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City Council Approves Chicago Infrastructure Trust
On April 24, 2012, the Chicago City Council approved an ordinance establishing the Chicago Infrastructure Trust by a vote of 41 in favor and 7 opposed. The trust will operate as a nonprofit corporation, pooling private and institutional investment funds with grants and bond proceeds. Using these resources, the trust will provide tailored financing packages to support public infrastructure projects. Private investments would be repaid with dedicated project revenues. For its inaugural project, the City plans to work with private investors to raise $200 to $225 million to improve the energy efficiency of City-owned buildings. A copy of the ordinance is available on-line.
The City of Chicago first proposed the Chicago Infrastructure Trust on March 1. Prior to the vote on April 24, several aldermen expressed concern that the initial proposal did not provide adequate oversight of the proposed trust. While the ordinance that passed had been changed in response to the concerns, the Chicago Tribune states that some aldermen remain wary about issues of oversight and financial liability. Among other changes, the ordinance now places an alderman on the trust's board, guarantees a City Council vote on any project involving city resources, requires trust projects to follow city procurement regulations, and forbids board members from voting on projects in which they have a financial interest. Mayor Rahm Emanuel also issued an executive order requiring an independent financial evaluation of the trust's projects, as well as an annual assessment of the program.
According to an article from the Brookings Institution, the Chicago Infrastructure Trust is the first such body implemented by a local government. Thirty-four states and Puerto Rico operate state infrastructure banks that serve similar purposes, and several proposals for a national infrastructure bank have been made in recent years. Illinois does not have a state infrastructure bank. To learn more about the advantages and disadvantages of PPPs, check out our four-part Policy Updates series on the topic.
Federal statute gives CMAP authority to prioritize major capital projects in the region's long-range transportation plan, which is part of the GO TO 2040 comprehensive regional plan. High-priority GO TO 2040 capital projects located in Chicago include the West Loop Transportation Center and the Red Line improvements and south extension.