Committee on Finance meeting, March 22, 2024
- When: Fri, Mar 22, 2024, 1:00 PM (Chicago time)
- Where: City Council Chamber, 2nd Floor, City Hall, 121 North LaSalle Street - Chicago, IL 60602
- Status: Scheduled & Published
- Committee: Committee on Finance
- Video: https://vimeo.com/925523313
- Transcript: full text (50,342 words, official captions)
Meeting notes
AI-written from the transcript. Speakers are inferred from cues in the recording, so treat names as estimates and check the video at the linked time.
The Committee on Finance, chaired by Alderperson Pat Dowell, held a subject matter hearing on a proposed ordinance authorizing up to $1.25 billion in general obligation and/or Sales Tax Securitization Corporation bonds over five years for housing and economic development, split evenly between the Department of Housing and the Department of Planning and Development; no vote was taken. Sixteen public commenters spoke, most in support, with several urging community input, equity criteria, and oversight. Commissioners Ciere Boatright and Lisa Castañeda, CFO Jill Jaworski, and staff presented the plan as a replacement for declining TIF revenue as many districts expire, to be repaid from returning property tax increment without a tax increase. Members questioned debt service relative to pension costs, return on investment, project selection and council oversight, reporting frequency, delegation language in the ordinance, the city's credit rating, effects on CPS and the Park District, equity across wards, and the choice between GO and STSC bonds. Departments said they would introduce a substitute codifying regular reporting and provide requested information through the chair.
Topics: housing and economic development bond, TIF expiration, affordable housing, debt and pensions, council oversight, equity in investment, project selection, credit rating, public comment
Agenda items discussed
- 8:36 Subject matter hearing on the proposed issuance of general obligation and/or Sales Tax Securitization Corporation bonds for the Housing and Economic Development bond program ($1.25 billion): discussed
Alderpersons who spoke
- Pat Dowell (chair): Described the notice and materials provided to members, including the bond ordinance, financial model, TIF expiration list and written comments. (1:00:15); Responded to a question on minority contractors by saying alderpersons have significant say in who works in their wards by asking developers about partners. (2:47:01); Said biannual reporting is not enough and suggested more frequent reporting like other programs. (3:07:51)
- Jason C. Ervin (alderperson): Asked how dedicating returning TIF revenue to debt service compares with the city's pension obligations. (1:48:16); Asked what share of new revenue would go to debt service in the first five years and how the gap with rising pension costs would be filled. (1:49:51); Asked whether projected new increment from investments was estimated and said some calculation of return should be provided. (1:52:48)
- Andre Vasquez Jr. (alderperson): Asked whether the departments could look at past projects to estimate a comparable return on investment. (1:53:42); Said the recent referendum result calls for more transparency and detail and asked how much of the presented oversight is codified. (3:39:33); Asked for the rubrics used to decide which projects receive funding, noting members may define equity differently. (3:42:06)
- Gregory I. Mitchell (alderperson): Asked whether the ordinance gives the administration latitude to choose GO or STSC bonds each year and whether it must report that choice to council. (2:03:01)
- William Conway (alderperson): Asked what effect the bond would have on LaSalle Street development projects. (2:04:09); Asked how the returning revenue estimates were made and noted the five-year TIF revenue decline is far less than $1.25 billion. (2:04:45); Asked how the city's credit rating ranks among large cities and confirmed total repayment of about $2 billion through 2061. (2:07:06)
- Walter R. Burnett (alderperson): Commended the proposal as a creative way to front-load development and noted much of the expiring TIF revenue comes from the 27th Ward. (2:15:15); Said he expects needed projects in his ward, such as long-delayed CHA developments, to be completed. (2:17:12); Asked why bonds are better for economic development and for examples of helping areas with the least economic activity. (2:17:54)
- Byron Sigcho-López (alderperson): Said he fully supports the bond as good policy and asked how small homeowners can access the funds and how the process can be strengthened. (2:29:43); Asked how every ward can have the opportunity to access funds for affordable and public housing. (2:33:18); Asked about using funds for vacant and receivership buildings and to support struggling small homeowners. (2:35:33)
- Daniel La Spata (alderperson): Described TIF boundaries as arbitrary, citing businesses excluded by being on the wrong side of a street. (2:38:00); Asked to confirm Springfield historically approves only about four TIF extensions per session. (2:39:18); Asked about return on investment and said comparisons of TIF increment between the Fullerton/Milwaukee TIF and South Side TIFs reflect decades of disinvestment. (2:40:27)
- Ronnie L. Mosley (alderperson): Said TIF vendor payments rarely went to minority-owned businesses and asked how the bond program would change that. (2:45:42); Asked about the missing middle infill housing strategy, down payment assistance and retrofit programs. (2:48:04); Asked how workforce training grants could help over 300 pre-apprenticeship graduates in his ward. (2:51:59)
- Raymond A. Lopez (alderperson): Asked which community and for-profit partners helped craft the ordinance and the ratio between them. (2:54:36); Asked how much returning revenue goes to each taxing body and how existing programs are currently funded. (2:55:42); Raised concern that project selection would rely on prior processes he said were not responsive to communities and local alderpersons. (2:58:56)
- Anthony Beale (alderperson): Asked why voters should trust the council with $1.2 billion after rejecting the Tuesday referendum. (3:11:15); Asked how council has oversight when departments select projects and whether projects in his ward would be recommended. (3:12:39); Asked whether scoring is transparent and whether alderpersons can be in the room during project review. (3:15:45)
- Nicole T. Lee (alderperson): Requested data on TIF funding to CPS and Park District capital projects over the past five years. (3:24:45); Asked how the bond's per-unit housing cost compares with a recent adaptive reuse project at about $651,000 per unit. (3:27:18); Asked why a Massachusetts model was used for debt service projections and how the bond affects credit ratings. (3:29:09)
- David H. Moore (alderperson): Asked whether areas in TIF districts can still access bond money and whether that is codified. (3:52:57); Described distrust from past administrations and said he would support the ordinance if commitments to develop 69th Street in West Englewood were put in writing. (3:53:51); Asked how private dollars will be leveraged and what share of projects the city funds. (3:57:03)
- Julia M. Ramirez (alderperson): Asked whether equity metrics exist and suggested regional coordination across wards rather than ward-by-ward decisions. (4:04:51); Asked whether projects can use both TIF and bond funds. (4:08:27); Asked how the program will address cost increases from project delays. (4:09:12)
- Leni Manaa-Hoppenworth (alderperson): Thanked community members who testified, said she supports the proposal because the current approach is not equitable, and urged codifying the commitments. (4:11:00)
Exchanges between members
- 1:48:06 The chair called on Budget Chair Jason C. Ervin first because he had another meeting.
- 1:53:42 Vasquez thanked Ervin for his return-on-investment question and asked a follow-up.
- 2:03:57 Conway said Ervin's and Mitchell's questions had covered many of his own.
- 2:03:57 Conway said Mitchell's questions had covered some of his own.
- 2:47:01 The chair responded to Mosley's question on minority contractors by noting alderpersons' role in vetting developers.
- 2:55:33 Lopez said his revenue question followed what his colleague from the 34th Ward had raised.
- 3:08:03 Lopez said he would fully support the chair's call for more frequent reporting.
- 3:25:03 Lee followed up on the CPS questions raised by Lopez.
- 3:25:03 Lee followed up on the CPS questions raised by Beale.
- 3:37:39 Lee echoed Lopez's concerns about bond sales without council approval.
- 3:50:33 Vasquez responded to Lopez's point on population loss, agreeing public safety matters while adding housing and zoning factors.
- 4:04:01 Lopez answered Moore's question about the history of the Sales Tax Securitization Corporation.
- 4:05:39 Ramirez cited joint efforts with Lee on serving a growing Asian population across their wards.