“A one-year plan followed by a four-year wish list,” is how the Neighborhood Capital Budget Group (NCBG) describes the Board of Education’s Capital Improvement Plan for 2001-2005.
In its report released last month, entitled “The Good, The Bad and The Ugly,” NCBG writes that uncertain funding sources and vague time lines characterize most of the improvement projects listed in the board’s plan.
Nowhere is that uncertainty more evident than in the projects earmarked to receive funds from Tax Increment Financing (TIF) districts. A total of 20 projects, including school additions and new buildings, are listed as being “contingent on TIF funds.” The majority of those projects have no dollar figure or date attached to them, and those that do are moving ahead without evidence that TIF money is actually available.
In the 2001-2005 plan, the School Board identified $97 million in construction projects it hopes to fund with TIF revenue collected this fiscal year. To date, the board has collected only $16.1 million, according to the board’s operations director, Tim Martin. And that money came from the proceeds of bond deals in two high-profile TIF districts:
$11.1 million in bond revenue from the Near North TIF was used to help pay for the construction of the new Payton College Prep High School.
$5 million in bond revenue from the Near South TIF was used for initial work on an addition to Jones College Prep. The board is seeking a total of $14 million in TIF funds for the project, says Martin, and another bond sale is in the works.
The bond sales are unusual because TIF districts were designed as a pay-as-you-go mechanism to allow under-developed communities to keep any gains in local property tax revenues that result from tax-deferred development. Typically, it takes years to raise the millions needed for school construction projects.
For example, the 60th Street and Western Avenue TIF has generated only $641,000 since it was created in 1996, according to NCBG. In its Capital Improvement Plan, the School Board cites that TIF as the source for the $20 million needed to construct a new building for Anderson Community Academy, currently housed in a pair of crumbling buildings that once belonged to the Archdiocese of Chicago.
However, Principal Helen Johnson says she has already met with architects for the project and expects construction on the new facility to begin in June.
Juarez High School, long overcrowded, is in a similar situation. The board’s capital plan cites the Pilsen TIF as the source of $10 million needed to build an addition. NCBG says that so far the TIF has generated only $1.5 million. Leonard Dominguez, until recently the interim principal of Juarez, says preliminary work on the land has already begun.
The Chicago Teachers Academy, a combination elementary school and teacher training facility, is another example. The board cites the 24th Street and Michigan Avenue TIF as the source for $35 million needed for the new school at 22nd and Federal Streets. NCBG says the TIF has a balance of only $54,000.
Meanwhile, the board has turned management of the project over to the Public Building Commission (PBC), and land has been broken. Projected costs have risen to $42 million, according to PBC spokesman Terry Levin. But Levin says he doesn’t know where the school board is getting the money to pay PBC to build it. “That’s up to them.”
Asked where the money is coming from for these projects, Martin says, “CIP projects are prioritized based on need, not on funding source. Any TIF funds from the city allow CPS to expand its project list. Anderson, Juarez … and the Teachers Academy will be built as funding becomes available.” At press time, Martin had not responded to a request to clarify this statement.
No written agreement
Jacqueline Leavy, NCBG’s executive director, puts forth a couple possible reasons why the board is moving forward with the Teachers Academy before it gets TIF money: It expects a big increase in the tax increment following the reassessment of city property. It’s planning to sell more bonds. Or CPS will simply dip into its capital fund and hope the city will reimburse it as regular TIF money comes in. Creation of the academy was a major plank in Mayor Daley’s re-election platform two years ago.
Leavy says NCBG has not identified a written agreement between the city and board regarding the construction of the Teachers Academy. “We cannot announce any specific transaction at this time,” Martin said in writing, “but a process to make the decisions is in place and is progressing.”
In its assessment of the “good” parts of CPS’ capital program, NCBG gave the board credit for the school improvement work it has completed to date.
“Decades of neglected repairs have been addressed at many schools, and some have been replaced entirely. … And for the first time in years, new classrooms have been built in Chicago to alleviate severe overcrowding … this is what’s good.”