The Chicago City Council approved Mayor Rahm Emanuel’s controversial plan to lure private money for public-works projects, tossing aside concerns from some aldermen that there's not enough oversight.
Aldermen voted 41-7 to approve the Chicago Infrastructure Trust. (See no votes at the end of this story.)
“What we set here today, will be emulated by many, many cities throughout this country and many, many cities throughout the world,” said Ald. Richard Mell, 33rd.
Emanuel has touted the plan as a signature initiative, saying it will help in the effort to rebuild a city badly in need of a makeover. Defenders said the plan would help the city complete needed projects it otherwise could not afford — without further swelling the city’s traditional debt load or relying on dwindling state and federal resources — and create jobs at the same time.
"I won't tie the city's future to (Washington's) dysfunction," Emanuel said of failure to pass a federal transporation bill. "Working together, we have a tool here that takes some of the pressure off of our taxpayers. That's what we're doing."
Very few of the opponents said the trust was a bad idea. But they all wanted more safeguards in the ordinance.
An attempt by opponents to amend the ordinance was tabled on a motion by Ald. Patrick O’Connor, 40th, the mayor’s council floor leader. The vote was 39-9. A later vote on an oversight amendement by Ald. Scott Waguespack, 32nd, was tabled 40-8.
Ald. Robert Fioretti, 2nd, who has helped lead the opposition, said that even though property and sales taxes won’t directly fund trust-backed projects, taxpayers could still get hit if projects fail. “Who will be on the hook if the returns fall short,” Fioretti asked.
Ald. Leslie Hairston, 5th, meanwhile, said a similar proposal by President Barack Obama that’s before Congress includes the kinds of protections aldermen sought, but failed, to put in the city ordinance. “If it’s good enough for the national level, why isn’t it good enough” in Chicago? she asked.
She also raised the question of ceding authority to the trust’s board, which would be appointed by Emanuel and not directly accountable to voters. "They did not authorize me to give my power to an unelected board with the broad power to impose fees on them," Hairston said.
During his closing statement urging aldermen to support the plan, Emanuel directly addressed two opponents of the trust, Alds. Waguespack and John Arena 45th. The mayor used the example of a 2011 sinkhole near Elston and Foster avenues in Arena's Northwest Side ward to argue the funding available through the trust is needed to repair Chicago's infrastructure.
"Ald. Waguespack said Chicago's not going to fall into the lake. He's correct," Emanuel said. "But cars are falling into the street. They were in Ald. Arena's ward. That's the difference. You're right. The city isn't, but actually our residents' cars are falling right through the bottom of the street."
After Emanuel first introduced the plan about six weeks ago, some aldermen said it did not include enough oversight provisions. The mayor then changed the ordinance to put an alderman on the board and guarantee a council vote on all projects involving city money, assets or property.
He also inserted a provision requiring trust-funded projects to follow city bidding procedures and another barring board members with a financial interest in a deal from voting on it.
That convinced a handful of opposing aldermen, but others said those steps did not go far enough. They wanted council approval of all projects, even when it involved only the money, assets or property of city agencies, like the Chicago Public Schools, the Chicago Transit Authority or the Chicago Park District.
They also wanted to extend the city inspector general’s investigative and auditing authority to the board and its members, explicitly require trust board members to comply with city ethics rules and ensure the trust be subject to the full force of state laws requiring open meetings and public documents.
Facing that continued opposition, and a potential delay of up to two months, Emanuel last week agreed to delay the vote for six days. That ensured the trust would be approved during his first year and office and before the arrival of world leaders for a NATO conference next month.
After engineering the shorter delay, Emanuel said he would issue executive orders requiring outside review of trust deals and finances.
But good government groups, several aldermen and Inspector General Joseph Ferguson said those steps did not ensure full compliance with city ethics rules, hiring regulations and state government sunshine laws. They sought further changes that the mayor rejected as unnecessary and, in some cases, not allowed.
Ald. Joe Moore, 49th, defended the mayor’s decision in a 16-minutes speech that launched the council debate, saying Emanuel’s proposal has all the taxpayer protections that are needed — and legal.
Moore focused on two proposed CTA projects that “are the hallmarks of a great city, but they are hugely expensive and, as of now, unfunded.”
“The Red and Purple line modernization and the Red Line extension aren’t the only initiatives to want for an identifiable funding source,” he added. “Billions of dollars in unfunded capital needs exist throughout the city.
“Schools, parks, roads, bridges, sewer and water and other services and facilities require significant and ongoing improvement and upgrade.”
The trust is needed, he said, because state and federal dollars are drying up and the city can’t borrow more money based on property tax collections because it’s “drowning in debt.”
Moore also shot down the idea that the trust, a public-private collaboration, would result in deals like the much reviled long-term lease of the city’s parking meters under former Mayor Richard Daley.
“The trust is not about the privatization of city assets,” Moore said. “This not another parking meter deal.”
“As with any new and untried approach, there are risks and no guarantee of success, but the only thing worse than trying this new approach is to try nothing at all,” he concluded.
Before the vote, the strong opinions of opposing sides on the issue were on display outside the City Hall chambers, where supporters and opponents of the ordinance held back-to-back news conferences prior to the meeting.
Labor leaders and aldermen who favor the mayor's plan urged passage, playing up the jobs the projects funded by the trust would create. “This is a great opportunity for the working men and women of Chicago,” said Joe Healy, assistant business manager for Laborers Local 1092.
But as Healy spoke, opponents of the plan waiting for their turn at the microphone shouted “Chicago's not for sale,” and hollered questions about the lack of oversight in the plan.
When the Grassroots Collaborative, a coalition of community groups that opposes the trust, began its news conference, union members stayed behind, chanting “We need jobs.”
So far, the mayor has given only one example of a project the trust would help put together — one opponents say has been discussed publicly only because it is not controversial.
That’s the Retrofit Chicago program, under which private investors would loan the city up to $225 million to improve energy efficiency at its buildings. The money would be repaid with city savings, but the lenders would not get paid if the city didn’t realize those savings, officials said.
The Tribune has reported about examples elsewhere that haven't gone so well. In addition, some public finance experts said the projects end up costing more than traditional borrowing. The investors get that extra money.
Voting against the mayor’s plan were Alds. Robert Fioretti (2nd), Leslie Hairston (5th), Toni Foulkes (15th), Ricardo Munoz (22nd), Scott Waguespack (32nd), Brendan Reilly (42nd), John Arena (45th).
Absent were Alds. Michael Chandler (24th) and Roberto Maldonado (26th).Copyright © 2014, Los Angeles Times