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Seven Chicago College board members say they oppose a plan to permit Chicago Public Colleges to reimburse the town for a extremely disputed pension cost — kneecapping for now the town’s efforts to shut its finances books.
The declaration from the seven members — in a letter obtained by Chalkbeat and despatched to board President Sean Harden on Saturday — means the town doesn’t have sufficient assist from the Board of Training to get the $175 million it’s looking for from Chicago Public Colleges. Reimbursing the town would require a vote from the board to amend CPS’s finances, and such an modification wants two-thirds approval — or 14 sure votes — from the 21-member board.
The board president doesn’t vote until there’s a want to interrupt a tie. Harden didn’t instantly return a name for remark. A spokesperson for the mayor’s workplace couldn’t instantly be reached.
“We can not in good conscience make funds in the direction of issues for which we now have no sustainable technique of elevating income,” stated the letter signed by elected board members Jessica Biggs, Therese Boyle, Jennifer Custer, Angel Gutierrez, Carlos Rivas Jr., Ellen Rosenfeld, and Che “Rhymefest” Smith. The group has to this point emerged as a faction of the board that has typically been essential of insurance policies favored by Mayor Brandon Johnson, who appointed 11 of the 21 board members.
The pension reimbursement has been a significant topic of debate between metropolis and college district officers for months. For a number of board members, the concept of constructing cuts, borrowing cash, or restructuring debt to cowl the cost — which has been floated by Metropolis Corridor and, extra reluctantly, an impartial marketing consultant — has been a nonstarter.
“As a physique entrusted to control the Chicago Public Colleges, its lecturers, workers, and college students, you will need to make choices which are in the most effective curiosity of the district and according to our fiduciary duties,” the letter stated. “Any phrases introduced forth that recommend extra borrowing and the addition of extra debt to the district is just not monetary finest apply and creates additional threat to the district.”
The problem facilities round a pension fund the Metropolis of Chicago is legally obligated to fund, which covers, partly, retirement for CPS staffers who will not be lecturers. CPS started contributing to the pension fund underneath an settlement with former Mayor Lori Lightfoot. Johnson continued that apply, however CPS CEO Pedro Martinez has resisted reimbursing the town this fiscal yr because the district faces monetary challenges.
That resistance has turn into so charged that it helped value Martinez his job.
Within the letter, the seven board members say they may associate with the town in lobbying the state so CPS can levy taxes with the intention to cowl the pension cost sooner or later.
“We see a possibility to work collectively to create extra accountable budgeting on these points sooner or later, and stay up for these conversations,” the letter stated. “We perceive that the monetary entanglement between the Metropolis and CPS are huge and complex.”
The Metropolis of Chicago should shut its present finances by the top of this month and wishes the reimbursement from CPS or should flip to a different repair, similar to dipping into its reserves, which the town argues may lead to a bond ranking downgrade and make it more durable to borrow sooner or later.
The district seems near settling a brand new contract with the Chicago Lecturers Union, and Martinez has stated he desires to make sure the district has the funding to pay for extra labor prices. CPS — which didn’t finances for pension cost or union contract prices — would want to obtain extra funding from one other supply, make cuts, or refinance its debt with the intention to make the cost, in response to the skin marketing consultant’s report.
Town has offered the district with a further $139 million in surplus Tax Increment Financing, or TIF, {dollars}, which come from particular taxing districts meant to spur improvement. The district was set to amend its finances final week with the intention to settle for the extra funding and earmark it towards the pension reimbursement and labor contracts with lecturers and principals. That further cash is just not sufficient to cowl all the district’s upcoming prices.
Nonetheless, amid ongoing contract negotiations and pushback from a number of board members who don’t need to reimburse the town, Harden tabled the modification.
The letter says the listed board members will vote sure on a finances modification that allocates the $139 million towards new union contracts for lecturers and principals.
Reema Amin is a reporter masking Chicago Public Colleges. Contact Reema at ramin@chalkbeat.org.
