CHICAGO - Chicago Public Schools' chief financial officer Barbara Byrd-Bennett resigned, a month and a half after it was disclosed that federal authorities were probing her role in a no-bid contract.
"I am saddened by the circumstances that have led to Barbara's resignation and I wish her well," Chicago Mayor Rahm Emanuel said in a statement June 1. "As a city, our focus must remain on finishing the school year strong and tackling the billion dollar budget deficit that threatens the progress our students, teachers, principals and parents have made over the last several years."
Byrd-Bennett was placed on a leave of absence in mid-April after it was disclosed that federal authorities were probing a $20.5 million no-bid contract awarded to her previous employer.
The development came just days before the district sold $300 million of general obligation bonds. Chicago Board of Education Vice President Jesse Ruiz then took over the CEO's duties.
Emanuel holds sway over most major school decisions as he appoints school board members and handpicks the CEO. The contract under question went to SUPES Academy, which trains principals. Byrd-Bennett worked there before taking an advisory position with CPS in 2012. She was elevated to CEO later that year after Jean-Claude Brizard was forced out following a teachers' strike. Her contract expires in June.
The leadership turmoil comes at a critical juncture for the district. It faces a $1.1 billion deficit in its fiscal 2016 budget beginning July 1, due in large part to a $700 million pension contribution. Its grappling with a $9.5 billion unfunded pension obligation tab and annually bumps up against its property tax cap. The district also is embarking on teacher contract negotiations.
Emanuel and CPS officials are pressing for state legislative support that would ease the CPS pension burden, arguing that local taxpayers are penalized by having to pay property toward Chicago teachers' pensions and income taxes that support the state teachers' fund. No action was taken ahead of the legislature's adjournment May 31.
Moody's Investors Service last month stripped the Chicago Board of Education of its investment grade rating, one day after doing the same to Chicago. The board's $6.2 billion of debt was lowered to Ba3 with a negative outlook.
Previous downgrades earlier this year by Fitch Ratings and Moody's below the BBB level triggered swap termination events that could, under terms of the swap contracts, force payments of nearly $230 million to swap counterparties. The district has 10 interest rate swaps on a notional amount of $1.1 billion.