Chicago's Next Mayor? Susana Mendoza on Fiscal Crisis, AI, and Why City Hall Needs a Builder

Khullani Abdullahi (00:01.451) Welcome to the AI in Chicago podcast. I'm your host, Khullani Abdullahi, the founder of Techné AI, a Chicago based AI governance consulting advisory firm. AI in Chicago spotlights the operators, builders and thinkers scaling applied AI from the heart of the Midwest. Each episode delivers practical stories and playbooks leaders can use to win with AI minus all the hype. In today's episode, we're thinking about AI from the perspective of government. From transparency portals to city hall can government lead on AI data and public trust? As Illinois enacts some of the nation's most aggressive AI regulations and Chicago positions itself as a global AI hub, one of the state's most powerful fiscal leaders is preparing for what's next. Susana Mendoza, the Illinois State Comptroller and potential 2027 mayoral candidate joins AI in Chicago to discuss how she used technology and data transparency and good governance to transform state government and bring Illinois back from a fiscal crisis. What does it look like for tech forward fiscally innovative leadership to be applied on the ground? That is what we will learn today. From building real time portals to modernizing legacy accounting systems to navigating the next state wave of state AI laws, Susanna offers a rare perspective. What happens when a government leader who actually understands fiscal systems meets the AI revolution head on. Since taking office in 2016, Susanna has led a transparency revolution in state government. She built the first public facing data portals that track COVID-19 spending, asylum seeker expenditures, and state bond debt in real time. She inherited a state and fiscal crisis with 16.7 billion backlog of unpaid bills and a rainy day fund that was reduced to just $48,000. Illinois now pays its bills faster than the private sector. Her vision for the Comptroller's office and good governance is the best source for numbers and predictive modeling. Before becoming Comptroller, Mendoza served six terms in the Illinois House of Representatives, where she chaired the Biotechnology Committee and was the first woman elected Chicago city clerk. Welcome, Susanna. Thanks so much for joining me. Susana Mendoza (02:20.641) Thanks for having me. Khullani Abdullahi (02:22.606) I know that was a lot. You've done a lot. Earlier you shared that you have been an elected official since you were 27 years old. I would love for you to share kind of your origin story. think we know all the things that you've accomplished more recently, but how did you even arrive at this point, this moment of innovation and transformation and where did that come Susana Mendoza (02:48.34) Sure, well thanks for having me first of all and let me tell you a little bit about me. So I'm the proud daughter of Mexican immigrants. I'm one of three kids. I'm the baby of the house. two older brothers. My oldest brother has only wanted to be a cop since he could walk or talk and he's eight years older than I am. So we had a pretty sizable age gap. He was always my hero growing up, you know. My other brother was only a year and a half difference. So we, know, brother sister relationship like this, but of course we all love each other. But my oldest brother was always a really big inspiration on me. So when I was a little kid, I lived on the Southwest side of the city of Chicago. I was born in Chicago. We lived on a very hot block. And by hot block, I mean a block with a lot of really hot gang activity. And I used to remember what it was like to walk to school every day. And my brother Joaquin, the oldest, would hold my hand and say, OK, look, just hold my hand. Don't look anyone in the eye. We just make it to school without getting shot. That was literally every day in the conversation. And interestingly enough, I didn't think there was anything weird about that because that's just all I knew. And it wasn't until my parents had just had enough. There was a murder on our block and they said, that's it, we're done. Constantly lived under threats from the gangs. My brother being a 16 year old wanting to be a cop, it was just not a good fit. And so they literally overnight put us in the station wagon. drove us to a home in Woodridge, Illinois, which is the Southwest suburbs of Chicago. And that's where I realized that I don't have to hold his hand anymore and talk about, let's just get to school without getting shot, right? Like it was a completely different environment. And, you know, it's this concept that having access to a safe environment, to good public schools, which every public school in the Verbs, it was a good public school. Like these are things that are... So many people take for granted, but I certainly don't because I knew what both options were, right? And so I always felt growing up as a kid that my really good family had been run out of our neighborhood by games. And so I always had this desire to like want to do something about that as I got older, never thinking I'd ever run for public office. It was never in the cards. But I wanted to... Susana Mendoza (05:07.936) graduate college, I always knew like I wanted to do something. My brother went to college. I was going to go to college too. He was the first in our family to go. And I'm like, I'm going to do it too. And I played soccer since I was eight years old and I played on all boys teams. I was the only girl. And so I knew even before I knew that there were women's soccer in college, I just knew I was going to go to college to play soccer. And eventually, you know what I did, because I was just really goal driven and I made it to college to play soccer. And then I decided when I graduated college, to not take the easy route, which would have been, I was a business major, get a job really anywhere, speak both languages, Spanish and English. But I decided I wanted to make a difference. And so I came back to that same neighborhood that we had left when I was a little kid, because it wasn't my choice to leave, but it certainly was my choice to come back. And I wanted to make a difference for other kids to show that I made it and I wasn't going to forget where I came from. And hopefully, maybe other kids would see someone like me who made it and came back and wanted to make the community better and decide to make better choices, right? Try to emulate the life that I'm doing here for them. And so I got really active with kids in the neighborhood and that was kind of how it sparked my interest to eventually run for office and fight for those same kids and try to make our neighborhood better. And that's what got me started as a state rep. Khullani Abdullahi (06:09.464) Yes. Susana Mendoza (06:31.818) I was elected six times to the state house. was the youngest member in the 92nd general assembly when I took office. And then I went on to become city clerk of Chicago, the first woman elected city clerk in our city's history. And then I was elected twice to that role. And then of course, took on the hardest job in Illinois, I think literally in the nation when I took on the job of controller with the massive fiscal crisis that I walked into. But I've done that now for three terms and I'm going to finish out my third term. here in January of 27. So yeah, that's what I've been up to, but it really kind of gives you an idea of I two wonderful, amazing parents, the original Susanna Mendoza, Joaquin Mendoza, senior, my father. And then of course, I'm Susanna. My brother Joaquin is named after my father. We are not creative in naming people at all in our family. I'm married to David and our son David, right? So like I continued the non-creative tradition, amazing people, amazing life. And here we are. Khullani Abdullahi (07:26.094) I love it. I think that's fantastic. Thank you so much for sharing that early journey because I think no leader is made in a vacuum, right? All of us have, there's deep context there. I think that's helpful for people to understand. So I think a good starting point may be, tell me what was happening in the world. when you took office as Comptroller, because it probably wasn't the same world when you were running for it, right? Like even in the transition. Susana Mendoza (08:05.686) No, it was, it actually was in the sense that I had the state, I had served in the state house for, you know, six terms and before becoming city clerk and I left it and it was working, right? And it felt like the state was working. Then I went on to become city clerk and I sunk my teeth into like driving efficiencies and modernizing the office. But at the same time, I started to see the state of Illinois begin to implode. So in 2014, we elected a new governor. That was Governor Bruce Rauner. And while he campaigned, he talked about how he was going to shake things up and he was going to, you know, you know, drive fiscal stability, all things that, you know, I mean, I could say, yeah, we should be driving fiscal stability. We should be moving within our means. But his, his desire was to just burn it all down. And he said that he said, if I have to shut it all down, I will. And no one thought he was serious about it, but he literally was serious about it. And that meant. Khullani Abdullahi (08:36.749) Yes. Khullani Abdullahi (08:42.519) Yes. Susana Mendoza (09:03.894) driving Illinois into the two years before I took office. So during that two years that I was running, really a year. In that two year period, that governor, during the best economic bull market in American history, when the state of Illinois should have been just flush with cash, he drove us to eight consecutive credit downgrades. He drove us to a $1.104 billion Khullani Abdullahi (09:10.913) Yes. Khullani Abdullahi (09:26.872) Yeah. Susana Mendoza (09:31.667) late payment interest penalty hit. That's just the late payment interest penalty for natural sales on top, over a billion in interest. That's more than 18 years worth of governors combined. He did it in just two years. And a backlog of unpaid bills of $16.7 billion, almost $17 billion. And that's what I walked into, $48,000 in the rainy day fund at a time when every state in America was just Khullani Abdullahi (09:36.289) is. Susana Mendoza (09:59.735) pouring money into their rainy day funds, preparing themselves for future emergencies, not causing an emergency during the best economic period of our life. And so really it should have been criminal what he did to our state's finances, but nonetheless, I had to come in and fix it. And so I decided to run to stop the hemorrhaging of our state finances to then try to stabilize it and then turn it around. to lead us, I promised when I was campaigning that I would deliver our first credit upgrade. And people literally thought it was nuts because we had only seen about 20 years worth of credit downgrades for the state of Illinois. When I took office, we were just one notch above jug upon status, is like fours you can go. And we were hearing right there, it was so scary. Yeah, and then that's what I had to like. Khullani Abdullahi (10:43.948) of funds. Khullani Abdullahi (10:49.262) Yeah. Susana Mendoza (10:52.394) come in and so I'm saying, I'm gonna lead us to our first credit upgrade if you vote for me. And I think people thought, she's like cute and crazy, but I knew I could do it. I just know what I'm capable of doing when I'm in charge. And I'm very happy to say that I didn't stop at one or two. We've now delivered 10 full credit upgrades on my watch and I couldn't be prouder of that. But it was a tough, tough, tough job. No state in the nation was going through what we were going through. So that was hard enough. And then once we finally started coming up for air, which I can get into the nerdy details, but then we get hit in the face with the pandemic, right? it was definitely, if I had, if there was like a degree for what I went through, I would have like an advanced PhD in successful crisis management. So yeah. Khullani Abdullahi (11:32.503) in Christ. Khullani Abdullahi (11:39.4) No, absolutely. mean, an unprecedented statewide fiscal crisis and an unprecedented pandemic global. Well, that also led to a global. I mean, I think I am hopefully in your next term, wherever it is, there's no unprecedented event again, because I think at that point you might just walk away from all of us in Illinois and say, guys, I can't with this. Tell me what. So when you went in Susana Mendoza (11:47.88) Yeah. Khullani Abdullahi (12:08.46) to campaign as comptroller, you were seeing the deterioration of Illinois across all measures, fiscally, politically, like things just weren't getting done, financially compromised. And so you were aware of that state. How long do you, like what were the decisions that had to be made in the short term, medium term and long term? Like you show up and what did you do? You know how, you know when executives take on C-suite lead. roles, they're always like, here's my 90 day plan, right? But here you are leading a night, you're leading a statewide fiscal or trying to lead us out of a statewide fiscal crisis. What did that first 90 days feel like? What did, did you sleep? Where were you working? Like, what, how did you build that team? Um, like what, what, what are the foundations that you've built that allowed you to then start delivering on those campaign promises? Susana Mendoza (13:03.488) So I would say like the first thing that happened to me was right after I took my oath So I was on stage just came I was walking off the stage and I glanced at my phone and you know Like it's all like an appendage for all of us now, right? You're looking at probably 300 times a day So I looked at my phone and I saw that I had a fresh email and it was from this woman I'm just gonna call her Mary for purposes of her privacy, but and I'm reading this email as literally I'm walking off the steps and I'm like Please help me live. So I open it and she congratulates me on having one. But now that I'm the controller, she wanted to let me know that she was in dire need of assistance, that she had tried to get help from the prior controller and no avail, and that she wants to live. And it's up to me to decide whether or not she gets to. And it was this long email, beautifully written, but she went on to tell me that when she was a little child, she was diagnosed with a degenerative disease that... does not allow her to move any parts of her body anymore. Essentially, her body has consumed itself. And she says that she relies on a ventilator and a feeding tube for her survival. And her mother was dying with cancer and she wanted to still be around for her mother. And she said that her father, because of his work with the of Illinois in years past, that she was guaranteed health insurance by the state of Illinois for the rest of her life and her disability. But because the state wasn't paying its bills, they hadn't paid her health care bill in months. And she received notification from her health care company that if we didn't pay her bill by December, I want to say it's like the 18th, and this was December 5th that I'm reading this email, that they would disconnect her from her feeding tube and her ventilator on December 21st. That's just like a few days before Christmas. Yeah, and I was reading this email going, this is crazy. And then she says, Khullani Abdullahi (14:35.043) Right? Khullani Abdullahi (14:45.11) Mm-hmm. Khullani Abdullahi (14:55.595) It's Christmas. Susana Mendoza (15:01.246) I want you to know that I'm, the reason I can write this email, because I'm thinking, how does this woman who's so sick write this amazing email? And she's like, the reason I can do this is because I have a dot on my forehead that allows me to put my thoughts into words through a software program. And she says that I'm sending you a picture of me so you know I'm a real person. And it was like a gut punch, you know? To think that you've got to show proof of life to the controller, because you've been trying and it's gotten nowhere. And I'm thinking, this was the first Khullani Abdullahi (15:25.73) Yeah. Susana Mendoza (15:31.615) the first welcome to the job that I received. And it was like heartbreaking. And I thought to myself, wow, I thought this was going to be a really hard job, but I've just come to realize that this is a job where I will be making life and death decisions under the current economic crisis. And I never thought that it would, I hadn't thought about it like that, but it was literally the first email and it set the tone for the rest of my time as your controller because It was personal to me. You know, people say don't take it personally. You totally better take it personally when you're the politician in part of people's lives. And I thought to myself, no matter how bad things get, they're worse for Mary. And when people say, what would keep you up at night as controller in those dark days? I'd say it wasn't even Mary. It was thinking that there were people worse off than Mary that couldn't communicate to me, that were like on ventilators or feeding tubes and had no advocate. Khullani Abdullahi (16:24.686) Right? Right. Susana Mendoza (16:30.73) This woman was brilliant and she had the ability to do this. Other people don't have their mental capacities in the moment, yet we still have a responsibility to care for them, right? To give them a dignified existence or a dignified ending, right? And so those are all things that the state of Illinois pays for. And so I knew that I had to like prioritize people like Mary, the vulnerable amongst us. And on day one, I moved all of the high-priced tech consultants. No offense to our tech friends, right? Because I'm very techie, but I put everybody to the back of the line because they could afford to weather the financial storm much more than someone like Mary or people in hospice care, adults and children with disabilities who needed help from the state. They were at the back of the line. I moved them to the front of the line and I just kind of moved around the moral compass of the state, of the controller's office. And so I felt very good about that. But that is what drove me every single day. Like this realization that when I'm looking at the math of so much money that's owed, that I'm not just looking at it like a spreadsheet. It's like, these are not numbers on a spreadsheet. These numbers tell a story of real people who either lost their jobs, could be losing their lives, and many who had lost all hope, right? And so I had this real moral drive to reset that moral compass and to stop that hemorrhaging for all the right reasons. And I didn't have 90 days to figure it out. I had to start on day one. building this team that understood my vision, that we had no time to delay or think about, you know, panels or blue ribbon. No, it's like, get to work right now. Let's figure this out. Let's stop the hemorrhaging. Like if you were doing triage in a hospital setting, right? And that's what we had to do. We had to look at people and say, these folks, no matter how many resources we pump into them right now, are not going to survive. And these folks, if we pump enough resources into them, they might survive. And these folks just need a little bit. and they'll be okay, right? But like, it was like being Jimmy Stewart in It's a Wonderful Life. If you've seen that movie and you have all these people coming to say, rightfully so, where's my money? I want my money. And me saying, I know we owe you this money, but we don't have it to pay it. And so I have like this anemic breadstick, everyone's starving, and I've got to figure out who gets little tiny crumbs and who needs a little bit bigger piece to survive. That's what it felt like the first couple of years. And then obviously, I had to do a lot of things. Khullani Abdullahi (18:42.616) Yeah. Susana Mendoza (18:56.688) One of the first things was passing transparency reforms so that I could actually see the extent of our state's liabilities, which believe it or not, I didn't have the ability to do that when I first worked with. Khullani Abdullahi (19:03.372) Yeah. I was just going to ask, yeah, I was just going to ask in terms of gaps, you can only make good decisions in the face of good information, right? Like if you don't have the data that you need to make the right decisions. So the transparency acts emerged because you realize there were gaps in your ability to even diagnose and co-align like the extent of Illinois's fiscal responsibilities. And no one else, like those gaps just were never solved. how were we addressing them before? Susana Mendoza (19:40.917) Yeah, it's it's a online. That's what I said. I was like, OK, my first week on the job. So we're talking about those first nine days. The first week I got a call from a Republican representative who I had served with when I was a state rep years before, and he said that he had a nursing home provider who was going to go out of business if we did not help them make their payroll that week. This would be the first time that they ever missed their payroll. And you know, anyone who owns a business knows you miss your payroll. That's the beginning of the end. Khullani Abdullahi (20:10.829) Yeah. Susana Mendoza (20:10.902) And so I asked him, how much is the payroll? This group, this institution, service 7,000 seniors across Illinois. So we, know, the prospect of having 7,000 seniors having to be displaced was not a good one. So he said, well, they need a million, their payroll is a million for this week, but they're owed 21 million by the state of Illinois. But if we can even just get help with their payroll for this week, that would be great. And I said, well, I know I don't have 21 million. I mean, I had $48,000 in the rainy day fund. I said, but let me see if I can move other bills back and put together this million for the payroll. So I go into my system and I'm like, we don't have $21 million that we owe these people. We owe them $2.1 million. So now if you're me, you're thinking 21, 2.1, maybe it was just a loss in translation. Khullani Abdullahi (20:43.138) my god. Susana Mendoza (21:06.006) They were off by a decimal. mean, it's significant, right? But nonetheless, I'm thinking to myself, oh, cool. It wasn't 21. It's 2.1. Let me call him with the good news, right? Good news is I've got your million dollars for the payroll. Really good news is I don't owe you 21 million. It's 2.1 million. Bad news is I don't have the 2.1 million, but I'm going to work on it, right? And then he comes back and he's like, well, thank you so much, but... No, I don't think you're right. I think it's at least 21 million, but I'll double check. So he calls me and he goes, it is 21 million. So if you're me, you're the state's chief financial officer charged with paying the state's bills. And they're saying I owe him 21 million, but I only see 2.1 million. The obvious question is where's the rest? Why do I not see it? And it's because for years upon years, decades, right, since the existence of the office. Khullani Abdullahi (21:43.598) Kiss. Kiss. Khullani Abdullahi (21:50.22) Yes. Right? Yes. Susana Mendoza (22:00.811) the state agencies that work at the behest of the governor. I don't control them. I can't tell them when to send me things. The governor was able to hide the true extent of the state's financial refunction because they could hold onto the invoices. Let's say, Kalani, you and I are in a contract together and I pay for tech services that you render to the state. So you have your invoice to the agency that you contracted with. Let's say it's Department of Innovation and Technology. Khullani Abdullahi (22:23.905) Right. Susana Mendoza (22:30.518) and you provide services for them. So you do the work, you send them the invoice, they can sit on that invoice for up to the year. And then they decide when they want to send it to my office. And once I get it, now I have visibility on it. So essentially, the Department of DHS sent me the 2.1 million vouchers to pay, but they were holding on to 19 million more that I didn't even know existed. I didn't know how old they were. Khullani Abdullahi (22:46.392) Okay. Susana Mendoza (22:59.51) I didn't know if they were over 90 days. And in Illinois, after 90 days, you get dinged with late payment interest penalties, which is why we owed over a billion in late payment interest penalties. And thankfully I learned all this in week one. But I did what no other controller did before me, which was say, I'm going to fix this. Like how is anyone okay with not knowing what the bills have been incurred? And the other thing is the law only required those agencies to report to my office once a year. Khullani Abdullahi (23:15.992) Yeah. Nah. Susana Mendoza (23:28.424) In the month of October, they gave me a report of what their outstanding liabilities were, and they were only current as of June 30th of that year. So by the time I even saw their outstanding debts, they're already in the old days, like out of date. And the craziest part is, for all that time I was a state rep, myself, along with every other state rep and Senator, just assumed that the number that we were being given in May to craft the budget that is due on November 21st, Khullani Abdullahi (23:39.8) those are. Yeah. Yeah. Khullani Abdullahi (23:51.787) Yes. Khullani Abdullahi (23:55.691) Recruit. Susana Mendoza (23:57.397) were recent, but they were actually only recent as of June 30th of the year before. So almost a year out of date. It makes no sense. like knowing that as controller, how do I just turn the lights on and turn them off at the end of the day? Like you have to fix this stuff. And that's what the governor opposed me on it. And I overrode his veto. And hence we now transparency on the state's finances and I can get to work on fixing the. Khullani Abdullahi (24:14.563) Right. Khullani Abdullahi (24:25.934) I mean, I think that is such a master class in using data to drive efficiencies and operationalize new processes and then get better outcomes, which is greater visibility. Therefore now I can actually rank order and prioritize which bills should be paid when, since we don't have enough money to pay all of those bills. Okay, so your first 90 days as a fire. As you're kind of settling into the role, I didn't grow up in Illinois. I arrived in Illinois in 2016. And I don't think I really started paying attention to, I think I was still reading like the Star Tribune Minnesota's newsletter until like 2020. So I really paying attention to Illinois politics until the pandemic really. Tell me what happened that enabled us to catch up. Like what forced... and feedback loop and set of macro and micro activities and environments enabled Illinois to recover because we know places like Detroit that like collapse for much longer. And so what was it about Illinois that made it more resilient and tactically what happened because I suspect as we start, as we talk about AI later, AI is going to have significant labor market disruptions. that transform the general purpose fund and the state's ability to collect taxes that are associated with payroll, it is not unimaginable that we are going to have an AI labor-driven fiscal crisis in the next two decades. It could be in five years, it could be in 15. So I'd love to kind of think through it and have you share with us, how did we come out of that? Yeah. Susana Mendoza (26:04.702) Mm-hmm. Susana Mendoza (26:18.08) Cut the bill back on? Yeah. So once I had a handle on how bad the financial crisis actually was, because I walked in and it was like 10 billion, but it turns out it was 16.7 billion, and plus the billion in late payment interest balances, right? So it was well over 17 billion. Then I had to figure out how do I pay this down? And so, mind you, because those bills were so late, like some of them were two years late, the average bill payment delay, Khullani Abdullahi (26:31.212) All Susana Mendoza (26:48.306) was 210 business days. So if you were that company doing business with us, if you were lucky, you were just the average delay, and that was 210 business days. Others had two-year-old bills, right? They hadn't been paid. And so I can't fix it if I can't see it. So like number one was convincing the credit rating agencies to not downgrade us by passing the Debt Transparency Act, because I knew it would be worse than what we thought it was, and in fact, it was. And thankfully, they did not. I said, just give me a year to show you what I can do here, right? And so then essentially we got to work and I championed a bond deal. And normally I don't like bonding because bonding is borrowing. So there are reasons to do it appropriately, but sometimes people go crazy on bonding, right? And in this case, bonding made a ton of sense because we had almost $17 billion worth of bills that we were accruing 12 % late penalties on. We were paying interest of 12%. Khullani Abdullahi (27:45.518) Right. Right. Susana Mendoza (27:47.031) So like even with the worst credit in the nation, I thought if we were to do a bond deal, we'll get maybe in a worst case scenario, 6%, which is still a great deal. If you could refinance your home from 12 to six, of course you would do it. It's because you're gonna lose a boatload of money. Imagine when you're talking billions, right? So in this case, I championed this bond deal. The governor fought me on it, because this was all politics to like drive us into junk bond territory. It doesn't make sense and I won't get into the whys, but. this is what was happening. And so I had to like counter that. And I had to go to every single editorial board when they still existed across the entire state of Illinois and make the case for why this is just smart math. We shouldn't be paying 12 % if we can pay six and maybe we can pay four in like the best of cases. Well, long story short, I won this battle and the governor had so much pressure on him by all the edit boards and people saying every day we're burning $2 million in late payment interest on the teams, right? Khullani Abdullahi (28:27.534) Right. Khullani Abdullahi (28:43.404) Yeah. Susana Mendoza (28:43.926) So he finally decided to go to the market and we got better than we could have imagined because we were able to borrow $6 billion at 3.5%. And that difference in paying 12 % versus 3.5%, putting $6 billion into the market and getting people paid like saved businesses from going under. And what I did was as a controller, I found every single bill that would give me a federal match of 50 cents. And I targeted all $6 billion. towards federal matching bills. And so I turned 6 billion in state bonding authority into 9 billion of debt repayment, leveraging that free money essentially is how you should look at that free money in federal funds. And so that same formula, that chopped 9 billion off the backlog, this is even well before Governor Pritzker was governor, so this is still under the rounder, like battle between me and him. But the controller, what people want is more. Khullani Abdullahi (29:25.614) and I'll see you. Khullani Abdullahi (29:35.726) Yeah. Yeah, and Susanna, when you said battle, even with like the depth of the crisis, you were getting significant pushback on the reforms. Susana Mendoza (29:48.287) a ton of pushback from the governor. Yes, it was crazy. And there's lots of stories. If you Google us, you're going to see this. It was just super nuts. It didn't make any sense because like here I am trying to stop the bleeding and then he's adding to it. And this is a Republican who like says, I'm pro-business yet how could you oppose the Debt Transparency Act? By the way, the Debt Transparency Act, it mandates that the state agencies report to me every month instead of just once a year. Khullani Abdullahi (29:54.36) a little bit back. Khullani Abdullahi (30:06.86) and I'm 50 years old. Susana Mendoza (30:17.31) and they have to give me how many bills they're sitting on. Are they zero to 30 days old, 30 to 60, 60 to 90, or over 90 days? And if they're over 90 days, that means they're accruing late payment interest penalties. What's the estimate on the late payment interest penalties? Because by having that information, then I can decide how I'm gonna attack paying the bills. And a lot of people who like the controller, she's just a check writer. No, like I'm the one who decides who gets paid on what timeline. Khullani Abdullahi (30:41.123) Yeah. Susana Mendoza (30:46.292) So the legislature decides where the money's going to go. So like who those entities are. But then once that budget is signed, it's my job to navigate who gets paid when. And so it's very strategic. It takes a lot of smart financial sense to figure out where you can make money by moving a bill here or there and targeting bills that'll give you matches. I joke that I'm like the coupon controller because I love stretching the value of every dollar I can find, but There's an art, a skill set that's really required for managing this to the best of its ability. But in any event, like championing the bond deal is what got all this money into the market, stretching its value by targeting these federal matches every chance I could. That is how it's the same formula I've used since I employed it after the bond deal. And that has allowed us to significantly chip away at the backlog. Khullani Abdullahi (31:36.046) Right. Susana Mendoza (31:41.355) because we're putting more towards the principle. We're knocking these payments out as quickly as possible by leveraging federal funds. So we're multiplying the value of our money. And that allowed us to get to the normalization of our bill payment cycle. In fact, you mentioned in the opener that I bills faster than the private sector. And that's true. It went from a 210 day business delay to my oldest bill being 13 days old. And it's been like that for over four years now. And I want these businesses to get paid as quickly as possible because we're only reimbursing them for services that they've already rendered, they already had to pay for. So they're not getting like new money before they've delivered the service. They've had to put out of their own pocket to pay their employees and we're reimbursing them for that. So they should get their money as quickly as possible. Khullani Abdullahi (32:16.846) That's it. Right. Khullani Abdullahi (32:22.775) Right. Right. Khullani Abdullahi (32:29.646) Extraordinary. Tell me how you did AI technologies come up and when did they come up in your tenure? When did the vendors start calling? When did the predictive analytics models? Was that during COVID that you really saw that transition? And then tell us kind of your position on AI, both as a mother, as a citizen, as a state government leader. as a future potential city mayoral candidate, how do you think about AI? How have you worked with it and intersected with it? And what are some of those positions that we should know about? Susana Mendoza (33:12.704) Sure, so I am what I would call myself, like in the life product cycle, an early adopter. I am the one who's like, totally loves like, you know, tinkering around with new stuff, new things that come on the market, new ideas. I always get excited about them. I don't fear them at all. And when I was city clerk, for example, I was one of the only elected officials in the nation to team up with an open source data group to open up the code, the city council code. Khullani Abdullahi (33:17.57) Yeah, excellent. Khullani Abdullahi (33:38.017) Okay. Susana Mendoza (33:41.431) which we managed as a city clerk's office to essentially hackers, know, hack away, like here's our source code and, you know, see what kind of ideas you can come up with. And I teamed up with, I think it was the mayor of San Francisco back then or someone from San Francisco. And we, we did some open source coding nights and it was really cool because I do think like this data doesn't belong to me. It belongs to the people, right? Like taxpayers are the ones who have to abide by the laws that we craft, but it's their money. that we have a responsibility to manage. So they should know how their money's being spent. So when I ran for controller and I stabilized the finances and did all that, those first two years were like insanely brutal. I'd say the next two years we were now coming out of that. Then we get hit with the pandemic. But to the point of like transparency is key and that's where AI comes into play, right? And that it gets us data and information a lot quicker than we otherwise would have to wait to get. You need a lot more people doing a lot more analysis. And now we realize that with AI, this is where the debate comes in. You'd need less people. And the AI can do so much more analysis in a shorter time. Now, I could argue that it's not necessarily about having less people. It's about having your people do other things that they otherwise wouldn't be able to focus on because they're doing this grunt work that an AI could do for them. I'm not convinced that everyone's going to lose their job or that we're going to see massive losses, but we're already seeing them in some ways. Like Dell, you'd have to be blind to see that they've dramatically eliminated massive positions. I don't think for any other reason than AI efficiencies and stuff. We have to acknowledge that this is an issue. I think you made a very good point about how the entire financial model might be flipped upside down in the future. Khullani Abdullahi (35:11.863) Yes. Khullani Abdullahi (35:17.314) Yeah. Khullani Abdullahi (35:35.501) Yes. Susana Mendoza (35:37.16) And I just did a panel at Loyola a couple of days ago or a few days ago where, you know, gentleman from McKinsey was talking about that. to the right of me, so to the left of me was McKinsey, right? And to the right of me was the food bank. And, you know, I made this point that... Khullani Abdullahi (35:49.774) That is such a Chicago-esque panel, right? Government leader in middle, McKinsey and the food bank, everyone's represented at the table. Yeah. Susana Mendoza (36:00.021) Yes, and I made this case that like for the first time in our lifetimes, the food bank director might start to see a different constituency in those lines. And I don't say it as like a doom and gloom, it's just a reality that for so many years, like the white collar jobs could never have imagined themselves in a food bank. There are literally stereotypes of who those people are and what they look like in those food lines. But as we move forward for those who don't want to adapt to a new condition, they might find themselves very quickly out of a job and unable to quickly bounce back into a new one because everyone's in the same kind of like, you know, new adaptive environment. And so we are gonna have to rethink what this new unemployment line looks like. And as horrible as that is, it might actually be a catalyst to having communities come together to figure out this issue. Because in past it was like them versus us, right? And, you know, I certainly wasn't born with a silver spoon in my mouth. I mean, my parents were Mexican immigrants. You know, at best I had like a plastic spork, right? But it was definitely no silver spoon. But I can definitely relate to what that's like and also understand that people who were born with that silver spoon in their mouth might have no idea what's that like. And it doesn't make them bad and us good. It just makes a different life experience. I think that under this evolving AI and there are so many people who are either moving way too fast or way too slow. And, know, there's going to be disruptions, right? And so we have to be cognizant that how do we figure that out? How do we bring the smartest people together? Not just the AI models, but people too who understand that it's not, I think the AI is going to see it more from a numbers on a spreadsheet and efficiency versus. Khullani Abdullahi (37:34.499) Wait. Khullani Abdullahi (37:45.048) Yes. Susana Mendoza (37:55.061) real lives that are being impacted. And so that's where you still need people who understand these things to be part of a solution to mitigating the fallout from what is here to come and it's here to stay. And it's going to be, you know, the technology of the future. Khullani Abdullahi (38:11.298) Right. I'm going to take off my podcast hat and put on my Khullani constituent hat. so one of the things that I, as a constituent, find frustrating, I think, about Illinois, and I think most states in general are in this space, is Illinois doesn't have an integrated AI strategy. We don't have a state or city Illinois AI economic working group. that brings all those parties together. And so we know this crisis is coming and we don't have to wait until this crisis comes. If you continue to run for office in Illinois or in the city of Chicago, can you talk about your approach to ensuring that we build a centralized integrated AI strategy so that we can address what happens if 30 % of white collar workers in the loop are laid off? What happens if we lose all federal Medicaid and Medicare matching dollars? What happens if AI and these economic crises that are emerging do occur? How do we get ahead of that? And what would your approach be to ensuring that we have a developed strategy to implement before the crisis, especially since you've inherited a couple of crises that just showed up at your of your doorstep? How are you thinking about building and operationalizing new systems and frameworks to maybe be proactive before the next crisis emerges? Susana Mendoza (39:48.383) Yeah, I love that question. Actually, it's excellent. And I would say that Chicago is made up of incredible talent. You know, we have amazing people. I'm speaking to one right now, right? So obviously you've been thinking about this and you know, this is not my area of expertise. I definitely am a, like I said, early adopter of tech. I believe in it. And I think that for Chicago's future, we need to lean into innovation, which wouldn't be running away from it. But what a good or a great leader does is surround herself with great talent, right? People who are experts in their fields, people who can see this from multiple angles. So not just the AI experts, but the people who are worried about what this is gonna mean to their employment, right? The big job creators who are gonna have to be seeing, know, how's this gonna impact their footprints too? I think of the loop. Like a lot of the buildings are already empty. Khullani Abdullahi (40:40.332) Yeah. Yeah. Susana Mendoza (40:41.802) This is going to make it worse, right? And so like the people who own those buildings, like they need to be a part of this conversation as well. We're re-imagining what the future of Chicago could look like and the workforce, that's a part of it. So I think, know, to your point, I would just say, hey, please be a part of whatever it is I put together because we're going to need to do this and we need to identify the people who are passionate about this. And I would say start with someone like you, who you've already just in your little intro here framed. like probably five different touch points that would need to be a part of this collaborative effort, right? And so at least start there, and then we see how much you build. Because at some point you get too big and then nothing gets done, right? So you need to have people who are like, here's five things that we can tackle or we can avoid from happening. Three that we need to do, two that we need to avoid, right? And how does that come together with a vision and a plan of attack? That's really the essence of any problem is you identify what the problem is. and then you put the plan together to fix it, to attack it. And I think my experience in any job I've had, certainly when I was city clerk and as controller has been to identify a problem and fix it. And it's not always by having a million commissions, right? It's just like experts who know what the hell they're doing and are gonna sit down and try to move as quickly as possible. Because I'll tell you what, with tech, the one, I love tech and I hate it at the same time for this one reason, that if you don't implement quickly, Khullani Abdullahi (41:40.888) Yes. Susana Mendoza (42:09.246) you've lost it. By the time you are eight months into your development, you've moved on to something better, shiny, this is obsolete. So you really have to stay on budget, on calendar, drive those results. Otherwise, look at the Cook County tax project. This was all over the news in this last election cycle, 10 years, and they still haven't figured it out. And they've spent a boatload of money. Khullani Abdullahi (42:09.324) Yes. Yeah. Khullani Abdullahi (42:17.422) Yeah. Yeah. Khullani Abdullahi (42:26.062) Yes. Susana Mendoza (42:37.61) But that's because you have elected officials who have no experience championing technology improvements, who just go off the buzzwords and they hire bad consultants. They don't micromanage these projects, which you kind of need to do. Yeah. Khullani Abdullahi (42:45.037) Yes. Khullani Abdullahi (42:50.958) Yes, you have to. it's con... Vendors will burn all of your dollars. I have one recommendation on that. So I have a good friend who was brought on to manage Accenture's like $30 million Salesforce implementation for a city. So the city hired Accenture and then they brought in like this ruthless Salesforce consultant who knew everything. Susana Mendoza (42:57.654) 100 % you Khullani Abdullahi (43:18.798) to manage the vendors and the consultants and to give visibility. So I think you're right, 100%, if you're not micromanaging those processes and those projects, they don't go as far. I know we're coming up on time, but. Susana Mendoza (43:30.198) It's like Scope Creep Galore, which only adds lots of these projects. I think, know, I would love to, seriously, I'll kid in the side, moving forward, we need to keep communicating after this podcast and figure out like how I can be helpful in putting together a team that, people who are really interested, not people who are doing it for the money, but they're doing it for the city, right? They're doing it for the future. And, and this is about this great ideas coming together and saying, What's the plan? What do you think would work? And I'm interested in hearing what your thoughts are. You shouldn't just be interested in my thoughts. I want to know what your thoughts are and how you think you can be a part of helping craft that vision. Khullani Abdullahi (44:03.043) Yes. Khullani Abdullahi (44:08.75) amazing. I am. I would love to know what do you hope and excitement about Chicago. You were born in the city. You spent all of your career serving. You're going to intend to continue to do that. Where does that optimism come from? Because one thing I have learned as a transplant from Minnesota is they criticize elected officials in this state more than they do in any other state I've come from. Susana Mendoza (44:11.168) you Khullani Abdullahi (44:37.578) I have never heard a Chicagoan talk about their elected officials in a positive manner. Everyone's always upset, right? In Minnesota, I feel like it's just, it's a very different culture. In Illinois, it feels like a thankless job almost at every level of government. So there has to be something, you're not doing it for the accolades because you just get beat up all over the place. You're not doing it for the money because you could be in the private sector making a lot more. Susana Mendoza (44:44.79) Thank Susana Mendoza (45:00.18) Yeah. Khullani Abdullahi (45:06.862) walk us through kind of what is it that in an environment where everyone is, you know, there's people who are always going to be displeased and vocal about it. What keeps you wanting to serve? What keeps you hopeful about Illinois and Chicago's future? And what do you think the next phase of your career would look like? Susana Mendoza (45:30.24) So I love my state of birth and my city of birth with all my heart. And I think when you think about Chicago, this is a city that is so special compared to any other city in America. I do think we're America's We are a city that people love it so much and we're so proud of being a Chicagoan that like this is a city that people get tattoos of the city flag on their body for the rest of their lives, right? Khullani Abdullahi (45:45.517) Mm-hmm. Khullani Abdullahi (45:56.163) doesn't. Susana Mendoza (45:58.059) There's not too many other cities. Maybe New York, it's an I heart New York, but they all act like they're miserable anyway. We don't. As Chicagoans, we walk around, we say hi to people. We love our city. And yes, of course we love to complain about our city, but you know why? Because we love our city and we know how great it's supposed to be. This city is the best and people who live here want to see it reach its potential, right? Like I really do. And I think that for me, like knowing Khullani Abdullahi (46:01.954) Yes. Khullani Abdullahi (46:16.674) Yeah. Susana Mendoza (46:27.882) the potential that you have as a city and seeing it not realized is just not acceptable, right? Like I feel like, no, nobody should be talking smack about our city. But we ourselves can't look at our own faults, look at them honestly and say, okay, these faults exist and we need to fix them. And it's okay to talk about them because like I did that with the state's finances, right? For too many years, we like hid. Khullani Abdullahi (46:39.629) Yes. Khullani Abdullahi (46:45.742) Right. Susana Mendoza (46:56.63) the reality of how bad our finances were. And you know what? We got 20 years worth of credit downgrades and everybody's saying you should leave Illinois. And that if you were a smart investor, you'd invest in U-Haul and get the hell out of here. And I was like, no way, we're in an awesome state. I know we can do better. I can fix this. And guess what? We did 10 credit upgrades on my watch, 2.4 billion in the rainy day fund instead of $48,000. Our vendors get paid in 13 days versus 210. Khullani Abdullahi (46:56.951) with the Susana Mendoza (47:23.894) I mean, we have nailed it in every category that I said I was going to work to fix. And so you just need good leadership. The only thing that hurting Chicago right now is ineffective leadership. And so if you change that, I think this city can reach any, any goal. We've got two national labs in the Chicagoland area. We have two world-class airports in our city. have 20 % almost of the world's fresh water access right here in 312. And we have, um, We've got every single mode of railroad going through the state of it, not just state of the law, but actually the city of Chicago is the only city where every railroad goes through it. And we have, I would even argue underutilized waterways that we can tap into for even greater transportation. there, we have everything. We don't have blackouts. We don't have hurricanes. We do even have nuclear, right? So like we're the best. just need to have. Khullani Abdullahi (48:10.702) me Susana Mendoza (48:20.298) the best leadership. And when we get that, this city will be unstoppable. It will reach where I see it in my mind and in my heart. And I think that that's what Chicagoans deserve, right? They deserve somebody who is actually super competent, knows how to get things done, and knows where this city should be on the world map. And that is the destination city for anybody outside of America. We should no longer be a flyover city or a flyover state. We need to be the first place people think to come. but also get back those people who moved out of Chicago who went west or went east. Bring them back. Let's boomerang them back into Chicago once it works. That's kind how I think about our city. And it's how I think most people want to see the city, a great public transportation system, one that's safe and clean. Right? We don't have that right now. We need to have that. Khullani Abdullahi (49:07.592) Yes. People complain about the L. You can hop on Reddit anytime with the Chicago threads and there are certain themes that come up. If you had to prioritize, if you did join city leadership and run to lead the city of Chicago, what are those three to five things that you think the mayor has to solve in the first? couple of years. I'm not naive enough to think things happen overnight, but you did demonstrate a lot can get done even in the first 90 days during a crisis. So I think expectations will be a little bit higher for you. What do those key priorities look like if you were to be in City Hall? Susana Mendoza (49:57.655) Okay, so number one, public safety. And this, my interests too, by the way, are going to be not just what I think, but what I've been hearing from people across Chicago, right? Public safety. Even though you hear everybody saying it's safer, the sentiment is not that. You ask people what are their top three, it's always either one or two. Public safety. The other one is affordability. And that is tied directly to growth of this city. So we have to grow our way into a more successful Khullani Abdullahi (50:00.43) Okay. Khullani Abdullahi (50:15.842) Yes. Susana Mendoza (50:25.92) financial base, right, or revenue base, but also to be able to drive down the costs of housing, which still relative to other states or other cities is much more affordable. But nonetheless, because if you got your property tax bill this last time around, it doesn't feel very affordable right now. So we're seeing higher property taxes because we've lost people in our city and our state. And we need to bring people back into this city. Khullani Abdullahi (50:36.302) Okay. Khullani Abdullahi (50:50.776) Yes. Susana Mendoza (50:54.038) a growing tax base, so more people paying taxes versus less people paying more in taxes. That means building, building, building. We have a DNA of builders in this city and we have to get back to that. So public safety, growth and affordability, those two are intertwined and we need to lean into innovation. Like this is a city of creators, builders and not just in the bricks and mortar, but in this type of space. We've got an incredibly innovative ecosystem of startup companies here in Chicago. They make it to a certain point in order for them to like catapult to the next level. They unfortunately end up leaving to the West coast or the East coast. We need to create a start and stay concept here in Chicago where we're creating the next Amazon, the next Google, and they're staying right here in our city. And we need to figure out how do we get those venture capitalists to stop looking at San Francisco, is so expensive, California is so expensive, or New York, which is so expensive, and build a similar ecosystem here of support. You're in the biotech space. I was in bio, not bio directly, but I actually was the city's point person and the state back in 2006 for the International Biotech Conference. It's why I started the biotech committee in the state of Illinois, and I have a passion for all things bio. And so we have an incredible Khullani Abdullahi (52:13.038) think. Khullani Abdullahi (52:18.2) Right. Susana Mendoza (52:20.266) biotech ecosystem here in Chicago that under the right leadership could have been the major hub. Now we're going to be the hub for Quantum, but we can also really lean into innovating and supporting those innovators in our own space here. That's a massive potential for growth at this startup system that most people don't even know exists. I do, but I also want to champion it. And so I think like that's all going to lead to greater growth, more jobs. Khullani Abdullahi (52:26.798) Yes. Khullani Abdullahi (52:42.616) Yeah. Susana Mendoza (52:48.398) people having access to groundbreaking medical cures, all this cool stuff. And I understand these concepts because when I was a state rep, it was my baby. I championed the angel investor tax credit, which so many companies have taken advantage of and been able to grow their companies because of that. And so we're going to lean heavily, lean into innovation, safe communities, and growth and affordability. Those are really key things. And of course, one of my first things would be to fix our CTA system in terms of a safe, clean, reliable transportation system. I write it, I talk to people on it. Nobody should live in fear on this system. You also shouldn't be punched in the face with like disgusting odor of urine or feces or pot while getting on that or on those trains. And we have to fix that. Those are all things that are fixable. They should not be roving mental health clinics with no services attached, right? Khullani Abdullahi (53:23.266) Thank you. Khullani Abdullahi (53:35.01) Yes. Right. Susana Mendoza (53:45.718) It's not compassionate to just turn a blind eye to people with homelessness. These are issues that have to be addressed, but it has to be a quality of life for all Chicagoans. And that is, I think, the big challenge is how do you make that happen? But if you can do that, which I believe, you know, those are problems that all have solutions, you just need a good leader to be at the helm of that. Anything is possible. Khullani Abdullahi (53:46.04) Yes. Khullani Abdullahi (54:09.289) Extraordinary. Susanna, thank you so much for taking the time to chat with me and kind of lay out your vision. I really appreciate you actually also being very tactical in talking about those moments of crisis. Chicago is the third largest city in America. There's so much value and so much potential here, but it is definitely a moment of transformation and there's a potential for crisis in the macro environment. I think to your point about good leadership in moments of tumultuousness like this will be very key for the future of the city. I'm glad to have leaders like you who want to continue serving, regardless of all the complaining that the citizens of the state do. So thank you so much for taking the time. Susana Mendoza (54:52.022) Because they love our city, you know, deep down they love it and they want to it succeed. So do I. Khullani Abdullahi (54:57.738) Absolutely. Thank you so much. Susana Mendoza (54:59.947) Thanks for having me.