Yesterday's Board Meeting

Yesterday's Board Meeting

Lots of news today, including protests at yesterday's Board meeting (but no big decisions except on food services and for-profit dropout recovery contracts), hunger striking in Philadelphia (has that happened here yet?), another NCLB waiver from Arne Duncan -- for New Hampshire.  Plus more.  Take a look, let me know what I missed.

BOARD MEETING

Chicago teachers, parents, students, protest budget cuts to schools WBEZ: Board member Andrea Zopp said it was “magical thinking” to assume there’s a pot of money hidden somewhere. And board president David Vitale said school budgets were created “in the context of what we have said for a very long time, which is we have a significant financial problem. Nobody has tried to make any secret of that.”

Raucous Chicago Board of Ed meeting after school closures, looming budget cuts Sun Times: Proposed budget cuts to individual schools dominated the meeting as they have the conversation since CPS released the figures to principals and Local School Councils shortly after approving the closure of 48 schools this month.

CPS Budget Cuts: Demonstrators Demand More Money for Schools DNAI: Demonstrators accuse the city of misplaced priorities, most notably slamming a plan to provide $55 million in TIF funds for an arena that would be home to DePaul University's basketball program.

CPS cuts trigger heated debate ABC7Chicago.com: Some lousy weather was not about to keep parents, teachers and students away from a cause they say affects Chicago Public Schools on every side of the city, budget cuts. CPS faces a record $1 billion deficit next year.

Fireworks at Chicago school board meeting Chicago Student Union via Washington Post: At about 1:57 into the video, the fireworks start. Students addressing the board are stopped from speaking, and then other students begin to protest and are escorted out of the meeting room by security guards.

CPS chooses meal provider, but competitor cries foul Chicago Tribune: Aramark Corp. was awarded the business to deliver 75 million meals and 70 million cartons of milk for Chicago Public Schools students during the next school year.

Hunger strikers protest deep cuts to Philadelphia schools Reuters: Camped out under a tent, wearing red armbands and matching T-shirts, they have drawn considerable attention. Drivers honk at them. Pastors pray with them. Union leader Randi Weingarten, president of the American Federation for Teachers, plans to fast for the day Thursday in solidarity.

MISC

New Hampshire Gets NCLB Waiver Politics K12: That leaves Illinois, Maine, Pennsylvania, Texas, and Wyoming with outstanding requests for flexibility under the NCLB law.

Opponents of state virtual charter ban urge legislature not to limit digital ... Aurora Beacon News: The law that bans new virtual charters outside Chicago Public Schools until next April was originally sponsored by Rep. Linda Chapa LaVia (D-Aurora), who sought to give legislators more time to study virtual schools because she said existing state laws.

The New School Board Member Is a Glimpse at the Future of Education Chicago Magazine: It's more interesting as a look at the broader state of the education industry—how the rise of the technology and financial sectors, along with governmental interest in privatization during a time of strict budget cuts have integrated with school reform, creating a burgeoning market that's not limited to the hip MOOCosphere, but is making inroads in public education.

CPS wants 20,000 dropout seats in 5 years Catalyst: Board members voted Wednesday to give Camelot, which runs Excel Academy, a contract for a second school that will serve 375 older students who are far behind on credits. 

Filed under: Daily News Roundup

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  • So, Alexander provides links to six stories about yesterday's BOE meeting. Five headlines mention the budget cuts and describe the meeting with the terms "heated," "raucous," and "fireworks."

    A solitary headline looks as if it doesn't belong: "CPS chooses meal provider, but competitor cries foul."

    Yep, that's the Tribune. A "news" source so out of touch with the lives of Chicagoans and so interested in creating, rather than reporting, the news that we just don't care about it anymore.

    Can't remember the last time I bought a copy of that rag. Eleven, twelve years ago? And I've never missed it.

  • Mr. Beinen's comments at Board meeting, more at Substance.com
    This has to be one of George Schmidt's more brilliant descriptions of a CPS Board meeting he has ever written. Praise for George's searing criticism aside I have to admit I am starting to find Board member Henry Bienen particularly irritating, maybe it's the fact that I am now 60 plus years old, or maybe it's that Mr. Beinen attempts to present himself as a fiscal expert when his academic background was in foreign policy.

    It appears that he has decided to play the role of the former CPS Board member Norm Bobbins, but Norm to his credit actually had a background in finance.

    Possibly Mr. Beinen's most prominent foray into the world of finance was as a member of the Board of Directors of Bear Stearns beginning in 2004 until that firm's collapse during the financial crisis of 2008. Now that is something to be proud of, being on the last Board of a company that existed from 1923 and watching it's destruction.

    William Cohan's book, "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street," published by Doubleday,sheds light on the bankers who destroyed Bear Stearns while Mr. Beinen and his fellow Board members read falsified balance sheets and ate lunch.

    Former Wharton School dean Russell Palmer, in his book "Ultimate Leadership," directly discusses Beinen and his fellow Bear Stearns Board members writing:

    "Boards of directors must provide appropriate oversight, but boards will never know enough about the complex world of finance and the derivatives transactions that are being effected today. Boards need to provide detailed oversight, and so they have the responsibility to see that outside experts are brought in, if necessary, to assess the risk profile of the organization. They have to rely on experts such as their auditors, regulators, and others to see that effective oversight occurs." Clearly Beinen and his compatriots did not assure that effective oversight occurred at Bear Stearns.

    They sat and watched Bear's stock price plummet from the high hundreds to an eventual $10 a share offer from JP Morgan Chase. Beinen and his fellow Board members accepted this deal on behalf of stock holders that had just lost millions upon millions of dollars.
    Instead of fiscal oversight the Bear Stearns Board concerned itself with CEO James Cayne's pot use in the wake of a Wall Street Journal article. Beinen and other Board members more or less forced Cayne to resign as CEO in the wake of his month long vacations to play cards, and other high jinks at the headquarters. The board kept Cayne on as chairman, and Alan D. Schwartz takes over as CEO. By March 14, 2008 Bear Stearns was in full collapse and its chairman Cayne was taking part in a bridge tournament in Detroit. Yes, really you can't make this stuff up if you wanted to.

    I have a real problem with Mr. Beinen trying to play the role of the fiscal expert on the Board with this track record. His comments as reported by Catalyst in relation to Ms Katten's and others' statements before the Board were that he had heard “a lot of things that are just nonsense and ranting” in relation to fiscal issues. I have no doubt Mr. Beinen is familiar with nonsense and ranting he must have gotten a lot of that from the executives at Bear Stearns when he was on its Board. Really a little humility is in order after that experience isn't it?

    Rod Estvan

  • I don't think I have ever interrupted a public meeting before. Henry Bienen's smug and derisive attitude put me over the edge. I asked the Board if school closings added to the deficit for this school year. Doesn't the public have a right to know? A FOIA that a parent did revealed that they had no cost benefit analysis of the closings. This guy had the nerve to mock parents and tell them that they are "absurd" if they think school closings won't save money over time. No one said that. When will the savings kick in and how long will it take? How much will they cost for this school year? What's the impact to existing school budgets now? Mr. Bienen has no idea and has the nerve to tell everyone else they don't get economics. These people have some nerve.

  • In reply to WendyKatten:

    I don't know about economics, but a great many people opposing closings and cutbacks choose to pretend that budgets, financial obligations and fiscal management aren't real things.
    The issue for the board is if the money available is being fairly and efficiently allocated. Opponents (principally the CTU) who want to argue policy while ignoring reality can't be considered serious participants.

  • fb_avatar
    In reply to Donn:

    If you don't know economics, how do you identify who is pretending?

    Seems to me that the people who created the "billion dollar deficit" while there were few dips in revenue and at the SAME TIME also failed to pay their financial obligations might be the ones who don't understand that "budgets, financial obligations and fiscal management" are "real things".

  • In reply to Donn:

    If the "issue for the board is if the money available is being fairly and efficiently allocated," then it seems that a cost benefit analysis should have been done on the closings. Based on Raise Your Hand's FOIA response from CPS no such analysis was done.

    As Ms. Katten stated, the question is not whether eventually closing schools will save money, but rather when CPS projects that such a cost savings will occur. Analytically this is a critical factor because the cost of school closing if they are extended over multiple school years can actually wipe out projected savings even with a minimal rate of inflation.

    Most of the buildings being closed have use value, but very limited market value because of the cost of converting these structures for other purposes such as apartments or condos. Ms. Katten's and her colleagues questioning of CPS on this issue is most appropriate and Mr. Bienen's response was deeply disturbing especially given his history with Bear Stearns.

    I have been critical of the CTU and others for over playing the TIF card and not fully recognizing that there is a systemic fiscal crisis facing virtually all school districts in our state and charter schools. But my concerns in that regard do not equate to Donn's argument that the perspective of CTU and others constitute "ignoring reality."

    Economic reality of a school district's balance sheet is based on choices within the framework of the legally required governmental accounting system established by the Governmental Accounting Standards Board (GASB). There is an important difference between private sector accounting and governmental accounting. The main reasons for this difference is the environment of the accounting system. In the government environment, public sector entities have different goals, as opposed to the private sector entities' one main goal of gaining profit. Also, in government accounting, the entity has the responsibility of fiscal accountability which is demonstration of compliance in the use of resources in a budgetary context. In the private sector, the budget is a tool in financial planning and it isn't mandatory to comply with it.

    As a point of disclosure I was for a number of years one of the risk managers for the Rosenthal Collins Group here in Chicago a firm with assets of about $1.8 billion. My experience and occasional failures in trying to contain investment risk makes me in particular very critical of the Board of Directors of the large investment banks that blew up.

    Over 100 mortgage lenders went bankrupt during 2007 and 2008. Concerns that investment bank Bear Stearns on whose Board Mr. Bienen sat collapsed in March 2008 resulting in its fire-sale to JP Morgan Chase. The financial institution crisis hit its peak in September and October 2008. Several major institutions either failed, were acquired under duress, or were subject to government takeover. These included Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, Washington Mutual, Wachovia, Citigroup, and AIG.

    I find it deeply disturbing that Donn, whoever he is, is attempting to defend CPS on this issue and take cheap shots at Ms. Katten who fully discloses her identity in her posts.

    Rod Estvan

  • In reply to Donn:

    wake up Donn--Rahm has TIFs at his disposal and then blames Springfield. He makes a costly longer school day + HIS board agrees to a contract they cannot afford, so he reduces the budgets of all schools as his board opens too many charters-this from just a SIMPLE economic pov. Then puts Bienen on the board, a known loser to lose even more for the tax payers of Chicago.
    Rahm and the board have ignored reality-stop always putting it on CTU. I am not a CTU member and have nothing to do with this organization-wake up to your own double standard.

  • Bienen's an ass.

  • In reply to district299reader:

    Sounds like others agree. This was posted at substancenews.net as part of a comment by Rod Estvan about Bienen:

    "Below is a short comment on the complete incompetence of Mr. Bienen and the Bear Board in the wake of the collapse of that firm by J Robert Brown professor of law at University of Denver Sturm College of Law. Professor Brown for more than two decades has taught corporate and securities law, with a particular emphasis on corporate governance. He has authored numerous publications in the area and several of his articles have been cited by the US Supreme Court.

    "Bear Stearns and a Sleeping Board?

    "J. Robert Brown | Wednesday, May 28, 2008 at 11:00AM

    "The WSJ ran a story about the waning days of Bear Stearns and the concerns expressed within the investment banking firm in the days and months leading to its ultimate demise. At one point, buried in the piece, the WSJ described the board as '12 men largely handpicked by Mr. Cayne.' We have more or less made this point before. The board was not diverse and contained a large number of individuals who had served with Bear Stearn's management for more than a decade. And they were well paid.

    "We don't know what happened inside the board room. But serving for long periods of time with the same management can easily impair a director's independence. Moreover, the lack of diversity on the board probably reduced the likelihood that management would hear alternative views. What Bear Stearns (and the shareholders of Bear Stearns) needed was a board that could ask management tough questions. The dynamics of this board suggest that this is not what they got.

    "Posted by Rod Estvan"

  • As if the school closings are not bad enough, now we have the massive school budget cuts. To add to the list, Peck Elementary has lost $1 million in cuts for next year. Peck is an extremely overcrowded school on the south side at 206% capacity. Go to youtube.com and see the video 206PercentCapacity. Help make this video go viral!
    (http://www.youtube.com/watch?v=aV4N6o4W8jI)

  • In reply to district299reader:

    Peck is a fire trap. What is the Midway network chief doing about this?

  • In reply to district299reader:

    Peck lost $1 million? Rahm-close those expensive networks fast.

  • I suspect we misunderstand Mr. Beinen's response. The real problem, from his point of view, is that the lower orders should know their place, which is not to question the decisions of their betters. As should be clear from recent history, the wealthy are not punished for their crimes. Instead they are bailed out and later given a bonus. This is why I support an elected school board. While it is true that we may get some fools, those fools will at least have to pretend to be polite to their constituents.

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