Community Alert
Proposed Pension Bond
Infrastructure Project Timelines
Dear Neighbors,

Chicago 19th District Police have issued this alert about an Armed Robbery in our Ward. On Thursday, August 9th approximately at 1:25 AM on the 800 block of West Wrightwood, an unknown subject with a firearm robbed victims who were walking west on the street. The offenders approached from behind, displayed a firearm and took their belongings.
What you can do:
  • If you are leaving the house late at night, do not walk alone.
  • Call 911 to report any suspicious person, vehicles, or activity.
  • Be aware of your surroundings.

If you have any information about this incident, please call the Area North Bureau of Detectives at (312) 744-8263.

Anonymous Tips can be submitted to WWW.CPDTIP.COM

Reference: RD# JB-385578
Alert # JB385578
August 31, 2018
Keepin' It Real Burglary Workshop
Hosted by the 18th District Chicago Police
and 43rd Ward Alderman Michele Smith
Thursday, September 13th
St. James Lutheran Church, 2101 N. Fremont Street
6:00 pm - 8:00 pm

You are invited to the "Keepin' It Real" Burglary Workshop by the 18th Police District Community Policing Office. At this workshop, you will hear an in-depth discussion on burglary awareness and prevention from a panel of convicted burglars on parole. Past attendees have said that this is a highly informative evening, and I hope you will consider attending.

For more information, please contact the 18th District Community Policing Office at 312-744-0064 or
Pension Obligation Bonds – Both Sides of the Ledger
Recently, the City's Chief Financial Officer, Carole Brown, proposed the City sell up to $10 Billion in so-called “pension obligation bonds (POBs).” If approved, it would be the largest such bond issuance in history.
The rationale – If successful, taxpayers would save the difference between the annual payment for the bond and the pension payment savings.  According to the CFO, this could amount to up to $200 million a year in pension payments and reduce pressure to raise some revenue.

What is a Pension Obligation Bond?
The City’s four pension plans have a long-term unfunded liability of $28 Billion.  Even with good investment returns, the City’s pension contributions must climb over the next five years to reach levels required by state law.
CFO Brown proposes the proceeds of the $10 Billion bond be placed into the pension plans to lower the overall long-term debt from $28 to $18 billion. This immediate funding of part of the pension obligation, would lower the cost of the City's annual pension payments, at least in the short term. The logic is to lower city payments to 5.25% interest on the bonds from our current 7% interest on the outstanding liability.  In the best case, this accumulated savings could amount to $6 Billion by 2055, according to the CFO.
On the cost side - Chicago would repay the bonds with interest; the bonds would be secured by an as yet undisclosed dedicated revenue stream and, the pension plans would have to earn more than 5.25% on the money contributed. 
The Risks of Issuing Bonds – Can We Afford the Downside?
The  Center for Tax and Budget Accountability cautions “Chicago may find itself in an even worse hole a few years down the line” if Chicago does not use  every dime of the proceeds to fund the “unfunded liability.”  Moreover, if city "saves" $200 million a year, it isn’t “found money,” just a reduction in a large overdue bill.  
With interest rates climbing and the market at an all-time high,  bonds are cheaper right now, But, if the markets tank and the pension plans lose money over time, as in past recessions, the interest we will owe on the $10 billion debt could, in the long run, be more expensive than it is today.
  History of Public Offering Bonds (POBs) 
The  Center for Retirement Research study shows a wide range of outcomes – from a +1.5% return to a - 2.6% return for bonds issued close to the peak in the markets. A POB issued by the CTA in June 2008 failed. The State of Illinois Auditor analyzed that CTA only had a 50% likelihood of earning 7.7%. As it turned out, CTA paid 6.8% to sell the bonds, and after the market fell 45%, CTA kept the funds in 2% money markets for some time. . According to the CTA's pension plan , " the amount of contributions to be paid by the CTA, with respect to debt service on bonds issued for contribution to the Plan, is treated as a credit against the amount of required contribution." This means that the CTA contributes less to the pension plan and instead pays off the bondholders.
A Pew Foundation study predicts “If an invested bond lost… 20 percent in a single year in an economic downturn…it would be extremely hard for a state to get back on track and access the expected proceeds.”
Will bonds “solve the pension problem?”
No.  Chicago must dedicate resources over the next five years to be able to afford the full state law required contribution which will begin in 2023. If successful, the bonds would reduce the amount needed.
The Questions

What is the dedicated revenue to pay this new debt service?  

If the markets fall within the first few years of the bonds’ issuance, how will we raise money to cover the debt service and make the required contributions?

What is the difference between the anticipated savings this will generate and the cost of the debt service?  
Will all the pension bonds revenue be contributed to the pension funds?
When do the bonds mature?

Can we guarantee the bonds won’t be refinanced to evade paying our pension liability?

Bottom line : Is the potential   for short term savings and a long term 1% to 1.75% return worth the risk of a falling market that could drain city finances even more? As we receive answers to these questions, we will report back.
Finally, if taxpayers support this approach, then our energy should redouble to push for a constitutional way to reduce the pension liability – especially the so-called “Cost of Living” increases. The Mayor’s economic team’s first attempt to moderate benefits was ruled unconstitutional.  The “consideration” model, offered by Senate President Cullerton, should go back on the table. Some legislators favor a constitutional convention to consider many issues including pension obligations. It is important to note that Chicago is prohibited under Illinois law from declaring bankruptcy.

Please let me know what you think of this idea by emailing me or calling the office.
How to Appeal your Property Tax Assessment
Hosted by Board of Review Cook County Commissioner Michael Carbonargi
and 43rd Ward Alderman Michele Smith
Agassiz Elementary School, 2851 N Seminary
Thursday, September 13th
6:00 PM

Attendees will learn the process of the property tax system, the appeals process, and staff will be present to answer any questions at this event. Please bring your second installment of your property tax bill.

For more information please visit Cook Country Board of Review Website.
Register to Vote Online

The deadline to register to vote in the November 6th election are just weeks away and early voting begins September 27th. Residents may register to vote online by using a current Illinois driver's license or state ID. For more information on voting and elections, click here. Ballots will be mailed in early October.

The deadline to apply for a vote-by-mail ballot is  November 1st .

By law, any mail ballot postmarked November 7th or later cannot be counted, which might include ballots slipped in the mail on the afternoon or evening of Election Day, November 6th.
Infrastructure Update
It's been a much busier than usual construction season in the 43rd Ward, as several projects held up by State funding issues came on line and funds became available to replace 100 year old water mains in our neighborhood.

Given the age of the city's infrastructure, delays in project completion occur because unknown conditions surface. In addition, several telecommunications projects are underway to increase the speed of our wireless networks to 5G. Fortunately, most projects are very close to completion. Here are some updates.

Clark Street

Three projects are culminating on Clark St currently. Sunesys, a telecommunication company, is wrapping up at Dickens and Clark. Reliable Construction is finishing a large valve connection at Fullerton and Clark, and the Water Department is correcting a serious sewer issue at Webster and Clark. Bigane Paving is building new curbs and ADA corners, as well as more pedestrian and traffic safety measures from Diversey on the north to Dickens on the south. Final asphalt restoration of this long stretch of Clark Street will be completed by the end of September, weather permitting.

Sheffield Avenue

Sunesys is working on the Blocks of 2600-2700 N Sheffield as well as the Wrightwood and Sheffield intersection installing fiber optic cable. Final asphalt restoration will be done in the next two weeks.
Upcoming Events
Evening in the Garden
Fire Station Park
Thursday, September 13th
6:00 PM - 8:00 PM

Come celebrate the 5th anniversary of Evening in the Park presented by the Lincoln Central Association (LCA). This reception styled event is an opportunity to meet your local neighbors and celebrate saluting the volunteers of the neighborhood. 

Hors d'oeuvres & wine will be served from our very own neighborhood food and beverage establishments including J9 Wine Bar and Geja's Cafe. Enjoy illusions and magic close-up by Chicago magician, the amazing Benjamin Barnes.

If you live in the Lincoln Central Neighborhood and wish to become a member of the Lincoln Central Association neighborhood group please visit their member benefits page.

Michele Smith
43rd Ward Alderman
43rd Ward Office Hours: M 9 AM - 7 PM, T - F 9 AM - 6 PM 
  2523 N Halsted  |  773-348-9500
Text Us for Constituent Services: 773-906-4333