Despite money woes, CPS unveils ‘supplemental capital agenda’

The Chicago Public Schools may be forced to make deep classroom cuts without $215 million in state pension help, but it’s full speed ahead on school construction projects, thanks to a previously approved property tax increase.

That much was clear Friday when CPS unveiled a “supplemental capital agenda” that includes $75 million to build a new “middle-grades school” on the Northwest Side and another $75 million to bankroll a “new South Side high school.” The previously-undisclosed projects bring the “maximum possible capital budget to $938 million,” officials said.

The bevy of new construction projects will be financed by a $45 million property tax increase approved by the City Council last year for the sole purpose of school construction.

Lumped together with a $543 million increase for police and fire pensions, it was the largest property tax hike in Chicago history.

The spending plan was unveiled, one day after Gov. Bruce Rauner blew a $215 million hole in the CPS budget with his surprise veto of a bill that would have provided state pension help to Chicago.

If the governor’s veto is not overturned, CPS will have no choice but to cut deeply into the classroom. That’s something Mayor Rahm Emanuel has tried desperately to avoid.

That’s apparently why Schools CEO Forrest Claypool went out of his way to explain to worried parents whose children attend Chicago Public Schools that the $45 million cannot be diverted to school operations.

“Chicago’s students deserve to learn in modern school buildings with air-conditioning, wiring for technology and enough room for all their desks in their classrooms, which is why we are tapping into a revenue stream that can only be used for building projects,” Claypool was quoted as saying in a press release.

Depending on bond proceeds and public feedback, CPS expects to move forward on a host of new projects. They include:

• $285 million for roofs, renovations and mechanical projects at: Cardenas, Chavez, Clark, Franklin, Gary, Goudy, Haley Annex, Hammond, Hefferan; Perspectives IIT; Rowe, Salazar, Solomon, University of Chicago, Donghue and Zapata Elementary and at Clark, Curie, Lake View, Lincoln Park and Lindbloom High School.
• $243 million for annexes, modular classrooms or “potential new school buildings.” Specific projects were not identified–other than the vague description of a “Northwest Side middle-grades” school and a new South Side high school.
• $37 million for “programmatic investments and facility upgrades. Those projects include: renovations at Amundsen and Belding; new classrooms and gyms at Sheridan; new labs at Von Steuben and assorted renovations to “support high quality academic programming.”
• $29 million in “site improvements” supplemented by $6.7 million in “outside funding.” These projects include turf fields and campus parks at: Brooks; Clemente; Cook; Nathan Davis; Fernwood; Field, Morton Sauganash; Till and Wells.

In August, the mayor’s handpicked school team unveiled an initial list of $338 million capital projects aimed at addressing, what CPS considers “immediate” capital needs.

That earlier list included:

• $173 million in “overcrowding relief,” including annexes at: Byrne; Skinner West and Zapata Elementary. Modular classrooms were also planned at: Dawes and Bridge. New school buildings were planned at Dore and South Loop Elementary, with the latter bankrolled by tax-increment-financing.
• $133 million to: honor Emanuel’s promise to add air-conditioning at all CPS schools; upgrade the technology infrastructure and internet access and designated schools; add programming at Dyett and Dunbar High Schools and at Brown Elementary and bankroll architecture and design work.
• $32 million for general “facility needs” that include: $20 million for emergency rehabilitation; $6 million for emergency plumbing; $6 million for maintenance and $500,000 in work required by the Americans With Disabilities Act (ADA).

Last month, the CPS bond rating dropped even deeper into junk status, in part because Emanuel used one-time revenue to stave off another teacher strike: an $87.5 million tax-increment-financing (TIF) surplus that the mayor’s own City Council floor leader acknowledged is “not sustainable.”

On Friday, the governor’s veto of the $215 million in teacher pension help prompted Moody’s Investors to warn of a further drop — whether or not Emanuel can muster the votes to override the governor’s veto in the fifteen-day window for such an action.

“If the veto holds, CPS’ deficit net cash position could stand at over $1 billion when its fiscal year ends in June 2017,” Moody’s wrote.

“While the funds from a possible veto override would be positive for CPS, there would still be insufficient funding to alleviate the school district’s severe liquidity issues. CPS remains dependent on cash-flow borrowing and state assistance to sustain its operations and its reserves are nearly depleted. While CPS can still take steps to address its fiscal situation, it’s financial position remains weak and could further deteriorate.”