Chicago Mayor Rahm Emanuel said Wednesday that he’s putting a stop to bad borrowing practices that City Hall’s been leaning on for years. But one financial watchdog group says that move, while good for the city’s future, comes with some hefty short-term costs.

In front of a board room full of Civic Federation members, the mayor said the city has been masking the true costs of government for “many, many years” — like a family that lives outside of its means.

“The bills rack up, the high interest rates compound the debt problem, this goes on year after year until the credit card finally maxes out,” Emanuel said. “That’s where the city is today.”

Emanuel unveiled five steps his administration plans to take over the next four years, adding that he’ll be holding additional speeches to outline other financial fixes.

First, the mayor said that by 2019, he’ll stop the practice of so-called “scoop and toss” which delays bond payments by refinancing old debts. The mayor explained that the city began using the tactic in 2007, under Richard M Daley’s administration, and admitted that it continued under his own watch.  By ending the practice, Emanuel said the city would see a $75 million reduction in next year’s budget.

And, the mayor plans to end the use of swap transactions—also initiated under Mayor Daley. He said over the coming weeks, he’ll convert $900 million dollars that the city has in variable rate debt to fixed rate debt. The mayor said sticking with a variable rate puts the city’s finances “at the mercy of changing economic conditions and rising interest rates”

Lastly, over the next four years, the mayor said he will continue paying into the city’s rainy-day fund; and stop leaning on borrowed funds to pay down settlements and judgements, a practice Emanuel said the city has been utilizing for more than a decade.

“We have been using short-term debt to pay the costs of these legacy liabilities we inherited: Everything from the parking meter deal, from the purchase of Michael Reese property as part of our Olympic bid to the Orange Line lease,” Emanuel said.

According to the Civic Federation’s president, Laurence Msall, all of Emanuel’s proposals are “positive” steps for the city’s financial health in the future, but they also carry serious short-term costs.

“The city budget is already under enormous pressure,” Msall said. “This is going to require either additional new revenue, or further cuts in the city’s operating budget in order to finance.”

Take the swaps, for example: Msall said getting out from underneath them could cost Chicago hundreds of millions of dollars, as they’re tied to the city’s low credit rating. The exact amount depends on the market value of those swaps, and whatever terms the city is able to negotiate with the holders of the swaps. It’ll also cost more on the front end to use operating funds instead of borrowing to pay settlements, but Msall said doing so will be cheaper in the long run.

But for now, according to Msall, the question is how much more Chicagoans will have to pay in taxes to help shore up the city’s finances.

Lauren Chooljian is WBEZ’s city politics reporter. Follow her @laurenchooljian