FILE PHOTO: Lori Lightfoot speaks after being sworn in as Chicago's 56th mayor by Judge Susan E. Cox during an inauguration ceremony at Wintrust Arena in Chicago, Illinois, U.S. May 20, 2019. REUTERS/Kamil Krzaczynski

CHICAGO (Reuters) - Chicago Mayor Lori Lightfoot said on Thursday the city will save about $22 million from the termination of $1.4 billion of short-term debt programs as it looks to cut costs in the next budget.

The mayor plans to give a speech in late July or early August on Chicago’s financial challenges, including the size of the fiscal 2020 budget deficit. Prior to taking office in May, Lightfoot said she believed the gap to be “worse” than an estimate by the prior administration that topped $700 million.

A chronic budget deficit along with a big unfunded pension liability have led to low credit ratings and high borrowing costs for the nation’s third-largest city.

“By finding savings and creating meaningful financial reform, we are both strengthening our city’s fiscal position and freeing up dollars that are better allocated in next year’s budget toward investments in public safety, infrastructure, programs for youth, and improvements in our neighborhoods,” Lightfoot said in a statement.

Chicago used commercial paper and bank lines of credit programs to raise funding for capital projects on an interim basis. But the sale of nearly $721 million of general obligation bonds earlier this year and $2 billion of revenue bonds for O’Hare International Airport late last year covered project funding requirements for 2020, according to the city’s budget office.

The termination of three programs and reduction of one will save $14 million in bank lending fees and $8 million in interest, the city said.