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Will Emanuel back privatization transparency measure?

Community and public interest groups are calling on Mayor Emanuel to support a privatization transparency ordinance that is expected to be considered by the City Council Rules Committee on Wednesday.

The Privatization Transparency and Accountability Ordinance, submitted last November by Alderman Roderick Sawyer (7th) and sponsored by 32 aldermen, would require a cost-effectiveness study and public hearings when the city seeks to contract out services and operations.

Along with a cost-effectiveness study prior to the award of any contract, Sawyer’s ordinance would require a study of possible alternatives in collaboration with unions representing city workers whose jobs could be threatened.  City workers would also be qualified to bid on contracts through their unions.

Noting concerns over unemployment, wage levels and workforce diversity, the ordinance would require that at least half of contract work be performed by city residents, and that contractors pay wages and benefits comparable to what city workers get for the same work.  It would mandate City Council hearings and approval of contracts over $250,000.

“I have a concern about touting a monetary savings if we haven’t thought about the people that will lose a job, the families that could lose a home and the local businesses that could lose a loyal customer,” Sawyer said when he introduced the ordinance.

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TIF reform: one year later, no action

A year after Mayor Emanuel unveiled his TIF Reform Task Force’s report with great fanfare, none of its recommendations have been carried out – and the city has a long way to go on transparency and accountability around job requirements for TIF projects, according to a new report.

Along with greater transparency, Emanuel’s task force recommended subjecting all TIF projects to a thorough justification process; establishing strict performance metrics and taking swift action including revoking TIF funding when requirements aren’t met; and creating an internal TIF oversight board.

“None of the task force’s recommendations have gone into effect,” according to a new report from Illinois PIRG.

“The proposed reforms would move us in the right direction,” said Hailey Witt of Illinois PIRG in a release.  “But it’s not enough to have these ideas on paper.”

Short on Sunshine

In addition, the city has yet to fully comply with the TIF Sunshine Ordinance passed in 2009, according to the report.  Of five documents required by the ordinance, none of the projects studied by Illinois PIRG had more than three available online, and most had only one or two.

Of 32,396 jobs promised in $320 million worth of TIF projects, only 16,948 — just 52 percent — could be accounted for, according to Illinois PIRG.

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Protest to target River Point, LaSalle Central TIF

The news that the LaSalle Central TIF district took in no new revenue last year adds urgency to the demand of community groups that the TIF be shut down, said Eric Tellez of the Grassroots Collaborative.

On Tuesday, community activists will protest the newest LaSalle Central TIF subsidy, $30 million going to finance a plaza inside the planned River Point office development at Lake and Canal.

Starting at 11 a.m. (Tuesday, August 7), they’ll march from Merchandise Mart to the LaSalle Street district for a press conference and rally, and they’ll leaflet at a business owned by one of River Point’s developers.

They say “giving property tax dollars to wealthy developers to build in prosperous areas is not an effective strategy” for economic development – especially when basic services are being cut in the city’s neighborhoods.

In July, the annual TIF report from County Clerk David Orr revealed that annual TIF revenue in Cook County has declined 18 percent since the housing crash in 2007, and that LaSalle Central was among nine TIF districts with no revenue last year.

If that trend were to continue, the city could be forced to transfer funds from other TIF districts to pay for existing commitments downtown.  LaSalle Central TIF agreements involve multimillion-dollar subsidies to corporations including Miller-Coors, Ziegler Co., Accretive Health Inc., NAVTEQ, and United Airlines, which is collecting a $24 million handout.

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Questions remain on infrastructure trust

Illinois PIRG is calling on aldermen not to approve Mayor Emanuel’s infrastructure investment trust without more public safeguards, and the Grassroots Collaborative is urging a “no” vote on the proposal.

Leaders of community groups and union members in Grassroots Collaborative will hold a press conference Monday, April 16 at 9:30 a.m. on the 2nd floor of City Hall to call on aldermen to vote against the ordinance establishing the trust.

The council’s finance committee holds at hearing on the ordinance at 10 a.m. Monday.

Emanuel’s new tweaks to the ordinance go just partway to addressing the groups’ concerns.  “He’s dealing with the easy stuff,” said Celeste Meiffren of Illinois PIRG.

PIRG has called for far more stringent conflict-of-interest protections than Emanuel has offered: “Members of the board of directors should be free from conflicts of interest and instead should represent Chicagoans as primary stakeholders,” Meiffren writes in a blog post.

She calls for requiring board members to divest from any holdings in companies doing business with the city and in banks investing in the trust, and to agree not to work for them for a period after serving on the board.

As it stands the board looks to be comprised of CEOs and CFOs who will be “controlling taxpayer assets” and “accountable to nobody,” Meiffren said.

She doesn’t think putting an alderman on the board “solves the problem.”  She’d like to see watchdog groups represented on a board structured so that business leaders had a purely advisory role.

More bad backroom deals

Beyond that are larger concerns about the purpose of the trust.  “The ordinance is so vague that worst-case scenarios are really possible,” said Meiffren.

PIRG says the trust should be specifically committed to getting the best deal for the city and taxpayers rather than investors; and each deal should be subject to an independent evaluation to make sure that happens.

“There’s nothing in the ordinance that would prevent another bad backroom deal from happening,” Meiffren said.  “We have a history of bad deals, so we need to go above and beyond to ensure that taxpayers aren’t ripped off again.”

She cites the one project Emanuel has specified for the trust: a $225 million effort to retrofit city buildings for energy efficiency.  “Why can’t we do that with municipal bonds, which will get us a much better interest rate?” she asks.

“Instead of just going to private investors every time, we need a mechanism for determining what the best deal is – that evaluates every deal against other options,” she said.  “Nothing here does that.”

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Super PACs: Bad for democracy, good for TV stations

Super PACS “represent much of what is wrong with American democracy rolled neatly into one package,” said Marites Velasquez of Illinois PIRG, announcing a new report showing that fundraising monsters suddenly dominating our elections are funded by a very small number of very rich people.

Of itemized contributions by individuals to Super PACs in 2010 and 2011, 93 percent came from 726 individuals giving $10,000 or more, and more than half came from just 37 people who gave over a half-million dollars each, according to a new report from Illinois PIRG Education Fund and Demos.

Super PACs are “tools for powerful special interests” that work by “drowning out the voices of ordinary Americans in a sea of sometimes-secret cash,” Velasquez said.

“They undermine core principles of political equality in favor of a bully-based system where the strength of a citizen’s voice depends upon the size of her wallet,” said Adam Lioz of Demos.

Noting that 17 percent of Super PAC money came from businesses, the groups recommend the Illinois General Assembly pass legislation requiring shareholder approval for corporate political spending, among other reforms.

A bonanza for broadcasters

At the Nation, John Nichols and Robert McChesney (co-founders of the media reform group Free Press) detail the cost to democracy — and the bonanza for TV stations.

TV stations will take in up to $5 billion from political advertising this year – nearly twice the $2.8 billion they got four years ago.  The amount being spent on TV ads for House races is up 54 percent since 2008; for Senate races it’s up 75 percent.

Political ads accounted for 1.2 percent of total ad revenue in 1996; this year it’s likely to be 20 percent, and more in key states.

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On TIF reform, a long way to go

TIF subsidies returned by three corporations should be declared surplus and used to restore cuts in public services; and Mayor Emanuel should hold off on new TIF spending until he can implement his TIF reform panel’s recommendations, groups working on the issue said Tuesday.

News broke Monday that CME, CNA and Bank of America were returning a combined $33 million, CME saying it didn’t need the money now that the state has cut its taxes, CNA and Bank of America admitting they hadn’t met job creation goals.

CME had been the target of a series of protests by Grassroots Collaborative, which on different occasions set up a classroom outside the corporate headquarters to dramatize lost school funding, declared the site a “corporate crime scene,” and held a bake sale for the corporation.  Last week Stand Up Chicago delivered a golden toilet to CME, which was to get $15 million for a luxury bathroom, cafe, and fitness center.

Restore public services

“With communities reeling from proposed school closings, cuts to libraries, and the shutdown of six mental health clinics, the $33 million dollars should be immediately returned to critical public services that working families of Chicago depend on, and not redirected back to downtown TIF slush funds,” said Amisha Patel.

She said the news reflects the impact of groups working to highlight the issue of corporate subsidies and tax breaks.

Also Monday, Emanuel announced he would create an online TIF database and order random independent audits of TIFs.  It was his first action on the recomendations of his TIF reform panel since its report last August.

Illinois PIRG released a report calling on Emanuel to fully implement the panel’s recommendations as a first step toward TIF reform, and to declare a moratorium on new TIF spending until the reforms are in place.

“If the Mayor and the City Council admit that TIF is broken, why would they continue to use the program before it gets fixed?” said Celeste Meiffren, author of the report.

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Traffic camera concerns

Chicago now has one of the best red light camera deals in the country – and should be careful to maintain that distinction as it adds speed detectors to cameras around schools and parks, according to a new report from Illinois PIRG.

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TIF reform? Not yet.

With the release of his TIF Reform Panel report, Mayor Emanuel may want to check “TIF reform” off his to-do list, but community activists who work on the issue say that would be highly premature.

“They’re talking about transparency as if that’s all we have to do,” said Sonia Kwon of the Raise Your Hand Coalition.  “Transparency and accountability are just tools to reform TIF.  I don’t see this as TIF reform.”

In any case, Emanuel’s panel skips “the first step in transparency” – listing TIF information on property tax bills, said Kwon.  “To know you are in a TIF district and how much of your tax money is going to TIF – that’s the first step.”

That was a major proposal of the Community TIF Task Force of the Neighborhood Capital Budget Group, which brought together dozens of community groups, said Jacqueline Leavy, former executive director of NCBG.  (It was also a major proposal of then-Cook County Commissioner Mike Quigley, apparently forgotten when he reacted enthusiastically to the report this week.)

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