# Borrowing $350 million for police settlements would cost about $190 million in interest, Chicago's CFO tells alderpersons

*At the first full budget hearing, members asked about the bond's cost, the head tax's 'Plan B' and the lease tax freeze. Our records show the last borrowing ordinance passed 39-11, and this one needs only 26 votes.*

By Chicago Politics · Updated Oct 27, 2026

On the first full day of hearings on Mayor Brandon Johnson's 2027 budget, alderpersons asked what it would cost to borrow for police misconduct settlements. The City's new chief financial officer gave them a number: about $190 million in interest on a $350 million bond.

Why it matters: the City is proposing to borrow up to $480 million to pay settlements and judgments, much of it for the [Reynaldo Guevara wrongful-conviction cases](/on-my-block/guevara-wrongful-conviction-settlements-260-million) the Council approved this month. Borrowing spreads that bill over years of payments, and the bonds would be backed by a property tax levy, as [we reported](/on-my-block/chicago-480-million-police-settlement-borrowing-2027) when the plan was introduced.

## What happened Monday

The Committee on Budget and Government Operations, chaired by Ald. Jason Ervin (28th), questioned Acting Budget Director Jonathan Ernst, Chief Financial Officer Ashlee Gabrysch and Comptroller Michael Belsky for most of the day. Video, the transcript and our notes are on the [meeting page](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5).

**The cost of the borrowing.** Gabrysch said in her opening statement that the bonds would be paid off in five to seven years with level payments, and contrasted that with settlement bonds from earlier administrations that ran 12 and 30 years ([watch at 1:10:02](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=4202)). Asked by Ald. Samantha Nugent (39th) what the City would owe, she said a banking partner estimated an all-in rate of 6.923% on a $350 million taxable bond, or about $190 million in interest over seven years ([watch at 4:41:03](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=16863)). She said the figure depends on market rates when the bonds are sold. Ald. William Conway (34th) asked her to walk through the structure ([watch at 5:30:54](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=19854)).

Fox 32 [reported](https://www.fox32chicago.com/news/chicago-budget-hearings-begin-questions-over-corporate-head-tax-police-misconduct-costs) a Finance Department estimate of more than $139 million in interest at the same rate. The two figures may count different things, such as issuance costs and the length of the bonds; the $190 million figure is the one given at the hearing.

**No unused settlement authority.** Ald. Andre Vasquez (40th) asked whether the City could draw on borrowing it had already approved. A finance official said the City has no unused authority to borrow for settlements and judgments, though it has other unused general obligation authority ([watch at 4:52:20](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=17540)).

**"Plan B."** Ald. Anthony Beale (9th) asked what happens if the head tax fails again ([watch at 1:30:23](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=5423)). The administration said it would work with the Council, the [Sun-Times reported](https://chicago.suntimes.com/city-hall/2026/10/26/chicago-mayor-brandon-johnson-2027-proposed-budget-defense-hearings), noting that 29 alderpersons have signed a letter opposing it.

**Ratings.** Ald. Brendan Reilly (42nd) said the budget repeats concerns Fitch Ratings cited when it downgraded the City in February, and asked Gabrysch, who once worked at Fitch, what outlook she would give it ([watch at 1:49:31](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=6571)). She pointed members to the risk factors in the published rating reports.

**The lease tax.** Ald. Nicole Lee (11th), the committee's vice chair, called the proposed lease tax increase "just an insane amount" and asked what happened to last year's promise not to raise it before 2028 ([watch at 2:23:31](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=8611)).

**More settlements coming.** Ervin said the recent global settlements were somewhat of an anomaly, "with probably one to two more to go" ([watch at 2:00:26](https://www.chicagopolitics.org/meeting/4E4F726A-90C9-F111-AAAE-001DD80B58E5?t=7226)).

## What our records add

**Borrowing votes have split the Council before.** The [2026-2027 general obligation borrowing ordinance](https://www.chicagopolitics.org/matter/O2025-0021097-issuance-general-obligation-bonds-capital-projects), which also covered settlement costs, passed 39 to 11 in December 2025.

How each ward voted: [O2025-0021097](https://www.chicagopolitics.org/matter/O2025-0021097-issuance-general-obligation-bonds-capital-projects)

**This bond needs 26 votes, not 30.** Ald. Marty Quinn's rule requiring 30 votes for City debt [passed 32 to 15](https://www.chicagopolitics.org/matter/O2026-0026270-adding-new-regarding-ordinance-requirements-issuance) in September, but the Mayor's veto stood when the override got 33 of the 34 votes it needed, [as we reported](/on-my-block/city-council-30-votes-to-borrow).

**Where the bond is.** The [$480 million bond ordinance](https://www.chicagopolitics.org/matter/O2026-0029650-issuance-general-obligation-bonds-general-obligation) (O2026-0029650) is in the Committee on Finance, chaired by Ald. Pat Dowell (3rd).

## What's next

Department hearings continue through Nov. 10; the full schedule is in our [hearing guide](/on-my-block/chicago-budget-hearings-schedule-department-by-department-2027). The Police Department and Department of Public Health are up Wednesday, Oct. 28. The Council's public hearing on the budget is Dec. 8, and a budget must pass by Dec. 31.

*Sources: [Chicago Politics: Oct. 26 hearing transcript](https://www.chicagopolitics.org/files/transcripts/1238928881.txt); [WTTW: Chicago financial officials defend plan to hike corporate taxes, borrow $481M](https://news.wttw.com/2026/10/26/chicago-financial-officials-defend-johnson-s-plan-hike-corporate-taxes-borrow-481m).*


## Legislation in this story

- [Issuance of general obligation bonds for capital projects and other purposes (2026-2027 General Obligation Borrowing Ordinance)](https://www.chicagopolitics.org/matter/O2025-0021097-issuance-general-obligation-bonds-capital-projects) (O2025-0021097)

## Sources

1. City Clerk: [O2025-0021097: Issuance of general obligation bonds for capital projects and other purposes (2026-2027 General Obligation Borrowing Ordinance)](https://chicityclerkelms.chicago.gov/Matter/?matterId=8C91FEA9-BCC1-F011-BBD2-001DD80C033C)
2. City Clerk: [O2025-0021097, Legislation: O2025-0021097 SIGNED BY MAYOR.pdf](https://occprodstoragev1.blob.core.usgovcloudapi.net/matterattachmentspublic/215116f0-0a6a-4973-8f79-3816bba92749.pdf)
3. City Clerk: [O2025-0021097, Miscellaneous: O2025-0021097 Transmittal.pdf](https://occprodstoragev1.blob.core.usgovcloudapi.net/matterattachmentspublic/2be3722b-b86c-432d-87ff-dfd4d2f1f9ee.pdf)
4. City Clerk: [O2025-0021097, Legislation: O2025-0021097 Revised GO Borrowing Ord clean.pdf](https://occprodstoragev1.blob.core.usgovcloudapi.net/matterattachmentspublic/4909119d-a76e-4318-85e3-0443c7f9a9e7.pdf)
5. City Clerk: [O2025-0021097, Exhibits: O2025-0021097 Exhibit A.pdf](https://occprodstoragev1.blob.core.usgovcloudapi.net/matterattachmentspublic/67f38d68-9c79-4af4-bd17-4c93a554d9c1.pdf)
6. City of Chicago: [City Council, Dec 19, 2025: meeting video](https://vimeo.com/1147756540)
7. City Clerk: [City Council, Dec 19, 2025: Agenda](https://occprodstoragev1.blob.core.usgovcloudapi.net/meetingattachmentspublic/53e4dd02-fec2-4762-b368-34b24a23eaca.pdf)
8. City Clerk: [City Council, Dec 19, 2025: Notice](https://occprodstoragev1.blob.core.usgovcloudapi.net/meetingattachmentspublic/f47bf8a5-b0da-f011-8543-001dd80c6da5.pdf)
9. fox32chicago.com: [reported](https://www.fox32chicago.com/news/chicago-budget-hearings-begin-questions-over-corporate-head-tax-police-misconduct-costs)
10. Chicago Sun-Times: [Sun-Times reported](https://chicago.suntimes.com/city-hall/2026/10/26/chicago-mayor-brandon-johnson-2027-proposed-budget-defense-hearings)
11. WTTW: [WTTW: Chicago financial officials defend plan to hike corporate taxes, borrow $481M](https://news.wttw.com/2026/10/26/chicago-financial-officials-defend-johnson-s-plan-hike-corporate-taxes-borrow-481m)
12. Chicago Politics: [O2025-0021097: votes, timeline and summary](https://www.chicagopolitics.org/matter/O2025-0021097-issuance-general-obligation-bonds-capital-projects)
13. Chicago Politics: [City Council, Dec 19, 2025: transcript](https://www.chicagopolitics.org/files/transcripts/1147756540.txt)

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Source: https://www.chicagopolitics.org/on-my-block/chicago-budget-hearing-settlement-bonds-190-million-interest-cfo · Chicago Politics, an independent tracker of the Chicago City Council. Guide for agents: https://www.chicagopolitics.org/llms.txt