Committee Hearing, April 4, 2006

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, April 4, 2006 10:25 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL L. CLARKE COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN JUAN RAMOS COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO BILLS 060001, 060002, 060003, 060004, 060006, 060007, 060008, 060014, 060089, 060090. RESOLUTIONS 060019, 060099, 060100, 060119, 060172 - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2

Good morning, everyone. This is the continued public hearing of the Committee of the Whole. I would ask Mr. McPherson to please read the bill numbers. MR. McPHERSON: The bill 9 numbers are 060001, 060002, 060003, 060006, 060007, 060014, Resolution 11 060019, Bill 060089, Bill 060090, Resolution 060099, Resolution 060100, Resolution 060119, Resolution 060172, and today we'll have testimony on bills which were previously read, Bill No. 060004 and 060008, which are School District taxes. The title of Bill No. 060004 is an ordinance amending Section 19-1801 of The Philadelphia Code, entitled "Authorization of Tax," to further authorize the Board of Education of the School District of Philadelphia to impose a tax on real estate within the City of Philadelphia, all under certain terms and conditions. 3 4/4/06 - WHOLE - BILL 060001, ETC. Bill No. 060008, an ordinance 3 amending Chapter 19-1800 of The Philadelphia Code, entitled "School Tax Authorization," by amending Section 6 19-1806, entitled "Authorization of Realty Use and Occupancy Tax," 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 very much. Our first witness I believe would be Mr. Vallas. Good morning. Please identify yourself for the record and proceed with your testimony.

Paul Vallas, Chief Executive Officer of the School District of Philadelphia.

Good morning. Sandra Dungee Glenn, member of the School Reform Commission. 4 4/4/06 - WHOLE - BILL 060001, ETC.

Good morning. Folasade Olanipekum-Lewis, CFO for the School District of Philadelphia.

Good seeing you again.

Good morning. Council President Verna, if you will allow, I would like to give the lead-off testimony and I'll be followed by our CEO, Paul Vallas.

That would be fine.

Thank you very much. Again, good morning to you, President Verna. Good morning, Councilwoman Blackwell and members of City Council. I am Sandra Dungee Glenn, member of the School Reform Commission. SRC Chairman James Nevels asked that I present today's testimony on behalf of the Commission. Due to previous commitments with his company, he has to be out of town at this time. Let 5 4/4/06 - WHOLE - BILL 060001, ETC. me assure you that Chairman Nevels and each member of the School Reform Commission is dedicated and fully committed to working for children. But periodically we must attend to our professional responsibilities. 04 billion. While our Chief Executive Officer, Paul Vallas, will speak in greater detail about how we propose to allocate our resources, I am pleased to say that this will be the District's third balanced budget in a row. This is a very different place from where we were just four years ago, and we can thank City Council, the Honorable Mayor John F. Street, Governors Mark Schweiker and Edward G. Rendell and the state legislature for their continued 6 4/4/06 - WHOLE - BILL 060001, ETC. support. It is through our united commitment to the children of Philadelphia that we are well on the way to making our School District a national model for urban school reform. Our report to you today is a reflection not only on how we propose to spend revenues going forward, but also on what progress we have made in living up to our mission. Mr. Vallas will expound on the many initiatives put in place over the past four years that have resulted in the creation of vital programs to support the academic growth of our children. He also will speak to the vision of what we want our school system to be and what it will be by 2008. The year 2008 has particular significance for our District. In May 2004, after much thoughtful discussion and deliberation, the members of the School Reform Commission developed a statement of 7 4/4/06 - WHOLE - BILL 060001, ETC. beliefs and visions for this District. We also hammered out a set of quantifiable measures to meet by the year 2008. We call this document of beliefs, vision and measures our Declaration of Education. Everything we do in the District is now influenced by these beliefs and goals. In fact, the presentation of the District's proposed budget for Fiscal Year 2007 is couched in how each program, activity and initiative will move us toward the achievement of the measures that matter contained in the Declaration of Education. To achieve our outcome-based goals, this proposed budget focuses funding on the six measures that are fundamental to the Declaration of Education: Administering early childhood programs that enable every child to begin school ready to learn and succeed; ensuring that all children reach their 8 4/4/06 - WHOLE - BILL 060001, ETC. learning potential and achieve the high academic standards set forth by the District, the Commonwealth of Pennsylvania and the federal government; promoting the safety and security of our schools and the surrounding areas; providing equitable resources and opportunities for all District students; supporting collaboration with community groups and families throughout Philadelphia; and enhancing the efficiency of operations that support an academic environment that is conducive to learning. Materials further describing the Declaration of Education were included in the information provided to you. Just as the Commissioners expect that this proposed budget should; in fact, must, support the Declaration of Education goals, we also ask that Council evaluate the proposed budget that we have placed before you by these same measures 9 4/4/06 - WHOLE - BILL 060001, ETC. that matter. The School Reform Commission and the School District administration are committed to eliminating the achievement gaps that for so long have been a characteristic not only of this District but also of urban school systems across our nation.

With the continued support of City Council, the City Administration and the entire Philadelphia community, we will create a public school system that is second to none, where all students will be prepared and empowered to achieve their full intellectual and social potential. Let there be no mistake. How successful we are in delivering a quality education to all of our children is directly linked not only to their realization of future achievements, but also to enabling them to see now that these achievements are within their grasp. 10 4/4/06 - WHOLE - BILL 060001, ETC. If we are successful, they will be successful in creating positive visions of their future and attaining them. If we are successful in providing them with a quality education, they will step confidently into the realms of higher education and the workforce ready to contribute fully as active and engaged citizens, leaders, business owners and valued and valuable workers. Providing our children with an engaging, relevant and rigorous education is one of the most effective strategies to eliminating youth violence. It is imperative. We are committed to nurturing and guiding our boys and girls, our young men and young women, and helping to propel them to the bright futures of which they are capable and which each of them deserves. That is my personal goal as a 11 4/4/06 - WHOLE - BILL 060001, ETC. member of the School Reform Commission, and it is a goal that I share with my fellow SRC members, with Mr. Vallas and his team, and with our principals, teachers, parents and students. I know that every member of City Council also shares in this commitment. Failure is not an option. Success is our only option. Thank you for your attention.

Thank you very much.

And I will remain for the remainder of this morning, if that so pleases the Council. Thank you.

Thank you very much. Mr. Vallas.

Thank you. Thank you so much. First of all, before I get into the substance of my presentation, I'd like to once again take a moment and thank each member of the City Council and 12 4/4/06 - WHOLE - BILL 060001, ETC. our Mayor for his strong support. We would not be here today, we would not be here with the clear evidence of progress not only on the financial front but also on the academic front had it not been for the Mayor's leadership, had it not been for the support of City Council, obviously not mention the great support we've received from the Governors and the legislature. So we certainly want to give credit where credit is due. So, once again, our thanks to you all. My testimony today will lay out the successes we've had, and I'm going to make references rather than spend a lot of time talking about those successes, I'm going to reference certain sections in our multi-colored book here that has all the bar graphs and pie charts and line graphs that you'd ever want to have, and simply refer you to those things and spend a few minutes talking about those things before getting into the crux of the budget. 13 4/4/06 - WHOLE - BILL 060001, ETC. I'm also going to, as advised, try to keep my remarks brief so that we can provide ample time for questions and answers. And, of course, I'll be available both days if you need me to come back, if there are any other questions or any other issues. I'm joined by my Chief Financial Officer, Sade. I'm joined by my Chief Academic Officer, Greg Thornton. My Chief Operations Officer, Natalye Paquin, is also here, and our critical department heads. So we'll be here in force over the next two days to answer any questions or, for that matter, resolve any issues that should emerge. Let me make a couple general comments on an academic front. If you look at Pages 4 and 5 of our bound presentation, it summarizes both our TerraNova test scores and our PSSA test scores. The TerraNova test scores look at performance from the fall of 2002 to the fall of 2006, and the 14 4/4/06 - WHOLE - BILL 060001, ETC. TerraNova test scores look at the performance of the TerraNovas from 2001 to 2005. We're waiting for the results from this year's PSSA. If you look at the performance, across the board, the performance has, I think, been exemplary. You've seen significant growth both in the TerraNova, a nationally norm test, and the PSSA exams. In fact, if you break down the data by the various subgroups, there's been consistency in terms of improvement across the board. So if you look at the performance of African-Americans, the performance of whites, the performance of Asians, the performance of Latinos, the performance of special education children, there's been a consistency in terms of the improvement. Also, the improvement in TerraNovas and PSSAs have been eerily similar. There's been a very close -- they're statistically very close. So I think the test scores on 15 4/4/06 - WHOLE - BILL 060001, ETC. both exams are mutually reinforcing and reinforcing the notion that the School District is realizing, I think, significant improvement. Also, let me point out that in contrast to other districts that have experienced some growth in academic performance, those districts are also in states that have overall experienced growth in academic performance. There's a contrast here. The growth in PSSA scores has dwarfed the growth in the state overall. Just, for example, the last year alone, we experienced about a 15 percent growth in our 5th grade math scores, where I think the overall aggregate state growth was seven or eight percent. So our growth has been consistently stronger than the state's. Now, we're playing catch-up, and we have a long way to go and we are not at state averages yet, but, again, we are certainly gaining vis-a-vis the state. In fact, I like to think that 16 4/4/06 - WHOLE - BILL 060001, ETC. we've helped carry the state growth on the PSSA. So the numbers are there for your examination.

Two years ago, we were cited by the Council on Great City Schools as one of two urban districts that have shown the most significant improvement in academic performance. We anticipate we'll be cited again this year. And there is no district that has come close, large district, that has come close to us, I think, in overall academic performance. So we have a long way to go, an incredibly long way to go, but I think we've come a long way, too, and proof is in the pudding. I think the numbers are there showing that the School District is improving. I can certainly answer more questions about overall academic performance, and Greg Thornton is here to get into any details should you have 17 4/4/06 - WHOLE - BILL 060001, ETC. questions once my testimony is complete. I'd like to get into some of the programmatic components of the budget, and I'm going to talk about the core reforms and how the core reforms are impacted by this budget, and then I'll spend a few minutes summarizing some of the financial highlights. I'll then ask Sade to get into more detail on the financial highlights. Let me, first of all, talk about early childhood education. We are going to be once again expanding the number of students in our early childhood programs. In 2001, we had 6,319 children in School District-sponsored and funded early childhood programs. With the 700 additional slots we will add this year, we will have increased the number of children in early childhood programs to 9,769. Our goal here by 2008 is to have 11,000. We're reasonably optimistic that we're going to reach this goal. 18 4/4/06 - WHOLE - BILL 060001, ETC. But we just haven't expanded early childhood in a vacuum. In standardizing our curriculum, we've standardized our curriculum pre-K all the way through high school. We focused on early literacy. We focused on early health and early intervention. So I'd like to think that not only are more children being served in early childhood programs, but more children are being served in quality early childhood programs. And working with the City and working with Alba Martinez and the United Way, there's been a coordinated effort to work with the private providers to help improve the quality of services overall. Incidentally, that coalition continues to work and continues to look at ways that we can coordinate the delivery of higher quality early childhood programs, but the thing is, the numbers are improving and I think the quality is improving. And if you look at some of the performance of the primary 19 4/4/06 - WHOLE - BILL 060001, ETC. grade children, I think you're beginning to see evidence that the early childhood program is making significant progress. I will tell you one program that we're looking -- that we've piloted that we're looking to bring to scale in the next couple of years is our Home Program, and this is a program that targets children who are not enrolled in any early childhood or pre-school program, and we are reaching those parents and providing those parents or the parent with training and with support so that that parent can effectively home-school the program. Our goal is always to get the child into some organized or institutionalized early childhood program, but there are a lot of children who are falling through the cracks. So the Home Program, that outreach program, is a way of reaching those parents who, for one reason or another, do not have their children in programs, in 20 4/4/06 - WHOLE - BILL 060001, ETC. institutionalized programs, or have elected not to place their children in those programs. But, again, I think you're seeing an expansion in not only the numbers, but also the quality of early childhood programs. Curriculum and instruction: Our managed instructional program, I think, is one of the best managed instructional programs around.

If you look at all the research, all the quality research that is out there from the Council on Great City Schools to some of the recent research that the Gates Foundation has invested into Kati Haycock's work at Education Trust, a comprehensive managed instructional program is the key to academic revitalization. This year, in this coming budget year, we will have completed our curriculum in instructional reforms, all the curriculum instructional models, 21 4/4/06 - WHOLE - BILL 060001, ETC. pre-K all the way through 12th grade, the standardized professional development, the standardized interventions. This year we're adding the final grade to our curriculum instructional models, and that's 12th grade. Also, this coming year we will be institutionalizing the mandated African-American curriculum. So our curriculum in instructional reforms will have been complete, and this budget will allow us to complete those reforms, as well as to sustain those reforms. So we're happy to say that in really over the span of about four years, we've been able to modernize and standardize our curriculum in all the core subject areas. Our first two years here we did language, arts and math and then we added social studies and science. Now we're finishing with 12th grade. Also, with those reforms have come a standardization of our SAT and PSAT test preparation, a standardization 22 4/4/06 - WHOLE - BILL 060001, ETC. of our counseling when it comes to getting kids interested in and enrolled in college. We now mandate PSSA and SAT testing. We now subsidize PSSA, PSAT and SAT testing. And in standardizing our curriculums, we just haven't standardized our core curriculum, we've standardized our intervention curriculums, we've standardized our honors, advanced placement and accelerated curriculum. So we've made a lot of gains, and we fully intend on maintaining our investment in our curriculum reforms. What's next in the area of curriculum instruction and professional development? Well, a couple things. First of all, on the curriculum instructional side, we are going to move into high gear with our campaign to modernize our classrooms. This budget and next year's, but over the next two years, we will invest about $137 million in classroom modernization. We will be 23 4/4/06 - WHOLE - BILL 060001, ETC. modernizing 2,100 classrooms. Our goal is to modernize all classrooms 6th grade through 12th. We do not have enough money to reach that goal, but we're going to make a big down payment in focusing on 2,100 classrooms. We're also very optimistic that the Governor is going to be successful in getting his technology classroom modernization grant program through, of which we could receive upwards to $5 million. And there's a second initiative moving through Harrisburg that would also provide us with another $5 million, which we are also optimistic. And if that happens, we'll be able to add another 800 classrooms over the next two years in our classroom modernization efforts. When we're talking about modernizing classrooms, we're talking about wireless Internet access, wall-mounted interactive Smart Boards, ceiling-mounted projectors, printers and work stationary as wired to the local 24 4/4/06 - WHOLE - BILL 060001, ETC. area network, modern furniture and facilitating flexible instruction, electrical upgrades, improve physical space and student laptop computers. So 2,100 classrooms is a lot of classrooms and adding another 800, which we're pretty optimistic, that's 2,900. We're going to be getting pretty close to our goal. We're not going to be able to reach our goal of 5,000 without a considerable increase in funding from the state or without some local or federal support, but this will be one of the largest classroom modernization efforts in the country. We're also working with Congressman Fattah in the new telecommunication legislation in Washington to get a modification in the E-rate program to allow us to spend money on classroom modernization.

Philadelphia, and I'm not exaggerating, has the best record for managing and expending E-rate funds than 25 4/4/06 - WHOLE - BILL 060001, ETC. any school district in the country. We were the model district in the recent E-rate hearings looking at how school districts have used and abused their E-rate dollars, and we feel that we can make a strong case that since we've used E-rate so well, we should get the flexibility to use E-rate to do classroom modernization, to do electrification, to purchase laptop computers. But Congressman Fattah has made that a top priority of his, and we're working very closely with him, as we do on so many things, to address that issue. So we feel very good. We feel very good about what we're going to be able to do on the classroom modernization side. Let me make a couple comments about after-school and extended-day programs. We pretty much are going to hold the line on after-school and extended-day programs. The federal 4/4/06 - WHOLE - BILL 060001, ETC. government has cut federal earmarks; in particular, the Specter earmark, which is the Empowerment Grant money, that he has been able to secure for school districts across the State of Pennsylvania the last three years. That appropriation for us is about $14 million. What we've done is, despite the loss of that appropriation, we've reprogrammed existing dollars so that we can continue to provide the same level of after-school and extended-day and summer school services as we've provided in the past. So we're not going to be cutting back in after-school and extended-day. We hope to serve about 32,000, 33,000 kids in our extended-day academic programs. I'm not talking about some of the other extracurricular enrichment programs or, for that matter, the number of children who will be served through Safe and Sound. What we hope to do in the summer is to serve as many as 60,000 kids in our summer school programs. 27 4/4/06 - WHOLE - BILL 060001, ETC. So despite the cutbacks at the federal level, we are not going to be cutting back on our after-school and summer school programs. We are, though, going to be modifying one aspect of our after-school and summer school programs, and, that is, we're going to take the after-school accelerated and gifted programs to scale. Last year, about 120 schools did after-school and extended-day accelerated and gifted, and this year we feel very confident that all the elementary schools are going to be able to do after-school, extended-day and gifted. Let me also point out that those programs also include the credit recovery programs. Last year, we had close to 11,000 students in credit recovery. Four or five years ago, there was no credit recovery program to speak of. So that also includes the credit recovery program for 8th graders and 9th graders. But we're going to work very 28 4/4/06 - WHOLE - BILL 060001, ETC. hard to hold the line and to do some modest enhancements. Let me make a couple comments about how the budget is going to impact our teacher programs and the quality of our teacher programs. Since the creation of the Campaign for Human Capital, cultured by Sandra Dungee Glenn, we, I think, have had dramatic progress in terms of the improvement of our teacher recruitment and retention efforts. Let me just give you some statistics. As of today, there are 16 vacancies in the School District. That's 17 22 vacancies. We have 10,555 classroom 18 positions. And as of today, 95 percent 19 of the teachers in the system are fully 20 certified or considered to be highly 21 qualified. That means they've passed the 22 Praxis Exam, et cetera. Also, as of today, 90 percent of our new teachers are considered to be fully certified as opposed to in past 29 4/4/06 - WHOLE - BILL 060001, ETC. years about 50 percent of our new teachers from year to year are being fully certified. Our retention rates have improved significantly. Three years ago, only 77 percent of our new teachers stayed beyond the year.

Last year, 94 percent of our new teachers stayed beyond the year. So we're showing gains. I'd like to take credit for it, but I can't. I mean, the Campaign for Human Capital has been the vehicle. Sandra Dungee Glenn and Tomas Hanna, in strong partnership with Ted Kirsch and Jerry Jordan in the business community. I mean, they have been the architects of these efforts. And now we're going to be moving in a big way into the area of promoting greater diversity within our workforce, too. So we still have a ways to go, because the June 2006 No Child Left Behind deadline for highly qualified looms before us and we still haven't 30 4/4/06 - WHOLE - BILL 060001, ETC. issued, despite the fact that we've doubled the number of middle grade teachers who are middle grade certified, we still have this issue of certification in the area of instruction. And so we still have some work to do, but the bottom line is, we're seeing great progress. Last year, we had three times the number of teacher applicants that we had for every position. We still have some shortages in special ed and some shortages in the ESL, English as a second language, but this is real progress. We feel, though, that in addition to the recruitment and retention efforts -- and I'll submit to you that over a third of our workforce have been just hired since 2001. So we've seen a transformation of our workforce. In our efforts to improve teacher quality, our recruitment and retention efforts, combined with the effectiveness of our managed 31 4/4/06 - WHOLE - BILL 060001, ETC. instructional program, I think is having a dramatic impact. Because if teachers are teaching out of their area of certification and if teachers are new or inexperienced or if teachers are overwhelmed by classroom management issues, that managed instructional program -- those standardized curriculum instructional models are a great, great asset. So we feel that this is helping also improve the quality of our teacher core. And this year we're going to take some further steps to help improve curriculum instruction. In our schools, we're going to be assigning in the schools that are not making AYP, in the schools that are not showing the progress that we deem sufficient, we're going to be assigning 129 school growth teachers. These are highly qualified, fully certified teachers who will be highly trained teachers who will be released full time and will be used to support 32 4/4/06 - WHOLE - BILL 060001, ETC. school-based professional staff development, instruction, monitor instruction, assisting teachers. We're going to be literally placing one in 129 schools, both the elementary schools and in the high schools. In addition, we are going to be able -- and the school growth teachers are going to be spending the majority of time in their classrooms in professional development sessions, in training, assisting the teachers in instruction. This will literally be like a freed-up full-time curriculum coordinator, who will be able to work very closely on professional development. We think that's going to provide a big help to our schools. In addition, the District is embarking upon an effort to establish math and literacy leaders in all of our high schools. This is going to be a three-year phase-in. We're identifying the teachers now. They have part of 33 4/4/06 - WHOLE - BILL 060001, ETC. their day freed up to focus on coaching, to provide supports. Our goal within three years is to have all of their time freed up. If we're able to secure more money, we'll free up the time in a more rapid fashion. Finally, through the Annenberg Foundation, we've been provided funding for literacy and math cultures, who 11 are going to work on curriculum and 12 instructional support exclusively in our 13 high schools.

14 So there's going to be upwards 15 to 170, 180 additional curriculum 16 instructional personnel in the schools 17 helping us in the area of curriculum 18 instruction, and we feel -- I'm sorry; 19 between 155 and 160 additional personnel, 20 not counting the math and literacy 21 leaders, and we think that this is going 22 to help provide a stronger human 23 infrastructure in the schools to help us 24 in our curriculum instructional efforts. Let me say a few things about 34 4/4/06 - WHOLE - BILL 060001, ETC. how this budget is going to impact our gifted and high-achievement programs. This year, over 120 schools piloted our after-school, extended-day and Saturday, what we call, gifted and high-achievement initiatives. Next year we're going to bring these to scale in all of the schools. In addition, as you know, as part of the School District's small high schools initiative, about nine of the small high schools being created are going to be select enrollment of the magnet schools in terms of the type of school's -- I don't want to say quality, but in terms of their draw, in terms of the fact that they will have academic requirements, admission requirements. So that will take the number of City-wide magnet schools from, I believe, 13 select enrollment schools to about 22. In addition, we're going to continue to expand and implement our international baccalaureate programs, 35 4/4/06 - WHOLE - BILL 060001, ETC. which are in five schools. We're looking at increasing that number to eight schools. And this does not include our middle grades international baccalaureate and our primary grades international baccalaureate. And then, finally, we're going to be adding more schools to our 10 accelerated academy programs. As you 11 know, last year we began a program to 12 place accelerated academies, high 13 achievement academies, in neighborhood 14 schools. Thirty-seven got started last year. They will be fully implemented this year. Last year -- I should say the current year we're in -- was a prep and training period for those 37 schools. Next year they're going to be enrolling kids in the classes, I believe, for the first time. We're going to be adding 14 more schools to that. There are actually, I believe, 67 schools that have expressed an 36 4/4/06 - WHOLE - BILL 060001, ETC. interest. So we're hoping over the next three to four years to have accelerated academies in over half of our K-to-8 schools. Again, funding is going to drive a lot of this, but we do have funding for 51 schools, and we will be adding more schools. We will be 10 adding 14 more schools to the program in 11 the next year. 12 In addition, for ambitious high 13 school students, the District is 14 developing what we call our early college programs in partnership with local colleges and universities. Let me explain what early college does. Early college programs offer students an opportunity to complete their high school education in three years by taking courses on Saturday and during the summer months. And we're going to be providing these early college courses or these accelerated courses in designated schools. The designated schools, 37 4/4/06 - WHOLE - BILL 060001, ETC. incidentally, are going to serve all the kids. So we are looking at selecting schools in each of the regions that will offer the accelerated programs over the summer. Students who are academically proficient and academically performing and are interested in graduating in less than four years, graduating early so that they can either enter college early or they can take university courses their senior year while still on our student rolls will be able to participate in these summer programs. So we're going to be providing these programs in our magnet schools and in a number of our select neighborhood high schools, but they will be open to all students. The objective here is to, once again, provide more school choice, provide more enrichment, provide greater opportunities.

In addition, next year we're going to be doubling our dual enrollment program, which means the number of 38 4/4/06 - WHOLE - BILL 060001, ETC. students their senior years who will be taking courses on university campuses will be more than double than it has been in previous years. This is obviously going to be open to students in all of our high schools. It's not going to be limited to a select number of students. And then, finally, next year we're going to be piloting what we call our College Academy Program. And the College Academy Program is kind of dual enrollment -- let's call it dual enrollment on steroids, so to speak. It's a dual enrollment program that, in effect, has a university partner with one or two high schools. The university then sets up a program whereby cohorts of students from that high school can be enrolled in that university their senior year to take either a half load or even a full load, incidentally subsidized by the School District at negotiated rates. They then are afforded all the privileges of being a university student, the 39 4/4/06 - WHOLE - BILL 060001, ETC. counseling, the supports, the help on securing scholarships, the mentoring. The only thing that they cannot participate in is the athletic activities. And we are going to be doing pilots with three schools, the Community College system, number one; number two, LaSalle University; and, number three, Manor College, who is going to be partnering with Northeast High School. But Drexel has expressed an interest. A number of other universities have expressed an interest, but our goal here within the next two to three years is to have literally these College Academy Programs affiliated with most of our high schools. If the money follows the children, really follows the children, the College Academy Programs can be implemented without a significant increase in financial obligations. So we're very, very excited. We're going to 40 4/4/06 - WHOLE - BILL 060001, ETC. spend a year refining these models, and then we hope by 2008 to have taken these models to scale. But, again, you see there's a lot of options. There's expanded gifted and accelerated. There's expanded magnet school options. There's expanded local school accelerated options. There's expanded opportunities for students to enroll in college and earn dual credit. There's opportunities for students to literally take a full load of college courses their senior year. There's opportunities for children to move through an accelerated program in order to graduate early. We also think this early college model, by providing students with School District-financed college courses that they can obviously use for college credit, that will go hand in hand with Congressman Fattah's CORE Philly Scholarship Program to really send a signal to students that college is within 41 4/4/06 - WHOLE - BILL 060001, ETC. their financial grasp. And so we're very excited about the potential. Philadelphia, I think, outside of Boston is probably the richest city in the country in terms of the number of colleges and universities. There's something like 80 in just the metropolitan area. There are more degreed college students in that network of college and universities than there are students in the Philadelphia public School District. There are unlimited resources to be taken full advantage of, and we fully intend to take full advantage of those resources. A couple other things on the -- in addition to the -- obviously the curriculum instructional reforms, we're going to continue to invest in our enrichment and enhanced extracurricular programs. Let me just give you some statistics. In the past three years, we've dramatically increased the number of 42 4/4/06 - WHOLE - BILL 060001, ETC. sport teams and clubs in the School District, and there's a chart -- there's a nice bar graph in the color-coded presentation.

Can somebody give me the number on that for a second the I just want you -- I would like to refer you to for a second, if I can find it. Okay. Great. Thank you. Sandra, of course. Much faster than my staff, I might add. Let me point out, high school teams, if you look at the high school athletic teams, we've gone from 473 --

Mr. Vallas, are you looking at a particular page?

I'm sorry. It's on . And obviously I'm much slower than my staff, too. I didn't even give you the page yet. But if you look at and 18, and 18 gives you a list of the dramatic growth in high school sports 43 4/4/06 - WHOLE - BILL 060001, ETC. teams, the tripling -- I'm sorry; the more than doubling the number of middle grade sports teams and the more than doubling of the number of high school clubs. Also, a significant increase in new high school bands, in renewed high school bands and renewed high school orchestras. So if you look at these bar graphs alone, every picture tells the story. Well, here's a couple pictures that I think tell a big story. So there's been a big push towards expanding extracurricular activities. We have estimated that three, four years ago only about to 18 percent of our students were in any sort 19 of extracurricular activities, be it 20 athletic, be it music, be it art, be it 21 clubs and other school-based 22 organizations and associations. Our goal 23 is to get that percentage to 80 percent. 24 And when you dramatically expand the 25 number of clubs and athletic team 44 4/4/06 - WHOLE - BILL 060001, ETC. opportunities, while at the same time reducing the size of your high schools, you significantly increase the likelihood that children are going to be engaged in constructive activities. This has happened in part because of support we've received from you and because of the mandates that the School Reform Commission, really under Sandra's leadership, has pushed us, particularly on this whole issue of equity and providing equitable opportunities for extracurricular enrichment opportunities. I also might want to add that the City Council by earmarking revenues from the sports facilities, which you did a number of years ago, we were able to use that money to secure a $35 million bond, which we've used to modernize -- purchase new sports equipment, purchase new musical instruments, to renovate our stadiums, to build some of our supersites, to renovate a number of our 45 4/4/06 - WHOLE - BILL 060001, ETC. gyms. So we've been very fortunate with the leadership of the Council in being able to access those resources to make this a reality. So we are focusing on enrichment. We're going to continue to try to do more, but the bottom line is, we are making progress. And I just want to give you -- just recently, this past month, a wonderful thing happened. We, of course, sent teams to the state basketball 14 PIAA champion tournaments, and, of 15 course, one of our teams, in the four 16 divisions, one of our teams took first place and one of our teams finished in second place, and I know the Council is going to be recognizing those teams. But that same week, we sent nine Odyssey of the Mind teams to the state competition in their academic decathlon competitions, up from one team the previous year. In fact, two schools had sent actually two teams. And, of course, that same week, 46 4/4/06 - WHOLE - BILL 060001, ETC. our students were invited to compete in national chess competitions and the national chess tournaments. So, again, we're pleased to say that these type of extracurricular activities are showing results, and we have to continue to make sure that these areas are not neglected. I also want to give you one other statistic, too, because some people have been critical in some circles about our decisions to participate in the PIAA. The PIAA is not only about athletics, it's about scholarships, it's about opportunities to go to college. Since our entering the PIAA, the number of high school teams has not only increased by 19 percent, but the interscholastic school 20 teams have competed by 55 percent. But 21 there's been a 25 percent increase in 22 college recruitment among our student 23 athletes and a 36 percent increase in the 24 number of college athletic scholarships 25 being awarded to our students and a 50 47 4/4/06 - WHOLE - BILL 060001, ETC.

percent increase in the number of student athletes visiting colleges this year alone. So, again, at the end of the day, it's not about athletics. It's about college opportunities. So I think our participation in the PIAA is certainly in terms of the performance of our teams, but also in some of the immediate benefits in terms of enhanced college opportunities I think has been significant, and we're going to continue to make sure those areas do not get shortchanged. A couple other things, if I may. The School District's phasing out of its middle schools and the conversion to a K-to-8, 9-to-12 system continues. Now, let me point out that by 2008, we will be down to actually about 15 middle schools and we will have converted -- we have gone from about 67 K-to-8 schools to about 115 K-to-8 schools. We're already seeing the results in terms of the percentage of 48 4/4/06 - WHOLE - BILL 060001, ETC. reduced serious incident reports and in the performance of our 6th, 7th and 8th graders academically. Sixth grade always used to be one of our lowest performing grades. It has ceased to be one of our lowest performing grades. We've seen improvement in the test scores of the academic middle schoolers. With the conversions from K-to-5 to K-to-8's, we have been investing in those schools so that we can make those schools adaptable to a K-to-8 environment. We're going to have to be vigilant. We're also prioritizing 6th, 7th and 8th grade in our classroom modernization efforts, because we want to modernize those classrooms first. We want the kids who are going to stay in their former K-to-5 school as it converts to K-to-8, when they move into middle grades, to move into a different learning environment. So we're going to continue to do that. It's a challenge, but we're 49 4/4/06 - WHOLE - BILL 060001, ETC. struggling to meet that challenge. One of the by-products of the phase-out of the majority of our middle schools is the expansion of high school options. There are new small high 7 schools that have been created or 8 restructured in the last three years. We 9 will be adding four more small high 10 schools to that entourage this year, with 11 scheduled three more to be added the 12 following year. Literally, we will have 13 doubled the number of high schools when 14 you include the charter schools. 15 What this is doing is, it's 16 doing a couple of things. The first 17 thing it's doing is, it's dramatically 18 expanding school choice. So wherever you 19 live, you now have school choice. You 20 now have multiple choices. If you do not 21 want to attend what is hopefully your 22 improving neighborhood high school, you 23 have multiple choices, even if you can't get into the City-wide magnet high schools. 50 4/4/06 - WHOLE - BILL 060001, ETC. And what it's also doing is, it's reducing the size of our high schools. By 2008, the average size of a high school in Philadelphia will be 800 as opposed to 1,700 when the School Reform Commission took over. And over half of the high schools will have fewer than 500 students. So, again, I think the efforts are already showing dividends. We're going to have to continue to make sure, though, that we're making the infrastructure improvements in the schools so that the schools can obviously accommodate the K-to-8's and the small high schools can also accommodate. We've identified about 40 schools that we would like to build small additions for in the next four to five years. And we're hoping to do about five to six a year so that a small high school can have that regular-sized gym and can have that gym/auditorium, as well as additional classrooms. And that K-to-8 51 4/4/06 - WHOLE - BILL 060001, ETC. school can also have a regular-sized gym and auditorium, along with additional classrooms added up, so that they can take their little multi-purpose room and convert it to a cafeteria. So we're well aware of the need to address the capital challenges that the K-to-8 and 9-to-12 conversions will entail.

Let me talk about student discipline and alternative schools. The School District, we're going to continue to maintain and, in some cases, expand the number of alternative schools and transitional schools for students who are disciplinary problems or students who are at so high risk that they need to be put in an alternative setting, not only for their good but also for the good of the other students in the schools that they're currently residing in. This year, we will have funding for 3,600 slots, alternative education 52 4/4/06 - WHOLE - BILL 060001, ETC. slots. It will be a slight increase over last year. The number of alternative school slots, disciplinary school slots, is really dependent on state appropriation, and we have requested an increase in the appropriation for alternative schools this year. Alternative school funding was not included in the Governor's budget, but traditionally it has not been. The Speaker of the House, John Purcell, has added it back every year. We anticipate it will be added back again this year. We'd like to get an increase. We're not budgeting assuming on the assumption that we're going to get an increase, but we have requested additional funding so we can have enough slots for 5,000 kids. Let me point out that the schools are fully certified. The schools have to comply with the No Child Left Behind standards. I think if you look at the studies that have been done of the 53 4/4/06 - WHOLE - BILL 060001, ETC. schools, the schools are making progress. I think the schools are making progress with the students. In addition, we're looking to expand our transitional high school programs next year. This past year, we opened three transitional high schools. These transitional high schools were schools that targeted overage underachievers, children who had dropped out, children who were on the verge of dropping out, children who were likely to drop out, children who were like 17-year-old freshmen who were maybe reading at the 4th or 5th grade reading level. We are going to slightly expand that program next year, but that program -- but a dramatic expansion of that program is going to depend on additional funding from the state, too. We have put ourselves in a position budgetarily because we have not budgeted for any increase in federal 54 4/4/06 - WHOLE - BILL 060001, ETC. dollars, Title 1 dollars, or, for that matter, a restoration of the federal earmarks, we have put ourselves in the position where if that money is available, that money instead of being used for summer school and after school, which we are funding in-house, we will use that money to fund our transitional school programs and our drop-out prevention and drop-out intervention programs. As you know, under Senator Specter's leadership, they have added $7 billion more to the health education and welfare appropriations in the Senate, and Representative Castle in the House is pushing for a similar add-back. We don't think he's going to be successful, but we think that this issue is going to be resolved probably in the Appropriations Conference Committee, and we believe that there will be some additional money put in the budget. And if there is additional money and we have our earmarks 55 4/4/06 - WHOLE - BILL 060001, ETC. restored, we will use that money to expand our intervention programs to help our at-risk high school populations. In fact, we will expand those programs to begin intervening in our drop-out prevention efforts as early as 6th grade. It doesn't mean we're doing nothing. We're going to actually serve about 2,800 kids in our transition programs, our twilight programs, our late start programs, but we feel that we're perhaps serving half the number of kids who we absolutely need to serve. So we're going to need to secure more funding to take these programs to another level, but we're well positioned to put additional money in those programs if the earmarks are restored, if the Empowerment Grant money is restored.

And Senator Specter and Senator Santorum and the Philadelphia delegation, Congressman Fattah, they've made that restoration a priority. So we're hopeful, but we're not counting on 56 4/4/06 - WHOLE - BILL 060001, ETC. that money yet. Finally, we're going to continue implementing year four of our school construction program. Let me point out that there are $720 million in projects, either in design, either out on the street for RFP, going into design; in other words, projects that we are going to financially commit to next year. It doesn't mean we're going to spend $720 million next year, but what it means is, we're going to be contractually engaged in $720 million in projects. And just to highlight some of those projects, the District next year will be breaking ground on the new Fels, on another branch for Kensington High School. We will begin breaking ground on Lincoln and Audenried. Actually, those two ground breaking ceremonies may occur before the end of this current budget year. And we're going to begin major renovations at Mastbaum, Vaux, the Academy at Palumbo, Roxborough. We're 57 4/4/06 - WHOLE - BILL 060001, ETC. going to complete our renovations at Sayre, Longstreth, Shawmont, Ethel Allen. And we're going to begin construction on the additions at GAMP, Bluford, Carver High School for Engineering and Science, Forrest, Lankenau, Penrose, Kearny and Ziegler. In addition, there are numerous campus parks planned. We have a one-page summary of our capital projects, new construction, major renovations and the dates that they had started or the dates that they will be starting, and we'll circulate that one-pager to the Council for your perusal, and you can take a look at those dates and hold us to those dates. Incidentally, any time there's a major project, be it a renovation or a new project, we have public hearings on those projects. We've had close to 600 public hearings, public meetings, on our construction projects since the capital plan began. And sometimes they've gone well; sometimes they haven't gone well. 58 4/4/06 - WHOLE - BILL 060001, ETC. Sometimes the community has asked us to modify projects or to consider different locations. So that's basically where we're at. We're hoping to break ground on the Barry School, too, this year. That's not listed here, but it's listed on my summary sheet. We're prepared to break ground on Willard, but as you know, we're still trying to secure property for the Willard School, because the current site that the community has lobbied for is a recreational center that was built on a cemetery that did not have all the bodies removed. So we're trying to wrestle with that issue. So we're anxious to get Willard done. We already have a design of a building, which we'll have to modify to accommodate the site. We certainly have the money for the site. So we're hopeful. Let me make a couple summary comments about the budget before I turn 59 4/4/06 - WHOLE - BILL 060001, ETC. it over to Sade. Assumptions that have gone into this budget: First, we are assuming that while the Governor's education budget may be kind of reprioritized, we feel reasonably confident that the Governor in an election year and with a state that's running a surplus and with a state that has reserves higher than anticipated, we feel optimistic that the Governor is going to get his bottom line, and we've had conversations with the Governor's critical staff people. We've had conversations with our former Commissioner, Michael Mesh, who feels very optimistic that the Governor is going to get his bottom line in most of his education priorities. Clearly, there's a lot of work to do, but we're confident. We've adjusted our assumptions about federal dollars based on what is in the President's budget, and we've also at least budgeted based on the assumption 60 4/4/06 - WHOLE - BILL 060001, ETC.

that we're going to get no earmarks, which means if we get earmarks from the federal government or if there's an increase in Title 1 because of Senator Specter's efforts to add back money and if he's successful, that's money we're going to be able to give to schools and that's money, particularly the earmark money, that we're going to be able to invest in our drop-out prevention programs. At the City level, we assume nothing new from the City other than what is statutorily required. So, in other words, our projection on City revenues is based on the City's Five-Year Plan and what the property tax growth is going to be. We're hopeful that the estimates are conservative, which means we'll have additional money that we can, in effect, add back to the discretionary spending line and things like that, but right now, we're budgeting based on the 61 4/4/06 - WHOLE - BILL 060001, ETC. Five-Year Plan, and we're not assuming any other funding from the City, reimbursements or anything like that, and I think that's the prudent approach to take. In terms of some highlights in this budget, things that we are going to be doing that's going to impact local schools, probably the two biggest things that are going to impact local schools is, we have initially budgeted local schools at 95 percent of last year's discretionary spending. Incidentally, every year, we budget either slightly below or we freeze the levels of discretionary spending at the start of the budget process. We want to add back during the year, not take away, and I think that's prudent given the uncertainty over just what ultimately might happen at the federal level and given the fact that we always want to hedge our bets on what the ultimate outcome might be in Harrisburg. But we 62 4/4/06 - WHOLE - BILL 060001, ETC. are budgeting discretionary spending at 95 percent. We've also asked the schools to pick up the costs of their primary grade SSAs. This will really impact -- the impact on the schools will vary. Some schools have one central office-funded SSA; others may have as many as four to five. These are three-hour-a-day classroom assistants and classroom aides. Let me point out that only about half of the new SSA positions we added to the budget last year were actually ultimately filled, because No 16 Child Left Behind mandates that all staff be highly qualified, including staff assistants. So there's been a number of vacancies that cannot be filled. We have told schools that they can obviously pick up the SSAs if they have the money to do that or we will replace the SSAs with our university interns. Our university interns are actually, in most cases, much better 63 4/4/06 - WHOLE - BILL 060001, ETC. qualified than the SSAs. They're considered highly qualified under No 4 Child Left Behind, because obviously they already have their Associate's degree, and our university interns are either in their senior year or in graduate school. Last year, we had 1,100 student teachers working in our school system and I believe between 300 to 400 participated in the Philadelphia Education Fund's subsidized student teaching program, which, in effect, took student teachers and put them through training similar to the literacy interns, and those student teachers not only worked in the schools and went through all the professional development that the teachers went through and were trained on the standardized curriculum, et cetera, but they worked all day in those days and then many of them would work in the after-school and summer school programs. So any school that has lost two or three SSAs or has not filled two or 64 4/4/06 - WHOLE - BILL 060001, ETC. three SSA vacancies, we will provide them with the university interns to replace those positions left unfilled or to replace those positions that they have eliminated. Last year, we had 1,100 student teachers, about 150 student counselors working in our schools. We anticipate that that number is going to increase this year.

And, again, there's tremendous resources on the university campuses that we can access. Also, when you have a highly qualified student teacher, a fully trained student teacher, who has been provided with the standardized curriculum and who is in the PEF training program, that student training can be as effective as any first-year student teacher from prior administrations who did not have the benefit of the intensive professional development and who did not have the benefit of these standardized curriculum. Those teachers are also able to 65 4/4/06 - WHOLE - BILL 060001, ETC. do guided reading and do small group instruction and even stand in if a teacher has an emergency or if the teacher has an emergency absence in a given day. So we feel that we're going to be able to offset the loss of the SSAs through an expansion of the university internship program. Again, if there are additional revenues that we're able to access either through the federal or state level beyond what was expected, the money is going to go into the schools in their discretionary spending line, or in the case of the Specter grant, that money would be used obviously for our drop-out prevention/drop-out intervention programs. There are some things, though, that the School District is going to pick up the cost for. The additional curriculum support, people going into the schools, and the numbers are 153 -- 129 66 4/4/06 - WHOLE - BILL 060001, ETC. plus -- 153 are going to be fully funded by the District. In addition, the School District is going to pick up the full cost of the school climate managers. We are putting school climate managers, also known as freed-up assistant principals, in all of our K-to-8 schools, and as you know, we had only made a commitment to funding them for two years, then the schools were supposed to pick up the cost. We are just going to assume the cost and make them a permanent part of the school budget. So there are those additional positions that are going to be funded permanently or, in some cases, additional positions that are being added that are going to be funded by the central office for the first time. One final comment to make about the budget. We will do in the budget what we've done in past years. When we load the budgets, we always load the 67 4/4/06 - WHOLE - BILL 060001, ETC. budgets based on cautiously conservative estimates, what our Title will be, what our discretionary money will be. And we also load the budgets based on what our projections on individual school enrollment will be. Because the School District does not level down anymore, it means we've got to have a real accurate estimate on what the number of students are going to be in that school, because in the past, in past administrations, eight weeks into the school year, the School District will come in, take a count of your students, and then if you had a hundred fewer students than anticipated or 50 fewer students, you would take one, two, three teachers out. We don't do that anymore. We level up, but we don't level down. But that puts the burden on us to be conservative in our estimates on what the enrollment will be. In this budget, we have about 68 4/4/06 - WHOLE - BILL 060001, ETC. 70 teachers budgeted that have not been assigned yet. Why? Because we know that there are going to be some schools whose enrollment estimates are going to be lower than the number of students they actually have. So we know that from now until June, we'll be adding and dispatching those 70 teachers to individual schools or those 70 teacher positions to individual schools once we get finer numbers. Likewise, we anticipate that before the budget process has run its course, we will be doing what we've done every year, and, that is, we will be constructing a hold harmless to help those individual schools who may have been more adversely impacted by the budget allocations and we will make those appropriate adjustments.

Every year we've done a hold harmless before completing the budget. But we load the budgets. Schools now over the next few weeks will be telling 69 4/4/06 - WHOLE - BILL 060001, ETC. us what they can do with the budgets that we've allocated to them, and then we will do what we always do, we will look at the school budgets individually and then we'll make a determination on which schools are truly impacted the worst and which schools are in need of additional funding. And we will also make our final determination probably within the next month or so on how we will structure this year's hold harmless. So we're not done making adjustments to the budget, but I think this budget as introduced, we're well prepared to go up rather than to go down, contingent obviously on the Governor at least being reasonably successful in getting his education initiatives through. So I can turn it over to Sade. Thank you. Thank you.

You're welcome.

Good 70 4/4/06 - WHOLE - BILL 060001, ETC. morning, Council President Verna and distinguished City Council members. My name is Folasade Olanipekun-Lewis, and I am the Chief Financial Officer of the School District of Philadelphia. Thank you for this opportunity to share with you the financial status of the School District of Philadelphia. I am pleased to announce that the proposed Fiscal Year 2006-2007 budget will be the School District's third balanced budget in a row. Fiscal Year 2007 will mark the first time in over a decade that the District will rely almost exclusively on recurring revenues to balance the budget. This accomplishment is not a small one. When the SRC undertook the responsibility of reforming a school district in academic and financial distress, it established aggressive goals to improve the quality of education in the City of Philadelphia. To transform the educational 71 4/4/06 - WHOLE - BILL 060001, ETC. climate as quickly as possible, the District used creative and responsible one-time financing methods. The use of one-time revenues proved successful at making rapid improvements in the academic achievements of Philadelphia students, while allowing the School District to regain fiscal stability. The proposed 2006-2007 fiscal year budget will use recurring revenues to fund recurring expenses, using only $5 million in one-time revenues. Living within our recurring annual revenues is not, however, a meaningful goal in and of itself. As Mr. Vallas pointed out, sustaining the School District's reform efforts is contingent upon maintaining a sound fiscal status. Non-mandated initiatives funded by the District have been responsible for the rising test scores, safer schools, more equitable facilities and improved teacher recruitment and retention. What is so impressive about 72 4/4/06 - WHOLE - BILL 060001, ETC. the proposed 2006-2007 budget is that while we are reducing our reliance on one-time revenues, we are also maintaining full funding for our core educational reform efforts. The proposed 2006-2007 fiscal year budget devotes over $175 million to the non-mandated expenditures that are the foundation of the School District's educational reform agenda. Reform cannot survive financial instability. With this truth in mind, the District will continue to manage its budget based on the funding levels available to it, delivering balanced budgets that rely on recurring revenues. To ensure that our educational reform agenda is sustainable, the District continually updates a five-year financial plan, originally created in August of 2002. All major expenditures are evaluated in light of their impact on the District's finances over a five-year period. The current Five-Year Plan 73 4/4/06 - WHOLE - BILL 060001, ETC. ensures that the District can continue the educational, safety and other reforms through the next two fiscal years while maintaining a positive fund balance. Relatively small adjustments in increased revenues or expenditure reductions of approximately $20 million per year will be necessary in order to extend financial stability through the final three years of the period ending in Fiscal Year 2010-2011. Because the amount of increased revenues or reduced expenditures amounts to less than one percent of the District's projected revenues over the next five years, I am confident that we can and will take the steps needed to remain financially stable through the next five years without significantly undermining the core reform efforts that are currently in place. To maintain a sustainable Five-Year Plan, we are continually seeking methods to reduce non-classroom expenditures and increase savings. In 74 4/4/06 - WHOLE - BILL 060001, ETC. 2006-2007 fiscal year, the District will generate savings through ongoing reforms to ACCESS reimbursements, strategic sourcing, workers' compensation and transportation savings.

These efficiencies make it possible for the District to devote over 79 percent of our proposed 2007 operating budget to academic achievement and equity initiatives. As I close, let me take the opportunity to thank the City Council, the City of Philadelphia and the Commonwealth of Pennsylvania for your continued financial and legislative support. Without the intervention of the City and the State, the School District would be facing a cumulative deficit of nearly $1 billion this year. However, thanks in part to the City's commitment of $45 million in additional annual funding and its approval of the School District's $300 million deficit financing bonds, the School District will preserve 75 4/4/06 - WHOLE - BILL 060001, ETC. 9 million through the end of next fiscal year. While we are pleased that the Fiscal Year 2006-2007 budget that we present to you today is balanced and funds our reform initiatives, the needs of our students are likely to outpace our resources for the foreseeable future. It is only with your ongoing support and our mutual partnership that we will see further change and productive progress toward our financial and educational reform goals. Thank you.

Thank you. I would like to ask a few questions, and then we have a number of Councilmembers that want to be recognized. I will make the ground rules known now. Each Councilmember will be given ten minutes, and that will include 76 4/4/06 - WHOLE - BILL 060001, ETC. Mr. Vallas's response. So I don't think I have to say more than that.

That's not fair. It's only on our time.

I want to know why my team is laughing.

Mr. Vallas, can you explain what a virtual pre-K, a new online parent training/engagement program is?

Yeah. Is Donna here? No. Then I'm going to have to take a run at it. The virtual pre-K program is -- it's part of what we call the HomeNet, FamilyNet program. And basically what we do with parents who have children in our pre-K program is, we provide them with a laptop computer. We train them in the laptop computer, and they are then connected to the -- they're Internetted and then they're connected to the classroom. They can access all the 77 4/4/06 - WHOLE - BILL 060001, ETC. information that they need about their child, about their child's performance, instructional sports, instructional helps, instructional tips. They can communicate with the teacher on a regular basis. They can get regular reports on the teachers. They can get --

Excuse me. Isn't that pre-K?

No. I'm talking with the pre-K -- the FamilyNet is in all the schools, but the way it would work for pre-K is, a pre-schooler -- and I believe virtual pre-K actually goes all the way up to kindergarten -- is, they'll be provided with the home computer, so to speak, and then they will be trained in the home computer and then they'll be connected to that teacher and to that pre-K classroom. So we can continually provide the parent with help. The parent can communicate with the teacher. The teacher can communicate to the parent. The teacher can provide advice to the 78 4/4/06 - WHOLE - BILL 060001, ETC. parent and vice-versa. Plus, all of our pre-K programs have a parent training and parent counseling component, which places a person at the disposal of the parent, who can help the parent with basic parenting tips and can help the parent, giving the parent advice, giving the parent help, hooking up the parent with various social service agencies and social service supports. So that's the way the virtual pre-K or the virtual pre-K component of the Early Family -- the FamilyNet program is intended to work. But I can have Donna give you -- there's actually a video presentation on that. I'll have Donna provide you with that.

Thank you very much. On of the Executive Summary, you state that the FY07 budget includes only $5 million in one-time revenues compared to $55 million in FY06. 79 4/4/06 - WHOLE - BILL 060001, ETC. What are the one-time revenues in FY07?

The one-time revenue in -- Folasade Olanipekun. The one-time revenue in FY07, the $5 million, represents part of the proceeds of the sale of our former headquarters at 21st and Winter Street. We sold the building last year for $25 million, and then county methods require that we take the proceeds over a five-year period in $5 million increments, but we realize it in the fiscal year in the $5 million increments.

Thank you. On , you state, quote, The District's FY07 Operating and Grants Budget contain over $175 million of non-mandated expenditures, over $70 million of which could be eliminated without any risk to budgeted Operating or Grant Funding, end of quote. 80 4/4/06 - WHOLE - BILL 060001, ETC. Would you please explain what the $70 million is for?

Sure.

Let me make a general policy comment, though, and then you can get into the details. One of the questions that's raised is, should you have a larger Rainy Day Fund. Should you build a big Rainy Day Fund. And my position is, great, you can build a wonderful Rainy Day Fund, and then schools get shortchanged. So any time we do an initiative, Madam President, we do -- the initiatives and the programs that we put into our budgets, like the shifting money to the classrooms to our reforms, none of it is mandated. Many aspects of the Collective Bargaining Agreement are not mandated. So if you're in a fiscal crisis, you have the ability to, in effect, move money around. The net effect is, you've created like what I call a Working Rainy Day Fund. 81 4/4/06 - WHOLE - BILL 060001, ETC. So what we tell the rating agencies is, Look -- the rating agencies look at our financials, and we say, Not only do we have a structurally balanced budget and a $50 million reserve, but among large urban districts, we probably have the smallest percentage of mandated costs, the type of costs that lock you in, the type of costs that force you into deficits, you see. So when we talk about the 170 or the 70 in particular, what are we talking about? We're talking about the expansion of the after-school programs, the summer school programs. We're talking about some of the enrichment things we're doing. We're talking about some of the enhancements that we've done in terms of special interventions. Now, none of these things are things we would want to get rid of, but they are all things that are not mandated. So we're really pointing out what we're trying to do is, we're trying 82 4/4/06 - WHOLE - BILL 060001, ETC. to reassure those who are a little nervous by saying, Look, even though we're structurally balanced and we have this reserve, if we faced dramatic cuts at the federal level, for example, or if Rendell's budget was killed in Harrisburg, if we had to, we would be able to go in and cut certain programs without closing schools, without shortening the school year, without failing to pay our contractual obligations with our union. So that's the point, but you can...

Mr. Vallas is correct. And I think the word he used was "enhancement." Many of these non-mandated district initiatives are enhancing the core programs of the School District. They total $177.6 million, of which $70 million, if the budget at the state and federal level does not come in to the levels we anticipated, could be reduced without 83 4/4/06 - WHOLE - BILL 060001, ETC. compromising or jeopardizing the core reforms. I can go through the list with you and provide the schedule, but some, for example, would be the after-school, extended-day program, expanded summer school, enhanced public safety, the reduced class size program, which is a very fond program of Paul's in terms of helping with academic achievement, the teacher recruitment and retention, office of staff development, gifted programs and staff. These are just examples of the non-mandated district initiatives which enhance and support the core reforms of Mr. Vallas, the School District.

Obviously cutting any of these programs would adversely impact us and, as Sandra Dungee Glenn reminded me, would impede our ability to implement our reforms. But we show it there because people are always fearful you're going to run into a deficit and suddenly you're 84 4/4/06 - WHOLE - BILL 060001, ETC. not going to be able to open schools or you're not going to be able to honor Collective Bargaining Agreements. So we do that to say, Unlike past districts, we have maximum flexibility in moving our money around. But I don't want to suggest that this is money that can easily be cut or easily be shifted around. They are in programs that are needed and they're in high-priority programs, but they're not mandated programs.

Thank you. I would like to know how many charter schools we have. Also, on 12, you talk about the impact of charter schools on the District's budget. Could you explain for the record how the charter schools impact the District budget and how they cost the District funding?

Yes. We have 56 charter schools in the District currently 85 4/4/06 - WHOLE - BILL 060001, ETC. in operation, and there are five that have been approved for opening in '07. The total number of students -- I'm pulling the charter school numbers now, or I should say Greg is pulling the charter school numbers now. We have currently 26,000 students in charter schools. Sixty percent of all --

How many?

Twenty-six thousand.

That's a lot.

That's about 15 percent. And the budget for the charter schools is about $215 million. So those are the raw numbers. We have the largest charter school program per capita in the country, and we have like the second or third largest just in aggregate numbers in the country. Now, how does it impact the School District's budget? Well, the 86 4/4/06 - WHOLE - BILL 060001, ETC. money follows the kids, and if you open up a charter school, the money is going to follow the kids by statute. And charters get roughly almost the same amount that our kids get. Of course, we have some additional responsibilities. There's some additional mandates. But it's very, very close. So when you open up a charter, it draws students away. When it draws students away and schools lose students, they then lose teaching positions. Now, the state provides a charter school reimbursement. They're supposed to provide that reimbursement at 30 percent of the cost of the charters to the District, the theory being that when you open a charter, probably 20, 20 percent of the kids are going to be kids 21 who maybe weren't going to your district 22 school, so you need to get some 23 additional money. 24 The state, under Governor 25 Rendell, has increased the actual 87 4/4/06 - WHOLE - BILL 060001, ETC. reimbursement rate from 22 percent to 27 percent in this year's budget. It's not at 30. We're lobbying to get it at 30, but 27 percent -- let me point out that Councilman Fumo and Dwight Evans have been very supportive, too. So we get almost a 30 percent reimbursement. If they reimburse us at close to 30 percent, I believe -- and there's certainly differences of opinion -- I believe there's really no 13 meaningful financial impact on the schools and I believe that the benefits far outweigh the disadvantages. What are the benefits? The benefits are expanded school choices. The benefits are -- we've used charters to depopulate our large behemoth high schools. We've used charters to provide alternative schools. We've used charters to take over failing schools. So we think charters really --

Who pays for the -- as you heard, the bell 88 4/4/06 - WHOLE - BILL 060001, ETC. went off a long time ago. Who pays for the utilities at the charter schools? Who pays for the rental?

They do.

Who does?

The charters. It has to come out of their increment.

The charters do. And I thought that you said that the charter schools were paid per diem, per child?

Yeah. It's driven by formula. The state indicates how much they should get. They get funding Title 1, special ed, the teacher/pupil ratio funding. Everything that our schools get, for the most part, the charters get. And the money is shifted from our budget to the charters based on the formulas that fund our schools, and they're identical formulas. So the charters roughly get the same amount of money that 89 4/4/06 - WHOLE - BILL 060001, ETC. our public schools get. They then have to take that money and they have to deal with their utilities, their health insurance and all those things. And sometimes that works to our advantage. For example, very quickly, in Northeast Philadelphia one of our elementary schools was overcrowded. So we identified -- and we've done this three or four times. We've done it with June Brown. We've done it with Brian Gardner. We've done it with Mastery Charter, High-Tech High, where we've said, We got to relieve overcrowding here, can you open a school, get a charter, establish an enrollment boundary so we can relieve this overcrowded school. Well, Brian Gardner was able to get that charter open in a year. The building is splendid. He was able to take 350 people out of that neighborhood school and, thus, relieve overcrowding. It didn't cost us a dime in capital investment. 90 4/4/06 - WHOLE - BILL 060001, ETC. So charters can be very effective tools at implementing our reforms. We're doing more of this. Mastery Charter in your neck of the woods, Madam President. Thomas Middle School was converted to a high school. There's a waiting line to get into that high school. We needed another high school there. We needed to offer more choices beyond South Philly. And they were able to open that school. They were able to renovate it. They've been able to do all the things that normally would have been on our dime, so to speak. So charters can be very advantageous. As long as we get the -- as long as the state is faithful to the reimbursement -- we're hoping 30 percent. Twenty-seven percent is a good reimbursement. Charters really become a big winner, as long as we are scrutinizing the charter proposals that come before us, so that we're not approving inferior proposals. And I'll 91 4/4/06 - WHOLE - BILL 060001, ETC. tell you, since the Reform Board's arrival, we've been very, very careful to only approve charters that we felt provided us with quality educational options.

And of the 56 charter schools that we have, would you say that they are all successful?

Don't I wish.

Wait a minute. Who ascertains whether the charters are actually performing the way they should? Is it the School District? Is it the state? Who makes that determination?

It's really both. The charters are required to take the PSSA test, the state exam, and those scores are listed. And charters either make AYP, adequate yearly progress, under No Child Left Behind or they don't. And we require that they take the TerraNovas. So we require that the charters 92 4/4/06 - WHOLE - BILL 060001, ETC. go through the same accountability matrix, so to speak, that the public schools go to. And when charters come up for renewal, we will evaluate them based on their academic and financial performance.

Have any charter schools been closed since they've started?

I believe two have. Let me point out, though, that most of the charters have not reached their five-year authorization date. Only, I think, about of them have, 16 where they've now been -- they're up for 17 recertification. They're given, in 18 effect, five-year state contracts. We 19 can close them for financial malfeasance 20 and obviously if the children are placed 21 at risk, but if they're struggling 22 academically, we can't necessarily go in and close them within that five-year period. We have to wait until the five years is over before we close them. 93 4/4/06 - WHOLE - BILL 060001, ETC.

Thank you. I have other questions, but I don't think it's fair to my colleagues. Therefore, at this time, I recognize Councilwoman Blackwell.

Thank you, Madam President. Good morning all.

Good morning.

I have just a few questions. Number one, on in the new directory, in the Fiscal Year '07 Executive Summary, you have that the School of the Future opens in fall of '07, and some people in our community have said it's opening fall of '06. Would you clarify that date for us?

No. It's opening September of this year. That's '06, right? '06.

Thank you. That's real good news. So I'll note that.

September, 9th 94 4/4/06 - WHOLE - BILL 060001, ETC. grade, and it looks like it's going to be on time. That's Fiscal Year '07. The reason you say '07 --

Oh, absolutely. It's Fiscal Year '07. Correct.

I don't want to give anybody a heart attack.

All right. So we'll let folks know it will be opening in September. Let me ask you a question. You mentioned the students being able to take early college courses, and I noted in the book, in your budget presentation, in the black loose-leaf book, that you mentioned five schools would be participants and you mention Saturday and summer programs. So when would they start and what grade for children?

The early college program would really be for all four years. In other words, every grade. 95 4/4/06 - WHOLE - BILL 060001, ETC. Ninth graders could go to school over the summer, earn additional credits and be put on a three-year track to graduate. And the beauty of this is this: If they take courses over the summer and they've come close to earning enough credits to graduate by the end of their junior year, then their senior year the bulk of the courses that they can take will be college courses. So because we're subsidizing those courses under our dual enrollment program, a student can earn perhaps a full semester of college course credit, and that goes a long way towards making college affordable. That, and the CORE Philly Scholarship initiative by Congressman Fattah. I mean, that becomes a great incentive for a child to stay in school, and it gives a child a financial incentive to work harder, because suddenly there's a goal. Your senior year you'll be off campus. You'll be on a university campus. You'll be earning 96 4/4/06 - WHOLE - BILL 060001, ETC. college credit. It gives them a clear and tangible prize that they can get their hands on. So we have conventional dual enrollment programs, but we're excited about this college academy model, because here you'll literally have universities who will take cohorts of students under their wings and provide them with all the supports that they would provide their general college population. And it's really taking the dual enrollment program to another level.

Your testimony here mentions five schools.

We're doing pilots this year. All the schools participate in dual enrollment, but this one-to-two school partnership with individual universities and colleges, we're, I believe, doing five pilots this year, and then we'll be prepared to take it to scale the following year. We need to make it work financially for us. 97 4/4/06 - WHOLE - BILL 060001, ETC. Let me also indicate that there is a state subsidy now for dual enrollment, and they increased it significantly this year. The problem is, there's a five percent cap to make sure that Philadelphia doesn't get a large amount of the money. And so that five percent cap limits us somewhat, and we're trying to get the cap raised to at least ten percent in terms of the amount of money that can be given to an individual district. But we want to refine this pilot, because if the money really follows the kids and we negotiate good per-credit-hour financing from individual schools, we can take this to scale without an adverse impact on our finances.

Thank you. I just want to raise two other issues. One is, people ask me all the time about our alternative schools, twilight program, the teen drop-out and 98 4/4/06 - WHOLE - BILL 060001, ETC. drop-in programs. Would you expound a little on those, please?

Yes. We have -- and let me point out that I have a copy of the testimony that I prepared that I submitted to Representative Roebuck and Chairman Stairs' committee on the drop-out problem, the state-wide drop-out problem. And with your permission, I'll distribute that testimony. It lays out in detail what our drop-out intervention and prevention programs consist of and what we're requesting from the state in terms of intervention programs to help us. I'll tell you, our most effective drop-out prevention initiative is the CSAP program. That is a program in which we identify students who are academically underperforming, and we providing them with 120 hours of intervention. And that is mandated. That is mandated at all elementary school grade levels. And what that is designed 99 4/4/06 - WHOLE - BILL 060001, ETC. to do is to take that child who is performing in the lowest percentile, who is academically struggling -- because you can tell by 6th grade who is going to drop out and who is not going to drop out. And those type of interventions I think are one of the best interventions to address the drop-out issue. In addition, at the middle grade level, we've begun a program called the Transitional Middle Grades Program where we try to identify kids who are highly at risk of dropping out, particularly overage underachieving kids, put them in self-contained classrooms, provide them with more individualized attention, provide them with the counseling and the wrap-around services that they need and really make a conscious effort to try to keep them in school. And then, of course, at the high school level, credit recovery is one of our more effective drop-out 100 4/4/06 - WHOLE - BILL 060001, ETC. arrangements. Most of our kids drop out because they academically fall behind and they don't believe they can ever catch up. And credit recovery last year reached about 11,000 9th graders and 10th graders. In other words, these are kids who took credit recovery courses to get caught up. The passage rate in the credit recovery courses was, I think, about 70 -- was about 80 percent. And then, of course, at the high school level, we've begun to open up what we call transition high schools. That's where we're taking overage underachieving kids and we're putting them in smaller high schools, more self-contained, that have kids at the same chronological age and at the same level of academic performance. We're trying to take those programs to scale. We're also revamping the twilight programs. We're trying to standardize the twilight program so all 101 4/4/06 - WHOLE - BILL 060001, ETC. the big neighborhood high schools have their own transitional program that's in their school in their quarters. It just starts a little later in the day, it ends a little later in the day. So those are some of the big things that we're doing and that we'd like to expand upon. I have asked the Philadelphia delegation to perhaps, when they're looking at their earmarks, to consider, just as the Speaker has, earmarked money for disciplinary schools, to get the caucus to earmark money for our transition schools so that we can begin to get some transition school funding so we can take these transition school programs to scale. And as I've mentioned, we've structured this budget so that if there are any earmarks or any restoration of funding at the federal level in the Department of Education through the efforts of Senator Specter, supported, I 102 4/4/06 - WHOLE - BILL 060001, ETC. might add, by Senator Santorum and, of course, people like Representative Castle and Chaka Fattah in the House, that if that becomes a reality, that money will not be needed for after-school, summer school. That money will be used exclusively for our drop-out intervention programs.

The twilight program --

Point of information.

Certainly.

You said you can tell by Grade 6 whether someone is going to drop out. You did not elaborate in terms of how you can tell.

Well, John Hopkins has done a study where they've looked at 6th grade performance. They've looked at attendance. They've looked at grades. They've looked at the level of parental involvement, and they looked at general 103 4/4/06 - WHOLE - BILL 060001, ETC. behavior, whether or not students have been disciplinary problems. And using those four criteria, they've been able to develop a model that basically says this kid is at high risk of dropping out and these kids are not. And they came and actually did the study. We requested the study and secured foundation money for them to do the study in Philadelphia. So we're using the model to identify our at-risk 6th graders for special intervention. And I'll be more than happy, Councilman, to share the model with you to provide you with the methodology and a copy of their report and how we use it to trigger our interventions.

I was interested in the way you put it, that you can tell by Grade 6. Of course, you can tell who is at risk. Of course, I understand the modeling is being used and I look forward to reading more about it, but if you're following that model and if 104 4/4/06 - WHOLE - BILL 060001, ETC. you accept the methodology, are you approaching the situation that X percentage of people who are at risk who actually drop out, or is there actually a plan to keep those people from dropping out? I mean, how are you actually combatting this?

Well, the CSAP program is designed to do just that, and the CSAP program began this year. And the way the CSAP program works is, we identify children who are at risk. And we just simply don't limit it to the children who, incidentally, hit the four risk factors. We also provide CSAP intervention for children who maybe hit the one risk factor and the most important risk factor, academic underachievement. And they are literally provided with 120 hours of intervention. In other words, they're provided with more instructional time on tasks. They're provided with more counseling. We attempt to provide more coordinated 105 4/4/06 - WHOLE - BILL 060001, ETC. wrap-around services, social service agencies, et cetera. So the objective here is to provide them with more support to try to get them more social service supports, but in the school itself, provide more instructional time and provide more instructional intervention so we can get them up to where they need to be.

I'll come back during my line of questioning.

Councilwoman Blackwell, if you have another question, you certainly can ask.

Thank you. The twilight program, are they neighborhood programs for anybody who wants to attend or for teenagers?

No. The twilight programs are for students, and they can serve students up to the age of 21.

But they're a student program. 106 4/4/06 - WHOLE - BILL 060001, ETC. Finally -- I know other people have questions -- your family's -- I've forgotten the name of it. Do they allow children who are having problems? For example, I heard about a child at a school in Southwest whose mother, just Saturday I heard about it, whose mother is on crack, who is years old, who is 10 one of some young ladies who are meeting 11 men, who are prostituting after school at 12 3:30 where male adults, according to one of the parent volunteers, are picking them up. Her mother is on crack and she has to feed a younger brother. Now, in this kind of a situation, who do these children talk to? We know that narrowly we don't have counselors and nurses, I don't think, or do we for every school?

Well, we do. We don't have them in the abundance that we'd like to have them, but we do have counselors and nurses. And in a number of the schools, a growing number of the 107 4/4/06 - WHOLE - BILL 060001, ETC. schools, we have teams of behavioral support specialists and we have C&E coordinators. These are coordinators who coordinate with, let's call it, behavioral support departments, like mental health, et cetera. So there's a core group of professionals in a growing number of schools, and we target those schools where we have the greatest number of students at risk for that type of support. And someone can go to those individuals, and those individuals will make referrals or those individuals will provide intervention. I mean, those are the kids beyond the classroom teacher or the principal assistant.

What are they called? How do kids know where parents who are volunteering know who to ask for?

There's the behavorial support specialist, and I can give you the number of schools that 108 4/4/06 - WHOLE - BILL 060001, ETC. they're in, and there's also the C&E coordinators. C&E coordinators work among a -- they work in more than one individual school. In addition, though, schools do have nurses. They may not be at every school every day, but the smaller schools will have nurses who will rotate from school to school, and schools, particularly K-to-8's and obviously the high schools, they have counselors. They don't have the number of counselors that we'd like to have, but there are counselors. In addition, as you know, last year we began to create what we call our parent help desk, our parent help rooms in the schools. About two-thirds of the schools, correct me if I'm wrong, have the parent help desks, the parent help rooms, and these are cadres of parents who work in the schools, who are in the schools on a daily basis, and they are there to provide other supplemental 109 4/4/06 - WHOLE - BILL 060001, ETC. support that might be needed, and those parents become almost like de facto parent and student counselors. So, again, it's not all that we need, but there are individuals that someone can go to for special inventions. And if children are being exploited, every single school has a school police officer. And next year we will be hiring anywhere from 50 to 100 additional school police officers. We're going to be phasing out some of the per diems and converting them to full-time positions. The reason I say 50 to 100 is, minimum 50, maximum 100. It depends on the securing of some additional funds. And that police officer is trained to make referrals, so if there are drug problems or problems of prostitution and things of that nature, that's a trained officer who is plugged into our school police department, which is, in turn, plugged into the Mayor's Safe Schools Task Force, and they are exchanging 110 4/4/06 - WHOLE - BILL 060001, ETC. information every single day. So they will do intervention.

What's C&E, did you call it?

Consultation and education. I'm going to ask you the same thing tomorrow because I always forget.

Okay.

I can provide you -- first of all, we will make available to the Council the report, the John Hopkins report, and we will make available to the Council our template or our outline on the C&Es and behavioral supports. The Mayor's Blue Ribbon Task Force, incidentally, is looking at this whole issue of school, of behavioral supports, and there are a number of recommendations emerging for more school-based -- better coordination of support services at the local school level. 111 4/4/06 - WHOLE - BILL 060001, ETC. I will submit to you the testimony that I presented to the group and I also presented to the Mayor. We think his Blue Ribbon Task Force is a brilliant idea, and it has great potential, and we're hoping what will emerge from that is a more coordinated effort to provide more school-based services so we can provide these type of interventions.

Thank you. And we'd appreciate getting a copy of your report on the school drop-out rate, because you know we're also doing a report on that, and then the President will be happy to distribute it. Thank you very much.

Thank you. At this time, Council will stand in recess until 1:15. See you then. Thank you. Enjoy your lunch. (Short recess.)

Good 112 4/4/06 - WHOLE - BILL 060001, ETC. afternoon. We will now continue our public hearing. The Chair recognizes Councilwoman Brown.

Thank you, Madam President. I'd like to, if I may, two quick follow-ups. One, if you could forward to the Chair the listing of the current inventory of the Philadelphia charter schools that we have in the City. And another quick follow-up, of the non-mandated initiatives, please help me understand why reduced class size is not a mandated initiative.

Well, the contract sets a target class size that we adhere to, and additional class size reduction beyond the targeted numbers -- and I believe in the primary grades, there are 30. In the middle grades in --

33.

There are 33 in the high schools? 113 4/4/06 - WHOLE - BILL 060001, ETC.

30.

There are 30 in the high schools, but any -- so that's the formula by which the teachers are allocated based on the 30 primary, 33 middle, 30 high school. Any reduction beyond that is dependent on the use of Title 1 money, Chapter 1 money or the additional money that we may allocate to local schools. Most local schools use some of their money to reduce class size. The actual average class sizes in Philadelphia is probably 25, when you 16 include all the school that reduce class 17 size. 18 What we do is, we have provided 19 schools with additional money to do 20 targeted class size reduction at the 21 primary grades. Not all of them, because 22 we can't afford it, but at the primary 23 grades. The simple fact of the matter 24 is, we can't mandate lower class sizes 25 without a significant increase in state 114 4/4/06 - WHOLE - BILL 060001, ETC. funding. That's going to take a real commitment on the state's part, because for every -- it costs $20 million, a minimum $20 million, to reduce the class sizes of every 1,000 grades. That means getting the class sizes down to about 25, 24, to do all the grades would cost $120 million. So we do targeted class size reduction, but in all honesty, Councilwoman, it varies from year to year. One of the reasons that we funded the SSAs last year, the additional SSAs, was to give schools the ability to at least get a second person in the classroom. Now, we're going to replace them with university interns, who we think are better qualified, but at the end of the day, we can't do more class size reduction without a significant increase in funding at the state level beyond what's in the Governor's current budget.

Okay. 115 4/4/06 - WHOLE - BILL 060001, ETC. Budget-related questions. Define for me, what is a structurally balanced budget? What does that mean?

I don't want to answer all the questions now. Go ahead. A structurally balanced budget, I can't help myself, a structurally balanced budget is a budget where the spending does not exceed the revenues without drawing down on your reserves. So what this means is, we're not going to dip into our bank. We're not going to dip into our savings account. We're not going to dip into our reserve fund. The revenues that we project we will get this year will be the only money that we spend this year. And let me indicate that all but one-fourth of one percent of the revenues we are getting this year are permanent revenues. Only about $5 million in this budget is one-time revenues that will not be reoccurring. And that's a historic low, I think, for 116 4/4/06 - WHOLE - BILL 060001, ETC. any major school district. So that's what a structurally balanced budget is, two years in a row.

And that 5 million goes to the proceeds from the sale?

Yes. Yes.

Okay.

And every year we're going to do some transactions, but if we over the next four to five years can keep our budget structurally balanced, with less than one percent reliance on one-time revenues, believe me, we will be building a pretty strong financial foundation.

Okay. You provided some context where you indicated that most of the discretionary budgets will be funded at 95 percent of their current level to save 10 million. Speak to why the goal to save 10 million, and is that universal, this 95 percent, universal across the School District? 117 4/4/06 - WHOLE - BILL 060001, ETC.

Yes. We've cut all the schools' discretionary budgets to 95 percent across the board. We originally were going to do some targeting, but we just elected to initially budget everybody at 95 percent. That is the one major cut to the schools. The second major cut is the elimination of the SSAs. Any school that had more than three SSAs we would fund the additional SSAs. Like at the Powell School, we had a conversation when we went off mike, they budgeted five SSAs or we paid for five SSAs, $62,500. So that money, we will not fund those SSAs this year. What I'm going to try to do, though, is, we're going to try to replace the SSAs with the university interns that we will fund centrally. Let me also point out that the university interns are not only academically better qualified and they're trained in teaching, because we're 118 4/4/06 - WHOLE - BILL 060001, ETC. talking about education majors, they also work a full day, not a half a day.

I'm aware.

So now that teacher won't just have the SSA for the morning. They'll have the university intern for the entire day. So we think that's going to be a better arrangement. In terms of adding money back, we will, before this budget is over, do a hold harmless to provide additional funding to schools that got hit very hard by the combination of getting stuck with the SSA budgets and getting hit with the 95 percent level.

For schools that meet AYP, for schools that have active home and school associations, for schools that have clubs, are there any incentives or rewards that they get because they are meeting all of those standards, for principals who get it and are achieving in all the areas I just stipulated? 119 4/4/06 - WHOLE - BILL 060001, ETC.

Yeah. I don't replace them. You know, there are not -- gallows humor. There are not major incentives, and I'll tell you why. Providing additional financial incentives to those schools or financial rewards is something that we can't do without reprogramming a lot of dollars. There is such a need for our schools that we just can't really develop financial rewards for those schools.

What's the flip answer to that question, for principals who are not measuring up in those areas?

If schools are making AYP, let me point out, that if schools are making AYP, those schools may be selected as a best practice school, in which case they'll get financial incentives to mentor other schools. So we use mentored principals and mentored teachers. If you have a school making 120 4/4/06 - WHOLE - BILL 060001, ETC. AYP, like the Kearny School, we will pair them up with another school and we will give them supplemental pay to work with that school and to mentor that school. So teachers and principals that are performing in exemplary schools, a lot of times they get the opportunity to get extra money to do coaching, to do mentoring, to adopt schools and things like that. On the flip side, if schools are not making AYP, there's a variety of interventions. One is, they can be closed. Two is, they could be converted to a charter. Three is, they could be restructured, reconstituted, in which case we'll make leadership changes. But a lot of the schools that are not making AYP have been making a lot of progress, and what we do is, we don't ignore those schools. The 129 growth --

School growth teachers.

-- school growth 121 4/4/06 - WHOLE - BILL 060001, ETC. teachers -- I really call them curriculum coordinators -- are going to be assigned to the schools not making AYP.

Okay.

The additional coaches are going to be assigned to some of the high schools that are not making AYP. Schools that are not making AYP and are doing very poorly may be put in the CEO's region. That's where we go in and we radically restructure the schools. So there are a series of interventions for schools that are not making AYP.

All right. That goes to the coach question I have. Let's move to the modernization of schools. You mentioned that the goal was 5,000. In the coming year, there are only enough dollars to do 2,100 classrooms, not enough money to reach the goal. Has there been any consideration 122 4/4/06 - WHOLE - BILL 060001, ETC. or thinking around looking to see what opportunities we can connect with EarthLink and Wireless Philadelphia? Because the time is ripe, since we're in the midst of those hearings, to look to see how we can promote equity and access to technology across the board in one fell swoop.

The answer to that is yes. We've actually met with the Mayor and we've talked to the Mayor about incorporating the classroom modernization campaign into the Wireless Philadelphia, and the Mayor is very interested in that. We're still in discussions with them on that. I haven't had interaction with EarthLink. We have, though, haven't we? Pat Renzulli is our Director of Technology. And we've been participating in the Task Force. As you know, Pat, our Director of Technology, has been very active in the Task Force. 123 4/4/06 - WHOLE - BILL 060001, ETC. So we've had conversations with the Mayor about how we can pull our resources to meet our goal, which is to modernize all of our classrooms 6th grade through 12.

All right.

We are going to do 2,100 classrooms, and if we're able to secure the anticipated additional state dollars that are going to be earmarked for this purpose, we believe we can get that number in the next few years closer to 3,000. But that still leaves us with a minimum 2,000 and, in many cases, perhaps as many as 3,000 additional classrooms that need to be modernized. I have done this, though: The School Reform Commission has taken the position that if the two Philadelphia casinos are going to be approved, that each of those casinos need to earmark money to schools, and we would like to see the money earmarked for classroom modernization. 124 4/4/06 - WHOLE - BILL 060001, ETC. Let me point out that the one casino proposal in Pittsburgh purports to raise enough money to build a stadium for the Pittsburgh Penguins. I got to believe that asking each of the casino licensees to maybe earmark $5 or $10 million a year each for classroom modernization efforts, not only public schools but also parochial and private schools, I think would be a reasonable request. So we will be testifying and we've been talking to a number of the elected officials and we have suggested that that might be something worth doing. But we will do, with the additional state money, we will do 3,000 classrooms in the next two years.

Okay. I'll see you on the next round. I'll talk to you on the next round.

Thank you. The Chair recognizes Councilman 125 4/4/06 - WHOLE - BILL 060001, ETC. Goode.

Thank you, Madam President. Good afternoon, Mr. Vallas. I want to return to the drop-out issue and first say for the record that both of our issues of drugs and crime and violence and education, economic opportunity are often intertwined. I want to read from a recent study, Black Males Left Behind. I don't know if you're familiar with it. It was just recently released. It states that in 2000, 65 percent of black male high school drop-outs in their 20's were jobless, and by 2004, the share had grown to 72 percent, compared with 34 percent of white and 19 percent of Hispanic drop-outs. So we're looking at an increasing trend that black male high school drop-outs in their 20's, nearly three out of four, are going to be unemployed, and that's just the way 126 4/4/06 - WHOLE - BILL 060001, ETC. things are going. So I want to go back to the John Hopkins model and ask you whether you are actually employing that model. Were you referencing the model or are you actually employing that model?

Well, we are not only employing the model, but actually I'm beginning my interventions at primary grade, because while the 6th grade will trigger many of the specific interventions that I referred to, we're actually looking at intervening at the pre-school level. That is why we've not only expanded pre-school, but that is why we've got the parent training component as part of our pre-school education. That's also why we've been working to provide these wrap-around interventions for pre-school kids, because we have a lot -- I feel, and obviously I don't have the research to back it up, but I feel that you can begin to predict who is going to drop out as early as third 127 4/4/06 - WHOLE - BILL 060001, ETC. grade. So the reason we've made universal pre-school as the number one priority and parental counseling and parental training as a mandated part of that priority is because I think we don't prepare -- our kids who start school in kindergarten and first grade are not ready to start school in kindergarten and first grade. There's also one more thing. We've been pushing legislation in Harrisburg to mandate that children start school no later than 6 years old. In this state, you are not required to start school until you are 8 years old. Every year we have upwards to 700 students who do not start school until they're 7 or 8 years old, and these kids haven't been home-schooled. So they are literally -- I mean, where do you put them? You can't put them in kindergarten. So we're looking even earlier than that.

I have a 128 4/4/06 - WHOLE - BILL 060001, ETC. series of quick questions. Do you know based upon that model and based upon using 6th grade as an example how many or what percentage of 6th graders are projected to drop out?

Yeah. I can't give you that number right off the top of my head, but we've begun using model this year. The study came out last year.

Correct.

And we introduced CSAP this year. I can try to get you an estimate.

You can provide that through the Chair?

Sure.

Can you also provide if you have any particular statistics on black male 6th graders?

Yes. Sure.

Is there a tracking system in place, and can you describe it?

We disaggregate 129 4/4/06 - WHOLE - BILL 060001, ETC. all of our data. So, in other words, we not only track, we track by disaggregated categories. We're required to disaggregate under No Child Left Behind. So we do test scores, drop-out rates, et cetera.

You talked about linking drop-out rates to parent participation, and you're tracking. Are there any parent participation issues for black male students?

Well, I can only speak anecdotally.

I'm actually talking about statistically.

No, I don't have any statistical -- there are no studies that have yet to be done that have done this statistical correlation.

Correct.

Let me ask a few quick questions and you can respond to all of it. General questions about parent 130 4/4/06 - WHOLE - BILL 060001, ETC. participation. How many home and school associations do you still have? I don't know if you still call them that.

I'll give you the exact number. Where's Cecilia? There she is. How many home and school associations are we up to now? About 120.

Do you know how many parents are involved in home and school associations?

It varies.

It really varies from school to school. Some home and school associations have heavy --

I mean total.

2,000.

And particularly related to drop-out prevention, are there any programs that mandate parent participation? Is that a component of the programs? 131 4/4/06 - WHOLE - BILL 060001, ETC.

A couple programs do. First of all, the Smart Program does. That's the program that involves students who are experiencing disciplinary problems. Not students who face expulsion, but students who are on the wrong track, who are badly behaved. And that requires not only parent participation but parent attendance. They have to come to the Saturday program, the Smart Program. CSAP, which is the intervention program I've referred to on a number of occasions, also requires parental involvement. So there's a parental involvement, counseling, outreach component of CSAP. And then, finally, the early childhood programs all have a parental involvement component. For example, the reason our Head Start Programs are proven to be as effective as they are is, they're not just Head Start for the kids, it's also like Head Start for the 132 4/4/06 - WHOLE - BILL 060001, ETC. parents. And then, finally, the Cradle to the Classroom Program at the primary grades dealing with pregnant teens obviously is heavy on parental involvement, because the parent advocates who we send out to work with the pregnant teens are spending as much time training the pregnant teens as much as they are working to get the child into daycare and pre-school and things like that. We can give you -- I will have Cecilia give you a list of all of our parental involvement programs and initiatives, and we could get you that by tomorrow's testimony.

Okay. Any other comments you might have on black male drop-out rates and parent participation?

Yeah. Just a general comment, in that the vast majority of -- the majority population in the School District are African-American. 133 4/4/06 - WHOLE - BILL 060001, ETC. So I know that I am not going to be successful as a superintendent unless I can defy those trends, unless I can defy those statistics. If I'm not doing better, if I'm not showing improvements in those areas, then basically I'm not doing my job. Because at the end of the day, this is an 85 percent minority system, and over 80 percent of the kids are eligible for the free and reduced school lunch program. And the majority of the children in this system are African-American. So I know the challenges that I face, and when we design our programs, we are cognizant of the data and of these trend lines, and that's what we're trying to reverse here.

One last quick question. How many parents in the District?

At least --

Don't guess unless you have a number. 134 4/4/06 - WHOLE - BILL 060001, ETC. We'll try to get you an estimate on that.

Thank you. Thank you, Madam President.

At least we know there's at least one per child.

The Chair recognizes Councilman Rizzo.

Thank you, Madam President. Mr. Vallas, let me first start off by acknowledging the good work of you and the rest of the school administration. I think just looking in from afar, there's vast improvements from the way it once was. One of the issues that I have an interest in, and there's a few here that I'm going to discuss with you, the one -- because I recollect the way classrooms were configured years ago, and my issue is school safety. I remember that there was communications or telephones or buzzers for not just 135 4/4/06 - WHOLE - BILL 060001, ETC. teacher safety but also student safety. And in some of the schools today, I know you have the assistants that keep an eye on things, but some of the older buildings, from what I hear, four, five stories, it would take quite a while to get some help to a teacher or a student that may be having some difficulty. Does that system still work or is there a way to provide that teacher security that we once had in the classroom so if a teacher does need some help, that maybe there's a way that they can get it quickly?

Well, we don't -- there probably was a day when schools had phones in every classroom, but -- UNIDENTIFIED SPEAKER: They still do.

In every single classroom? Every single classroom has a phone? UNIDENTIFIED SPEAKER: Yes.

And they work? 136 4/4/06 - WHOLE - BILL 060001, ETC. UNIDENTIFIED SPEAKER: Yes.

Okay. I don't know. I don't know. I visited a lot of classrooms and sometimes the teachers have complained to me that they don't have the contact that they should have. All classrooms should have phones. I've talked to our technology people, our telecommunications people, about the possibility of where classrooms do not have phones, providing the teachers with our -- it's squelchers, right?

It's Nextel.

Chirpers. Well, the squelchers are like walkie-talkies. So the idea here is, there should either be a phone hooked in the wall or there should be a squelcher so the teacher who is on the fifth floor, if there's an emergency -- and not necessarily an emergency involving a disruptive kid, any emergency in general. We have a lot of children who are 137 4/4/06 - WHOLE - BILL 060001, ETC. asthmatics and things like that. They can in fact contact the help desk and they can get somebody up. So we are looking at that, and I know at your direction we're looking at that possibility.

My last question is, last year we talked about the issue of our young people leaving school at the age of 16. They just say, Now legally I don't have to go to school and I want to quit, and they intimidate grandmom or whoever, grandpop, into letting them leave school. Is there something in the pipeline, is there some legislation that's going to move the age from 16 to 17 and beyond?

Yeah. We've talked to legislators about raising the school age to 17, and there's just not a lot of support for it. There's also not a lot of support among other school districts. So we focus most of our 138 4/4/06 - WHOLE - BILL 060001, ETC. attention on getting Representative Roebuck's 6-year-old mandatory program in. I'm all for raising the age to 17. We're just not getting too many takers legislatively.

I'm sitting here trying to think, who would object to trying to -- we're encouraging young people to go to school. Is it bad to have a law on the book that said you can't leave at 16? And maybe in that 16th to 17th year, you're able to save them and turn them around a little bit. Because I think if they leave school at 16, it's hard to ever get them back after they've been on the street for a couple months.

The problem that you run into, particularly in this state, is, there is a very, very strong sentiment in many of the communities that government should not be dictating, should not be overly dictating the 139 4/4/06 - WHOLE - BILL 060001, ETC. parents. It's one of the reasons why we don't say mandatory early childhood or we say mandatory universal early childhood. We say we want to make universal childhood available to families, because believe it or not, that in itself, the whole early childhood initiatives, meet with some opposition from those who think that this is government again trying to dictate what I should do with my kids and things like that. And I'll tell you, it's the same thing -- there's a lot of opposition to Representative Roebuck's bill that would -- and we just want to limit it to Philadelphia, and there is opposition. There's opposition to it in some of the rural areas and some of the more conservative areas where the feeling here is, Here is government imposing another mandate and another unfunded mandate at that. So I support it. There are a number of superintendents who do support the earlier starting age and the later 140 4/4/06 - WHOLE - BILL 060001, ETC. exit age, but so far, there's just not the legislative support there to successfully pass a bill.

Well, I agree with what you say here, but there's still a number. It's 16. So is government tinkering at 16? That's a phony argument, as far as I'm concerned.

Well, it's not my argument.

I hear you.

I agree with you 100 percent. I'd like to see the ages 6 to minimum. 16

In my mind, 17 I just can't see who could beef about encouraging a young man or woman to stay in school. At 16, they're at what year? Where are they in the process?

Well, they're supposed to be at 10th grade.

Right.

We have a lot of them at 9th grade. 141 4/4/06 - WHOLE - BILL 060001, ETC.

You lose them, then it's very difficult to get them back on track. And if that age would increase to 17, I think that --

I agree.

-- keeping them there an extra year and then they say, Well, I only have one more to go, so let me finish.

We will go back and we'll revisit whether or not we can get someone to sponsor the flip side of the early start. I'll be more than happy to do that.

Because what's the drop-out rate today?

Well, let me refer to the graduation rate, because, again, kids drop out and then they reenter. The graduation rate here is about 68 percent, according to state figures. The figures that we use for the graduation rate are lower. I think the state has a tendency to -- their definition is too broad for 142 4/4/06 - WHOLE - BILL 060001, ETC. graduation. Now, that's an improvement of about ten percent or about eight percent over the last four years, but the bottom line is, that's still a terrible, terrible rate. And when you're losing whether it's 32 percent or 40 percent of your kids, that's simply unacceptable.

Can you tell, is there a way to tell how many young people in the system the minute they hit that 16th birthday they're out of there?

Yeah. I can tell you that. I will tell you this: The biggest exodus of children we experience is between 9th and 10th grade. That's a fact.

So there we are.

Just to give you an example, four years ago when I arrived, we had 22,000 9th graders and we had, what is it, 6,000, 7,000 12th 143 4/4/06 - WHOLE - BILL 060001, ETC. graders. I mean, what does that tell you? And half the 9th graders had to repeat 9th grade. Now, that number last year dropped. It's gone from 22,000 to less than 1,700, and the number of 12th graders has gone from like 7,000 or 8,000 to 11,000. So what we're saying here is, we're getting them into the second and third year. The number of seniors is going up. That's a good sign. That's still an imbalance. And I'll get you the actual numbers tomorrow, but those are close to ballpark numbers. But credit recovery, we had 11,000 kids, 9th and 10th grade, in credit recovery. So that's when the kids are leaving. They're leaving after 9th grade, because a lot of our kids are a year older than the average 9th grader when they're coming in. They're already 15 years old. Sixteen years old, they're sophomores, they're on their way out. 144 4/4/06 - WHOLE - BILL 060001, ETC.

Well, I think you appreciate the great support you get here out of this legislative body, and I think if you communicated your interest at the state level to change that, I think you'd get the same support from Harrisburg that you get here locally. And if it's a good change, then I would assume that you would push for that.

We'll do that. In fact, perhaps what we could also do is request a City Council resolution on Representative Roebuck's bill and perhaps if we can get someone to sponsor the 16 to 17-year-old bill that we could basically take to Harrisburg with us, too. A resolution asking the legislature to support it at least for Philadelphia.

Because professionally I think if you could show us what happens at the 16th year when young people leave and having it on the books that they have to stay until 145 4/4/06 - WHOLE - BILL 060001, ETC. they're 17, that could be real significant.

Absolutely.

Thank you, Madam President.

You're welcome. The Chair recognizes Councilman Nutter.

Thank you, Madam Chair. Good afternoon, Mr. Vallas. I'm going to leave it at Ms. Sade and Mr. Thornton. Mr. Vallas, Councilman Rizzo was at the one end of the spectrum. I want to go to the other end of the spectrum. You made reference in your testimony, and it may have been mentioned a couple times, what I want to talk about is -- unless you've exhausted the subject.

No. I've been -- I'm raring to go. I'm just entering the 146 4/4/06 - WHOLE - BILL 060001, ETC. stretch here.

No. I didn't say that you would be exhausted. I'm not sure that that is possible. I'm concerned about you exhausting the subject that I want to talk about, which is the early childhood education. Have you talked much about that today?

Yes.

I know the numbers are up. What I want to know is, what would it take to provide full early childhood education services for all the children who are eligible? What's the difference between number of students served versus the number of students who might have a need?

I don't have that exact number, but I will have it to you by tomorrow. Donna Piekarski, who is our early childhood expert, has a personal matter today, and I'll make sure that I get you those numbers. But for every $5 million in 147 4/4/06 - WHOLE - BILL 060001, ETC. additional funding we've received from the state, we've been able to put another 500 kids and children in early childhood programs, 500 to 600 children and --

$5 million in funding for 500 kids?

That's right. So we've increased Head Start by about 500 to 600 students. I think this year we're expecting a five and a half million dollar increase from the state. The state is increasing Head Start again. And I believe we're looking at an additional 700 kids in early childhood programs.

Approximately $10,000 per student.

I was just doing the math here.

That's what quality --

You were reading my face.

That's what 148 4/4/06 - WHOLE - BILL 060001, ETC. quality comprehensive Head Start costs you. It's actually between $8,000 to $10,000 per student.

And do you utilize any City funding for early childhood education?

I don't -- not --

The allocation we get from the City is put into the General Fund and used for General Fund purposes. We don't specifically earmark the 45 million allocation we get from the City for specific programs, just for part of our General Fund allocation.

But you do for some of the dollars that come from the state, they are specifically for early childhood education?

Yes, sir.

And federal dollars. There's also federal dollars that are specifically earmarked. But, 149 4/4/06 - WHOLE - BILL 060001, ETC. no, there is no specific earmarks from the City for early childhood education.

In response to Councilman Rizzo just a little while ago, you said you thought that the state uses a, quote/unquote, graduation rate of 68 percent. You thought that number was a little high or at least was not the number that the Philadelphia School District uses. What is the number for the Philadelphia School District?

The number that we use is 61 percent.

Sixty-one percent. And what do we know about the other approximately 39 percent of the young people who did not graduate? Where are they? What are they doing?

Well, prior to two years ago, there wasn't too much tracking going on. The District didn't track. It didn't track the drop-offs. Once they dropped out, they were gone from the system. So we've really just begun to 150 4/4/06 - WHOLE - BILL 060001, ETC. track. So I can't tell you definitively where they end up, but some may re-enroll, some may move to other districts, but most kids, in effect, just leave the system or leave the school system in general, never to return. Now, let me point out that the education collaborative or the drop-out collaborative that we are part of, it's funded by Penn and the Out-of-School Youth Transition Collaborative. We've been working with them to actually do this very study, to look at children from 1994 on and to look at them when they dropped out, where they went, what happened to them. I mean, children literally from the ages of -- from literally 6th grade all the way through 25, years old. 21 And the collaborative is going to 22 complete their research in June and then 23 they're going to present kind of what I 24 would consider to be a definitive 25 document on what has in fact happened to 151 4/4/06 - WHOLE - BILL 060001, ETC. the students who have dropped out of the system since 1994. And no other school district in the country is doing this and there's no other effort on this scale and in this detail. So come June, we will have definitive numbers on just what's happened to the kids who have been dropping out since the mid to late '90s.

I know we're getting the ten minutes, so I'm kind of hopping around to use my time wisely, and then I'll come back. The School District provides up to a certain age of student school bus services; is that correct?

Yeah. We don't bus at the high school level unless -- and, actually, we bus through 6th grade. Any bussing beyond 6th grade is tied to whether or not the children are special ed, special needs, whether they have a specific IP. And, of course, charter school children are bussed, but that's 152 4/4/06 - WHOLE - BILL 060001, ETC. it. So we will provide general bussing through 6th grade. Beyond that, we provide the tokens, but that's it.

So approximately how many students utilize the school bus service?

About 33,000.

No. You'll need to --

Listen, if there's any numbers out here, shout them out or come on up so we can get an answer.

33,000.

33,000.

33,000 students?

Yes.

Does that include the charter schools?

That's the total --

Why don't you just make yourself comfortable. 153 4/4/06 - WHOLE - BILL 060001, ETC. Enjoy yourself over there. It's a once-in-a-lifetime opportunity. You never know what might happen.

We'll get the numbers out.

And does the School District actually provide the service with its own employees or are these contracted services?

I would say roughly it's about half/half. So we hire most of the available bus companies, because we bus for not only ourselves but we bus for the charter schools, the private schools and the Catholic schools. And then, of course, we have our own in-bus services. So it ranges like 54/45. So that's why when there's a snow day, I have to call it, even for the Archdiocese.

Are you making a public statement today that you on at least snow days have more authority 154 4/4/06 - WHOLE - BILL 060001, ETC. than the Cardinal?

No. No. I always ask the Archdiocese what they would prefer that we do, because I find that if they close and we close, we don't get any complaints.

Very smart. Very smart. I'm just checking.

We get the blessing of the Cardinal.

The Cardinal, he's a constituent, so I'm just trying to understand where the power is. So 54/45. Fifty-five School District or private?

Our count --

Why don't you grab that mike. I don't think he's done this very often.

Fifty-five is contract, 45 is --

Fifty-five contract, 45 School District. Okay. 155 4/4/06 - WHOLE - BILL 060001, ETC. And how many different companies are involved in this?

We have a new contract going into effect this coming September, and there are about private 7 vendors that we use. Small companies 8 range from like ten buses up to large 9 companies that have close to 300. 10

And is 11 there any distinction between the types 12 of buses when you compare the School 13 District buses to the private sector 14 buses? 15

Basically, a lot of the contractors that we use, we have smaller groups, like special needs students where there's only eight to ten students. So they have a lot of mini buses that go greater distance. And our buses are basically like 48 and 66 passenger that take large groups and transport throughout the City.

And what are the standards that we utilize either 156 4/4/06 - WHOLE - BILL 060001, ETC. for the buses themselves, whether they're safety standards on the buses, as well as training and education for the drivers?

There are state guidelines that we abide by as far as commercial driver's license. All of our drivers have to have commercial driver's license. We do the random drug and alcohol testing for all employees, child abuse checks, criminal history checks. Every four years the drivers go through a ten-hour recertification process, and we provide --

Is that state required?

Yes. We go above and beyond what the state requires. We have an in-service training that we provide before school opens for all of our contractor drivers, as well as our in-house drivers. So it's an ongoing process.

Are the in-house drivers part of any collective 157 4/4/06 - WHOLE - BILL 060001, ETC. bargaining unit?

Local 1201.

And what about the private?

Some of the larger vendors do have unions, and the smaller ones are no unions involved.

Could you provide to the Chair a list of all the companies -- I knew we were getting close -- a list of all the companies involved?

Sure.

And you seem to indicate that there was a new contract coming into effect with the upcoming new school year?

Yes.

Is that something that went out to bid?

It was through an RFP process, and we did get some large companies from around the country that expressed interest, but it came out that 158 4/4/06 - WHOLE - BILL 060001, ETC. pretty much the local vendors won out based on the best price.

Okay. And has that been awarded?

I believe it's on the agenda for the SRC in April.

Okay. If you could provide to the Chair a copy of the bid, as well as all the respondents and the pricing information, the standards, the specifications, that would be helpful.

Certainly.

Thank you. Thank you, Madam Chair. I'll come back.

You're welcome.

We can have that by tomorrow.

Great. Somebody is going to be busy overnight.

Excuse me. The gentleman that was just 159 4/4/06 - WHOLE - BILL 060001, ETC. at the table, the stenographer needs your name.

Jerry Rineer.

Do you mind saying it again?

In the microphone.

Would you say it in the microphone.

Jerry Rineer.

How are you spelling your last name?

R-I-N-E-E-R, General Manager, Transportation.

Thank you. Mr. Vallas, on in the detailed budget, the graph of total expenditures, can you tell us how you are reducing contracted services-property from $68.6 million in FY06 to $30.9 million in FY07?

I'm sorry. What page? 160 4/4/06 - WHOLE - BILL 060001, ETC.

94. Do you have it?

Yes. Can you repeat your question one more time? I apologize, Madam President.

On , the graph of total expenditures, can you tell us how you are reducing contracted services-property from $68.6 million in FY06 to $30.9 million in FY07?

We'll get --

Does he need the page?

No. He's trying to track down the page. I'll get you the page number.

Well, maybe I ought to wait to ask this at the same time. On the same chart, the last category, quote, Other, end of quote, has increased dramatically from FY05 to FY07 from $298 million to $588 million. Can you explain what is included in this category and why the 161 4/4/06 - WHOLE - BILL 060001, ETC. dramatic increase?

The "Other" category is capital. Because in these numbers, we're including capital. But I'll get you the explanation of the "Other" line, and we'll get you a breakdown of what all the items are in that "Other" category, but I believe that's capital.

That would be fine.

We'll get you the "Other" line just shortly. So we can come right back to it as soon as he scans it.

While we're waiting, I have a couple other questions. The state took away the residency requirements for teachers; did they not?

Yes.

How about the non-teachers? 162 4/4/06 - WHOLE - BILL 060001, ETC.

There's no residency requirement for any --

I'm sorry. I don't know that your microphone is on.

Is it on?

I can't hear you.

I do not believe there's a residency requirement for any School District employees. There's no residency requirement.

So would you venture to say that the greater majority of the School District employees live outside the City?

I can actually give you the breakdown.

That would be great.

Of the total employees of the School District, as of March of this year, we have 23,835 163 4/4/06 - WHOLE - BILL 060001, ETC. employees. Of that, 72.7 percent are City residents and 27.3 percent are non-residents, or put differently, 17,329 are residents and 6,506 are non-residents.

We'll submit that chart to the Chair.

I would appreciate seeing that. Would you say that the greater majority of the 6,000 are teachers?

Classroom teachers represent 4,684 of that number. So, yes.

But let me point out that the teacher breakdown is 54/48, roughly. So among the categories, the number of teachers who are City residents are -- percentage-wise they constitute the smallest percentage living in the City. So while 72 percent of our employees, almost 73 percent, of our employees live in the City, only 52 percent -- I'm sorry; only 57 percent of 164 4/4/06 - WHOLE - BILL 060001, ETC. the teachers live in the City. So, in other words, of our total employees, almost 73 percent live in the City, 27 percent live outside the City. But among our teachers, who constitute the largest group of employees, 57 percent live in the City and 43 percent live outside the City. I'll give you the chart.

Well, that is surprising. Would you say that was one reason why we were able to employ as many teachers as we have?

Yes. We think that the residency requirement would have restricted our ability to recruit teachers. Absolutely.

On , I'd like an explanation of this, please. On , you show two classroom teachers for early literacy at a cost of $226,110, which averages over $113,000 per teacher. Is this accurate?

Wayne Harris, Budget Director. 165 4/4/06 - WHOLE - BILL 060001, ETC.

I'm sorry. What is your name, sir?

Wayne Harris, Budget Director.

Thank you.

That cost does not have to all be full-time salary for those two people. The number that you see there is the number of full-time employees, and then the salary -- the two. And then the salary number is the amount of salary paid for people to do those services, but they don't -- it doesn't mean that two people are getting the entire salary amount.

How many people are getting that salary, the cost of 226?

I would have to get back to you on that, but there are almost certainly significant numbers of part-time employees involved in that number who don't show up. We have per 166 4/4/06 - WHOLE - BILL 060001, ETC. diem employees. We have extracurricular pay, after school and things like that.

And part-time teachers, retired teachers. We'll get you those numbers by tomorrow.

We're working on getting that.

We're going to get you that other question before the line of questioning is over.

Thank you. In the meantime, would you explain what you mean by, quote, efficient and effective support operations, end of quote? What do you mean by that?

Where are you quoting?

Are we just using words? It was one of the budget categories.

Well, that's one of the Declaration of Education goals, which means that it says --

For 167 4/4/06 - WHOLE - BILL 060001, ETC. to be efficient and effective?

That's right. We like to think that we're more efficient and more effective. Are we as efficient or as effective as we should be? I guess that's in the eyes of the beholder, but the bottom line is, we're making progress in the area of efficiency and effectiveness.

All right. The efficient and effective support operations, I believe, costs something to the tune of $407 million. I believe that's on . So it does cost some money, and I was just curious to know exactly what that means.

We're going to get you the A, B, C costs. We'll break it down for you.

We'll get you exactly what's included in that. That obviously includes people in Finance, people in Human Relations, but those are small pieces of this. It's all of food 168 4/4/06 - WHOLE - BILL 060001, ETC. services, it's all of Finance, it's all of HR, it's the Board of Revision of Taxes folks. It's something --

Wouldn't it be easier to put that in writing rather than put "efficient and effective support operations"? How would anybody decipher what that meant?

Well, what we do is, we prepare summary tables and we prepare the summary tables with aggregate numbers to make --

We'd prefer some explanation. So if you would provide us with an explanation, I'd appreciate it.

No problem.

Earlier this morning we were given a snapshot status report on some of the, I guess, construction and many of the projects that are in design. I guess, Mr. Vallas, I am asking you so it will be on record. 169 4/4/06 - WHOLE - BILL 060001, ETC.

Yes.

Audenried replacement, it would appear from the list that you gave today, but I want you to -- do you have a copy?

Yes, I do. In fact, I was looking and suddenly Wayne became Pat.

Pardon me?

I said suddenly Wayne magically reappeared as Pat Henwood, our capitals person. So we're ready for an answer for you.

Well, if you want a copy of the --

No. We have it right here.

Okay. Audenried replacement, I want you to tell me for the record so I have proof of what you have told me, because Audenried has been vacant now for some time.

Right. 170 4/4/06 - WHOLE - BILL 060001, ETC.

It has not been demolished. I don't see anything happening there, and I think the community feels that perhaps we have not been as truthful with them as we should be.

Right.

So I want the record to really reflect, if you don't mind, Mr. Vallas, precisely --

I don't mind at all.

-- what is happening with that project.

We're going out -- go ahead.

That project is -- I'm sorry. My name is Pat Henwood, Director of Capital Programs. That project is on the agenda for award.

It's been on the agenda.

No, it hasn't. 171 4/4/06 - WHOLE - BILL 060001, ETC.

Let me ask a question. When is the demolition supposed to take place?

The demolition will start roughly a month after the SRC approves the contract on April 19th.

Did that go out before for an RFP?

It went out to bid in February. It was advertised. We got the bids, and it is currently on the agenda for award at the next SRC meeting.

Which will take place when?

April 19th.

April 19th. And when would we see construction beginning?

You'll see the demolition activities occur roughly a month after the SRC awards it.

So the demolition would take, what, about a month for that building to be demolished? 172 4/4/06 - WHOLE - BILL 060001, ETC.

The demolition will probably take closer to six months.

For demolition?

Yes.

My Lord. Is this going to be a hand demolition?

We're not going to implode it. It's going to be piece by piece.

Is there any reason why you wouldn't implode it? Is it because it's so close to the highway?

The community doesn't want us to implode it because there are suspicions that imploding creates environmental problems because of the dust in the air and things like that. We've had community meetings out in Audenried. The community has made adjustments in that design more than once, and the decision was made not to 173 4/4/06 - WHOLE - BILL 060001, ETC. implode, and so we're going to dismantle it. It will take -- and the same entity that's going to get the demolition contract is also going to get the construction contract.

That's correct.

So we're not going to have to rebid the contract. We're ready. The design is done. As you know, the design was modified at the request of the Arts Council, so that delayed us. And we could not demolish the building before we were able to set up an independent heating source for the --

Alcorn.

Alcorn. That delayed the process almost an entire year. But there's nothing stopping it. The design is already done. We've gotten sign-offs from everybody. The contract will be awarded in April. We'll probably begin demolishing a month later. It will take us about six months to demolish, and 174 4/4/06 - WHOLE - BILL 060001, ETC. we'll be breaking ground before the end of this calendar year.

We actually got zoning approval on Audenried today.

Great. And how long do you anticipate it will take to erect the school building?

Approximately two years.

Oh, boy.

I'll be completely bald by the time that's done.

Nothing is ever easy. Also, I know that, Mr. Vallas, you and I have been at more than one meeting regarding GAMP.

Yes.

And I see here I'm assuming that ADV means advertising date.

Yes. It will be advertised in May. That is my goal, and 175 4/4/06 - WHOLE - BILL 060001, ETC. I expect to meet that goal.

Well, apparently there was a problem with the advertising. Something was radically wrong when the RFP came back, something like $8 million over budget.

Yes. It was over budget.

Something is wrong. I just can't imagine something like that happening, and I'm not going to question it, but I would suggest that you look very carefully at the RFP so it doesn't happen the same way again. While I have the mike, I'm sorry, also in this lovely book that you gave us, Mr. Vallas --

Yes, ma'am.

-- this lovely book that you gave us early on, safe and orderly environment. We're talking about the alternative schools. On you have IEP. Can you tell us 176 4/4/06 - WHOLE - BILL 060001, ETC. where that will be located?

Well, they haven't made a final decision. As you know, they've had their site moved twice. So we don't have -- they have not submitted to us a final plan on where they're going to locate the site.

That's strange, because I was told by area residents that IEP had pulled out of the second site.

Right. I don't think they've secured a third site yet. Have they? They have not.

But they are not going to the second site?

No, they're not going to that site.

Okay. Let me just double-check my list again. Penrose/Bartram gym, I see that that's to be advertised August of '06?

That is correct. 177 4/4/06 - WHOLE - BILL 060001, ETC.

Hello. Can you tell me more about it?

Well --

It will be put out for advertisement in August of '06?

That's correct.

It would be responded to when, by what date?

Mid September. And we would anticipate an award roughly a month, say mid October.

And construction would begin?

By the end of the year.

So you know, when we identify these projects advertised, the only thing that will hold these projects up, only thing, is zoning. Because these projects are ready to go. The reason Willard is not on the --

Well, 178 4/4/06 - WHOLE - BILL 060001, ETC. it's not just zoning. Apparently if the bids come in over, I think that would be --

But we'll rebid that. But we have some projects that are held up in zoning right now. For example, the Brown addition has been delayed because the Zoning Board has asked us to air condition the old building as a condition for getting the new building approved, and that's held up Brown.

Do you see any reason why this would be held up?

We can't --

For zoning? Is there an issue that we should be looking at?

If we're asked to air condition the old building as a condition for getting the new addition approved, it will be held up.

Are 179 4/4/06 - WHOLE - BILL 060001, ETC. we air conditioning all of our schools?

We're not air conditioning our old buildings. We don't have the money to air condition the old buildings.

So it's only when we go before the Zoning Board of Adjustment are we required to air condition our schools?

Well, we have to get approval --

Is that the proviso that we usually get?

Well, we've been requested that on a couple buildings. At the Lincoln High School building, we have been asked by Zoning to wrought iron fence the entire campus. So they did not approve the school that's ready to be built because we won't put a fence around the campus. And at the Sayre School building where we've requested that the building where we want to do a play lot and all-weather athletic field, they have 180 4/4/06 - WHOLE - BILL 060001, ETC. told us that they will not approve the playground unless we replace the Cyclone fence with a wrought iron fence. So we've had a couple of these where basically we've gone beyond simple zoning approval and they said air condition this building, put a fence around this building or, in the case of Lincoln, change the facade of the building, after we've had our community hearings, after we've done our networking. So what I'm saying is, these projects, the only thing that will hold up these projects, the only thing besides an overbid, the only thing that will hold up these projects will be basically an entity like Zoning telling us that we have to do something more than we have agreed to.

That's why I think it's very important then that parent/teachers associations get involved and go to the Zoning 181 4/4/06 - WHOLE - BILL 060001, ETC. hearings.