RESOLUTION CALLING FOR HEARINGS INTO CURRENT BORROWING PRACTIC ES
OF THE CHICAGO PUBLIC SCHOOLS
WHEREAS. An in-depth analysis conducted by the Chicago Tribune regarding the Chicago Public School's controversial auction-rate borrowing rather than through traditional fixed-rale bonds has been recently reported in a three-part series that is being characterized as '■extraordinary"; and
WHEREAS. This study has revealed taxpayers may end up paying $100 million more over the life of such deals than if thev had used traditional borrowinii methods. Dur ing the period Irom 2003 through 2007. the CPS issued SI billion worth of auction-rate securities, nearly all of it paired with complex derivative contracts called interest-rate swaps, in a move thought to lower borrowing costs; and
WHEREAS. The analysis revealed that very few other school districts in the nation issued more auction-rate bonds. In fact, during that time period the Chicago Public Schools issued more of these risky-debentures than most cities, more than even the State of California; and
WHEREAS, Responsibility for pursuing such a risky financial course rests squarely on David Vitale who was appointed as President ofthe Chicago Board of Education by Mayor Rahm Emanuel in May of 201 1. Previously, he served as the Chief Administrative Officer for the Chicago Public School system pro-bono from 2003 to 2008; and
WHEREAS, David Vitale has strong corporate roots. From February of 2001 through November 2002, he served as President and Chief Executive Officer ofthe Chicago Board of Trade. In addition to serving as a member ofthe CBOT's Board of Directors and Executive Committee, he also served as President and CEO ofthe Mid-America Commodity Exchange. Additionally, he is a former Vice Chairman and Director of Bank One Corporation in charge of their commercial banking, real estate, private banking, investment management and corporate investments businesses.
WHEREAS, Concurrent with his presidency of CPS. David Vitale is also the Chairman of Urban Partnership Bank, a newly formed bank serving the financially underserved neighborhoods of Chicago. Cleveland and Detroit; and
WHEREAS, Such a resume calls into question a possible conflict of interest as David Vitale's former and current business interests stand to directly benefit from the Chicago Public Schools financial policies and austerity measures implemented during his watch: and
WHEREAS, Based on the disturbing allegations raised in the Chicago Tribune series, it behooves this body to, now therefore
BE IT RESOLVED That wc. the undersigned members ofthe City of Chicago City Council, gathered on this 12"' Day of November. 2014 AD, do hereby call upon the Committee on Education and Child Development to expeditiously hold hearings and take testimony from expert witnesses concerning the current borrowing practices ofthe Chicago Public Schools.
BE IT FURTHER RESOLVED That certified, copies of this resolution be prepared and presented to David .1. Vitale, President ofthe Chicago Board of Education and the Honorable Latasha R. Thomas, chair ofthe Copiwrrriee on "Education and Child Development.
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