City to Borrow $78.4 Million to Pay for Firefighter Settlement

Fran Spielman, Chicago Sun-Times, October 23, 2012

Chicago will borrow the $78.4 million needed to compensate nearly 6,000 African-American would-be firefighters bypassed by the city’s discriminatory handling of a 1995 entrance exam, Mayor Rahm Emanuel said Tuesday, compounding the cost of a settlement that’s already twice as high as anticipated.

Emanuel said the city anticipated the higher-than-expected tab and tucked it away into a general obligation bond issue normally reserved for infrastructure repairs and equipment purchases. {snip}

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A reporter noted that the approach “sounds expensive” because the cost of paying interest on borrowed money would compound an already high cost.

“That’s one perspective. There’s another perspective. We had a Fire Department that was also found [to have] discriminated. I want to make sure that we never again have the experience we had in the past where we had policies and practices in place that discriminated,” the mayor said.

“From a management standpoint, we prepared ourselves,” he said. “We bonded for this back in the spring or summer so it wouldn’t impact the budget. I made sure we also brought a class of African-American firefighters in, and they’ll be graduating soon. And I want to make sure that the practices and policies of the past don’t ever repeat themselves and we have a diverse Fire Department.”

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The price tag is double the anticipated amount because prior estimates were an “educated guess” that “turned out to be way too low once we got payroll data that allowed us to calculate actual wage increases over time,” Piers said.

The 1995 firefighter entrance exam was drafted by an African-American with an eye toward diversifying a Chicago Fire Department with a long and documented history of discrimination.

When results for minorities were disappointing, the city established a cutoff score of 89 and hired randomly from the top 1,800 “well qualified” candidates.

In 2005, a federal judge ruled that the city’s decision had the effect of perpetuating the predominantly-white status quo because 78 percent of those “well-qualified” candidates were white.

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