Finance and Facilities Committee Meeting: September 3, 2020

by Lynda Rubin

This remote Committee meeting, held  immediately after the Student Achievement Committee,  opened with an update on the District’s financial health in light of additional expenses and drops in revenue. The meeting did not, however, address the Board’s continued spending of large sums of money for contracts to favored businesses despite stating months ago that it was only going to spend money on essential programs. The Facilities Safety Report presented by the new Chief of Operations stands in contrast to the just released Office of Inspector General (OIG) Report that found both errors were made during the process and lies to the public about the safety of students and staff during in-school construction work and asbestos abatement. To date, no one has been held accountable. Any doubts about who the Board actually represents evaporated when, without prior announcement, representatives from a company vying for a tax-free KOZ contract, along with the City’s Commerce Director, were allowed to present a lengthy presentation that contradicted many statements in its August presentation. 

[The posted agendas for both committees can be found here.  Slide presentations and descriptions of upcoming Action Items for both committees can be accessed through links on this agenda.]

Minutes for the Joint Committee meeting of August 13, 2020 were approved.

Lee Huang chaired the Finance and Facilities meeting; Committee members Letitia Egea-Hinton and Joyce Wilkerson attended.  Board members Angela McIver, Julia Danzy, Mallory Fiz Lopez and Maria McColgan also attended. (Note: McColgan and Egea-Hinton left the meeting just before the Facilities Update.)

District Faces Fiscal Challenges 

Chief Financial Officer Uri Monson reviewed current financial status and concerns during the  continued Covid restrictions.  August revenues from Liquor-by-the-Drink and Use and Occupancy taxes have dropped more than previously projected by this office. Expenditures are, at the same time, higher than Monson had predicted. Monson expects there will be an increase in cyber charter enrollment, increasing District costs by $13 million. Any cyber charter with a business address in the city must be funded by the local district.

Cyber charters have launched an aggressive advertising campaign on radio and television to take advantage of the current upheaval. Wilkerson asked whether the upsurge in enrollment was due to Philadelphia students transferring, and she wondered  if the District could market its schools to these students when buildings reopen.  At this time the District plans to maintain current school staffing levels and hire a larger pool of supplemental teachers for use when the face-to-face hybrid model is instituted. So far, an additional $10-12 million above the current budget will be spent on these new hires. There will be fewer reimbursements for food services, while savings during the current all-digital status (e.g. transportation) are not yet clear. Monson pointed to Central Office cuts and the hiring freeze as helpful to the District’s bottom line.  Monson updated information on money received from grants from both School Health and Safety Funding,  $7.9 million in the first funding cycle,  that will help offset (but not cover) costs to preparation of buildings, and the limited Governor’s Emergency Education Relief Fund (GEER) to both District public schools and charter schools. Monson noted that charter schools received monies directly from this fund and from additional grants they were allowed to apply for.  McIver expressed concerns about the loss of $6 million per month from the liquor-by-the-drink tax and said that the District must take a “creative” approach to making up that revenue. She suggested that the District become more “intentional” in supporting local businesses that sell alcohol. McIver explained  that the campaign did not necessarily have to come from 440, that individual  Home and School chapters could organize such an effort. Wilkerson suggested that McIver ask these questions of the City Commerce Director, who would be making an appearance later in the meeting.  Monson did reply about the reality that liquor, cigarettes and gambling–the “sin taxes”–make up a large part of local education funding.

The Board missed an opportunity to point out that sin taxes cannot adequately fund public education and that funding based largely on property taxes puts poorer communities at a disadvantage. 

In response to questions about newly hired supplemental teachers if or when buildings reopen, Monson said that lay-offs will be a last resort. He said that they have no plan to move resources around as yet. Assistant Superintendents are talking with Principals about their staffing needs; Dr. Hite and Monson consult frequently about changes in the District’s financial status. 

APPS continues to raise the issue of the Board’s and District’s expenditures to outsource services, especially for non-essential programs and materials, in a time of budget unknowns. The District has a long history of spending large amounts contracting with outside companies instead of increasing in-house capacity that would be cheaper and more educationally coherent. Building maintenance and repairs have been put off.  Last Spring, in response to repeated questions from APPS members, the Board promised to limit spending to essential items, but that has not happened.

Board Introduces New Facilities Chief 

Reggie McNeal, who joined the District as Chief Operating Officer on August 24, narrated a brief slide presentation on the Environmental Plan Update. Danzy and Fix Lopez told McNeal that videos produced  by District Asbestos Expert Dr. Arthur Frank are too stodgy to capture the interest of parents and students, nor are they serviceable for parents speaking foreign languages.  McNeal said that he had not yet seen the Dr. Frank videos. Huang addressed the OIG Report’s criticisms of the Hite administration’s handling of  Ben Franklin HS/SLA building construction and eventual student relocation in the past three years. 

Huang stated that thetunnel vision commitment to meeting timelines ignoring the realities culture in the Facilities/Operations Dept. needs to change.” Huang stated that this is particularly a failure of Dr. Hite, with a role played by the Board. Huang asked McNeal to address this culture in his office. McNeal said that he understands tunnel vision on timelines and their effects on the safety of students. However, he also stated that he has to trust staff approval for whether a school is ready for occupancy.

APPS members cannot accept the Board’s failure to hold Dr. Hite and members of this administration accountable for the Ben Franklin/SLA debacle. Does Huang expect someone just hired to change the way the Administration has operated since 2012? What about the Board’s responsibility to examine its own role in the scandal? The OIG Report details countless decisions  made at the expense of the health of both students and staff. Not only were the pleas of staff and parents ignored, but Hite administration officials lied to them.  Knowing the obvious health risks, they had children and adults breathing in toxic substances for over a year. Most disturbing is the Board’s reaction, or lack thereof, to the damning picture painted in the OIG Report. This denial of responsibility and accountability cannot be allowed to fade into the rearview mirror without action.

Unprecedented Reconsideration for Corporate Tax Breaks 

Action #27 Authorization of Keystone Opportunity Zone (KOZ), added to the agenda the morning of the meeting, represents a reconsideration of a resolution  to approve Hilco’s application for tax-free status for its refinery project. That Item had been voted down at the August 20th Action Meeting. Not only did Hilco and the City get an immediate do-over, but the Board provided extensive time for the three Hilco  representatives and Mayor Kenney’s Commerce Director Sylvie Gallier Howard to give their lengthy power-point.  In many respects Hilco’s presentation at this meeting contradicted the one it gave just last month. 

Huang did not explain why Hilco was granted another presentation or why the presentation was omitted from the agenda. Because the public had no knowledge of the Hilco presentation, no one signed up to speak on that topic. Even if someone had spotted the Item before the meeting, it would have been too late to sign up to speak, as that window closes the day before. The Board made room for corporate representatives seeking tax cuts, but it did not make room for members of the community  to speak against it. Among the flip-flops from Hilco’s first to second presentations were promises about providing apprentice jobs for students and other workers. Two weeks before, when asked for the same assurances, Hilco said they do not actually hire staff, they hire developers who control their workforce. This time Hilco promised all sorts of career opportunities and preparatory programs for students and new workers.  Board members raised the issue of the deep racism in construction jobs and the exclusion of minorities in such trades, but then seemed to be assuaged by a few limp promises.

Hilco, whose reputation in other cities for not following through on promises and even abandoning projects mid-stream has been well documented in major media outlets, 

will now be a champion of reinventing how KOZ’s are chosen for the public good?  According to the Hilco representative, approvals have always been based solely on tax write-offs; in fact, he recited state rules that do not allow for any conditions to be made for approval. The Board did not ask for any explanation of the discrepancies. 

Donna Cooper, Executive Director of PCCY (Philadelphia Citizens for Children and Youth), said in her recent Inquirer commentary

“Philadelphia students already suffer the indignity of an inferior education. The approval of this tax break would add insult to injury by taking funds out of our classrooms to make a meaningless contribution toward an enormous redevelopment project, orchestrated by a company managing $2.5 billion in assets. It simply belies credibility to think that a project this large cannot afford to make their school property tax payments.”

The Board should explain at its next meeting why it snuck in an extensive multi-person presentation by a corporation that stands to benefit from tax breaks–which means, as Cooper points out in her Inquirer commentary, that the rest of us will just have to pay more.

Parent and activist Cecelia Thompson spoke on School District Building walk-throughs. Thompson, the only public speaker at this meeting, stated that family and community members should be invited to participate in all walk-throughs with administration and union representatives to oversee the condition of the buildings their children would be returning to. She specifically mentioned cleanliness of bathrooms and social distancing accommodations.  Thompson added that parents of special needs and ELL students should be included, as well as community organizations serving those students.She suggested that the District should establish a hotline for reporting problems and an online form sent to the District and to the Board. Since many previously reported repairs have not been completed, an on-site examination should be made after the correction. Thompson reminded the Board that requests for funding support by the Fund for Special Education are due in November with money provided by May 5th. She asked if the District was going to apply this year. Monson stated the District will be applying for any funding for which we are eligible.