He has accepted the resignation of the district’s chief financial officer, Everton Sewell, who headed the district’s financial staff as the district built up a $30 million deficit. Dade referenced Sewell’s departure during a school board meeting Tuesday night.
During the board meeting, Dade also said that he has imposed a hiring freeze and, with his staff, is analyzing $5.2 million in expenses items that were added to this year’s budget. Additionally, Dade said he’s looking at the costs of substitute teachers, contracted services, and the “extended learning” program.
- PHOTO BY JAMES BROWN, WXXI NEWS
- Rochester Superintendent Terry Dade, with his chief of staff, Annmarie Lehner, at Tuesday's school board meeting.
Over the long term, he said, he plans to try to “right size” the district – which will likely lead to school closings – and review the district’s school choice program, which has increased transportation costs.
In his presentation to the school board Tuesday night, Dade outlined what his investigation has found about the deficit’s causes and how he plans to deal with its impact.
While Dade filled in some of the details about the budget shortfall, the fundamental issue is that the district has increased expenses faster than its revenue has grown. It hasn’t budgeted enough in areas like substitute teachers, charter school tuition, and transportation, so it has overspent in those areas, he said. And as that happened, the district turned to its fund balance – its “savings account,” as he put it. It entirely depleted those funds, leaving the district with no money for unexpected expenses, he said.
Dade said he wants to build the fund balance to $29.3 million by the end of this budget year.
But, he told the board last night, “we will not be all budget, all the time.” If the district spends the next four months dealing with nothing but its financial problems, he said, “the state will ask why we weren’t focused on student achievement.”
In their discussion after Dade’s presentation, board members repeatedly expressed concern about their own lack of knowledge about the budget problem. And Dade said the problem wasn’t new. The district had been spending too much for several years and had been drawing down its reserves to balance the books, he said. And, he said, there were plenty of warning signs.
The school board approved all of the district’s budgets during those years, and board members said Tuesday night that no one warned them that there were problems. “I was assured that we had a healthy fund balance,” said board member Cynthia Elliott.
Dade noted that the district is currently in contract negotiations with its unions.
“We have to reset the contracts to Ground Zero,” said board member Natalie Sheppard. “We can’t afford the contracts we have now.”
In his presentation, Dade noted that as the district’s enrollment has declined, it has added 1064 people to its staff over the past four years, including 632 teachers and 33 administrators.
But several school board members pointed to the large needs of the city’s students. While enrollment has declined, board President Van White said, the number of special education students has increased dramatically. “My understanding is that enrollment of students with special needs is at a 10-year high,” he said.
“The homeless population among our students is up 49 percent,” White said, and “Rochester has more students who suffer from lead poisoning than Flint, Michigan.”