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Can CPS avoid closing early?

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Illinois

* WBEZ’s Sarah Karp and Becky Vevea take a look today at how CPS could avoid closing classrooms early this June.

The district is suing the state for more money, but lawsuits are always iffy propositions. It probably can’t borrow the money because it’s pretty much locked out of the markets and borrowing would simply push the problem onto next year. It can’t really delay the coming pension payment, either.

* So, what about TIF money?…

Here’s the rub: TIF surpluses are not available at this point in the fiscal year, mainly because the city can’t surplus money it doesn’t yet have. The next infusion of property tax revenue will be in August, said Tatia Gibbons of the Cook County Clerk’s office.

And August is too late to make that $215 million pension payment by June 30th.

It could cancel construction projects that use TIF money. But it’s unclear how much that would free up by reading the article.

* It could also cut its budget and/or move money around…

Its current deficit amounts to just about 2 percent of its $5.4 billion operating budget. It also has a $1.5 billion line of credit.

CPS says its line of credit is being fully used, though the district still may be able to borrow more money in the short term or shift funds around and hold tight until its next infusion of property tax money in August. […]

The district refuses to say how much money it has on hand, what bills for this year are outstanding and whether it has any wiggle room when it comes to using its line of credit to manage cash flow.

CPS officials said cash flow information is not revealed for “market reasons,” offering only that CPS’ cash flow situation is precarious.

They need to open the books. Stat.

posted by Rich Miller
Friday, Apr 21, 17 @ 11:54 am

Comments

This may be the most dangerous game of chicken CPS has ever played. The entire CPS strategy has been to dare Springfield not to bail them out. They havent done a thing to make it easier for a suburban or downstate legislator to give them more money at a time like this. If they “magically” find a way not to close on June 1 absent some sort of deal, it will make it even more difficult for non-Chicago legislators to ever take CPS threats seriously again. I think CPS is way over their skis with this threat, and when they find that extra money under a couch cushion to keep the schools open they will do serious long term damage to themselves in Springfield.

Comment by Red Ranger Friday, Apr 21, 17 @ 12:07 pm
What do the leaders of the House and Senate who are both Chicago Democrats have to say about the matter? Alderman have weighed in, but the other Chicago state legislators are as quiet as a mouse.

These two now claim to be back benchers who had no role in this “racist school funding formula” pushed by Chicago democrats.

There is a deal is still on the table to get the extra pension funds.

Both afraid to address the media until after the court decision. Real leadership.

Comment by Lucky Pierre Friday, Apr 21, 17 @ 12:27 pm
City & CPS may want to look into Chapter 9 relief for CPS. It’s already insolvent and that’s before its upcoming big pension payment of June 30 it cannot make.

Comment by Deft Wing Friday, Apr 21, 17 @ 12:50 pm
This can’t be happening on Rahm’s watch. He’s a financial genius, who has made millions from his business acumen.

Comment by weltschmerz Friday, Apr 21, 17 @ 12:54 pm
kids will likely not meet the ISBE required 180 class days. Will they allow current seniors to
graduate ? will Universities or Scholarship programs accept them ?

Comment by Texas Red Friday, Apr 21, 17 @ 1:06 pm
==They need to open the books. Stat.===

Yep.

Comment by A guy Friday, Apr 21, 17 @ 1:07 pm
i feel for the parents and kids, however this has been coming for years - “Kick the Can” financing needs to end.

Yes, Receivership in the future for the many of the insolvent operations of the state. None of the egos involved can solve the problem.

Comment by Cannon649 Friday, Apr 21, 17 @ 1:09 pm
While I agree with “open the books” this is more likely to cast more shadow than light. What “the books” will reveal will be subject many multiple interpretations. Completely reject the idea that this is a bailout. It simply repairs an agreement that was vetoed out of spite by the Governor. Also agree that legislators leaders, Chicago and downstate need to take a stand to fund education.

Comment by Peters Post Friday, Apr 21, 17 @ 1:09 pm
Rahm/Forrest - File bankruptcy already!!! Rauner is giving you all the cover you could ever wish for.
Shed the legacy costs and start over on teacher pay scale.
Drop seniority pay. A 20 year Kindergarten teacher need make no more than a 2 year K teacher.
Pay should increase based on level of teaching, not years of service.

Comment by old pol Friday, Apr 21, 17 @ 1:11 pm
=They need to open the books. Stat.=

They are open. A Big Eight firm audits the books every year and the audit is publicly available. So are all their legal bond sale disclosures, in excruciating financial detail, from last year. The budget and all the revenue and expenditures is online.

What’s not available, or obvious, is CPS’s cash position, because it constantly changes. Big question is how much cash they have left, if any. We know they’ve maxed out the short term line of credit and got boxed out of the long-term bond market late last year.

Comment by Bond Buyer Friday, Apr 21, 17 @ 1:29 pm
=The district refuses to say how much money it has on hand, what bills for this year are outstanding and whether it has any wiggle room when it comes to using its line of credit to manage cash flow.

CPS officials said cash flow information is not revealed for “market reasons,” offering only that CPS’ cash flow situation is precarious.=

This is public information not subject to any of the FOIA exemptions. Refusing to release current info is a FOIA violation.

Period.

Comment by JS Mill Friday, Apr 21, 17 @ 1:42 pm
=Pay should increase based on level of teaching, not years of service.=

If only the private sector worked that way. Maybe they can get $25 million to get fired?

Comment by JS Mill Friday, Apr 21, 17 @ 1:44 pm
=== Drop seniority pay. A 20 year Kindergarten teacher need make no more than a 2 year K teacher.===

What a surefire method to attract the best and the brightest into teaching! Keep in mind that the most significant school-related factor in student achievement is the quality of the teacher.

Comment by anon2 Friday, Apr 21, 17 @ 2:00 pm
===cash flow information is not revealed for “market reasons,”===

LOL! I’d like to see them try and use that as a legal argument for withholding public information.

Comment by Anonymous Friday, Apr 21, 17 @ 2:11 pm
What a surefire method to attract the best and the brightest into teaching! Keep in mind that the most significant school-related factor in student achievement is the quality of the teacher.”

Huh? Parents are the single most signifcant factor.

Comment by Ron Friday, Apr 21, 17 @ 2:24 pm
In fairness, CPS asked for an evidentiary hearing to lay all this out in court under oath. Both the State and the judge rejected the need. The state cedes the facts. Its up to the judge on the law now.

Comment by Lawyer Guy Friday, Apr 21, 17 @ 2:25 pm
Lucky Pierre, Madigan and Cullerton don’t care. There are unionized public workforces to protect.

Comment by Ron Friday, Apr 21, 17 @ 2:25 pm
CPS is elegible under state law to issue tax warrants, which is a loan from a bank with future tax receipts as collateral.

Comment by TD Friday, Apr 21, 17 @ 2:28 pm
TD, yeah! CPS needs more debt!

Comment by Ron Friday, Apr 21, 17 @ 2:30 pm
I think we have some rogue public employees here. As JS Mill says any FOIA should be honored.

Bond Buyer leans on audit reasoning. Audits are samples and many times auditors miss the truth. Nix that avenue to any level of confidence. Source documents needed; end of subject. (insert Mautino joke)

I sure learned some things here.

CPS has $6 BILLION in revenue
and interestingly, a $5.5BILLION budget

380,000 students, and 36,000 employees.

That’s ONE EMPLOYEE for every 10.5 students!

Good heavens. What the heck is going in that city?

http://www.cps.edu/About_CPS/At-a-glance/Pages/Stats_and_facts.aspx

http://cps.edu/fy17budget/Pages/revenue.aspx

Comment by cdog Friday, Apr 21, 17 @ 2:33 pm
Years of service does not equal quality.

Comment by old pol Friday, Apr 21, 17 @ 2:42 pm
Old pol, come on, don’t inject reason into this! We have public employees to protect!

Comment by Ron Friday, Apr 21, 17 @ 2:45 pm
A lot of these financial projects go back to Mayor Daley and Renaissance 2010, but Rahm has only made it worse.

https://www.roosevelt.edu/~/media/Files/pdfs/news/Closed-By-Choice.ashx?la=en

Comment by Carhartt Representative Friday, Apr 21, 17 @ 2:45 pm
CPS can layoff about 5,000 employees and provide the same level of service it has today. It’s administrative costs are outrageous, though oddly more rational than other Illinois school districts.

Comment by Ron Friday, Apr 21, 17 @ 2:50 pm
=- old pol - Friday, Apr 21, 17 @ 2:42 pm:

Years of service does not equal quality.=

Of course not. So if I have a company and I promise to pay employees $30,000 a year and my competitor promises to pay them $30,000 a year with yearly raises up to $80,000 for the same job, I wonder where they will go to work.

As for experience not producing better teachers, the research says you’re wrong.

http://www.edweek.org/ew/articles/2015/03/25/new-studies-find-that-for-teachers-experience.html

Comment by Carhartt Representative Friday, Apr 21, 17 @ 2:51 pm
CPS lost 10,000 students last year. Time to cut some payroll.

Comment by Ron Friday, Apr 21, 17 @ 3:00 pm
=CPS lost 10,000 students last year. Time to cut some payroll.=

Or maybe start by stop creating new schools

Comment by Carhartt Representative Friday, Apr 21, 17 @ 3:15 pm
Remember, when hiring “the best” teachers, they can only live in Chicago. Those dreaded teachers outside of the city can’t be considered. GO BACK TO SCHAUMBURG is the rally cry from my fellow city dwellers.

Comment by Jose Abreu's last homer Friday, Apr 21, 17 @ 3:26 pm
I agree, CPS should also close another 50 schools and the associated payroll.

Comment by Ron Friday, Apr 21, 17 @ 3:30 pm
Bankruptcy declarations by governmental entities in Illinois are prohibited by law. CPS is one such.

Comment by Usedtabe Friday, Apr 21, 17 @ 3:46 pm
Usedtabe, another fine example of Illinois’ terrible governance.

Comment by Ron Friday, Apr 21, 17 @ 4:47 pm