Mayor Daley’s chief financial officer, Gene Saffold, called a press conference this afternoon to talk about layoffs to help plug the city’s latest gaping budget hole. This follows two days of meetings Daley aides held with aldermen to try to assuage their concerns—without actually providing details—about the mayor appearing to hand the International Olympic Committee a blank check to pay for the 2016 games.

As the administration and City Council look for "creative" solutions to our money problems, they might want to take a close look at one of the city’s rising outflows of cash: lawsuit payouts and legal fees.

Last fall I reported that Chicago has been paying more in legal settlements and judgments than LA, Houston, Phoenix, Philly, and Dallas combined. From the beginning of 2005 through the middle of last year, Chicago paid out nearly $230 million. Los Angeles, which has a million more residents, paid out about $77 million in that time. The vast majority of Chicago’s payments were for lawsuits involving the police department.

The city has since released data for the second half of 2008, and a little number crunching shows that while the pace of payouts may be slowing, taxpayers are still spending piles of money on these legal expenses:

• From July through December of last year, the city spent nearly $27 million to close lawsuits. That’s down from the breathtaking $103 million paid out the first half of 2008, but it’s hard to call it great news, since as recently as 2005 the total was about $34 million for the entire year.
• Of the $130 million tab for 2008, $78 million, or about 61 percent, went toward police-related suits.
• The next-highest sums covered lawsuits against the fire ($23 million) and transportation ($13 million) departments. Another $12 million was spent to settle claims related to the Shakman consent decrees, court-ordered bans on political hiring and firing.
• All told, the city paid out more than $256 million in settlements and judgments from 2005 through 2008, including $172 million for police-related suits. The annual totals rose each year.
• On top of those figures, the city spent $52 million during that time to pay fees to private-sector attorneys who worked on some of the cases. Almost $37 million of that money was used on suits involving the police.
• Preliminary data released by the city suggest 2009 should be less costly than 2008 but significantly more expensive than previous years. Through the end of April, the city had spent about $18 million on lawsuits. If that rate holds steady through the rest of the year, the 2009 total would hit $54 million—the second-highest ever, behind last year.

 

	TOTAL PAYOUTS	POLICE PAYOUTS	OUTSIDE COUNSEL COSTS
2005	$                  33,843,218	$                   22,704,681	$                    12,449,120
2006	$                  48,015,706	$                   33,499,150	$                    11,513,958
2007	$                  44,731,829	$                   37,146,953	$                    12,640,506
2008	$                129,670,874	$                   78,727,632	$                    15,666,458
TOTAL	$                256,261,627	$                 172,078,416	$                    52,270,042