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Chicago Achieves Savings via Streamlined Procurement Process
An efficient purchasing system and renegotiation of contracts with suppliers account for a third of $144 million in savings by Chicago Public Schools this year.
Chicago Public Schools has announced that it has found a way to shrink its budget deficit for next year by nearly $144 million. Some of the savings will be effected by a more aggressive purchasing strategy, and a smarter plan for technology upgrades. The new trend towards greater thrift comes courtesy of the district’s new procurement office, which was created in response to the efforts by the private contractors who deal with the CPS, to introduce more efficiencies and savings into the process of purchasing.
Additional cost-cutting will come as a result of recently introduced practices like having the milk deliveries cut from daily to once every two days and having schools cleaned at night.
The news is a good one for the district which is facing a $700 million budget deficit. For the second year in a row, CPS has to work out which programs will have their budgets reduced and which ones will get completely cut in order to cut operating expenses to cover the shortfall. The need is especially acute in light of the fact that the district will also need to come up with a way to pay for a longer school day starting next year. CPS has already announced that 850 district teachers will be losing their jobs this year, mostly due to school closures and conversion of “turnaround” schools from traditional public schools to charter-like schools, a process which usually leads to a complete staff replacement. The number won’t be finalized until the contract negotiations with the Chicago teachers union are concluded. If the union wins in its demand for higher salaries, the number of staff positions that will be eliminated might go up significantly.
The district has already said it is levying the maximum increase allowed to the property tax to raise an additional $41 million. The increase will mean an addition of $28 annually to the property tax bill sent to the owner of a $250,000 house in Chicago.
Ahead of the budget’s release, CPS spokeswoman Robyn Ziegler would not discuss how the district will close the remaining deficit.
Instead, officials focused on the savings realized for the 2012-13 budget. CPS officials said they challenged vendors’ costs by doing research on market prices and renegotiating where they saw a gap between that and what was being paid.
The district will also save money by pushing some of the services previously provided by the central office down to the school level. School principals will have the discretion to either continue the programs themselves or discontinue them and channel the money elsewhere.
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