CHICAGO — Facing a budget shortfall of nearly $1 billion, Chicago Mayor Brandon Johnson sidestepped questions Thursday about a $100 million pay raise for a Kansas-based company — Preferred Healthcare Staff — that supplied the city's migrant shelters.
The change order and contract extension comes at a time when the city has reduced the number of shelters from 27 to 16 and expelled immigrants through a temporary residency program.
At the height of the city's migrant crisis, nearly 14,000 people were living in city-run shelters. Today that number is about 5,300.
When asked directly about the pay increase, Johnson sidestepped the question and told NBC 5 Investigates: “We've saved taxpayers over $200 million based on the work we've done. $200 million while still investing in the West and America.” “The south sides of Chicago, that's what I promised to do and that's what we're doing.”
When pressed further on why the $100 million contract extension was necessary, Johnson said: “There's a reason for that. There's actually less spending on shelters right now — there's less spending. We're spending $70 million less… while also investing Hundreds of millions of dollars on the West and South sides of Chicago, we've saved taxpayers over $200 million, the number of people in shelters has decreased because we've activated the foster care system.
The city's online migrant spending portal shows Kansas Preferred Health Care Staff, which supplied the city's migrant shelters, received $291 million through a combination of Chicago taxpayer money and additional public money through federal grants. The latest contract shows the city sought and received approval to recover at least $9 million through a Federal Emergency Management Agency (FEMA) grant.
But Johnson did not address that in his response. He continued by saying: “When will the federal government do its part? I just returned from a conference with mayors around the world and the federal and national governments are failing to respond to an international crisis.”
Preferred health care workers have been criticized by local councilors for what they described as “exorbitant” hourly rates — between $50 to $156 per hour. Our own investigation last year showed that Favorite routinely billed the city for 84 hours per week per employee.
Johnson has repeatedly said his office saved money by lowering those rates.
As of Thursday, there were 5,302 people in 16 shelters across the city. Since April, when the city began implementing the 60-day shelter-in-place policy, 2,463 people have left the shelter system, with more than 1,700 people returning to the city's “drop zone” and being reassigned back into the shelter system.
In response to our follow-up questions, the city's Department of Family and Support Services provided this statement via email:
“The City of Chicago Department of Procurement Services recently approved an increase in the maximum amount of funds that preferred health personnel can bill the City for asylum seeker services. Although this is not an approval for additional funding, it will enable the City to pay for the shelter services it provided in Previous Favorite Health from April 2024 until next month, October 2024.”
A Preferred spokeswoman referred questions to DFSS.
The wage increase brings the total value of Favorit's contract to more than $334 million.
