UPDATED 04/24/12 – 2:37 p.m.

CHICAGO (CBS) — The City Council on Tuesday approved Mayor Rahm Emanuel’s plan for a controversial infrastructure trust.

Aldermen approved the plan by a vote of 41-7 at a special City Council meeting.

The planned trust will have five major banks lead an effort to invest $1.7 billion in private financing to upgrade city infrastructure. It is part of a greater plan worth more than $7 billion to renew the city’s crumbling infrastructure.

A board of five people appointed by the mayor will be empowered to decide how the majority of the money is spent. The City Council will only have oversight when city assets, properties or money are involved. Projects involving public schools, parks, or public transit would be exempt from City Council approval.

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Some aldermen said there’s still not enough City Council oversight of future projects, and they recalled the ill-fated parking meter lease deal as instructive.

But Mayor Rahm Emanuel insisted the two plans are like night and day.

“I understand why people want to use the parking meters for political purposes to scare everybody, but I want you to step back and think about it, the contrast,” Emanuel said. “Something that was introduced on a single day got passed five days later. This has been two months. Something got passed without your chance to alter it. We’ve got 16 amendments.”

During more than two hours of debate, Ald. Ameya Pawar (47th) argued there are now enough safeguards in the plan, and that the City Council will have sufficient oversight of the private money that would finance public works projects.

“This is money that should be staying local to build our infrastructure, to build transformative projects, but also to create jobs,” Pawar said.

But Ald. Toni Foulkes (15th) said residents of her South Side ward remain skeptical.

“A whole group of young men came to me and they said no, they don’t trust it, because they have been promised over and over again that they’re gonna be the ones that get the jobs, and over and over again, they’re not,” she said.

The only projects currently proposed for the fund are energy-saving retrofits for some city buildings.

As aldermen took up the proposal on Tuesday, groups for and against the program held dueling news conferences at City Hall.

Before the activists who oppose the infrastructure plan could hold their news conference, a group of aldermen and labor groups moved in to announce their support of the initiative.

Joe Healy, with Laborers Local 1092, said the program isn’t perfect, but it’s needed right now.

“The mayor has spoken with the council and spoken with groups like ours for over a month now in order to make sure that this is the right bill at the right time,” Healy said. “We need this bill to get our people to work.”

But Amisha Patel, with the Grassroots Collaborative, followed with the threat that there would be a political price to be paid for yes votes on the initiative, which she said lacks sufficient oversight.

“Because when these deals come down and the user fees go up, or the developments all get focused downtown, and not in neighborhoods across the city, we’ll know who passed this ordinance, and we’ll be watching, and we’ll make sure that they remember come next election,” she said.

The trust had been up for a vote at a City Council meeting last week, but it was pulled off the agenda amid concerns from some aldermen about whether the privately-funded trust would be accountable to anyone.

Some aldermen argued that the infrastructure trust is similar to since-retired Mayor Richard M. Daley’s move to lease the city’s parking meters – a move that caused street parking rates to skyrocket. After the parking meter deal was approved in 2008, many aldermen complained that they were asked to take a vote on the plan before being able even to examine it.

Emanuel said after the meeting last week that he did not plan to change the ordinance before it comes to a vote, but would simply make some alterations by executive order.

“One will be that each project will have a mission statement with financial advisers – what it’s supposed to do, how much it will save, how many jobs it will produce. So each project will have that,” the mayor said after Wednesday’s council meeting.

The following day, the mayor said he had already made 16 changes, in order to give the City Council greater oversight of projects that would be funded through the initiative.

“We have these ideas that we’ve put into the executive order, and I think that will allow us to address concerns, and move this city forward,” Emanuel said.