Urban Prep strike enters day two as CTU signals financial concerns

Urban Prep strike enters day two as CTU signals financial concerns

Sticking points include Urban Prep’s refusal to enshrine students’ special education rights in enforceable contract language, and management’s insistence on an extended period to fire educators even if highly qualified, despite the charter operator’s notoriously high teacher turnover rate. CHICAGO — Educators at three Urban Prep campuses will hold a press conference at 7:30 a.m. TODAY, Tuesday, June 8 at Urban Prep’s Englewood campus, located at 6201 S. Stewart Ave., to talk about next steps in their efforts to land a fair contract and reopen schools. Educators went on strike Monday at Urban Prep’s three campuses: West, Englewood and Bronzeville. Despite numerous requests from striking teachers to continue negotiations, Urban Prep management did not agree to meet again until 5:30 p.m. Monday. The parties bargained late into Monday night, but despite some productive conversations, Urban Prep was not willing to compromise on several of the teachers’ key issues to reach an agreement.

Teachers are also flagging troubling financial practices at Urban Prep, whose CEO makes nearly as much to run just three schools as CPS’ CEO earns to oversee more than 500 schools. In 2020 alone, Urban Prep management paid out more than $1.6 million to Merchant Cash Advance businesses — equal to nearly 30% of their annual instructional spending. In one of the agreements, Urban Prep sold $149,900 worth of future revenue for $100,000 — a profit of 50% for Queen Funding. In another agreement with Green Capital Funding, Urban Prep sold $438,000 worth of revenue for $300,000, a profit of 46% for Green Capital.

For Urban Prep, this has meant selling its future revenue from CPS and other taxing bodies — funds intended to support Chicago students and schools — to these lenders at a steep loss. Every dollar of that loss drives down the funds available for Urban Prep’s classrooms and student needs. Urban Prep also has received a total of $3 million in forgivable COVID PPP loans, yet teachers charge that they see no evidence that those funds have been invested in educational needs.

Many of the financial operators with whom Urban Prep has done business have addresses in New Jersey and New York, states with favorable laws for their activities. These agreements are not structured like typical loans; instead one party sells a portion of its future revenue to the lender for a fixed price — usually at a large profit for the lender. Those practices include the charter operator’s history of resorting to payday loan terms to finance school operations — even though CPS provides Urban Prep the same funding as other charter and district run schools. Among the troubling financial instruments that Urban Prep management has entered into are “Sales of Future Receivables” contracts with Merchant Cash Advance organizations. These contracts are unheard of in the public education sector and rare even amongst charter schools, because they inevitably come with shockingly high interest rates.

Source www.ctulocal1.org The Chicago Teachers Union represents more than 25,000 teachers and educational support personnel working in Chicago Public Schools, and by extension, the nearly 400,000 students and families they serve. The CTU is an affiliate of the American Federation of Teachers and the Illinois Federation of Teachers and is the third-largest teachers local in the United States. For more information please visit the CTU website at www.ctulocal1.org.

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