CPS spent $1 million on outside lawyers at its July 27 meeting alone... Emanuel press release touting 'savings' at City Hall ignores mess in CPS budget presentation and distortion of CPS finances down the street at 125 S. Clark

It's only about a ten-minute walk (or a three-minute limousine drive) from Chicago Mayor Rahm Emanuel's City Hall offices on the fifth floor of 121 N. LaSalle St. to the downtown headquarters of the Chicago Board of Education at 125 S. Clark St., but there is a world of difference between the way in which public finances are presented and managed at City Hall under Chicago's new mayor and the way they are being managed under the Board of Education that Emanuel just appointed as it does its work a few blocks away. If "transparency" is the watchword at City Hall, "murky and mendacious" are the practices at the Chicago Public Schools in budget and financial matters. The two will stand in dramatic contrast this week, as the city's energetic mayor touts additional transparency and care in city finances while ignoring the corruption down the street at the headquarters of the schools.

We'll begin at City Hall. After three months of nearly daily announcements of plans, programs and what he called progress, Mayor Rahm Emanuel announced at midnight on August 21, 2011, that he had gotten "two thirds" of the way towards his goals of saving the taxpayers $75 million from the city budget. (A copy of the press release issued by the Mayor's Press Office is reprinted precisely as it went out to the media below). But while the mayor has indeed forced a great deal of transparency on some agencies of city government, he has simultaneously allowed the Chicago Board of Education and its Chief Executive Officer to provide the taxpayers with a budget that is incoherent, incompetent, and incomprehensible, and has looked the other way while "transparency" in CPS finances has become a growing joke for those who (like this reporter) have followed the CPS budget and studied it for more than a quarter century.

Chicago Mayor Rahm Emanuel at one of his regular media events, announcing the opening of four new branches of Chase bank at Montrose and Central on the city's northwest side on August 9, 2011. At most of his media events, the mayor announces new private sector "job creation" while also reminding reporters that he has been trimming and reorganizing city government. Substance photo by George N. Schmidt.During the coming week, Substance will be reporting dozens of stories about the (more than $5 billion operating) budget which the Chicago Board of Education is expected to pass at its meeting on Wednesday, August 24, 2011. But with the mayor taking public credit for greater transparency and detail in city finances, it's stunning that he (and his supporters in Chicago's corporate media) can ignore the fact that the Chicago Board of Education is going in the opposite direction.

Among other things the mayor has ordered at City Hall is a reduction in the use of outside lawyers by the City of Chicago (see below). The August 22 press release states: "The Law Department has taken back certain cases from outside counsel, has ceased outsourcing certain types of cases, and has engaged four firms to provide pro bono counsel."

But at Chicago Public Schools, the use of outside lawyers continues unabated — and may even grow during the FY 2012 budget year (July 1, 2011 - June 30, 2012). In addition to proposing that the Board of Education expand the number of people working in its Law Department (from 74 to 76, according to the Area and Central Office breakdown of the CPS Proposed Budget 2011 - 2012), the CPS budget for 2011 - 2012 has a little over $1 million listed for "contingencies" for the Law Department. If "contingencies" in the legal work of the Board means payments for outside lawyers, then those dollars have been used up before the Board even votes on the Proposed Budget.

At its second regular meeting since it was appointed by Mayor Emanuel, the Chicago Board of Education continued the expensive policy of outsourcing legal work on a variety of issues.

The total amount approved by Emanuel's newly appointed Board of Education on July 27, 2011 alone was $1,025,000 for outside lawyers alone. One Board Report from the Board's meeting of July 27, 2011, authorized payment of $600,000 to one law firm alone. The URL for that Board Report for those who cannot access a hotlink it

In a touching bit of irony — considering that Mayor Emanuel did a media event with Chase Bank vice president Glen Tilson on August 9 — on July 27, CPS noted that it had to refund more than $6 million to Chase Plaza (10 S. Dearborn) following the corporation's successful challenge of the bank's property taxes for public schools.

The proposed CPS budget includes an increase in the number of people working in the CPS Law Department (which already takes up the entire seventh floor at 125 S. Clark St.) as well as more than $1 million for outside lawyers. But it is unlikely that that amount will even get near the amount CPS will actually have spent by June 30, 2012, on outside lawyers (while having more than 40 lawyers working in house), since the contract negotiations with the Board of Education's unions are being conducted by an outside law firm that has already been paid a great deal since this budget year began on July 1, 2011.

The following is the version of Chicago's city budget reality, verbatim from the Mayor's Press Office, released August 22, 2011:


August 22, 2011


Mayor’s Press Office



Mayor Rahm Emanuel provided a report to Chicago’s residents today on the progress made in achieving the $75 million in savings for 2011, something he announced he would do on his first day in office. Within the first 100 days, $51.3 million has been realized by cutting senior management, merging government functions and freezing non-essential contracts, among many other things. “Promises are merely promises but results are what we are here to deliver to taxpayers,” said Emanuel. “The goals I set for my Administration hold me, and my team, accountable to the people who pay the bills and rely on us to be responsible stewards of the City budget: the taxpayers.”

The Mayor's Office is alerting the public by notifying media, adding an alert on the City of Chicago’s website, posting the information on the Mayor’s Office Facebook page, and tweeting to the City of Chicago’s followers on Twitter.

In addition to the $75 million savings initiative, to end the mandatory furlough program for non-public safety employees, the Mayor's Office has instituted several other cost-savings measures that will realize significant savings this year, including:

$20 million in savings due to the hiring freeze for the non-essential workforce and the enhanced partnership between the Department of Public Health and Federally Qualified Health Centers to provide high-quality health care to taxpayers at a lower cost.

The Mayor's Office expects to achieve $10-12 million in additional savings by the end of the year through seasonal labor reductions and several outsourcing initiatives, including: the management of employee benefits; custodial services at the airports and libraries; and the city’s water bill call center operation.

To date, the following steps have been taken to achieve $75 million in savings in 2011 for the City of Chicago:

Cuts in Senior Management Payroll ($5.5M)

Most of the required reductions in staff and salary have already occurred, with the last few items being processed this month. These payroll reductions, including the savings in the Police Department with their recently announced reorganization, will meet the $5.5 million in targeted savings goal for this portion of the $75 million.

Reduce Outside Legal Counsel Expenses ($3M)

The Law Department has taken back certain cases from outside counsel, has ceased outsourcing certain types of cases, and has engaged four firms to provide pro bono counsel. These combined actions to reduce the use of outside counsel and increase pro bono services are expected to yield the planned $3 million in 2011 savings.

Merge Overlapping Functions Across Departments ($3.5M combined)

The implementation of the merger of the Departments of General Services and Fleet Management (DGS/Fleet) merger is well under way, and a new organizational structure for the combined Departments of Finance and Revenue has been identified. Through the elimination of redundant positions and non-personnel costs, the savings goal of $3.5 million will be achieved by the end of the year. The departments will be fully merged by the start of 2012.

Freeze All Non-Essential Contract Spending ($17.5M)

The 6 percent holdback on all non-essential contracts remains in place, which is expected to achieve the savings goal of $17.5 million by the end of 2011. In addition, the Office of Budget and Management (OBM) continues to review existing contracts that have been outstanding for a substantial period of time but not yet spent against. To date, more than $25 million of such contracts have been identified and queued up for termination by the Department of Procurement Services. While these contract terminations do not result in direct savings, the measure prevents future spending from occurring.

Implement Real Estate and Energy Reductions ($5M)

To date, the City has realized approximately $2.5 million in 2011, yielded through lease credits and cancellations, the re-negotiation of a fuel contract, and adjustments by ComEd to the City’s street-lighting rates. DGS/Fleet has identified approximately $2.5 million in additional savings opportunities for this year, including the procurement of a new natural gas vendor, which may enable the department to exceed its targeted savings. Rationalize and Reduce Vehicle Programs ($1.5M)

DGS/Fleet has taken all actions necessary to achieve more than $550,000 in savings to date through the reduction of alternative fuel prices and the termination of the City’s shared lease program. The department continues to work towards achieving the full target savings through a continued audit of the City’s fleet and reductions in repair and maintenance costs. Return Laborers to Work ($0.5M)

An agreement with Laborers’ Local Union 1001 regarding the return to work of employees currently on duty disability has been drafted and is under review by the union and the City. The list of titles that will be available for a return to work under this policy is being finalized during this review. Parking Enforcement and Traffic Control Efficiencies ($2.3M)

The Office of Emergency Management Communications (OEMC) has fully implemented the plan to significantly decrease full-time Traffic Control Aides in the loop and at O’Hare and Midway Airports. OEMC will maintain 24 full-time positions and will supplement part-time staff as needed for special projects, emergencies, and special events. The Department of Revenue has expanded their parking enforcement to include daytime enforcement in the Loop in order to ensure that there is no reduction in enforcement. It is expected that the full $2.3 million in savings will be realized this year via both cuts to costs and increased revenues. Improve Grants Management ($31.2M)

OBM’s regularly recurring process of flagging, reviewing and preventing the under-utilization of grant funds has captured approximately $12.2 million, about 40 percent of the targeted savings for this initiative. As a result of OBM’s efforts, these dollars, otherwise at high risk of being left unspent or returned to the grantor, will be utilized for City programs and services. OBM has also fully implemented a regularly recurring process for flagging, reviewing and preventing personnel-related overspending on grant accounts.

Department of Water Management/Department of Transportation Project Coordination ($5M)

A total of $4.2 million in savings has been definitively identified under this initiative and will be achieved as the subject projects proceed. The remaining savings are expected to be identified as the departments complete a comprehensive survey of all scheduled water/sewer projects and street/alley resurfacing projects, and reviews GIS data to identify water main replacement and sewer lining projects in areas where deteriorated road conditions currently exist.


August 28, 2011 at 7:26 AM

By: Jeff Burdick

Mayor Emanuel

George-- My sketch comedy troupe hasn't done a comedy sketch specifically about the CPS under Rahm, but you and your readers may enjoy these other "light" lampoons of Mayor Emanuel. Like your watchdog efforts, I feel having informed comic commentary on local politics is a feature of a robust local democracy -- but which is lacking. Good luck with your continued efforts, and hope you enjoy the comic sketches. Just click on the titles starting with "Rahm's Hand"...

Add your own comment (all fields are necessary)

Substance readers:

You must give your first name and last name under "Name" when you post a comment at We are not operating a blog and do not allow anonymous or pseudonymous comments. Our readers deserve to know who is commenting, just as they deserve to know the source of our news reports and analysis.

Please respect this, and also provide us with an accurate e-mail address.

Thank you,

The Editors of Substance

Your Name

Your Email

What's your comment about?

Your Comment

Please answer this to prove you're not a robot:

5 + 4 =