Two funds created by Mayor Rahm Emanuel to rebuild impoverished neighborhoods left behind by Chicago’s downtown construction boom got major boosts Tuesday.
One year after the $100 million Catalyst Fund was created to bridge the funding gap outside the downtown area, the City Council’s Finance Committee finally got around to approving the first $50 million in city contributions to the fund.
The ordinance approved Tuesday also outlines the process for appointing board members and the conflict-of-interest provisions those appointees will be required to follow.
They will be prohibited from voting on projects in which they have a financial interest, defined as “with a current value of more than $1,000.”
The ordinance would also establish strict limits on the source of city contributions to the Catalyst Fund.
Contributions would come from the corporate, service reserve and concession funds “not subject to other investment restrictions as determined joint by the comptroller and the treasurer.” Money from enterprise funds and debt obligation proceeds would be off-limits.
In March, City Treasurer Kurt Summers proposed that $58 million in excess portfolio earnings generated by his office be used to stop the bloodshed on Chicago streets by sweetening the pot of city investments in the Catalyst Fund.
On Tuesday, Summers was accused of deceiving the City Council about the investment windfall, most of which was in the airport, water and other enterprise funds and is required by law to be re-invested in those funds.
“You . . . specifically announced that there was an extra $58 million. Where is it?” said a clearly irritated Ald. Ricardo Munoz (22nd), who wanted to spend $25 million of the investment windfall on programs to combat gang violence.
“It is now late in the summer. We missed the opportunity. There were 48 shootings this weekend and six deaths. We had an additional cadre of officers on the street to prevent the crime. We could have prevented some of that crime if we had that money.”
Summers, who will serve as chairman of the Catalyst Fund he has long championed, countered that he did, in fact, generate $125 million in investment income last year “and that was above what was budgeted across all the funds: general, reserves, enterprise fund.”
“The decision that’s made on how we use surpluses versus shortfalls really falls outside of” the treasurer’s office, he said.
“That question should be posed to a different party. . . . I don’t control the expenditures, alderman. This is the equivalent of asking the people who are collecting parking meter revenues what happens to that revenue. They have no say over that,” Summers said.
Also Tuesday, the Budget Committee increased by $3.5 million the funding limit for the booming Neighborhoods Opportunities Fund created with share-the-wealth contributions from developers allowed to build bigger and taller projects in a broader downtown area.
That paves the way for a second round of $100,000 grants this fall to entrepreneurs on the South, Southwest and West Sides. The fund doled out its first round of grants, totaling $3.2 million, to 32 organizations in 16 different wards in June.
Arti Kotak, managing deputy commissioner of the city’s Department of Planning and Development, said the city is also working with “eight partner lenders” to give struggling entrepreneurs access to capital and exploring the possibility of authorizing construction grants “in the middle of a project — before construction is done.”
Budget Committee Chairman Carrie Austin (34th) called the grant program “an inspiration” and proof that City Hall “has not forgotten” people struggling to rebuild long-neglected inner-city neighborhoods.
But rookie Ald. David Moore (17th) questioned why some groups but not others were awarded $100,000 grants.
“Things have to be spread around. If they’re not, there are going to be problems. I expect to see an increase [in Round Two] where people didn’t get any,” Moore said.