Mayor Brandon Johnson’s administration has renewed a controversial contract with the company from suburban Kansas City that staffs the city’s migrant shelters despite the firm billing the city significant overtime and the administration saying it intended to replace the company with cheaper, local alternatives.
On Monday, Favorite Healthcare Staffing and the city signed a $40 million extension through October 2024, according to the city’s procurement website. It’s the third extension for the firm and empowers the company to continue hiring case workers, security guards, janitors and other employees for the roughly two-dozen migrant shelters currently housing thousands of Chicago’s asylum-seekers.
The renewal is on top of at least $56 million the firm has been paid from September 2022 as migrants began arriving in Chicago and when the firm’s initial contract on the shelters was inked by Johnson’s predecessor, former Mayor Lori Lightfoot.
A recent Tribune investigation found that as part of the city’s original deal with Favorite Staffing it has paid out extensive volumes of overtime. A selection of invoices provided by the city following a Tribune request for records shows hundreds of Favorite Staffing workers logged working 84 hours a week — with a majority of that time being paid at an overtime rate at a 50% premium.
At a Woodlawn shelter in early February, for example, 36 of the 50 Favorite Staffing employees logged working at least 12 hours a day, seven days a week. The city’s bill for one week in early February at that shelter was nearly $460,000.
At the Streeterville site one week in March, roughly 8 in 10 workers logged the same 84 hours. One worker at the Inn of Chicago shelter was logged as pulling five 12-hour shifts, a 14-hour shift and a 16-hour shift during one week in mid-March. For his work alone that week, the city was billed $15,525, invoices showed. Another staffer logged working 12-hour security shifts at least 56 days in a row this winter and spring.
Since taking office in May, Johnson’s team has been critical of Favorite Staffing’s rates, saying the contract was costly to the city and that it planned to phase it out and bring on local community-based organizations. Those plans have not come to fruition. Instead, his administration signed previous renewals of the Favorite Staffing contract — one shortly after his inauguration another in July and the most recent one this week.
Officials with Johnson’s administration did not respond to questions Thursday about the status of a search for a more affordable vendor or on its decision to extend Favorite Staffing’s contract, the latter of which was not publicly announced and reported earlier by Axios.
A representative with Favorite Staffing did not immediately respond to a request for comment, but Keenan Driver, a vice president with the firm, has previously said the company charges “fair and market-based” prices and “is committed to working to continue to provide high quality services to assist the City of Chicago in navigating this crisis.”
Johnson deputy chief of staff Cristina Pacione-Zayas told the Tribune this summer that the first two Favorite Staffing extensions were a “stopgap measure … even though it is exorbitant in costs, while we were awaiting an alternative.” But after negotiating cheaper rates with Favorite Staffing in October, she suggested the company may not be on its way out and the new question is, “How do we shift from Favorite, or do we do a hybrid combo?”
Indeed, the new contract reflects recently renegotiated rates touted by Johnson’s team, a move that was necessitated because the city brought on Favorite Staffing to man its migrant shelters by piggybacking off a state contract on responding to the COVID-19 pandemic.
The state deal, which is set to expire in mid-November, had listed specific positions and hourly rates for emergency health care work to be provided by Favorite Staffing. As the city engaged Favorite Staffing to handle migrant shelters, the city contract simply changed the names of jobs and kept the same pay rates.
So previously, a “pandemic healthcare worker” — paid $100 an hour by the state — became “shelter security.” Under the new terms inked in October, a security guard’s regular hourly rate decreased to $68 an hour. If the guard was a local resident and didn’t need a hotel room, the rate would drop to $48 an hour, according to the contract.
The initial prices for Favorite Staffing employees has led several aldermen to criticize the contract and call for the city to audit the invoices. In addition to the city’s contract with Favorite Staffing, it has also contracted with GardaWorld Federal Services under a nearly $30 million deal to put up migrant “yurt” base camps across the city.
As of Thursday, more than 19,000 migrants have arrived in Chicago since August 2022, with 11,800 currently staying inside the city-run shelters and another 3,300 staying inside Chicago police stations and at O’Hare International Airport.