too much." CBS 2's Jay Levine reports.

Emanuel ordered department commissioners to cut their payroll by 10 percent—either through salary cuts, staff reductions or a combination of both. While the 10 percent cut is not negotiable, Emanuel is leaving it up to the department chiefs to determine the best way to get there. He said the cuts will save about $5.5 million.

Most of those savings will be made through attrition or by not filling open positions.

The biggest savings will come from better management of grant programs. Emanuel said the city's poor management of grant dollars is wasting $31 million a year—forcing taxpayers to pick up the difference.

Emanuel said city managers failed to follow-up on securing the second installments of grant money for projects—forcing the city to use tax money to make up the difference.

That's money that could have been used to fix city infrastructure, the mayor said.

The new mayor also asked Chicago's law firms to help defend the city against litigation by providing discounted—or pro bono rates. The city also will rely more in in-house lawyers to handle the cases, resulting in a $3 million savings.

New York City is using a similar model that has saved the city $10 million, Emanuel said.

Another $17.5 million in savings can be achieved by reviewing and eliminating what Emanuel called non-essential contracts with outside vendors.

Emanuel says he already found unsigned contracts left over from Daley administration, and may not sign them. He may instead earmark that money for elsewhere.

The remainder of the savings will be achieved through a variety of other measures, including:

• Better management of construction projects between the departments of Water Management and the Transportation; ($5 million savings)

• Cutting the number of vehicles used by city workers and replacing older vehicles with more fuel-efficient ones; ($1.5 million)

• Eliminating unused rental space; ($5 million)

• Eliminating redundant offices, specifically in the areas of information technology, procurement and payroll ($3.5 million); and

• Improving workplace safety to reduce the number of city workers who are being paid while not on the job due to injury ($500,000).

"These $75 million worth of immediate savings to the 2011 budget are only the beginning," Emanuel said in announcing the cuts at the Chicago Department of Fleet Management Tuesday morning. "They pave the way toward a leaner budget for the 2012 fiscal year, and they also send, in my view, an unmistakable message -- I'm committed to stabilizing the city's finances in order to secure Chicago's long-term economic future.

"For Chicago to continue to thrive as a business hub, every stakeholder will need to approach the deficit reduction with seriousness of purpose, and a willingness to consider new ideas and new ways of doing business."

Emanuel says the 2012 budget deficit is between $587 million and $700 million.

Yesterday, Emanuel also issued a new series of government ethics rules.

New Mayor Returns To Campaign Stomping Grounds
Earlier in the day, Emanuel hugged, and was hugged, and he had smiles and words of encouragement for kids headed to school at the CTA terminal at 95th Street and the Dan Ryan.

"Their faces are filled with optimism, and if I can just impart -- but you know, look, there's something you impart, but there's something they give me, which is to remember why I ran for office; why I wanted to be mayor," he said at the terminal. "This is a sense of my responsibility to them and their parents about making sure our schools are safe and strong, our streets are safe and our finances are stable so we can have a bright future, and I see in their faces a bright future for the city of Chicago."

How did he feel on his first full day on the job?

"Energized, because I'm coming back to a place where I always received not only great warmth and reception, but you've got to remember... the voices you're going to take to the fifth floor," Emanuel told WBBM Newsradio 780's Bernie Tafoya.

LISTEN: Newsradio 780's Bernie Tafoya reports


The people at the station appreciated it.

"He's on the 'L' -- that's great!" said Alexis Mayweather. "Reuniting with the public -- that's good, I like to see that."

Emanuel visited the stop five times during his campaign.

"I am proud to lead a city united in common purpose, and driven by a common thirst for change," Emanuel said.

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