The Council’s Budget Committee met for less than five minutes yesterday morning, which was just enough time to pass two ordinances, one of which establishes new procurement reforms, without any departmental briefings or debate.

Members Present: Chairman Carrie Austin (34), Brian Hopkins (2), Ariel Reboyras (30) [Note: we recorded the meeting but were not present, those three aldermen were the only ones mentioned in the recording of the meeting.]

The intergovernmental agreement the Committee approved implements recommendations from a Procurement Reform Task Force the Mayor formed in 2015 to better coordinate, streamline and increase transparency in how the city and its sister agencies award contracts. Noting that the city and its various sister agencies–the Chicago Park District, Chicago Housing Authority, Chicago Public Schools, Chicago Transit Authority, City Colleges of Chicago, and Public Building Commission–award approximately $6 billion in contracts a year, the taskforce sought ways to reduce redundancies by creating a more centralized website to announce bids, take economic disclosure statements, in addition to creating a more uniform system to cut administrative costs. The 52-page report the task force released in November compares in exhaustive detail the procurement process for all city agencies.

The other proposal the committee approved transfers $10,000 to the City Council’s Committee on Education and Childhood Development, Chaired by Ald. Will Burns (4). Since no one testified and no corresponding record number for the ordinance is listed on the agenda, it’s unclear where that money came from or why the transfer was needed.

A plan Mayor Rahm Emanuel unveiled over the summer to sell the old Malcolm X Community College campus to the Chicago Blackhawks and Rush University Medical Center for a massive redevelopment project is one step closer to reality.

Members Present (11/16): Chairman Joe Moore (49), Ald. Pat Dowell (3), Gregory Mitchell (7), Sue Sadlowski-Garza (10), Raymond Lopez (15), David Moore (17), Michael Scott, Jr. (24), Walter Burnett (27) Ariel Reboyras (30), Deb Mell (33).

Yesterday, the City Council’s Committee on Housing and Real Estate approved an intergovernmental agreement that would transfer City College’s Malcolm X College campus to the Department of Planning and Development and the Department of Fleet and Facilities Management. Once the City Council approves the transfer of the 11.15 acre site at 1900 W. Van Buren St., the City will demolish the academic building and remediate the land before selling part of it to the Chicago Blackhawks for a new training facility and youth hockey center, and part of it to Rush University for the expansion of their west side campus.

Last month, the City Council approved an intergovernmental agreement with the Public Buildings’ Commission for the $10 million demolition of the school’s only building. Once that’s complete, DPD will need council approval to sell the property. Asked yesterday if the demolition cost will be added to the sale price, Mary Benone with Department of Planning and Development said yes.

An amended plan to transform the historic 20th District Police Station in the 40th Ward into a performing arts center, an agreement to transfer city-owned lakefront property on the far South Side to a private developer for the construction of a mini-park, and various ordinances authorizing routine land sales also got the greenlight from the Housing Committee.

The Griffin Theater Company bought the century-old police station from the city in 2011 with plans to construct a 55-seat black box theater and another 100-120 seat performing arts space. The building located on the corner of California and Pershing was designed by architect C.F. Hermann, built in 1908, and appraised at $1.2 million. When Griffin bought the property from the city for $1, it agreed to finish the $2.1 million redevelopment plan by 2016. But due to the “financial crisis and ensuing recession”, according to the amended agreement, the developer failed to raise the capital necessary to complete the project and now needs an extension.

Sarah Wilson, with the Department of Planning and Development, says the new agreement expands seating for the planned blackbox theater and designates a new construction timetable. Phase 1 one the project, consisting of interior and exterior demolitions, must be complete by September 2016. From then, developers will have 11 months, or until August 2017, to complete the final stages.

Another ordinance sponsored by the City’s Department of Transportation authorizes the exchange of two parcels of lakefront property the city acquired during construction over the summer on Lake Shore Drive’s outbound ramps to the Stevenson Expressway. The agreement the Council Committee approved transfers the land to Chicago Lakeside Development, LLC (McCaffery Interests) for the development of a public park on the city’s lakefront. Under the agreement, the developers will have to maintain the pocket park for the next 20 years.

Of the 13 mostly routine items on the agenda, only one got deferred: an ordinance authorizing a lease renewal with the Chicago Transit Authority for the use of vacant city-owned land in the 39th Ward. Ald. Marge Laurino asked her colleagues to hold off on approving the lease agreement for the property at 5975 N. Pulaski because she isn’t thrilled that bus drivers use the stop for bathroom breaks.

“Currently at this particular location, which is a lovely turnaround for the CTA with trees and grass, and is really, very nice…[but] right smack dab in the middle of it is a porta potty,” she explained, adding that she’s working out an agreement with the neighboring fire house to let bus drivers do their business there.

After a series of one-on-one meetings with aldermen following her contentious testimony in front of a joint committee on police accountability, Independent Police Review Authority (IPRA) head appointee Sharon Fairley seems headed towards winning full Council approval. A month earlier, aldermen were visibly frustrated with Fairley, who struggled to answer pointed questions about IPRA investigations and policy. She’d only been appointed by Mayor Emanuel a handful of days before.

Even Ald. Raymond Lopez (15), who had previously distributed a draft ordinance that would dissolve the Authority, said he was pleased to see Fairley’s leadership shakeups, and he’d be willing to give her the benefit of the doubt until budget season rolls around.

Attendance (8/19 Committee Members): Chairman Ariel Reboyras (30), Gregory Mitchell (7), Patrick Daley Thompson (11), Matt O’Shea (19), Willie Cochran (20), Chris Taliaferro (29), Anthony Napolitano (41), Deb Silverstein (50)
Other Aldermen in Attendance: Raymond Lopez (15), David Moore (17), Derrick Curtis (18), John Arena (45)

Aldermen still questioned Fairley for roughly an hour on her resume, how she planned to improve public trust, what structural and policy changes she has in mind for the Authority, and whether she can maintain independence from the Mayor’s office.

While still emphasizing that she was new to her position, Fairley shared some changes she has made or is planning for in the near future:

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  IPRA recently reached an agreement with the Chicago Police Department and State’s Attorney’s office “for a more collaborative protocol,” Fairley says, where IPRA will be given “earlier, more equal access” to crime scenes. At a press conference earlier this month, Fairley said IPRA would have representatives available at some crime scenes to offer early comment. This could be in response to the backlash against FOP representative Pat Camden, a frequent source for crime reporting, who told reporters that Laquan McDonald “lunged” at officers before he was shot, which dash-cam video later contradicted.

  
  


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  New hires Fairley announced at that same press conference earlier this month will be starting in the next couple weeks. Fairley told aldermen yesterday that IPRA plans to hold a nationwide search to find her next First Deputy. Both Chief Investigator Elizabeth Lerner and General Counsel Eric Muellenbach, who served under Fairley’s predecessor, Scott Ando, are being replaced. Fairley announced last month that her new Chief of Staff would be Annette Moore, and her new Chief Investigator would be Jay Westensee.

  
  


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  Partly in response to criticism over IPRA’s firing of investigator Lorenzo Davis, who WBEZ reported was let go after resisting orders to reverse findings that police were at fault in six shootings, Fairley says she plans to meet with Davis, and for employees to have performance plans. “They weren’t being evaluated,” Fairley said of senior leadership when she started her role. She said there will be performance metrics for employees at every level, and and ethics officer who operates outside of investigations. “If someone feels they’re being asked to do something unethical, they can express it to someone outside of chain of command.”

  
  


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  While better case management will be a priority, Fairley also outlined some communications changes she plans to enact, including informing the Mayor’s office of case investigations that take longer than 6 months to conclude. Larry Merritt, IPRA’s Director of Community Outreach and Engagement, said the Authority had already dramatically reduced its case backlog. In his budget testimony in October, Ando said much of the same, showing a dramatic downward trend in the number of pending investigations.

  
  

The solutions for Chicago Public Schools’ growing financial crisis narrowed down by two today, as leaders from Chicago and the state rejected the possibility of direct aid to the school system any time soon.

In a conference call with reporters yesterday afternoon, Chicago CFO Carole Brownacknowledged that CPS has a pending financial crisis, but then said, “The city has no plans to directly, financially assist CPS.”

And, in an interview with CBS2’s Derrick Blakely yesterday afternoon, Gov. Bruce Rauner said the state won’t step up either. “Just raise taxes in the state and send us cash? That’s not going to happen,” said Rauner.

While CPS has not set a specific date for when it will run out of cash, a recent analysis by Aldertrack found that mid-February will likely be when the cash crunch arrives. Property tax receipts do not begin to arrive until February 20, according to the Cook County Treasurer’s office.

CPS’ ability to raise property taxes is capped: Last year’s maximum levy increase only raised $19 million last year. And because the city and state have both said a financial bailout is out of the question, CPS is left with choosing either conducting layoffs or borrowing hundreds of millions of dollars more to get through the school year.

A resolution calling on the Circuit Court of Cook County to appoint a special State’s Attorney to handle the prosecution of the officer charged with murdering Laquan McDonald narrowly passed the County’s Committee on Criminal Justice yesterday, with commissioners rehashing some familiar arguments on a hot-button issue.

 

Items Awaiting Council Approval

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  Mayor Emanuel’s nearly $3 billion bond offering, including $650 million in general obligation bonds (down from the originally proposed $1.25 billion), $1 billion in Midway Airport revenue bonds, $200 in sales tax revenue bonds ($70 million of which will pay for the 2016 Aldermanic Menu Program), and three separate water and sewer bonds totaling $800 million. (Short powerpoint presented to aldermen from CFO Carole Brown)

  
  


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  Inducement authority to issue up to $98.4 million in tax-exempt special assessment bonds for the massive, 3,000-unit Franklin Point Development Project in the South Loop.

  
  


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  Ethics reform that would eliminate the Office of the Legislative Inspector General, which is currently vacant, and put the task of investigating aldermen and their staff in the hands of the City’s Inspector General. Ald. Michele Smith (43), andAmeya Pawar (47), are the lead sponsors.

  
  


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  Appointment of former Chicago Board of Education Vice President Jesse Ruizto the Chicago Park District Board of Commissioners

  
  


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  Appointment of Sharon Fairley to the Independent Police Review Authority

  
  


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  Appointment of Christopher M. Michalek, a partner at McGuire Woods, LLP, and Edward T. McKinnie, Sr., the President of the Board of Directors for Black Contractors United, to the Board of Local Improvements, the body that oversees infrastructure improvements prompted by new development projects.

  
  


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  Creation of a two-year curbside cafe pilot program. Permits would cost $600 and the season would last from Sept. 1st through December 31st, four months shorter than the sidewalk cafe season.

  
  


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  Expansion of a pilot program in the 1st Ward that lets nonprofits near residential streets buy daily parking permits (up to 150 stickers a month) for its employees. The ordinance introduced by Clerk Susana Mendoza would add the 43rd Ward (Lincoln Park) and 44th Ward (Lakeview/Wrigley) to the plan.

  
  


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  An intergovernmental agreement between the city and its sister agencies aimed at implementing recommendations of a Procurement Reform Task Force the mayor created last year. (Here is their full report)

  
  


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  An agreement with City Colleges of Chicago that transfers the old Malcolm X College campus to the City, so it can demolish the school building and sell the land to the Blackhawks and Rush University.

  
  


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  A land transfer deal with the charter bus company Megabus, so it can build a new bus stop under the Congress Parkway.

  
  


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  A transfer of $500,000 from the Canal/Congress TIF to Amtrak to help pay for construction costs associated with the Union Station Master Plan, a multi-year, multi-phase plan to increase capacity, modernize, and improve Union Station’s connectivity to other public transit. The City is paying for 8% of the $6 million plan.

  
  


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  A transfer of $4.6 million from the 24th/Michigan TIF to reimburse CPS for a new athletic field it built for Williams Jones College Preparatory High School andNational Teachers Academy, a public elementary school.

  
  


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  Two Class 6(b) property tax incentives that will save two South Side Companies a combined $2 million in property taxes over the next 12 years. Balton Corporation, a paper, plastic and dairy product distributor, and Takis Royal Foods, a wholesale foodservice supplier to restaurants, applied for the tax break.

  
  

Scheduled Pressers Ahead of Today’s Council Meeting

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  Immigrant Rights @ 9:30 a.m – The City Council’s Latino Caucus is holding a press conference this morning to highlight a resolution they plan to introduce at today’s full City Council meeting condemning the Immigration and Custom Enforcement (ICE) raids on immigrants from Central America. The resolution sponsored by Ald. Carlos Ramirez-Rosa (35) condemns the federal agency’s practice of detaining immigrants, reaffirms that the City welcomes immigrants and offers refuge, and urges the Chicago Police Department to not cooperate with the raids. Ald. Rosa joined Cook County Commissioner Jesus “Chuy” Garcia, who is introducing a similar resolution on the County side, and theIllinois Coalition for Immigrant and Refugee Rights (ICIRR), a statewide coalition of more than 130 organizations committed to immigrants’ rights, against the raids at a press conference yesterday.

  
  


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  Campaign Finance Reform @ 9:30 a.m. – Another group of aldermen will convene to announce a so-called Fair Elections Ordinance that would create a small donor match campaign finance system, similar to New York City’s. The ordinance would establish a special election fund to provide candidates running for mayor, aldermen, city clerk, and city treasurer with $6 of public matching funds for every dollar raised up to $175. In order to qualify for the money, a candidate can’t accept any donations more than $500 from one individual source. Common Cause Illinois and the Reclaim Campaign helped draft the ordinance that Ald. John Arena (45), Michelle Harris (8), and Joe Moore (49) plan to introduce at the full City Council meeting today, according to a joint release from the two government watchdog groups

  
  

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.

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.

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 Ald. Tom 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.

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.