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MPC works to ensure our governments efficiently deliver high-quality services and investments to keep our region attractive to residents and businesses

Making the Most of Taxpayer Dollars: Government Efficiency + Innovative Financing

We live in an era in which we’ve come to accept—and expect—rapid technological advancement, with new updates queuing up daily on our phones and computers. Yet we’re largely resigned to “business as usual” from our governments, which were established decades ago under very different circumstances.

Illinoisans are governed by 7,000 units of local government—more than any state in the nation. Local and state government spending in Illinois was an estimated $136 billion in 2014. Through two related initiatives, MPC is working to ensure our governments efficiently and effectively deliver services and investments that Chicagoland and Illinois need to be known as great places to live and do business.

Transform Illinois

Illinois has a proliferation of local government, including 1,452 road and bridge districts and 865 school districts. By comparison, the state of Florida, with nearly 6 million more residents than Illinois, sustains only 1,650 total units of government.

MPC is partnering with DuPage County Chairman Dan Cronin to lead Transform Illinois, a new coalition of organizations, elected officials and civic leaders grounded in northeastern Illinois, who are coordinating research, advocacy, and legislative and policy change to improve the effectiveness of government service delivery in Illinois in the long term.

“We no longer can afford to sustain duplicative and inefficient layers of government. We need to transform our government infrastructure to deliver public services in a more cost-effective manner.”

—DuPage County Chairman Dan Cronin

Chairman Cronin’s leadership on this issue began in 2011 when he undertook an examination of DuPage County’s appointed agencies. He was dismayed to learn, for instance, that a property owner in his county likely receives a property tax bill assessed by more than a dozen taxing bodies. He began the Accountability, Consolidation and Transparency Initiative to streamline and strengthen procurement and ethics policies across the County’s appointed boards and move toward consolidating the essential services of various agencies, such as IT and human resources. These changes have saved DuPage County’s 215 government agencies—and their taxpayers—more than $100 million.

“We no longer can afford to sustain duplicative and inefficient layers of government,” says Chairman Cronin. “Similar to the private sector, we need to transform our government infrastructure to deliver public services in a more cost-effective manner.”

To build on DuPage County’s successes, Transform Illinois was formally established in April 2015 and quickly authored a resolution introduced in the Illinois House of Representatives, supporting “efforts to examine the landscape of local and State government to determine how more effective and efficient models can be developed.” Transform Illinois also has supported a range of proactive and productive bills, including one to prohibit the formation of new units of local government and allow for the dissolution of defunct units of local government.

Through Chairman Cronin and MPC Board Member and Senior Fellow Hill Hammock, former vice chairman and COO of LaSalle Bank, Transform Illinois is also staying connected to Ill. Gov. Bruce Rauner’s Local Government Consolidation and Unfunded Mandates Task Force.

“The sheer number and fragmentation of Illinois governments pose a tremendous barrier to understanding how decisions are made, how resources are allocated and who should be held accountable,” said Josh Ellis, MPC director. “Transform Illinois is working to improve government service delivery in Illinois toward more engaged citizens, smarter investments and, ultimately, a stronger region.”

Comparison between units of government per capita between states

Source: Better Government Association, U.S. Census

Innovative Financing

In addition to researching and advocating ways for government to make the most of taxpayer dollars through Transform Illinois, MPC has continued to uncover and promote new ways to fund and finance infrastructure. “In the last year, much of our work has been about reframing the questions about how infrastructure financing is delivered in Illinois,” says Hui Feng, MPC manager. “We are finding creative solutions that address this issue.”

The challenge is formidable: In 2013, the American Society of Civil Engineers gave Illinois infrastructure a “C-.” The Society estimated that the total cost of urgently needed repairs was $100 billion—five times the state’s total FY ’15 capital budget.

MPC President MarySue Barrett served as co-chair of Gov. Bruce Rauner’s Infrastructure Transition Committee, which identified a number of ways to fill the gap. Many experts believe one solution can and should involve increasing the role of the private sector in designing, building, maintaining and operating infrastructure in Illinois.

“What the world needs in infrastructure is implementation—and for that to happen, of course, resources are needed.”

—George Bilicic, Vice Chairman of U.S. Investment Banking, Lazard Freres & Co. LLC; MPC Board member

“One of the major challenges we have seen is that there are often scarce public resources for infrastructure—but a great need for investment,” says George Bilicic, an MPC board member who is Vice Chairman of Investment Banking for Lazard Freres & Co. LLC. “What the world needs ultimately in infrastructure is implementation—and for that to happen, of course, resources are needed.”

In June 2014, MPC partnered with Lazard to host global infrastructure investors and public sector leaders to explore the need for a regional intermediary to better facilitate, procure and implement infrastructure projects—including social infrastructure, i.e., the building of schools, courthouses, jails and other public facilities. “Private capital could build buildings, operate them and be guaranteed a measured, fixed return on investment that could also incentivize performance,” says Bilicic. “A county could consider this option for building a courthouse, for example.”

Another example of how private funds might work, Bilicic suggests, is "if more than one community needed work, say, to upgrade a water utility system, instead of one community spending funds on a problem, private investors could address it on a bigger scale through aggregation across communities and create efficiencies—which could include better pricing.”

MPC Board Member Lerry Knox, a private investor who has more than 20 years of experience as an engineer, private equity investor and investment banker, also points to the potential of innovative financing tools and strategies as a significant way to help improve infrastructure.

“There’s only so much debt that municipalities can take on to finance themselves,” says Knox. “There is an opportunity to bring private equity to the table—and an urgent need for it. Our infrastructure in this country is largely 100 years old and needs a great deal of work.”

Knox says that value capture can be an effective and innovative financing strategy. Value capture taps the increased value that public infrastructure generates for private landowners. “I see a growing awareness of how we can bring private capital effectively and efficiently into the public sector,” Knox says.

“MPC is helping Chicago-area decision makers fundamentally rethink how to invest in infrastructure, deploy new financing tools when appropriate and stay committed as a region to priority investments and plans that will put us back on the path to growth,” said Barrett. “Pursuing aggressive infrastructure investment is the ticket to economic growth.”

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For more than 80 years, the Metropolitan Planning Council (MPC) has made the Chicago region a better place to live and work by partnering with businesses, communities and governments to address the area's toughest planning and development challenges. MPC works to solve today's urgent problems while consistently thinking ahead to prepare the region for the needs of tomorrow. Read more about our work »

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