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Critics prepare to challenge Daley appointees' claims on pension, 'deficit'... Large number prepare for CPS budget hearings

Despite efforts by Ron Huberman and the communications staff of the Chicago Board of Education to deflect critical questions regarding the Board's 2009-2010 budget, a growing number of groups and individuals are preparing to testify at the three budget hearings scheduled for next week, as well as bring their concerns to the Board's August 26 meeting.

Chicago Public Schools Chief Executive Officer Ron Huberman (above left at the Board's February 25, 2009 meeting) deliberately informed certain members of the media — including Substance — at the last minute of his scheduled press conference on the Board's proposed 2009 - 2010 (FY 2010) budget. At the press conference held at CPS headquarters on August 11, 2009, Huberman repeated false claims that CPS was facing a massive deficit because of obligations to the Chicago Teachers Pension Fund (CTPF) and continued to claim that the Board faces huge "deficits." By excluding Substance from the event, Huberman guaranteed that he would not face any detailed questions about his budget claims from the city's news media, which generally repeat the corporate line handed down by CPS. Substance photo by George N. Schmidt.As of August 12, the Board had scheduled hearings for August 17, August 18, and August 19 in the evening. The hearing on August 17 will be held at Amundsen High School, 5110 N. Damen, on Chicago's north side. The hearing will begin at 7:00 p.m., according to a Communication submitted to the Board of Education at its July 22 meeting. Sign in for public participation at the hearing will be from 6:00 p.m. until 7:00 p.m.

The hearing on August 18 will be held at Marshall High School, 3250 W. Adams St., on Chicago's west side. The hearing will begin at 7:00 p.m.; Sign in for public participation at the hearing will be from 6:00 p.m. until 7:00 p.m.

The hearing on August 19 will be held at Robert A. Black Magnet Elementary School, 9101 S. Euclid, on Chicago's south side. The hearing will begin at 7:00 p.m.; Sign in for public participation at the hearing will be from 6:00 p.m. until 7:00 p.m.

August 26 Board meeting to vote on budget

The August meeting of the Chicago Board of Education will be held on August 26 at the Board's headquarters at 125 S. Clark St. in Chicago. The meeting will begin at 4:00 p.m. instead of at the usual morning time of 10:30 a.m. According to the Board, sign in for public participation will begin at 2:30 p.m. at Board headquarters.

The decision to hold the Board of Education meeting in the afternoon instead of in the morning was made after a growing number of teacher, parents, student and community groups protested the fact that for seven years the Board had been meeting during what were once called "bankers' hours", thereby making it impossible for many to attend. Between April 2002 and July 2009, the Board met monthly at 10:30 a.m. at CPS headquarters.

Budget not available to public

Despite years of public examination of the CPS proposed budget, the first budget presented by the administration of Chief Executive Officer Ron Huberman is being withheld from the public. In the past, copies of the budget were distributed to every public school, to every public library, to the offices of the aldermen, and to other public bodies. Additionally, the Board of Education made copies of the budget available at the Board offices for public inspection.

Despite having seven months to prepare it and having claimed that CPS had the largest "deficit" in history, Chicago Public Schools CEO Ron Huberman made certain that the majority of people could not even get to a copy of the "Proposed Budget for 2009-2010". As of August 12, 2009, there were five copies of the budget available for public review, but all of them required that an interested person go to CPS headquarters at 125 S. Clark St., know that the budgets were in the "Office of the Board" on the sixth floor, and know what to ask for. Above, a photograph of the Budget that was provided to Substance on August 12, 2009, with the warning that the budget could not leave the room. Substance photo by George N. Schmidt.As of 2:00 p.m. on August 12, 2009 — less than four working days before the first of three public hearings — the only copies of the CPS proposed budget available for public inspection were virtually hidden from public view. Five copies were in the Office of the Board of Education on the Sixth Floor at CPS headquarters at 125 S. Clark St. But in order to review those copies, members of the public had to know where to go to look. There were no notifications or signs in the lobby of CPS headquarters.

At the Office of the Board, anyone who wishes to read one of the five copies of the proposed budget is told that the budget cannot leave the Board's offices. Board officials do not even provide a reading desk for the reading. Instead, members of the public are directed to a faux leather couch.

When asked about the problem in providing the proposed budget to the public for review prior to the beginning of the hearings on August 17, members of the staff of the Board's Office of Communications stated that since the proposed budget was available on line, the Board had fulfilled its legal duty to make copies available for review.

CPS communications chief Monique Bond told Substance that the cost of reproducing the budget was a factor in the Board's refusal to make copies available. Bond told Substance on August 12 that additional copies of the proposed budget were being printed that afternoon — at a Kinko's. Prior to the current administration, CPS had its own (unionized) printing facilities and traditionally was able to turn around large items like the budget with prior planning.

[Full disclosure: this reporter was part of the 1989 "Budget Transition Team" and helped prepare the proposed budget at that time for printing].

Budget contents not proofread or fact-checked

By August 12, 2009, it was clear to anyone trying to review the budget that CPS and Ron Huberman are trying to make it impossible for the public to review this document prior to the Board's August 26 meeting. With the hearings scheduled for August 17, 18, and 19, the need for people to review the actual budget with enough time to do some comparisons becomes more dire.

Although CPS Communications told the public that copies of the proposed budget would be available by August 7, the only copies available to the public as of August 12 were stamped "August 10..." at the Office of the Board at 125 S. Clark St. Substance photo by George N. Schmidt.In one way, the lack of a publicly available budget is not a problem for those who want to spin the news from City Hall or CPS. Catalyst magazine, the TV stations, the Chicago Sun-Times and Chicago Tribune, and the rest of the media have already completed their stories about the CPS budget based on the talking points prepared for them by CPS and City Hall and the spin being provided on a regular basis by the CPS Office of Communications.

Substance missed the Tuesday (August 11) press conference at CPS because CPS Communications sent us the notification of the 3:30 p.m. media event at noon the same day. This is fairly typical at this point. Despite his supposed technocratic brilliance, Ron Huberman refused to answer any specific questions about antying. He talks ever more blandly than Arne Duncan is pre-digested talking points, and the facts never get in the way of a good narrative.

I only had an hour on August 12 to go over the "proposed budget" at the Office of the Board at 125 S. Clark St. As of 2:00 p.m. on August 12, 2009, the only copies of the budget available to the public for review were at the sixth floor offices of the Board at 125 S. Clark St. Three people from the Office of Communications told me, at different times, that in their opinion the Board was complying with the law and procedure by having the proposed budget available in PDF format on line.

Previously, the Board had copies of the proposed budget available at every public school, at every branch of the Chicago Public Library, at the office of every alderman, and at other locations (including City Hall). As everyone knows, other public bodies publish their entire proposed budget in the Sun-Times or Tribune (e.g., the Cook County Board, which is so maligned under Todd Stroger).

The "proposed budget" that you can read if you can get to 125 S. Clark St. during regular business hours consists of 345 pages of text, plus a CD which contains additional information.

Distortions and outright lies: The "Reserves" and the "Stabilization Fund"

At every point in the proposed budget, there are distortions or outright lies. Last year, at the beginning of the annual budget hearings, I said that for the first time I had to grade the proposed budget with an "F" because it was such a mess. What grades is lower than an "F" -- because this thingy is a bigger mess than at any time in history. And it is simply full of lies and some silly evasions, as even a quickie read shows.

Ron Huberman's accounting for the Chicago Board of Education's reserves deliberately misleads the public. In 2008, CPS announced that it was splitting the system's huge reserves into two separate lines, one of which was thereafter going to be called the "stabilization fund." The "stabilization fund" was supposed to remain at five percent of the total operating budget, while the rest of the reserve was being accounted for in a separate line. Supposedly, the stabilization fund took care of all requirements the rating agencies had for CPS reserves. The text of the 2009-2010 proposed budget approved by Huberman deliberately obscures the way in which the two funds exist, and also makes the claim (not verified) that CPS has to sustain a five percent reserve. Substance photo by George N. Schmidt.Despite the claims reporter in the corporate media (quoting Ron Huberman) about draining the "Reserve", CPS will end the most recent fiscal year with a combined Reserve well in excess of anything legally or normally required. Since CPS does not audited and produce its annual financial report until December, however, the public won't be able to compare the claims made by CPS officials in July and August (and going back to the claim about a "$475 million deficit" in March) until December 2009. That's when the Comprehensive Annual Financial Report for FY 2009 (the 2008-2009 school year) will be available.

CPS has been lying about its reserves for several years. Last year, because the total reserve had increased to nearly 10 percent of the total operating budget, CPS split the reserves (that was already a plural, as we'll be reporting) into two broad categories:

Reserve

"Stabilization Fund"

The so-called "Stabilization Fund" was a new invention, supposedly to sustain the required five percent (against what total has not been clarified) for "reserves." However, the claim that CPS must -- MUST -- have reserves totaling "five percent" of the total budget was not supported. The last time Substance asked the bond rating agencies whether they required five percent, the answer, ultimately, was "No". In fact, three years ago (last time Substance called Standard and Poors, Moody's Investors Services, and Fitch Ratings), they all stated that they wanted to see a level of reserves that made them "comfortable". But, they added, they would not think of requiring a fixed amount (or percentage) for an entity that had stable management with a long history of conservative budgeting, was based on tax revenues, etc., etc., etc. According to the agencies at the time, a history of conservative management such as the one in Chicago was as important as a fixed percentage. Substance will utilize the Freedom of Information Act and other means to determine how the "five percent rule" has been established, and by whom.

As a result of this fact -- viz., that nobody from the rating agencies is going to be publicly on the record stating that five percent of the CPS total budget must be kept in reserve -- CPS is now claiming that it is "policy" to have five percent in reserve. Whose policy? Based on what requirement, CPS or other?

Such questions have been evaded by Chicago schools officials for years. Traditionally, Arne Duncan's method was to try and avoid being asked the precise question and then answering "I'll get back to you on that." He never did.

During the past year, when CPS was being reviewed for its most recent bond offerings, Fitch ratings noted (in passing) that the CPS reserves were in excess of $400 million! Combining the thing they are calling their "reserves" with their newly created "stabilization fund," that is probably still true. Therefore, the statements made by Ron Huberman (and quoted by our corporate media colleagues as fact) regarding the reserves are simply lies. While they are typical bureaucratic lies (leaving out a key fact, like the existence of a "stabilization" fund) they are still lies.

Four years ago, CPS also discovered it had "reserves" in several large departments. When CPS announced that it was rolling back some cuts in special education services in 2006, the question was asked "Where did the money come from?" At the time, the chief officer of specialized services told a meeting of the school board that specialized services had reserves.

The 'rainy day fund' meets the rainy day

The reserves are a major question at this point in history. Those "rainy day funds" (so-called in the media) exist in every nook and cranny of Daleyland, but most especially at CPS. That is because over the past ten years, CPS has gotten away with low balling teacher pay and benefits and couldn't spend all of the money it was getting as a result of increased property taxes and increased tax revenues.

During the hearings next week, the questions about the actual "reserves" (that's a plural because reserve funds also exist at various other points in the massive CPS budget) one of the major questions will be the "reserves."

The budget includes drolleries, worth noting.If you want to find "Taft" look under the "Ws"

The budget ensconced in its secret hiding place at 125 S. Clark St. contains a breakdown of spending for every regular school in the system. (No such exists for the burgeoning number of Chicago charter schools, at least not in the Proposed Budget).

But unlike other places, the school-by-school does not track history.

The Huberman administration decided to continued the Chicago Public Schools tradition of listing schools by the first name, rather than last name. Hence, on the page above, the magnet schools are listed as follows: "Thomas A. Edison Regional Gifted Center" (with the wrong address), followed by "Walter Payton College Preparatory High School"; followed by "Whitney M. Young Magnet High School"; followed by "William Jones College Preparatory High School." The above is a photograph of Page 260 of the proposed budget taken at CPS headquarters on August 12, 2009. The budget lists a total of 22 schools named "William" in its main schools section (there are other sections for magnet schools, so-called "performance schools" and other types of schools). There are also six schools named "Richard" (Edwards, Henry Lee, J. Daley, J. Oglesby, Crane, and Yates). There are also six schools named "Robert" but only one named Roald. Substance photo by George N. Schmidt.A citizen looking for a particular school, however, needs to know that according to CPS methods of tracking such things, it's impossible to find the schools in any normal way. Virtually every organization maintains its lists in alphabetical order by Last Name, then First Name. It lessens the confusion. Since Paul Vallas initiated corporate school reform in beginning in 1995, CPS has deliberately listed its schools by First Name (!).

For example, if you look for "Taft" or "Harper" (high schools) under "T" or "H", you don't find them.

Why?

Because CPS, unique among public bodies that maintain complex records, has decided to alphabetize schools by FIRST NAME!

Hence, the following:

"William K New Sullivan Elementary School" (p. 220)

or

"William Penn Elementary School" (p. 220). or

"William Rainy Harper High School" (p. 221).

There are 22 schools in Chicago named "William" but no "Taft High School."

An award winning rendition

Needless to say, the CPS budget again reminds us that it has won awards. Before you get to the CEO's message, there is a page that contains the "Government Finance Officers Association Distinguished Budget Presentation Award..."

A growing group of people will be devoting some time over the next couple of days documenting how CPS is making it impossible for most of the public to review the "Proposed Budget."

Expect that a larger number of people to be testifying and asking questions at the budget hearings on August 17 (Amundsen High School, listed under "R" for "Roald Amundsen High School), August 18 (Marshall HS, listed under "J" for "John Marshall High School"), and August 19 (Black elementary school, listed under "R" for "Robert A. Black Magnet School").

The hearings begin every night at 7:00 p.m.

The public is asked to sign up to speak between 6:00 and 7:00 p.m.

Some long time observers of CPS are taking bets on the following:

First, no one from the corporate media will be there to cover the hearings on August 17, August 18, and August 19.

Second, Ron Huberman and the seven members of the Chicago Board of Education will not be at the hearings to listen to the concerns of the public, answer questions about the nearly $7 billion budget CPS proposes, and the ridiculous document and its ridiculous context.

BUT

On August 26, 2009, the seven members of the Chicago Board of Education will vote unanimously to pass this budget, as presented by Huberman, without discussion or debate.

The seven members of the Chicago Board of Education, like Ron Huberman, were appointed by Mayor Richard M. Daley. And Mayor Richard M. Daley (whose father's school is listed under "R" rather than "D" in the proposed budget) and Richard M. Daley has already declared that the budget is another example of how wonderfully things are going under the latest iteration of Mayor Daley's Miracle Management Team.

Someone will probably ask the Board members during public participation to locate one of the "William" schools in the budgets they will have ponderously before them. There is another joke embedded in how they are alphabetizing within "William" and elsewhere which Substance will be saving for August 26. 

Final edited version of this article posted at www.substancenews.net August 13, 2009, 6:00 a.m. CDT. If you choose to reproduce this article in whole or in part, or any of the graphical material included with it, please give full credit to SubstanceNews as follows: Copyright © 2009 Substance, Inc., www.substancenews.net. Please provide Substance with a copy of any reproductions of this material and we will let you know our terms — or you can take out a subscription to Substance (see red button to the right) and make a donation. We are asking all of our readers to either subscribe to the print edition of Substance (a bargain at $16 per year) or make a donation. Both options are available on the right side of our Home Page. See "CLICK HERE TO SUBSCRIBE" or "CLICK HERE TO DONATE." For further information, feel free to call us at our office at 773-725-7502.



Comments:

August 13, 2009 at 3:48 PM

By: Diana Lauber

Budgeteer

I went to the Galewood-Mont Clare library branch to see a hard copy of the CPS proposed 2009-2010 budget. There weren't any copies. Back to the Internet, I guess.

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