CHICAGO-- Mayor Richard M. Daley of Chicago yesterday announced a plan to issue $160 million of general obligation bonds to finance infrastructure repairs and industrial parks, marking the city's first bond program for infrastructure since 1987.
"Upgrading Chicago's infrastructure is vital to the city's economic well-being," Mayor Daley said during a press conference on a city bridge. "Our roads and bridges are the arteries of commerce that keep our economic blood flowing."
The plan would provide the city with 1,500 new and retained jobs, he added.
'Upgrading Chicago's infrastructure is vital to the city's economic well-being. Our roads and bridges are the arteries of commerce that keep our economic blood flowing,' said Chicago Mayor Richard Daley during a press conference yesterday.
Noelle Gaffney, a spokeswoman for the mayor, said the majority of the infrastructure work was not related to the underground flooding that plagued the city last month. She said $3.5 million of the bond proceeds would be used for tunnel and structural improvements related to the flood.
Mayor Daley also said that with the refinancing and retiring of old GO bonds, the GO bond issue can be accomplished without raising property taxes.
John Holden, a spokesman for the city's finance department, explained that a significant amount of GO debt is expected to be retired within the next year, making room under current property tax revenues for debt service on the proposed new bonds.
Proceeds from the bond issue would finance $64.3 million for public facility renovations; $46.8 million for commercial and industrial development; $19.2 million for residential and industrial street repairs; $13.7 million for bridge improvements; and $4.7 million for viaduct and transit lighting.
The plan also would finance the development of a wholesale food market, energy conservation programs, and recycling facilities.
Mr. Holden said Hamilton Investments Inc. has been chosen as the lead underwriter for about $50 million of bonds that would be issued for proposed material recovery and recycling facilities. Other underwriters and bond counsel are expected to be identified within the next month, Mr. Holden said.
Avis LaVelle, the mayor's spokeswoman, said the proposal should come before the city council in June. She added that the bonds probably would be issued in mid-July.
Mayor Daley also challenged the federal government to do more to meet the infrastructure repair needs of aging cities like Chicago. "We are doing our part," he said. "Now it's time for the federal government to do its part. If we can do this much without a tax increase, surely the federal government can do more than it's doing."
Earlier this month Standard & Poor's Corp. affirmed an A-minus rating and a stable outlook for $173 million of Chicago's unenhanced GO debt after the underground flooding. In April, Moody's Investors Service confirmed an A rating for $995 million of its GO debt.
On April 13, at least 250 million gallons of water flooded an underground tunnel system and some basements in the city's downtown business district when a retaining wall in the Chicago River ruptured. Chicago officials have estimated the cost of the flooding at nearly $40 million. The federal government is paying most of that cost because the downtown area was declared a federal disaster area by President George Bush.