Calling it a “no-brainer” the City Council’s new Finance Committee chairman on Friday promised quick action to set up the structure for issuing up to $10 billion in pension obligation bonds.
Mayor Rahm Emanuel urged the Metropolis Council final month to log off on a $10 billion pension borrowing to save lots of beleaguered Chicago taxpayers “as much as $200 million” in his successor’s first finances.
He also argued that there is “not an infinite amount of time” for aldermen to behave because the window of opportunity created by decrease rate of interest might soon shut.
On Friday, Ald. Pat O’Connor (40th) strongly agreed.
“The pension borrowing, I feel, is a no brainer. I’m hoping to get that via…You’re not borrowing any money. You’re setting the stage to permit the money to be borrowed….The market is what dictates whether or not we will do bonds or not,” stated O’Connor, Emanuel’s Metropolis Council flooring leader.
“If the market is favorable when a brand new mayor and a new council are available, it is perhaps favorable in Might or June and totally unfavorable in July and August. It takes months to get this in place. So, so as to avail your self of the opportunity to refinance, you would wish to have this thing in place to do it when the new council comes in.”
Commonplace & Poor’s has warned that pension obligation bonds “in environments of fiscal misery or as a mechanism for brief-time period finances aid” might threaten Chicago’s BBB+ bond score. Municipal finance specialists have additionally raised considerations, pointing to pension-bond defaults in Detroit, California and Puerto Rico.
But O’Connor argued Friday that not issuing pension obligation bonds was equally risky and, in truth, a missed alternative to attenuate the ache from another punishing spherical of publish-election tax increases.
“Slightly than hamstring a council by not putting it in, we’ll be accountable and give them another software to battle the pension disaster,” he informed the Chicago Sun-Occasions.
“Frankly, the question must be to the mayoral candidates: Are you gonna use it? Because that’s the extra salient question. That’s what Chicagoans have to know. The fact that you’ve an excellent kicker doesn’t imply you’re gonna use him in a sure state of affairs within the ballgame.”
By coaxing Ald. Edward Burke (14th) to relinquish the Finance Committee chair that has been his power base for decades, Emanuel hoped to secure the final months of his legislative agenda earlier than the mayor leaves office.
That includes a ultimate contract that may pave the best way for visionary billionaire Elon Musk to build a “Tesla-in-a-tunnel” excessive-velocity transit system between downtown and O’Hare Airport.
Transportation Commissioner Rebekah Scheinfeld has warned aldermen to seize Musk’s supply or danger having the mercurial Musk stroll away from Chicago and take his concept to a different city.
O’Connor strongly agreed.
“I don’t know him. But I’m advised that he’s slightly quirky and he may determine that it’s not well worth the battle. I…