Budget Analysis: Merger of Chicago's Information Technology, Fleet and Facility Departments Slowed Spending Growth

New Department of Assets, Information and Services reduced spending growth by $1.8 million per year post-merger, exceeding $1 million savings target.

​Findings

The consolidation of the City of Chicago Department of Information Technology (DoIT) and Department of Fleet and Facility Management (2FM) into a single new Department of Assets, Information and Services (AIS), announced as a cost-saving measure in Mayor Lori Lightfoot’s 2020 budget and continued in the administration’s subsequent budgets, made only modest reductions in staff positions, and appropriations for the combined department have continued to rise. However, rates of spending growth have been curtailed in several significant areas since the merger, including:

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

  • A reduction of departmental spending growth to below the overall growth rate of the city budget

  • A reduction in the annual growth rate of spending on key appropriations 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 purely 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 successfully achieved its stated budgetary goal, and offers a potential model for other departments with significantly overlapping staff position and appropriation categories.

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 Facility Management (2FM) into a new Department of Assets, Information and Services (AIS).

The mayor’s announcement of the merger on Oct. 9, 2019, included a projection of $1 million in savings, with “additional efficiencies and savings over time.” To evaluate the mayor’s claim and the budgetary impacts of the administrative change, the Better Government Association’s policy team investigated city budgets from 2017 through 2022, comparing the three years pre-merger to the available three years of budget data post-merger.

Analysis

At face value, the projected $1 million did not appear as actual negative growth or budget cuts. Combined appropriations for DoIT and 2FM in the 2019 budget totalled $428.9m, while the 2020 budget contained $435.8m in appropriations for the new AIS.

However, the overall rate of growth slowed slightly — in the three years prior to the merger, 2FM/AIS budgets were growing at a combined average of 5.9% annually, while in the three years since, the AIS budget has grown at an average rate of 5.7% annually. That decrease in growth rate has translated to a savings of about $5.3 million over the three post-merger budget years.

Since 2020, the rate of growth in AIS’s budget also has been slower than the rate of growth in city budgets overall, reversing an increasing growth trend from the pre-merger years.

Change in Specific Appropriations

The merger should not be credited for all post-merger departmental savings. Pre-merger, most of the annual growth occurred on the 2FM side of the ledger, with DoIT appropriations relatively flat:

The pre-merger 2FM budget included large categories unique to that department and unrelated to DoIT’s function, such as the multimillion-dollar rental equipment and services, vehicles, and street lighting categories. Substantial cuts and savings in those categories accounted for almost all of the post-merger savings in the AIS budgets. While commendable, those savings represented ongoing operational changes on the part of 2FM, and are unrelated to the merger.

However, consolidation of appropriation categories shared by both departments prior to their merger has clearly slowed post-merger growth trends. In those 19 shared appropriations categories, the average annual growth rate dropped from 15.2% pre-merger to 5.2% post-merger, including reductions in the growth of the three largest shared appropriations categories: professional and technical services, software maintenance and licensing, and repair and maintenance of equipment.

In raw dollar terms, departmental appropriations have still grown considerably, but the rate of growth has slowed, and it has slowed more dramatically in the shared appropriations categories utilized by both departments pre-merger.

Positions and Salaries

As with most city departments, the single largest appropriations category within the AIS and pre-merger DoIT/2FM budgets is salaries and wages. Growth in the salaries and wages category fluctuated significantly year-to-year both before and after the merger, but the average annual growth rate has dropped from 2.2% pre-merger to only 0.2% post-merger: 

Pre-merger, DoIT appropriations included 50 unique staff titles, 11 of which also appeared on 2FM appropriations. Staffing for those 11 titles stayed the same in the first post-merger year, 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 purposes of this analysis were not counted as eliminated positions.

Of the position changes, only a few clear efficiencies from consolidation emerge, in which positions were eliminated and not replaced by any similar or overlapping title:

  • Two “Assistant to the Commissioner” positions were eliminated
  • One “Project Coordinator” position was eliminated
  • Three “Staff Assistant” positions were eliminated

While relatively small in a department of over 1,000 employees, the elimination of six positions is still some realization of the merger’s efficiency goal, and as of 2022’s budget represents a savings of approximately $400,000 in yearly salaries. The position of director of information services was moved to the Mayor’s Office for one year, and removed entirely in the 2021 budget, indirectly eliminating another $160,000 line item that had formerly been part of DoIT’s appropriations.

Conclusions

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

Based on the pre-merger spending trends of the two parent departments, AIS appears to have exceeded its initial $1 million target. In its three years as a combined department, AIS has appropriated roughly $1.8 million less annually, on average, than DoIT/2FM would have at their pre-merger rate of growth. 

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

Since the merger, six redundant positions have been eliminated from the AIS budgets, along with the executive director of information services position that was initially transferred to the mayor’s office. Salary expenditures for the new department have fluctuated year to year, but overall have been kept nearly flat, with an annual average growth of only 0.2% post-merger.  

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