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Infrastructure trust and Red Line extension

Mayor Emanuel’s proposed infrastructure trust will be discussed at a community meeting on the Red Line extension in Roseland on Thursday.

Representatives of Grassroots Collaborative, the NAACP, AFSCME and other groups have been invited for a panel on “threats and opportunities” related to the infrastructure fund at the quarterly meeting of the Red Line Oversight Committee of the Developing Communities Project, said organizer John Paul Jones.

The meeting takes place at 11 a.m. on Thursday, April 19 at Lilydale First Baptist Church, 649 W. 113th Street.

DCP has been pushing since 2003 to extend rapid transit service to the city’s last unserved area.  After being on hold for decades, the project was approved by the CTA in 2009.

The project — which would extend the Red Line from 95th to 130th Street and add four new stations — is proceeding steadily, Jones said, with an environmental impact study and public outreach now underway.  Consultants conducting the environmental study are expected to report tomorrow.

Earlier this year the CTA hired Goldman Sachs, Loop Capital, and Estrada Hinojosa to serve as financial advisers for the modernization and extension of the Red Line.  Jones said it’s possible the infrastructure trust, if passed, could also come into play.

DCP executive director Gwen Rice said the group wants to weigh the benefits of public-private financing and make sure the community is at the table when decisions are made.  One of the group’s priorities is making sure that work on the extension goes to local residents, she said.

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When the infrastructure trust was first announced on February 29, the city’s chief financial officer Lois Scott created a small stir by saying private financing for the Red Line extension could be paid for with distance-based fares.

In her new blog for the Center for Neighborhood Technology, CTA vice chair Jackie Grimshaw rejects the idea.

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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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