CPS Proposes to Increase FY2013 Capital Budget by $363.7 Million

April 17, 2013


At its April 24, 2013 meeting, the Chicago Board of Education approved the District’s amended FY2013 capital budget.

Original blog published on April 17, 2013

On April 6th Chicago Public Schools (CPS) released its plan for an amended FY2013 capital budget. The original FY2013 Capital Plan, released in May 2012, totaled $109.7 million. The proposed supplemental capital budget for FY2013 will add $363.7 million, resulting in a total FY2013 Amended Capital Plan of $473.3 million. This amount is 231.5% more than the original capital budget.

This proposal for additional spending comes after CPS amended its original FY2013 budget by $103 million in October 2012 as a result of a new contract agreement between CPS and the Chicago Teachers Union. CPS stated that it planned to fund the additional spending through cost-reductions in operations and one-time revenue sources. The Civic Federation urged the Board of Education to reject both the amended budget and the District’s original FY2013 proposed budget, in favor of financially responsible plans.

The supplemental plan is intended to address the needs of schools that will experience an influx of new students coming from schools that will be closed as a result of the District’s School Utilization plan. CPS refers to these schools as “welcoming schools” and proposes to spend $155.0 million in investments and improvements for these sites. The $155.0 million, or 42.6% of the total supplemental budget, in capital investments for welcoming schools, will provide the following:

• $34.4 million in furniture and cosmetic upgrades;
• $18.7 million for air conditioning;
• $4.6 million for libraries and computer labs;
• $31.1 million in building repairs;
• $7.4 million for food service capacity;
• $20.0 million in ADA (Americans with Disabilities Act) accessibility; and
• Approximately $14.3 million in STEM program expansion.

The proposed spending for the remaining $218.7 million of the supplemental capital budget and the $109.7 million from the original capital budget is shown in the chart below. (Click to enlarge.)

According to the proposed plan, funding for the supplemental capital budget will come from $329.8 million in bonds and $34.0 million in TIF proceeds. The original FY2013 capital budget is funded through $68.8 million in bonds, $39.9 million from the Chicago Infrastructure Trust and $950,000 in grant funding from the Illinois Environmental Protection Agency. The chart below displays the proposed funding sources for the original and supplemental FY2013 capital budgets. (Click to enlarge.)

While the District offers useful details in its proposed FY2013 Amended Capital Plan on how it will spend the additional dollars, it does not provide adequate information about how the increased costs will impact the FY2013 and FY2014 operating budgets. The budget deficit for FY2014 is already estimated to be at least $1.0 billion due to its ongoing structural deficit and the expiration of a three-year partial pension contribution holiday. Furthermore, the new plan does not state when the proposed bonds will be issued or how the bonds will affect the District’s debt service costs. It is also unclear whether any of the borrowing will be issued through the City of Chicago’s Public Building Commission (PBC) given that recent news reports have cited Mayor Emanuel’s instruction that the $155.0 million in welcoming school investments be managed by the PBC.

CPS’ 2013-2017 Five-Year Capital Plan totaled approximately $813.6 million. An update to the Five-Year Capital Plan and the proposed FY2014 Capital Plan will be released by May 1, 2013.