CHICAGO — Chicago hosted potential buyers of its bonds and other financial and municipal market participants Thursday at a first-time city-sponsored conference aimed at bolstering its strained fiscal standing with investors.
Officials said 300 attended the conference that was financed by the city and World Business Chicago. Non-investors paid a $100 fee to attend.
“Chicago is a central hub for business and culture in our country and across the globe … I’m focused on not only highlighting what we have to offer, but on making the investments necessary to secure a prosperous future,” Mayor Rahm Emanuel said.
Emanuel told investors attending the Chicago Investor Conference at the Union League Club that his administration is concentrating on improving government operations, increasing economic development and investing in city infrastructure. Emanuel took questions from attendees but only his remarks were open to the press.
Credit presentations were made by Chicago chief financial officer Lois Scott and other members of the city’s finance team, the aviation department, and water department. Representatives of the city’s sister agencies with bonding authority — including the Chicago Board of Education, the Chicago Transit Authority and the Chicago Park District — also made presentations.
The conference followed Emanuel’s release of a proposed $6.3 billion 2012 budget last week and comes ahead of its $250 million issue of sales tax refunding bonds and $500 million of general obligation bonds next month.
One positive point city officials emphasized was the rating affirmations announced this week, along with praise for the new administration’s proposed budget and efforts to stabilize city finances.
Fitch Ratings rates the city’s GOs AA-minus and Standard & Poor’s assigns an A-plus. Moody’s Investors Service rates them Aa3. All assign stable outlooks.
In their downgrades last year, the agencies cited Chicao’s heavy reliance on reserve draws, growing personnel costs and other fiscal challenges.
Emanuel has proposed eliminating a more than $600 million deficit through tax and fee hikes, layoffs, management reforms, other spending cuts, and a small piece of debt restructuring. The budget does not include a sales or property tax hike and adds $20 million to city reserves.
The rating reports praised Emanuel’s administration for proposing a plan that moves the city closer towards a structurally balanced budget, but they also warned of the challenges ahead.
“Fitch views this positively, while believing the city’s ability to implement ambitious changes is likely to face significant challenges from those affected by the changes, particularly labor unions,” the agency wrote.
The CTA inext week plans to issue $96 million of capital grant-backed bonds and $456 million of sales-tax receipt revenue bonds. The Park District recently sold $178 million of debt and the Board of Education sold $400 million.
