"More than a decade ago, demographic projections signaled an important reversal for Chicago Public Schools: Enrollment was about to shrink dramatically.
Yet CPS leaders appointed by former Mayor Richard M. Daley issued billions of dollars in bonds to repair, expand or replace the vast majority of the district's schools regardless of future needs and without voter input, a Tribune investigation found.
In total, CPS officials have borrowed more than $10 billion in general obligation bonds since 1996 to fund school construction projects, debt that has contributed to the system's current financial crisis. Officials poured $1.5 billion of that money into schools that today are less than 60 percent full.
Along the way, CPS invested $100 million in schools it closed this year, in part, because they were underused. About half of that spending came after demographic projections predicted districtwide enrollment drops.
For decades to come, taxpayers will be paying off bonds that funded tuck-pointing, better windows, new roofs and other repairs on buildings that are now shuttered.
If the district had asked voters to approve the borrowing, the loans would have come with new property taxes to cover debt payments.
Instead, officials avoided referendums by linking the bonds to other funding sources, a move that drained significant revenue from the district's operating budget.
In 2011, for example, more than a quarter of all unrestricted general state aid, the per-pupil funding sent by the state of Illinois, went to paying off old debts rather than funding new opportunities for children.
CPS officials also contributed nothing toward teachers' pensions for a decade, depriving the pension fund of $2 billion and using the money to run the district instead.
Much like the city of Chicago, CPS is now struggling to overcome the consequences of heavy borrowing, deeply underfunded pension plans and persistent budget deficits.
"It's not been carefully managed, or you wouldn't have this mess," said Henry Bienen, current school board member and former Northwestern University president.
The financial difficulties contributed to the teachers strike last year and the contentious fights surrounding the closing of more than 40 of the district's roughly 500 elementary schools this year. Officials say dozens more schools remain underused.
Annual debt payments on bonds, meanwhile, have grown from $80 million in 1998 to more than $322 million in 2012.
And although officials have saved money by refinancing $3 billion in debt, during the past three years they used $366 million in borrowed funds to push debt payments into the future, a maneuver called "scoop and toss" that will cost more in the long run.
Daley, who as mayor touted the money CPS put into school projects, did not respond to the Tribune's requests for an interview.
Current CPS officials said the district had no choice but to fix up aging, deteriorating buildings to provide safe environments for children, regardless of demographic trends or whether the schools were full.
"Whether there is one child in those buildings or 100, if there's a broken window or boiler that is not working or roof that is caving in, we have an obligation to address that issue because it falls under the buckets of life, health and safety," said CPS spokeswoman Becky Carroll.
School construction experts say demographic trends should help determine spending priorities. Well-planned building programs, they said, should prevent the kind of sudden, mass school closings CPS went through this summer.
"It's just not something I've seen before," said David Waggoner, chairman of the Council of Educational Facility Planners International, an industry association made up of school officials and builders. "It's disappointing to those of us who are advocates for school facilities."
Even after spending billions, Chicago officials failed to solve one of the problems used to justify the borrowing — overcrowding. CPS still has 78 schools with too many students."
rest at http://apps.chicagotribune.com/bond-debt/cps-bonds.html?utm_source=et&utm_medium=email&utm_campaign=dailynewsletter
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