City Council committee OKs bare-bones, $100M capital plan with promise of bigger bond issue later this year
Over the years, projects would make the capital plans list just because the mayor wanted them. But the Lightfoot administration hopes to work with aldermen to devise a new strategy for Chicago’s long-term capital plan.
The City Council’s Finance Committee on Monday authorized a bare-bones, $100 million capital plan with the promise of a larger general obligation bond issue later this year.
“The city is proposing to get this program kick-started as soon as possible, in part to create jobs as quickly as we can in the midst of this crisis, but also to make sure the city can take advantage of the summer construction season,” Chief Financial Officer Jennie Huang Bennett told aldermen.
“The projects will be funded from the existing $100 million line of credit. The city will seek authorization from City Council for a general obligation bond financing later in the year to repay the line of credit.”
Normally, the city issues general obligation bonds backed by property taxes to cover a more sweeping capital program. But these are not normal times.
For now, the plan includes: $83 million for the aldermanic menu program; $3 million for the shared sidewalk program; and $13.8 million to purchase 200 police vehicles, 15 salt trucks and two front-end loaders that are “past their useful life,” the CFO said.
Over the years, Chicago’s capital plans have been more like political documents. With no assessment of the city’s overall needs, projects landed on the list because whoever the mayor was at the time wanted those projects.
The Lightfoot administration hopes to work with aldermen to devise a new strategy governing Chicago’s long-term capital plan.
Key factors will be “ensuring equity of investments” across the city after conducting a “needs-based assessment” of Chicago’s overall infrastructure needs,” the CFO said.
“The best capital plans out there by cities ... look at what the needs are, build a plan for how you fund them, and then, you follow that plan,” Huang Bennett said.
“We do have a limited set of resources. But especially in this time post-COVID, the government has a role to play in helping to support the economic recovery as well as investing in Chicago’s future. So it’s a conversation that is very important for us to have. It’s not gonna be easy, but we look forward to having that conversation.”
With a potential pandemic-induced revenue shortfall of more than $500 million, Ald. Ray Lopez (15th) asked about the city’s ability to bankroll “big-ticket items” in the city’s existing capital plan — including the $95 million police and fire training academy that Mayor Lori Lightfoot wants to make bigger, better and more expensive.
Huang Bennett said the $800 million in general obligation bonds issued by former Mayor Rahm Emanuel — including $65 million for the police academy — has already been secured.
But, she said, “To the extent that there are potential additional needs or alterations to the projects that were approved there, we expect to have that conversation as part of the broader capital plan discussion we have later this year.”
“We’ll have to see how long it takes for us to get out of COVID, to get through the recovery process and, importantly, what the state of the city’s finances are looking like. It’s all part of a broader discussion of affordability, but also about what are the critical needs.”
During Monday’s debate, several aldermen were more concerned about the fact that their menu money was being frozen yet again.
The menu program allocates $1.32 million a year to each alderman. That leaves a gap of $228.8 million that must be pursued through other sources, such as tax-increment-financing (TIF), Inspector General Joe Ferguson has said.
“We have close to 700 streets. … About 400 of them really need resurfacing. Yet, we’re only resurfacing 16 to 18 per year. And it’s less now because of the 3-to-5 percent [increase] annually. Streets that cost about $61,000 in 2016 and 2015 are now $70,000 to $80,000,” said Far Northwest Side Ald. Anthony Napolitano (41st).
“It seems like this is a system set up to fail when we’re resurfacing 16 to 18 streets per year and that’s decreasing every year because of the annual increase [in cost]. There has to be a point when we stop and re-work this because we’re not going to get ahead of the infrastructure problems in our wards. And that’s not even including alleys.”
Ald. Susan Sadlowski-Garza (10th) agreed making do with $1.32 million a year in her large Southeast Side ward is “like putting a Band-Aid on a machete wound.”