Mayor Brandon Johnson’s Costly Agreement
In a recent development, Mayor Brandon Johnson’s administration in Chicago has inked a substantial $40 million agreement with Kansas-based Favorite Healthcare Staffing. The purpose of this agreement is to continue staffing the city’s migrant shelters, and it is set to run through October of the following year.
The Growing Migrant Population
Over the past year, Chicago has seen a significant influx of migrants, with over 19,000 individuals arriving in the city. As of the latest census, more than 11,000 asylum seekers were residing in the city’s shelters, and an additional 3,000 were being accommodated in Chicago police stations.
Examining the Costs
This agreement has not been without controversy, primarily related to the rising costs associated with caring for and sheltering migrants. In a revealing investigation, NBC 5 Investigates found that Favorite Healthcare Staffing received at least $56 million in the past year to staff the migrant shelters, based on city finance records. The core concern among city aldermen and citizens revolves around the hourly rates charged by Favorite Healthcare Staffing.
Hourly Rates Under Scrutiny
A detailed review of invoices for 400 Favorite Healthcare Staffing employees uncovered that Favorite often billed for 84 hours of work per week. These rates varied significantly, ranging from nearly $50 to $156 per hour for regular pay and from $75 to $234 per hour for overtime during the period examined.
The Cost of Housekeeping and Security
For employees assigned to housekeeping, invoices indicated a median pay rate of $17,000 for each housekeeper over a four-week period. This translates to a potential median annual cost of approximately $221,039 for each housekeeper supplied by Favorite. Security personnel, on the other hand, had a median pay rate of $24,000 apiece for four weeks of work, which equates to an annual charge of $312,000 per security guard. These costs raise questions about the effective allocation of resources.
The Challenge of Controlling Costs
The invoices also highlight substantial expenses for specialized roles. For example, a registered nurse’s services for four weeks were billed at more than $64,272, potentially exceeding $830,000 annually. Ald. Brendan Reilly expressed concern about these expenditures, emphasizing the need for cost-effectiveness.
Administration’s Response and Rate Reduction
The Johnson administration has defended the hourly rates, stating that they were inflated to cover administrative expenses, such as housing and transportation. The administration claims to have worked on re-negotiating these rates, including in the latest agreement. While the new contract does introduce rate reductions, these reductions are not uniform across all positions.
Disparity in Rate Reductions
Some positions will see more significant rate reductions than others, based on an analysis by NBC 5 Investigates. These reductions are contingent on whether the staff is local or from out-of-state and requires housing and transportation coverage. The newly reduced rates now range from $40 to $156 per hour.
Ongoing Cost Concerns Around Healthcare
Despite the rate reductions, the expenses remain a matter of concern. If Favorite Healthcare Staffing continues to bill at 84 hours per week, the newly reduced hourly wages for certain positions could still result in substantial annual costs ranging from $264,000 to $374,000 for each worker.
High Salaries for Specialized Roles
Certain positions, such as facility managers and nurses, still command high hourly rates before overtime, as specified in the contract. This means that even with hourly rate reductions, Favorite Healthcare Staffing could still charge the city for six-figure annual salaries for many of its shelter employees.
Seeking Cost Control
The administration’s statement acknowledges the need for cost control and mentions a shift towards a regional recruitment model. The email from Mayor Brandon Johnson’s spokesperson indicates ongoing efforts to re-negotiate rates, promising further reductions starting in October and an emphasis on hiring local candidates.