CHICAGO - Facing a nearly $1 billion budget deficit, Chicago Mayor Brandon Johnson side-stepped questions Thursday about a $100 million pay increase for Kansas-based company - Favorite Healthcare Staffing - which has staffed 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 evicted migrants through a temporary stay program.
At the height of the city's migrant crisis, nearly 14,000 people were living in city-run shelters. That number today is roughly 5,300.
When asked directly about the pay increase, Johnson side-stepped the question and told NBC 5 Investigates: "So we’ve saved the taxpayers over $200 million based upon the work that we’ve done. $200 million while still investing on the West and South sides of the city of Chicago. That’s what I promised to do and that’s what we’re doing."
When pressed further about why this $100 million contract extension was necessary, Johnson said: "There’s a reason why. There’s actually less spending in the shelters right now – there’s less spending. We are spending $70 million less... while also investing hundreds of millions of dollars in the West and South sides of Chicago. We have saved the taxpayers over $200 million. There are less people in shelters because we have operationalized a system of care."
The city's online migrant spending portal shows that the Kansas-based Favorite Healthcare Staffing, which has staffed the city's migrant shelters, has been paid $291 million through a mix of both Chicago taxpayer dollars and additional public funds through federal grants. The latest contract does show that the city sought and gained approval to recoup at least $9 million through a FEMA grant.
But in his response, Johnson didn't address that. He continued by saying: "when will the federal government do its part? I just returned from a conference with mayors all over the globe federal and national government are failing to respond to an international crisis."
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Favorite Healthcare Staffing has been criticized by aldermen for what they called "exorbitant" hourly rates – between $50 to $156 per hour. And our own investigation last year showed Favorite routinely billed the city 84 hours per week per employee.
Johnson has repeatedly said his office saved money through lowering those rates.
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As of Thursday, there were 5,302 people in 16 shelters across the city. Since April, when the city began enforcing its 60-day shelter stay policy, 2,463 people have left the shelter system, with more than 1,700 returning to the city's "Landing Zone" and being re-assigned back into the shelter system.
In a response to our follow-up questions, the city's Department of Family & Support Services provided this emailed statement:
"The City of Chicago Department of Procurement Services recently approved increasing the limit to the amount of funds which Favorite Health Staffing can invoice the City for asylum seeker services. While this is not an approval for additional funding, it will enable the City to pay for shelter services previously rendered by Favorite Health since April 2024 through next month, October 2024."
A spokeswoman for Favorite referred questions back to DFSS.
The pay increase now brings the total value of Favorite's contract to more than $334 million.
