Wednesday's Chicago Public Schools monthly board meeting began with various rituals: the Pledge of Alliegiance, introducing a new student board observer, praising two high-achieving high schools and formally welcoming a new superintendent, the latest to make it through the beleaguered system's quickly-rotating executive revolving door.
After the Superintendent de Jour, Barbara Byrd Bennet, a New Yorker, made a few benign comments and announced two top appointments of her own---via Cincinnati and Cleveland, as if the nation's third-largest city lacks a sufficient talent pool to serve her interests---it was time for Tim Cawley, the chief administrative officer to enlighten the assembled with his Cliff's Notes version of an amended budget in light of a rather expensive new contract with the teachers union.
It was here that one was grateful for some adult supervision in the system, on this day in the presence of Henry Bienen, a former longtime president of Northwestern University, and Penny Pritzker, the wealthy and well-connected businesswoman.
In particular, there were several items of interest in Cawley's presentation that intrigued them due to the distinctly low-key manner in which they'd been offered.
First, there was a slide on "How will we cover the new costs?" of a contract that adds $103 million in compensation to a system hundreds of millions of dollars in the hole already and without any reserve funds.
The biggest element, Cawley said, was what he termed a "$70 million increase in operating revenue," which includes capitalizing interest on $13 million in bonds, selling surplus buildings and refinancing bonds maturing in 2013 and 2014.
Then there was a slide whose header declared, "FY 14 Budget Still Poses Significant Challenges," including a stunning $1 billion projected deficit.
Bienen asked to speak and briefly noted that to call the FY 14 budget one posing "significant challenges" was "the understatement of the week." He then pointed out that refinancing bonds wasn't a savings, it was just putting off certain (growing) payments for a bit.
Unless Cawley had Manna from Heaven, in the form of magical revenues, the budget was simply postponing for a year or so the real reckoning, Bienen declared. "We haven't come to grips with the structural problem," he said, while diplomatically, even decorously, dispelling any possible inferences that he was suggesting Cawley was trying to "pull the wool" over the eyes of anybody.
Pritzker later noted that she likes to look at budget numbers in a more far-reaching manner, such as three or so years out. Obviously, she said, the projected $1 billion deficit is not a onetime predicament. If you look at it all, as she is inclined to look at it, in terms of three years out, then one could argue you're staring at a $3 billion deficit.
She also indicated, as had Bienen, that you can't view as recurring revenues the capitalizing of interest when refinancing bond deals.
Cawley then offered up what he could easily have underscored in the first place. He "couldn't agree more. We clearly understand that capitalizing interest doesn't lead to recurring revenues." Better said late than never.
The bottom line was crystal clear: the system is headed toward huge shutdowns of schools. There was talk by Cawley and Bennet of looking at every "nook and cranny" for more savings and efficiencies. There are not that many nooks and crannies in any institution in America outside, say, the Pentagon or the New York Yankees payroll.
So one must thank Bienen and Pritzker---each pilloried gratuitously by the teachers union president in an outrageous, stream of consciousness speech to a Seattle group last year--- for understatedly stating the grotesquely obvious reality facing Chicago Mayor Rahm Emanuel and the school system.
Karen Lewis, the failed stand-up comic who negotiated a surprisingly strong, and thus unaffordable contract, for her members, sent a surrogate to begin the public portion of the meeting.
Michael Brunson praised the new teachers agreement, by and large, and then lambasted "the constant rumors of school closings." He beseached the board to go forward in a "participatory and transparent manner," otherwise, he said with an air of combative melodrama,"There will be reprecussions."
On Wednesday, if anybody, including Brunson, was listening, the reprecussions were entirely transparent.