CHICAGO — Chicago and Cook County, collectively facing nearly $1 billion of red ink in their next budgets, could save up to $140 million in coming years by consolidating their purchasing power and some services and collaborating on their capital programs, according to a report released Monday.

The report was commissioned in March by the freshman leaders of both governments — Mayor Rahm Emanuel, who took office last month, and County Board President Toni Preckwinkle, who took office late last year — as both administrations grapple with rising operating costs that are outpacing revenue growth.

Chicago is facing an estimated $600 million to $700 million deficit in its 2012 budget after dealing with a $654 million shortfall in its $6.15 billion 2011 budget. Cook County faced a $487 million gap in its $3 billion 2011 budget and a $250 million to $300 million hole looms in the next one.

The aim of the effort to join forces and share resources in some areas of government is to reduce costs and improve services. The report, compiled by a seven-member committee, lays out changes that could be implemented beginning this year and continuing to achieve full savings by 2014.

The group also recommends other areas in need of further exploration, including the possible integration of the city and county's health clinic systems.

"This report is a blueprint for reform. It paves the way for a first-of-its-kind collaboration between the city and county in order to more efficiently deliver our residents with the best services for the best price," Emanuel said.

The city and county, which together employ 58,000 people, could see a potential savings of between $12 million and $24 million by tapping their joint purchasing power, another $11 million to $23 million by streamlining custodial services, and $9 million to $23 million by centralizing energy management, the report said.

Other areas that should be consolidated to either save money or raise more revenue include tax and fine enforcement and collections, fleet management, real estate management, and election services.

The report urges the city and county to begin coordinating their capital programs to achieve economies of scale, though it did not put a price tag on potential savings.

The city has an annual $300 million infrastructure program, not including its airport and water and sewer system projects, while the county has a $682 million program of new and ongoing projects.

As they undertake new projects, the city and county should work through the city's Public Building Commission or another third party for design work, to purchase construction materials, and finance maintenance and operations, according to the report

The city and some of its sister agencies, like the Chicago Board of Education, currently use the 55-year-old PBC to oversee some projects. The county is a member of the commission but does not use its services. "The PBC has suggested that if the county, city, and sister agencies choose the PBC for more of their capital project management needs, the increased volume of work will achieve economies of scale and reduce the unit cost for all clients," the report said.

The report cites savings achieved by other governments that have taken even more significant steps to merge governance and operations, such as Miami-Dade County and Indianapolis-Marion County.

Preckwinkle took note of the city and county's lack of past coordination even as the two governments share the same downtown headquarters. "For decades our two governments have shared a hallway, but never has the city and county seen such a clear and coordinated partnership like this," Preckwinkle said.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.