Wednesday, April 25, 2012

Chicago City Council Passes Infrastructure Trust Ordinance

By a vote of 41 to 7 on April 24, Chicago’s City Council approved Mayor Emmanuel’s $1.7 billion private public partnership Infrastructure Trust ordinance, following six weeks of behind the scenes maneuvers, and the mayor’s agreement to nine key changes in the original proposed ordinance. Likening the current ordinance to former Mayor Daley’s deal leasing city parking meters to a private contractor, the seven dissenting aldermen complained about lack of City Council oversight and public transparency in the final measure as passed.

After six weeks of vetting by the Better Government Association and City Council committees, Mayor Emmanuel did accept the following changes to his initial proposal:
1.    Originally, all five board members were required to have finance experience. Now, one of the board members must be an Alderman.
2.    Originally, the ordinance appointed Boeing CFO James A Bell to the board. Now, all board seats are open and subject to City Council approval.
3.    Originally, the board could remove one of its members by a majority vote. Now, only the Mayor can remove a board member, and removal must be for cause.
4.    Originally, there was no recusal provision for a board member’s financial conflict of interest. Now, a board member must refuse to participate in discussion or voting on any trust deal involving personal or financial interest of the member, including a trustee’s business performing work for the Trust, or receiving Trust funds for deposit.
5.    Originally, the Trust board was required only to develop “criteria” for financing infrastructure projects. Now, the Trust board must directly develop the details of each Trust financing.
6.    Originally, there was no provision for public disclosure of the details of trust transactions. Now, each investor will be required to make full financial disclosure, which will be made public on line.
7.    Originally, Trust board meetings and records were not directly subject to the Illinois Open Meetings Act and the Illinois Freedom of Information Act. Now, they are expressly subject to both statutes.
8.    Originally, Trust contracting was not subject to City of Chicago MBE and WBE contracting requirements. Now, all projects financed by the Trust are subject to city of Chicago MBE/WBE set asides.
9.    Originally, City Council approval was not required for each Trust project involving city property. Now, City Council approval is needed for any Trust project involving “present or anticipated funds, revenues, assets or properties of the City.”

The last of these nine changes did not satisfy the dissenting aldermen, since a lot of projects to be funded by the Trust could involve property owned by Chicago Public Schools, The Public Building Commission of Chicago, the Chicago Park District, and the Chicago Transit Authority. All of these other agencies are separate units of local government under Illinois law, and though they are headed by mayoral appointees, none of them is subject to City Council oversight.

Dissenting 32d Ward Alderman Scott Waguespack introduced an alternative ordinance that would have placed each and every Trust investment under City Council approval, but his proposal was rejected. Chicago’s Inspector General Joseph Ferguson objected to the fact that the ordinance, as passed, does not subject Trust dealings to the City of Chicago ethics ordinance, city personnel rules, or a federal prohibition on taking politics into consideration when hiring and firing employees. Several aldermen mentioned projects in their own wards which could be financed by Trust money, but so far the only specific Trust project disclosed is retrofitting City owned buildings with energy efficiency improvements, and paying back Trust investors with the resulting utility bill savings.

Two of the dissenting aldermen succinctly summed up objections to the ordinance during the more than two hours of City Council debate.  Fifteenth Ward Alderman Toni Foulkes said, People have been promising us over and over and over again to trust. And we’ve been let down. And now people are afraid. They’re terrified.” Thirty fifth Ward Alderman Rey Colon quipped, “We have something called PMT. It’s parking meter trauma.” Mayor Emmanuel would only respond, “There’s medication for that.”

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