Privatization Ordinance Passes Chicago City Council
The Chicago City Council on Wednesday, November 18 took an important and long-awaited step towards increased transparency and accountability.
After years of pressure from the Better Government Association and a coalition of advocates, the Privatization Transparency, Accountability and Performance Ordinance (PTAPO), introduced by Mayor Emanuel and 6th Ward Alderman Roderick Sawyer, is now the law of the City of Chicago.
The Better Government Association was heavily involved in conversations with the Emanuel administration, Alderman Sawyer and other advocates throughout the drafting of this ordinance.
So what does this new law mean for residents of the City of Chicago?
To begin with, it prevents the City from rushing through another parking meter deal. As many Chicagoans will remember, that fiasco of a transaction was shoved through City Council in two days without independent review or adequate time for City Council discussion and public testimony.
Going forward under PTAPO, the City will have to allot adequate time for review, provide a heightened level of transparency and guarantee contractor accountability.
With respect to the privatization of assets, the new law requires:
- At least 90 days for public and City Council review, starting with a prominently posted, plain-English summary that includes a location for public comment.
- A public hearing on every proposed privatization in addition to a City Council committee meeting. Both meetings will have opportunity for public comment.
- The City to engage one or more independent advisors to monitor and assess a proposed deal and issue a report to City Council.
- Contractor-funded city oversight of the transaction, and that the asset be returned in good condition at the lease’s end.
- 10 percent of the proceeds of very large and very long-term leases to be set aside in an intergenerational trust fund for benefit of future Chicago residents. This fund will be invested by the City Treasurer and can’t be touched for at least half the duration of the lease.
With respect to the privatization of services valued at $3 million or more, the new law requires a cost-effectiveness study, a City Council hearing and vote on each proposal, annual performance reports and biennial evaluations of contractors.
The BGA has no opinion on the merits of privatization of assets or services in general, but believes that the oversight provisions included in this new law are important requirements to ensure that any future privatization deal has a reasonable chance of being a good one.
The passage of this ordinance was a critical first step, and we commend Mayor Emanuel, Alderman Sawyer and all those who advocated for this reform over the last few years. The BGA policy team will continue to monitor city government to ensure the ordinance’s proper implementation.
READ BGA POLICY COORDINATOR JUDY STEVENS’ TESTIMONY TO THE CITY COUNCIL JOINT COMMITTEE ON FINANCE, BUDGET AND GOVERNMENT OPERATIONS BELOW: