Claypool defends his hirings and announces more cuts

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Chicago Public Schools CEO Forrest Claypool on Tuesday defended his decision to surround himself with an expensive cadre of trusted advisers, many of whom served under him at the CTA

Chicago Public Schools CEO Forrest Claypool on Tuesday defended his decision to surround himself with an expensive cadre of trusted advisers, many of whom served under him at the CTA, and denied that he is adding more than he’s cutting at the financially strapped district.

To prove the point, Claypool disclosed plans to save another $1.4 million and eliminate 11 full-time positions by phasing out the Office of Strategic Support Services, known around CPS as “OS4,” that his predecessor Barbara Byrd-Bennett created soon after taking office.

Despite a $1.1 billion shortfall and a $9.5 billion pension crisis, CPS had planned to spend $1.3 million by hiring 10 “directors of schools” in the central office.

Claypool nixed the plan he viewed as a redundant layer of bureaucracy and ordered $600,000 in additional OS4 money transferred to the local level. He also eliminated 10 “family liaisons” he felt were duplicating the work of the city’s Department of Public Health.

Last month, Claypool took a 20 percent whack at his executive budget and laid off nine senior aides drawing $1 million in salaries to dramatize the sacrifice needed to put more money into the classroom.

Claypool ordered the largely symbolic cuts to set the stage for approval of a 2016 budget precariously balanced with additional borrowing, another up-to-the-limit property tax increase and the risky assumption that CPS will receive $480 million in pension help from Springfield.

Without pension help, Claypool has said he would have no choice but to order another round of “unsustainable” borrowing and mid-year budget cuts that will dramatically affect the classroom.

But during a closed-door executive session, Claypool asked the revamped Board of Education to authorize nearly another $1 million in additional spending by hiring five top aides with six-figure salaries, many of whom earned Claypool’s trust at the CTA. One of them also needed a residency waiver to work for CPS while living outside of the city. Claypool also hired four more top aides at about $400,000 a year, whose appointments didn’t need board approval.

The board was also asked to authorize a $500,000 contract to hire Jackson Lewis, a politically connected law firm who helped Claypool negotiate a 2012 CTA contract.

A report stemming from the vote says the firm is being hired “relating to legal matters including labor negotiations, consultation and strategy developments, as well as other matters as determined by the general counsel.”

That’s in addition to the law firm run by Jim Franczek, who continues as the chief labor negotiator for CPS. The firm has been paid more than $5.5 million since 2011, according to CPS vendor records.

All of those moves and that they were discussed in executive session with none of the items appearing on the board’s agenda made Claypool appear somewhat disingenuous. To some, he looked like he was talking out of both sides of his mouth and doing more hiring than cutting.

On Tuesday, Claypool argued that every chief executive needs to surround himself with a handful of trusted advisers and that, sometimes, you have to spend money to save even more.

“You can’t make fundamental change in a large organization or tackle a fiscal crisis of the magnitude facing CPS without a large number of highly talented, proven managers and leaders. We have a new team here at CPS. Just as I’ve done in other management roles, I’m bringing in my own team to help me carry out this mission,” Claypool said.

“Most of these positions are not new. They are individuals who are stepping into critical roles that already exist that are either vacant or I’ve made the decision to replace the incumbent. Occasionally, we will create a new position for a specific and important need. Building a talented team is how you manage organizations effectively.

“But at the same time, we are making deeper cuts throughout the bureaucracy and eliminating redundant or unnecessary positions so our net savings for the taxpayers and the schools provide millions of dollars of new resources. On a net basis, we’re making significant and meaningful cuts in the central bureaucracy.”

As of Tuesday, Claypool said he has added nine people, eliminated 31 and saved a net total of $6.1 million, including phasing out the 7 percent pension pickup for nonunion employees.

He pointed to $191,000-a-year chief internal auditor Andrell Holloway as one of his marquee hires.

“At one project at the CTA, he saved taxpayers more than $6 million in an anti-fraud campaign in the use of CTA train and bus passes,” Claypool said.

“When you get a talented individual, they’re impact players who make a big impact for taxpayers. That’s what’s going to get us over the hump: a strong talented team. In some instances, they make less [than their predecessors]. In some instances, they make more. An individual may be making a [bigger] salary at another job. I’m asking them to leave and come here. It’s not fair to ask them to take a pay cut to do that.”

Claypool said the wave of executive hirings were discussed in executive session because state law requires it. He denied the closed-door debate was an attempt to conceal the hirings.

As for the decision to hire a second law firm to help negotiate a contract with the Chicago Teachers Union, Claypool said it became necessary when the one-year deal was pulled in favor of negotiating a multiyear agreement.

“That’s much more time-consuming and complex. There will be intense periods of work and much more time at the negotiating table. We have to reflect that with additional resources. But the work will be split between two firms, not duplicated. There’s not additional resources that would not have been spent. The same amount of resources will be spent whether it’s one firm or two. These firms will divide the work in negotiating a new agreement with the CTU,” he said.

Claypool said there’s no secret why he chose the Jackson Lewis law firm.

“They’re a very talented, leading labor firm that achieved great results in other domains. At the CTA, they negotiated the first labor agreement in decades. Every other labor negotiation had gone to arbitration after an inability to conclude a negotiated settlement. They worked with me to do that while saving $55 million. We got unprecedented savings from our union partners,” he said.

“Jim Franczek is still the lead negotiator. But the work that happens as a result of bargaining will be divided between two firms. You get strategic advice of two different perspectives and two different lawyers, and the capacity of two firms at times of peak demand in negotiations. But the amount of actual work is fixed.”

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