tomato can

Yeah money sure does make its way into the hands of some bad people

I have not lied to you. I will try and help you to better understand what I am saying. Yes there are standard practices. The mall had to go against the grain and do things to keep certain retailers there and to pay the bills. The mall in the 90's was a thriving mall with almost 1 million square feet of property. It was anchored by Carson Pirie Scott, Montgomery Wards, Circuit City, & Walgreens, yes Walgreens was there for a long long time. Hard to believe but we had them. Wards went bankrupt and closed I believe in 1998? It was a big loss. They had 4 levels and over 400,000 square foot. In 2004 Circuit City was in such bad shape they closed our location. Walgreens was wanting out because there stores were all free standing. We had no luck getting a retailer to take the Wards location. It sat empty and the losing Circuit City hurt. Some very good National Retailers like New York & Company, Limited, Limited Express, & Wilson's Leather to name a few did not resign leases and left. Sam Goody and Musicland were in financial trouble with the downloading of music online. Everyone that remained there was feeling the pinch of less traffic in the mall. Some of those locations were replaced with stores like Man Alive, Jimmy Jazz, J Bees, DTLR. The mall was becoming more of an Urban mall by adding those hip hop stores. Walgreens closed their location and began to try and sub-lease it. The mom & pop stores that were there for years were hanging tough. The nationals that remained knew they were in a position to bargain. Men's Footlocker, Ladies Footlocker, Finish Line, Champs Sports, Ashley Stewart, Lane Bryant, & Finish Line to name a few all had big stores, some as big as 15,000 to 20,000 square feet. Reduced levels of traffic = reduced levels in sales. Their real estate people knew this and wanted a much better deal to remain. I wont say which one but one of them were able to even cut a deal for just percentage rent. I know there are standard practices in this business. Even in good times when the malls could stick to those practices. Kb Toys did not pay the same amount per square foot as a Men's Footlocker, Finish Line, Lane Bryant, Victoria Secret, Bath & Body Works. They were never capable of generating the amount of sales those retailers could. Those national retailers that could generate big sales numbers paid the $40 per square foot rent. The moms and pops didn't pay that amount either. The Lottery stores selling lotto tickets, soft drinks, magazines, & newspapers couldn't afford that rent either. KB being a national retailer on a much smaller scale paid more than the mom & pop but there were not paying the premium rent that the big players paid. The anchor store while they had lots of space and were considered the stores that would draw in the traffic, they were paying very little per square foot for rent. I know Mitt wasn't with Bain when they KB deal was done. My point was that he worked for that company that had predatory business practices and they did some very shading deals in the eyes of a lot people. Anyone running for public office is subject to this scrutiny. People want to know what role he played when he was there in the deals that went bad or looked very shady. I certainly hope I cleared things up a bit. I wasn't trying to come up as disingenuous.

Speaking of women you sure got your panties in a bunch just kidding. I guess we will have to agree to disagree on this topic. One valid point that you made was there was a good chance that KB was headed for this. Bain just made sure they got them there faster. I mean heck we are all going to die some day, I don't think we are looking for someone to speed that up..... One last point that I would like to state again. Bain was sued by the creditors. They were sued because the acted totally unethical, they looted this company of its money, and screwed the creditors. Those creditors had a good solid case and were ready to prove it in court. Bain not wanting to be expossed for this quickly settled and made sure that the terms were not disclosed. You can say so what. I say those are the facts and they are undisputed! And as Billy O would say................I will give you the last word

Is that your final answer? I have answered plenty of questions in this topic including several by you. But I am not going to play a childs game with you. I have not misstated anything. I have spoken from my own expierences. Who knows maybe some landlord hosed in a lease that had a personal guarantee and you are still stewing about it today and its got you thinking you are all the sudden the know all of leasing.....

It can vary by location. I would suggest you look it up!

Depends on which formula the landlord uses, there a quit a few of them they can use to calculate s/f. Yes a real indoor mall. Base rent.

I was responding to the comment tiny mall stores................which my reply was small stores like KB can usually be around 700 sq feet. Did they have stores that were 1,000 sq feet, 1,500 sq feet. I am sure they did and I am sure those malls that they had larger stores in had high volume of traffic. Yes that is my contention.

Jim, I will give you an opinion. Look at it this way. Its a little off topic but its a reason a lot of people don't get mad about it this. For Example : Bain Capital got close to a 400% return on investment after it purchased KB Toys and took out dividends. Lot of people looked at that shortly after KB went into bankputcy and said hmmmmm, all this looks fishy, maybe even criminal. People that support what Bain did say hey "that's business". Now take raising taxes 300% on dividend paying stocks. Take your Policeman, Fireman, or School Teacher that make $70,000 a year. Got a wife, kids, mortgage payment, car payments, school tuition, insurance, ect. They don't have the luxury of purchasing dividend paying stocks. Do you really expect them to feel sorry for the guy making well into the 6 figure range with enough disposable income to purchase dividend paying stocks because he got a tax increase? You know what there response usually is "that's investing" Now I dont agree with raising taxes 300% on someones dividend paying stock because it's an absurd amount. I havde stated my opinion on the Bain / KB Toys debacle in another thread. Don't want to sound like a broken record repeating in this thread.

Yes Bain assessed the client, took their shot, that's business. I will counter with paying TAXES is part of doing business. Yet I see a lot of conservatives cry a river of tears about having to pay taxes! Remember "that's business" Upset? Not really. I didn't lose anything. Sad? Yeah sure. Sad to see good hard working Americans lose a job. Sad to see good people that I was able to interact with while working for the mall management company lose a job. Sad to see the college kid struggling to keep his head above water, work & go to school lose his job. Sad to see the high school teenager lose his or her part time job. You are giving me an industry analysts opinion after Bain cannibalized this company I see the article was written more or less to defend Mitt's role at Bain. I am sure there are opinions out there that would say the opposite.....Since I am new here and proved I can think for myself I will go one step further. I will give you facts rather someones after the fact opinion! Below is a few quotes from an article that is dealing with facts about KB. "In 1996, after an aborted attempt in 1995 to spin off Kay-Bee Toys, the Melville Corporation decided to sell the chain of 1,045 stores to Consolidated Stores Corporation for about $300 million. Consolidated already operated Toys Liquidators, Toys Unlimited, and the Amazing Toy Store close-out stores, as well as general retailers Odd Lots, Big Lots, All for One, and the It's Really $1.00 stores. William Kelley, chief executive officer and chairman of Consolidated's board, said in a New York Times article that he expected the combined businesses to offer 'a great deal of synergy.' Kay-Bee, under the direction of president Michael Glazer, continued to be run as a separate business within Consolidated's new Toy Division despite talk of its merging with their Toy Liquidators chain. Immediately after the sale, the stock of Consolidated surged upward. Kay-Bee provided a 50 percent return on Consolidated's investment in its first nine months of new ownership. In 1997, Kay-Bee's sales boosted Consolidated's revenue by about 70% " Glazer, quoted in Discount Stores News in July 1997, attributed the chain's outstanding performance to closing underperforming stores and writing off lots of obsolete inventory prior to the sale to Consolidated. Consolidated also established a specific identity for the 1,200 stores and brushed up the chain's image with a new logo, KB. It integrated Kay-Bee with its core close-out business, and was boosting the chain's higher-margin close-out items from 25 to about 30 percent of its business. It seemed nothing could stop KB Toys from challenging its rivals in the toy industry. Operating profit for 1999 was up 51 percent from 1998. The company, seeking to capitalize on its growth, decided to hold an initial public offering in the spring of 2000, then postponed trading due to unfavorable market conditions. Notwithstanding this delay, KB was more focused than ever on fine-tuning its position in the very fashion-forward toy industry. With relatively small stores and a knack for innovation and creativity in marketing, KB was ready as ever to make quick adjustments to changing customer and merchandise trends. This information was from this piece, http://www.fundinguniverse.com/company-histories/kb-toys-history/ . Those happen to be facts, not some ding a ling's ( or industry analysts) opinion KB was sold to Bain for fair market value. KB didn't do their stockholders wrong, Bain did when they saddled it with enormous debt and sent it into bankruptcy. Politifact piece you sited is an opinion, which I don't really agree with! One other fact to note. Bain was sued by the creditors and very quietly settled with them, not disclosing the terms. If it was just business and everything they did was on the up & up, why settle? The questions remain : will you sir continue to rely on shoddy opinions or as my favorite journalist Bill O'reilly would say will you "wise up"

How is it wrong? I worked for a mall management company for 18 years. I have direct knowledge of how thing work. KB Toys were small stores in regional shopping malls. They weren't leasing 10,000 sq foot stores. Not every store in malls pay the $38 per square foot rate. Not every mall is owned by Simon Property Group, Westfield, or General Growth Properties. For your information there are regional malls that are privately owned. So yes at times they lacked leverage to command that high rent. They also lack leverage to fill up their malls with all National retailers. They often times deal with higher vacancies than the big guys. So yes it is a fact that the real estate people for those national retailers will use that as leverage and get much lesser price per square foot. Water Tower Place in downtown Chicago can command high rent because of the high volume of traffic that they have. Retailers are willing to pay that high rent at Water Tower Place because the potential for high volume of sales is there based on that malls traffic numbers. Not every mall in the Chicagoland area has Water Tower Place traffic numbers. Remember this also KB toys did okay throughout the course of the year but they were not capable of generating the numbers of sales that a Mens Footlocker is capable of month to month. That is why KB would negotiate for cheaper rent and the landlord would counter with a breakpoint on sales knowing that KB would do extremely well come Holiday season. I have brought facts to the table. You have only countered with a bunch of gibberish & like a prepubulent child make the claim I was drunk posting This was a few years ago but I do remember reading a statement by KB that they would not be able to meet the news terms set by GE and the only option left for them was a complete liquidation. I am assuming that GE was able to re-coup some of their money from the liquidation.

I wont concede that busting them was the best plan. When Bain made the purchase they were a profitable company. I will concede with the competition that was out there they needed to get creative and change the way they did business in order keep some of their market share and remain profitable. We will never know that outcome because Bain made sure of that by cannablizing that company and saddeling it with enormous debt. Again lots of companies make changes to ensure they remain viable. They same could have possibly been done with KB. Real Estate people for companies like KB are good at negotiating rent with the malls. The tiny mall stores like KB are usually about 700 square foot. At $10 a square foot that $7,000 a month rent. Because sales at times run high and $10 a square foot is very reasonable there is usually a breakpoint in the terms of the lease. Once the retailer is above that breakpoint they pay the landlord a couple of percent of the sales. Payroll is not much of a problem, aside from the manager the sales people are part timers and made minimum wage. That is crap. A company that is turning profit is not a broken business model. Yes there were challenges that lied ahead. What Bain did was unconscionable. They got a 372% return on investment. Some investment bank was left holding the bag, the malls lost a rent paying national tenant, and people lost jobs. Bain came in like a theif in the night and made a ridiculous profit. There were a lot more losers than winners. Strong enough Bain put them into bankruptcy in 2004. Another company took them over out of bankputcy in 2005. The company was in such bad shape and credit markets were so tight that GE through them a life line. A short time after that GE quickly changed the terms of that life line that they knew KB would not be able to meet. The company was done after that. Complete liquidation and out of business. This was a company that was around for many years and was a good thriving business until these people destroyed it. The Solyndra deal was a bunch of crap also. I can assure of this you won't find one single post from me singing the praises of a politician.

And who do you think the creditors were? I know Mitt was gone from Bain when they purchased KB. My point was that while he was there they engaged in these types of things.

KB wasn't doomed from the start but they most certainly cannibalized them. See KB went through a restructuring in 1996. They closed unprofitable stores and increased profits and got themselves back on very good footing. Bain purchased them with only 6% cash of value and shortly there after take out dividends at over 400% of their investment. Saddling KB with that much debt and taking out astronomical dividends they had no choice but to go bankrupt. Bain took a company that had been restructed and was making profit and raided it of its cash. There is no way around this. Mitt was sitting on the board of that company. Leveraging 94% of the purchase against the companies assests, then walking them right into bankruptcy, and leaving someone else holding a bag of crap is criminal. Everything they did after acquiring KB was just egregious! Should be unconstitutional!

I give credit to Bain Capital for doing the right thing by those 33 companies that they helped get back on track. Let's talk about KB Toys one of the companies that they bankrupted. Bain purchased KB for 305 million and took them private. Bain put up only 18 million in cash and leveraged the rest of the money against the assests of the company. In 2 years Bain paid itself 85 million in dividends a 372% return on investment. Due to increasing competition from national discount chains such as Wal-Mart and Target and its enormous debt they filed bankruptcy protection in 2004 and closed all 365 stores. I think most people have a problem with them paying themself 85 million to walk this company right into bankruptcy. But leveraging the overwhelming majority of this purchase against the companies assests and getting a 372% return on investment! Who is on the hook for that money that was leveraged?

A voice of reason

I get it GG! I understand everything you are saying. I am well aware that the private sector needs to create new NET worth and economic growth. Of course the Government can not lead the way in those area's the private sector has to, and yes Government should let the private sector do there thing and stop with the unreal regulations that make things impossible at times. But Government does play an important role in the economy, espically when we have a recession like the one we had. Those public works projects are extremely important to the private sector contractors in tough times and extremely important to businesses flow of good & services. Sure spending has to be controlled and not get to out of hand. Yet you dismiss those extremely important public works projects. It almost seems like you would rather see those contractors starve a little more until the private sector gets back on its feet to try and prove your theroy as the only correct way. Yes the economy is much better off with the private sector driving the car and the Government riding shotgun. However I am not ignorant enough to act as if Government or Public Employees have no role. I certainly wont be crying and screaming to fire those people when times are tough and the private sector is hurting. That's is the reason this Country is so divided and we have Politicians that refuse to budget an inch and why nothing ever gets done right today. That is exactly how you have persented yourself in this discussion, my way is right, you dont know anything, and i'm taking my ball and going home! Get over yourself, the world dont owe you anything! Give an inch and learn to see the other person's point of view! By the way the private sector don't fix anything that ain't theirs! Ford was so unhappy with the traffic boondoggle with the long freight trains and all the traffic that they made the Government start that public works project. Ford threatened the City if the project was not done and soon they would close the Plant on Chicago's southside and move to Atlanata! Not wanting to lose those important jobs, the Feds, State of Illinois, & City of Chicago are footing 85% of that 150 million dollar project. Ford, the railroad, & South Shore Rail that takes commuters to downtown Chicago each kicked in 5%. They benefit the most and payed the least. Those are the FACTS and I can prove it I need to!

Your the nitwit that said great for Ford Motor Company but bad for the construction company waiting to fix a bridge or road. Then I provide you with a litany of projects where the construction company is being put to work & you come back with Japan & the lost decade! The problem with you guys that think you know everything about economic growth is you are reading the book the hard working people of America wrote many year ago and you want to claim its all wrong! The conservative premise that government itself cannot create jobs but government can provide a framework in which economic growth can occur. In order for the private sector to create new net worth they need good roads, bridges, ports, & rail system's! A good sound infrastructure! Without that the flow of good and services will come to crawl! You can dismiss the data a provided as a collection of factoids with no baring on the discussion but they are facts that are relevent!

The Government can't just hand out that info for a parked car Should have just installed a parking meter

Going to fly the work force in from China! http://online.wsj.com/article/SB10001424052702304458604577489062449154168.html?mod=WSJ_hp_LEFTWhatsNewsCollection

It's an indictment on the pols! The government worker ( policeman, fireman, teacher, garbage man, ect) showed up and put in an honest days work! Paid their taxes & paid their share into the pension fund. The pols looted the money from every avenue and then made it appears as if the public pay roll was the cause of the deficits. The tax payers seen the deficits and screamed cut the public pay roll but they got the wool pulled over their eyes. They got rid of the workers and privatized the services in an ironclad contract and now the people are taking it up the pooper

Were comparing apples to oranges. There are people that don't want to pay for abortion and there are people that don't want to pay for the wars we have to fight....There is a great alternative...........move to Pakistan

Point taken! You are correct. I have a choice not to attend. What Federal Government Services are you being horribly over charged for that you don't want?

That's why you got to pay to park

Privatising basic city services like them are never better for the people even if corruption is not involved. Once a private company takes over something like that the one goal in mind is to make money and lots of it. It always ends up costing the people a great deal more. I'm not denying that Chicago has corruption and plenty of it. Corruption is corruption where is here, there, or some place else. I copy & pasted an article below. We have some good reporters that work for the local newspapers & they try hard to get to the truth, oftens times its after the horse has left the barn. I bolded a few important things in the article. By the way I have enjoyed the discussion. I am just trying to get you to see that the Police showed up to work and did their best to fight crime, the fire fighters fought the fire, the teachers did their best to teach the kids, the garabe man picked up the trash, the street sweeper cleaned the streets, ect. Majority of the workers showed up put in an honest days work, paid their taxes, & paid their share into the pension fund. The pols looted the money from every avenue they could and quickly made it appear as if it was the work force baknrupting the city. By Jason Grotto, Chicago Tribune reporter 6:35 AM CDT, May 2, 2012 Advertisement Two years into his reign as Chicago's longest-serving mayor, Richard M. Daley took advantage of the state's convoluted pension system to significantly increase his potential payout while saving $400,000 in contributions, a Tribune/WGN-TV investigation has found. Daley, a former state senator, made it happen by briefly rejoining the legislative pension plan in 1991. He stayed there just one month before returning to Chicago's municipal pension fund, but the switches made him eligible for benefits worth 85 percent of his mayoral salary — a better rate than all other city employees receive. He was just 49 years old at the time. Even if Daley had never won another election, he could have started collecting a public pension at age 55 of $97,750 a year. Without the steps he took, his public pension benefits at that age would have been worth just $20,686. Of course, Daley went on to win five more elections, remaining ensconced on the fifth floor of City Hall for the next two decades. When he retired last May, his pension benefits had grown to $183,778 a year — about $50,000 more than he would have otherwise received. Daley declined to be interviewed for this story. His spokeswoman, Jacquelyn Heard, wrote in an email: "I can only assume that his pension was handled in the same manner that anyone's would be, given the length of service — nearly 40 years — in government." The Tribune and WGN-TV already have detailed how Daley used the city's pension funds for political purposes. In 1991, the same year he secured his much larger pension, Daley's administration helped aldermen land a dramatic pension increase, providing them with benefits far exceeding those of the average city worker. The same legislation, rushed through the General Assembly on the last day of the session, also gave private labor leaders public pensions based on their much higher union salaries. Under Daley's watch, former Chicago Federation of Labor President Dennis Gannon was given a one-day city job that allowed him to collect a public pension based on his $200,000 private union salary. In 1995, when Daley wanted to fund his school reform package, his administration pushed legislation that allowed it to divert $1.5 billion from the Chicago Teachers' Pension Fund over a 15-year period. All the while, Daley blessed benefit increases for city workers without ensuring that payments into the funds would cover the costs, a problem worsened by the economic downturn. Today, the combined unfunded liabilities of Chicago's four pension funds have grown to nearly $20 billion, which doesn't include the $6.8 billion shortfall at the teachers fund. The city's pension debt is not only damaging Chicago's financial stability, but also breeding cynicism about government's ability to provide modest pensions to the people who teach the city's children, collect the garbage, run into burning buildings and keep the peace. "When these plans are misused, there is a price that will be paid by taxpayers and other pension plan participants," wrote Keith Brainard, research director at the National Association of State Retirement Administrators, in an email after hearing of Daley's deal. "But there's another cost, possibly far greater than the financial cost. That cost is the erosion of public support for decent retirement benefits for employees of the state and local government." Last week Mayor Rahm Emanuel wrote to legislative leaders in Springfield urging them to move forward on meaningful pension reform and outlined four principles the mayor would support, including increasing the retirement age and suspending automatic increases for pension benefits. "If our pension system is not reformed, Chicago has two roads to take: We can watch each of our funds go bankrupt ... and be unable to pay the hardworking people who have paid into their retirement funds, or we will be forced to raise property taxes by $1.4 billion per year — triple what we now pay toward pension costs," Emanuel wrote to House Speaker Michael Madigan, Senate President John Cullerton and minority leaders Rep. Tom Cross and Sen. Christine Radogno. In response to questions about a Tribune/WGN-TV story about aldermanic pension perks, Emanuel said Tuesday that broad reforms are needed. "What I don't want to see is that we ... take our eyes off the big change that is required." Daley left an indelible mark on the city. But Chicago's pension crisis threatens to become part of that legacy, shaping the city's future as much as Millennium Park, the expansions of O'Hare International Airport and McCormick Place, or any of his other achievements as mayor. His own public pension, meanwhile, will end up costing taxpayers all over the state. Records show that his contributions to the statewide General Assembly pension fund weren't nearly enough to cover the benefits he receives. Generous laws The roundabout way that Daley lined up his pension was made possible by a law sponsored in 1981 by then-state Sen. John D'Arco, D-Chicago, who was convicted on federal bribery charges in 1991 and 1995. Under the law, members who had left the General Assembly but were participating in other Illinois public pension funds could rejoin the state legislative fund for up to four years as long as they did so by Jan. 1, 1992. At the time, the former members had to have at least eight years of service in the General Assembly Retirement System, known as GARS, to qualify. Daley spent less than eight years in the state Legislature, having left office with more than two years remaining on his term to run for Cook County state's attorney in 1980. But that same year, he asked to purchase pension credits covering his unfinished term for about $6,000 in extra contributions, as allowed under Illinois' generous pension laws. The move gave him a total of 10 years of service. "I am hereby notifying you that it is my intention to elect to make payment for the remaining 25 months in the term to which I was elected as Illinois State Senator for the 23rd Legislative District," Daley wrote to the General Assembly Retirement System in November 1980. He didn't actually pay for those credits until September 1981, a month after D'Arco's provision was signed into law, according to state pension records. Daley spent the next seven years as state's attorney before winning election in 1989 to complete the term of Mayor Harold Washington, who had died while in office. In May 1991, a month after Daley was elected to his first full term as mayor, an official from the state retirement system contacted the county and municipal pension plans on his behalf, records show. "We received an inquiry from Mayor Daley … requesting information as to the cost of transferring service from the County Employees' Annuity and Benefit Fund of Cook County" to the state legislative pension fund, said one of the letters from Rudy Kink, manager of the General Assembly pension fund at the time. A month later, Kink wrote Daley to lay out his options. Daley could use D'Arco's law to rejoin GARS for one month. That, in turn, would allow him to transfer pension credits from the county and city to the legislative pension fund. After that, he could quit GARS and rejoin the municipal plan, which would allow him to base his GARS pension on his city salary. "After you have contributed one year, or more, in the (municipal pension plan), and reach age 55, you could, thereafter, retire using the final salary as Mayor of Chicago and receive 85 percent, for the rest of your life," Kink wrote. Within a month, Daley set the plan in motion. "I am enclosing my election to participate in GARS under Section 2-117.1," Daley wrote to Kink. "I will also write to you in July revoking my participation under section 2-117.1 effective, August 1, 1991." $400,000 saved The maneuvers not only boosted Daley's benefits but also saved him hundreds of thousands of dollars in pension contributions, records show. Normally, when people transfer pension credit into a more lucrative plan, they have to pay in extra money to compensate for the increased benefits, according to pension fund experts interviewed by the Tribune. The terms of the transfer should also be based on their current salary. Yet under another obscure state law, Daley was able to transfer his years of service with Cook County and the city of Chicago to the state legislative pension fund without making additional contributions. That's because the transfer was based on his decade-old legislative salary of $17,500 — even though his pension would be calculated using his mayoral salary, then $115,000. Had the costs of the transfer been based on Daley's actual pay, he would have been required to pay in about $540,000, according to a Tribune/WGN-TV analysis based on the state's formula for pension credit transfers. Instead, he simply transferred the $128,000 he had accumulated in the city and county funds, saving more than $400,000 in contributions. Daley eventually retired with a state pension based on his final mayoral salary of $216,210 — 12 times his old legislative pay. The $183,778 in public pension benefits that Daley now receives is divided up between GARS and the municipal pension fund. Under the state's convoluted reciprocal system, the GARS plan pays the former mayor $117,629 a year, while the municipal pension plan pays him $66,149. Yet Daley paid far more in pension contributions to the municipal pension plan than he did to the GARS plan. After jumping back into the municipal plan from GARS in 1991, Daley contributed 8.5 percent of his pay, the base rate for city workers, for the remainder of his career. That worked out to about $307,000, including interest from investments. The city kicked in another $283,000 with investment returns. Those amounts were enough to cover the benefits the plan is paying to Daley now. But the former mayor never contributed another penny to GARS, even though that fund pays him more than $117,000 a year. Today, the GARS pension plan, which taxpayers all over the state pay into, has a funding level of just 21.2 percent and unfunded liabilities of $235 million. Because Daley's shortfall makes up part of that deficit, state taxpayers will end up footing the bill for the pension of Chicago's longest-serving mayor. "There is no public policy justification or taxpayer interest in allowing people once they left the General Assembly to come back and re-enter the General Assembly pension," said Laurence Msall, president of the nonpartisan Civic Federation. "This is an example of why the state Legislature needs to wake up and stop treating the pension system as if it's their personal piggy bank." WGN-TV producer Marsha Bartel, WGN-TV reporter Mark Suppelsa and Tribune reporters Hal Dardick and Ray Long contributed to this report.

That is just not true! The city takes in enough revuenue to cover the costs of its public employees. Chicago ran into problems when the pols started hiring their private contractor buddies to beautifying the city! The cost overruns were outrageous! What don't you get about that? I watch Fox News as well. Stuart Varney is a smart man but only told us half the story. He did tell us why they are so unfunded. In today's Chicago Suntimes there is an article by a Government Watch Dog agency on the unfunded pension liabilities. The next paragraph is some of what I read in the Watch Dogs report. It's not to hard to comprehend why we are in this mess. The pols stopped funding there share and took the money and spent it hiring private contractor buddies to do work around the city. It was one scandal after the other. The Hired Truck Scandal here in Chicago was unreal. All the trucks were private contractors that were hired to haul away debris from projects around the city and when there was nothing to haul the trucks sat idle while being paid. All the truck owners were connected to some pol that handed them this sweet heart deal. All the sudden its the public employees fault? Chicago’s pension crisis has ballooned to $27.4 billion—a six-fold increase since 2001—because of inadequate employer contributions, declining investment income and a shrinking base of active employees, a taxpayers’ watchdog group has concluded. The Civic Federation’s report on the sorry state of the Chicago area’s 10 public employee pension funds underscores the need for Mayor Rahm Emanuel and union leaders to come together on a solution and for the Illinois General Assembly to approve it when lawmakers finally get around to solving the state’s $83 billion problem. The 10 pension funds had an average funding level of 56.2 percent in 2010, down from 88 percent in 2001. The firefighters pension fund is in the worst shape, with assets to cover just 32.4 percent of future liabilities. The laborers pension fund is in the best financial condition at 73.8 percent. Government employees did their part, by contributing the required portion of their paychecks to their future pensions. But the government contribution fell $1.2 billion short of the $2.1 billion required to cover costs and reduce a portion of unfunded liabilities over a 30-year time-frame, the report concludes. To reach an “actuarily sound level,” government agencies should have made contributions equal to 27.8 percent of payroll in 2010. Instead, the employer contribution was 12.6 percent.In 2010, the 10 funds had 1.23 active employees for every retiree, down from a 1.70 radio in 2001. The laborers, CTA, Park District, Forest Preserve District and Metropolitan Water Reclamation District all had more beneficiaries than active employees in 2010. Chicago Federation of Labor President Jorge Ramirez said he doesn’t need another report to tell him who is to blame for the city’s pension crisis. The city stopped making payments into the funds under Mayor Daley, exacerbating the problem. The only people who’ve paid into the city pension funds are the workers. They’re the only ones living up to their obligations,” Ramirez said. Yes it was corruption amongst other things. I know why they signed the deal. I have said it numerous times. The city ran up a bunch of deficits hiring private contractors to do work around the city. Cost overruns were outrageous. They needed the money. The pols were smart they shifted the focus to the public pay roll and many citizens wanted the public pay roll slashed. You neeed public severants to maintain the parking garages, parking meters, & the Chicago Skyway. The privatized those entities and fired the workers. The deal to privatize was crony capitalism! It went from $6 a day to park to $6.50 and hour