Eight aldermen on Wednesday joined forces with National Black Wall Street, a group dedicated to promoting black businesses and their access to capital, to demand City Council approval of a plan to use up to $1 billion in city assets as leverage to spur investment in Chicago neighborhoods.
The so-called Municipal Depository Ordinance would require the list of banks authorized to hold city deposits to file periodic reports on their investments in surrounding Chicago neighborhoods.
Those that fall short on the community investment front could lose city deposits that range from $500 million to $1 billion on any given day.
The ordinance was introduced in June but is still languishing in the City Council’s Finance Committee.
Finance Committee Chairman Edward Burke (14th) has a lucrative law practice specializing in property tax appeals that represents several major banks that either would like to avoid the reporting requirements or stand to lose city deposits at the expense of neighborhood banks, if the ordinance was approved.
According to his 2014 aldermanic ethics statement, Burke’s banking clients include Bank of America, BMO Harris Bank, Fifth Third Bank, Cole Taylor Bank, Northern Trust, JP Morgan Chase Bank, U.S. Bank and Seaway Bank & Trust.
Ald. Scott Waguespack (32nd) said he has no idea whether Burke’s roster of banking clients has anything to do with the fact that the municipal depository ordinance is still bottled up in committee.
No matter what the reason is, Waguespack and his colleagues are demanding a hearing on the ordinance at Monday’s Finance Committee meeting.
That’s the day before Mayor Rahm Emanuel is scheduled to unveil a 2016 budget with a $500 million property tax increase, a first-ever garbage collection fee and a host of other new revenues.
“If we’re not pushing hard as a full City Council, then we’re not doing the job that our constituents have asked us to do. Which is making sure that we know where every tax dollar is spent or invested,” Waguespack said.
“The point of this is making sure that the banks understand that, at a time of crisis, you really do need to know where each one of those dollars are being invested. Whether they’re going overseas, out of state or being redirected back to communities that are basically padding these accounts.”
Waguespack argued that information is power. The first step is to find out where municipal depositories are investing their money.
“If we see that they’re not investing in our neighborhoods, we’ll figure out a way to work with them to [pump] a significant portion of that back into the neighborhoods that are demanding investments and really saying, `We need funds to do these projects that are viable projects,’” Waguespack said.
Rookie Ald. Carlos Ramirez-Rosa (35th) said the stalled ordinance would authorize the city to deposit its money at a broader array of banks in “three-year designation cycles” after an annual bidding process.
Banks designated as municipal depositories would then be required to file annual reports, including a “statement of community involvement” outlining economic development programs as well as “cultural, educational, health, social service or civic contributions made by the bank, its directors and officers in the surrounding community.
Mayor Rahm Emanuel and his handpicked City Treasurer Kurt Summers have thrown their formidable support behind the ordinance.
“The city of Chicago on any given day has $500 million to $1 billion in a bank. This would ensure that the banks that are depositing the city’s money are also investing in Chicago’s neighborhoods,” Ramirez-Rosa said.
“I have a lot of small business owners that I meet with every single day. The No. 1 need that they have is capital to grow their business, to jump-start their business. Chicago is in a financial crisis. But, we still have a lot of funds at our disposal. This is the right ordinance to make sure that the money that Chicago banks with is going to banks that are, in turn, giving loans to small business owners.”
Summers said in a statement: “I am taking the concerns of the groups represented today very seriously and will continue to work closely with residents, the mayor’s office and members of City Council to come to a swift resolution in order to provide the transparency and investment our neighborhoods deserve.”
Burke’s staff had no immediate comment on the ordinance. The agenda for Monday’s Finance Committee meeting has not yet been finalized.