CHICAGO (WLS) -- Mayor Rahm Emanuel's administration announced a $389 million borrowing plan on Friday that they say will keep Chicago Public Schools open until the end of the school year and pay teacher pensions.
The Chicago Public School Board is expected to vote on the plan at its May 24 meeting.
In a press release, the mayor's administration announced that CPS plans to complete a short-term financing of up to $389 million in Grant Anticipation-Notes (GANs). According to the release, the GANs will be secured by the delayed state block grant payments. The release said CPS expects to receive that in the upcoming months.
The mayor's administration had discussions Friday with aldermen on how the city planned to find enough money to keep Chicago Public Schools open until June 20.
The mayor let his chief financial officer Carole Brown brief the aldermen on his CPS plan.
Despite criticizing his predecessor Mayor Daley for borrowing money, Emanuel said the state has backed him into a corner and he must do something to keep schools open.
Jogging with police recruits was one of many events Friday for Mayor Emanuel, none of which included a briefing with aldermen about his plan to keep Chicago Public Schools afloat until the end of the school year.
Some alderman were very blunt about the mayor not being in the briefings to answer questions.
"I'm really frustrated, a lot of other aldermen are frustrated at the fact that the mayor does not sit down and know enough to go through these issues with us, that Claypool is not here. That they've blown off several meetings. It's very irresponsible of the mayor," Ald. Scott Waguespack, 32nd Ward, said.
The end game is a $389 million loan backed by state block grant payments that have been delayed because of Springfield's two year old budget impasse.
Aldermen were briefed by administration staff members who said the loan would likely only carry a 35 percent interest rate. Many don't buy it and called the mayor's plan nothing more than a payday loan.
"This is going to be a very difficult loan it's going to continue to hurt CPS and it's not going to solve anything, it's going to make Wall St richer," Ald. Carlos Ramirez, 35th Ward, said.
"I understand that, but the fact is we have a state under a governor that is not doing its job," the mayor said.
Months ago, Governor Bruce Rauner vetoed a bill that would give CPS money for teacher pensions and accused the governor of backing CPS into a corner, some aldermen said the mayor doesn't have a choice, but to borrow money.
"Right now that's the only viable plan we have to deal with the situation," Ald. Howard Brookins Jr., 21st Ward, said.
"What's good about it is schools are going to stay open, so I commend the mayor to come up with some way to keep schools open," Ald. Walter Burnett, 27th Ward, said
So far, there is no long-term solution to the CPS budget crisis, with the city pointing the finger at Governor Bruce Rauner, who has been criticized for not treating CPS fairly.
Meanwhile, the governor's team fired back, saying the mayor is to blame for a school system in crisis.
A spokesperson for the governor said in a statement, "Instead of engaging with leaders and lawmakers to find solutions to this crisis, the mayor continuously chooses to lay blame on others instead of taking responsibility for his own massive failure of governance.
While the mayor is pointing fingers at Springfield, he's running a city with crumbling infrastructure, a school system in crisis and violence that affects every neighborhood in Chicago.
It's apparent that this mayor of mismanagement is avoiding responsibility as a means to distract from the failures of his own leadership."
Instead of a loan, some aldermen suggest bringing back the head tax or using TIFF funds to keep CPS open.
On Friday, the mayor said TIFFs have already been tapped out for CPS.
The Civic Federation, a non-partisan government research group, said the CPS plan to borrow money will come with a heavy price.
Mayor announces $389 million borrowing plan to finish CPS school year, pay pensions