Oct 26, 2023 - News

Chicago quietly renews controversial migrant shelter staffing contract

Photo of a man sweeping the sidewalk outside of a migrant shelter

A contractor from the migrant shelter in the former Inn of Chicago cleans the sidewalk outside the shelter. Chicago Tribune/Getty Images

Mayor Brandon Johnson this week quietly reupped a controversial migrant shelter contract with Favorite Healthcare Staffing that some alders had called "shameful" and "insanity."

Why it matters: The multimillion-dollar contract has drawn intense criticism over the Kansas-based staffing company's "exorbitant" rates and use of out-of-state labor.

Driving the news: Chicago approved a new $40 million contract with Favorite Healthcare Staffing through mid-October of next year, per city filings.

  • The terms include reduced rates for certain positions, including housekeepers and nurses. Hourly rates went from about $60-$200 in March to roughly $40-$156 today, per an Axios analysis.

Catch up fast: In September 2022, as the city rushed to open the first migrant shelters, Mayor Lori Lightfoot signed an emergency contract with Favorite Healthcare, which the city has since paid more than $57 million.

  • In a budget address this month, Johnson called it one of many "expensive emergency contracts" he inherited from Lightfoot.
  • Some alders, including Ald. Brendan Reilly, have called for the contract to be canceled.

Zoom in: Reilly told Axios on Wednesday he was caught off guard by the new contract.

  • "[The mayor] didn't consult me. If he had, I would have advised him against it," Reilly said.

By the numbers: Documents Axios obtained through an open record request show that in March alone the city paid Favorite $14 million in staffing fees.

  • For one week of staffing at the Woodlawn shelter that month, Favorite charged $427,991 — an average of $117 per hour per employee, most who worked some overtime. Payment for one nurse to work a single 12-hour shift at the shelter was $2,700.
  • The wages also covered hotel costs for Favorite's mostly out-of-town staff.

What they're saying: Not much. The mayor's office has not responded to multiple Axios requests for comment on the contract sent since Sept. 30.

  • The Johnson administration told NBC-5 that, as of mid-September, Favorite hired 265 of its 750 staffers from the local workforce and that it will "focus on hiring local candidates almost exclusively" going forward.

The other side: Favorite spokesperson Joanna Klonsky, a former Lightfoot consultant, declined to answer Axios' questions.

  • "Favorite has proactively worked with the city to reduce rates through a commitment to hire additional local candidates," the company's senior vice president Keenan Driver said in a statement earlier this week.
  • "Favorite has also proposed to the city further cost savings by increasing headcount and reducing overtime, given the length of the mission."

Context: Johnson has budgeted just $150 million in his 2024 budget for migrant aid, a number his administration acknowledges will not come close to covering costs.

  • As of Wednesday, more than 19,000 migrants had arrived in Chicago and more than 3,000 were sleeping in police stations and at the airport.

Get more local stories in your inbox with Axios Chicago.

More Chicago stories