What would happen, Board of Education member Rev. Michael Garanzini wondered on Wednesday, if Chicago’s school board did not approve hundreds of millions in more borrowing for the district that’s struggling to keep its doors open?
The mystery endures as he and his five colleagues present cast aye votes on taking out up to $396 million in short-term borrowing likened to payday loans. The six also authorized district officials to sell up to half a billion in bonds to float the cash-strapped district through the new school year until tax revenue pours in.
Meanwhile, board members also unanimously approved hiring a new procurement chief, at nearly $20,000 more than the last one, in a motion that was not on the public agenda.
Jon Maples is moving from California to be closer to family, CPS spokeswoman Emily Bittner said, and will make “38 percent less” than his last job in the private sector overseeing procurement operations for major corporations. She declined to name his salary but sources told the Chicago Sun-Times that’s it’s $180,000, or $19,000 more than Leslie Norgren, who last held the post.
“Mr. Maples oversaw tens of billions of dollars in spending and realized billions of dollars in savings, and he will provide experienced leadership to guide a critical CPS department,” CPS’ chief administrator, Jose Alfonso de Hoyos-Acosta, said in a provided statement.
Struggling all year to balance its budget, CPS asked to borrow up to $396 million against late state block grant payments still owed to the district to finish the rest of the school year and make a $721 million payment for teacher pensions due on June 30. The interest rate for the “grant anticipation notes” still is unknown, and cannot top 9 percent, but still is likely to be high for the district with a junk-bond rating, prompting some aldermen and the Chicago Teachers Union to liken it to a “payday loan.”
Board members also authorized CPS to borrow an additional $215 million on top of a previous $285 million to start the new fiscal year that begins July 1, while it awaits property tax money.
CPS parent Jennifer Jones was among those Wednesday who questioned the borrowing as the promised fix.
“When I heard this news, I thought, ‘Who thinks this is the best option?’ ” she asked board members. “I don’t know what each of you is thinking. I do know that you, our Board of Education is responsible for the oversight of Chicago Public Schools. The decision to drive CPS into further debt doesn’t exhibit watchful care but a quick temporary fix for a long-term issue.”
Board President Frank Clark said officials are left without good choices.
“No one sitting here feels good about continuing borrowing. We don’t do it in our personal life, and frankly we don’t want to continue doing it for the board, but we will do all we can to keep the schools open, and this is the options we’re left with for the time being,” Clark said. “I do believe there will be permanent solutions.”
Mayor Rahm Emanuel has recently toyed with taxing downtown businesses and wealthy Chicagoans to generate between $400 million to $600 million for the schools. And CPS has long been lobbying for adjustments to the state’s education funding formula that would benefit districts populated by poor children. But those efforts are caught up in a larger state budget impasse between Democrat-led legislators and Republican Gov. Bruce Rauner.
CEO Forrest Claypool indicated he would continue to fight for fair funding against Rauner, whom he frequently blames for CPS’ budget troubles.
And yet, Claypool did not mention that late last week that his general counsel quietly refiled a civil rights lawsuit against the governor, a stark contrast to the publicity he sought with press conferences and tours of African-American churches for its original iteration. The original suit was dismissed in late April by a Cook County judge who invited CPS lawyers to take another stab at it.
The lawsuit also was one source of contention between Claypool and his longtime friend, Emanuel, who believed the case a lost cause, as the Sun-Times has previously reported.