The City Council’s Finance Committee will consider authorizing $600 million in general obligation bonds as part of the Administration’s overall $1.2 billion GO issue for 2016. The original borrowing plan, introduced in January, was cut down to $650 million following Council concerns about growing city debt and unclear plans on how the bond proceeds would be spent.
“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,” city Chief Financial Officer Carole Brown told Finance Committee members on January 11.
Of the $600 million in GO bonds, $100 million of taxable debt will help with the cost of legal settlements expected to be paid out in 2016 and 2017, $150.5 million of tax-exempt debt for “E-Note” or equipment purchases in 2016 and 2017, and $237.2 of tax-exempt debt for capital spending in 2016 and 2017. While the total comes to $487.7, the city is seeking authorization for $600 in spending to cover the cost of borrowing the money and issuance fees.
At today’s Finance meeting, aldermen will also consider a plan championed by the Council’s Progressive Caucus that would require “more rigorous evaluation and more meaningful public scrutiny” of future debt offerings.
Under the plan, the city wouldn’t be able to enter into a debt transaction until a strict timeline is met. The Chief Financial Officer (currently Carole Brown) would be required to direct a Registered Agent to prepare a report determining if the issuance of new debt is in the best interests of the city and its residents, in addition to detailing the associated costs and risks.
The City Council’s newly-created Office of Financial Analysis (COFA) under the direction of Ben Winick, would be required to prepare a report on the debt transaction and circulate it to all members of the City Council. COFA would also be required to post that report publicly at least a week before the Finance Committee holds a hearing. That report must evaluate whether the proposed debt issuance is in the best interest of the city and quantify the associated risks to the taxpayers.
The Progressive Caucus drafted the “Debt Transaction Accountability” ordinance in consultation with the city’s Finance Department, following concerns raised over the city’s exposure to expensive swap termination fees. That debate was part of the reason why the administration chose to table half of its borrowing plan. Part of the proceeds from the first round of borrowing would have paid off some of those termination fees to switch the city’s variable rate debt to a fixed rate.
The Finance Committee will also take up a resolution from Chairman Ed Burke (14), Ald. Rod Sawyer (6), and Ald. Gregory Mitchell (7) to rename the South Water Purification Plant at 3300 E. Cheltenham Place to the Eugene “Gene” SawyerWater Purification Plant. Sawyer, the father of the 6th Ward aldermen and 53rd mayor of the city, began his career with the city’s water department, the resolution notes.
Another proposed ordinance from Chairman Burke would require that representatives with the Independent Police Review Authority testify before the Finance Committee when the body is deciding on legal settlements against police officers. The ordinance, co-sponsored by Ald. Scott Waguespack (32), Ald. Leslie Hairston (5), who first called for the IPRA’s dissolution, plus Ald. Sawyer, would have required officials at IPRA attend the finance meetings and provide members with a “written status report on any and all investigations involving department members who are named parties to said lawsuits and controverted claims.”
Last Friday, in an op-ed published by the Chicago Sun-Times, Mayor Emanuel announced he would move to abolish the agency. The committee will also consider two settlements for families of men killed by CPD, totaling $3.2 million (more details in our Friday newsletter).
Another police-related ordinance on the Finance agenda from Chairman Burke would require the Police Superintendent to refer all cases involving the death of a suspect in custody to the Cook County State’s Attorney’s Office. According to the ordinance, an “officer involved-death” includes any death that results directly from “an action or directly from an intentional omission, including unreasonable delay involving a person in custody or intentional failure to seek medical attention when the need for treatment is apparent.”
Any police-involved death that occurs while an officer is off duty would fall under this rule, as well, if that officer was “performing activities that are within the scope of his or her law enforcement duties.” The ordinance would take effect upon passage. Public Safety Chairman Ariel Reboyras (30), Budget Chair Carrie Austin (34), and Pedestrian and Traffic Safety Chairman Walter Burnett (27) are listed as co-sponsors.