1st Ward Report

The Mayor’s office put this document together. It is informative and reasonably objective. 

Infrastructure Trust

Frequently Asked Questions: 

What is the Infrastructure Trust?

The Chicago Infrastructure Trust provides a new option to finance transformative infrastructure projects while maintaining public ownership. The infrastructure needs in the city are great and growing and we cannot afford to address only the current needs. We must find a way to invest in transformative projects that will move Chicago forward and help us build world-class infrastructure throughout the City, and that is what the Trust is for.

 

Why can’t the City Council continue funding infrastructure project the way it already does?

The nation’s infrastructure deficit, the difference between what we can afford to fix and what needs to be fixed, is growing. Chicago’s infrastructure needs are great, and growing. We cannot afford to address only the current needs. We must find a way to tackle transformative projects that will move Chicago forward and help us build world-class infrastructure throughout the City. The Trust will give us the ability to evaluate these new projects, and make sure we are getting a good, accurate read as to whether these are good for taxpayers. It is designed to take the risks associated with new projects off the back of taxpayers, who are already being tapped to fund routine capital needs of the City. The Trust is about freeing us from reliance on Springfield and Washington, DC and the shrinking funds available for infrastructure during these difficult times. The Trust will also ease the City’s existing reliance on bonds and reduce its dependency on government-issued bonds.

 

Why can’t these projects be done without the Trust? Is the Trust really necessary? The Trust is designed to either provide a better deal for taxpayers on projects than is traditionally available, or to put together projects that would not be possible without the Trust. Without the Trust, foundation money and other institutional money is difficult or impossible to attain. And the aggregation of individual projects into packages, such as the Retrofit Chicago process, makes possible transformative infrastructural projects that would never happen otherwise.

 

Why is the City Council giving over its authority to the Trust?

It is not giving over any authority to the Trust. The Aldermen will be voting on every project the City enters into with the Trust, and an Alderman will serve as a member of the Trust’s governing committee. The City Council will have full approval of any financial commitments made by the City to the Trust. This process is to set up the Trust to give the City Council an additional financing option.

 

Has this process been rushed?

For over a month, Mayor Emanuel and his team have been working directly with Aldermen to address their concerns and questions about this ordinance. Together they have made 16 improvements and clarifications with respect to transparency, openness, and ethics. The Mayor and his staff continue to work with Aldermen to clarify questions regarding the Trust. Every month we don’t address our City’s energy challenges, $1 million goes out the window.

 

Why doesn’t the Board have Aldermen on it?

It will. The Board of the Trust will consist of five voting Members appointed by the Mayor, with the approval of the City Council. One of the five voting members will be a Member of the City Council.

Additionally, there will be six non-voting advisory Board Members. Three of these will be appointed by the Mayor – commissioners, officials or employees of the City or sister agencies, and will serve ex-officio. Three others will be appointed by the voting members. The board will provide a team of industry leaders, experts, and dedicated public servants, who can help guide the Trust toward the right projects.

 

How will the Board prevent conflicts of interest for its members?

Voting members are subject to Board of Ethics rules and regulations, owe the Trust a fiduciary duty, and must recuse themselves from voting on any matter they may have a financial interest in. They will be required to provide extensive disclosure of financial interests and would be prohibited from using the Trust as a revolving door to future jobs.

Further, the Trust will require full disclosure from investors on all projects, and will make these disclosures available online. The Board members will not be compensated.

The Mayor will sign an executive order that requires an independent financial advisor, who will: 1) Conduct a full assessment of each project undertaken by the Trust, and provide a written assessment that includes (at least) a full risk assessment; a full cost analysis; a cost comparison to traditional municipal financing methods; and an economic benefit analysis for Chicago and the region, with a particular focus on job creation and retention. 2) Comply fully with ethics disclosures required of all consultants with the city, and have no financial interest of any sort in the deal. 3) Deliver said report with at least fifteen days of time for review by City Council, prior to any decisions.

 

Isn’t this another example of taking authority and decision making out of the public’s view?

No. The Trust will be required to comply with the Illinois Open Meetings Act and Freedom of Information Act. It will issue an annual report that is posted online. It will comply with the City’s procurement rules and policies, and must get City Council (or sister agency governing board) approval for all projects.

 

In addition to the previous description of the per-project assessments, the executive order will further call for an independent third party who can analyze the impact of the Trust overall, as well as its specific projects, on an annual basis. The report will include recommendations for ways to improve the Trust, will be delivered to the Mayor and the City Council and posted on the Trust’s website.

 

How is there a guarantee that investors will even be interested?

Some of the world’s largest financing institutions have sent letters of interest totaling more than $1.7 billion for potential projects. Union pension funds from around the country have inquired about the Trust, as the Trust is a win-win for them: investing their resources in a fashion that directly puts their membership to work. Additionally, foundations have expressed strong interest in the Trust, as it allows them to invest in key projects in accordance with their missions. Lots of people want to be involved with this innovative project.

 

Can you give more examples of projects that the Trust will fund?

The first project for the Trust is Retrofit Chicago, a $200 million retrofitting project for all of Chicago’s public buildings that will save more than $25 million a year in wasted energy costs. It is prudent to take this one step at a time to ensure that we can get the model right.

 

Why can’t we wait until an independent study is done?

The concept of a Trust is not new and has been discussed for years. President Obama, Republican and Democrats in Congress have all proposed similar infrastructure Trust plans. There has been extensive coverage of the policy idea nationally and globally.

 

Isn’t this just another way to privatize City assets?

All assets will remain publicly owned. The Mayor has been clear that the Trust is not about privatization of city assets, but rather, it is about building new resources that help Chicago remain competitive in the world, jobs today and jobs for the future.

 

Why can’t the Inspector General have authority and oversight over the Trust?

The IG will continue to have oversight and investigative authority over every project involving City funds or assets. Additionally, the City’s sister agencies have their own Inspectors General who will maintain oversight. The IG Ordinance is very clear about its authority over City funds and assets.

 

Why doesn’t the ordinance as written require Aldermanic approval of every project?

The Ordinance as written does already require that Aldermen approve every project that involves City assets, and City funding (both current and future).

The various sister agencies, CTA, Board of Education, Chicago Park District and CHA, were all created by State statute as independent political bodies with jurisdiction over their own functions. State statues do not give City Council any authority over those independent Agencies or Boards. The Trust ordinance does not change this. The City simply cannot by ordinance require these agencies to submit their infrastructure projects to City Council approval.

 

What, exactly, will be the roles of inspectors general who monitor various areas of city governance?

There is no further legislation needed for the Inspector General to have jurisdiction. The City’s Inspector General’s enabling ordinance (Chapter 2-56) sets out the IG’s authority very clearly. In any matter that the Trust is involved in that implicates a misuse of City funds or assets by the Trust or subsidiary, or misconduct by the Trust or subsidiary in the role of contractor to the City, the IG would have jurisdiction.

 

Would City Hall itself monitor the Infrastructure Trust’s obedience of Freedom of Information, open meetings and other transparency regulations? Or would, say, the Illinois attorney general’s office referee disputes, as it now does with the state’s FOI act?

The Administration has maintained that the FOIA and Open Meetings provisions in the Trust ordinance are enforceable through our Grant Agreements.

The City’s entry into such a Grant Agreement with the Trust becomes a binding contractual obligation of the Trust, enforceable by the City (which includes the City Council). Further, the City Council can withhold approval on Trust projects in order to force compliance with these and other transparency measures in the Grant Agreements.

The FOIA and Open Meetings provisions for the Trust are not enforceable by the State’s Attorney General.

 

Do projects done by the Trust cost us more? Municipal bonds do not always provide the best value for taxpayers. The Trust allows us to structure deals to access foundation funding or other types of funding that are not traditionally available. It is important to note that there are many factors aside from interest rates that go into the total cost of a project. So one of the key things to keep in mind is that things like cost overruns, extra supplies, etc., which in the case of most current projects is borne by the government, would actually be borne by the private sector company in these projects. Oftentimes the final costs of these projects are significantly lower over the lifecycle of that investment.

 

What are the terms of the retrofit project?

When the Trust is approved we will articulate the scope and nature of the project, present it publicly and seek financing from those banks that have expressed interest in the Trust, and get the best possible terms. There will be an effort in every project to maximize the value for the city by being strategic during the project design and negotiation phases.

 

When would a project be undertaken by the Trust, as opposed to traditional methods of financing?

If it was a transformative infrastructure project, if it had a built-in payback mechanism, and if it offered advantageous terms for the city.

O R D I N A N C E

WHEREAS, The City Council of the City of Chicago seeks to reduce the toxicity of waste materials in the solid waste stream directed to resource recovery and sanitary landfill facilities, and to maximize the removal of plastic carryout bags from the waste stream; and

WHEREAS, The City Council finds that plastic carryout bags do not biodegrade, which means that these bags ultimately break down into smaller bits that contaminate soil and waterways and enter into the food supply that animals and marine life ingest; and

WHEREAS, The production of plastic bags worldwide uses over 12 million barrels of oil per year, which causes significant environmental impacts; now, therefore,

             BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CHICAGO:

SECTION 1.  Chapter 11-4 of the Municipal Code of Chicago is amended by adding a new Article XXIII as follows:

ARTICLE XXIII.  RETAIL BAG USE

11-4-4000 Definitions.

(a) As used in this Article:

ACustomer@ means any person purchasing goods from a store.

AOperator@ means the person in control of, or having the responsibility for, the operation of a store, which may include, but is not limited to, the owner of the store.

APlastic carryout bag@ means any bag made predominantly of plastic derived from either petroleum or a biologically‑based source, such as corn or other plant sources, which is provided to a customer at the point of sale. APlastic carryout bag@ includes compostable and biodegradable bags but does not include reusable bags, produce bags, or product bags.

APostconsumer recycled material@ means a material that would otherwise be destined for solid waste disposal, having completed its intended end use and product life cycle. APostconsumer recycled material@ does not include materials and by‑products generated from, and commonly reused within, an original manufacturing and fabrication process.

AProduce bag@ or Aproduct bag@ means any bag without handles used exclusively to carry produce, meats, or other food items to the point of sale inside a store or to prevent such food items from coming into direct contact with other purchased items.

ARecyclable@ means material that can be sorted, cleansed, and reconstituted using available recycling collection programs for the purpose of using the altered form in the manufacture of a new product. ARecycling@ does not include burning, incinerating, converting, or otherwise thermally destroying solid waste.

ARecyclable paper carryout bag@ means a paper bag that meets all of the following requirements: (1) contains no old growth fiber, (2) is one hundred percent (100%) recyclable overall and contains a minimum of forty percent (40%) post‑consumer recycled material; (3) is capable of composting, consistent with the timeline and specifications of the American Society of Testing and Materials (ASTM) Standard D6400; (4) is accepted for recycling in curbside programs in the County; (5) has printed on the bag the name of the manufacturer, the location (country) where the bag was manufactured, and the percentage of postconsumer recycled material used; and (6) displays the word ARecyclable@ in a highly visible manner on the outside of the bag.

AReusable bag@ means a bag with handles that is specifically designed and manufactured for multiple reuse and meets all of the following requirements: (1) has a minimum lifetime of 125 uses, which for purposes of this subsection, means the capability of carrying a minimum of 22 pounds 125 times over a distance of at least 175 feet; (2) has a minimum volume of 15 liters; (3) is machine washable or is made from a material that can be cleaned or disinfected; (4) does not contain lead, cadmium, or any other heavy metal in toxic amounts; (5) has printed on the bag, or on a tag that is permanently affixed to the bag, the name of the manufacturer, the country where the bag was manufactured, a statement that the bag does not contain lead, cadmium, or any other heavy metal in toxic amounts, and the percentage of postconsumer recycled material used, if any; and (6) if made of plastic, is a minimum of at least 2.25 mils thick.

“Store” means a retail establishment that sells products and has over five thousand square feet of retail space.

11-4-4001 Plastic carryout bags prohibited.

(a) No store shall provide to any customer a plastic carryout bag.

(b) This prohibition applies to bags provided for the purpose of carrying away goods from the point of sale.

11-4-4002 Reusable bags.

Each operator must provide reusable bags to customers, either for sale or at no charge.

11-4-4003 Permitted bags.

Nothing in this Article prohibits customers from using bags of any type that they bring to the store themselves, or from carrying away goods that are not placed in a bag, in lieu of using bags provided by the store.  

11-4-4004 Penalties.

Any person who violates Section 11-4-4001 shall be subject to a fine of not less than $150 and not more than $250 for each offense.  Any person who violates Section 11-4-4002 shall be subject to a fine of not less than $50 and not more than $150 for each offense.  Each day that a violation continues shall constitute a separate and distinct offense.

SECTION 2.  This ordinance shall take effect 120 days after its passage and approval.

__________________________________

                                                                                   Joe Moreno

                                                                            Alderman, 1^st Ward

_____________________________                               ________________________

Robert Fioretti                                                                 Daniel Solis

Alderman, 2^nd Ward                                                         Alderman, 25^th Ward

_____________________________                               ________________________

James Cappleman                                                             Ameya Pawar

Alderman, 46th Ward                                                       Alderman, 47th Ward

Whereas, Tax increment financing (TIF) is a tool intended by state law to encourage economic
development by providing public support to encourage investment in targeted areas that meet certain
conditions of blight, decay or underperformance; and

Whereas, Tax increment financing is not an end in itself, but a crucial tool for supporting quality
businesses, creating more jobs and building strong neighborhoods; and

Whereas, the City of Chicago’s neighborhoods are currently suffering from the economic recession; and

Whereas, in light of the current economic circumstances, a short-term infusion of funds back into the
neighborhoods could provide a great benefit, helping achieve the ultimate goal of supporting strong
neighborhoods; and

Whereas, every tax dollar released back to our neighborhoods this year is a dollar that could go a long way
to ensuring the ongoing viability of critical services, such as schools, parks, and libraries; and

Whereas, even in these tough economic times, TIF districts throughout the City collected $469.9 million
in property taxes in 2010; and

Whereas, multiple TIF Districts have surplus funds not required, pledged, earmarked, or otherwise
designated for payment and securing of the obligations and anticipated redevelopment project costs; and

Whereas, 65 ILCS 5/11-74.4-7 requires that any monies held by a municipality and not required for the
payment and securing of obligations of a tax increment financing district and/or redevelopment project
costs shall be deemed to be “Surplus Funds”; and

Whereas, in the current economy, these Surplus Funds afford a means to meet basic needs throughout the
City; and

Whereas, last year, pursuant to this statute, Mayor Daley declared a surplus, returning $187million of
funds levied from TIF districts; and

Whereas, in light of current needs, all those who live and work in the City would benefit from the
redistribution of roughly half of these surplus funds back to the municipality, schools, parks, and other
taxing entities;

Therefore, be it ordained, that:

SECTION 1. Recitals. The above recitals are incorporated herein and made a part hereof.

SECTION 2. This section shall apply only to City TIF districts with 2011 fund balances exceeding $5 
million. For such TIF districts, the total revenues that are not already required, pledged, earmarked, or
otherwise designated for payment of or securing of obligations at the close of this fiscal year shall be
calculated. Fifty percent of this cumulative total shall be designated, declared, and distributed as Surplus
Funds.

SECTION 3. As provided by 65 ILCS 5/11-74.4-7, within 180 days after the close of the City’s fiscal
year 2011, Surplus Funds shall be distributed to the municipality and returned to the affected taxing
districts, such as the school district and park district, to pay for necessary services.

a lot of exciting things coming up.

Here’s my e-Newsletter for this week. I’m excited about our Run the Ward event and pleased about the recent decline in graffiti.

This is what I’ve done and what I hope to do going forward.

Thanks to Kelly Tarrant for spending some time with me.