Follow @MarkBrownCSTCity Treasurer Kurt Summers made a political play last week that probably deserves more attention.
Summers announced his office generated $57 million in “excess” investment earnings last year that he now wants to put into an economic development program he initiated for city neighborhoods.
This was noteworthy on two levels:
First, for the assertion that the financially-challenged, deeply-in-debt city of Chicago has $57 million in “excess” money for any purpose, let alone for Summers’ favored project.
And second, because Summers seemed to be stepping out on Mayor Rahm Emanuel, the guy who originally put him in the job and who typically sets the city’s spending priorities.
OPINION
Follow @MarkBrownCSTAs Summers told the group of mostly African-American business and community types who gathered to hear him in Bronzeville that day, the investment earnings he wants to use would normally go back into a broader pool that the mayor and his budget office would control.
Summers warned his audience that without their advocacy “it’s not a given” that he’ll be allowed to add the money to the $100 million Chicago Community Catalyst Fund that he says could be used to attract private investment to economically-deprived areas of the city such as Bronzeville.
As a political matter, it’s pretty rare for any city treasurer to stand up in public like that and, in essence, invite citizens to help him put pressure on the mayor.
That doesn’t make it a bad thing. We could probably use more independence from both the treasurer and city clerk.
But it’s a tricky maneuver for the ambitious Summers, who would like to be the next mayor of Chicago but also keeps floating himself as a potential candidate for governor — and might want Emanuel’s help in either case.
When I asked him about it later, Summers deftly sidestepped, saying he presented his proposal in advance to the mayor and hopes for his support, but also thinks Chicago residents want him to exercise independent judgment.
Summers said there should be no greater priority for the city right now than to address the lack of economic opportunity he believes is driving the city’s violence.
“If we’re serious, we need to invest, and we need to do it now,” Summers said that day. “If we don’t invest here, no one will.”
The city treasurer’s job is to manage the city’s cash and investment portfolio, as well as those of its pension funds. There’s not much glamor in it.
But Summers convinced Emanuel to earmark $35 million in his 2017 budget for the Catalyst Fund (which Summers prefers to call FUND 77 for the city’s 77 official communities.)
That’s supposed to be increased by an additional $35 million in 2018 and $30 more in 2019. Summers wants to add the additional $57 million to the fund right away.
The concept is for the Catalyst Fund to invest its money by loaning it toward real estate projects and small businesses — with an expectation of getting the money back with interest. There could be some glamor in that, but there also would be risk.
There’s a threshold question of whether the $57 million — which is the difference between the $68 million the city budgeted to receive from investments and the $125 million it actually collected — is an “excess” at all.
Emanuel put a happy if equivocal face on Summers’ move.
“This would be welcome news, and we look forward to sitting down with the Treasurer to confirm the numbers,” a city spokesperson said.
In the normal course of business, city revenues and expenses can vary greatly from what was budgeted, and the city adjusts as it goes during the year.
City budget officials said they can’t determine how much additional money will be available from the treasurer’s investments until the city’s comprehensive annual audit is released at the end of June.
That sounded like a stalling tactic. I would think the budget office closely tracks the treasurer’s investment returns and doesn’t wait until the year-end to figure out generally what will be available.
If there really is another $57 million lying around, shouldn’t the City Council have some say in how it’s spent?
Ald. Roderick Sawyer (6th), who joined Summers for his Bronzeville announcement, said he believes putting the $57 million in the Catalyst Fund would be “as good a way to use the money as any.”
But Ald. Ricardo Munoz (22nd) said he totally disagrees with the treasurer’s approach to the immediate violence.
“I’d rather see the money go toward direct intervention services,” Munoz said, noting the Catalyst Fund has yet to form its governing board and won’t be fully funded for three years.
Ald. Scott Waguespack (32nd) said the money should be returned to the city’s general fund and be appropriated through the normal budgeting process, possibly to be used to pay down some of the city’s debt.
After all, it’s not for nothing that the Civic Federation has scheduled a half-day event next month titled “Chicago’s Fiscal Future: Growth or Insolvency?”
The conference promises to examine the lessons of recent municipal bankruptcies.
