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.