On Feb. 26, the Chicago City Council approved a $830 million general obligation bond by a 26-23 vote to fund infrastructure improvements.
The measure includes a condition by Mayor Brandon Johnson prohibiting the use of funds reserved for Chicago Public Schools to pay pensions for non-teaching staff or to cover the still-unsettled Chicago Teachers Union contract, according to the Chicago Sun-Times.
The new language says: “Each grant or loan of authorized funds shall be made only for a capital project located within the city at the direction of the alderman representing the ward in which the capital project is located and no more than $75 million of the proceeds of the bonds shall be used for such grants or loans.”
The language relates to payments each of the city’s 50 aldermen can use at their discretion to improve their individual wards.
“I think it was unfortunate that it did pass,” said Ald. Marty Quinn (13th). “I heard from residents of the 13th Ward that they had concerns, as do I, about the structure of the debt the City of Chicago has taken on.
“One of the things I filed last Wednesday was an ordinance to change the vote requirement from a simple majority, which is 26 votes, to a 2/3 majority, which is 34 votes.
“So, moving forward, I’m going to work on that ordinance to see if we can pass that ordinance, [so] number one, it would elevate the legislative branch one step further in being co-equal and number two, it would force the mayor to negotiate even further with the City Council.”
Southwest Side Alderman Silvana Tabares (23rd) said she voted “no” on the $830 million bond loan.
“We really need to make decisions in our city about what kind of city [of Chicago] we want to be five, 10, 15, 20 years from now,” she said. “The bond is a ticking time bomb for taxpayers and I’m not going to support something that’s going to make our city unlivable for my son and other families down the road.”
Tabares believes the city’s refusal to reduce costs and lack of focus on bringing more business to the city indicates an unhealthy administration.
“If we had a healthy government right now, we would not even be talking about the bond plan,” she said. “It’s a terrible decision that the mayor is taking on this loan, not making any payment until after he’s gone. That’s very irresponsible spending.”
Meanwhile, the administration and the Chicago Public School Board of Education remain in a fight over a different suggestion by Johnson that the CPS district take out another $242 million loan at either an interest rate of 4.37% at a five-year term or 4.6% for a 10-year term to cover CTU pension payments and costs incurred by the CTU teacher’s contract still in negotiation, according to a Feb. 24 story by WBEZ.
The administration-backed school-board loan strategy, written about in an updated story on Feb. 19 by the Chicago Tribune, reported the city would consider accessing Chicago’s monetary reserves to fund the CTU obligations instead if the $242 million loan was not approved.
As of last month, the contract with the Chicago Teachers Union has not been agreed upon.
Ald. Bill Conway (34th) attempted to reduce the $830 million dollar loan to $508 million with better terms before the Feb. 26 vote but was unsuccessful.
“If you find yourself in a hole, the first thing to do is to stop digging,” Conway said. “This will place an enormous burden on future generations. We don’t have to mortgage our children’s future.”
WTTW reported the $830 million loan would fund, among other items, $157.5 million for street repairs and improvements, $115.5 million for new streetscapes, $108 million to each of the city’s 50 alderman to make ward improvements at their discretion, $98.1 million for bridge repair and replacement, $73.8 million to renovate police and fire station including additional city buildings and $64.9 million to purchase new police vehicles and firetrucks.