The City of Chicago is moving forward with plans to use a huge private trust to fund infrastructure projects.
The trust hasn’t found investors yet, but the board heard presentations from the Chicago Public Schools and facilities and water management departments Thursday. All three are planning large energy efficiency upgrades they want the trust to pay for.
“It’s a reduction of energy, it’s reduction of manpower, reduction of ongoing maintenance, it’s an improvement in our carbon footprint,” said Tom Powers, commissioner for the Chicago Department of Water Management, describing upgrades to an aging steam-powered water pump he said could lead to millions in savings.
The city currently has four steam-powered pumps which require around-the-clock staffing. The replacement station at Jardine would be “one of the most green water pumping stations in North America,” Powers said.
If the water management project is funded by the infrastructure trust, the savings would likely be used to pay back private investors. The trust’s five-person board also heard presentations from lawyers hired by Mayor Rahm Emanuel’s office on developing an initial request for qualifications from potential investors.
The city hopes to find investors willing to put in a minimum of $50 million dollars to be paid back as energy retrofits yield large savings.
“We can’t decide that we know for sure what the terms will be,” said David Hoffman, the city’s former Inspector General who is now on the trust board.
He played the role of watchdog at the meeting, questioning lawyers and department heads as to whether they were already accounting for the infrastructure trust funds in their budgets. All three city departments who presented were careful to say that any projects they had budgeted for in 2013 already had funding sources.
The trust has been the object of ongoing scrutiny because it was established to operate independent of City Hall and is now applying for nonprofit 501(c)3 status. Its status as an independent entity would exempt it from many of the transparency requirements city entities are subject to. When the ordinance establishing the trust was first passed, some aldermen worried that it could lead to lucrative private contracts being granted behind closed doors.
Other presenters at Thursday’s meeting included David Reynolds, commissioner for the Chicago Department of Fleet and Facility management, and Pat Taylor, Chicago Public Schools Chief Property Officer.
Reynolds presented a proposal for a large project retrofitting and automating lights, repairing heating, cooling, and ventilation, and making structural efficiency improvements to city buildings including City Hall and the Chicago Cultural Center. Reynolds projected a project cost of $37 million that would result in $3.3 million in yearly savings on energy costs.
He said a structure that could provide large sums of up-front funding would be an ideal structure to allow pursuit of efficiency projects that are longer-term, such as replacing boilers in buildings.
Taylor echoed Reynolds as she explained a massive energy efficiency project already underway in the public schools. She hopes investors in the trust will be interested in reimbursing the costs in exchange for a promise of returns. She estimated $3 million dollars in annual savings in energy costs beginning as soon as March 2013.