August 25, 2023
The Civic Federation issued a report in 2008 that reviewed the operations and finances of the Illinois International Port District (IIPD). In that report, A Call for the Dissolution and Restructuring of the Illinois International Port District, the Federation expressed concerns about:
- The District’s focus on recreational activities in its operation of a golf course rather than improving port operations;
- A decided lack of transparency and openness to the public in the District’s governance and reporting; and
- The lack of a strategic plan or vision for the Port District’s future.
At that time the Federation called for dissolving the District and then:
- Transferring port operations and related lands to the City of Chicago;
- Transferring open land on District property to the Forest Preserve District of Cook County; and
- Transferring Harborside International Golf Center to the Chicago Park District.
Since the release of the Civic Federation’s 2008 report, the Port District has significantly improved the transparency of its operations and has undergone a planning process with the assistance of the Chicago Metropolitan Agency for Planning. The Federation will follow with interest as the Master Plan is implemented by the District and will take into account progress on implementing the plan in any future position on port dissolution.
This blog post reviews the changes that have been made in Port District operations since 2008 as well as a summary of current District finances.
About the Illinois International Port District
The Illinois International Port District was created by the Illinois General Assembly in 1951. The District’s mission is to promote commerce through the port and port related facilities in Chicago. IIPD’s boundaries are coterminous with Chicago and it has title to 2,000 acres of property in and near Lake Calumet on the far south side of the City, including the port of Chicago and the Iroquois Landing facility.
The Port District operates as a lessor of facilities primarily for maritime operations, which include storage facilities, dockage and wharfage and Foreign Trade Zone #22. The enabling statute permits the District to lease property, rights of way and privileges for up to 99 years. It must contract for operating its public warehouses and other public storage facilities. In addition to port facilities, the District also operates the Harborside International Golf Course, managed by Kemper Sports.
A nine-member board of directors governs the IIPD. The board consists four members appointed by the Illinois Governor and five appointed by the Mayor of Chicago. Their five-year staggered appointments must be confirmed by the Illinois Senate. Board members are allowed to receive annual compensation not to exceed $20,000, although with board approval, the chairman may receive an additional $5,000. Members receive reimbursement for expenses incurred in the performance of their duties as well.
Improved Port District Transparency of Operations
In its 2008 report, the Civic Federation had a number of specific concerns regarding the Port District’s transparency of operations and reporting to the public. Since then, the District has made significant improvements regarding these points. The changes between 2008 and 2023 are summarized below, grouped in three categories: port district governance, finances and operations.
Port District Governance
Information about Board of Directors Meetings
In 2008 the District did not make information about its Board of Directors meetings publicly available.
The District now posts board agendas, finance and personnel committee agendas, lease and agreement agendas and board meeting notices in a section of the website called “Public Information.”
Also, Board and Committee meeting minutes are posted at https://www.iipd.com/public-information.
Information about Board Members and Staff
In 2008 the District did not make the names and/or contact information for District board members and staff publicly available.
The names and Biographies of the Board of Directors and the District staff are now posted on the IIPD website. However, contact information for Board members or staff is not provided other than a general phone number and a contact request form.
In 2008 the District did not publicize press releases about the port or provide any sort of annual report or projects update.
News releases are now published on the IIPD website.
Port District Finances
In 2008 the District did not publicize its audited financial statements or other financial documents. Freedom of Information Act (FOIA) requests were required to access these documents, and the District’s audited financial statements specifically stated that they were not for public use.
Port District Operations
Economic Impact Study
In 2008 the District did not publish a full economic impact study.
IIPD now posts a short summary of economic impact, although this is not a full report.
In 2008 the Port District did not have a strategic plan or any other type of plan.
In 2020 through 2022 the Port District worked with the Chicago Metropolitan Agency for Planning (CMAP) to develop a Port Master Plan. The purpose of the Plan is to identify ways to better use the Port’s facilities and to strengthen its economic potential.
Doing Business with the District
The District also now provides information about in the “Doing Business” section of the website. This includes information about RFP/Procurement opportunities, leasing opportunities, security, tariff schedules and current projects.
Illinois International Port District Finances
The IIPD is a business-type enterprise. It does not have the power to levy taxes, but can generate revenue through leases, rentals, and other fees. It also can apply for grants, loans, and appropriations from the federal government, the State of Illinois, and the City of Chicago. The District is authorized to issue revenue bonds, notes, and certificates.
The District’s FY2023 operating budget revenues are projected to be $5.6 million. Of that amount, nearly $3.5 million, or 62.2% of the total revenues, will come from transit shed and warehouse fees as well as land leases. Smaller amounts will derive from dockage and wharfage fees, Harborside golf course revenues and other sources such as elevator, free trade zone or port fees.
Operating expenses for the Port District will be $5.0 million in FY2023. The largest amount is budgeted for salaries and benefits, or $1.8 million. Legal and professional fees will total $675,000, or 13.4% of total expenses. Insurance expenses will be $566,000 and repairs and maintenance will require $500,000.
The next table examines total revenues and expenses for the Port District for the five-year period between FY2019 and FY2023. During this five-year period, total operating revenues rose from $5.0 million to $5.6 million, a 10.8% increase. Operating expenses rose from $4.3 million to $5.0 million, or by 18.3%. In each year the District reported a positive operating balance, shown below as revenues, net of expenses. However, the District also pays annual interest expenses, which are the cost of borrowed funds.
In 2020 the District issued a $9.4 million taxable revenue refunding bond. A portion of the proceeds were used to repay a 2003 variable rate refunding bond originally issued for $15.0 million. Due to the retirement of that debt, the interest expense budgeted to pay for debt service on this bond fell from $845,000 to $434,00 between FY2019 and FY2023. The interest expense payments are reported on income statements as non-operating expenses. They are subtracted from revenues, net of expenses, and are reported as a net income or loss figure. In FY2019, IIPD reported a $47,000 loss. However, in the four subsequent years, positive amounts were reported. The Port District was in violation of certain financial covenants as of December 31, 2016, because it did not have sufficient assets to make payments. Public Act 100-0546 forgave some of that debt owed in 2017.