Relying on nearly half a billion dollars from Springfield and more than $250 million in costly “scoop and toss” borrowing, the Chicago Board of Education unanimously approved the FY2016 budget for Chicago Public Schools Wednesday.

The $5.7 billion budget includes $200 million in what the Board called “painful cuts” that affect CPS’ central office and hundreds of teachers. The budget also calls for a property tax hike to the cap for Chicagoans, and draws on TIF surplus funds.

“There is no question that the budget approved today is not the budget we want for our schools this year, but it does reflect the District’s extremely challenging financial situation in the absence of pension reform and sufficient state education funding,” CPS CEO Forrest Claypool said in a press release hours after the vote. “We are pleased leaders in Springfield have acknowledged our structural deficit must be addressed, and we will continue working diligently with our partners to ensure a solution is reached that brings CPS the resources it needs to provide every one of its students with a high-quality education at the school of their choice.”

The Board’s so-called “partners in Springfield,” have until August 31 to put a balanced budget in place. Without Springfield’s help, Board of Education officials have said they’ll hit a financial wall at the start of 2016.

Chicago Teachers Union President Karen Lewis was scheduled to speak at a City Club of Chicago luncheon today, but Vice President Jesse Sharkey will be taking her place. The sold out event begins at 11:30 a.m.

A month after appointing Lori Lightfoot as the new president of the Chicago Police Board, the City Council Committee on Public Safety approved two new members to the Board, including a former Los Angeles police officer turned investment banker.

Committee Members Present: (8/19 members) Chairman Ariel Reboyras (30), Vice Chairman Willie Cochran (20), Gregory Mitchell (7), Ed Burke (14), Matt O’Shea (19), Chris Taliaferro (29), Anthony Napolitano (41), Ameya Pawar (47).

John Simpson, a partner at the investment banking firm Broadhaven Capital Partners, who also contributed $77,000 to Mayor Rahm Emanuel reelection, told the Committee that he got a job with the LAPD after graduating from Harvard Law School. He eventually moved to Chicago in 1989 and has worked in the financial services industry for the last 30 years.

If his appointment is approved by the full City Council next month, he will be the only person on the nine-member board with previous law enforcement experience. Former Chicago Police officers Ald. Anthony Napolitano (41) and Ald. Chris Taliaferro (29) had called for more police experience on the Board during the Lightfoot hearing, when they expressed concerns that relationships between police and the communities they serve are at an all-time low. They made similar remarks at yesterday's hearing, and were joined by two other former police officers on the city council, Ald. Ed Burke (14) and Ald. Willie Cochran (20).

But unlike Lightfoot's confirmation hearing, which consisted of a lengthy Q&A and a laundry list of concerns about strained community-police relations in Chicago and across the country, yesterday's nomination meeting was less of an interrogation and more reflective.

Committee Vice Chairman Cochran (20) gave what can only be described as a monologue about community policing following Simpson's testimony. "We see more bad than good in our communities," Ald. Cochran said as he went on to describe the difficult positions police face in the line of duty and the responsibility of the Police Board to keep the officers accountable. "We are counting on you to make us better."

In addition to approving Simpson's appointment, the committee also approved the appointment of Claudia Venezuela, an immigration lawyer with the Heartland Alliance National Immigrant Justice Center. During her testimony, Venezuela gave a brief synopsis of her resume highlighting her expertise handling policing issues in immigrant communities. The meeting went on somewhat of a tangent after that, as Ald. Burke asked Venezuela if she thought an ordinance he championed back in 2002 allowing Mexican immigrants obtain library cards and bank accounts with their Mexican issued ID was successful.

"I think it benefited many individuals forced to live in the shadows," Venezuela responded, adding that she worked with people who benefited from the program. The conversation moved from the Matricula Consular cards to a discussion of legislation in Springfield from Rep. Daniel J. Burke, Ed Burke's brother, related to detention centers. Burke eventually spiraled into an odd, exhaustive history lesson on James Shield, an immigrant who ended up serving in the U.S. Senate for three different states, Illinois, Minnesota and Missouri.

The third nominee, William Conlon, a partner at Sidney, LLP, was absent, but the Committee advanced his re-appointment to the board.

Bankruptcy for Chicago Public Schools would not only be a long and complicated litigation process, but could cause a “death spiral” for the district, according to a group of panelists at a City Club of Chicago event Monday titled, Chicago Public Schools: Is Bankruptcy Inevitable?

Governor Rauner floated bankruptcy as a potential fix for Chicago Public Schools’ financial problems in April, but CPS would have several legal hurdles to jump before it could declare it is out of cash.

For starters, a municipality like CPS couldn’t file for Chapter 9 bankruptcy without state approval, according to panelist George Panagakis, a lawyer who deals with reorganizations, debt restructuring, and insolvency. But even if the state allowed CPS to file for bankruptcy, Panagakis says the school district would have to meet three eligibility criteria.

First, it would have to be insolvent in near-term cash flow. “It would have to be really really out of money,” Panagakis explained. Whether CPS could raise more revenue or make more cuts would have to be hashed out in court.

Second, the district would need a plan for how to get out of bankruptcy, either by extending debt maturities, reducing the amount of principal or interest, or refinancing the debt by obtaining a new loan.

And lastly, CPS would have to negotiate with a majority of its creditors to get a consensus that bankruptcy is the best step forward.

Getting legislation in place, then convincing a judge the district meets all three requirements would take a year or more to prove, Panagakis said, adding that filing for bankruptcy can be a useful way to create a forum as a last ditch effort to try to straighten out finances. He said talking about Chapter 9 is a good thing.

But Charles Burbridge, a deputy chief financial officer at CPS 20 years ago, called talk of bankruptcy a red herring, saying education policy and pension funding are the real issues.

“It’s reprehensible that the state would even consider bankruptcy,” he said, to applause from the crowd. “CPS is a creation of the state, the state controls almost every aspect of education… the state needs to step up and take responsibility for it.”

In an interview with the Tribune about the source of CPS’s budget woes, Burbridge, now head of the Chicago Teacher’s Pension Fund, talked about his part in contributing to the problem back in 1995. “We felt that we made good calls on the priorities…History may judge that we didn't. Certainly good pension funding shows that we didn't. But we thought we were doing good things." He told today’s crowd the pension fund survived through World Wars and a Depression, but can’t survive without full employer contributions.

Panelist Troy LaRaviere, the principal of Blaine Elementary School, a self-described passionate defender of public schools, didn’t partake in the City Club’s lunch in solidarity with the hunger strikers for Dyett High School. He argued emotionally that blame shouldn’t rest entirely on Springfield’s shoulders, and read a prepared statement saying Mayor Emanuel’s allowed poor financial decisions to continue well into his administration.

“Pensions are not the source of our problem. This administration consistently misappropriated pension funds and then attempts to convince us that pensions themselves are the problem. That’s like a thief stealing your rent money and then attempting to convince you that the landlord is your problem.”

LaRaviere said reckless and corrupt city borrowing, a “parasitic private sector,” and state legislators that create a climate for “this kind of nonsense to happen,” are taking all of what little teachers have.

And then there was Jesse Ruiz, vice president of the Chicago Board of Education, who bypassed bankruptcy talk altogether and instead blamed Springfield for the district’s financial woes. “The fact of the matter is, state support for public education has been in decline,” he said. Chicago schools have taken a $100 million hit in this past fiscal year alone, Ruiz added.

Ruiz is now tasked with voting on CPS’s proposed budget, which includes a $450M gap that the district hopes Springfield will fill. CPS CEO Forrest Claypool has said there’s no Plan B in place if Senate President John Cullerton doesn’t pull through on the bill he is championing in Springfield to help give the district a break.

Just after the panel, the Civic Federation issued a press release urging the Board of Education to reject CPS’s budget, calling it irresponsible for the same reason one member of the crowd brought up: there’s no Springfield rescue yet. “This budget is yet another financially risky, short-sighted proposal and fails to provide any reassurance that Chicago Public Schools has a plan for emerging from its perpetual financial crisis,” the release said. You can read Civic Fed’s full report here.

Former CPS CEO Paul Vallas might’ve summed things up most succinctly when he said bankruptcy would be “the kiss of death for CPS,” not only because kids and teachers could flee to private and charter schools, decimating per-student funding. “The legal obstacles, the implications, the fact that the courts are going to force you to demonstrate that you’ve done everything that you could normally do in a normal political environment to resolve the issues before they declare bankruptcy, it’s just not an option just for those reasons alone. But it’s also not an option because who wants to send their kids to a bankrupt school district?”

City Treasurer Kurt Summers hired former Illinois Tollway executive Kristi Lafleur and the former Chief Investment Officer for the New York State Insurance fund, Miriam Martinez, to help manage the city’s $7 billion investment portfolio.

Lafleur will take over the role of Deputy Treasurer, Chief Operating Officer with a starting salary of $113,898, according to 2015 Budget numbers. Lafleur will oversee day-to-day operations and help Treasurer Summers implement several key initiatives he unveiled when he first took office in December 2014. This includes his neighborhood and infrastructure investment plan he dubbed “Invest in Our Chicago”, as well as his proposal to streamline fees the city pays financial service firms that handle the city’s 11 public pension funds.

As head of the Tollway Authority in the Pat Quinn Administration, Lafleur was widely credited with reducing patronage at the agency and helping to make it more efficient, following the excesses of the Blagojevich years.

Martinez will serve as the Treasurer’s new Chief Investment Officer and will carry out the same duties she had in her former job as the fiduciary of the $16 billion fund for New York state public employees.

In addition to hiring Lafleur and Martinez, Summers also named Alexandra Sims the new Director of Programs and Intergovernmental Affairs.

The Committee on Economic, Capital and Technology Development approved roughly $3.3M in property tax breaks over twelve years for Chicago-based companies looking to expand on dilapidated industrial sites yesterday.

Members also advanced Mayor Rahm Emanuel’s four appointees to the Community Development Commission (CDC), an independent body that oversees the city’s Tax Increment Financing (TIF) districts and Special Redevelopment Areas. One of the appointees, Gwendolyn Butler, was absent from the meeting, but the committee approved her nomination anyway.

Committee Members Present: (10/20 members) - Vice Chairman Leslie Hairston (5), Joe Moreno (1), Gregory Mitchell (7), Patrick Daley Thompson (11), Toni Foulkes (16), David Moore (17), Michael Scott, Jr. (24), Jason Ervin (28), Gilbert Villegas (36), John Arena (45)

Three of Mayor Emanuel’s four nominees to the Community Development Commission (CDC) made brief statements before the Committee quickly approved their appointments. Other than Ald. David Moore (17) asking each appointee to explain what they expect to bring to the board, few questions were asked. Each appointee spoke for less than five minutes.

Cornelius Griggs, a native of the Austin community on Chicago’s West Side, told aldermen he has served on Chicago’s Community Land Trust, in addition to working for TRIO, a national organization that lobbies in Washington, D.C. on behalf of low income students.

Griggs was followed by Celena Roldan Moreno, the Executive Director of Erie Neighborhood House and 1st Ward Ald. Joe Moreno’s wife. When Ald. Moore asked Roldan Moreno to explain what she brings to the table, Moreno said she brings “an important community perspective of what it means to do community development,” and is familiar with the needs of low income, vulnerable populations. Ald. Joe Moreno (1) invoked Rule 14 and abstained from voting to approve his wife to the 15 member panel.

The third appointee, Philip Alphonse, gave a brief synopsis of his resume, highlighting his experience founding The Vistria Group, a private equity firm that manages $350 million and focuses on education, healthcare, and financial services. Alphonse has lived in Chicago for 13 years and lives in Roscoe Village.

The Committee also approved four Class 6(b) real estate tax incentives for several Chicago-based companies interested in expanding their operations. Most of the companies started in the Fulton Market district, but can no longer afford rent in the rapidly gentrifying neighborhood.

The class 6(b) real estate tax incentive is intended to reduce vacant industrial real estate in Cook County by providing businesses with a lower tax rate if they commit to rehabbing existing buildings or constructing new industrial property. Properties given the designation are assessed at 10% of market value for the first 10 years, 15% in the 11th year and 20% the 12th year. Industrial buildings that don’t receive the designation are assessed at 25% of market value. And while the following resolutions list the corresponding aldermen for the ward in which the property is located as the sponsor, this press release attributes the applications to the Mayor.

Altogether, the applicants plan to spend more than $16M renovating or building on those sites.

Economy Packing Company
R2015-568 | 4501 W. 42nd Place |  23rd Ward

According to the testimony from John Malloy, with the Department of Planning and Development, the applicant, Economy Packing Company, seeks a Class 6(b) Property Tax Incentive for the acquisition and rehabilitation of the 96,000 sq ft. warehouse on 4501 W. 42nd Place. Founded in 1932 and originally located in Fulton Market, Economy Packing Company is a wholesale distributor of fresh and frozen foods, and a poultry processor. It recently acquired Sam’s Meat.

Both companies will move into the space formerly occupied by Kronos Euro, a Mediterranean food distributor that relocated out of Chicago in 2009, Malloy said. Economy Packing will spend approximately $4.9 million in renovations. If the Class 6(b) designation is approved by the full City Council, the company is estimated to save approximately $1.2 million dollars in property taxes over the 12 year incentive period.

REWL Venture, LLC on behalf of Marilyn Miglin, LP
R2015-571 | 315-321 N. Loomis St., 324 N. Odgen Ave. | 27th Ward

Marilyn Engwall, with the Department of Planning and Development, testified on behalf of the applicant, REWL Venture, a limited liability company created in 2013 for the redevelopment of the project site on 315 N. Loomis St. The applicant has spent $1.9 million on upgrading the three-story, 21,00 sq ft facility for Marilyn Miglin, LP, a Chicago-based beauty products company started in 1963. The company has already leased 65% of its available space and plans to use the facility as a warehouse and distribution center. The company will save approximately $261,000 in property taxes if the designation is approved by the City Council.

Wichita Packing Co; Elizabeth St. Partners, LLC
R2015-573 | 340 N. Oakley Blvd; 333-340 N. Claremont | 27th Ward

Chicago-based Wichita Packing Company, a pork ribs processor and distributor, seeks a property tax incentive to help buy and rehab a 50,000 sq ft building on 340 N. Claremont Ave, on the Near West Side. Founded nearly a decade ago, the company was originally located in the Fulton Market District, and is interested in expanding its facilities. According to Essie Banks, with the Department of Planning and Development, the applicant plans to spend $4.1 million on renovations and would save $477,691 on property taxes over the next 12 years if the designation is approved the City Council.

4GP, LLC on behalf of Primrose Candy Company
R2015-570 -1800-1856 N. Kostner Ave.; 4419 W. Cortland St. | 36th Ward

Marilyn Engwall, with the Department of Planning and Development, also testified on behalf of Primrose Candy Company, a 4th generation family owned business specializing in hard candy and popcorn confections. The property tax incentive would help support the $5.2 million rehabilitation of a 151,000 sq ft building in Hermosa, in addition to potentially saving the company $1.373 million in property taxes over the next 12 years.

Now that former federal prosecutor and Chicago Police investigator Lori Lightfoot is in place as president of the Chicago Police Board, the City Council Committee on Public Safety is slated to consider three more appointments to nine member independent body tasked with deciding disciplinary action against cops accused of misconduct.

The three Mayoral appointees to the Chicago Police Board include a major donor to the Mayor’s re-election fund and an immigration lawyer:

• John Simpson is a partner at Broadhaven Capital Partners with over 30 years of experience as a head investment banker and financial services executive, according to his company bio. Before joining Broadhaven, he was Vice Chairman and Chief Operating Officer of Canyon Partners and a former Vice Chairman of Wasserstein Perella & Co. He donated $52,800 to Chicago for Rahm Emanuel and $25,000 to Chicago Forward this past election cycle.


• Claudia Valenzuela is an Associate Director of Litigation at the Heartland Alliance National Immigrant Justice Center, an organization that provides legal services to immigrants. She represents non-citizens facing deportation before the Department of Homeland Security (DHS), the Executive Office for Immigration Review (EOIR) and in federal court.


• William Conlon (re-appointment) is a partner at Sidley Austin LLP. He was first appointed to the board in 2011 and is a former Assistant United States Attorney.

Mayor Rahm Emanuel will unveil his proposed FY 2016 budget to the City Council on Thursday, September 22, according to a timeline his office released yesterday. But before he brings his spending guidelines to the Council Chambers, he’ll follow a tradition established by Mayor Richard M. Daley by holding three town hall meetings with members of his finance team that will be open to the public. Residents will have the opportunity to provide their ideas in person and on social media during the public meetings with the hashtag #ChiBudget2016. Representatives from various City Departments will be on hand to answer questions related to specific city services. Each meeting starts at 6:30 pm, with doors opening an hour earlier:

• Monday, August 31: Malcolm X College, 1900 West Van Buren Street


• Wednesday, September 2: South Shore Cultural Center, 7059 South South Shore Drive


• Thursday, September 3: Wright College, 4300 North Narragansett Avenue

There are four Mayoral appointees to the Community Development Commission (CDC) slated for aldermanic confirmation this afternoon, including 1st Ward Ald. Joe Moreno’s wife, Celena Roldan Moreno.

Roldan Moreno currently serves as the Executive Director for Erie Neighborhood House, a social services agency. She also served as a member of Mayor Emanuel’s Education Transition Team and Early Childhood Task Force, two initiatives the mayor rolled out during his first term in office.

If approved to the CDC, Moreno will serve with 14 other members, whose job is to review and recommend the creation of new Tax Increment Financing (TIF) districts, Redevelopment Area designations, and appointments to the various Community Conservation Councils across the city. The CDC also reviews and recommends action on the sale of city-owned property in TIF districts and Redevelopment Areas, as well as allocating TIF funds for private redevelopment projects.

In addition to Moreno, Mayor Emanuel has nominated:

• Gwendolyn Butler, vice chairwoman and chief marketing officer for Capri Investment Group, LLC, a global real estate investment manager. She specializes in raising capital for the firm’s global investments. Prior to Capri, Butler worked for UBS Global Asset Management, Bear Stearns, and SEI. She is the former Chair of the national Association of Securities Professionals and a past President of the Board of Directors of the YWCA Metropolitan Chicago. [LinkedIn]


• Cornelius Griggs, Managing Partner, GMA of Illinois.


• Philip Alphonse, a partner in the The Vistria Group, a private equity firm focused on education, healthcare, and financial services. The Vistria Group was founded by Marty Nesbitt, who also founded the airport parking company The Parking Spot with U.S. Commerce Secretary Penny Pritzker. Alphonse also worked at private equity firm Sterling Partners for ten years. [LinkedIn]

In addition to the Mayoral appointees, four aldermanic requests for a tax break on large, industrial properties in the 23rd, 27th, and 36th Wards will be discussed. The class 6(b) real estate tax incentive is intended to reduce vacant industrial real estate in Cook County by providing businesses with a lower tax rate if they commit to rehabbing vacant industrial buildings or constructing new industrial property. Properties receiving the designation are assessed at 10% of market value for the first 10 years, 15% in the 11th year and 20% the 12th year. Industrial buildings that don’t receive the designation are assessed at 25% of market value.

Some political watchers might’ve been surprised when 39th Ward Democratic Committeeman Randy Barnette was replaced at last week’s slating. But Barnette, the husband of 39th Ward Alderman and Council President Pro Temp Marge Laurino, said the move was a long time coming. “It was only abrupt to people who didn’t know,” Barnette told Aldertrack. “I wanted to get through last election with my wife, then I got this new job at a suburban college these last couple weeks.” He said his departure was timed precisely to let the organization elect a new committeeman in time for slating.

And it’s time for new blood, he says. That new blood is Patrick Molloy, the Director of Government and Public Affairs for the Chicago Public Library and a life-long 39th Ward resident who Barnette calls a “good kid.”

“I learned around the end of July that Committeeman Barnette was planning to resign from his position in early August. After discussing it with my wife and some others close to me, I decided that I would be interested in running for the office,” Molloy said in a written statement to Aldertrack.

He’s thought about running for the seat for a long time, and plans to run for election in the upcoming primary against Robert Murphy, an architect who lives in Forest Glen. Murphy co-founded the Fair Allocation in Runways (FAiR) Coalition that opposes O’Hare noise, and ran for alderman against Laurino in this year’s election, but lost by 1,100 votes.

31st Ward Ald. Milly Santiago is teaming up with Cook County Commissioner Luis Arroyo, Jr. and State Representative Will Guzzardi to hold a back to school fair this Saturday. While their names aren’t listed in the press release the alderman’s office sent out last night, Mayor Rahm Emanuel, City Treasurer Kurt Summers, and Cook County Circuit Court Clerk Dorothy Brown are expected to attend the event at Foreman College and Career Academy, Kevin Lamm, the alderman’s chief of staff says.

When asked why Cook County Democratic Party Chairman and 31st Ward Committeeman Joe Berrios won’t be in attendance, since the event is in his backyard, Lamm said they weren’t “snubbing” the party chairman. Lamm said Summers and Brown reached out to the alderman to express interest in attending. It’s still unknown whether Ald. Santiago will challenge Berrios in the Committeeman race next year. She is weighing her options, Lamm says.