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Rahm delays vote on controversial Infrastructure Trust plan

Updated: April 18, 2012 3:34PM



Mayor Rahm Emanuel put the brakes on his own plan to make a revolutionary change in the way Chicago funds its public works.

In a surprise move, a planned City Council vote on the so-called Infrastructure Trust was preemptively deferred by two mayoral allies: Aldermen Edward M. Burke (14th) and Patrick O’Connor (40th), the mayor’s floor leader.

Five financing giants are planning to invest in the $1.7 billion trust, which would fund “transformative projects” in the city.

Ald. Ricardo Munoz (22nd) said at least two aldermen he wouldn’t identify were prepared to exercise their right to put off a vote on the trust for at least one meeting. So instead of being victimized by them and looking weak, at least temporarily, Emanuel apparently decided to control his own destiny, said Munoz, who was prepared to vote against the plan.

“I’m not convinced we need an additional layer of bureaucracy to negotiate these deals on behalf of the city,” he said. “We should be negotiating those deals. Yes, we should have financial experts assisting us. But they shouldn’t be driving the bus.”

He added: “I am worried about all kinds of implications [from] this public-private partnership. User fees is just one of `em.”

Added Ald. Scott Waguespack: “The point got across that we still have serious concerns about this.”

After Wednesday’s meeting, Emanuel made it clear that the reprieve for opponents would be both short-lived and unproductive: The City Council will meet again on Tuesday to vote on the Infrastructure Trust when, all sides agree, the mayor will have the 26 votes he needs to pass the groundbreaking ordinance.

And although Emanuel plans to issue a pair of executive orders to appease his critics — one requiring a mission statement on each Trust-funded project, the other an annual report by an outside consultant on how the Trust is working — he said he is done making changes to the ordinance.

“From the first idea that we discussed on the Infrastructure Trust, to what I proposed, to the changes we made, it’s constantly about improving,” he said. “But I will not back away from building a new Chicago, putting people to work and allow a crumbling infrastructure to hold the city back.”

If he’s really intent on improving the ordinance, the mayor was asked, why not wait a few months, instead of a few days?

“In the time that we wait, we have costs going out the window literally at these old facilities that need to be weather-proofed and retro-fitted. And people who could be going to work aren’t going to work,” he said.

Although he acknowledged there are questions about the ordinance, “if I wait to [answer] all those questions, you’re never gonna get [anything done]. A lot of these members have made up their minds. We will give additional time. We will [make these] additional adjustments. But we’re gonna go forward.”

But Waguespack thinks more time is needed so “serious changes are made to the ordinance.”

His concerns are many, including the possibility that user fees will be imposed to guarantee investors a return on their money

“If somebody has to walk into the park and start paying five bucks to get in the door or whatever it’s gonna cost, people need to know that ahead of time,” he said. He was also concerned about not having strict oversight by the inspector general.

Aldermen had been under intense pressure from Emanuel to pass the plan.

“People are scared of the wrath of Rahm,” said one alderman, who asked to remain anonymous. “He carries a big stick. He hasn’t whacked anybody with it yet, but” aldermen are afraid that he might.

The plan called for a five-member board chaired by newly-retired Boeing executive vice-president James Bell to oversee a $1.7 billion fund that will help Chicago build what the mayor has called “transformative” infrastructure projects the city could not afford to build on its own.

Aldermen would have had one of their own on the board, but City Council oversight would have been limited to transactions that include city assets, revenues or properties. If the project involved a park, school or CTA project, aldermen would have been powerless to stop it.

“The City Council is still giving up control. ... You’re looking at CTA , CPS and Park District [projects] still not having the kind of oversight we need over these kinds of decisions for public policy and handing it over to five people who are not beholden to the taxpayers,” Waguespack said.

The Trust was to launch with $225 million in energy efficiency projects for government buildings, expected to generate $20 million in energy savings that will be used to repay investors.

Under questioning from the Finance Committee earlier this week, Chief Financial Officer Lois Scott repeatedly refused to discuss what other projects the city wants to finance or what user fees would have to be imposed to make certain investors get their money back with interest.

“I can honestly say there’ve been no other projects we’ve talked about for the Trust. I can walk you back up to my office and let you poke through my papers there, too,” Scott said.

“We are focused on Retrofit Chicago. ... We need to take one project, do it correctly, then go back and see what the next project might be. But if we don’t do the first project well, there’s no reason we should be looking at five.”

But, she said, “The more risk we transfer to the private investor, the higher the rate we will pay. ... To the extent that they are taking risk, they deserve a higher return. Risk-reward always go together.”

On Tuesday, the eve of the City Council showdown, Emanuel explained why he was not prepared to wait.

“I will not tie the city’s economic future, its job growth to the dysfunction of Washington and the dysfunction from Springfield,” the mayor said.

“We have debated this long enough…The question is, are we gonna do something about it or not? I have proposed an idea—just like a car loan, just like a student loan, just like a home loan—of paying for a piece of that infrastructure….We will no longer, as a city, tie ourselves to the dysfunction of other capitals. We will try to find a strategy to continue to invest in our neighborhoods. After 30 years of discussion, it’s time to move forward.”



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