Friday, November 8, 2013

Meet Chicago Bond Mutant: Juahm Emanugel

Time to dig out your notes from your college Econ class, readers! We're taking a look at UNO's finances, and it's not pretty.

We're not forensic accountants at WCT, but we sure could have used a team of accountants and MBAs to explain all the numbers in this alarming presentation on UNO Charter Schools. Researched and presented by Byron Sigcho several weeks ago and hosted by fellow blogger Rogers Park Neighbors for Public Schools, this presentation should be required reading on how private industry seeks to profit off the public and what charter schools have to do with it.

Educational excellence in the 21st century has become synonymous with the charter movement.  Neighborhoods might not be so welcoming to these schools--especially UNO--if they understood how they operated. 

Here are a few highlights, or rather lowlights, of UNO's finances:
  • This year, UNO will generate $91 million dollars of debt, $61 million of which is private loans.
  • UNO is paying over $2 million dollars a year in debt interest, while only paying $70,000 a year toward the principal (maybe UNO never went on a college spending spree, but we learned the hard way you can't just pay interest!).
  • The bonds that UNO has issued are backed by the state, meaning that the state can use any available revenues including taxes, to repay the investors. In UNO's case,  one investor is the local Nuveen Securities. Those investors are waiting for some high yield returns, while taxpayers should await higher taxes! Cha-ching!!
  • "Fees" are listed in the revenue table and are projected to increase each year, kind of like that $7 million $70,000 marijuana ticket ordinance the city was hoping to cash in on. One former UNO teacher said fees are generated when, for example, a student deigns to speak Spanish in the classroom. No excuses, amigos!
  • Despite UNO running a $21,000 per student debt (or $71 million dollars), in 2012 UNO managed to have net revenues and then something we assume is even better: excess net revenues. Revenues on top of revenues? That's some magical accounting.
Ironically, the Tribune published an editorial on Tuesday about Chicago's "runaway bond habit." UNO and City Hall must co-plan because the city has spent $9.8 billion dollar in bonds since 2000 on such items as: spare vehicle parts, trash bins, library books, obsolete software, and other short term issues. 

Bonds are supposed to pay for long-term projects for the benefit of all, not to be used as payday loans which benefit a few.

The entire UNO presentation is available here. We encourage you to take a close look at the information and see for yourself how Rahm Emanuel and Juan Rangel have morphed into the bond mutant Juahm Emanugel. 

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