City Budget Director: Chicago's Debt Led To Creation Of Infrastructure Trust

By Chuck Sudo in News on Apr 5, 2012 5:40PM

As aldermen ramped up their questions and criticism of the Chicago Infrastructure Trust created by Mayor Rahm Emanuel with $1.7 billion in funding from corporate financing, city budget director Alexandra Holt told a group Wednesday the Trust is a result of economic necessity.

Hold told a group at a City Club of Chicago luncheon that Chicago's debt load is simply too steep to invest in upgrading the city's infrastructure itself without a property tax hike that would facilitate Chicago turning into Detroit, which was why the trust was created.

“The city has a sizable … debt service load and one that we’ve been talking about how we handle on a going-forward basis. What we’re talking about with the Infrastructure Trust is to look at other mechanisms for financing — and ones that don’t tie directly to our property tax levy and the usual G.O. [general obligation] bonds that we might issue.”

Ald. Joe Moore (49th) distilled Holt's comments down to this:

“We borrowed heavily during the Daley administration and we’ve really reached our limit under the current property tax level. So, we either have to raise property taxes to cover financing additional bonds or look at other creative ways of financing."

Other aldermen are concerned about what projects the trust will fund, how they'll be chosen, possible user fees that may be imposed so the companies see a return on their investment and if the Trust continues the privatization of city assets that started under former Mayor Richard M. Daley.

2nd Ward Ald. Bob Fioretti said there are too many questions to move forward with the project.

“It may end up costing taxpayers money in the long run,” Fioretti said. “I believe the city needs a complete makeover. The question is, what is the appropriate way to finance it? We can’t have any cost on the taxpayers. We don’t want any hidden fees.”

The Sun-Times reported earlier that the Chicago Infrastructure Trust would be set up as a 501(c)3 non-profit organization. among other things, this means the Freedom of Information Act Requests wouldn't apply to it. Furthermore, Macquarie Infrastructure and Real Assets Inc, who shelled out $1.83 billion to lease the Chicago Skyway, is among the five initial pledged financers, which has Fioretti and other aldermen wary.