The City Council’s vote to approve the $830 million General Obligation Bond issuance ensures the funds necessary for the city’s Capital Improvement Plan. The Capital Improvement Plan is what allows for our roads, street lights, bridges, and water lines to be modernized. As Chair of the Finance Committee I have relentlessly reviewed this issuance and find it imperative that these projects are funded for the betterment of crucial infrastructure within Chicago.
I recognize the angst in the City and our Ward surrounding our current financial status. With uncertainty becoming the new normal when it comes to our federal funding level, a tense budget process that is still in recent memory, and an overwhelming number of voices providing feedback on the City’s current financial state, I understand the trepidation to this issuance. However, this bond is necessary to ensure the safe and continued growth of our City.
We have been issuing GO Bonds year after year to ensure that our City continues to improve every day. This bond issuance represents a continued commitment to the people of Chicago that we hold their standard of living paramount. Improvement projects that continue to keep our streets up to snuff, our streetlights lit, our bridges standing, and our sidewalks walkable go beyond just daily maintenance, they represent the wealth of infrastructure that makes Chicago the city that it is. These infrastructure projects just named do not even begin to get into the Aldermanic Menu and the individualized projects that we as Alders take on within our communities as only, we know how. All of this is included in this run of the mill issuance.
For those interested in the City’s credit rating and the impact that the bond issuance will have, the rating agencies did NOT cite borrowing for capital improvements as a reason for the City’s recent limited downgrade. In fact, borrowing for capital projects already factors into rating agencies’ expectations as part of their “outlook period” and does not introduce new risks to the City’s credit standing.
As for the impact on the City’s overall debt load, most of our debt is from pensions, not borrowing. Our 2025 pension contribution is $2.9B while our general obligation debt service payment is $361M. This bond issuance does result in some debt being taken on, however, it does not rise to the catastrophic level that is has been made out to be.
The size and scope of this bond is structured in such a way that it ensures the flexibility to spend less than the authorized amount. It is an authorization not a directive. The schedule being discussed, disseminated, and unfairly ridiculed is dependent on and adaptable to the circumstances the city faces at any single point in time. As of right now, delaying the payment on the principle bond amount by 20 years gives us the opportunity to rectify some of the current debt the city holds, ensuring that we as a city do not drastically increase property taxes on you, our constituents, in order to make payments.
When it comes to the scope, I frankly cannot see how we can further limit it: the proceeds from this bond will only be used to fund capital projects in the City’s 2024–2028 CIP. They will not be used for awards and legal settlement or operating expenses. There is no scope beyond the fundamental purpose of capital investment: maintaining and improving our City’s infrastructure that supports daily life and helps our residents get around safely.
The 30 year time period over which this debt is spread allows the City to make the improvements that need to be made while also spreading costs equitably across the life of the assets.
Finally, I must reiterate the uncertainty of federal funding. Under the Trump administration, the City of Chicago cannot risk pulling back from borrowing and issuing our own bonds to fund desperately needed capital projects, because we anticipate there will be little if any support coming from Washington anytime soon.
We cannot delay in issuing these bonds, because any delay deprives Chicagoans of the infrastructure they rely on every day. With a construction season that is already numbered, delaying infrastructure improvements creates a snowball effect of construction delays leaving aging infrastructure under construction and under adverse conditions. Aldermen have a duty to the residents of this city to provide them with the safe, accessible, and vital infrastructure that makes Chicago what it is. Those speaking against this issuance without providing an alternative plan or understanding the impact on Chicagoans should do so knowing that nothing short of the safety and accessibility of our City is at stake.