Chicago Public Schools Faces $1 Billion Budget Gap in 2014

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Since 2009, CPS has reduced its Central Office staff by about 30 percent to its current 1,090 employees. The Central Office, located at 125 S. Clark, has over 500,000 usable square feet and formerly accommodated more than 1,500 employees, according to a press release.
Since 2009, CPS has reduced its Central Office staff by about 30 percent to its current 1,090 employees. The Central Office, located at 125 S. Clark, has over 500,000 usable square feet and formerly accommodated more than 1,500 employees, according to a press release.

In addition to closing schools, Chicago Public Schools (CPS) is cutting back and consolidating resources in the face of a projected $1 billion Fiscal Year 2014 (FY 14) budget gap.

According to a summary of its 2014 budget summary, declining revenues and increasing costs are the reasons for the FY 14 shortfall.

CPS cites the continual decline in state funding as part of the reason for the billion dollar "gap" it's facing.

Barbara Byrd-Bennett, CPS's chief executive officer, announced $17 million in cuts as a way out of the looming financial abyss. Finding a new location for its headquarters is also a way the school district is looking to save an additional $2 to $3 million in FY 14.

"We are looking into every option possible to reduce Central Office spending and direct our limited resources directly into the classroom," said Byrd-Bennett. "We will continue to make smart decisions to find savings and consolidate resources so that we can provide every student in every neighborhood with the high-quality education they deserve."

The FY 14 cuts announced last week come from a variety of departments and are expected to save $17 million, which includes:

*$6 million from renegotiated healthcare contracts with vendors for the same or better services;

*$2.1 million from a migration to Google mail, calendar and applications;

*$2.1 million from reduced IT infrastructure support costs via renegotiated contracts and insourced consulting positions;

*$2 million from renegotiated office supply contracts;

*$2 million from insourced or eliminated consultants and contractors supporting systems operations activities;

*$1 million from a reduction in external legal counsel, managing more caseload and legal work using in-house expertise;

*$1 million from a new waste management contract that shifts the contract cost structure from a lump sum fee to a per-unit or volume-based fee that will better accommodate fluctuations in facilities and lend increased transparency on actual costs for service;

*$500,000 from the implementation of an easy-to-use purchasing system for schools that will drive the use of low-cost vendors through comparison shopping; and

*$200,000 from reductions in non-personnel costs in the communications office and new fundraising partnerships for back-to-school projects. The local funds that had been used previously for back-to-school efforts will be redirected to classrooms.

The $17 million in projected FY 14 savings follows the pattern in central office spending cuts made in Fiscal Year 2013 (FY 13).

FY 13 savings resulted from a variety of reduced central office services and supports such as less-frequent trash collection and the removal of more than half of the office's printers.

Since 2009, CPS has reduced its Central Office staff by about 30 percent to its current 1,090 employees. The Central Office, located at 125 S. Clark, has over 500,000 usable square feet and formerly accommodated more than 1,500 employees, according to a press release.

"Every child in this city deserves to have a high quality education that will prepare them for success and we are working to build a school district that gives our students the best chance to excel," said Mayor Rahm Emanuel. "CPS and CEO Byrd-Bennett will continue to make smart, necessary decisions to focus our limited resources so that we can continue to make smart, critical investments in our students' bright futures."

In the event that CPS does not find a suitable new location, it will consolidate within its current building and lease empty office space to third parties. Ultimately, CPS seeks to sell its current property.

CPS also announced $15 million in savings from more efficient management of engineers and reduced utility costs, which will be invested in district-wide, full-day kindergarten.

By Deborah Bayliss

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