>> There's fierce debate and city Council over Mayor Brandon Johnson's proposal to borrow 830 million dollars for infrastructure improvements.

Opponents say the plan lacks fiscal responsibility after receiving a credit downgrade.

While supporters say it's the only way to complete already planned projects.

Here's some of what was said at last week's council meeting.

>> It is.

Downright ludicrous for us to borrow an additional 830 million dollars with this proposed debt structures when our financial challenges are so evidence investment vital.

But the proposed debt structure is fiscal insanity and not normal.

>> What was his conversation with Skyway was so.

Where was this conversation when the parking meters with so what was just pop states?

But now when it's time for the south and West side to see stuff in this bond issue, oldest pump the brakes.

>> And joining us to Chicago's chief Financial Officer Joe Jaworski.

Thank you for joining us.

the infrastructure needs, what are the infrastructure needs that this would be paying for?

>> So general obligation, bond issue is going to find what we consider sort typical infrastructure for the city.

It's going to find street repairs, sidewalks, bridges, there's 100 million dollars is going to going to lead service line replacement, which really important responsibility that the city has to take on.

It also is going to do some work on certain buildings and it's going to provide funding for some of our fleet as well.

>> Now we know the city just completed a very challenging budget process where you will have to close in 982.4 million dollar deficit.

Is this the time to increase then the city's debt?

So the city issues every single year to fund these infrastructure investments and one of the reasons that we find them with fines as opposed to just using what makes me like a pay as you go money.

>> Meaning any additional money that we're taxing for and providing directly in infrastructure is that these type investments?

They have a value that is carries over for many, many years.

And so when you borrow money over an extended time period, a 30 year time period or so and you're investing in projects that themselves last 4 decades.

You're you're you're you're carrying that cross over now.

Multiple generations, in essence, as opposed to paying for it all today.

So if we took inside what we're going to do, 800 million in infrastructure investments today and we didn't borrow for it.

The current tax payers, we have a very heavy burden.

Even a future taxpayers would be enjoying the benefit it.

So this is standard practice and the city every year is borrowing money and investing in infrastructure.

As is the state and really every other government agency around us.

This is standard procedure.

You're saying spreading out the cost, of course, over over years, over the life of whatever the projects that would funded under that von.

Yes, exactly summer to making.

And if you make a major investment by buying a home.

>> Most people finance at over 30 years.

One of the concerns that we're hearing is the repayment schedule.

The city won't be making payments on the principle for the first 20 years.

Critics are calling this, quote, back loaded projecting that it's going to add an additional 2 billion dollars in additional costs, which you say, though, that's inaccurate.

Yes, I mean that statement alone that's going add an extra 2 billion dollars is not accurate.

The entire structure itself.

There's 803 men of principle, the illustrated, the luster to structure that we show to alderman, which was a back on structure had about one point 2 billion dollars in interest.

So we can't be creating an additional 2 million in costs when, in fact, the interest is only 1.2 billion.

So that's an exaggeration that has gotten a lot of play.

the city Chicago has a lot of front loaded deck.

So we have a very large amount that we're paying down right now.

And and so when we think about how we can not schedule repayments of this ponds, if we add them all up front, which of course, will reduce our interest cost same as if when you borrow for a home.

If you do a 15 year Mars, Russia, 30 year, you would pay much less interest.

And that's a very financially prudent thing to do.

If you can afford to make that 15, that that that mortgage payment for the 15, your schedule because we already have a lot of debt in place.

If we were to amortize it.

Sure right now to save interests, we would drive up our costs so much that we we really be adding a tremendous amount of pressure on a budget.

And I think everyone saw challenges that occurred last year.

There was some significant debate over the mayor's proposed budget and some of the revenues were propose were taken away and replaced with someone time uses and a smaller amount of revenues.

So we had a struggle getting close that budget gap with sustainable revenues, adding in a lot of debt service in the near term is ongoing.

Put more pressure on the revenue need to the city going forward.

A few older people have proposed ways to restructure the planned.

You see any other way to do that or to pay it sooner.

You know, certainly one of the things that we do it every single time we issued we try to optimize the debt structure to lower the costs.

So when we showed the your son areas to the alderman it was showing, look, we have a lot of debt here up front and a lot of us debt is going to get repaid after this debt.

But every time we go to market, we're looking at what are the current interest rate?

What is our debt structure look like today and what are ways we can save money.

So our current tax structure has a lot of debt service, but there's ups and downs is not the same every year.

It's unlike having a mortgage because the city has 25 mortgages.

In essence, we have 25 series of outstanding debt.

We have about 5 billion in general obligation, bonds outstanding.

So some years the deaths are more than others.

And so we might repay.

Or in those years where we have a dip so that we end up more level overall.

So each time we go to the markets were going to look at what the markets like today are interest rates higher.

They is the Oakhurst eat and make a decision?

How are going amortize act to save money?

And to that point, when you go to the market, you take your own credit rating with you.

The city's credit rating force.

critics also pointing to that downgrade, which is >> 2 notches above junk, according to S But you've said you don't agree with that downgrade.

Well, we were really disappointed, downgrade because it really didn't speak to the credit fundamentals of the city.

Now, the city has some major financial challenges.

We acknowledge those.

The mayor talked about those all the time.

There's a lot of legacy debt that the city carries primarily our pension debt.

We have about 40 billion dollars in pension liabilities and that's a result and the city for years and years and years making payments into the system that were just insufficient.

>> And so are funded.

Ratios got worse and worse.

Those are legacy debts that we carry and we have knowledge and they weigh down our credit rating.

We have more pension debt, pension liability than any other city in this country.

And in fact, more than most states.

So that is why we primarily why we have a low credit rating.

The reason that the 2 agencies downgraded us after the budget was because concerns about the budget process.

So the mayor proposed budget with a property tax increase in the property tax.

I know it is something that many people get concerned about.

And they really worry about the impact on their budget.

But it is also a very stable source of revenues.

And for most people in the city would have been a very, very modest increase in their annual costs.

Because of the long process it took with City Council to get to a resolution on what other revenues are we going to do and ultimately not getting to a resolution where we replaced all those revenues.

And so we some one time maneuvers and that led to a process where the rating agency said some real concerns about the budgeting.

And, you know, the budgeting ability in the political challenges that we're facing getting these through city council.

And that was really what led to the downgrade.

Some critics have expressed concern that the money would end up paying for projects that are not infrastructure specific.

How do you alleviate that concern?

Yes, we had a lot we've heard that mentioned a lot.

>> And you know, the plan that we put forward that we introduced to city council that we share with alderman we've shared with the public is to find 830 million of infrastructure, all capital investments.

That includes things I talked about, but also what we call menu money, which is the 75 million dollars in total.

It's one and a half million because each alderman for them to address specific projects in their ward that they and their community know are important.

Because all that is Capitol we're putting together.

We've put together a substitue ordinance that would go before council and it specifically for Capital only to make sure that even though we've presented her plans, we understand some people still don't have trust.

And so we've made it clear in some sort the canopy is for anything other than capital, many municipalities and states are also concerned about the stability of federal funding in this administration.

Has that influenced this decision and how are you all taking that into account going forward?

Certainly we are very focused on what's going on at the federal level.

>> Our Office of Budget Management as well as my office is looking at and allies in the situation every single day.

Much of the federal money that we get does come for infrastructure.

And when you delay funding infrastructure, it only becomes more expensive in the future.

No different than if you get a leak in your roof.

If you fix it right away, it's not going to be that expensive.

If you let it go because you don't want to put the money rough, you're going to end up with water damage inside your house.

And that will be much more expensive to fix.

That is exactly what are his years like.

We have to keep up with that need.

It only gets more expensive.

We defer it.

So we less capital dollars from the federal government.

doesn't change the need for us to invest.

So we need to keep current with our investments right now because we may be more challenge officially going forward and we may be having to limit our dollars and how they're used.

So now is not the time for us to step back on what they're spending.

It's a time for us to stay steady and keep expect spending on our infrastructure.

Are you worried or how are you addressing taxpayers trust after after these debates and all >> I mean, certainly that's a big concern to You know, one of the things that I think can really important administration is that the mayor has done what he said he was going to do.

So, you know, we hear a lot of folks who doubt, you know, what we say is an administration what the mayor says, you know, we've heard people said, you know, you're not gonna use this money for capital.

You know, you're going to use this for CPS.

You're going to use it for their pension payment.

What we really look at this, the history of what the city has done.

The mayor has said he's going Dustin Housing.

He said he's going vest and mental health youth employment, public safety.

Those are things that we have done in this administration.

We will continue doing so.

We hope that we build back that public trust by people looking