The Chicago Board of Education sold three vacant school buildings for about $8.5 million and approved up to $1.2 billion in borrowing at Wednesday’s monthly meeting.

Typically, the school board approves a budget in July, but principals were given individual school budgets just last week. A complete budget must be passed before students go back to class in September.

“The budget process this year has been delayed for a variety of reasons,” said David Vitale, outgoing president of the Board of Education. Those reasons include a push for pension reform in Springfield and ongoing contract talks with the Chicago Teachers Union.

But Chicago Public Schools has been dealing with a structural deficit for several years, a truth not lost on Vitale during his last meeting on the school board.

“For what it’s worth, that funding problem was identifiable from the day I sat down in this chair,” Vitale said, listing some of the contributing factors: ballooning pension payments, decreasing federal and state funding, and skyrocketing debt payments.

Vitale said the school board hasn’t been “ignorant” or “sitting back, waiting for disaster to happen,” but he argued its power is limited, saying, “all we can do is advocate to others to, frankly, give us more authority to tax.”

The board, under Vitale’s leadership, voted to raise property taxes to the legal limit every year for the past four. But it still hasn’t been enough.

In June, the board approved a $1.1 billion line of credit that will expire at the end of August. The move was done to ensure CPS could make payroll. This week, the board approved another $1.2 billion in long-term borrowing.

CPS Chief Financial Officer Ginger Ostro insisted the amount of money was simply an estimate and should be considered “a cap” or “limit” to what the district can issue in bonds.

The Board will have to approve actual bond sales in September or October, Ostro said.

Revenue from school sales

Board members on Wednesday also approved the sale of three vacant schools that were shuttered in 2013, providing a small windfall of cash for its struggling budget.

Liza Balistreri is in charge of real estate at Chicago Public Schools and outlined the sales of Near North Elementary in Noble Square, Overton Elementary in Bronzeville, and Von Humboldt Elementary in Humboldt Park.

Near North is being purchased by Svigos Asset Management for $5.1 million. It will be used for residential and commercial development, Balistreri said. Svigos also purchased the old Peabody Elementary for $3.5 million. There was some controversy around Peabody earlier this year when a public charter school rented space in the building. Previously, district officials had said no closed school would be used as a public school.

Von Humboldt is being bought by IFF Von Humboldt LLC for $3.1 million and will be redeveloped to include a day care, housing for current and retired public school teachers, office space, and a cafe. There was a higher bid for the massive school, but it did not line up with what the community wanted, CPS officials said.

Overton is being sold to Washington Park Development Group for $325,000 and will be used for counseling, career training, housing or retail space.

Newly-seated board member and former CEO of BMO Harris Bank Mark Furlong told Balistreri he wants to see the district pick up the pace when it comes to selling its vacant property.

“It’s been a couple years,” Furlong said. “We’ve gotta find a way to accelerate the sale of these buildings so that we can bring cash into the classrooms.”

Balistreri said seven or eight more buildings are almost ready to go out for bid.

Shuffling at the top

There were several new faces in the board chamber on Wednesday.

David Vitale remained in the president’s chair, but was flanked by new mayoral appointees Furlong, Dominique Jordan Turner, Gail Ward, and longstanding member Mahalia Hines. Ward and Hines are both former CPS principals, and Jordan Turner runs the Chicago Scholars Foundation, which works with first generation, low-income, college-bound public school students in the city.

Rev. Michael Garanzini is also officially a new member of the board, but was not present Wednesday because he was travelling, Vitale said. Incoming Board President Frank Clark sat in the audience.

Interim CEO Jesse Ruiz remains in his post through the end of the week, and then will return to serving as vice president of the school board. He took a moment to thank Mayor Rahm Emanuel for giving him the responsibility to manage CPS, and, in Spanish, he thanked the community for its support.

“Muchísimas gracias a todos,” he said.

The son of Mexican immigrants, Ruiz is the only Latino among the top leadership at CPS, despite the fact that Latino students are the largest ethnic group in the district — at 46 percent and growing. 

Replacing Ruiz as schools CEO is mayoral confidant and former head of the Chicago Transit Authority Forrest Claypool. Janice Jackson will serve as Chief Education Officer and Denise Little will take on the role of senior adviser to the CEO.

Claypool will earn $250,000 annually, while Jackson and Little will make $195,000 and $180,000, respectively. Claypool and Jackson’s salaries are comparable to those of their predecessors, but Little’s is a new position with no precedent for salary.

Becky Vevea is an education reporter for WBEZ. You can reach her at bvevea@wbez.org and follow her @WBEZeducation.