Mayor Brandon Johnson’s plan to borrow $1.25 billion to bankroll economic development and affordable housing projects is back on track for City Council approval, but not without a bit of a fight.
The Rules Committee on Tuesday sent the mayor’s ordinance to the Finance Committee, where it would have been assigned originally if Ald. Anthony Beale (9th) hadn’t slowed it down. The vote was 29-7, with Ald. Bill Conway (34th) leading the charge against the legislative reroute.
Finance Committee Chair Pat Dowell (3rd) said the massive borrowing — signaling a fundamental shift in the city’s long-standing dependence on tax increment financing as a primary economic development tool — will not be on the agenda of Monday’s Finance Committee meeting.
“I’m not moving the bond issue fast. There has to be robust discussion and answers to the questions already asked in the briefings and concerns raised in the Rules meeting,” Dowell told the Sun-Times.
Dowell’s go-slow approach didn’t satisfy Conway.
He argued the mayor’s ordinance should stay stuck in the Rules Committee so long as his own ordinance demanding prior City Council approval for any spending exceeding $1 million from federal COVID-19 relief funds is similarly bottled up and going nowhere.
“The bond ordinance is set to issue $250 million of debt for each of the next five years. … It’s going to require significant oversight. Tanking or derailing my ordinance indicates that, on some level, the mayor’s office is fighting government oversight,” Conway told the Sun-Times.
“In the wake of several significant missteps by the mayor’s office, where oversight and collaboration was avoided, we need to make sure that the mayor’s office is embracing oversight before we can even move on with this bond ordinance,” he said.
Conway ticked off six recent examples: the NASCAR contract; the costly extension of the ShotSpotter contract; the Fraternal Order of Police contract; the GardaWorld contract for migrant camps; ongoing issues with Favorite Healthcare Staffing, the firm the city hired to run its migrant shelters; and the proposed winterized base camp on a contaminated industrial site in Brighton Park that was nixed by Gov. J.B. Pritzker.
“These are areas where the mayor’s office did not embrace oversight, tried to handle it themselves, then ran into some difficulty. And then, we have a mess to clean up on the back end,” Conway said.
Although the city plans to borrow $1.25 billion, interest would cost the city $2.4 billion over 37 years. Top mayoral aides have insisted that money would be more than recouped by property tax revenues that would flow back into the city’s coffers from expiring TIF districts.
Two city departments — Planning and Development, and Housing — would each get $625 million in new money to spend. Housing would use its share to build and preserve affordable housing. Planning and Development would make neighborhood development grants and support small business and job training.
Former Finance Chair Scott Waguespack (32nd), replaced when Johnson reorganized the council, sided with Conway.
Waguespack noted the massive borrowing that would wean the city off its heavy reliance on TIF subsidies is not happening “in a vacuum.” Rather, many expenditures now in the pipeline could have a major impact on city finances. Council briefings on the mayor’s ordinance focused only on “how we were going to spend the money, but not on the fiscal impact or implications” of borrowing so much money in one fell swoop, he said.
“Making sure that we hear Ald. Conway’s ordinance is imperative before we march along this path of, ‘Here’s how we’re gonna spend this money that we bring in,” Waguespack said.
“We have the Bears asking for public funding. We have the Sox asking for public funding. We have probably other teams out there as well. We have a real estate transfer tax proposed. And we’re spending a lot of time talking about how we’re going to spend those funds, but not about the fiscal impacts,” he said.
Dowell essentially accused Conway of mixing apples and oranges.
“One is a grant program and this is related to our bonding capacity and the TIF program. They are not tied together. And the point that Ald. Conway makes about wanting oversight can be done and discussed through the Committee on Finance at the appropriate time that these ordinances come before us,” Dowell said.
Ald. Brendan Reilly (42nd) said he has “ultimate faith” in Dowell to deliver an “open process” with “robust debate.” But he added, it’s “a bit ironic that that’s going to have to be a transparent process,” while Conway’s ordinance is stuck in committee.
“Based on my read, this leaves a whole lot up to interpretation in terms of how this money will be spent and the justification for the size of the program and the dollar amount,” Reilly said. “It also requires the taxpayer to pay a substantial amount of money back on the back end at the time when our bond ratings are faltering.”
