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But how the proposed loan would be paid off is dividing the City Council.
Alders will consider the mayor’s borrowing plan, along with two multimillion-dollar settlements, on Wednesday. They may also consider a proposed measure that would reduce Chicago’s speed limit from 30 to 25 miles per hour, as well as a $7 billion redevelopment project around the United Center, called the “1901 Project.”
There’s a consensus among alders that the maintenance and infrastructure work needs to be done in all wards. But under Johnson’s borrowing plan, the city would only pay the interest on the loan for several years, which could cost the taxpayers in the billions down the road.
The plan comes as ratings agencies downgraded Chicago to just above “junk status” following the city’s marathon budget process late last year. The downgrade means it will cost the city more to borrow money.
Ald. Bill Conway (34th Ward) acknowledged the infrastructure investment is much-needed, but said he “was shocked at the timing of the proposal.”
“On Jan. 14, S&P, the largest credit rating agency, downgraded us to BBB, barely above ‘junk status.’ And on Jan. 15, the mayor’s office made the announcement they were going to seek this $830 million worth of debt,” Conway said. “The timing of that was clearly terrible.
“… We need to be doing investment in our capital infrastructure. A lot of the debt here is for necessary purposes. But the way we’re structuring is just irresponsible.”
Like Conway, critics say the $830 million that Johnson wants the city to borrow will just make budgeting in the future more difficult. Payment on the loan’s principal wouldn’t start until 2045. In other words, it’s like only paying the interest month after month on a credit card bill, in that the credit card holder ends up paying a lot more for the initial purchase.
However, Ald. Jason Ervin (28th Ward) said “the structure of the plan is not different from what we’ve seen in past administrations.”
“The structure of this is about payment of bonds over time,” Ervin said. “We make infrastructure investments that are generally paid for over time. So this is nothing new, this is nothing extraordinary, this is nothing out of the norm.”
If approved, the money borrowed by the city would go to infrastructure and maintenance projects in all wards. But Ervin questioned whether some alders were more opposed to which wards the money would be used to invest in.
“It’s ironic that some of the individuals that are bringing these things up, their communities are in great shape,” Ervin said. “But when other communities on the South and West Side need investments, and here’s an opportunity to make those investments, now we need to pump the brakes.
“I find that very ironic, and something doesn’t smell right with this.”
Ervin said he believes the mayor has enough votes in the City Council to get the borrowing plan passed, while Conway said he believes it will be sent back to the Finance Committee.
2 settlements up for vote
Meanwhile, the settlements up for a vote Wednesday include $27 million to the family of Angela Parks, a mother of five who died 18 months after being hit in an Armour Square crosswalk in August 2020 by an SUV that was being chased by Chicago police, and $3.5 million to Nicholas Pellegrino, who suffered a traumatic brain injury after a dead tree fell and hit him in December 2020 in Uptown.
Several 311 calls were made about the tree prior to it falling.
One settlement not getting a vote Wednesday is to the family of Dexter Reed, who was shot and killed last March after shooting a police officer during a traffic stop in Humboldt Park.
The city initially suggested a settlement of $1.25 million to Reed’s family to try to avoid any possible court costs for future lawsuits. However, some city leaders have held the settlement up because Reed shot an officer.
“The guy’s a felon, the guy was a gang member, the guy had a gun — an illegal gun — and the guy was out on parole for gun possession,” Ald. Nicholas Sposato (38th Ward) said. “He shot first, but yet we’re giving him a million-and-a-quarter dollars.
“So, very disturbing.”
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