A proposal to sell approximately 3.5 acres of city-owned land to the University of Chicago for construction of a new charter school campus is up for consideration in Council’s Housing and Real Estate Committee today.

The committee will consider an ordinance that would transfer a plot of vacant land valued at $755,000 to the university for $1. The university is interested in building a new campus for their existing Woodlawn Charter School, which currently serves 650 6th-12th grade students. U of C operates four charter schools scattered throughout the South Side. An allocation of up to $200,000 in TIF money to one of those schools, Donohue, was approved in 2011.

Woodlawn is about a block away from the development site, and is housed in what used to be a CPS school, Wadsworth Elementary. The new campus would allow the school to increase enrollment to 750 students and includes plans for STEM labs and an outdoor track that would be open for community use.

The university plans to spend $27.5 million on the new three-story building in Ald. Willie Cochran’s 20th Ward, bounded by East 63rd Street to the north, South University Avenue on the east, East 64th Street on the south and South Greenwood Avenue on the west. Cochran has sponsored a series of zoning changes to accommodate the build.

Other notable items on the agenda:

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  a sale of city-owned land in North Lawndale to Sinai Health System and Sinai Community Institute. The 12 city-owned parcels of land in the 24th ward appraised at $255,000 will be sold to Sinai Health System for $1. The hospital will rehab the existing 7,800-square-foot, one-story building into a child development center with eight classrooms, administrative offices, and an outdoor playground. Construction will cost $3.5 million. According to a press release from the mayor’s office, the facility will serve as the new home for the existing Gads Hill Center, “a community-based family resource provider serving low-income residents.” The center has been in operation at its current location on the city’s southwest side since 1898. The move is part of the “Sinai Tomorrow” redevelopment plan of the hospital campus. (24th Ward)

  
  


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  a $40,000 sale of city-owned land to the Luna Liena Group run by the Mickelson family. According to the application they filed with the city, the company will build a parking lot. (3rd Ward)

  
  


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  an amended redevelopment agreement with Windy City Habitat for Humanity(d/b/a Habitat for Humanity). The organization got approval in 2011 to build 16 single family homes to be sold at 100% of area medium income (AMI) and are now seeking an extension. The organization has built two homes so far. Under the extended timeline, construction will need to be completed by March 31, 2018. (34th Ward)

  
  

The Committee on Human Relations advanced an ordinance that would make it harder for landlords to discriminate against veteran and active duty military personnel looking for housing amid questions by some committee members about whether the protections would have unintended consequences for individual renters.

Members Present (11/17): Chairman Joe Moreno (1), Brian Hopkins (2), Patrick Daley Thompson (11), David Moore (17), Jason Ervin (28), Ariel Reboyras (30), Scott Waguespack (32), Milly Santiago (31), Anthony Napolitano (41), Michele Smith (43).

According to testimony from Mona Noriega, the head of the city’s Commission on Human Relations, it is becoming more common for landlords to discriminate against military personnel, especially those who are still active, for fear that notice of sudden deployment will leave the landlord in pinch to fill the vacant unit.

Similarly, veterans who attempt to lease an apartment with their GI bill benefits listed as their main source of income find a hard time getting an apartment, because landlords don’t consider those benefits to be a stable source of income, Noriega added.

The ordinance received some pushback from Ald. Jason Ervin (28) of East Garfield Park and Ald. Brian Hopkins (2) of the Gold Coast. Both gave voice to a concern that a significant number of landlords in the city are “mom and pops” or seniors who are heavily dependent on the income they receive from renting out their apartment or a floor in their home.

“The average dwelling in my ward is a two-unit building, and that means that someone is generally owning and someone is renting, and those residents, they depend on that income to pay the mortgage and to balance out their lives financially,” Ervin explained. These types of renters would be left in a bind to fill the rental units once a military member breaks the lease, he argued.

Victor J. Lagroon, director of veterans affairs for the city, said active duty military officers don’t receive their deployment orders in a 24-hour period, it’s closer to 60 days. In that span, officers can decide whether to continue paying the rent while they are away or break the lease. “Every command in this country requires you to pay your bills. The military is adamant about that,” he added.

Ald. Hopkins echoed concerns on another provision in the ordinance that would make it illegal for a landlord or realtor to retaliate against a tenant who files a housing discrimination complaint against them with the city. Those protections are already in place for employees to file discrimination complaints against their employer.

Without this protection, said Commissioner Noriega, tenants will continue to be reluctant to file complaints for fear of discrimination by their landlords. Such discrimination could come in the form of charging more rent, sexual and other harassment, or other unfair terms and conditions added to the rental lease, she explained. These measures are already codified at the county and state level, she added.

“It’s one thing to have the right to file a complaint, it’s another thing to have an incentive,” Ald. Hopkins warned, arguing the ordinance creates an incentive for a tenant to file a “non-meritorious complaint” when facing possible eviction.

“People who have the skill of being able to move from rental unit to rental unit, they know where the loopholes are, and they know how to play the game and run the clock… and this is one more tool they can use to stay in a place where they’re not paying rent, causing harm to those mom and pops.”

If a tenant files a complaint, that complaint would not stay any ongoing eviction proceedings, a staff representative with Noriega countered. Hopkins ended up voting to approve.

The committee also approved the appointment of Julio Rodriguez to the Commission on Human Relations, a 19-member body created in 2012 to enforce the city’s human rights and anti-discriminatory housing laws. Rodriguez is a deputy director in the office of employment and training for the state’s Department of Commerce and Economic Opportunity.*

“This is an area that I am very, very interested in. Human rights and access to housing, employment, and other services to me is something that we always have to be very diligent on,” he told the committee.

Chairman Joe Moreno (1), who said he knows Rodriguez personally, touted much of his resume, including various roles with the Illinois Latino Prevention Network andIllinois Leadership Development Council, and his induction into the Chicago Gay and Lesbian Hall of Fame.

Correction: Yesterday, we incorrectly reported Rodriguez’s job title based on his LinkedIn, which said he was “director of program services.”

Ald. Jason Ervin (28), representatives from AFSCME Council 31, employees of the city’s mental health clinics, and mental health self-advocates are holding a press conference today at 11:00 a.m. to “discuss a new plan to expand public mental health treatment options in neighborhoods of greatest need by expanding community outreach and hiring needed staff for city mental health clinics,” partially in response to the police shooting of Quintonio LeGrier.

“Recent tragic events such as the fatal shooting of Quintonio LeGrier have shone stark light on the urgent need to reverse years of cuts and closures to public mental health services in Chicago,” a press release from AFSCME reads. Six of the city’s 12 mental health clinics were shuttered in 2012.

Mayor Emanuel recently announced changes to CPD’s crisis training for dealing with mental health issues, and a 24-member “Citywide Mental Health Response Steering Committee,” though their recommendations mostly involve police response and crisis intervention training.

As we reported last week, the Chicago Department of Public Health has one full time psychiatrist for the city’s six remaining mental health clinics, which are mostly on Chicago’s South and Southwest sides. Contractors have been working other psych hours at clinics–some have been there for more than a year. CDPH has touted spending on targeted programs for families of homicide victims and victims of sexual assault, and has blamed a national shortage of psychiatrists for staffing problems.

An ordinance Ervin introduced at last month’s City Council meeting would beef up staffing, require new contracts with managed care contracts, and compel CDPH to increase outreach about available resources.

Another day of headlines for Chicago Public Schools:

• Gov. Bruce Rauner doubled down on his pitch for a state takeover of CPS;


• As part of another round of cuts, CPS officials announced they would end the pension pickup for union employees and eliminate $100 million from classrooms this year; and


• The Chicago Teacher’s Union said Gov. Rauner is a “madman” and CPS can’t be trusted, calling their latest actions “an act of war”.

All this comes as the district makes its second attempt to sell $875 million in general obligation bonds to pay off old debt and fund operations after an eleventh-hour decision last week to pull the offer. Details below.

Rauner Makes CPS Takeover Threat

The day after the Chicago Teachers’ Union’s Big Bargaining Team unanimously rejected a new contract with the Chicago Board of Education, and in the midst of a day-to-day bond issuance to prop up the district’s struggling budget, Gov. Rauner ramped up the pressure by again pushing a state takeover of Chicago Public Schools, telling reporters Tuesday morning he would “fight hard for it,” and was instructing the State Board of Education to plan ahead.

At a press conference on procurement reform in Springfield yesterday, Rauner said he has asked the State Board of Education to begin the selection process for an interim superintendent for Chicago Public Schools, and for the State Board to identify whether CPS meets certain financial conditions for state control. “The state should be able to take over the schools, manage those contracts properly, restructure things, and bankruptcy should be an option. There’s support for it. It’s the right thing to do. We need it around the state, and we’re going to fight real hard for it right now.”

Rauner alluded to CPS’ dire financial straits. In the past few weeks, the Board of Education has seen credit downgrades from two ratings agencies, an unusual “pulling” of its planned $875 million in borrowing, a round of administrative layoffs at its central office, and Monday’s dashed hopes of a new contract with the union.

The governor blamed CTU and the Mayor for proposing an unaffordable contract, painting it as more kick-the-can financing. “[Mayor Emanuel] was pushing off the day of reckoning and the teacher’s union still rejected that. The teachers’ union in Chicago has had complete control, they’ve been calling all the shots for decades, and it’s the reason the system there is so financially bereft, they’re so broke. I hope this rejection will wake up the Mayor, and the City Council, and the taxpayers there and around the state.”

But a state takeover would require enabling legislation from the General Assembly–something House Speaker Mike Madigan and Senate President John Cullertonhave opposed so far.

“He doesn’t have a budget, what is he going to take us over with?” CTU President Karen Lewis joked when asked about the governor’s plans by reporters later that afternoon.  “Please don’t pay any attention to the ravings of a madman.”

For CTU, one of the biggest concerns is over the state’s control of charter school expansion. It was one of the major reasons why the union rejected CPS’ contract offer on Monday. The union wants put a halt to expansion and a citywide moratorium won’t cut it, according to Lewis, because charter schools can get approval from a state-run board. “The critical issue for the contract is about support for public schools, and here’s a governor that has his name on a charter school. There’s no basis for trust there,” said Jesse Sharkey, CTU Vice President.

“What is he going to do, send in the National Guard?” he quipped.

Claypool Outlines Further Cuts, Hopes to Restore Trust with CTU

Hours after Rauner’s press conference, officials from CPS held their own, saying they would work to restore trust and bargain in good faith with leaders from the union. But officials did not paint a rosier picture of the Board’s Finances. CPS CEO Forrest Claypool announced further cuts to classrooms, and said in 30 days, the district would stop putting in its 7% share of teachers’ 9% pension contribution.

“Together, the $45 million we cut from the Central Office a few weeks ago, as well as the $100 million in cuts to school budgets and the $170 million a year in savings from pensions - $315 million in total - are the serious steps we must, and will, take to close our immediate budget gap and make progress towards eliminating our structural deficit,” Claypool read from a prepared statement.

Officials released this briefing doc on the components of the proposed contract, this statement on Monday after no agreement was reached over the weekend, and this fact sheet on cuts announced yesterday.

An $875 million bond deal–part of which will help patch over a cash crunch at the district–will also head back to market tomorrow, Claypool announced. At about this time last week, the deal was pulled. CPS officials denied that investors were spooked by Gov. Rauner and Republican legislators’ moves toward enabling municipal bankruptcy for CPS. Earlier this week, Mayor Emanuel paid a visit to ratings agencies to discuss Chicago finances, but budget officials said the trip was pre-planned, and not in response to CPS’ bond offering.

Claypool said he had both “good momentum” and “strong interest” from investors going into this morning’s planned pricing, and that recent announcements of cuts were meant to signal that the district is doing everything in its power to right its financial ship.

Both Claypool and Frank Clark, the President of the Chicago Board of Education, reiterated that their end of the bargain with CTU was fair. “It would have raised teachers’ pay – both for seniority and cost of living adjustments. It would have prevented teachers from being laid off due to a lack of funding. It would have provided more autonomy for teachers. And it would have restricted charter school expansion,” Claypool said.

Clark said despite Monday’s blow, he’s confident CPS and CTU can reach an agreement.

CTU Officials Respond: "The problem is the lack of trust."

CTU President Lewis characterized the cuts as a “retaliatory tactic” to the union’s decision yesterday to reject CPS’ contract offer. She suggested Claypool's decision to make further cuts to the classroom in the middle of the school year further proves their point that CPS leadership cannot be trusted.

“The problem is the lack of trust. That’s what our bargaining team said,” Lewis told reporters when asked about ways the Board could address the union’s concerns.

Her comments about Governor Rauner and CPS were made at a late afternoon press conference the union called to give an official response to CPS’ newly announced cuts. “We are certain that everyone who works in our public schools is facing a clear and present danger,” she said in her opening remarks.

“CPS has a revenue problem based on debt service, those toxic swap termination payments, charter expansion and their underfunding of our pensions. This is a problem they created, not the teachers, paraprofessionals, and clinicians who work extremely hard every day under deplorable conditions,” Lewis told reporters.

The union, according to Sharkey and Lewis, believes the Board of Education is no longer bargaining in “good faith” because it announced these cuts and the decision to eliminate the so-called pension pickup for CTU members in the middle of ongoing contract negotiations. The union is seeking legal action with the state’s Educational Labor Relations Board.

If the board sides with CTU, the union would no longer have to wait out the 105-day fact-finding period required under ongoing contract negotiations and could call for a strike immediately. Lewis even joked that a significant number of her members have already bought red winter coats in preparation to strike at any time.

On a more symbolic note, Lewis announced the union would be withdrawing its money, about $1 million, from the Bank of America as a way to protest the hundreds of millions of dollars in swap agreements the district has paid out to the banks. The withdrawal is happening today. The union will also hold a rally downtown at 4:30pm today at the Bank of America on Lasalle and Adams.

TIF Surplus Moves Await Committee Action

Meanwhile, a resolution calling for a full the use of surplus Tax Increment Financing funds to offset the budget deficit at CPS will likely be called up in the Budget Committee’s meeting next Tuesday, according to Monica Trevino, Chief of Staff for the resolution’s sponsor, Ald. Carlos Ramirez-Rosa (35). The Mayor’s office told Trevino they believe it will be on the agenda. “We are just waiting to hear from Chairman [Carrie] Austin,” Trevino told Aldertrack.

Legislation in Springfield to allocate all TIF surplus funds to CPS, rather than among other local taxing bodies like Parks and MWRD, is currently sitting in the Rules Committee. Barbara Flynn Currie, the lead sponsor of the bill, is chair of the committee, but there’s no meeting currently scheduled.

In a brief statement tweeted Monday evening, Ald. Will Burns (4) confirmed that he’ll be leaving City Council, without explicitly mentioning his resignation or when it would happen. Listing a series of accomplishments on affordable housing, construction in the South Loop, and raising Chicago’s minimum wage, he closed with a brief line: “I can look back at the last five years and see the change that we have created together, and I believe that our momentum will continue in the future.”

Burns did not return requests for comment Sunday or Monday, but Mayor Rahm Emanuel’s office confirmed his exit and said he would be missed: “I thank him for his time and commitment to public service, and wish him the best of luck."

Patrick Corcoran, Communications Director for City Clerk Susana Mendoza, says while Mendoza had yet to receive resignation documents from Burns, it wouldn’t be unusual for the Clerk’s office not to be CC’d on a resignation email. Corcoran says the Mayor could declare a vacancy at the upcoming City Council meeting on February 10. Airbnb spokesman Christopher Nulty told the Chicago Tribune that Burns will start his new job with the company on March 1 as a senior advisor and director of Midwest policy. Mayor Emanuel has 60 days to fill Burns’ vacancy from the effective date of the resignation, so a replacement would presumably be in place by May.

In a statement, Emanuel said any resident of the ward would be able to apply for the position, and a commission of 4th Ward community leaders, led by Rules Committee Chair Michelle Harris (8) will help determine the finalists and submit their list to the Mayor, who will ultimately choose Burns’ successor. The Mayor’s office says information required for the application and a link will be announced in “the coming days.”

Illinois Election Law states: "If a vacancy occurs in an elective municipal office with a 4-year term and there remains an unexpired portion of the term of at least 28 months, and the vacancy occurs at least 130 days before the general municipal election next scheduled under the general election law, then the vacancy shall be filled for the remainder of the term at that general municipal election.”

Jim Allen, Communications Director for the Chicago Board of Elections, says there will be a special election on February 28, 2017, the day of the Consolidated Primary Election. “If no candidate received more than 50% of the votes, there would be a special runoff on April 4, 2017,” Allen says, the date of the Consolidated General Election.

That seat-filler will likely serve for just under a year until that special election. As for Burns’ position as chairman of the Council’s education committee, Vice Chair Ald. Michele Smith (43) will act as the presiding officer until a new Chairman is submitted to and approved by Harris’ Rules Committee, says Corcoran. In addition to a resolution on the new chair, the committee could also name new members to empty committee slots Burns would leave behind. Burns sits on the Budget, Finance, Housing, Pedestrian and Traffic Safety, Transportation, and Workforce Development Committees.

Burns could also put a bow on some legislative leftovers over the next month. He’s co-sponsor of Mayor Emanuel’s proposed tax hike on tobacco and increase of the smoking age in Chicago to 21. Revenue from the hike would go towards CPS summer programs. The proposal is likely to be on this month’s Finance Committee agenda.

Reform to the Office of the Inspector General could also wrap this month. He’s one of the members of the working committee tasked with ironing out kinks to an ordinancethat would merge the Office of the Legislative Inspector General with the Office of the Inspector General. The merger ordinance was deferred and published last month byAld. Carrie Austin (34) and Ald. Ed Burke (14).

While Burns was a co-sponsor of that merger ordinance, he also warned the ordinance could leave aldermen susceptible to political attacks. He’s also listed as a co-sponsor on Ald. Jason Ervin’s (28) ordinance compelling the city’s mental health clinics to adequately staff psychiatrists and enter into managed care contracts.

The Committee on Human Relations will take up one new appointment and several reappointments to the City’s Commission on Human Relations, a 19-member body created in 2012 to enforce the city’s human rights and anti-discriminatory housing laws.

The only new appointment before the council committee is that of Julio Rodriguez, a director of program services for the state’s Department of Commerce and Economic Opportunity. The other four candidates are reappointments.

The committee will also take up a so-called “clean up” ordinance Mayor Rahm Emanuel introduced on behalf of the Chairman of the Commission on Human Relations that broadens protected statuses for job applicants to include gender identity, in addition to codifying other rules that bar the city from taking into consideration a job applicant's criminal or financial history.

New provisions to the municipal code would also add a layer of protection for tenants who file a claim against their landlord. The change to the Fair Housing Regulations would bar a landlord from retaliating against and evicting a tenant who reports them to the city.

Another technical amendment expands the protections offered to active and retired members of the armed services. The current anti-discrimination provisions offered to military personnel are based on “military discharge status.” By striking “discharge” from the code, the protections would be broadened to include any branch of the armed services.

The Chicago Teachers’ Union rejected the Board of Education’s most recent contract proposal, which, according to CPS, included pay raises and met the union’s key demands on charter school expansion and more autonomy for teachers. But according to the teachers’ union, the contract didn’t go far enough, especially as it relates to curtailing the expansion of charter schools and finding a new stable source of revenue to wean the district off of using borrowed money to pay for operations.

At a late afternoon press conference yesterday, forty members of the union’s “Big Bargaining Team” and CTU President Karen Lewis announced their decision to to reject the Board’s contract proposal, because it failed to address the district’s long-term fiscal crisis and falls short of providing services to the city’s “most vulnerable students.”

“There were a lot of things [in the contract] that were great,” CTU President Lewis said, “however, the things that will affect the classrooms the most, especially around the budget, were concerning to people.”

Several CTU members cited the Board’s “chronic spend and borrow practices,” and, on more than one occasion, mentioned the district’s eleventh-hour decision last week to pull its $850 million bond offering as proof the financial industry agrees with their assertions that, “CPS is broke on purpose.”

“There is no guarantee of funding to do the things… the only concrete piece of funding is out of our pockets. That’s what we do know,” Lewis explained, using the example of the Board’s plan to have teachers contribute a greater share of their annual pension contributions.

“The appointed Board of Education continually prioritizes corporate interests over the interests of our students and as a result, we have a legitimate distrust of the Board of Education,” said Dr. Monique Redeaux Smith, a member of the bargaining committee and 11-year teacher at CPS.

The contract, according to Jim Cavallaro, a special education teacher and member of the bargaining team, was contingent on over 2,200 CTU members retiring at the end of this school year, putting “undue pressure on our veteran members to retire before they intend to.”

While CTU has been without a contract since June 30, 2015, negotiations have been ongoing since November 2014. In December 2015, the Board of Education offered a four-year contract that would eliminate the 7% pension pickup, as well as net pay raises in the third and fourth years of the contract. The proposal also included a reduction in standardized testing and decreased paperwork for teachers.

That same month, CTU held a strike authorization vote where 88% of those allowed to vote gave the CTU leadership the authority to call a strike. Under state labor law, CTU can’t strike until mediation and fact-finding have concluded. Yesterday was the first day of fact-finding, and since that must last for a minimum of 105 days, the earliest CTU could strike is late May. But Lewis wouldn’t say if a strike could occur this or next school year.

When asked how the Board could do a better job of establishing trust, Lewis said the union wants three things: for Mayor Rahm Emanuel to “immediately” declare a surplus of TIF money; have the state legislature pass a TIF surplus bill that would divert the extra property tax revenue to CPS; and impose state rules to make it so the charter schools can’t get around a city-imposed charter school cap.

But the Board said it has done a lot of what the union demanded, including step-and-lane raises for seniority and experience, a commitment to restoring a dedicated 0.26% property tax levy for teachers’ pensions, and a commitment to “push for alterations and revisions” to the legislation that authorizes the Illinois Charter Commission.

In a statement released shortly after CTU’s announcement, CPS Chief Executive Officer Forrest Claypool expressed disappointment in the rejected offer, adding, “CPS remains committed to reaching an agreement with our partners at the CTU that is in the best interest of our students, parents, teachers and city.”

Although she’s in Iowa covering the caucus, Super-Reporter Mary Ann Ahern from NBC5 scooped everyone last night by reporting that Ald. Will Burns (4) plans to retire and take a job at Airbnb. Burns did not respond to requests for confirmation by Aldertrack’s publication deadline.

Ald. Burns is Chair of the Education and Child Development Committee and has been holding a broadly supported resolution from a vote out committee calling for a halt to additional charter schools. Burns, who came to Council after three years as a State Representative and time in Springfield as former-Senate Pres. Emil Jones, Jr.’sconfidant, and was elected alderman with the support of 4th Ward Democratic Committeeman Toni Preckwinkle after she was elected Cook County Board President. Burns has also served as a contractor to lobbying powerhouse, AKPD, recently rebranded as Kivvit.

Despite its name, the Education Committee has virtually no purview over Chicago Public Schools, since education reforms passed in 1995 removed all Council oversight from CPS and gave the mayor total control. Burns is highly unpopular with the Chicago Teachers Union. “Burns is like Ken Dunkin to the CTU,” said one labor organizer speaking anonymously last night.

Because Burns retired before a 28-month cutoff date, the time an alderman must serve to allow the Mayor to appoint a replacement, the 4th Ward will need to conduct a special election to replace him.

“Total shock,” said Ald. Joe Moore (49), who has worked with Burns closely in the past. “If he was not happy, he certainly kept it close to his vest.”

Gold Rush Amusements, one of the largest distributors of video poker gaming machines in Illinois, is still donating money to Chicago aldermen even though Mayor Emanuel remains opposed to its legalization within city limits.

In January, the company wrote a $2,500 check to Ald. Michelle Harris (8). Two months ago the company donated $1,000 to Ald. Joe Moreno (1) and Ald. Raymond Lopez (15). Lopez introduced an ordinance in the Council last year to make video gaming legal in Chicago, but Mayor Emanuel immediately squashed that plan, telling reporters the day it was introduced he would never approve it. The company has already given money to 31st Ward Ald. Milly Santiago ($2,500) and 40th Ward Ald. Pat O’Connor ($300). The 33rd Ward Regular Democratic Organization, run by the ward’s Democratic Committeeman and former alderman Dick Mell, received a $10,000 donation from the company, too.

Since creating a new campaign committee on January 7, Ald. Harris has reeled in quite the campaign cash. Her first two reported campaign transfers to the new Citizens for Michelle Harris campaign fund are large: one $25,000 check was from theConstruction & General Laborers’ District Council of Chicago, another $53,900 check was from the UA Political Education Committee. 27th Ward Democratic Committeeman Walter Burnett transferred $10,000 to Harris’ campaign, as did Ald. Ed Burke (14), with a $1,000 donation to Harris from his personal campaign fund.

City Treasurer Kurt Summers brought in $24,400 in donations, all of which were dated on the January 11th. The biggest check he received, $5,400, the maximum allowable contribution, was from Killerspin, LLC., a table tennis facility near Grant Park owned by Robert Blackwell, Jr., founder of Electronic Knowledge Interchange, a government technology contractor. Like Ald. Harris, Summers got money from theConstruction and General Laborers’ PAC, put they gave him far less than Harris: $5,000. Summers’ also got a $1,000 check from former 43rd Ward alderman andKirkland & Ellis attorney Bill Singer.

Chicago for Rahm Emanuel, the Mayor’s candidate committee, declared $36,581.66 from Stand For Children Illinois, PAC for postage and mail. Emanuel’s overall fundraising fell short of December’s amounts, when he brought in more than $100,000 in contributions. In January, he received three donations: $5,000 from Wellness Healthcare Partners, a home health agency for senior citizens; $1,500 from Bruce P. Weisenthal, an attorney with Schiff Harden, LLP; and $1,500 from Paul Meister, Vice Chairman of GCM Grosvenor, a global investment firm.

South Loop Ald. Pat Dowell (3) and downtown Ald. Brendan Reilly (42) continue to bring in a lot of campaign cash, well beyond that of their colleagues on the City Council.

For the past few months, Ald. Dowell has been reporting checks from the real estate industry. The trend continued in January: Dowell reported a little over $17,000 in total donations, which includes contributions from the prominent zoning law firm DLA Piper($1,500), South Loop Chicago Development ($1,500), and Holsten Real Estate Development Corporation ($1,500). Ald. Dowell also received a $5,000 donation fromErnest Sawyer Enterprises, a consulting firm run by Ald. Roderick Sawyer’s (6) brother. The company was hired by the city in 2014 to draft an analysis recommending the establishment of the then controversial Washington Square Park Tax Increment Financing (TIF) district.

Meanwhile, Ald. Reilly brought in an additional $35,500 to his personal campaign fund in individual contributions ranging between $1,000 and $2,500. Most of the donations were from the real estate industry, too.

This winter, Chicago will need to dig out of a number of major challenges, including policing reform, city pensions and a storm of shootings in our poorest neighborhoods. But the blizzard that threatens to overtake them all is last week’s failed Chicago Public Schools $875 million bond issue.

The concepts behind it are dry, but CPS’ giant problem with bond markets has the potential to permanently damage the school system, halt a burgeoning white, upper-middle class student body, decimate property values in some of Chicago’s hottest neighborhoods and possibly harm the city’s residential property tax base.

I’m not exaggerating.

CPS’ financial problems have been building for some time. It hasn’t had a balanced budget in four years. Last year, it used 13 months of revenue to pay for 12 months of operations. This year, it passed a budget with a $480 million gap, expecting the state legislature to fill it. But as we all know, Republican Gov. Bruce Rauner has refused to support a CPS bailout, and the Democratic-controlled state legislature lacks the votes to override Rauner’s veto.

So the schools have been borrowing. There’s two kinds of debt: Short-term, which comes from banks and has high interest rates, likely in the double digits. And long-term, which comes in the form of bonds, debt taken on by investors in an open market.

Last December, CPS Vice President of Finance Ron DeNard reported the schools had already incurred $1.065 billion in short-term debt on an overall annual budget of $5.692 billion. This sort of short-term borrowing for CPS–especially without a serious revenue solution on the horizon publicly–is unprecedented.

So then we get to last Wednesday’s $875 million bond offering. The offering, which was part of a regular borrowing by the school system–they’re carrying over $6 billion in bonds–failed, just a week after investors heard talk from Gov. Bruce Rauner and Springfield Republicans that they want a state takeover of CPS and to allow the district to declare bankruptcy.

Nobody wants to lend money to an organization that might go bankrupt.

Chicago CFO Carole Brown and CPS CEO Forrest Claypool ran to the microphones Thursday to say that pulling a bond issue from the market at the last minute is “common”. And that Gov. Rauner’s declarations had nothing to do with the bond offering. But we reported analysts saying otherwise. So did Bloomberg. And so did the trade newsletter Bond Buyer.

Last week Claypool said that the school system will, “definitely go to market before next week, early next week at the latest,” but since the bonds are already on the market day-to-day (that means they’re actively looking for investors and trying to figure out how much buyers will pay, and how much they’ll buy), that’s a fairly squishy statement. The key question is, when does CPS expect to close the sale, but saying so would tip their hand to the market too much.

After such a public failure, and little support from the Governor, bond investors are spooked, and CPS’ ability to borrow is on the line. Since its property taxes are capped and Springfield won’t bail it out, without the ability to borrow, CPS could be quickly sent into a death spiral.

Here’s why: While the vast majority of Chicago’s public school students are lower income and minority, some of the city’s trendiest, largely white neighborhoods are deeply linked to CPS. Ravenswood, North Center, Lincoln Square, Roscoe Village, West Lakeview, West Town and Wicker Park have some of the city’s best neighborhood elementary schools, and their high schools are improving, too. Many of those schools have improved because of the personal investment area parents have made, including through many “friends of” fundraising organizations. Gradually, the schools in these areas have become high performing, excellent education options for families.

As a parent for one of those schools, I can attest to the changes. But for four years I also reported for a neighborhood publication covering many of those neighborhoods, and I heard endless stories about school crowding because of their popularity. Realtors were selling homes purely because of the neighborhood school and a burgeoning pride in public education. Ald. Ameya Pawar (47) has made neighborhood school improvement his centerpiece, and recently his neighboring colleagues, Ald. Pat O’Connor (40) and Ald. Tom Tunney (44), have joined him to push for more resources to the area neighborhood high schools, Lakeview and Amundsen.

The local interest in public schools is not altruistic. It’s because housing costs east of Western Ave. and south of Foster Ave. are incredibly expensive. Single family homes are rarely found for less than $600,000, and $1 million-plus is becoming the norm. After paying the mortgage, few families–even ones able to afford a million dollar house–are able to afford the $15,000 per year more per child many private schools cost.

As a result, many of these North Side white parents are living in Chicago, rather than the suburbs, because of their schools.

If the quality of CPS schools begins to decline noticeably, and already many of even the “best” schools have 25-28 kids in a classroom with little special education support, then there’s a danger well-to-do parents will pick up and move to the suburbs. Because they can.

What then happens to these “hot” neighborhoods? Some will stay and find a private school, but many will move out. We should expect to see moving vans filling the streets, but an inexorable decline seems likely. Despite the housing downturn, Chicago’s North Side neighborhoods south of Foster and east of Western have bounced back the fastest and highest in terms of property values.

If CPS can’t get back into the bond markets and fix its finances, much of that is in jeopardy.

In this week's episode, we talk Gov. Bruce Rauner's State of the State address, CPS' scrapped $850 million bond offering, a contentious Board of Ed meeting, and Sen. President John Cullerton's state school funding fix. Plus, we dive into aldermanic fundraising and expense accounts. Music: "Honey Money" by Spectacular Fantastic

The City Council’s Committee on Transportation & Public Way advanced Mayor Rahm Emanuel’s appointment of Paul Connolly to the City’s Board of Local Improvements, a five-member board in charge of overseeing private development on city streets and sidewalks. Ald. Marty Quinn (13), one of the least vocal members of City Hall, gave Connolly and his union work a ringing endorsement.

Members Present: Chairman Anthony Beale (9), Vice Chair Pat Dowell (3), Will Burns (4), Michelle Harris (8), Sue Sadlowski Garza (10), Marty Quinn (13), Jason Ervin (28), Chris Taliaferro (29), Gilbert Villegas (36), Michele Smith (43), Anthony Napolitano (41)

Before a private developer can build anything along the public way, the board must approve the plans and financing. The appointment went through Chairman Beale’s Committee because the board serves under the capacity of the Department of Transportation. Two other appointments to the Board of Local Improvements,Christopher M. Michalek and Edward T. McKinnie, Sr., were approved earlier this month by the full Council.

At his preliminary confirmation hearing with the council committee yesterday, Connolly mentioned his 34 years experience with the Laborers Local Number 4. During his tenure representing 1,400 local unionized construction laborers, Connolly served as an organizer, instructor, and eventually as a recording secretary treasurer and business manager, a title he’s held since 2008, he said. Serving on the board, “fits within the category of construction, which is what I do,” Connolly explained, “I think I will do a good job.”

The position used to be paid, but in 2011, Mayor Emanuel eliminated the stipend as a way to cut costs. That year, according to the Chicago Tribune, the Board of Local Improvements met once, but members walked away with a $19,000- $23,000-per-year stipend.

About half of the aldermen on the committee, many of whom who represent union-heavy wards, praised the Mayor for Connolly’s appointment. A handful, including Pat Dowell (3), Marty Quinn (13) and Michelle Harris (8), said they knew Connolly in some personal or official capacity. Dowell recognized him from a few South Loop construction projects. Harris mentioned his work with the Department of Streets and Sanitation. Quinn remarked that he has known the Connolly family for more than 30 years, dating back to what he called the “Mozart days” at Mozart Elementary School. Quinn, who represents Illinois House Speaker Michael Madigan’s ward and is usually silent during committee meetings, took an opportunity to defend the importance of unions.

“Thank you for what you have done the past 30 years, working on behalf of the working people, many of whom who live in my community right now in the 13th Ward. Right now, their rights are under siege in this state and I think it’s really, really important that you continue your advocacy on the working people,” Quinn remarked.

The rest of the 40 minute meeting was spent approving hundreds of routine items, such as sidewalk cafe permits, planters, honorary street designations, awnings and more. The meeting ran longer than usual because George Blakemore, a Council fixture, signed up to testify on every item he could fill out a pink witness slip for. Chairman Beale suggested that he’d be better served sitting up front by the witness mic for the whole meeting, to save energy walking back and forth from his seat.

Another mayoral appointment to the City’s Board of Local Improvements awaits Council consideration today. The Council Committee on Transportation and Public Way will consider Mayor Rahm Emanuel’s proposed appointment of Paul Connolly to the board in charge of approving any public way improvements by private developers.

Last month, the City Council approved a pair of appointments to the five member board:Christopher M. Michalek, a partner at McGuire Woods LLP, and Edward T. McKinnie, Sr., President of the Board of Directors for Black Contractors United. Connolly, a business manager for the Chicago Laborers’ Pension and Welfare Funds, will fill the remaining vacant seat. All board members serve without term limits or compensation.

In his second State of the State as governor, Bruce Rauner doubled down on his Turnaround Agenda, again reaffirming his commitment to his pro-business, competitive strategy for the state while offering vague education reforms that didn’t include any specific solutions to help Chicago Public Schools and its projected one billion dollar deficit for 2020.

“Change is hard. Reform is difficult, but we can’t just raise taxes again,” Gov. Rauner said during his roughly 30 minute speech as he again called for local control as a way to freeze local property taxes and strip collective bargaining rights for unions. “Let’s give local control now, so homeowners can afford their houses and our communities can compete for jobs with neighboring states that have far lower property tax burdens,” he urged.

On the union issue, he was particularly peeved with AFSCME, the state’s largest public sector union, dedicating a page of his speech calling their demands “out of touch with reality,” and its members overpaid and their overtime-pay purposefully “manipulated.”

Offering a “first step toward bipartisan compromise,” Gov. Rauner affirmed his support for Senate President John Cullerton’s pension plan that would save the state $1 billion by giving state employees a choice over cost-of-living increases to their retirement benefits. He said his lawyers will work with Cullerton’s staff to, “finalize the language as soon as possible.”

He concluded the speech with a ten-point plan for education reform, which he described as “bold and transformative,” and includes long-term goals to increase school choice and funding for low-income and rural students, cut administrative costs at state-run universities and city colleges, and “flexibility” for local school districts when it comes to collective bargaining and issuing contracts. Senate President Cullerton and other Democrats in the state legislature have been calling for reforms to the state’s school funding formula for years.

In a statement released hours after the governor’s speech, the Chicago Teacher’s Union called the governor’s education proposals the “clearest evidence of his continued support for the status quo.” The union took particular issue with the governor’s call to give local school districts more flexibility, claiming that local control is what led Mayor Emanuel and the Chicago Board of Education “to go broke on purpose.”

The Chicago Public Schools “pulled” a planned issuance of $875 million in bonds yesterday, throwing into question the school system’s ability to issue further long-term debt and jeopardizing its ability to get through a major cash crunch in the coming weeks.

Yesterday morning, the school system planned to offer the debt at an exorbitantly high rate of 7.7%, but then pulled the deal before finalizing pricing, typically the last step before a sale. In a call with financial reporters yesterday afternoon, City of ChicagoCFO Carole Brown said, “CPS did not pull its deal, the deal has not failed…[We] had numerous discussions with investors and they are making evaluations of the credit on structure, terms and price. They asked for more time.”

PDF of bond offering document.

However, Brown’s claim did not go over well on the call with financial press, at one point resulting in a shouting match on the call between Brown, CPS Vice President of Finance Ron DeNard and reporters over whether or not it should be termed a “pulled” deal or a “failed” deal.

“We’re still on course to issue CPS’ bonds,” said Brown yesterday. “The fact that the CPS bond deal has not sold today has not altered the funding plan.”

CPS is now planning to go “day-to-day” on the sale, which means that it will keep the terms open until underwriters can assemble a large enough group of buyers to complete a sale. In yesterday’s call, CFO Brown said that the size, structure and yield of the bond offering could still change.

“For bond buyers to be shirking a deal, the issue of the state takeover was likely the last straw. People don’t like to buy bonds that have uncertainty,” said Kristi Culpepper, Executive Director of the Kentucky School Facilities Construction Commission, which manages school bond offerings statewide in Kentucky.

Gov. Bruce Rauner’s announcement last week of plans to attempt a CPS takeover and enable Chapter 9 bankruptcy in Illinois likely impacted this week’s CPS bond offering, said Culpepper. Even if it wasn’t politically likely.

“A lot of muni market participants aren’t digging into the details of the credit,” said Culpepper. “Now you have people looking at it, and evaluating the risk. When you have a giant headline with the governor saying ‘We’re going to take it over,’ people think about it differently.”

CPS’ bond rating is four notches below investment grade, according to ratings agencies Standard & Poors and Fitch.

The 7.7% rate originally offered for the bonds is unusually high for munis, 5.24% higher than the standard rate investment grade bonds get. Because yesterday’s offering was not successful, CPS has two options: Raise the offering to a higher rate to attract more investors, or reduce the amount offered to the number of investors willing to buy. A higher rate means more costly borrowing, a lower amount offered means a more likely cash crunch later in the year.

As Aldertrack reported last week, CPS is heading into a dire cash position, projecting to end the school year in June with about $33 million in the bank. At the start of 2013, the Board had $1.07 billion in the bank. This month’s bond issue will help CPS get through a tight cash position and allow the school system to avoid more borrowing at high short-term rates. In December, CPS announced it had already incurred $1.065 billion in short-term debt.

If the current offering is not completed soon, CPS may fall back on even more costly bank debt, said DeNard. “We will make our cash flow needs. We do have short term financing available,” he said yesterday to reporters.

Meanwhile, if CPS is unable to complete the $875 million bond offering, or it has to reduce the size of the offering, there are few funding options available because the district has already met its property tax cap and Gov. Rauner has refused to approve a bailout without passage of his Turnaround Agenda. Chicago CFO Carole Brown alsosaid earlier this month, “The city has no plans to directly, financially assist CPS.”