Leadership of the Chicago City Council committee that vets bond deals and other financial transactions is in the hands of an independent who heads the council’s Progressive Caucus.
The changing of the guard Wednesday gives Alderman Scott Waguespack — a frequent critic of new Mayor Lori Lightfoot’s two predecessors — a seat at the head table, marking a sharp contrast to the reign of Edward Burke, who chaired the finance committee for 30 years.
Bankers referred to Burke as “Mr. Chairman” and their visits to Chicago's chief financial officer to pitch finance ideas typically included a stop by Burke’s office to cultivate the relationship with him that was considered essential to avoid bumps in the deal approval process.
Burke stepped down as committee chairman early this year after he was charged on federal counts of attempted extortion. Burke was accused in an
Waguespack made a point of noting the differences between him and his predecessor after the city elected a new mayor who campaigned on a promise of reform and whose campaign was bolstered by the Burke charges.
“I have no financial interest, personal financial interest” in the decisions that will come before the committee, he said in an interview after Lightfoot’s first council meeting, during which aldermen approved her council reorganization. “I don’t have a job outside of this where I’m benefiting.”
Waguespack was referring to Burke’s private law firm work where he handled real estate business that ranged from small developers to Chicago's Trump Tower, ties made clear by his frequent citing of a Rule 14 conflict that prevented him from casting a vote on many subjects.
“I won’t be calling Rule 14s because I don’t have a financial interest” in telling the public one thing and working with people behind closed doors in another way, Waguespack said. “I’m hoping we can provide more predictability, stability in an open and fair way for people in the financial community so that they understand we are moving forward but there are no strings attached to any decision making.”
During his tenure, Burke did not hesitate to display his power by holding up, at least temporarily, bond deals and other measures if the administration had failed to fully address all committee questions or he had questions over a bond team participant.
Waguespack said he would pursue more transparency on legal settlements, for which he believes in the past aldermen have received too little information, and he intends to extend review times of transactions if needed.
The council at times has received little information ahead of key decisions, most notably with the now-maligned parking meter lease vote in 2008 just two days after Mayor Richard Daley unveiled it.
Waguespack said as he considers transactions before the committee he will be mindful of their impact on the city’s weak ratings with one in junk territory, two at triple-B levels, and one at single-A.
That’s “absolutely important,” Waguespack said, and something that market participants stressed to him when he participated in a recent panel discussion hosted by the Chicago Municipal Analysts Society.
Cultivating a relationship with the committee still may be a good idea, but Waguespack said it goes against his grain to expect the same deferential treatment Burke demanded.
“We would expect any financing participants to work collaboratively with the city financial team and the city council finance committee to discuss proposals prior to producing final documentation,” Waguespack said. “We are interested in full disclosure and robust transparency.”
After Burke stepped down, the vice chair of the committee, Patrick O’Connor, took over, but he lost his re-election bid.
Waguespack was Lightfoot’s early pick for the post despite opposition from some members who had been rubbed the wrong way by Waguespack's criticisms and push for reforms over the last decade.
Lightfoot, who took office May 20, butted heads with some aldermen not just over her pick of Waguespack but also her ouster of longtime Budget Committee chair Carrie Austin in favor of Pat Dowell and her elevation of other aldermen who have been critics of previous mayors.
Some aldermen had struck a defiant tone in recent weeks and suggested the council should organize its committees on its own. But as has been the case with prior mayors, Lightfoot wanted her own handpicks because they will be responsible for shepherding her agenda through the council.
That agenda will include action to close a more than $700 million operating budget gap next year due to rising pension, personnel and debt costs with additional work needed to tackle what last summer was estimated as a $250 million structural gap.
Lightfoot did retain some of Emanuel’s leaders and gave others first-time chairmanships while putting others considered more reform-minded in key positions. Alderman Gilbert Villegas will serve as her floor leader. Alderman Brendan Reilly is president pro tem and Alderman Tom Tunney is vice mayor.
Burke, who won re-election as alderman, spoke up ahead of a vote on the adoption of new rules, questioning the gender references in the legislation, and Alderman Ray Lopez, who has been critical of Lightfoot’s style, criticized what he said was a lack of Latino participation in leadership posts.
Lightfoot dismissed their complaints, and her reorganization and the new council rules were adopted by a simple voice vote with just a handful of the 50 council members heard shouting no.
“While there is still work to be done to increase transparency and enact additional ethics reforms, I am proud that we have immediately taken steps to create a stronger and more accountable government,” Lightfoot said. On her first day in office, Lightfoot signed an executive order removing aldermanic discretion over licenses and permits in their wards, a power that has been leveraged by past aldermen accused of corruption.
Waguespack first won election in 2007. He was a frequent critic of Daley and Emanuel’s policies and fiscal maneuvers. Since 2015, he has led the 11-member Progressive Reform Caucus. Waguespack was an early Lightfoot supporter before she emerged as the top vote-getter in the February contest that landed her in the two-person runoff April 2, which Lightfoot won handily. Lightfoot has said that early support meant something.
Waguespack’s finance committee will retain power over city bond deals and key financial transactions but earlier this year control over the city’s $100 million annual workers' compensation was transferred to the administration, a move long sought by the Progressive Caucus. Control over tax increment financing subsidies was also moved to a separate committee.
Lightfoot remains elusive about how she plans to tackle the city's fiscal ills. She said earlier this week her finance team, led by Chief Financial Officer Jennie Huang Bennett, continues “poring over” city books.
"We must confront our financial mess head on,” and “identify a path forward to improve our fiscal situation not just in the next budget cycle, but to really achieve structural change to put our city finances on a long-term footing of solvency,” Lightfoot said in a speech to the Chicago City Club Tuesday.
Lightfoot has offered some clues as to what actions she may pursue, some that could help and some that could add to the city’s fiscal burden. She continues to pursue state help. She wants to roll back taxes and fees that hit low earners the hardest, such as red light camera fines. All options remain on the table, but a property tax hike is at the bottom of the list. Emanuel won passage of a record $550 million hike to raise pension funding
"Of course we are going to have to generate revenue" but the city can’t go it alone, she said citing the need for state and federal help and that the wealthy and big corporations must "pay their fair share."
Lightfoot praised the legislature’s passage of a resolution sending a progressive tax amendment to voters on the November 2020 ballot and the expected passage of recreational cannabis, both of which could eventually generate some additional revenue for the city. She is also pressing for a Chicago casino that could be part of a gambling lawmakers may consider this week.
Lightfoot said her top priorities are combating gun violence, improving neighborhood schools, and getting the city’s fiscal house in order. Municipal market participants believe the city’s property tax must be tapped to raise revenue but she must tread carefully to avoid driving out residents and businesses. Lightfoot during questioning said that a property tax hike remains on the table but during her speech warned that “property taxes are killing people and they are driving them out of the city.”
