Wolf Administration, Chester Upland Receiver Propose Bold Financial Turnaround Plan For District

Aug 18, 2015, 14:40 ET from Pennsylvania Department of Education

HARRISBURG, Pa., Aug. 18, 2015 /PRNewswire-USNewswire/ -- Governor Tom Wolf today announced that Secretary of Education Pedro Rivera and Chester Upland School District Receiver, Dr. Francis V. Barnes, filed an amended financial recovery plan in Delaware County's Court of Common Pleas for the Chester Upland School District. Chester Upland's 2015-16 budget shows a projected budget deficit of more than $22 million, and without drastic corrective action to put the district on sound financial footing, the district's accumulated deficit will grow to more than $46 million.

"All children in the commonwealth deserve a high-quality education, and all of our lives are enriched when this happens," said Governor Wolf. "Unfortunately, for 25 years, the Chester Upland School District has mismanaged its finances and failed its students, and even more troubling is that the commonwealth's solution, through governors from both parties, has been to throw money at the problem in an attempt at one-time fixes and band aids, masking what is a recurring crisis.

"We can no longer accept the status quo and today, my administration filed a bold corrective action plan that will right Chester Upland's sinking financial ship," continued Governor Wolf. "This is the end of the road for Chester Upland, there can be no more one-time fixes that allow the district to only get by year-to-year because without action the district will not exist. My administration is taking this dramatic action because we cannot afford the toll this potential disaster could take on the children of Chester Upland School District."

The problems that Chester Upland is facing date back to 1990 and have persisted to today. The district was first classified as financially distressed in 1994. Since 2010-11, the district has received $74.25 million in state funding from one-time, unsustainable cash infusions that only provided temporary fixes. Equally as troubling, from 2003-04 until 2008-09, the district overspent by a total of $25.1 million, and from 2009-10 until 2011-12, the district overspent by a total of $19.3 million. Currently, the district spends more in payments to charter schools that its total annual basic education subsidy from the commonwealth and they spend more on special education students at charter schools than any other district in Pennsylvania. The district is required to pay the charter schools an inflated amount – an astonishing $40,315.42 – for each special education student. This is more than twice the amount it expends on its own students with special education needs and more than any other district in the commonwealth.

The district has a recurring and growing annual budget deficit that it cannot fix absent drastic measures to address their dire financial crisis, and without action Chester-Upland School District will not open its doors this year.

The Wolf Administration, through Secretary Rivera and Chester Upland Receiver, Dr. Francis Barnes, have proposed a sustainable plan to fix the district's finances and keep its doors open:

  • Initiate a forensic audit to reassure funds are being spent properly and to identify potential savings for 2015-16.
  • Bring in a financial turnaround specialist to find immediate savings in the 2015-16 school year, and to try to mitigate the district's debt.
  • Implement the special education rate proposed by the Special Education Funding Commission for special education students in brick-and-mortar charter schools to better reflect the charter schools' actual expenses and student counts. This would produce an estimated savings to the district of $20.7 million in 2015-16.
  • Implement a tuition cap of $5,950 per regular education student and the special education rate calculations proposed by the Special Education Funding Commission for special education students in cyber charter schools to better reflect actual costs and student counts. This would produce an estimated savings of $4.0 million in 2015-16.
  • Engage a financial management firm to achieve savings immediately in 2015-16 and beyond.
  • Restructure a loan agreement the district has with the Pennsylvania Department of Education to delay the first payment toward a $10 million loan.

"For too long the quality of education a student receives has been dictated by their zip code, and in some cases a child's education has suffered due to the missteps of adults," Secretary Rivera said. "Reducing the structural deficit is essential in order to secure financial stability for the district and make the improvements needed to provide Chester Upland students with the opportunities they deserve and those that the constitution's 'thorough and efficient' system demands"

You can view the amended recovery plan here.
You can view a fact sheet here.
You can view a historical perspective here.

Media contacts:
Jeff Sheridan, Governor's Office, 717-783-1116
Nicole Reigelman, Department of Education, 717-705-8642

 

SOURCE Pennsylvania Department of Education



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