chicago infrastructure trust briefing
DESCRIPTION
This is what Chicago Aldermen were given for their briefings on the so-called infrastructure Trust. Here's what I think: http://tinyurl.com/Dont-Trust-TrustTRANSCRIPT
Chicago Infrastructure Trust
Aldermanic Briefings
April 2, 2012
1
Funding Chicago’s Infrastructure
Historic Approach
General Obligation (GO) bonds
Revenue bonds
Pay-as-you-go funding
Problem with Historical Approach
Limited resources due to property tax and revenue constraints creates significant backlog of
projects
Taxpayers assigned most of the risk – cost overruns, underperformance, etc.
Current funding mechanism has many competing interests
– Getting a project funded can take years to become a priority
Looking for New Alternatives
Engage community partners to invest in infrastructure
2
With increasingly limited resources and budgetary pressure, cities worldwide continue to look for
efficient and effective financing opportunities that allow them to maintain and build infrastructure
Our economy depends on quality infrastructure
3
Potential Project Candidates
Energy Conservation (City and Sister Agencies)
Street Improvements (City)
Public Transportation (CTA)
Airports (City)
Schools (CPS)
Water and Sewer Projects (City)
Parks and Harbors (CPD)
Examples of Leveraging Private Investment for Infrastructure Improvements
• Water and Wastewater Systems in the 1800’s
• New York City Subway System in the 1900’s
• New York City Schools Infrastructure Fund in the 2000s’
Selecting the Right Projects
Project Selection Criteria
Transformative impact on communities we serve and how we serve them
Immediate and long term reductions in the cost of government services
Economic gains to the City anticipated from investment (e.g., savings $ and %)
Service and quality improvements for City residents
Ability to accelerate modernization of government services and practices
Payback period and savings percentage for recovering the investment
Job development impact
Contribution to public safety and quality of life
Shovel readiness
4
Project ideas can be generated by the Oversight Board, Sister Agencies, City Council and the public
through a transparent vetting process
Project Selection Process
Cost savings,
Revenue generation and
Service improvements
Oversight
5 voting members of governing board,
appointed by the Mayor
Advisory board
Strong infrastructure, marketing and
finance backgrounds
Aldermanic representation
Flow of Funds for the Trust
How does it work?
5
Equity
Investors
City / Sister
Agency
Contribution
Equity Return on Investment
(Based on risks borne)
Contribution
(energy savings)
Chicago
Infrastructure
Trust (501c3)
Equity Contribution
• City/Sister Agency retains control of the project
• Any City contribution has to receive additional authorization by City Council
Debt
Investors
Annual Debt Payment
Debt Contribution
(Leveraging savings)
Retrofit Chicago
Project Funding
($100MM est. energy retrofit project) Project Savings
(TBD project-by-project)
Project 2 Each project separately
financed
Retrofit Chicago Selection and Implementation
6
May 2012
Submit application
April 2012
Pass enabling ordinance, develop program guidelines and circulate application
June 2012
Evaluate and select projects
July 2012
Draft loan agreements between project departments and trust
August 2012
Finalize documentation and receive funding
September 2012
Begin project construction
• Based on size and scope, projects can be funded as stand-alone or as pools with other similar deals
• Other projects within the Infrastructure Trust would follow a similar timeline as described
• Depending on the complexity of the deal, a longer timeline may be needed
Retrofit Chicago is phase one of the Infrastructure Trust and consists of energy conservation projects
Types of Projects to Target
Achieve cost savings, revenue gains, or service improvements
– Energy savings > Total cost: GO
– Energy savings + operational savings > Total cost: Probable
– Energy savings + operational savings < Total cost: Possible
• Final decision on these types of projects may be based on service improvements and/or if other funding sources found
Implementation Timeline
• AddingtwonewrunwaysatO’Hareby2015tohandlethenewestgenerationof aircraft.• ReducingdelaysatO’Hareby80%andincreasetheairport’scapacityby300,000 passengersperyearby2015.
Parks
Creating 30,000 Jobs over the next three Years. investing More than $7 billion in our CitY’s infrastruCture.
Water and roads
• Infiveyears,everyChicagoanwillbewithinaten-minutewalktoanimprovedpark.• Building100basketballcourts,20newplaygrounds,and12newparks.• 180acresofnewparkland,sixnewcommunitybuildingsandeightnewartificial turffields.• Completingthe31stStreetHarborandtheBloomingdaletrail.• FournewboathousesalongtheChicagoRiverwilloffercanoeing,skulling,and kayaking.
• Aquarterofourwaterinfrastructureismorethanacenturyold.Wewillsave170 billiongallonsofcleanwaterbyimprovingthesystem.• Replacing900milesofwatermainsthatareover100yearsold.• Repairing750milesofsewerlineand160,000catch-basins.• Repaving2,000milesofstreetsoverthenextdecadethroughwaterandroadway projects–nearlyhalfofalloftheroadmilesinChicago.• Buildingnewbridges,improvingintersections,andmakingourwalkwaysand sidewalksmoreaccessibletothedisabled.
• Expandingschoolstoeaseovercrowding.Buildingnewlaboratoriesand gymnasiums.• Replacingoldroofsandwindowsandbuildingtech-readyclassrooms.• BuildinganewfacilitiesforMalcolmXCollegeandOliveHarveyCollegetobetter trainstudentsforcareersinhealthcare,transportationandlogistics.
schools
• Fixing26milesofslowzonesthroughoutthesystemoverthenextdecade.• Upgradingandrepairingmorethan100CTAstationsinthenextthreeyears.• TheCTAmovesmorepassengersmonthlythanAmtrakdoesannually–improving stationsandservicewillimproveourcommunities.
CTA
airPorts
AGENCY 2012 ($MM)
2012 Jobs
2013 ($MM)
2013 Jobs
2014 ($MM)
2014 Jobs
Total ($MM)
Total Jobs
Water 348 1,450 465 1,935 556 2,316 1,369 5,701
CTA 340 1,416 598 2,491 190 792 1,128 4,699
CDOT 622 2,592 485 2,020 433 1,803 1,540 6,414
CPS 660 2,750 - - - - 660 2,750
PBC 229 955 72 300 7 30 308 1,285
CCC 479 1,996 - - - - 479 1,996
Aviation 589 2,452 483 2,013 337 1,406 1,409 5,871
CPD 80 333 85 354 55 229 220 917
Retrofit 225 938 - - - - 225 938
TOTAL 3,572 14,882 2,188 9,113 1,578 6,576 7,338 30,571
2012-2014 infrastruCture investMent:funding and Job Creation ProJeCtions
The 2012 daTa for CPS, CCC and reTrofiT ChiCago refleCTS announCed mulTi-year CaPiTal PlanS wiTh
ConSTruCTion oCCurring beTween 2012-2014. all oTher agenCy daTa refleCTS CaSh flow ProjeCTionS.