Chicago News

  • Everyone in Springfield takes shots at CPS, while the school system lays off administrative staff. Plan Commissioners get upset about lack of city support for affordable housing. Police Board Chair Lori Lightfoot bigfoots policing policy.

  • An ordinance merging the Council’s Office of the Legislative Inspector General with Inspector General Joe Ferguson’s office cleared its committee hurdle Monday, but sponsors and co-sponsors cautioned that it was far from a done deal. “As you heard in some of the discussion this afternoon, there’s some aldermen who think we still might not have it right, but this is a legislative process, it’s not a legislative finality,” Workforce Development and Audit Chairman Pat O’Connor (40) told reporters after the vote.


    Attendance (10/18 Committee Members Present): Chairman Pat O’Connor (40), Will Burns (4), Raymond Lopez (15), Derrick Curtis (17), Danny Solis (25), Carlos Ramirez Rosa (35), Marge Laurino (39), Brendan Reilly (42), Michele Smith (43), Tom Tunney (44)


    Other Aldermen present: Michelle Harris (8), Sue Sadlowski Garza (10), George Cardenas (12), Matt O’Shea (19), Rick Munoz (22), Walter Burnett (27), Ariel Reboyras (30), Milly Santiago (31) Deb Mell (33), James Cappleman (46) Ameya Pawar (47), Joe Moore (49)


    Chairman O’Connor kept the meeting brief, refusing to replay last month’s marathon subject hearing on proposed changes to the Office of the Legislative Inspector General. The plan the committee advanced today would eliminate the Legislative Inspector General’s Office, which is currently vacant, and put the responsibility of investigating aldermen and their staff under the jurisdiction of the city’s other Inspector General who is already in charge of monitoring the rest of city hall. Under the plan, the 2016 budget the council approved for the OLIG’s office would be transferred to the IG.


    A few aldermen, including AldTom Tunney (44) and Ald. George Cardenas (12), said they wanted Board of Ethics Director Steve Berlin to again outline changes. But Chairman O’Connor refused, saying aldermen had already been briefed and should return to the Finance Committee, which was into its fourth hour of debate on billions of dollars in bond issuances. “I’d like to cut everybody loose and get them back there,” he said. The meeting lasted just under half an hour.


    Ald. Will Burns (4), a co-sponsor of Ald. Michele Smith (43) and Ald. Ameya Pawar’s (47) ordinance to merge Council’s watchdog office with the City’s, was the sole alderman to voice concern about changes to the office.


    "I raise these questions because as a member of the 2011 Ethics Reform Task Force, there were a number of concerns about the very political nature of our job,” Ald. Burns said, "Sometimes when you tell people ‘no’ and you make difficult decisions over land use, over TIF funding, over public subsidies, CDBG, whether someone can purchase a vacant lot, you could anger those people and they could file complaints and use, or abuse, unfortunately, the ethics process to harass and to seek retaliation."


    Burns said he’d like to see more protections against false claims against aldermen, and perhaps a special City Council committee, similar to the State Legislature’s bicameral Legislative Ethics Commission, to “have some sort of oversight over whether or not the Inspector General conducts an investigation… as a check or protection against what can be fairly sweeping powers.” He said he worried that it would be politically difficult to amend provisions of the ordinance in the future without it looking like aldermen were “watering it down.”


    Ald. Joe Moore (49) and Ald. Cardenas both said they understood Ald. Burns’ concerns, as they were both targets of former LIG Faisal Khan. “You know what? I survived,” Moore said, “It’s important not to let the perfect be the enemy of the good. I think we really need to send a very strong message to our constituents that we don’t believe ourselves to be above the law.”


    Ald. Pawar, a co-sponsor of the ordinance, said there were certain checks granted to the Committee on Committees, Rules, and Ethics, that he believed addressed Burns’ concerns. After the successful vote, Pawar compared the focus on Khan and Ferguson to the three year long fight over the establishment of a Council Office of Financial Analysis. “I think for too long, people focused on personality rather than structure. I think it’s the same thing here,” he told Aldertrack, stopping short of calling Monday’s vote a victory.


    Shortly after the committee meeting, Ald. Burns and Ald. O’Connor were spotted in the doorway to Council Chambers with their heads together.


    Last month, during the subject hearing on the IG ordinance, O’Connor refused to bring the item for a vote because the city was in the midst of hiring a new Legislative Inspector General. O’Connor reasoned that it wouldn’t be appropriate for the Council to eliminate the office until a new LIG candidate was found. But late Friday, following a closed door meeting with representatives from the Mayor’s office, O’Connor reversed course and told the Sun-Times that Ald. Smith’s ordinance would be the only item under consideration.

  • Former Chicago School Board Vice President Jesse Ruiz easily won approval to head up the Chicago Parks Board, marking a big political transition in his long career in education statewide. "I would have preferred to see you serving at the Chicago Board of Education a while longer," Ald. Milly Santiago (31) told him to laughter from the room before she was chided by Chairman Tom Tunney (44).


    Attendance (13/20 Committee Members Present): Chairman Tom Tunney (44), Brian Hopkins (2), Leslie Hairston (5), Roderick Sawyer (6), Patrick Daley Thompson (11), Marty Quinn (13), Derrick Curtis (18), Michael Scott Jr. (24), Walter Burnett (27), Milly Santiago (31), Carlos Ramirez Rosa (35), Michele Smith (43), Ameya Pawar (47)
    Other Aldermen Present: Marge Laurino (39)

    Ruiz fielded congratulations and tame questions on privatization, underutilized parks, and allocating the department’s $458 million budget, which Ruiz says largely goes to programming.


    He told aldermen he’d work to increase ties with Chicago Public Schools and Libraries to, “have more seamless programming between winter breaks, summer breaks, and just year round,” and that he would “always take a marketing and customer approach to serving the constituents of the City.”


    Ald. Brian Hopkins (2) said he’d like to work with Ruiz on two parks in his ward where the private sector has offered to help with capital improvements: Seneca Park and Lake Shore. His appointment won unanimous approval and will be reported out at Wednesday’s full City Council meeting.


    The committee also approved the use of up to $191,000 in Open Space Impact Fee funds to help pay for the construction of bridges associated with North Branch Trail Extension in the 39th ward. The 18-mile-long hiking and bicycling trail starts north at the Chicago Botanical Gardens and ends at the Cook County Forest Preserve in Edgebrook. The City and the Forest Preserve are working on a four mile long extension south, and hope to complete the second stage of the project by the fall.

  • A conference call organized by a pair of Black pastors late last night resulted in dozens of high-profile activists and pastors from across the city agreeing to boycott Mayor Rahm Emanuel’s Martin Luther King day breakfast at McCormick Place and to begin planning protests of the event.


    The call, organized by Rev. Jedediah Brown and Bishop James Dukes, included dozens of callers, confirmed by an Aldertrack reporter who was able to hear the closing minutes of the conference call. Brown later confirmed for Aldertrack that the call included pastors such as James Meeks, Ira Acree, Bishop Larry Trotter and activists such as Ja’Mal Green and Ameena Matthews.


    “We’re not going to dishonor Dr. King by having breakfast with a man that has not delivered justice to our community,” said Brown. “I’ve never seen the clergy have such a rebellious nature to do something.”


    The group agreed to boycott the breakfast, encourage other pastors and activists to boycott the breakfast, and to organize a small protest at McCormick Place next Monday. In addition, the group will hold a press conference before Wednesday’s City Council meeting and hold an organizing meeting on Thursday.


    Brown has also been leading a push to organize a group of activist leaders, The First Fifty, to help plan an agenda and list of demands to present to the Mayor. The group, which is close to completion, Brown says, requires a time commitment and a $1,000 contribution to management of the group. Brown says it includes not just activists and pastors, but a few high profile African-American celebrities. Their first meeting is set for January 21.

  • The Committee on Public Safety meets today to consider the appointment of Sharon Fairley as Chief Administrator of the Independent Police Review Authority, the independent body that investigates allegations of police misconduct. Fairley has been serving as acting IPRA head since December 6, when her predecessor, Scott Ando, left the position in the fallout over the release of the Laquan McDonald video.


    This won’t be Fairley’s first time before the Committee on Public Safety. Aldermen put her through the ringer at a marathon joint committee hearing on police accountability on December 14. Fairley, brand new to the job, spent nearly four hours before the Council as they peppered her with questions relating to IPRA’s handling of the Laquan McDonald shooting. But she didn’t reveal much, largely telling aldermen she either wasn’t sure of the answer or would need to get back to their questions at a later date. Many of her comments focused on what she hoped to accomplish as the new head of the agency responsible for investigating allegations of police misconduct.


    “She got her butt kicked,” one alderman said.


    She didn’t fare much better at a press conference a few weeks later to announce staffing restructuring changes at IPRA that, “are just the beginning of improvements that I intend to make.” After announcing the hiring of a new Chief of Staff, Chief Investigator; intentions to hire more legal personnel, and expanding community outreach, Fairley struggled to get specific about changes to the agency, aside from offering comments from Authority representatives at some crime scenes and during active investigations. She abruptly ended her press conference after nine minutes of questioning from reporters, who called after her: “This is transparency?”


    She served for nearly a decade as an Assistant United States Attorney in Chicago, working on drug and gang cases, federal criminal national security, financial and government program fraud, immigration, narcotics, and violent crime cases. Fairley served in the Chicago Office of the Inspector General as First Deputy and General Counsel for roughly nine months before her appointment, where she helped supervise the hiring oversight section.

  • Following a marathon six hour meeting, the Council’s Finance Committee approved a reduced borrowing plan that calls for the issuance of $650 million in general obligation bonds to pay off old debt come due, as well as $200 million in new sales tax revenue bonds to refinance old debt and pay for the 2016 Aldermanic Menu program, $1 billion in bonds to refinance old debt and pay for capital improvements at Midway Airport, and $800 million in water and sewer bonds. The new borrowing plan for 2016 comes as the city prepares to sell half a billion dollars today in previously approved general obligation bonds.


    Committee Members Present: Chairman Ed Burke (14), Joe Moreno (1), Pat Dowell (3), Will Burns (4), Leslie Hairston (5), Roderick Sawyer (6), Gregory Mitchell (7), Michelle Harris (8), Patrick Daley Thompson (11), George Cardenas (12), Marty Quinn (13), Toni Foulkes (16), Matt O’Shea (19), Willie Cochran (20), Howard Brookins, Jr. (21), Rick Munoz (22), Michael Zalewski (23), Danny Solis (25), Walter Burnett (27), Jason Ervin (28), Ariel Reboyras (30), Scott Waguespack (32), Marge Laurino (39), Pat O’Connor (40), Brendan Reilly (42), Tom Tunney (44), John Arena (45), Harry Osterman (48), Joe Moore (49)


    The Bonds


    The original borrowing plan proposed by Mayor Rahm Emanuel’s administration included up to $1.25 billion in general obligation bonds funded by property tax receipts with $700 million in new money to pay for capital improvements for fiscal years 2016 and 2017.  But following vocal concerns from aldermen, the city’s Chief Financial Officer Carole Brown reduced the authorization request to $650 million in general obligation bonds, all of which will go towards restructure existing debt, with $400 to $450 million to pay for “scoop and toss” and $50 to $250 million for savings.


    “We will come back to the Council when we have more details around the capital projects with a proposal to do general obligation new money capital later in the year,” Brown explained.


    In his 2016 budget, Mayor Emanuel promised to phase out by 2019 the practice of issuing long-term debt to pay down short-term debt payments come due. This new bond offering would expedite that plan by paying off that debt this year instead of dividing the payments by issuing new debt over the next three years.


    The decision to phase out scoop and toss earlier than planned is based on three factors, according to an analysis of the bond deal conducted by Ben Winick of the Council’s new Office of Financial Analysis. In his report sent to aldermen last Friday, Winick argued it’s in the city’s best interest to phase out scoop and toss earlier than planned because: (1) the Federal Reserve’s decision in December to increase interest rates could make it costlier down the line; (2) issuing the debt now rather than over the next two years would reduce the payment schedule from 17 to 15 years; and (3) “unforeseen budgetary pressures” could make it harder to phase out the practice in stages.

    [Download the COFA Analysis of the proposed bond issuances.]


    While there was no dissent on the general obligation bond authorization–it was approved unanimously by voice vote–three aldermen asked to be recorded as “no” votes on a sales tax revenue bond package worth $200 million. The sales tax bonds would raise $70 million in new money to pay for the Aldermanic Menu Program, which gives each alderman $1.3 million a year to spend local improvement projects of their choosing, in addition to another $130 million to refund outstanding payments on existing sales tax revenue bonds. Aldermen Scott Waguespack (32), John Arena (45), andMike Zalewski asked to be recorded as the sole “no” votes. Ald. Roderick Sawyer(6) abstained from the vote under provisions of Rule 14.


    While this would not be the first time the city has borrowed money to pay for the annual aldermanic menu program–which costs the city an annual $6 million in administrative fees alone–this is the first time the city would be using sales tax receipts to pay for the program, according to CFO Brown and Budget Director Alex Holt. Historically, sales taxes have been used for city operations, while property taxes have been used for capital spending, and pension and debt payments.


    “One of the concerns we had heard from the rating agencies and from investors is they would like to see the city diversify more the sources of support for our debt,” CFO Brown told aldermen. She said even after the Council approved a historic property tax increase last year, the city’s current property tax levy is maxed out and the junk rating on the city’s general obligation bonds would have made it too costly to borrow.


    When pressed to explain how this bond offering would impact the city’s general fund, since sales tax revenue supports 18% of city operations, CFO Brown said yesterday’s package would be a test run to determine if sales tax revenue in place of property tax revenue for future debt payments is more cost-effective.


    “So, we have to continue to make sure that we protect the sales tax for our corporate fund, and so this is not something that we would do…move wholesale to. But it’s something we are definitely exploring,” Brown explained.


    This bond sale was the only offering that concerned Winick, who noted in his report that the deal could, “place an additional strain on the corporate fund budget.”


    And CFO Brown revealed the city is looking for other revenue options to back future borrowing plans, but wouldn’t detail those plans publicly.


    Ordinances authorizing the sale of $1 billion in Midway Airport Revenue Bonds and three separate water and wastewater bonds totalling $800 million quickly passed without dissent towards the end of the meeting. The former would raise $500 million in new money to pay for capital improvements for parking, concessions, noise mitigation and other general infrastructure repairs, $200 million to pay for outstanding debt, and $200 million to convert outstanding Midway Airport Revenue Bonds to so-called “Customer Facility Charge Bonds”. The proceeds from the new water and sewer bonds would terminate swap agreements with the Royal Bank of Canada (RBC) transferring existing wastewater bonds from a variable to a fixed rate. That change will cost the city about $100 million, an amount that is based on today’s market. The full cost won’t be known until the deal is finalized.


    This past summer, around the time the rating agencies downgraded the city’s general obligation bonds to junk status, the city converted its existing general obligation, sales tax, and wastewater bonds to fixed rate. “And so this water conversion is the last conversion we need to do to totally de-risk the city’s balance sheet,” CFO Brown explained to aldermen when asked why the city is opting to pay such a high cost to convert the water bonds.


    When asked by Ald. Rick Munoz (22) if the city could sue the banks to reduce the costs associated with the swap termination, CFO Brown said while nothing precludes the city from litigating the matter in court, the city is voluntarily choosing to pay the termination fee.


    That comment didn’t sit well with Ald. Sue Sadlowski Garza (10) who is not a member of the Finance Committee but still complained about the “astronomical amounts of money in termination fees,” and asked why the City doesn’t just threaten to stop doing business with banks that refuse to forgive termination fees.


    “We can’t keep paying these astronomical termination fees, especially in the fiscal state that the city is in,” Garza warned. The city has paid $250 million in swap termination fees since Mayor Emanuel took office, according to CFO Brown.


    Jim McDonald, Deputy Corporation Counsel with the City’s Law Department, stepped in to testify that his department sought outside counsel in 2014 to determine if the city had a legal basis under federal or state law to sue banks and overturn the swap agreements. The report found that the city has no legal grounds to do so, McDonald said.


    The $100 million termination fee on the water bonds will be borrowed through the bond issuance and paid back with revenue collected on water fees.


    “So we’re borrowing money from another entity to pay for money we already borrowed,” Ald. Garza asked, sarcastically noting, “That doesn’t make any sense. That’s like me taking out a credit card to pay off another credit card.”


    But Holt said that wasn’t an accurate portrayal of the deal, saying, “I recognize [these swap agreements] aren’t the most transparent thing in the world, but it’s not like we’re borrowing money to pay borrowed money. In this case there is a termination fee that we owe [...] The city has actually been receiving money all of this period of time, and now, in order to get out of the agreement, we have to essentially pay back the money.”


    Aldermen Pushback on Other “Routine” Items


    Every item on the Finance Committee agenda, save for a series of Special Service Area appointments, faced heavy scrutiny by aldermen who wanted to make sure they weren’t approving money transfers for projects that shouldn’t receive city subsidies.
    That’s why, after nearly 40 minutes of debate, Chairman Burke decided to hold two proposals that would have waived building and permit fees for the Metropolitan Pier and Exposition Authority, as well as a proposal that would authorize $7 million in TIF funds to pay for a new public park next to the Marriott Marquis Hotel currently being built.


    Ald. Pat Dowell’s ordinance would have saved McPier roughly $2.6 million in construction fees associated with the McCormick Place expansion plan through 2017. But after having already approved a $55 million dollar TIF subsidy for the construction of the Marriott Hotel, Ald. John Arena (45) argued the city shouldn’t be giving private developers additional subsidies when it’s already strapped for cash.


    Mike Merchant with the Metropolitan Pier and Exposition Authority, argued the Authority brings in $8 billion in economic activity and the new hotel will be an “important catalyst” that will bring hundreds of millions in additional revenue.


    “We know we’re getting returns on a hotel wherever it’s placed [...] but if we’re subsidizing the cost of building it for a private company, that company should be giving us hard returns. I’m not understanding why this is a good deal for the city,” Arena countered.


    Chairman Burke tabled the items and said they would be brought up for consideration after McPier provides a breakdown of pending capital projects that would benefit from the fee waivers.


    Aldermen were less than thrilled with another plan that would refund CPS for a nearly $5 million athletic field it just built for Williams Jones College Preparatory High School and National Teachers Academy, a public elementary school. The ordinance the committee ultimately approved would reimburse CPS for the construction costs with $4.6 million from the 24th/Michigan TIF.


    A proposal that would give the city the authority to reimburse the developers behind a massive redevelopment project in the South Loop for any costs incurred in the public way received some pushback but eventually advanced in committee, too.


    The ordinance approves inducement language for the city to issue up to $98.4 million in tax-exempt special assessment bonds for the proposed 3,000-unit Franklin Pointproject in the South Loop. The Plan Commission approved the joint venture from Chicago developer CMK and Australian firm Lend Lease Group in November, but it has yet to advance to the full Council. Should the city choose to issue the bonds, another ordinance authorizing the sale would have to be approved by the full Council. The money would reimburse the developer for costs associated with their plans to improve the Chicago Riverwalk through local property taxes.

  • While the Finance Committee continued its marathon meeting, aldermen in the Economic, Capital and Technology Development Committee quickly passed two property tax incentives for food distribution businesses in the 14th and 8th Wards.


    Attendance (9/20 Committee Members Present): Chairman Howard Brookins (21), Ald. Leslie Hairston (5), Ald. Toni Foulkes (16), Ald. David Moore (17), Ald. Michael Scott Jr. (24), Ald. Milly Santiago (31), Ald. Michele Smith (43), Ald. Tom Tunney (44), Ald. Ameya Pawar (47)


    Other Aldermen present: Ald. Michelle Harris (8)


    Hailing it as a welcome addition to the South Side, the committee approved a class 6(b) property tax incentive for Balton Corporation, who plan to move into the former site of a Jay’s Potato Chips facility in the 8th ward. Jay’s relocated to Indiana. Local alderman Michelle Harris (8) said using the empty space made her “doubly excited” about the relocation, and that she was excited to see 55 existing jobs and ten new ones come to the South Side. “Anything we can do to get black businesses in black communities I'm going to support it 1000%." Chairman Howard Brookins (22) andAld. Leslie Hairston (5) both voiced support for the move.


    Balton, a wholesale distributorship with food contracts with Chicago Public Schools through Aramark, and with City Colleges, plans to spend $4.6 million to renovate the building and expand operations. If the property tax break is approved by the full Council on Wednesday, the company would save an estimated $1.2 million in property taxes over the next 12 years.


    Takis Royal Foods, a 43-year-old family-owned food distribution company, also received committee approval for a class 6(b) tax incentive for the acquisition and rehab of an industrial building in the 14th ward. Essie Banks with the Department of Planning and Development says the building had been vacant for approximately 5 years. The owners plan to invest $3.1 million to buy and fix up the property with new office space, HVAC systems, and new garage doors. Pending full Council approval, the applicants would save roughly $532,000 over the 12 year incentive period.
  • An intergovernmental agreement between the city and its sister agencies aimed at implementing recommendations of a Procurement Reform Task Force to is up for discussion in City Council’s Budget Committee Meeting today.


    The task force was formed in May 2015 to find uniform best practices to govern the award, management, and oversight of contracts with the Chicago Park District, Chicago Housing Authority, Chicago Public Schools, Chicago Transit Authority, City Colleges of Chicago, and Public Building Commission, which spend billions in procurement each year. The primary objectives from the Task Force were to standardize contract terms among agencies and make information more transparent for the public. It was co-chaired by the city's Chief Procurement Officer Jamie Rhee and Inspector General Joe Ferguson.


    Representatives from each sister agency participated in the task force, which released its recommendations in November. Recommendations are broken up into immediate, mid-term, and long term–divided by depending on how long it would take to make a change and resources available. The first round of reforms are expected to be done by the end of this winter.


    Per a press release, the IGA the Budget Committee would consider provides for the creation of a Chief Procurement Officer Committee and a Chief Information Officer Committee, with representatives from each agency. It also establishes roles and responsibilities for members, an agreement to track progress on recommendations, and give those progress reports to City Council.


    Lori Lightfoot, the recently appointed head of the Chicago Police Board and Police Accountability Task Force, helped guide the Procurement Task Force discussions while she was still an attorney at Mayer Brown LLP. Lightfoot also guided procurement reform in 2005 under the Daley administration. The Civic Consulting Alliance also contributed services. More on the task force here.

  • An ordinance co-sponsored by Ald. Tom Tunney (44) and Ald. Michele Smith(43) first introduced in July is up for committee consideration today. The ordinance would create a one-year Pilot Program for curbside cafes. Permits would cost $100, plus the anticipated cost of any lost parking meter revenue if a parking space is used for the cafe. The cafe would be placed “in a section of the traffic lane closest to the curb that is normally used for parking.”


    Just one permit can be issued for a location on the same side of a block. The cafe area must be in a parking area that has less than 8 feet of sidewalk, and can't be longer than 25 feet, nor can it "unduly interfere" with foot or vehicle traffic or parking, or extend into a bike lane. Cafes can operate between 8:00 a.m. and midnight, and can’t have live or recorded music playing.

  • Aldermen will be asked to approve Mayor Emanuel’s appointment of former Board of Education Vice President Jesse Ruiz to the Chicago Park District’s Board of Commissioners, where he will be likely elected President of the Board by fellow Board members.


    Ruiz served as the Education Board’s vice president for five years before taking over as Interim CEO for Chicago Public Schools last year when the former CEO, Barbara Byrd-Bennett was removed from the post after a federal investigation found she steered millions of dollars in school contracts to her former employer.


    Ruiz will replace the Park District board’s outgoing President, Dr. Bryan Traubert, who has led the Board since 2010 and stepped down at the end of last year. The Mayor wants Ruiz to take his place at the helm. Last November, when the Mayor first announced plans to put Ruiz in charge of the Park District, he said the appointment would set the stage for a major parks initiative he’d be rolling out in December. But no announcement has been made, a likely consequence of the political fallout of the release of the Laquan McDonald video. Four days after the Mayor announced Ruiz’s appointment, Chicago Police Officer Jason Van Dyke was charged with murdering Laquan McDonald.

  • Proposals to provide two South Side companies with approximately $2 million in property tax relief over the next twelve years are up for consideration.


    Balton Corporation, a paper, plastic and dairy product distributor, is seeking a Class 6(b) property tax incentive to relocate from New City to an old industrial facility in Burnside previously occupied by Jay’s Potato Chips. The company plans to spend $4.6 million to renovate the building and expand operations. If the property tax break is approved, the company would save an estimated $1.2 million over the next 12 years.


    Takis Royal Foods, a wholesale foodservice supplier to restaurants, is applying for the same property tax incentive to support the recent acquisition and rehabilitation of a 48,000-square-foot industrial building in Archer Heights. The company recently relocated from the Near West Side and has budgeted $2.3 million for renovations and upgrades. If the property tax break is approved, the company would save an estimated $532,000 over the next 12 years.

  • Aldermen will be urged to approve Mayor Emanuel’s plan to issues billions of new bonds, including $1.25 billion in General Obligation bonds after reluctantly approving a $1.1 billion borrowing plan less than a year ago. At the time, Chief Financial Officer Carole Brown warned the city would default on its debt payments and ruin its credit if they failed to act.


    This new borrowing package would pay down or restructure existing debt, including a continuation of “scoop and toss” through 2019; fund the Aldermanic Menu Program, which gives each alderman $1.3 million to pay for local infrastructure projects of their choosing; pay for capital improvements at the city’s airports as well as to the city’s water and sewer system; and commit $700 million to the city’s capital program over the next two years.


    The bond initiatives up for a vote include:





    • $1.25 billion in General Obligation bonds – with $700 million going towards capital improvement projects over the next two years and a planned continuation of “scoop and toss” until 2019, according to the Mayor’s office. The remaining proceeds are to retire old debt.




    • $1 billion in Chicago Midway Airport Revenue Bonds – The bond issuance includes $500 million in new money to pay for capital improvements at the airport for parking, concessions, noise mitigation and other general infrastructure repairs, $200 million to refund bonds for savings, and $200 million to convert outstanding bonds to Customer Facility Charge bonds. The conversion gives rental car companies operating at the airport greater financial flexibility and mirrors the financing structure used at O’Hare, according to draft documents. Barclays will manage the bond sale.




    • $200 million in Sales Tax Revenue Bonds – This bond issue would raise $70 million in new money to fund the Aldermanic Menu Program, which gives each alderman $1.3 million a year to spend on local infrastructure projects of their choosing. The rest will be used to pay off existing debt. Called an “experiment” by CFO Brown, for the first time the city would use sales taxes to finance the Aldermanic Menu Money program. Historically, sales tax revenues have been used for operations, while property taxes were for capital programs, debt and pensions. However, most of the city’s existing property tax levy has been committed to pensions and debt already, forcing the city to begin to use other revenue sources for capital programs. Siebert will manage the bond sale scheduled for the third quarter of 2016.




    • $400 million in Second Lien Wastewater Transmission Bonds - The new money will pay for flood abatement, sewer replacement, and other infrastructure improvements to the city’s sewer system. The bonds are backed by sewer fees and will be issued in either the second or third quarter of 2016. Chicago-basedMesirow is handling the sale.




    • $400 million in two separate Second Lien Water Revenue Bonds - Half of the new money will pay for swap terminations, the other half will pay for capital improvements.




    • $98.4 million in Special Assessment Bonds for Franklin Point - This is an inducement ordinance that gives the city the option to issue tax-exempt bonds in the future to pay down existing project costs. Should the city decide to issue the bonds, a separate ordinance would have to be introduced and approved by the City Council.




    Tax-Increment Financing (TIF)-related Ordinances Before Finance Committee


    Aldermen will consider a proposal to allocate $500,000 in TIF money to help pay for construction costs associated with the Union Station Master Plan, multi-year, multi-phase plan to increase capacity, modernize, and improve Union Station’s connectivity to other public transit. Amtrak owns the downtown train station and will foot the bill for half of the the $6 million plan and the city will reimburse up to $500,000 of the cost with money from the Canal Congress TIF.


    Plans call for approximately $1.3 million to renovate and expand the lobby entrance off Canal Street to allow for greater pedestrian flow and “increased natural light into the Concourse”; $1.3 million to widen METRA train platforms to minimize congestion during peak hours; and approximately $1 million to repurpose an existing unused corridor into an underground, weather protected pedestrian passageway connecting the Union Station concourse with the Ogilvie Transportation Center.


    Another ordinance allocates $4.6 million in TIF funds to pay for a new athletic field to be shared by Williams Jones College Preparatory High School and National Teachers Academy, a public elementary school. Chicago Public Schools is building the new athletic field at 2300 South Dearborn Avenue, and the 24th/Michigan TIF, which spans the 3rd, 4th, and 25th Wards, will pay for it.


    Two Metropolitan Pier and Exposition Authority-related Ordinances


    Ald. Pat Dowell (3) has introduced an ordinance requesting all construction permit and zoning fees incurred after November 5, 2015 associated with the Metropolitan Pier and Exposition Authority be waived. Under the agreement, the MPEA will be required to submit quarterly reports to the city’s Office of Budget and Management detailing the fees waived. [O2015-8533]. Another MPEA related ordinance from the Mayor’s office is an intergovernmental agreement with the Chicago Park District for the redevelopment of Prairie Park.

  • On Monday, the Finance Committee will consider seven bond-related ordinances, including one authorizing the issuance of $1.25 billion in General Obligation bonds, $300 million of which is a so-called scoop and toss restructuring over the next two years, part of Mayor Rahm Emanuel’s promise to phase out the practice by 2019.


    Other bonds up for a vote include:





    • $98 million for municipal improvements within the Franklin Point and River South Areas




    • $200 million for issuance of bonds funded by sales tax revenue, $70 million of which will  finance aldermanic menu money spending




    • $1 billion in Midway Airport Revenue Bonds




    • $800 million in three separate water- and wastewater-related bonds




    [View PowerPoint presented to aldermen by CFO Carole Brown]


    The City’s Chief Financial Officer, Carole Brown, briefed aldermen in person on the issuances earlier this week, but aldermen Aldertrack spoke to don’t necessarily feel up to speed, and some feel rushed.


    “I think the issue here is not that they’re borrowing the money. It’s that they haven’t talked about it until the last couple days,” Ald. Ameya Pawar (47) told Aldertrack, noting that the airport and water bonds are not out of the ordinary. Pawar is not a member of the Finance Committee, but he says he hopes the votes will be delayed untilBen Winick, with the Council’s newly created Office of Financial Analysis, can provide context to aldermen.


    All seven bond authorization ordinances, some upwards of 500 pages, were introduced before the holiday break at the December 9 full City Council meeting.


    Ald. Howard Brookins (21), a Finance Committee member, said he had a one-hour briefing with Brown this week. “It was comprehensive,” he said, “so much so that they handed us literally 50 sheets of paper.” He said from his briefing, the borrowing seemed in line with what the Mayor previewed in budget negotiations, but, “unless you’re a finance major, it’s like, what are we looking at?”


    Another alderman put it bluntly, “I don’t know what the hell it is. I don’t know why they’re trying to do all this at one time.”


    Ald. Scott Waguespack (32), a vocal critic and the sole “no” vote on the last issuance of general obligation bonds in committee last June, said, “This is a massive bundling of offerings and some are basically a blank check.” At the June 15 Finance Committee meeting, aldermen voted to advance Mayor Emanuel’s plan to issue up to $1.1B in General Obligation bonds, although several committee members said they had a hard time understanding the language of the ordinance or what was at stake if they failed to approve it.


    Rather than be connected to specific tax receipts or revenue streams, General Obligation bonds are backed by a government body’s entire revenue stream, and repaid through the general fund for regular government operations. Other bond issuances, like airport bonds, are backed by revenue specifically generated from airport activities, like ticket fees and gate lease fees charged to airlines.


    Of the $1.25B general obligation bond authorization up for a vote Monday, $125 million would go towards traditional refunding for present value savings, $300 million would cover two years of scoop-and-toss restructuring for budget relief, and $700 million would cover two years of as-yet unannounced capital projects, according to finance publication Bond Buyer.


    A Mayoral briefing presentation from June includes the four-year phase-out schedule for scoop and toss, which would be $225 million in 2015, $150 million in 2016, $100 million in 2017, $50 million in 2018, zeroing out in 2019.


    Of the $200 million authorized for sales tax revenue bonds, $70 million will fund the 2016 Aldermanic Menu program which gives each alderman $1 million to spend on local improvement projects in their ward. The bonds will also "refund outstanding Sales Tax Revenue Bonds for interest cost savings," according to Brown’s presentation.


    Winick, who was appointed last year to oversee the City Council’s new independent budget office, told Aldertrack he’s still looking over the details and hasn’t offered concrete answers to aldermen.


    Next Tuesday, $500 million in General Obligation bonds authorized in September will go to market. Five aldermen on the Finance Committee voted against the issuance at the time: Ald. Willie Cochran (20), Ald. Pat Dowell (3), Ald. Scott Waguespack (32),Ald. John Arena (45), and Ald. Gregory Mitchell (7).

  • A blue ribbon panel Rules Committee Chairman Michelle Harris (8) assembled to find a new Legislative Inspector General is expected to make its recommendations in “the next few days”, one member on the selection team told Aldertrack yesterday. The news came the same day Ald. Michele Smith (43) announced she has the votes needed to eliminate that office and put the responsibility of investigating aldermen under the jurisdiction of Chicago Inspector General Joe Ferguson.


    Alejandra Garza, one of the five members of the selection committee, confirmed with Aldertrack last night that, “the search process is coming to an end and [they] will be making their recommendation in the next few days.” Harris created the panel in November to find a replacement for the Council’s former LIG Faisal Khan after his term expired. But Garza wouldn’t confirm how many applicants applied or remain for consideration.


    That candidate could be announced as early as Monday, according to a memo Ald. Pat O’Connor’s office sent to aldermen yesterday afternoon. The memo says his Workforce Development Committee will meet Monday afternoon to consider Ald. Smith’s merger ordinance, in addition to potentially “accept[ing] and consider[ing] a substitute ordinance that retains the Office of the Legislative Inspector General and enhances the powers and duties of that Office in place of the above ordinance.”


    While neither O’Connor’s nor Harris’ office could confirm that a candidate would be announced at that meeting by our publication deadline, O’Connor said in December–when he held a subject hearing on the two ordinances–that he would not allow a vote on either until an LIG candidate was found. He reasoned that all 50 aldermen should have the opportunity to decide and that decision shouldn’t be made until then.


    “You will not be making that choice in a vacuum, because you will also have an opportunity to understand who this selection committee has picked and have an understanding of what that person’s thought process is,” O’Connor told aldermen at the meeting.


    When asked multiple times by Council colleges and reporters why the city needed to find a new LIG when a majority of the Council seemed to favor eliminating the office, O’Connor said the ordinance that created the office legally requires a search for a replacement take place should the office become vacant.


    “By January we will be voting on one or the other,” he promised his colleagues.


    But Ald. Smith thinks the Council has waited long enough. She held a press conference at City Hall yesterday morning announcing she has the votes to discharge her merger ordinance from Ald. O’Connor’s committee at the full City Council meeting next Wednesday. The procedural move, known as a Rule 41, would need a majority of the full Council to bring the ordinance to the floor for consideration. Another alderman could object the motion, but if the item makes it to the floor, the full Council can vote to amend or pass it. 27 aldermen signed the Rule 41 notice Smith filed with the City Clerk’s Office.


    “Our numbers in support of this effort reflect the cries of Chicagoans who demand accountability of their lawmakers, particularly at this significant time in our city’s history. There have never been this many Aldermen to co-sponsor a ‘Rule 41’ to bring about true, lasting change,” Smith said at the press conference, with ten of her council colleagues echoing her call to put the issue to rest.


    Hours later, after O’Connor sent out the memo, Ald. Smith told Aldertrack, “Considering a substitute ordinance and a [LIG] candidate on such short notice would be a huge mistake for the City Council.”


    “None of us know if there is a new LIG and if so, who it is,” she added.


    While this debate over who should investigate aldermen has been going on for more than a year, support for the merger ordinance “surged” this past fall, according to Smith, when former LIG Khan’s term expired. Before he left the post, he claimed his office was designed to fail because his $354,000 budget barely covered expenses, and his inability to investigate anonymous complaints made him powerless.


    And when Harris announced in November she had created a selection committee to find Khan’s replacement, Ald. Smith expressed concern that the city would hire a new LIG before the Council had an opportunity to consider her merger plan.


    She and Ald. Ameya Pawar (47) introduced a second ordinance to strengthen the LIG’s office. That ordinance, which Smith described as a parliamentary “plan b”, would increase the OLIG’s annual budget to at least $500,000 and authorizes the LIG to initiate its own investigations without prior approval from the BOE and a signed and sworn complaint. The possible substitute O’Connor referred to in his memo could further amend that plan, but neither Smith nor Pawar know who is drafting it.

  • A pilot program in the 1st Ward that lets nonprofits near residential streets buy daily parking permits for its employees could be expanded through 2016 with two additional lakefront wards, under a proposal before the Council’s Pedestrian & Traffic Safety Committee today.


    The ordinance introduced by Clerk Susana Mendoza would expand the pilot program to Ald. Tom Tunney’s 44th Ward (Lakeview) and Michele Smith’s 43rd Ward (Lincoln Park). Under the program, not-for-profits can buy up to 150 daily parking permits a month for its employees, or 30 stickers a month for each of up to five employees.


    The rest of the committee’s agenda consists of routine parking matters. The meeting originally scheduled for noon was pushed to 1:30 pm and will now be held in the Council Chambers.