What is up with the chain on that one Teacher?

I tend to fix up about 3 or 4 bikes a year for city riding.
I usually spend less than $20 on them and sometimes give them to friends and relatives to ride.
My biggest problem is finding large enough frames to be comfortable, but there are tons of 20" bikes around and they usually have 26 x 1.5 wheels.
The second biggest problem is getting inexpensive racks for carrying stuff.
The third thing is fenders.

The joy of cheap looking older bikes is they can have the best of parts in them and people(thieves,vandals) still don't mess with them much.