Chicago’s City Council would have approval power over high-dollar projects funded by Mayor Brandon Johnson’s proposed $1.25 billion borrowing plan to finance affordable housing and economic development under a new version of an ordinance unveiled Thursday.

In response to initial concerns about how projects would be chosen, Johnson’s administration included beefed up transparency measures and City Council approval for projects that will receive more than $5 million in funding under the plan. Prominent fiscal and policy groups, such as the Metropolitan Planning Council, Civic Federation and Chicago Community Loan Fund, endorsed the financing proposal and “added guardrails” during Thursday’s Finance Committee meeting — but still raised concerns.

“In addition to several fiscal cliffs on the near horizon, we are on the precipice of a TIF cliff, for which immediate response is needed,” said Joe Ferguson, president of the nonpartisan financial watchdog the Civic Federation, and Chicago’s former inspector general. “This proposal, as presented, standing on its own, merits a place in the toolbox. However, the city must remain mindful that a part of this funding which has been used to help fill past budget shortfalls will not be available for future budgets during which we will be facing greater challenges.”

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Johnson’s plan, which requires City Council approval, relies on the expiration of dozens of controversial tax increment financing, or TIF, districts — which siphon tax dollars away from the city’s general funds to pay for local development projects. City officials estimate that expiring TIF districts will lead to roughly $2.2 billion in additional revenue coming back to the city in the next 15 years alone. The city would use the recouped tax money to pay for the debt, which is expected to total $2.4 billion over 37 years.

The bond proceeds over the first five years would be split between the city’s Housing and Development departments for neighborhood development grants, small business support, the construction and preservation of affordable rental housing, homeownership preservation, and more.

More stringent transparency measures included in Thursday’s updated proposal include quarterly reports to the City Council on expenditures and allocations of bond proceeds, an online, searchable database providing details on financed projects and program guidelines, and an annual update to the bond financial model, including on revenue returning from expiring TIFs and debt service.

“Those updated models and updated information will ensure that council has up-to-date data to inform any future decisions about additional bond sales or TIF extensions,” said Daniel Hertz, director of policy, research, and legislative affairs for the housing department.

The $5 million threshold for projects requiring City Council approval would encompass “essentially all” multifamily projects and large Community Development Grant projects supported by the housing and planning and development departments, Hertz said.

Despite additional council oversight, Johnson’s plan received renewed scrutiny and questions from alderpersons at its second public hearing, as they pressed for assurances that funded projects will be located on the historically disinvested South and West sides.

“To me, it’s a matter of: it looks like it’s just a name change. It’s just a name switch. You’re going to go from TIF to bonds. How do we re-ensure that the communities that really need it will actually get the funding?” said Ald. Jeanette Taylor, who represents the 20th Ward on the South Side. “What is in place in this ordinance, or any substitute, that reensures that the South and West side won’t go to the wayside when it comes to development.”

City officials have repeatedly said the bond plan will allow them to invest beyond the geographic limits of a TIF district’s boundaries, and TIFs will not be disappearing outright.

Ciere Boatright, Johnson’s Planning and Development Commissioner, said Thursday four Invest South/West projects — former Mayor Lori Lightfoot’s signature development program, which directed public and private investment to commercial corridors on the South and West sides — should have construction completed this year, while the department is trying to “right-size” other projects. But the commitment to providing public dollars remains, with the potential for funding for the bond plan to flow to them, if approved, Boatright said.

“I think that would help us to address the gaps,” Boatright said of using bond dollars toward Invest South/West projects. “Overwhelmingly, we’re still continuing to support those projects and support those developers through TIF as one form of city subsidy. We’re not stopping those projects.”

Alderpersons also renewed their urging for the city to commit to using revenue from expiring TIFs to pay down its growing debt. In 2024, paying off debt will make up about 17% of all city spending with pension contributions accounting for nearly 23%, according to an analysis by the Civic Federation.

“It’s not just about us. We’ve got kids, we’ve got grandkids that are living in this city. We know that the deficits get bigger year over year. And if we’re not doing our due diligence to pay off these debts, we may feel like we’re doing something investing on the front end, but it’s going to be a larger problem for our city,” said Ald. Andre Vasquez, 40th Ward.

The bond proposal still requires approval from the committee, and is slated to be heard during Monday’s Finance Committee meeting. Thursday’s hearing came on the heels of development announcements last week from the mayor’s office, including a proposal to allocate more than $150 million in TIF dollars to redevelop four downtown office properties into residential apartments that feature affordable units.

Tessa Weinberg covers Chicago government and politics for WBEZ.