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.
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