Aldermen push ordinance that would force city to spend federal relief on social services, but Lightfoot won’t tip hand until September

Mayor Lori Lightfoot won’t offer details on how she wants to spend an avalanche of federal relief money headed to Chicago until mid-September, at the same time she plans to present her 2022 budget.

Budgets typically are proposed by Chicago mayors in October. The news that Lightfoot is moving it up by a full month came just hours after a group of aldermen said they will introduce an emergency ordinance that seeks to ensure the city will quickly spend the $1.8 billion in federal money on social services.

Their ordinance would not allow any of the money to be used to pay down city debt, as Lightfoot prefers.

“We are sitting on at least half of that money, and the federal government did not give it to us to sit on,” Ald. Daniel La Spata (1st), one of 12 co-sponsors of the Chicago Rescue Plan, said Tuesday at a news conference held in Daley Plaza. “They sent these dollars to us so we could put them out as expeditiously as possible.”

But in a letter to aldermen late Tuesday, city Budget Director Susie Park said meetings with the Council’s “Budget Working Group” will “begin in July and run throughout the summer to take feedback on your views” about how federal relief money should be spent.

“In an effort to accelerate the application of these [federal] dollars to Chicagoans while allowing time for engagement with our residents and members of the City Council, we will be working on the allocation … and the 2022 budget simultaneously,” Park wrote.

“We will also accelerate the introduction of the 2022 budget to mid-September, approximately one month earlier than is our custom along with amendments to the 2021 budget. By considering all of the revenue and expenditures at the same time, we will provide a complete view of the city’s investments.”

The ordinance La Spata and the other 11 aldermen plan to introduce this week calls for the money to be earmarked and quickly spent on a range of immediate needs, including helping people behind on water bills and rent, and expanding access to child care and mental health facilities.

Lightfoot had planned to use more than half the money to pay down borrowing that followed pandemic-induced shortfalls. But her plan was put in jeopardy after the Treasury Department issued guidelines last month stating the money couldn’t be spent on tax cuts, pension funds, debt services, legal settlements or judgments or be deposited in rainy day funds.

“While the (federal relief) program offers broad flexibility to recipients to address local conditions, these restrictions will help ensure that funds are used to augment existing activities and pressing needs,” the guidelines state.

In her letter, Park noted the U.S. Treasury Department’s “interim guidance” on how the money could be spent will be open for public comment until July 16 and the city’s Office of Budget and Management “will be providing comments and making requests for clarification on the guidance.”

Ald. Byron Sigcho-Lopez (25th), a sponsor of the ordinance that will be introduced Wednesday, said the money was needed in hard-hit communities as soon as possible.

“We can’t wait anymore. This is the time to act now,” he said.

Lightfoot balanced her 2021 budget by refinancing $1.7 billion in general obligation and sales tax securitization bonds and claiming $949 million in savings in the first two years. That approach extended the debt for eight years.

The mayor’s financial team had told aldermen federal relief money would be used to repay $965 million in scoop-and-toss borrowing.

Lightfoot reiterated that promise to investors last month amid heavy resistance from a City Council hellbent on using that money to address poverty, homelessness, mental health and economic disinvestment.

La Spata said Tuesday he was optimistic the ordinance would get enough votes.

“We believe there’s going to be a broad appetite for supporting our communities, for keeping their lives stable right now,” he said.