Chicago ? Former White House chief of staff Rahm Emanuel was sworn in Monday as Chicago’s first new mayor in two decades, a historic power shift for a city where the retiring Richard M. Daley was the only leader a whole generation had ever known.

Emanuel took the oath of office at the popular downtown Millennium Park, one of the signature accomplishments in Daley’s efforts to transform the city. Emanuel planned later to head over to City Hall and, for the first time since he was elected in February, walk into the fifth-floor office that was Daley’s lair for 22 years.

“We must face the truth,” Emanuel said in his inaugural speech. “It is time to take on the challenges that threaten the very future of our city: the quality of our schools, the safety of our streets, the cost and effectiveness of city government, and the urgent need to create the jobs of the future right here in Chicago.”

“The decisions we make in the next two or three years will determine what Chicago will look like in the next 20 or 30.”

Emanuel inherits a city with big financial problems. His transition team predicted a $700 million budget shortfall next year, but because of some controversial decisions by Daley — most notably the push to privatize parking meters — he has limited ways to pay for school improvements or repair the city’s aging infrastructure.

In his speech, Emanuel thanked Daley for his service to the city, noting how the “world class” park where he was speaking had once been an abandoned rail yard and “nagging urban eyesore.”

When Daley took office in 1989, “he challenged all of us to lower our voices and raise our sights. Chicago is a different city today than the one Mayor Daley inherited, thanks to all he did,” Emanuel said.