Committee Hearing, March 6, 2001

COUNCIL OF THE CITY OF PHILADELPHIA SCHOOL DISTRICT BUDGET BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, PA March 6, 2001 10:00 a.m. - - - Bill No. 010011 - "School Tax Authorization" Bill No. 010012 - "School Tax Authorization" Bill No. 010013 - "School Tax Authorization" (Full text of Bills attached.) PRESENT: COUNCIL PRESIDENT ANNA VERNA COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN JAMES KENNEY COUNCILWOMAN BLONDELL REYNOLDS-BROWN COUNCILMAN DAVID COHEN COUNCILWOMAN MARIAN B. TASCO COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN DARRELL CLARKE COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN FRANK RIZZO COUNCILMAN W. THACHER LONGSTRETH VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X Deborah Kahn, Secretary of Education...........5 Pedro Ramos, President, Board of Education.....14 Phil Goldsmith, Chief Executive Officer........21 Deidre Farmbry, Chief Academic Officer.........30 Rhonda Chatzkel, Chief Financial Officer.......43 John Lombardi, Transportation Services........139 Ron Daniels...................................156 Tom McGlinchey, CEO...........................283 3

Good morning, everyone. We're here this morning to hear from officials of the School District of Philadelphia as to what they propose to spend on operations for their Fiscal Year beginning July 1, 2001. As we all know, the School District's operating budget is not subject to the approval of City Council, whose role in the fiscal affairs of the District is limited to the authorization of the levy of taxes by the Board of Education of the School District. These hearings are basically for informational purposes only and are used to support the Board of Education's request for an authorization to levy taxes in the amount that the Board of Education, all of whoms members are appointed by the Mayor, believes are necessary to balance the budget for the School District of Philadelphia. The amount and adequacy of the District's budget is determined exclusively by the Board of Education. This is the Committee of the Whole. I would ask Mr. McPherson to please read the titles of Bills Nos. 010011, 010012 and 010013. 4 3/6/01 - School District Budget

Bill No. 010011 an ordinance amending Chapter 19-1800 of the Philadelphia Code entitled School Tax Authorization by amending Section 19-1801 to further authorize the Board of Education, the School District of Philadelphia to impose a tax on real estate within the City of Philadelphia. Bill No. 010012, an ordinance 10 amending Chapter 19-1800 of the Philadelphia Code entitled School Tax Authorization by amending Section 19-1804 to further authorize the Board of Education of the School District of Philadelphia to impose a tax on net income from real property, tangible and intangible personal property of residents of the School District of Philadelphia. Bill No. 010013, an ordinance 18 amending Chapter 19-1800 of the Philadelphia Code entitled School Tax Authorization by amending Section 19-1806 to further authorize the Board of Education of the School District of Philadelphia to impose a tax on the use or occupancy of real estate within the School District of Philadelphia.

Thank you. 5 3/6/01 - School District Budget Before we begin, I'd like everyone to know that Councilman Nutter's child is sick. He will be unable to attend today's hearings, but has indicated he'll be here tomorrow. Please Identify yourself.

Good morning, President Verna, Councilmembers. My name is Deborah Kahn. I'm the Secretary of Education for the City of Philadelphia. It is a privilege for me to be here this morning on behalf of Mayor John F. Street to lead off the presentation of the School District of Philadelphia's Fiscal Year 2002 budget. Joining me at the table on my left is the President of the Board of Education, Mr. Pedro Ramos, and the Vice President, Mrs. Dorothy Sumners Rush. On my right, our interim Chief Executive Officer, Philip Goldsmith, and Chief Academic Officer, Dr. Deidre Farmbry. And Rhonda Chatzkel, Chief Financial Officer. After our prepared remarks, we all will be available to answer questions. It has been one year to the day since the School District appeared in this 6 3/6/01 - School District Budget Chamber to present its preliminary budget for the current school year. It has been a long year. A year of making change and progress on our twin goals of improving educational performance and restoring the School District to financial stability. " We took responsibility and worked hard to get rid of the excuses, both in fact and perception, that for too long have prevented the School District from getting where it needs to go. Enormous challenges remain, but we are moving in the right direction. As a result of the Home Rule Charter change, the Mayor appointed a dedicated new School Board that has tackled tough issues, like academic standards, school uniforms, budget cuts and charter schools with intelligence and integrity. We work as a team. This Board is "our" Board, an integral part of Mayor Street's administration. We changed the management structure of the School District so that the Board's policies can be carried out more effectively. Strong management is as necessary 7 3/6/01 - School District Budget to obtain educational results as it is to exercise good business practices. Our new leaders have set a tone that we can accomplish more with cooperation, candor, concentration and courage. These values will be put to the test as the District's budget process unfolds and still more changes are forthcoming. We negotiated a landmark contract with the Philadelphia Federation of Teachers. I'm pleased to recognize that Mr. Jerry Jordon, the Vice President and Chief of Staff for the PFT and the PFT chief negotiators is with us today. The contract provides many benefits, including professional growth opportunities for teachers, better learning conditions for students and greater flexibility for management. In fact, this new contract addresses nearly all of the constraints that have been expressed by principals and other managers over the years in operating schools and the criticisms leveled against the District from outside sources whom we need as our allies. Successful implementation of this contract, which we are doing in partnership with the PFT, is 8 3/6/01 - School District Budget fundamental to achieving our ultimate goals for the School District. Working with a team of community members, the School District this year also developed a comprehensive education Empowerment plan to significantly improve our student's academic performance as measured by the Commonwealth's PSSA exam. Districts that fail to carry out their plans and raise student achievement face a State takeover in three or four years. The Empowerment plan was approved by the State Department of Education in January and it will guide our educational and financial decision making in the years ahead. Our proposed operating budget already contains funding to retain some of the essential elements of the plan that have been underway in our District for a while now, such as full-day kindergarten, because we know these are the right. Things to do. Additional funding is needed on top of our proposed operating budget.

Without it, the District will not be able to achieve the team's full vision of smaller class sizes, intensive 9 3/6/01 - School District Budget instruction for struggling students, wide-spread use of technology and safe, orderly schools. Complementing this educational plan, the School District for the first time has prepared a multi-year financial plan, similar in concept to the City's five-year plan. The plan was an important undertaking that provides a history of School District revenues and expenses over the past several years and it explains why the District is in financial crisis. The plan does not seek to portray villains or to make excuses. But it is a presentation of the facts in a clear and straight-forward manner. The all-important budget gap-closing chapter remains to be written. Underscoring all of these developments of the past year have been our efforts to build stronger relationships with the School District's chief funders, the Governor and General Assembly of Pennsylvania and the City Council. Being at odds with our funders makes no sense and we continue to take steps to get it right. We're very aware and appreciative of how concerned and committed the members of this Council are to helping strengthen Philadelphia's 10 3/6/01 - School District Budget public schools. We have met with you as a group and with individual members on numerous occasions throughout the year to keep you informed of events and solicit your advice. We still make mistakes. I hope you believe that our efforts deserve better marks. On the State level, Mayor Street and Governor Ridge have forged a positive relationship that is working well for our City in general and our schools in particular. That good relationship extends to the members of the Governor's staff and secretaries of education and budget. A vital expression of this mutual support came in arranging the budget agreement last spring, which enabled our schools to be open for this full year. 9 millions in new funds. As welcome as these funds are, it will still not be enough to solve the District's financial problems. We also continue to work hard with the General Assembly, our own delegation and other key 11 3/6/01 - School District Budget members to increase their knowledge and improve their image of the Philadelphia School District. Many meetings in Harrisburg and at home with legislative leaders and staff are helping to bridge the communication barriers. In fact, about ten days ago the members of the House Education Committee spent about hours with us in here in Philadelphia eager 9 to see our schools despite the snow storm. There are 10 some big differences for sure between Philadelphia 11 and all of the Commonwealth's 500 other School 12 Districts. But the more we talk, the more we find 13 growing areas of common ground that give us reasons 14 to be hopeful. 15 With all of these efforts and our 16 determination to avoid excuses, I wish I could tell 17 you that we have found the solutions to the School 18 District's financial problems. You will hear today 19 the reasons why we currently project a deficit next 20 year of $191 million. You also will hear that the 21 District and City Administration will do everything 22 possible on our own to reduce this number. Our 23 actions will include a combination of organizational 24 changes, spending cut-backs, targeted use of federal and other grant funds, generation of local non-tax 12 3/6/01 - School District Budget revenues, coordination or consolidation of functions between the City and the School District and a willingness to think and act outside the box for financial and educational solutions that make sense. But the School District's financial problems have been years in the making and they will not be resolved in one budget cycle, nor will the District be able to solve the problem on its own.

We simply must find a way, working together all of our partners, to generate sufficient recurring revenues to support a quality education for our 214,000 public school students. If we don't, let's not be surprised that the current conditions and results that we find so unsatisfactory will persist. For the next two days, we'll focus on the School District's budget. That means we'll be hearing about some of our big problems. But in truth, this is also an opportunity to share some of our successes. More than 70 percent of the School District's operating dollars are spent right in the classroom, and for that money our teachers, principals and counselors produce a lot of really successful students. They are the science and the chess and 13 3/6/01 - School District Budget the horticultural champions whose talents are awesome. They are the choral students whose concerts give us goose bumps. They are the learning disabled students who earn their places on the honor roll. They are the thousands of young men and women who become the first in their families to graduate from high school and go onto college. It helps me, and I hope it does you, to be reminded that in spite of our problems, we can take pride in our accomplishments and have confidence in our potential to do even better. My colleagues have important parts of the story to tell. Each will speak from his or her own perspective as we carry out our different roles in helping the School District do better. But from all of us you will hear a common commitment and conviction: this is a School District that needs and merits support for the sake of the children and this City, whose futures are one.

Good morning. My name is Pedro Ramos. I'm president of the Board of Education, School District of Philadelphia. 14 3/6/01 - School District Budget Last March when it was my pleasure to last testify before this Committee, I had the honor of introducing new members of the Board of Education along with some valuable veterans. Since our last appearance in this Chamber, I'm proud to say the new Board has worked tirelessly on behalf of the children of Philadelphia. Our volunteer Board members have put in many long hours and wrestled with serious challenges. If I may, I would like to introduce the Board Members here today, starting with our able vice president, Dorothy Sumners Rush seated to my left. Also sitting immediately behind me are Board Members Martin Benarik; Reverend Ralph Blanks; Helen Cunningham; Sandra Dungy-Glenn; Christine James Brown; Michael Masch and Dr. Amelio Maticoli.

Why don't you all stand so we can recognize you. (Applause.)

I'd like to note, as I was reading their names I was happy to see they were all still there. The past 12 months have brought 15 3/6/01 - School District Budget some highly significant and very positive changes to the School District. One could almost call it a new era. We have, as I said, a new Board, all of whom were appointed by one Mayor, and all of whom are accountable to that Mayor. I'm a five-year veteran of the Board and I can't begin to tell you how this has changed the way we do our business. We still are a diverse body with expertise in many fields, but now I see our Board as one team joined for the betterment of public education in this City. This Board has not been afraid to roll up its shirt sleeves and do the work it feels must be done, even if the decisions we made were not universally popular. The mandatory uniform policy is an excellent example. Through personal visits in last winter's education town meetings held in every 20 cluster, the Board heard citizens throughout the 21 City say they wanted children in uniform. So the 22 Board, under the leadership of Christine James Brown, looked at the issue from all sides, convened hearings, took testimony, and with the help of parents, students, teachers and 16 3/6/01 - School District Budget administrators crafted a policy. The Board also did something very bold. It did not try to "sell" uniforms as a panacea for many of the ills that are present in our schools. The Board took the realistic approach of saying uniforms are a good thing for improving school climate and making parents happier, but that policy is by no means a silver bullet. Another major change for the School District is our new management structure. This past October we named Philip Goldsmith as our interim Chief Executive Officer. We adopted this business model to focus and leverage the District resources, time, people and money towards its educational mission. Working with Phil on his leadership team is the respected educator, Dr. Deidre Farmbry, the Chief Academic Officer. Rhonda Chatzkel is our Chief Financial Officer. Phil, Deidre and Rhonda will be testifying in a few minutes. Rounding out the team is Tom McGlinchey, Chief Operating Officer, and Ron Daniels, Chief Information Officer. 17 3/6/01 - School District Budget We believe that this new structure increases the importance of education by allowing Deidra and the educators that she leads to focus on teaching and learning, the things they do best, while trained and seasoned managers do what they do best, manage. While there have been some growing pains as we implemented this new structure, I was pleased and surprised to see how quickly the new lines of authority were extended throughout the School District. Phil and his team have brought to the School District a new way of looking at all of the things that we do. As someone from the private sector who believes that too many School District employees spend too much time in meetings, I was pleased when one of Phil's first acts was to post standards for meetings in every conference room. A blue sign hangs in every conference room asking who called the meeting and why. Whether everyone in the room needs to be there, whether it is the best use of their time, whether someone who is not there should be, and whether the meeting will help the children and, if so, how and when. 18 3/6/01 - School District Budget Phil also took the issue of discipline by the horns and is dealing with it thoughtfully and aggressively. In addition, Phil is communicating that dollar savings don't need six zeros to be significant. The manager's perspective has also demanded greater focus on all sides of our house. The last year has also been a dramatic change in the relationship between the District and Harrisburg. Indeed, it is totally inaccurate for us to speak of us and them anymore.

For the past year we have enjoyed a relationship that put aside many of the City and State differences that impeded our progress and we have worked together for Philadelphia's children. Perhaps the most significant example of this new cooperation was the new contract with the Philadelphia Federation of Teachers. It would have been impossible for the School District acting alone to offer our teachers all that they deserve. It would have been nearly impossible for the City and the School District to put together a decent package. 19 3/6/01 - School District Budget With the State, the City and School District working together, and here's an exciting word "cooperating," we were able to offer our teachers a contract they could accept and not one school day was missed. We are also enjoying improved relations with the PFT. It's no secret that the contract negotiations were long and difficult. After the pact was approved, the Union and School District came together promptly and professionally to work together for our children. I want to point out two examples. Shortly after Phil took the helm, PFT president, Ted Kirsch suggested Phil convene what is popularly known as a summit on the critical issue of school safety. I'm pleased to report to you that the first session of the safe school collaborative will be held later this month with at least two more sessions to follow. The second example is just as exciting. Procedures were developed to implement a revolutionary concept contained in the new contract, the selection of teachers by schools, rather than the selection of schools by teachers. 20 3/6/01 - School District Budget Teachers at 15 schools volunteered their schools to be pilot sites. As we learned from the pilot, this number will continue to expand. None of this is to in any way diminish the challenges we face on many fronts, not the least of which is financial. I want to leave you with the notion that this Board and Administration have been working hard to meet all the challenges through collaboration and cooperation with all of our stake holders. Certainly, this Council is one of our principal partners and we're here today to receive your help. At this point, I'd like to thank you and introduce Phil Goldsmith, the School District's interim Chief Executive Officer.

Thank you. Good morning, President Verna, Councilwoman Miller, Members of City Council. Aside from the people that have already been introduced, and others will be introduced later, I do want to acknowledge that there are a number of people here from the School District who really helped me and helped Dr. 21 3/6/01 - School District Budget Farmbry in providing us with the expertise and support to get the job done. I want to make sure that they're recognized for their support and hard work. Last November 1st I assumed the position as interim Chief Executive Officer of the School District as part of a new management structure the Board approved. I'm pleased to be working with my colleague Dr. Farmbry, who in August was named Chief Academic Officer. I accepted the position as interim CEO to give the Board time to evaluate the viability of this model and assess the characteristics and attributes needed in a permanent CEO. I also thought it would bring a fresh set of eyes to the School District. Not the eyes of an educator, yet someone who cares about education and who has also been in the private sector but familiar with the special dynamics of the public sector. But whether we are in the private sector representing shareholders or in the public sector representing tax payers and constituents, one thing should remain the same, we have an 22 3/6/01 - School District Budget obligation to manage our scarce resources in the most effective manner possible. We must always be asking whether there isn't a better way to be doing something. In fact, we should be asking whether we have to do it in the first place. Is it central to our core mission? Is there someone else who can do it better or more efficiently? We owe it to our school children to be asking these questions. These are the questions that I have been asking, some of the answers are complex and will take time; others, frankly, are Basic Management 01 practices. It's good, old fashion blocking and tackling. It's about having clear objectives, appropriate policies and procedures, a way to monitor results, a feedback, an accountability system. For example, we must better monitor and control overtime. We have begun that process. We must make sure that overnight travel and conferences are being utilized consistent with our educational focus. We have begun that process. 23 3/6/01 - School District Budget We must look in every nook and cranny for unnecessary costs, such as unneeded telephone lines. We have begun that process. We must make sure that we have a methodology in place to prioritize technology projects to ensure they are in line with our strategic needs. We have begun that process. We must look at ways that the City and School District can leverage their resources in expertise. Our chief Operating Officer, Tom McGlinchy, and City Managing Director, Joe Martz, have begun that process in the areas of fleet management and risk management. There are a host of other areas the City and School District can and must look at. In New York City, for example, the police department assumed responsibility for its School District's police officers. That has improved the recruiting, training and supervising of New York school safety officers. Our School District has the fourth largest security force in the Commonwealth. I can assure you Commissioner Timoney knows a lot more about policing than I do. 24 3/6/01 - School District Budget The retention of teachers is a critical issue for this District. It is our teachers who we rely on day in and day out. We have intensified our efforts to understand why teachers leave. For every experienced teacher we lose, it is one more inexperienced teacher we have to recruit. In the business world, it is common knowledge that there it is much better to retain a customer than to have to find a new one. Teachers are no different. We are trying to do a better job of analyzing our data. For example, are there some schools where the turnover is greater?

Is there a specific point in time when teachers leave? When they leave, where are they going and why? This information will not only help us project what our needs may be in the future, but more importantly help us design targeted strategies to increase our retention rate. A school-safe environment is one such strategy. It is essential if we are to retain and recruit teachers. It is also essential in fostering a learning environment in our schools for our children. It is essential in 25 3/6/01 - School District Budget order to retain the public's trust and confidence and public education. The fact of the matter is that we are in a fight for market share, and a safe school environment is a must. It is a priority. We are undertaking a number of steps: First and foremost, to solve a problem you have to first acknowledge that it exists. A safe school environment is not simply a Philadelphia issue; it exists in our suburbs and across the country, as today's headlines remind us. My concern, indeed my responsibility, is here in Philadelphia. Secondly, you have to let people know what you expect. Dr. Farmbry and I have communicated with our school administrators that we expect them to report serious incidents promptly, as required by School District policy and State law. Not reporting and under-reporting will not be tolerated. Thirdly, at Central Administration, we need to make sure our processes are as streamlined as possible. We are reviewing our procedures and will continue to do 3/6/01 - School District Budget so. In some cases, we've already streamlined the paperwork. CEP, Community Educational Partners, an innovative alternative school is now filled to capacity. We look forward to its larger new facility in the fall. Fourth, we must recognize that a safe school environment is not the responsibility of the Administration alone. It will require cooperation and team work among the entire School District family and beyond, with other agencies and organizations. Consequently, I have established a safe school collaborative. It consists of representatives of teachers, principals, cluster leaders, administrators, parents, the Board and students. I thank Ted Kirsch and the PFT for suggesting this concept to me. The first meeting of the safe school collaborative will be held later this month. Two others meetings will follow; one in April and one in May. We can hear from others as to their recommendations and suggestions on what we can be doing together. Our work in this and other areas will continue. 27 3/6/01 - School District Budget Today we present you with a proposed operating budget for Fiscal Year 2001, contains $191 million deficit. This is a staff-generated budget. It is the first step in our process. Much work remains to be done. We must be true to Mayor Street's commitment to cut $100,000,000 of expenses from the budget over four years. Last year was the first down payment. It is now time for the next one. It is essential that in the months and years ahead we re-evaluate the way we conduct our business, not only in our business services like transportation or facilities or food service, but also in the way we provide and support educational services. Like any successful enterprise, we must focus on our core mission. We are inundated with many good ideas and programs, but the fact is that we can only do so much. To use the language of technology, our bandwith is measured by dollars, time and capacity is limited. So we must make choices. When we say no, as we must, it's 28 3/6/01 - School District Budget not that we don't care; it's because we do care. We must focus on what is essential and build on what we know works. Let us not forget that the most important organizational unit in the School District is a classroom. It is our center stage. Our students are the stars. Our administrative function should exist for one purpose, to support the learning and teaching that takes place in our schools.

We are, in essence, the stage hands. We need to develop a customer service orientation toward our schools that would rival any business. Our students are no less important. Dr. Farmbry and I have been and will continue to evaluate the District's organizational structure to determine what makes the most sense at this point in time. We must preserve what is best with the current system and shed what is not. I'm not advocating change for change sake, but instead to reinvest the savings and resources into hands-on teaching and learning. After all, that is our mission. Although there are things we can do more efficiently and effectively, I must strongly 29 3/6/01 - School District Budget caution we cannot cut our way out of this financial problem. Many of the changes we aspire to will not occur overnight. Under the leadership of Board Member Mike Masch and Chief Financial Officer Rhonda Chatzkel, we have developed a three-year financial outlook for the District. It explains why we are where we are. As a result, we have a more accurate picture of the magnitude of the situation facing us. As our Chief Financial Officer, Ms. Chatzkel, will demonstrate, the current financial situation did not occur overnight. One-time financial fixes over the years have allowed us to forestall a deficit which otherwise would have occurred in 1997. These one-time actions allowed us to get through the school years, but they masked the District's underlying structural deficit. Consequently, the deficit for 2001 and beyond is more pronounced and stark than ever. I know that you have heard that before, but the multi-year plan tells a story as accurately and as cogently as possible. Without 30 3/6/01 - School District Budget a full and open understanding, we will not be able to arrive at a comprehensive solution to our financial issues. Without a long-term comprehensive solution involving the City, the State and the District, we will be unable to provide the type of education the school children of this Commonwealth's largest City need, deserve and require to ensure they become productive citizens. Thank you.

Thank you.

I'd like to now introduce our Chief Academic Officer, Dr. Deidre Farmbry.

Good morning, Council President Verna, Councilwoman Miller and Council Members. My name is Deidre Farmbry. I'm the Chief Academic Officer for the School District of Philadelphia. I thank you for the opportunity to update you on the educational progress being made in our District. As you are all aware, we are in the midst of a major transformation of the management structure of the District. My role as 31 3/6/01 - School District Budget Chief Academic Officer is to evaluate and promote sound educational policies and programs that support what is the key, the prime, the absolutely vital element of this School District, the classroom. It is in the 9000 classrooms of our 264 schools where the real work gets done. It's in the classrooms that are 212,000 students guided by our 13,500 teachers learning to connect today's successful learning with tomorrow's success in the workplace, in the Boardroom and in the this Chamber. As a proud product of the School District of Philadelphia myself and as a former teacher, department head, principal and cluster leader, I am keenly aware that making the connection has never been more challenging for Philadelphia and, indeed, for most urban School Districts. Schools reflect society. Nowhere in Philadelphia is the impact of the City's evolving demographics and economics felt more keenly than in our schools. Let me site just two examples. 32 3/6/01 - School District Budget Seventy-five languages and dialects are spoken by children in our District. Among them, Cambodian, Mandarin Chinese, Hmong Vietnamese, Russian and Albanian. Even within the more traditional world languages, such as French, there are dialects which vary by region. Seventy-eight percent of our students are from low-income households. Grand parents who live on fixed incomes are raising a significant percentage of our students. That means we must provide basic services, such as health screenings even as we teach reading, math, technology and science. While such facts of these have changed over the past decade, the overall story line of the triumphs and trials of the School District have remained pretty much the same; big City, poor kids, a staff trying and parents aspiring. My first experience telling that story came 13 years ago when I wrote and revised materials for former superintendent. Yes, I'm here 13 years later and the story line is the same; big City, poor kids, a staff that is trying and parents still aspiring. A major difference 33 3/6/01 - School District Budget this time is a degree to which finances are tightening. Consequently, the road to the happy ending that we all want for the story this year will be accompanied by tough decisions within the District over what is worthy of preserving and what gets eliminated. Everyone who is spellbound by the story, either because of their direct involvement in it or their desire to alter the ending, is aware that this year more than ever a satisfactory ending will take herculean and creative maneuvering given the fiscal realities and constant pressure for our students to do better. As we engage in this yearly process of balancing fiscal prudence with educational responsibilities, we must always keep our eyes on the most important characters in this School District story, without whom there would be no tale to tell. They are our students, whose personal stories add to the complexity of each chapter. Whether it is the chapter on pre-school, grade school, middle school or high 34 3/6/01 - School District Budget school, their story of struggle and success anchor our efforts and lend focus to the overall District plot line and educational story that leads to self-sufficiency and solid citizenship. Keeping that end in mind, please indulge me while I write the current chapter by focusing on individual highlights.

Just this winter, the District began a partnership with the prestigious United States Naval Academy to help students at Benjamin Franklin High School prepare to attend that academy. Arlene Fields, the coordinator for the Naval Academy Center of Influence at Benjamin Franklin High School, the woman who initiated the partnership, is here today. We are impartial when it comes to the service academies. In the audience are four students, Aneesa Romans, Joshua Young, Thristan Senior and Khristina Allen from Carver High School who have been accepted to West Point. They are here with their exemplary principal Roselyn Chivis, and Herb Young, corporate partner from Turner Construction who helped to initiate that connection. ) 35 3/6/01 - School District Budget

Despite our fiscal constraints, the District provides instruction in vocal and instrumental music in neighborhood schools, not simply in music-magnet schools. About 270 music teachers provide not only appreciation, but also opportunities to perform and compose. In the audience are fifth grader Jasmine Hernandez, her teacher Lillian Adorno and her Principal, Sonja Perez from Potter-Thomas School. Jasmine's composition was orchestrated by professional composer Robert Sierra and performed by the Philadelphia Orchestra. (Applause.)

Last month on February 17th, 40 students performed with the Philadelphia Orchestra at the Academy of Music in the side-by-side program many of you may have attended. Also joining us today are students from the West Philadelphia High School Automotive Academy whose electric car will be entered into the National Tour de Soul in May. (Applause.)

It is clear that many hurdles remain as the District moves into the 21st Century, but the District is moving forward where it 36 3/6/01 - School District Budget counts the most, teaching and learning. I will name a few items to prove that point. This is the School District that has seen both student attendance and achievement rise to levels honored by the Commonwealth of Pennsylvania. Fifty-eight schools received 1.3 million of the State's awards for improved performance on State standardized tests, and 10 schools received $525,800 of the awards for 11 improved attendance. Five of our schools 12 received awards in both categories. 13 In the audience is Creighton 14 principal Katherine McKellar-Carter and Home and 15 School President Liberta Veara. 16 Creighton's 8th grade students 17 showed the most impressive improvement, not only 18 on the State's test but also on the District's 19 own SAT-9 test. 20 (Applause.) 21

This is a School 22 District which has pioneered in partnership with 23 communities of faith starting years ago, long before President Bush endorsed that concept. Over 150 churches, synagogues and mosques are working with 37 3/6/01 - School District Budget schools to improve educational opportunities. Reverend Albert Campbell of Mt. Carmel Baptist Church in West Philadelphia and Reverend Robert Shine of Barachah Baptist Church in West Oak Lane have engaged their congregations in school partnerships resulting in exemplary after-school programs and mentoring relationships. The Reverend Joel Barnaby of Port Richmond's Greater Church of Philadelphia and Bill and Nancy Wolf of St. Philip United Methodist Church of Harrowgate run after-school programs with the Sheridan School. This is the School District that is working with the Philadelphia Federation of Teachers and the Commonwealth Association of School Administrators, the administrators and principal union, to develop the most effective plans for use of the most precious resource we have, time in the classroom with children and teachers working to raise their skills. Next school year, this team's work will help our teachers and children get the most out of the extra half hour a day we will be 38 3/6/01 - School District Budget implementing as a result of the new PFT contract. This is the School District that is holding the line on requiring students to take more courses in math, science and world languages, and trying innovative efforts to relieve the shortage of teachers in those subject areas, a shortage that is affecting Districts nationwide. This is a School District that has gained national recognition for the reduced class size early bound literacy initiative, which has brought 494 literacy intern teachers to 176 schools, where these college graduates partner with a classroom teacher to give kindergarten and first grade children a double-dose of attention focused on reading. The results after one year shows more kindergarten and first graders reading on grade level, and more teachers choosing to stay in the District. This is the School District which has created twilight schools, alternative educational programs associated with our comprehensive high schools for students with severe and persistent behavioral and attendance problems. 39 3/6/01 - School District Budget At one high school, more than percent of the twilight school 9th graders were attempting to pass 9th grade courses for a third time. At the same school during 1999-2000, 57 percent of twilight school 9th graders earned at least one credit and 34 percent had earned the maximum two. As you can see from just these examples, good, solid instruction and learning goes on each day in this District, the nation's seventh largest. I haven't the time to list more successes of our children, the Baldi Middle School's "Math Counts" team victory in regional competition or AMY Northwest's partnership with the Prince Theater to help students write and perform their own plays, or the Lincoln and Saul High Schools' team, which along with several colleges, created a combined major exhibit at this year's Philadelphia Flower Show at the Pennsylvania Convention Center. I can't begin to list the achievements of our great graduates, which include several members of this body, as well as University presidents, heart surgeons and others you will be hearing about soon on radio. 40 3/6/01 - School District Budget Back to the most important feature of the District's progress, student achievement. In addition to report card grades, progress is documented each year by results on the SAT-9, Stanford Achievement Test, and the State's 7 PSSA. The SAT-9 measures student progress in 8 reading, math and science with graduated scores 9 from below basic one to advanced.

Each year since 1995-96, student achievement on the SAT-9 has improved at each level; elementary, middle and high school, and in each subject; reading, math and science. This is a remarkable achievement, one for which our students and teachers deserve our praise and even a round of enthusiastic applause. ) The most successful students on SAT-9 were the students in the lower grades, where the students were the first to experience full-day kindergarten and new programs to improve reading instruction. In Grade 4, 58 percent of students reached basic levels across reading, math and science last school year. 3 percent of 41 3/6/01 - School District Budget 4th graders reached the same levels. Even more remarkable, the achievement gained came even as increasing numbers of students participated in the test, including special education pupils and English language learners. In most large-scale testing programs, such inclusiveness typically results in lower schools while being more selective about who was tested typically results in higher scores. All in all, however, I'm not satisfied. As Chief Academic Officer of the District, I will not be satisfied until every school focuses on the essentials of proficiency in reading, writing, mathematics and science, until every principal, administrator and non-instructional staff member recognizes the classroom as center stage and performs all their duties to support the children as their customers. I will not be satisfied until teachers are provided with the training and tools to implement high quality instruction, and school and District leaders the training and tools to lead and manage effectively. The District's 42 3/6/01 - School District Budget placement on the State's Empowerment list by virtue of our score's rankings in reading and math as measured by the PSSA heightens the challenge to improve. We accept the challenge and commend the efforts of the Empowerment team in producing a strategic plan for improvement. This plan reinforces the need for the continuation of full-day kindergarten and early balanced literacy. The plan invites a revisitation of organizational alignment and supports greater accountability and public disclosure of school progress. The plan calls for a concentrated focus on reading, math and science. In essence, the plan requires that we focus on what is essential and build on what works. My role is clear. I plan to set high expectations, not only for students, but also for staff, and to mandate implementation of educational programs and supports that work everywhere in the District. I will focus on the District's core responsibility, providing all students with effective instruction, instruction that gives them the educational skills and tools 43 3/6/01 - School District Budget needed to become productive citizens. I welcome Council's support and look forward to a productive relationship as we forge a District that builds on what works and recognizes that when our students succeed, we all succeed. Thank you. Now I may introduce our Chief Financial Officer, Ronald Chatzkel.

Good morning, Council President Verna, Councilwoman Miller and Councilmembers. My name is Rhonda Chatzkel. I'm the Chief Financial Officer of the School District. Thank you for this opportunity to update you on the financial status of the School District of Philadelphia. You have each received a copy of the School District's Fiscal Year 2002 staff requested operating budget. This budget projects a cumulative deficit of $44 million for the current Fiscal Year ending June 30, 2001. This reflects an improvement of $36 million in the cumulative deficit of $80 million that was projected last May, May of 2000. To put this improvement in perspective, it represents a variance of about 44 3/6/01 - School District Budget one percent of total School District spending. $20 million of the improvement is due to better-than-anticipated operating results for last year, Fiscal Year 2000. Approximately $15 million of the reduction in projected cumulative deficit is due to an overall slow-down in spending for Fiscal Year 2001. This slow-down is indicative of the School District's efforts to contain costs as we embark on the critical task ahead, the difficult but necessary goal of identifying and eliminating unnecessary costs. As Mr. Goldsmith and Dr. Farmbry have expressed, we must focus our limited resources on what is essential, the teaching and learning that takes place in our classrooms. The School District's staff requested operating budget for Fiscal Year 2002 projects an operating deficit of just over $191 million and a cumulative deficit or fund balance deficit of $235 million. 7 million increase in local tax revenues. 71 billion. We should spend a few moments discussing how those dollars are spent, for the vast majority are spent directly on educating children in our schools. 2 billion for fiscal year 2002 are projected to be spent directly on educational programs for students. In July 2000, Philadelphia was designated one of 11 School Districts across the Commonwealth to be placed on the education Empowerment list. The Empowerment team submitted a plan for improving the educational performance of Philadelphia's children. Although the estimated cost of implementing all of the new empowerment plan recommendations in Fiscal Year 2002 is in excess of $75 million, a significant number of the educational initiatives detailed in that plan are already included in the School District's educational program and operating budget. 46 3/6/01 - School District Budget Close to $100 million of the Fiscal Year 2002 budget is dedicated to empowerment initiatives that have already been put in place by the School District, such as full-day kindergarten, reduced class size and extended time for at-risk students. Approximately percent of the 9 School District's operating budget is spent on 10 building, maintaining, securing and operating the 11 School District schools. Another six percent is 12 spent on administrative costs, a percent that is 13 consistent with other large urban School 14 Districts. 15 The School District will dedicate 16 the weeks and months ahead to cutting expenses 17 wherever it can responsibly do so. It is evident 18 that the gap between expenses and revenues can 19 only be closed through a combination of new 20 revenues and cost containment. 21 This year, for the first time the 22 School District has prepared a three-year financial plan. At this point, the financial plan explains the School District's recent fiscal history and provides a forecast for the period 47 3/6/01 - School District Budget Fiscal Year 2002 through 2004. The plan does not yet address how the significant gap that is forecast will be closed. The plan does, however, illustrate that the current budget imbalance is the result of revenue growth that has been only moderate and expense growth that has been driven by legislative mandate, judicial order and sound educational policy.

If the recent trends and revenues and expenses do not reverse, the School District forecasts a cumulative fund balance deficit in excess of $785 million by June 30, 2004. An additional $363 million has been estimated as the cost of implementing the recommendations, the new recommendations of the education Empowerment team. The School District has assumed in its projections that these initiatives will be implemented to the degree that funding is made available through a combination of additional Empowerment appropriations by the State, additional grants and a refocusing of current School District dollars. 48 3/6/01 - School District Budget We are at a moment of fiscal crisis. Any responsible resolution of this crises requires that we understand the factors that created it. With your permission, I will briefly review the recent financial history of the School District and will reference a summary of the multi-year plan which I believe was distributed to each of you this morning. You should each have a copy of a financial update with today's date on it. As Secretary of Education Kahn mentioned this morning, the School District has some big differences relative to the other 500 School Districts across the Commonwealth. Perhaps the most significant of which is sheer size. The School District of Philadelphia's current enrollment is approximately 215,500 students. Our enrollment has grown by more than 22,000 students since 1991, more students than attend the third largest School District in all of Pennsylvania. Of this growth, 14,200 additional students have enrolled since 1993; 6,600 additional students have enrolled since 1995. We 49 3/6/01 - School District Budget operate the second largest transportation system in the Commonwealth and the fourth largest police force. Based on the most recent data we have from the Pennsylvania Department of Education, which is as of Fiscal Year 1998, we are four times larger than the next largest School District in Pennsylvania and we are 70 times larger than the average School District in Pennsylvania. 27,000 employees, close to 95 percent, are housed directly in our schools. It's noteworthy as we look at the composition of the School District work force that close to half of our employees are teachers. As Mr. Goldsmith and Dr. Farmbry mentioned, retention and recruitment of teachers is one of our most serious challenges. On , we have a pie chart that shows the composition of School District operating revenues which has been fairly consistent since 1995. About 60 percent of our revenues come from the Commonwealth, about 40 percent come from local sources. We should also mention for Fiscal Year 2001 there's about $258 million of categorical for grant funding. 50 3/6/01 - School District Budget Primary sources of this grant funding include Title One monies for poorer children, Head Start monies and Individuals with Disabilities Education Act, or IDEA monies. What's important to note about our grant funds is that they must be spent in accordance with the terms of the grant. They are not generally permitted to be used to supplant or replace operating funds. They are intended almost exclusively for new programs. Federal grants which comprise about 85 percent of our all of our grants specifically require that funds be used to supplement our existing educational programs. On we have a chart that shows our revenue growth since 1995. 9 percent coming from the City in average annual growth. 2 percent for the same periods. Just looking at revenue growth doesn't begin to tell the whole story. Because during the same period, our student population 51 3/6/01 - School District Budget has grown. 5 percent, which is just above the rate of inflation. We should talk for a few minutes about why our revenues per student have been growing at this relatively low rate of growth. On we talk briefly about the ESBE, or State's basic education subsidy formula. As we've talked about before, this formula was changed in 1993.

It was changed so that virtually all of the ESBE funding is on a block grant basis, not particularly sensitive to growth in the student population. But since 1993, this School District has grown by 14,200 students. The cumulative impact of this change in the ESBE formula for this School District has been $655 million over the period from 1992 when the ESBE was in place through the fiscal year 2001 budget. 8 million less basic education 52 3/6/01 - School District Budget funding than would have been calculated under the original formula. Another way to look at the impact of the change in the ESBE formula is to measure what ESBE would have been during this period if it had just grown at the rate of inflation. On the next page we have a chart that illustrates what ESBE would have been if it had grown again on a per-pupil basis just at the rate of inflation. 8 million in additional funding for Fiscal Year 2001 only. 3 percent in the aggregate from the period 1993 to 1998, which places it No. 10 among the 11 urban School Districts that we use as our benchmarks; in other 53 3/6/01 - School District Budget words, right near the bottom of that group. This is all data for 1998, I should mention, which is the latest data available from the State. We've checked our website and there isn't current information yet available for 1999. If you look at this top chart, you'll see that because of the slow growth out of the 501 School Districts across the Commonwealth, we're ranked 186 in the revenues per student we receive from the State. But that's only a piece of our story. The other piece of the story is local revenues. You will note in the same top chart that of the 501 School Districts in the Commonwealth we are ranked 373 in terms of local revenues that we receive per student. I would ask you to turn to the next page, which speaks a little bit about our local revenue growth. Revenues from local sources have grown moderately, as have revenues from state sources, but for different reasons. The primary reason is a weakness in the local economy and tax base as the City attempts to stem the migration of businesses and population. 54 3/6/01 - School District Budget This weakness is particularly evident in local property values which drive 85 percent of local revenues for the School District. The City, with City Council support, has taken steps to diversify local revenues since 1995, including establishment of the liquor sales tax and establishment of the annual grant. 9 per anum. 6 percent. 6 22 percent per year on a per-student basis for 23 reasons which we will explain. 24 On you will see a chart 25 that details the expenditures per student and 55 3/6/01 - School District Budget their growth since 1995. 6 percent per student over this time period, we've reached a cross-over point, as Mr. Goldsmith mentioned. Would we not have taken one time extraordinary measures, we would have experienced a fund balance deficit much sooner. Turn to , there's a bar graph that illustrates what our fund balance actually was, which is detailed in blue, and what it would have been had we not taken, again, one-time extraordinary measures to forestall our deficit, such as refinancing debt, to reduce debt service payments during this time period by $103 million, and a tax lien sale in 1997 which yielded $40 million. 7 million. The reason this chart is important is because it illustrates that our imbalance is embedded. It's embedded in our programs. And just as it took more than one 56 3/6/01 - School District Budget year to occur, it will take more than the span of one year to reverse. 6 percent during the time period when our revenues were two and a half percent? We should talk about that. If you turn to , what we've illustrated are five key drivers of growth and expense, growth and educational expense.

In the aggregate, these five categories, which include ESL bilingual services, full-day kindergarten, payments to other educational entities, safety and security and charter schools contribute $150 million more to Fiscal Year 2001 expenditures. ESL bilingual students during this time period from 1995 to 2001 have more than doubled from 5600 to 13,200 students. Full-day kindergarten was implemented Fiscal Year 1996 as mandated by desegregation order to be offered in all of our schools. Payments to other educational entities is largely driven by placements made by social service agencies or the courts. Safety and security, as Mr. Goldsmith mentioned, has increased due to an expansion in the number of 57 3/6/01 - School District Budget school police officers from 342 to 527 as we work to achieve a safer climate for our students. Charter schools were not in existence in 1995. But for this year, 2001, we budget charter school payments of close to $80 million. We expect the net cost of those payments to the District, after taking all savings and all additional revenues, to be over $66 million as a direct contributor to our deficit. 6 billion I would ask you to turn to , which illustrates how those dollars are spent in some broad terms. As we mentioned, more than 72 percent of all of our dollars are spent directly on education in our schools. 9 percent of all of 20 our spending represents all central instructional 21 support and administrative services. It includes 22 every administrative dollar that we spend. Of the close to $1 billion on that we spend directly in our 264 schools, kindergarten through 12th grade, what we've 58 3/6/01 - School District Budget highlighted for you are four key categories of expenditure as basic as you can get, teachers, counselors, books and principals, which together comprise 50 cents of every dollar we spend. highlights how we spend our dollars in some detail. I won't go over them in detail. I will note that the categories of expense that we've highlighted, we've highlighted because they've grown or because the dedicated reimbursement for those expenditures has not kept pace with the expenditures. I should spend one moment and mentioned administrative expenses which are highlighted at the bottom of this page. In total central service departments are $77 million. You will note that there is some growth in administrative department expense between 1995 and 2001. As you will turn to and look at the bottom of that page, however, that expenditure growth is attributed primarily to three things, to expanded student testing, to increase staffing in the Office of Human Resources as we focus on recruitment and 59 3/6/01 - School District Budget retention of teachers, and to design an implementation of a District-wide integrated networking and telecommunications infrastructure. Without those areas of growth, administrative expenses would have grown three percent per year since 1995. 6 percent per student on average since 1995, our spending is still below other urban School Districts. I would ask you to turn to where there is a comparative chart. This chart illustrates that relative to the other Districts in the Commonwealth, we ranked 320 in total spending. Relative to the other large urban Districts nationally, we are in the bottom half. S. 7 percent less than the Pennsylvania average, and yet, based on our currently projected revenues and a preliminary estimate of Fiscal Year 2002 expenses, the School District would need to cut expenses by close to 12 percent in order to achieve a balanced budget. 60 3/6/01 - School District Budget During its fiscal crises just over a decade ago, the City would have needed to close a gap of only four percent in order to balance its budget. The magnitude is much more serious for the School District. 1 million. Before we discuss the projected operating deficit for Fiscal Year 2002, it's important that we talk for a minute about the budget process.

6 million for the current year, Fiscal Year 2001. We are now eight months into the budget year and we now have eight months of actual data. Each year in late February and early March when we come to Council and as we prepared the budget for the next year, we use actual data to update our current year forecast. We have concluded that our actual expenses so far this year were about one percent less than was budgeted. Over the course of the entire year, this should result in about $15 million in 61 3/6/01 - School District Budget reduced spending. Some of these savings occurred in areas like employee benefits, where a migration to managed care plans led to a reduction in estimated costs for the year of over $5 million. These savings, wherever appropriate, have been carried forward to Fiscal Year 2002 and are reflected in our projected results for next year. 7 million. 1 million for Fiscal Year 2002. I would like to show you how we get there. 1 million. Again, I would like to preface all of this by noting this is a projection that we have very early in our budget process. It's based on what we have seen in the Governor's proposed budget, what we have seen in the City's projections for next year's revenue, and what the staff has requested by way of expenses. Between now and May 31, we'll be 62 3/6/01 - School District Budget taking a look at all facets of this budget. 7 million is artificially low. It's artificially low because in order to operate the schools for a full year this year, we needed assistance in the form of additional one-time revenues from the State and from the City. Some of those one-time contributions are highlighted. 2 million. That's the base from which we need to build our budget for next year. Some of our expense increases include the cost of the PFT contract, cost of non-PFT salary and benefits increases. We project charter school payments to increase for three reasons; one being increased enrollment in our existing charter schools, the other being approval of new charter schools, and finally the payment we make per student for charter school students is based on current year expenses. As our expenses go up, so do our charter school payments for each student 63 3/6/01 - School District Budget that's educated in the charter schools. We expect to have a full year of operation for community education partners. 1 million increase in CEP costs for next year. Our debt service is projected to increase as we undergo a continual capital improvement program, but also as a result of restructuring debt in the last half of the '90s. 5 million. We offset those increases with increased revenues that we note in the Governor's proposed budget, which aggregate just under $67 million. 4 percent, which is better than the Commonwealth as 64 3/6/01 - School District Budget a whole where the ESBE or basic education subsidy was increased. 1 million. We're very early in the budget process and we will endeavor to cut unnecessary costs and better focus the resources we have. But the size and duration of this deficit is such that only a combination of sustained revenue increases, continued cost containment and most likely some deficit funding can lead us towards regaining our fiscal balance. I'd like to invite questions from any of you for my colleagues.

Thank you very much. For the first go-around, we'll be timed five minutes and move on. Mr. Goldsmith, what does staff-generated budget mean?

At this point, President Verna, what it means is that these are requests that have come in from the staff of the 65 3/6/01 - School District Budget basic reports to Dr. Farmbry and I. While there are guidelines put in place and some priority setting, we haven't gone through those requests with a fine-tooth comb and really shape it to where we think it has to get. It's sort of a bottoms-up budget at this point in time without more of a top down look --

Can you tell us, does this budget include the savings and efficiencies you have achieved to date?

I think it has some of them in and I think that there's more to come in and there's more things that we plan to do that's not totally reflected in the staff's generated budget.

For the record, can you tell us what the savings and efficiencies that have already been achieved.

I'm not sure I can quantify them at this point in time. Things like overtime and travel policies are really just kicking in now. We'll have better details and more information as we move ahead in the months. In addition to the new initiatives 66 3/6/01 - School District Budget that we will have, as I alluded to in my comments, the Mayor has challenged us to come up with $100 million of savings over the four years. Last year there were cuts of about a little bit under $30 million. I think we've got to keep pace with that this year.

Nowhere in this budget does it reflect what you anticipate the savings will be and efficiencies, nor is there a dollar amount attached to the savings?

I would say, and I might defer a little to my colleague, but I would say it's not reflected as much as it needs to be, particularly in things like the overtime, things like that. We really just have implemented those programs. What we have to do in the weeks and months ahead is really scrutinize what we think those savings can do in addition to other initiatives that we have to undertake. So that's yet to come. Which is another way of saying that the 191 million, unless something happens on the revenue side or something happens from an emergency perspective on the expenditure side, 67 3/6/01 - School District Budget will hopefully get better as we go through this process during this month in April and May and the Board obviously has its input in the approval process.

In your testimony you state that today we present a proposed operating budget for FY 2001, 2002. It contains $191 million deficit. I assume you mean operating deficit since the projected cumulative deficit is $235 million. What are the assumptions with regard to the Empowerment plan?

First of all, your assumption is correct, the 191 is the operating and then there's 44 million that Ms. Chatzkel referred to. As of now, and I'll ask my colleagues to correct me if I'm wrong, there is no Empowerment revenues in the operating budget reflected. One of the changes last year when we got about 16 or 17 million in Empowerment funds, they could have been used for any purpose. Those are not the rules of the road in the future, so they have to be geared 68 3/6/01 - School District Budget specifically toward Empowerment plan expenditures. So there are really no revenues reflected in the operating plan in terms of Empowerment plan funds.

Does this mean in order to implement the Empowerment plan an additional $76 million would be required?

I would say that there are many things, or certainly several things that we can be doing with the empowerment plan with our existing funds, but it's going to require us to do, which I think was something that hopefully came across loud and clear with Dr. Farmbry and I, we have to focus our existing revenues on things that we think are important. We think the Empowerment plan is not only important for practical purposes, but an educational blueprint. What we hope to do, for example, literacy interns and balanced literacy and those program which are instrumental to the Empowerment plan, we want to make sure that the dollars we have in the operating budget now get geared toward those programs as we acquire more funds on the Empowerment plan, it will allow us 69 3/6/01 - School District Budget to accelerate the initiatives on the Empowerment plan. Again, it will require us to focus the monies we have now consistently with what the Empowerment plan is saying that we should be doing.

Can you tell us what are the State requirements for those School Districts that fall under the Empowerment Act?

Yes. Our placement on the empowerment list is by virtue of our test scores on the PSSA. So the expectation is that by the school year ending in June 2004, we will increase the overall proportion of students in Grades 3, 5, 8 and 11, whose PSSA scores are currently in the bottom cortile to at least 50 percent. So it's upward movement. Right now, too many of our schools are in the bottom cortile, so we to reduce the number in the bottom cortile to at least 50 percent above the bottom cortile.

Can you tell us what happens if a School District does not meet the required improvements? 70 3/6/01 - School District Budget

The Empowerment Act, as written, states if the District in this three-year period does not meet the targeted improvements, then there is a possibility of a takeover by the State, unless we appeal for an extension.

If we did not have the resources to implement the programs required by our approved empowerment plan, how do we avoid a State takeover?

What we're currently doing is looking at how we are utilizing current resources, how we can construct time differently. For instance, one of the goals of the Empowerment plan is that we will actually increase the amount of time students spend on reading, math and science. That has roster implications in terms of how people are scheduling time at the school level. We're also looking at the extent to which we can change some of our schools to K through 8 schools. In other words, we're looking at the current school organization where there are lines that would support the merging of an elementary school and middle school into a K to 71 3/6/01 - School District Budget school since research indicates the students in K to 8 normally perform better. That's something we're looking at doing. We're looking at use of time, organizational structures. We're looking at actually mandating our curriculum. We're looking at other instructional supports we can put in place.

Thank you. Looking at the multi-year plan for the projected cumulative deficit, by FY 2002 it's in excess of $750 million. If you included the implementation of the Empowerment plan over this time period, the cumulative deficit would exceed $1 billion. I just don't know how the Administration plans to keep the schools open and solve the financial crisis.

The simple and short answer is that we can't. That is the reality before us today. I think we all acknowledge that the only solution here is one that involves the collaborative effort between the School District, and we've got to do our part, obviously, the City and the Commonwealth. 72 3/6/01 - School District Budget I think as Secretary of Education said, we do not think this is going to be something that's going to take place in one year. It's going to be a multi-year plan. So that's the challenge in front of us. That's the reality that we live in.

If I may add to that, as Mr. Goldsmith said, this will require the District, the City and the State all to take measures. I would argue that's the second step, not the first. The first step that we have to take is, first of all, as we move down this road towards the end of May, we all need collectively to determine whether this is a program that we want to take extraordinary measures with. Step One is for us to determine what we want that school system to look like at the end of the day. And then once we've done that, work on how we're going to get there. I would argue that the first step is really having a consensus about whether this is the type of program that we as a City are willing to accept.

In light of the new census data, we can expect to have a 73 3/6/01 - School District Budget population below 1.5 million people. If that happens, the School District would become a District of First Class A instead of just the First Class. What impact, if any, will this have on the School District?

I'm not sure what the answer is to that. It would probably be a rush in Harrisburg for them to amend the law to make one A1. That's probably what will happen. As a practical matter, it will have no impact.

There are a number of Councilmembers that want to be recognized. Everybody will be timed, including myself for five minutes. The first person to be recognized is Councilwoman Miller.

Good morning. I have a couple questions. I guess I can start off with the structure. Mr. Ramos and Secretary Kahn, do you believe that the current structure that you have in place is going to end up being more cost effective? It's my understanding that Philadelphia is the only School District to 74 3/6/01 - School District Budget presently have this structure; is that correct?

There are other School Districts that have adopted the CEO structure or some form of it. The ones that you read about most are certainly Chicago, and I suppose New York is called a CEO. In LA they have a similar structure, they don't call the Governor a CEO. I think that it will result in a better focussing of School District resources into the classroom. We usually talk about resources in terms of money. I'd like to talk about resources in terms of time, people and money. Because I think, you know, one of the most precious things we have is time. In the long term, I would like this School District to move to a point where a greater proportion of activities is the business of teaching and where you can have educators running an educational institution and where you don't need the managerial expertise of a CEO to operate the second largest transportation system, the fourth largest police force, enormous health and social services operation, a law firm, accounting firm, all those things. 75 3/6/01 - School District Budget We, I think, over the long term would like to, unless new extraordinary revenues are committed over some long period of time, over the long term, the School District is -- part of the job of the next CEO is to help us get more into the business of teaching and find other ways of providing the services that kids need.

Mr. Goldsmith, I think you used to be a deputy mayor; is that correct?

Yes.

Do you think, just in regards to our search for a new CEO, do you believe coming from the public sector and combining it with your private sector experience helps you as a CEO, interim CEO, understand the dynamics better, and would a CEO just with private sector experience not have that capability to be as flexible and understanding?

I think that's an excellent question. Part of my job in this interim position is to evaluate and help the Board evaluate what I think the characteristics are. I think it's important that someone certainly understands the political 76 3/6/01 - School District Budget process in the better sense of the word in public policy. I think it's interesting that the School Districts that Mr. Ramos has referred to do have CEOs that have had public sector experience. I think in Chicago it was a former budget director; San Diego, former U.S. attorney; Los Angeles, former Governor. And New York, while the chancellor has been primarily private sector I think he was on the Board of Regions. So he has clearly an understanding. I think a blending of the two and certainly a sensitivity to the two because it is a different world than just, you know, running General Electric.

Well, I just want to say that to me the structure seems to make sense. I know that if it's academic, I call the CAO. If it's building related, you now have a COO, and so on and so forth. For me it does make a lot of sense. I really hope this model is very successful, of course, because the bottom line is the product that comes out of the classroom and that's our children. I have a lot of questions. I know I can't ask them all right now. I do want to touch base on a couple things. When you say you're going 77 3/6/01 - School District Budget to look through every nook and cranny to find money, what is happening with the book budget? We've had a lot of discussion here in this Council about books. We still have children that come here from time to time and testify that they don't have books or they have old out-dated books. That personally worries me and all Members of City Council. I'd like to, before these budget hearings are over, get an update on what is going on with books. Do principals have the authority to use book money for other things other than books? Does each school have a designated budget for books? Where are we with the whole book piece? Do we still have the book hotline?

I'll show you how this new structure works. That's an academic question. Dr. Farmbry.

The issue of textbooks continues to remain an issue. I'd like to refer to it, however, as access to information. One of my missions is to try to help the public understand that the issue isn't only textbooks, but also technology. The reality 78 3/6/01 - School District Budget is that the most up-to-date information nowadays is not in textbooks, but on the Internet. How do we really begin to get the public to understand that it's both textbook access and information access via other ways. I would like to say schools do receive a textbook allocation each year in their budget. If they want to use a textbook allocation for other things, they must actually sign off and have their school council president, their home and school president, their PFT representative sign off that every single student does have a textbook in every single subject. We do maintain centrally a textbook fund so that during the year if principals again are told by parents or students they do not have enough textbooks, we do have supplementary funds we can offer to schools throughout the year at the principal's request for additional textbooks. We do have a textbook hotline. The number is 1-800-447-1169. I will say, however, that calls to that textbook hotline have dramatically declined. The textbook hotline is operational with calls from parents, concerns 79 3/6/01 - School District Budget about a lack of textbooks for their schools have practically ceased. The hotline received over 300 calls in its first year of operation, and two years later it's rarely utilized. I don't know if that's a need to publicize it more. Again I'll say the number is 1-800-447-1169. We're still very much committed to make sure that every child does have access to a textbook, and in addition, access to information via technology.

My time is up. But I do want to say that I do have questions around technology, computer instruction. Not how many computers are in a school, but what are the children being taught as it relates to this whole computer instruction. My time is up. - - - 80 3/6/01 - SCHOOL DISTRICT BUDGET (Hearing now being stenographically recorded by Josephine Cardillo, Registered Professional Reporter.) - - -

Debra Kahn mentioned in her opening comments that there are enormous challenges. I want to focus my series of questions around school safety, school security, those kinds of issues. Let's start out with an update on the school uniform policy. We know that this is the first year it is voluntary, with the expectation that it will be mandatory effective September 2001. I'm curious to know, where are you with it? and what are you doing to foster and ensure uniform disciplinary action for principals who do not enforce the uniform policy?

There's probably some tag-teaming on this.

Sure.

I can talk about the Board side of it. As you know, the Education Committee of the Board has had a working group that's been chaired by Chris James-Brown, who's involved with 81 3/6/01 - SCHOOL DISTRICT BUDGET students parents and a number of representatives. And one of the -- and a fair amount of discussion has been given to the issue of how do you know from school to school that -- that schools are being consistent. And it's an issue that comes up in any type of discipline or policy issue. I mean, you've got general guidelines out there. In the course of the day, professionals around the School District, every principal is exercising the discretion, and you don't know how consistent they're being. We are in the process of laying out some of the -- on the disciplinary side, some of the progressive nature of the discipline that's expected that leads up to what we call a "Level 1" infraction in our school code.

Okay.

And, you know, part of this is also communicating and training principals so that, you know, frankly, the most effective strategies that are being used in schools with high levels of school uniforms are the positive things -- the rewards, the pizza parties and the certificates and the recognition over the PA 82 3/6/01 - SCHOOL DISTRICT BUDGET system or the discount -- in the high school level, the discounts on the proms. So that, you know, those types of efforts are really what's driving it. I don't know if Dr. Farmbry's got, you know, anything to add to that on the implementation side. And, in fact, Mrs. Rush reminds me yesterday was -- we were scheduled to have another meeting on school uniforms, which we have been having pretty regularly, and Phil Goldsmith closed the schools so we couldn't have it.

Do you anticipate that you'll have some level of closure on what that uniformity will be prior to September 2001?

Yes. I mean, I think we're pretty much -- Chris is gone. The first time I looked around, everybody was still there. Chris -- yeah, I think so. I mean, I think there's been a lot of closure. You know, there's -- I think very soon, if principals haven't already been told, I think pretty soon, they'll start getting communication on how -- on the guidelines for that. 83 3/6/01 - SCHOOL DISTRICT BUDGET And I don't know. Deidre, is that consistent?

That's sufficient. I just wanted an update because I know the process that you endured last year to bring it to where we are now. Given the backdrop with the tragedy in California yesterday and the recent incident as well yesterday in our schools, and looking at one of the key expense drivers that Miss Chatzkel talks about, where you say that there's an increase of school police officers from 342 to 527. Do you their that presence have made a difference? And what I mean by that question is this: Has there been an analysis that says given this increase, the number of incidents have dropped, if you will, given the substantial dollar increase in the number of school police officers that you have on board?

Well, I think the other driver of that expense, in addition to the school police officers, is also metal detectors.

Okay. 84 3/6/01 - SCHOOL DISTRICT BUDGET

And the swipe cards that are in 52 of our facilities, primarily the high schools and annex.

Okay.

And so it's a combination of the two, and the metal detectors, the cost of the metal detectors is not as significant as the cost of the staffing of them. It's always hard to say what would happen if you didn't have it, but I think -- I mean, I can tell you, this year, for example, weapons confiscation is down about 6.9 percent.

Great.

I believe that, you know, there's -- you know, kids are going to be a little bit more reluctant to bring weapons into schools; that's not to say they don't. But if they got to go through a metal detector, you know, it's going to be a deterrent. So I think we see positive impacts, and we take -- and you know, we do confiscate a lot of things, you know, whether they be knives or, you know, cutting instruments and stuff like that. So I think it's a deterrent. I think the other factors is that we 85 3/6/01 - SCHOOL DISTRICT BUDGET are -- Dr. Farmbry and I, we have met with every principal in the system in the past four months at least twice. And one of our messages -- you know, our major message is really to hear from them and what their needs are in really trying to say what can we be doing to help them. But part of the message is, as I referred to in my comments, is that we've got to report these incidents and we've got to do it promptly and so forth. So it wouldn't surprise me to see a little bit of spike-up, frankly, in incidents, so it's hard to keep everything, you know --

Equal.

-- equal.

Yeah, I'd like to add one thing to that, Councilwoman, 'cause, I mean, the -- I was getting asked about this before we started in session this morning. And I think that an important part, as we know from the experience with weapon confiscation, is it can't -- you know, a large part -- you know, in addition to machinery in high schools and staff, a large -- a large part of our 86 3/6/01 - SCHOOL DISTRICT BUDGET successes depend on students themselves and the reporting by students.

Okay.

Students who feel a sense of responsibility in their schools and also students that have been told by teachers and parents what to report. And I don't know whether, you know, frankly within our school, I don't know whether we've got a formal program or whether one is required, but the teachers seem to be getting them -- teachers and parents seem to be getting the word out to students that they're to report situations. And, in fact, we had a contrast yesterday. On the evening news, one situation that went very bad, where students had heard rumors and not reported it, and one in an elementary school here, where an 8-year-old child was given access to a gun by adults.

Right.

And where another child reported them. And that's how we get most weapons, is because students are a very active participant in school safety. 87 3/6/01 - SCHOOL DISTRICT BUDGET

Madam President has indicated that my time is up, and I would just echo that the analysis on TV with regards to California was that you have to begin to change the culture, and the culture that you're talking about is the example that you've just given, where parents and students feel comfortable in bringing that to the attention of Administrators. So I'll continue my line of questioning on security next round. Thank you, Madam President.

Thank you. The Chair recognizes Councilman Goode.

Thank you, Madam President. Good morning to everyone assembled at the table. PANEL AT WITNESS TABLE: Good morning.

Good morning to Mr. Ramos and Mrs. Rush in particular. Let me first start off by applauding you and the Board for your leadership in terms of management reforms at the top level of the District. But as Mr. Ramos knows, I am probably a lot more concerned 88 3/6/01 - SCHOOL DISTRICT BUDGET with the management reforms at the most local level in individual schools. It's where I believe that the rubber meets the road. So I will direct the first part of my questioning really toward school-based management. What were we really seeking in the last teachers contract in terms of reforms in school-based management, and what did we get?

Well, there are a number -- a number of areas. I'll start off with some of the ones that are probably the more obvious. First of all, defining, you know, the size of the pie, or the size of the thing to be managed, in terms of the time, the important resource of time and adding time to the student day so that children have more time to not only study but, in many cases, to catch up. An important matter was also the flex -- you know, the flexibility in staffing, and we have underway the opportunity for schools, as I said in my testimony, to flip the usual selection process from teachers selecting schools to schools selecting teachers. And by "schools," I mean schools as a community, including teachers at that 89 3/6/01 - SCHOOL DISTRICT BUDGET school. And we -- although there was only, you know, a two- or three-month window to figure all of that out and implement it, schools are on 5 the way to doing it, and we expect to have more. 6 We -- in terms of the, you know, the 7 labor law aspects of this, or the normal labor -- 8 the textbook labor management stuff, you'll note 9 that there's a management's rights clause in the 10 contract for the first time in the history of the 11 School District. You'll notice that the contract 12 is probably like 140-something pages of regular 13 font, you know, with margins, as opposed to 14 300-something pages, small print. And so, you 15 know, somebody familiar with labor management agreements, you'll notice that as well. I mean, I guess those are the highlights, and I'd be happy -- I know you've also gotten the summary of the contract.

You refer to 15 schools volunteered to serve as pilot sites. How many were you seeking to volunteer?

We hadn't set out a specific number. The initial report that the media got really almost at the same time or ahead 90 3/6/01 - SCHOOL DISTRICT BUDGET of the Board, which I wasn't particularly pleased with, but that's life, had reported six -- I don't know whether it was six or seven sites. That turned out to be wrong, that release, and the initial number, in fact, had ended up at around 11, and then 2 middle schools were added after -- I'm sorry, it turned out to be around 13, and 2 were added. So we're up to around 15. And then I think -- and I was on record as being very disappointed with the first news of how many schools had volunteered for this, 'cause I know from experience that a lot of schools, a lot of faculties around the City, you know, had -- I thought, would welcome this. In the time frame that we're talking about, 15 schools, I think, is good. It's not a bad proportion, given the timing. It's also an opportunity to learn from it, and as we learn from it, to make sure that as we expand, we do it right.

Do you view that as a resistance to school-based management, and do you think that accounts for some of the increased growth in popularity of charter schools? 91 3/6/01 - SCHOOL DISTRICT BUDGET

No. I think that there' is a -- I mean, I don't -- I don't think that there is a huge resistance to school-based management in the School District. The School District, in some ways, has been ahead of other districts, including New York, by having school-based budgeting for many years, which people sometimes don't appreciate. So principals have been involved in some level of school-based management, and now principals and faculties are having the opportunity to define criteria and play a role in selecting teachers that come to their schools, and I think that that's something that as faculties and staffs and schools learn more about it, they'll continue to embrace. It will also depend on how, you know, from region to region in the City, you have different levels of receptiveness by, you know, some of the players. But in terms of the impact on charter schools, I mean, I think charter schools are largely driven by some sense of -- particularly on the part of community-based organization and agencies in the community to think that, you know, 92 3/6/01 - SCHOOL DISTRICT BUDGET that there's a better job that can be done. I don't know that in practice, we are at a point yet where you see a whole lot more parental involvement in the management than you would.

Under this reform contract, are principals actually empowered to manage individual schools?

I think they're -- yeah, they're empowered to manage more. There is still -- in any labor situation, I mean, the labor contract, almost by definition, limits the, you know, the managerial prerogative, and it's all about a balance between that and flexibility.

But you talk about the selection of teachers by schools rather than the selection of schools by teachers, but only 15 schools volunteered. Whose decision was that?

Those were -- that was in the time -- I mean, let's go back to -- when the did this contract get settled?

November.

I mean, we -- this contract was settled very late, well until into the 93 3/6/01 - SCHOOL DISTRICT BUDGET academic year, you know, and schools has to essentially before -- under the contract had until, I think, December 31st to go through a process where the faculty would vote. So that in that span of probably, you know, probably less than two months in practice, schools had to find out what this was all about because there was a whole new contract to learn, had to figure out what some of the rules were, and some of the rules weren't that clear to start with. The school had to organize enough to express some interest and want to do it. They, you know, they -- the -- the -- and you would have different levels receptiveness by principals, teachers, union representatives all played a role in how receptive and how quickly they moved. I was really impressed, you know, that some schools moved so quickly into uncharted territory to do this. I think the real test is this year, when there's a whole year and everybody knows that from right now through December 31st, they can go this route if that's what's right for them. So I think this year will be the truer measure because 94 3/6/01 - SCHOOL DISTRICT BUDGET right now, schools could be choosing to go through this process through the end of this year.

Councilman --

Could I just --

Councilman, I'm sorry, your time has been up.

Okay, thank you. I have questions later on regarding student transportation, but I think you know my concern that if there are teachers in schools that don't wish to revert to school-based management in its truest form, then looking at a $1.7 billion budget, it's really hard to determine how we move forward, 'cause I actually believe that it doesn't make a difference what you do at the top if it doesn't impact the principal's ability to manage individual schools. Thank you, Madam President.

Thank you. The Chair recognizes Councilman Kenney.

Thank you, Madam Chair. Let me just stick for a moment with the line of questioning that Councilmember Goode was 95 3/6/01 - SCHOOL DISTRICT BUDGET pursuing. Mr. Ramos, how long is the contract, this historic groundbreaking contract that we signed with the PFT? How long is it, what's its duration?

It's a four-year term.

And while I recognize and understand the explanation as to the schools participating in what is touted as to 11 be a cornerstone of this reform contract, which is 12 the issue of seniority and teacher assignment, in 13 the event that hypothetically, over the next four 14 years, over the next year or 2 years, that no more 15 15 or 20 schools out of 264 opt out for this, have we accomplished anything? and, you know, where are we as it relates to this historic contract that needs to be voted on as far as teachers pursuing this concept of removing seniority or diminishing seniority as a way in which they are assigned? If they reject it hypothetically over the term of the contract, where are we?

Well, the -- I think, first of all, the -- this isn't just about hiring, it's also about setting the academic agenda for the 96 3/6/01 - SCHOOL DISTRICT BUDGET school by people selecting criteria, and we've also done a lot to address the issue of faculty stability. But just to address your question head-on, four years from now, if all we have is, you know, stuff on paper that we haven't been able to implement, even with the CEO structure, and we are exactly where we are today without a lot of change, I think, you know, we would have failed.

Well, what's the plans on getting more of these teachers engaged in the process of making this decision to vote in favor of where you want to go?

Councilman, if I may, I think the -- from a change perspective, just from my perspective as someone that's been in the change business, the worst thing that you can do is try to rush something, and I think it's got to be controlled. And so I think the answer to the question is how do we get more teachers to participate, is to make sure that we knock these 15 schools dead: that they work well, that people see the results of it, that people see that this 97 3/6/01 - SCHOOL DISTRICT BUDGET is a way to go. And I think one of our concerns was to have too few schools, and the other concern was to have too many schools, because there's no way -- there's no better way to ruin change than to try to do too much. And so --

President Ramos indicated in his answer to Councilmember Goode that he was, frankly, disappointed with the number of 15.

No, I'm sorry, Councilman.

I'm sorry.

What I was referring to -- I think Councilman Goode will back me up on this. I was referring to my initial reaction when it was reported that the number of schools I had chosen was, like, 6 or 7.

So you're -- so 15 is a number --

I'm more satisfied with 15 than I was at 6, and I --

Well, what was the --

What we have done is -- 98 3/6/01 - SCHOOL DISTRICT BUDGET

What was the number you were hoping for?

Well, I wasn't -- I wasn't, but if we would have gone -- if the answer would have been 264, I would have said oh-oh, because I'm not sure that we were --

Well, in fairness, the way this contract was reported was that this particular cornerstone of this particular reform contract, this particular portion, was a major element in the reform contract that was touted throughout the City and Harrisburg --

Well --

Let me finish. And I, as a citizen at the time, when it was announced, had expected that this was going to happen, and not that it was a process over four years of convincing teachers and having them vote in a democratic process as to whether or not they were going to, in fact, participate in this cornerstone of reform.

Well, let me let Secretary Kahn add, but also, just all along, including in all the written summaries, we have said that the 99 3/6/01 - SCHOOL DISTRICT BUDGET site selection process -- what we did was give schools the ability to choose site selection. And that's as we've always spoken about it and reported it, where two-thirds of the school faculty would have to choose it. And --

I don't know if that's what the average parent of a school student in this city thought that was as part of this contract settlement.

Well, it's as we discussed it even before the contract settlement that -- but -- and for good reason, because what you're saying is, you want the faculty to be able to shape the faculty, and if you don't have a faculty that's willing to do that, it's not going to work. And so --

What are you anticipating the success rate for next year, this coming year? What do you expect? How many schools do you expect to vote two-thirds in favor of this plan?

We haven't set a goal yet.

What are we doing to try to educate, conciliate, whatever? 100 3/6/01 - SCHOOL DISTRICT BUDGET

Councilman Kenney, what I'm looking at this year is an opportunity to really focus on the and initially why these 15, 5 what was happening inside of the walls of these 15 6 schools terms of their state of readiness, because 7 to me, what stands out is that those 15 schools 8 were at a state of cultural readiness to say that 9 we want to have some hand in terms of who comes 10 into this very unique culture that we have 11 designed at the school. 12 And what I would like to see is that 13 some of the other provisions of the contract, such 14 as the additional 30-minute -- the time block, the 15 initial 30 minutes becomes a time when similar cultures can be built, whether that's through professional development, through greater teaming within schools, through teachers having time to sit down and really analyze what is the culture that we're trying to establish in this school. So my perspective is really looking at these particular 15 schools in terms of what did they have in place that made them so receptive to this idea and then what can we begin to replicate across the City. 101 3/6/01 - SCHOOL DISTRICT BUDGET

I think there are two phases, Councilman. One is looking at what works, why it worked, why it doesn't work. And we have the benefit of doing some of that, you know, now and as we go through the process for the first time. Then the objective is to take that knowledge and apply it. And the Board hasn't had a discussion with the administration yet about what the goals would be for next year. I think it's a fair question and a fair expectation for everybody that we have -- that we express, you know, some goals for that 2002-2003 year, which is what we're really talking about because we're talking about a vote at schools on December -- you know, by December of this year.

While I recognize that a negotiated teachers contract is much different than negotiating any other municipal workers' contract, and I know there's different elements, the concept of having a workforce once the contract is, quote/unquote, settled still voting on elements of the contract throughout the course of its life is a hard thing for people to understand in the community. I mean, it's like 102 3/6/01 - SCHOOL DISTRICT BUDGET taking the police force and saying, Well, we've settled your contract, these are the terms of your contract but, by the way, each district is going to have a two-thirds vote as to whether or not, in fact, those terms are in effect.

I think in general, you know, you're probably -- you know, you raise a good point about the distinctions between schools and municipal workers, but you also will remember that schools through -- I mean school communities are -- it's not that unusual in schools. When we did a mission criteria, you had the school council and the school councils voting on things.

Well, in past contracts --

No, I'm --

In past contracts, have we ever done this type of voting process?

Well, this isn't about what's --

And on what issues?

And this may be a technical thing, but it's not about what's in the contract. 103 3/6/01 - SCHOOL DISTRICT BUDGET This is about whether the contract provision is that the school has an option, the school has an opportunity.

The teachers have an option, the teachers have an option, not that the school community has an option; the parents don't make a two-thirds vote on whether or not seniority is an issue in assignment. I mean, when you describe it as the school community making a decision, it's not in fact the school community making a decision; it's the workforce making the decision.

Right. And if a school --

And I do think that the terms and verbiage of that contract are important.

Well, that's right.

And if these votes, these two-thirds votes are not made over the course of the next three years, this historic contract is somewhat flawed.

That's right. And if the contract's not implemented and we don't take up -- take advantage of the flexibility that we fought 104 3/6/01 - SCHOOL DISTRICT BUDGET for, it will fizzle.

But that's not the way it was portrayed -- in my opinion, of course -- to the citizens and taxpayers and parents of this city, that in fact this is, in fact, an historic, breakthrough contract that's going to move forward over the next four years, and what we're being told now and what you've said you've told us all along was that this was going to be a two-thirds vote --

Yeah, I mean, Councilman, that's just not accurate. I mean, the -- what we have said all along was that --

Well, I watch television. I mean, all I can see is what I saw from announcements that were made from press conferences and from other types of very celebratory events on television that this is, in fact, a reform contract. In fact, out of 264 schools, only 15 to date have opted out and we have no set goals at this point for who's going to opt into this concept of school reform.

Stated that way, Councilman, you make it -- you know, I'm afraid 105 3/6/01 - SCHOOL DISTRICT BUDGET you're not doing it justice.

Well, we can spin things any way we'd like to spin it.

That's right. I mean, you have -- you have schools in the course of a few 7 months and you have, you know, a board and 8 leadership team management team that is trying to 9 do things right, not just do them for the sake of 10 doing them, but make sure that we do it right. To 11 have, you know, to have probably, I guess, a 12 little bit more than 5 percent of your schools in 13 a couple of months decide to do something 14 radically different, to say that you're going to 15 learn from that in this part of the year so that you can apply it in the beginning of the new school year for the remaining three years of the contract, I think, is a responsible way of approaching it.

Well, I think if the Board and the Administration had explained that in those terms at the time the contract was settled, I wouldn't be asking you this question now.

Well, Councilman, I also 106 3/6/01 - SCHOOL DISTRICT BUDGET have to say that there was never a time when anyone involved in this negotiation pointed to only that provision in the contract and said that this was the breakthrough and --

Well, let's be fair. Is it not a cornerstone of this reform contract?

It is one of the cornerstone. I would say, having a longer school day is another one and --

I never said anything else but "cornerstone." I used the word "cornerstone."

I would say that having a pay-for-performance system is another one, and there are a number of provisions, and the sum total of them added up to it being the kind of breakthrough contract that it is.

What I'm asking about now is seniority and teacher site.

Well, the other aspect of seniority, Councilman, was greatly reducing the window in which teachers could put in for transfers, which is -- you're really familiar with 107 3/6/01 - SCHOOL DISTRICT BUDGET it. You have a big window in which people can put in for a transfer, that person gets a position, that creates another vacancy, and you've create a big ripple effect, and we set -- and we narrowed the window and there's a date by which if you're assigned to a school, you're no longer considered a temporary appointment and still a vacancy, you're still considered assigned to the school. And that was another aspect of reducing the impact of seniority in the contract.

Thank you.

Let me just say two things if I may. On the site selection, one of the things that we're doing now is going through the training of the staff and how you go about the interview process. There's a whole bunch of laws and rules and regulations. You just can't go and ask anyone -- any potential employee a question; otherwise we're all going to get sued. And so it's very important that --

I'm sorry, Madam, I know I'm over time but, Mr. Goldsmith, I don't understand what it is you're saying about being sued. 108 3/6/01 - SCHOOL DISTRICT BUDGET

Well, there's all types of questions that you are not allowed to ask during an interview process.

Like what?

Well --

Such as, how do you -- I mean, there -- I mean, basic employment law. For starters --

I'm not a lawyer, Mr. Ramos.

Okay.

I just -- give me an example of --

But I know you're familiar enough that you wouldn't ask 'em in your own hiring. I mean, you can't ask people about questions that relate to race, gender, national origin, disability, sexual preference.

That's common in hiring across the board.

And that's what we're talking about.

Is there --

You're now putting people 109 3/6/01 - SCHOOL DISTRICT BUDGET in a position where they're having a more active role as an employer and subject to all of the rules that apply to you in your role more as an employer.

Councilman, I just wanted you to finish your line of questioning on that issue.

I'm finished.

And we will get back to you. The Chair recognizes Councilman Ortiz.

Thank you, Madam Chair. Pedro, I want to thank you for all of the attention you are giving. But, you know, you stay around here long enough and you just grow cynical about a lot of things that are supposed to be happening. Friday I went to the Hunter School to inaugurate really a new setting up of the library, which is not a new library, but the realization of how much people accomplish with little, all right, of how much is done at certain schools with just a little bit of materials and so on. And you get 110 3/6/01 - SCHOOL DISTRICT BUDGET tired of doing that. And then you read stories of (indiscernible) Hernandez, the little girl who hears music in her head, you know, and she goes to Potter Towers, and you just say that is happening. And her father's name, by the way, is Rafael Hernandez, who happens to be probably the greatest Puerto Rican -- not her father, but Rafael Hernandez is the greatest Puerto Rican song writer. So I imagine that the spirit of Rafael Hernandez is living through this little girl. My wife's cousin came in very excited, and she said that she was going to start teaching at Shepherd, and she took her favorite niece -- my daughter, who goes to Greenfield -- to Shepherd to show her the school. And my little girl said, You're going to be teaching there? You know. And not knowing the environment that is there. 3 billion for two stadiums, and we approve it really without any questions asked, any rationale for it, and very little discussion as to how it's going to benefit Philadelphia. " In which stadiums prompt some questions. And in it, he quotes this lady from the Baltimore Oriole Park at Camden Yards, Miss Janet Marie Smith. And she said you just can't put a dollar value on what it feels like to be a major-league city. And he quotes how the arguments about stadiums went from being an economic development machine to maybe creating employment, and when none of that really showed up to be true about any of that, that there was going to be very little benefit, really, to Philadelphia and to Philadelphians as such, other than the intangible feeling of you can't put a dollar value on what it feels like to be a major-league city. And it comes out that -- they asked this economist at this conference where this lady was, over here at the Convention Center, Mr. Coates, and they asked him, they said, how much really does it cost to feel like a major-league 112 3/6/01 - SCHOOL DISTRICT BUDGET city? Can you put a cost to that? And Miss Smith could not, but Mr. Coates could. See, Mr. Coates said it would probably cost every citizen in the City of Philadelphia about $10 each a year to feel in order -- 'cause that's what we're giving probably the Phillies and the Eagles. And to me, just having a kid in 1st grade in public school and another one in 5th grade, what do I tell her, what do I tell him, right? And you grow cynical being here because we do this constantly over and over. And you come here and you talk about a structural deficit right now of $41 million, and forget the deficit later one into the hundreds. And when we talk reform, we don't talk about getting rid of -- to me a reform means -- because I really believe we've got great teachers, I see 'em every day, I see 'em every time I go to a classroom at Hunter, at Shepherd, at Greenfield. To me, reform means tearing down Shepherd and putting up a brand-new school. To me, reform means that we create a classroom with 20 students per class, and that when I walk into a library like I walked into at Hunter, I see it plugged 113 3/6/01 - SCHOOL DISTRICT BUDGET into the Internet, I see computers, and I see all of the other benefits that you can see when you go to a school like my cousin's kid goes up there in New Jersey. It has all of these little things that make it. So I just -- you come in here and you really -- I mean, we have -- I like charter schools as a pilot, but we have 14,000 kids and that's plus the 215,000 or not?

Included.

Included.

But we have 14,000 kids in charter schools, and I don't think there's anyone that can tell me that this charter's doing better teaching than Hunter School because I don't think there is, I don't think there's anyone that can tell me that there are many more kids who can hear music in their heads, and we produce that because we have a charter school. I don't think we can say that. However, I do see it in which a lot of money is being diverted and no monitoring and no 24 supervision and really no standards being placed. So I have questions about that. And even though 114 3/6/01 - SCHOOL DISTRICT BUDGET my wife is the chair of one of those schools and -- but I just don't know why we don't ask, why we don't spend $1.3 billion at one point over a 10-year period for the Philadelphia public schools. I mean, instead of coming here and talking about -- because if you're going to feel like a major-league city, you're never going to be able to attract the businesses just because you have the Eagles, you're never going to be able to attract the new millennium of young people just because the Phillies are playing, and they still won't be able to win the pennant, all right? And you will not have a major-league city until we do this. So until we can do that, until we begin establishing that area, I don't see -- everything else we discuss here is cynic, cynicism. It's all about plugging holes, it's all about not going in the right direction. But when we can sit here until 2 o'clock in the morning and discuss the merits, like we did for the Eagles and the Phillies, and pass a program that does that, I would rather be indebted passing bonds for the 115 3/6/01 - SCHOOL DISTRICT BUDGET school system than indebted passing bonds for the Eagles and the Phillies. Thank you, Madam Chair. (Applause.)

Thank you. The Chair recognizes Councilman Clarke.

Thank you, Madam Chair. Good afternoon, ladies and gentlemen. PANEL AT WITNESS TABLE: Good afternoon.

Before I ask my question, on the schools that volunteered for 15 the pilot program,, would it be possible for to you send a list of those schools? I would be interested to find out where they are, the demographics associated with them.

Yes, we'll do that.

For the Chair, please.

Thank you. I had a question about charter schools. On of the CFO's testimony, I think it says $79 million, and the text talks about 25.6 million 116 3/6/01 - SCHOOL DISTRICT BUDGET budgeted for children who were previously not enrolled in public schools. You all know that there's been recent discussion about whether or not we can maintain the middle class or stop the flight of individuals from the City of Philadelphia, hopefully using charter schools. Is, by any chance, any of that million, did it fall under the realm of those 10 people who might potentially leave the City of 11 Philadelphia? Or were these just new applicants 12 to the school system, or were they transfers from 13 parochial schools? Can you give me a sense of 14 where these children came from that are a part of 15 these now public-school enrollees. 16

Of the 14,000 in 17 students that are enrolled in charter schools, 18 fully 20 percent of the whole population is coming 19 from non-public schools, from private and 20 parochial schools. Ten percent are entering 21 charter schools at the kindergarten level, so that 22 the School District was never responsible for 23 educating them. 24 Those are the numbers. 25

Okay, so the 117 3/6/01 - SCHOOL DISTRICT BUDGET 20 percent are coming from private or parochial schools?

That's right.

And this may be early on in the process, but do we have a sense of why, what it was? Was it financial primarily, or was it the thought that it would be a better education than the chart school?

We don't really have that information in a comprehensive way, certainly, no 12 economic analysis of the students who were coming in. You know, there's anecdotal information, but, you know, we don't really have that in a comprehensive way. But you can look at the different areas around the City, you know, and maybe make some economic assumptions. But other than that, we don't have that. And the numbers I think that Rhonda cited are actually growing. I mean, that was the population overall. But in the last round for the current school year, I believe that the number of students who were not in the system has risen to. . .

37 percent. 118 3/6/01 - SCHOOL DISTRICT BUDGET

37 percent?

Yes.

Closer to 40 percent, right.

Are we looking at doing an analysis to determine why these people are making the decision to take kids out of private school and take kids out of parochial school to go into charter schools? 'Cause I'd just be interested in -- I'm assuming that primarily, it's an economic decision, but the question is, do they think that the educational opportunities are as good as, if not better, than the private and parochial schools? I'd like for us to do some sort of an analysis on that.

I think that's an excellent idea for us to do the type of research to find out why students are attending charter schools. Frankly, one of the issues we have right now is just staffing the whole charter school process in terms of the numbers of applications and reviewing them and so forth, and that doesn't undermine the importance of what you're asking for. I think that's something essential that should be done. 119 3/6/01 - SCHOOL DISTRICT BUDGET

Thank you. Parental involvement. As I was growing up as a child, and I think most of us in this room, there was substantial parental involvement in the schools and even after the school day with the child as it related to the children's education. What is the School District doing to attempt to increase parental involvement to get it either closer to the level that it used to be in the past? 'Cause I think without that, realistically, you can throw all of the money in the world at it, but if we don't have some level of parental involvement, we won't get where we need to get. What are we doing officially or formally to --

In addition to the more traditional home and school associations, which are in most schools. You know, in some schools, they're much more involved and active than in others, but in addition to the traditional home and school associations, every school is charged to have a school council, which is another way of having the parents involved in the governance 120 3/6/01 - SCHOOL DISTRICT BUDGET structure. Many of the grants that we apply for have parental components where parents are supposed to be receiving instruction to make them better parents in terms of being able to support the child's instructional program. Many of our reading grants that we received have a component for parental engagement in helping children become better readers. We find that our C tech labs, which are our technology labs, computer technology labs, in each cluster have also developed another way for parents to get involved. Many -- as we all know, many students are much more technologically astute than their parents, so it's a way for parents to come into schools and to become much more computer literate. So we're looking for ways to involve parents, not only in the traditional routes, where we think of parents helping to sell cookies and bake sales and so forth, but also ways for parents to be much more involved in terms of real decision-making through governance and also in terms of the instructional upgrades that all 121 3/6/01 - SCHOOL DISTRICT BUDGET parents need to stay contemporary in terms of helping their children.

Who the individual school is responsible for parent engagement? I mean, it's one thing for the Board level to talk about the need to do that, but at the end of the day, particularly as we talk about schools making decisions for that particular school, who in that school is it? Is it the principal or is there a staff member assigned?

Yeah, most principals have assigned a staff member to really take the lead in terms of parental involvement and parental outreach. So in most schools, there is a staff member -- it may be an assistant principal, it may be the home and school president, but in most schools, there is one person whose primary responsibility is parental and community outreach.

And does that person have a threshold that they should meet? Is there an analysis done? After six months, if the home and school association still has those same three people coming to the meeting, do we look at that person and say, You're not getting the job 122 3/6/01 - SCHOOL DISTRICT BUDGET done? 'Cause, I mean, to be frank, I mean, in a lot of our schools, we have, you know, really poor participation and you can't be soley dependent.

Right.

'Cause if that person's not a great person, you know, you don't have much to work with.

Right.

So, I mean, is there some threshold that that person should meet, or do we just kind of like let it go along?

Right. Currently, parental involvement is not a part of a school's performance index, which is pretty much the measure that's used to define a school in terms of how it's improving, but in terms of the principal's performance process, there is a category that talks about public engagement, and parents are viewed as part of the public and community outreach. So to that extent, principals are currently pressured to increase their level of parental involvement, although it does not, at this current time, show up as the measure on the performance index. 123 3/6/01 - SCHOOL DISTRICT BUDGET

Mm-hmm. One last question with respects to charter schools. Do you get a sense that the parental involvement is at a higher level at charter schools versus the non-charter schools?

In some cases, more so than others. I know in some charter schools, it is a part of the charter that parents be involved and to the extent that, you know, lack of parent participation means that a charter school may opt to say, Well, your child cannot attend here anymore, we cannot do that in the public-school sector; we take children whether or not their parents opt to be involved.

Well, the other thing, Councilman, is that -- I mean, in a sense, you know, the -- you know, I think some -- most of us have experience just from visiting charter schools, you know, and knowing people in charter schools of what the parent experience is. I think it varies a lot. It depends on the philosophy of the school that it's -- you know, I could propose a charter school that says, you know, all decisions will be made entirely democratically by 124 3/6/01 - SCHOOL DISTRICT BUDGET parents, or I could propose a charter school that says parents will have no say and everything is completely in the purview of educators, and that might be, you know, acceptable, and when parents choose that charter school, they will be taking that mode of operating. One of the things about the relationship is that, you know, we try to do with them -- what we're going to try to continue to do them as we have more experience with them is to try to learn from 'em, you know, where you have extraordinary levels of participation by parents, you know, because that's a value we have, we can learn from that, but we don't try -- we don't necessarily measure them -- we don't measure them by parental participation. It's up to their own boards of -- you know, their own school boards, their own board of trustees for each charter school to set the goals of parental participation for their own school.

But I think I heard in this last question, I think I heard that you can mandate some level of participation as a requirement of the charter school. Did I hear you 125 3/6/01 - SCHOOL DISTRICT BUDGET say that, Doctor?

Dorothy Sumners Rush. The board of trustees that operates that particular charter school can mandate that if the parents don't participate in a certain amount of percentage of time or energy or planning or preparation, they can then look at not having that child among their students, but the School District, whether the parent comes or doesn't come, we do not have the authority to exclude a student or keep a student from participating. That is the difference. They have a separate board which can determine that. We cannot. We must accept all children, whether the parent comes or doesn't come.

But as a part of the issuance of the charter school, we cannot -- the School District cannot require that?

That's a different question.

Yes, that's a different question. We do look at that particular part of the community support and the parental support and what they say to us. What they say to us usually 126 3/6/01 - SCHOOL DISTRICT BUDGET satisfies us after they understand what it is that we're seeking we. Do look at that very seriously as a reason to either accept or reject the charter, as to whether they do have parental involvement.

Okay, all right. Thank you. Thank you, Madam Chair.

Your time is up. Thank you. The Chair recognizes Councilman Rizzo.

Thank you, Madam Chair. Mr. Goldsmith, in an effort -- in your effort to control costs at the School District, I'd like to talk to you about something that you said today. When were the -- when were the additional 185 school police officers added to the District?

I think they've been added over the past several years. The force has grown. I'm not sure I can give you a -- I can certainly provide for you a year-by-year breakdown. 127 3/6/01 - SCHOOL DISTRICT BUDGET

It went from 342 to 527. I have no problem with that, I have no 4 problem with that, but I believe that that was almost -- I don't believe that that took too long a period of time for that to occur. And I have no problem with enhanced security, but it's interesting, we add 185 officers to the School District, and today, you state in your presentation that you think the Police Department can do a better job at doing this. Well, I believe in the last few months, officers have been added, and we're going to probably have to maintain those officers that have been newly hired for a long period of time until attrition clicks in or whatever, and many of these officers would have to go back to the Police Academy because they're not sworn officers, so there would be a lot of training. My point here today is that year after year after year, we sit here, we talk about ideas. You leave here -- not you, but the School District leaves here saying great idea, and we never hear anything about it. Today you say that the Police Department -- the Police Commissioner can do a 128 3/6/01 - SCHOOL DISTRICT BUDGET better job. Why did we hire 185 more police officers, why do we have a force of 527 if the Philadelphia Police Department can do a better job?

Well, I think there's a couple answers. I want to make sure that I say that I think it's an issue that we should look at. I'm not subscribing that we do it without, you know, the appropriate analysis. I was recently in New York visiting with School District officials there and discussed the process that they went through. It's a laborious process, it's not something that happens overnight, but I do think that it's something as we're looking at how do we leverage our resources and expertise, it's something that we should be looking at, and we should be looking at it seriously, but we have needs now that we have to take care of and we can't wait till for idea to happen. And the other thing is, in New York, and I would presume the same thing would happen here, it would be the school police officers that would be managed by the police district. It's not 129 3/6/01 - SCHOOL DISTRICT BUDGET converting those officers into regular policemen.

If I check the record of previous budget processes, we identified the fact that your School District police, and I'm not suggesting that we put armed police officers in our schools, but we have uniformed police that patrol in nights, find an open school, and the first thing that those police officers have to do, they have to call the Philadelphia Police Department to come to give them support, and it is something that could happen quickly. If you -- if the Police Department assumed certainly responsibilities, and we have classes going in and out of the Police Academy all the time, that a segment of that department could be designated as having police officers trained at the Police Academy. We talk year after year. And just out of curiosity, I checked the record in the area of school transportation. Tell me, we're going to spend over $45 million, 45 million on transportation. Year after year after year -- and no fault of yours -- the School District has been asked to talk to SEPTA about a relationship to try to save the School District 130 3/6/01 - SCHOOL DISTRICT BUDGET money. We've asked you to work with the Archdiocese about certain economy of scale. And I ask people, Has anything ever been done about those things? No. You walk out of here, happy as can be to get your taxing authority, and nobody follows up or does anything that suggests to me, or that I see, about trying to save the taxpayers of this city money. I hope under your and this new leadership that some of the things we talk about here you really do. Because, again, I don't see a whole lot of that going on. In the area of energy conservation, I ride by schools that every light in the place is on 24/7. Would you do that at home? I don't think so. I know I wouldn't. So, again, I'm frustrated when we talk about monies and these millions of dollars add up to, you know, to big money, that some of these small items be addressed very, very carefully. And I know -- and I've had private conversations with you -- that you are interested in some of these things. But, again, you mentioned it here today, that basically I can assure you that 131 3/6/01 - SCHOOL DISTRICT BUDGET Commissioner Timoney knows a lot more about security deployment than I do, so that suggests that you should be out of this business. Thank you.

Thank you.

Thank you. I don't know if Councilwoman Tasco is in the room. Her light is on. If she is not here, the Chair will recognize Councilwoman Blackwell.

Thank you, Madam President. I would like to say before I ask a few questions, I have many, but I will only ask a few that I think in all of the years I've been here, this is the best presentation that we have ever had from the Board and the first time that I feel that we're in good hands. So let me say thank you to all of you.

Thank you.

Thank you, Councilwoman.

Maybe it's because we have extra women this time. (Laughter.) 132 3/6/01 - SCHOOL DISTRICT BUDGET

I'll withdraw my thank-you.

Thank you. I was glad to read in your report that you are adhering to Judge Smith's recommendations, and we're glad to hear that. With regard to West and Southwest Philadelphia, do you think that we can get a truancy center there for West and Southwest Philadelphia? I know right now, we have one at Palumbo School. Do you think we can get a truancy center for West and Southwest? The President and I would be glad to share.

We will certainly look into it. It's actually one of the things that I inserted in the budget at this point in time because I meet with the police commanders, six police commanders, on a regular basis as well as our own safety folks. And one of the things that I heard in the course of those meetings is the value of the truancy center, so I exercised my executive prerogative and sort of inserted that in the budget. And -- but I -- we haven't determined 133 3/6/01 - SCHOOL DISTRICT BUDGET where that would go, but obviously we will listen very carefully to you.

Thank you very much. Also, rumor has it that clusters, some will be cut back. Is that true? And how will that impact on your overall educational or academic plan?

Well, I think, as I alluded to in my remarks, is that we have to look at the organizational structure, and that's something that we're doing and that we're going to continue to do. I really, truly believe that the focus has to be on the classroom, i.e., the schools. And I know there's a lot of talk and a lot of rumor about clusters, and I really prefer to focus on what's going on in the schoolhouse and how do we support that. I think one of the things that I think we have to be mindful of is that: in 1969, there were 8 districts; in 1977, there were 7 districts; in 1990, there were 6 districts; in '95, there were 4 districts plus the 6 new clusters; and in 134 3/6/01 - SCHOOL DISTRICT BUDGET 1996, we went to 22 clusters; and actually, at the turn of the century, not this most recent century, but the century before that, there were 15 districts. So I guess I'm saying there's a time for all regions, and we have to look and see, you know, what makes sense. My point isn't necessarily the number; it's how do we take people and put them in the classroom where they are desperately needed, and we're going to do that analysis. I want to do it with Dr. Farmbry because these are fundamentally academic issues, but do it in a thoughtful manner, because the last thing we need to do is turn the system topsy-turvy. But clearly, we've got needs in the schools and in the classroom, and to the extent that that's where people should be, that's where we have to put 'em.

Let me say thank you. We've asked the same questions over the years about the whole organizational structure, even when clusters first started, so we're glad to hear your response. And one more issue on crime before we 135 3/6/01 - SCHOOL DISTRICT BUDGET ask our next question, and that is, we have been involved with Tigerman, and we know that he works -- in fact Christine James-Brown is aware of the work does in terms of crime with the School District, and we certainly recommend his program. We had -- many people know I'm very close too Lee School, and we had an incident there. I taught there, it's two blocks from my house, and I'm just -- Lee School is special to me, I just have a relationship there. And certainly, we think that he does a good job and would recommend him to the Board. My next question is about summer school, and I'm encouraged to hear that with 75 percent of the students failing and -- will we be able to -- and I'm really, really excited to hear that we want to use summer school more. Will we be able to offer students in various subjects what they need to bring them forward for the next school year?

Our plan currently is to offer summer school at the same level that we did last year, and in that summer school, the emphasis really was on remediation and equipping students 136 3/6/01 - SCHOOL DISTRICT BUDGET with the skills to pass the test to enable them to get to next grade. There's always been a real focus on 9th-grade students for summer school on our 3rd- and 4th-graders really making sure that the grade of and the grade prior to our testing years, the students get an extra dose of the instruction that they need to be successful. We're always interested in the extent to which our summer programs can be used to equip high school students with the credits that they need for graduating, particularly since the Board just passed its commitment to really maintain our 23.5 expectation for students graduating next year. So we will be looking at how students can use the summer months to make sure they're on track for acquiring the credits necessary for graduation as well.

That's great. And I think it's really good what happens to get 9th-graders ready for high school. I think that's made a big, big difference. I know it has in my area for University City High School, and certainly we support using summer school that way 137 3/6/01 - SCHOOL DISTRICT BUDGET as well. Let me make one comment about charter schools. I think that -- my opinion is that charter schools really started and became popular out of the frustration with some neighborhoods schools. We support them. We have found them exciting places for learning, we've supported them from the beginning. As you know, we've done a lot in terms of newsletters and the fact that public libraries asked for ours when there was nothing else. And we support them and think that they are great alternatives. We support World Communications Charter and other charter schools, Dr. Jean Brown's charter schools and many that do a great job. Not all are great, and we're finding the more we have, the more we have the same problems that exist with public schools. Some are great, some are good, and some are okay, and that's -- you know, that's life in the big city. But certainly, we wanted to say -- I think they grew out of a frustrating time in our school's history, and I think they are important places and for our city, important schools, and 138 3/6/01 - SCHOOL DISTRICT BUDGET absolutely, we support them. Madam President, I'm willing to wait. I have a lot of questions, but I'm willing to defer mine.

Thank you. I think at this time, we'll recess until 2 o'clock.

Thank you. Thank you very much.

Thank you. (Break taken.) - - - (Proceedings resume at 2:15 p.m.)

The committee is now in session. And the Chair recognizes Councilman Goode.

Thank you, Madam President. Good afternoon. I have a few questions about student transportation issues. The first question that was found in the budget documents, but for the record, could you state how much the School District pays SEPTA for tokens and 139 3/6/01 - SCHOOL DISTRICT BUDGET transfers?

(Nods head.) (Witness comes forward.)

I'm sorry. I didn't hear the question.

I know the figure is accounted for in the budget documents, but for the record, could you state how much the School District pays SEPTA for tokens and transfers. We pay SEPTA 8.8 -- last year, we paid them $8.8 million.

8.8 million --

I'm sorry, excuse me. Please identify yourself for the record.

I'm John Lombardi. I'm Administrator of Transportation Services. And for Fiscal Year 2000, we paid SEPTA $8.8 million for tokens and transfers.

And what is the State reimbursement?

Approximately 65 percent approximately, Rhonda, 65 percent?

I think it's 140 3/6/01 - SCHOOL DISTRICT BUDGET 68 percent.

Approximately 65, 68 percent.

Of the token and transfer?

Correct.

Okay. You said 65 percent?

65 percent.

And how much is recovered from the sale of tokens to students?

The subsidized tokens are purchased by students throughout the City, both public and non-public. Students spend approximately $5.5 million of their money purchasing tokens, subsidized tokens. We subsidize those tokens for a quarter. Students pay 90 cents, SEPTA charges $1.15. We subsidize 'em for the quarter.

You pay 8.8.

Right. So in that 8.8 is the 25-cent subsidy as well.

Okay, follow for me a second. 141 3/6/01 - SCHOOL DISTRICT BUDGET

Okay.

You pay 8.8.

Right.

You get 65 percent back from the State?

Right.

That's 65 percent of 8.8?

Correct.

And you then charge the students 5.5 million?

No. We don't charge -- the students pay -- the students --

My question was, how much is recovered from the sale of tokens to the students?

65 percent of the $8.8 million. The money that the students spend is not recovered. The 90 cents that they pay for the tokens, the $5.5 million, that's not recovered.

You're not following me, you're trying to tell a story. I want you to answer the question as outlined.

Okay. 142 3/6/01 - SCHOOL DISTRICT BUDGET

You pay SEPTA $8.8 million.

Correct.

You are reimbursed 55 percent of that from the State.

Correct.

How much of that do you recover from the sale of tokens to the students? I'm assuming there's 35 percent.

None. We don't recover any of that.

So you charge students for what purpose?

We don't charge students. SEPTA charges students to ride their lines. These are students who are not eligible for free transportation. The students pay the 90 cents to SEPTA after the School District.

So you sell tokens to students.

At public schools, we sell tokens to public school students. Non-public schools sell tokens to non-public school students.

I'm referring to the 143 3/6/01 - SCHOOL DISTRICT BUDGET public schools.

Correct, we sell them.

You sell tokens to students.

Correct.

And you purchase them from SEPTA.

Yes.

And the cost of that is. . . ?

$1.15 to the District. We pay $1.15.

What's the total cost?

$1.15 per token for --

And what's the total cost?

I don't have my book here with me. I can get it.

I think it's $5 million. Does that sound right?

No, that's the student cost.

For free tokens with 144 3/6/01 - SCHOOL DISTRICT BUDGET transfers, it costs $5.6 million. That's what it costs the District for free tokens. For subsidized tokens, it costs us $3.1 million. That's what we pay quarterly. We pay them quarterly for that.

So the 5.6 and the 3.1 account for the 8.8 figure?

Yeah. There's a $98,000 expense that we incurred last year for a pilot program that we initiated last year at William Penn High School, which was discontinued this year.

So the 5.6 is the cost that goes directly attributable to the students. The students pay the 5.6.

No, no that's what we pay. The students pay an additional 5.5 million.

On top of the 5.6.

On top of it. The total revenue for SEPTA is about $14 million.

So the 8.8 that you pay SEPTA does not include the tokens that you purchase. So you pay the 8.8, and then you purchase another 5.6. 145 3/6/01 - SCHOOL DISTRICT BUDGET

No. 3

Explain it.

The students pay -- the students pay the --

Explain it.

Okay.

Don't break down the costs per trip, don't break down the costs per token per student.

Okay.

Break down how much money you give SEPTA.

8.8 --

How much you --

Go ahead.

How much you recover from the State.

Okay.

And what cost you pass onto the student, if any.

Okay. We spend $8.8 million a year for tokens. That includes free, subsidized, and transfers.

So you don't give 146 3/6/01 - SCHOOL DISTRICT BUDGET SEPTA any money for tokens or transfers beyond $8.8 million.

Correct.

Okay. What do you get back in terms of State reimbursement?

65 percent of the $8.8 million.

Okay.

There's an additional -- did you have a question?

Go ahead.

There's an additional $5.5 million approximately that students pay for subsidized tokens that is not reimbursed by the State. The revenue to SEPTA is --

Don't use term "subsidized tokens" for a second. The students pay that amount, you purchase 'em from SEPTA for that extra price --

Right.

And sell 'em to the students for that price.

For -- not the exact -- for 90 cents. The students buy them for 90 cents. 147 3/6/01 - SCHOOL DISTRICT BUDGET

So your purchase price in terms of tokens and transfers that you sell is what?

$1.15 per token, $8.8 million total.

And you discount it for a quarter, per token.

Correct.

Okay, what is the process for reviewing token prices?

What is the process for what, sir?

Reviewing token prices. How often to you review token prices, who reviews token prices, who decides what the cost of tokens are?

SEPTA does. SEPTA indicates to us what --

The School District purchases the tokens.

Yeah.

They then sell them.

Right.

Who determines the 148 3/6/01 - SCHOOL DISTRICT BUDGET price that they sell them at?

Some time ago, the Board decided to subsidize tokens for cents, probably 5 5 years ago. So it's been a long-standing 6 practice of the Board to charge 90 cents and -- 7

I got that. What's 8 the current process review of token prices? 9

SEPTA tells us what the 10 price is. 11

I'm talking about 12 how much you're going to discount to the students. 13

There hasn't been a 14 review in quite some time, if that's your 15 question. 16

Okay. Is -- do you 17 view any connection between token prices and 18 truancy? 19

And truancy? I 20 personally can't answer that. Perhaps someone 21 from the instructional side can, but there may be. 22

There may be some 23 connection between token prices and truancy, but 24 I'd probably venture to say that there's probably 25 a greater connection between a student's lack of 149 3/6/01 - SCHOOL DISTRICT BUDGET ability to read and truancy that leads to frustration and just not being in tune with the instructional program. And we know that there's a correlation between truancy and dropping out, and very often, students who are prone to drop out are those who had reading problems early on.

In terms of the connection that may exist between token costs and token prices and truancy, would the Board and the Administration be willing to consider further subsidizing or eliminating the cost of student transportation related to truancy?

Well, let me speak from the Administration. In terms of the truancy issue, we don't have any quantifiable data to really answer the question. I think occasionally, we hear stories that would underlie some indication that obviously it's an impediment.

I'm not making a claim.

Right, I understand.

I'm asking whether you see --

I would say -- 150 3/6/01 - SCHOOL DISTRICT BUDGET

-- a connection between truancy and token prices at all.

Well, I'm sorry, could you repeat that.

Is there any connection, relationship between token prices and truancy?

As far as I know, we don't have any quantifiable information to say yes or no on that.

So the answer is "I don't know"?

The answer is we do not know, yes.

Okay, thank you. Thank you, Madam Chair.

Okay, thank you. I have a few questions here. I think, Miss Kahn, in your testimony you talked the fact that lines of communications are better now between some of your major stakeholders like the State reps, the State's Education Committee. When they came down, did the entire committee come? and what did they find that was 151 3/6/01 - SCHOOL DISTRICT BUDGET different about Philadelphia schools and about some of the schools around other parts of State?

This was actually the second time in about six months or so that we had invited them and it just worked out members of the House Education Committee could come to Philadelphia. The first time was actually last August, and then again most recently, about ten days ago. No, the entire committee wasn't there, but there was a representative sampling, including the Chair. They had specifically this time requested to visit two of our schools, the Saul High School and then also the new Grover Washington year-round middle school. I think -- and again, with the weather, what had happened was, you know, we early-dismissed that afternoon and we went to Saul and schools wee closed the following morning, but that didn't deter them at all. And we had principals and teachers who, you know, who certainly stayed just so that they show the schools. I think -- you know, and we got a letter to that effect, that they were very impressed with what they saw. But more than that, as we just talked 152 3/6/01 - SCHOOL DISTRICT BUDGET about larger issues. We gave them, in fact, the financial presentation from the plan that Miss Chatzkel shared this morning talked, and we talked about issues that affect us, particularly when we looked at the key expense drivers, issues of special education, issues of charter schools. There was commonality, as well as the impact and problem in local communities about the reliance on the property tax to fund schools. They also pointed out certain things, and this is true as well, in their communities that they would like to have that we don't have in Philadelphia -- or that we have in Philadelphia that they don't, for whatever reason, like full-day kindergarten, for example, and that's something that we believe is a better statewide policy, you know, is something that would be great to say in Pennsylvania. So, you know, it's a matter of getting to know one another more, both as individuals as well as understanding each other's communities and trying to build that consensus.

I think that's important because I guess the more -- I believe 153 3/6/01 - SCHOOL DISTRICT BUDGET that the more people at the State level understand what the 1.6 or $7 billion is being spent on, then it increases our probability of accessing additional resources. So I'm really glad to hear that that's happening, and I hope some other visits are planned for the future.

Thank you.

I was out of the out of room, and I don't know whether my colleague -- Blondell, did you ask technology-based questions when I was gone earlier? I don't want to be representative.

(Responds off-mic.)

Okay, all right, thank you. I have a couple questions as it relates to technology, and I'd like to know, what is the overall technology mission and technical-based educational plan for the District, and what is being done to ensure that it will be successful? Is there a plan?

Our instructional plan is to make sure that now that are schools are wired, 154 3/6/01 - SCHOOL DISTRICT BUDGET that both teachers and students are adept at really using the computer to access information. We are also interested in the whole field of technology as it is a career option for students, making sure that students have good information relative to career development in fields where proficiency and technology does open the doors of access to those careers. As I said earlier in my response to the textbook question, we're very interested in making sure that students are aware that not only do they have textbooks as a resource for information, but they also have the Internet. We're interested in making sure that there's responsible use of the Internet, that we have at our disposal good software that will help students not only in a remedial sense of trying to catch up and be on top of their academics but also in terms of the use of good software for enrichment an advancement. So it's a comprehensive plan that is tied very much to standards for best use of technology, making sure that students are aware of how to use technology, how to access information, and then how to use it to show a better product, 155 3/6/01 - SCHOOL DISTRICT BUDGET how to use technology to show -- to give presentations, to make sure that they can use it proficiently when they have to give presentations, give talks, make convincing presentations, and so forth.

Okay. So the development and the design of that curriculum and the development of that plan comes out of that office. I know you have a COO and you have -- what was that -- Ron Daniels, was that his name?

Right, who's here.

Right.

And if Ron would like to come up and make any statements at this point --

And while he's coming up, every school pretty much has access to the Internet?

Right.

There's, what, classrooms set up where computers are required?

Yes. And Mr. Daniels can speak it. Last year, his office really completed a major, major accomplishment, I think, which is the wiring of all of our schools so we 156 3/6/01 - SCHOOL DISTRICT BUDGET are able to go into this, you know, technology age and our students are able to have access to the Internet and be able to network, and he may want to talk more about that.

Yeah. The technology plan is basically two parts. We're moving into the next phase of wiring which allows all of our schools to access the Internet, e-mail, that type of thing. Working in conjunction with the curriculum folks now, how do we train our kids, how do we train our teachers on use that technology. And, again, that's training our teachers on how to use it; and then secondly, how do you integrate that into the curriculum. And that's part of what the Curriculum Office is doing on conjunction with our office. How do we present that technology, first of all, from a infrastructure standpoint by having these schools wired and having the computers in the classroom, and then how do we train the staff to use that to make sure every student has a foundation of technology in their curriculum.

Okay. What about the schools that the School District -- what about 157 3/6/01 - SCHOOL DISTRICT BUDGET the buildings that the School District does not own, such as some of the alternative programs? Example, Parkway in the Northwest, up in New Covenant. Now, I know that Parkway rents space in those very old buildings, and I don't believe that that school and maybe some other programs like that are wired. And I'd really like you to look into that if it's not, and is there a plan? 'Cause someone said about a year ago that they weren't going to be wired because the School District did not own the buildings, but you have 250 high school children attending that program, and I'm not really sure whether it's been wired or not. I did raise this maybe in a private meeting maybe one-on-one, I'm not really sure, and I haven't checked.

Yeah, we would really need to look into that 'cause I think some are and some are not, 'cause I know in that same campus where Parkway is, that New Covenant campus, Parkway may not be, but I know Amy Northwest on that same campus is.

Right, right. 158 3/6/01 - SCHOOL DISTRICT BUDGET Well, they're in a newer building now. Amy is located in one of the newer buildings, the Parkway program is located in one of the older programs, so that may be the issue, I don't know, okay. And I --

If I may add, some of our schools, although there is 259 approximately schools, there approximately 400 buildings, if you include annexes. Not all of those are wired, which may fall into that category. However, there is access to technology at those sites via phone modems that each site has, whether it be a private school or a day care, or even some of our charter schools has access into our main system based on the technology we've provided, so even if they're that wired on our physical infrastructure, they do have phone-up access.

Okay, I'm not real technical.

Okay.

So when you say "phone-up," it doesn't mean much to me.

It's pretty much the same thing. It would have the same capabilities -- 159 3/6/01 - SCHOOL DISTRICT BUDGET Internet access, that type of thing. It's just not as quick as what the infrastructure --

So they can still access the Internet, then, whether it's wired or not.

Right.

Okay.

There are two other areas of technology that I think that we're interested in really making sure that we take advantage of, and that is, as we look at teacher shortages, the use of distance learning for some of our courses, and also technology as it facilitates management for teachers, the use of computerized records and so forth so that the teacher can be more freed up to teach with their management system done via technology.

Yes. I'm glad you said that 'cause that was going to be my next question, about the use of computers to supplement in the areas where you don't have a lot of teachers, such as math. When we visited Houston, the CEP program, and one of the things that we saw there 160 3/6/01 - SCHOOL DISTRICT BUDGET was that all of those students there were basically -- their teaching was supplemented on the computer. So I was just wondering if Philadelphia was moving in that area also, particularly for math. I know that math teachers and science teachers are hard to find. I'll stop and call on some other Councilperson in just a minute.

Councilman Kenney.

Madam Chair, I'm next.

Oh, this is my first time using this. Please allow for errors. SERGEANT-AT-ARMS; Councilman's Rizzo's next.

Okay, Councilman Rizzo.

Thank you, Madam Chair. Talking about technology, we have to get it down pat here too. I'd like to talk about a program and 161 3/6/01 - SCHOOL DISTRICT BUDGET many of the people watching and you're real aware that this hearing is being televised today. And I just received a call as a reminder from a constituent watching, asking about the Parent Cooperative Nursery program. As you're all aware at that table, there's some controversy associated with that program, a fee structure that you're talking about establishing. So could you discuss the program, the Parent Cooperative Nursery, the controversies associated with that, and how you plan to resolve the fee structure issue, please.

Yes. We are actually examining the whole Parent Cooperative Nursery issue in the context of early childhood in general in the District.

Could you please describe exactly what the program is.

Okay, yes. The Parent Cooperative Nursery program is a one-year program serving four-year-old children. It is a program where parents volunteer for part of the day. As part of the agreement for their participating, that volunteering is to help to provide parents 162 3/6/01 - SCHOOL DISTRICT BUDGET with additional support in terms of instruction for children. The Board of Education is currently reviewing a fee for September, which will be determined by March 12th. The history of it is, last year, the District attempted to require a flat fee for PCN users and later a sliding-fee scale. But, you know, this was not to the parents' liking, so they contacted various elected officials. City Council then sent a letter to the Board of Education on behalf of the parents. And in the fall of this year, we suspended the fee for this year, with the understanding the Board of Ed would review and appropriate a fee for next year. And we have been meeting and planning. There was a meeting with parents recently to get their input regarding a fee, and it is the Board's expectation on March 12th to have some determination.

So on March the 12th, we will know the fee structure as -- what is the -- what's the dialogue going on with the -- with the community, the parents that use the 163 3/6/01 - SCHOOL DISTRICT BUDGET program? Are they a part of the -- are they a part of this process?

Yes, they are.

Could you describe the process, please.

Okay, yes. The parents were issued a survey and a representative group of parents met last week to give their input regarding what should be the scale, what should be the fee. We have taken the input that we received from then and we're reviewing it in the attempts of having a determination by March 12th.

So March 12th is just a few days away.

Yes, correct.

So I'll take advantage of having the President of the Board here. Could you comment on what you're planning to do here? So I think a lot of folks would like to hear exactly where this program is going and what they can expect to pay.

Yeah, Councilman, I think that where we are as of right now, there has been this process -- maybe I ought to step back. There 164 3/6/01 - SCHOOL DISTRICT BUDGET was a board resolution that had a few pieces to it. One piece said that the sliding-fee scale that the School District had tried to impose last year would be suspended until this year, that was part one of the resolution. Another part said that the School District would work with stakeholders in the City to take a broader look at early childhood services generally. And what we've done is, one, we've been looking at options for what a fee scale would look like; and, two, starting a process that is going on in the City generally, looking at early childhood. I think it's a Carnegie grant that's funding the City and the District, and I think United Way is leading the effort and looking at early childhood generally. Specifically for PCN, the guidance that the Board has been giving the staff is that we want -- it is a different approach than last year. We said we would do a sliding scale and -- but things that had been overlooked before that we'd learned from really community and parent input were that we had to take into account the length of the school day. We had really last year keyed 165 3/6/01 - SCHOOL DISTRICT BUDGET the scale to the other program called Comprehensive Day Care, which is a program targeted at -- that we have to have a certain income to be eligible for and that -- where everybody -- where parents pay. So one of the things that we asked this year was, take into account the differences in the length of day 'cause PCN is, I believe, a shorter day; take into account, as parents told us, that they do contribute $25 a month for food, snacks, and supplies; and take into account that parents do staff the PCN. Now, that's not to say that parents don't volunteer over at CBC, but in PCN, it's a -- part of the program assumes that parents are going to be there. So value those things and come to us with a reasonable scale. What was reported to me from staff, after meeting with the parents, was that the feedback that they received was that there was some apprehension about a sliding-fee scale instead, if it would require income verification, and that -- and thus, our folks ended up recommending -- are in the process of recommending 'cause the Board doesn't have a recommendation in 166 3/6/01 - SCHOOL DISTRICT BUDGET front of it yet, I believe, a flat fee instead of a sliding scale that would avoid having to probe people's income. It would also -- so in a situation like that, I would expect that if the -- if someone's income was below, you know, a certain level, that they probably -- the proposal would probably be that you not charge the way you wouldn't charge in the other programs. But this is all -- right now, this is not the -- my understanding is that the staff and some folks who were having to look at this for us on the outside of the School District were still putting together the final touches in that proposal, and I expect the Board will have it in the next couple of days.

So, again, there will be a --

But that's the approach that's being taken.

That the next Board meeting, which is the --

Monday, the 12th.