Credits Mayor for Ambitious Proposal; Cites Need for More Accountability
For Immediate Release:
Alderman Reilly's Views on Chicago Infrastructure Trust
May 7, 2012 - As you may know, the City Council recently approved the creation of the Chicago Infrastructure Trust by a vote of 41-7. As one of the seven aldermen who voted "No" but one who considers himself a supporter of Mayor Emanuel and his vision for fiscal reform in Chicago, I want to explain why I voted against the proposal.
Mayor Emanuel deserves praise for his aggressive pursuit of creative new ways to fund city government and repair our aging infrastructure. In fact, I support the concept of the Infrastructure Trust and agree with the Mayor that it has the potential to serve as a powerful and effective new financial tool for Chicago.
That said, when the Mayor unveiled this proposal in March, I expressed a sincere interest in finding a way to address the need to ensure the Trust would be directly accountable to Chicago taxpayers.
I believe Mayor Emanuel has the best intentions for the Trust and agree that it could serve as a creative new financial instrument for the City of Chicago and its sister agencies to fund exciting new infrastructure projects that will transform our city and put people back to work. In fact, with the addition of some key accountability provisions, I believe the Trust could emerge as a national model.
After carefully reviewing the Ordinance; the Mayor's subsequent Executive Order; and conducting my own research into alternate public-private partnership models, I identified three important changes that I believe would have greatly improved the Infrastructure Trust proposal.
First, I thought it important to codify the commitment the Mayor expressed in his Executive Order requiring a detailed independent financial analysis be conducted for every project that includes a risk assessment, cost analysis and determination of economic benefit to the City of Chicago or its coordinating units of government. I believe that the Mayor's commitment, made via Executive Order, should have been integrated into the text of the Infrastructure Trust Ordinance.
Second, I agree with the Better Government Association and others that Trust obligations should not confer any obligation to the City or the City's sister agencies (CTA, CHA, CPS and Park District) not expressly stated in a grant agreement. It is important that all obligations be fully disclosed in grant agreements before the Trust approves the funding for these large projects.
My third and greatest concern about the Trust proposal focused on accountability to Chicago taxpayers. I believe it is critical for the City Council to review each project proposed to be funded by the Trust - whether it is a City of Chicago initiative or a project benefitting one of our sister agencies.
By requiring the City Council to review and approve each Trust project, the Trust's Board would be expected to package the deal and present it before the City Council for a simple "Yea" or "Nay" vote to ratify the project - with no opportunity for Council amendments or other changes to the original proposal.
I acknowledge the fact that the City Council has no appropriation authority over sister agencies like the Public Schools, CTA or Park District. However, I believe the Council, by voting to create the Trust and its related governance structure would be essentially endorsing the creation of a relatively untested new financial vehicle - the bulk of which would be used to fund projects approved by appointed boards at sister agencies, not by elected officials who are directly accountable to voting Chicago taxpayers. This was a very serious problem for me.
As the Mayor has stated repeatedly, the Trust is intended only to be used to launch transformative infrastructure projects that benefit the city and provide a value to Chicago taxpayers. Based on that rationale, requiring the City Council to provide a simple "Yes" or "No" vote on these projects would not pose any unnecessary burden that could reasonably jeopardize these proposals.
Because Illinois statute prohibits the City Council from having appropriation or spending authority over the City's sister agencies, I suggested the City of Chicago invest a nominal sum of money in every Trust project (City or Sister Agency related) - to serve as a trigger for City Council review and approval. Unfortunately that suggestion was not integrated into the final proposal that was approved by the City Council. As such, I had no choice but to vote "No."
I consider myself one of Mayor Emanuel's stronger supporters on the Chicago City Council. I share his goal to reform the City Budget and restore discipline to our city's financial practices. More importantly, I want to see our Mayor successful in every way, because the future of the City of Chicago is depending on strong, principled leadership during these difficult and uncertain times.
We are very fortunate to have a Mayor leading city government who is not afraid to propose bold new approaches to solving old problems. I believe old proposals deserve careful, open review before implementation. Taxpayers deserve to know the details of these exciting plans are subject to review, analysis and public scrutiny in the light of day.
This policy disagreement aside, I very much look forward to continuing my work with Mayor Emanuel to stabilize the City of Chicago's finances and erase our long-time structural budget deficit once and for all.