City Council to Consider Two Multimillion-Dollar Settlements and Plan to Borrow $830 Million

The City Council will consider two multimillion-dollar settlements and a plan to borrow $830 million for maintenance and infrastructure projects on Wednesday.

Concerns Over City’s Ability to Pay Back the Loan

The biggest concern for Chicago alders is how the city will pay the money back.

Under Mayor Brandon Johnson’s plan, the city would only pay the interest on the loan for several years, which could cost the taxpayers in the billions down the road.

Downgrade in Rating Agencies’ Assessment

The borrowing plan comes as ratings agencies downgraded Chicago to just above “junk status” following the city’s marathon budget process late last year. The downgrade means it will cost the city more to borrow money.

Critics’ Concerns Over Budget Implications

Critics say the $830 million that Johnson wants the city to borrow will just make budgeting in the future more difficult. Payment on the loan’s principal wouldn’t start until 2045. In other words, it’s like only paying the interest month after month on a credit card bill, in that the credit card holder ends up paying a lot more for the initial purchase.

Infrastructure and Maintenance Projects

If approved, the money borrowed by the city would go to infrastructure and maintenance projects in all wards.

Two Settlements Up for Vote

Meanwhile, the settlements up for a vote Wednesday include $27 million to the family of Angela Parks, a mother of five who died 18 months after being hit in an Armour Square crosswalk in August 2020 by an SUV that was being chased by Chicago police, and $3.5 million to Nicholas Pellegrino, who suffered a traumatic brain injury after a dead tree fell and hit him in December 2020 in Uptown.

Several 311 calls were made about the tree prior to it falling.

Settlement for Dexter Reed Not Getting a Vote

The city initially suggested a settlement of $1.25 million to Reed’s family to try to avoid any possible court costs for future lawsuits. However, some city leaders have held the settlement up because Reed shot an officer.

“The guy’s a felon, the guy was a gang member, the guy had a gun — an illegal gun — and the guy was out on parole for gun possession,” Ald. Nicholas Sposato (38th Ward) said. “He shot first, but yet we’re giving him a million-and-a-quarter dollars.

“So, very disturbing.”

Conclusion

The City Council’s decisions on these multimillion-dollar settlements and the plan to borrow $830 million will have significant implications for the city’s future budget and infrastructure. It is crucial for alders to carefully consider the long-term consequences of these decisions.

FAQs

* What is the plan for the $830 million borrowed by the city?
+ The money will go to infrastructure and maintenance projects in all wards.
* Why is the city planning to borrow $830 million?
+ The city needs to fund infrastructure and maintenance projects, and borrowing the money will help to do so.
* What are the concerns about the city’s ability to pay back the loan?
+ Critics argue that the city’s plan to only pay the interest on the loan for several years will cost the taxpayers billions down the road.
* What are the two settlements up for a vote?
+ The settlements are for $27 million to the family of Angela Parks and $3.5 million to Nicholas Pellegrino.