Everett,  February 16 2018

There’s no peace in the valley, yet

Mayor, Supt. continue battle over school-funding shortfall, council votes for $5M appropriation, Supt. wants schools fully funded and no layoffs

By Brendan Clogston


Teachers, students speak out against layoffs

The announcement that the budget shortfall would lead to 110 layoffs, including 58 teachers and 18 paraprofessionals, sent shockwaves through the school district. Students and teachers have been picketing in the streets, urging the city and schools to find a solution to prevent the layoffs. These activists took City Hall by storm Monday night, filling the City Council Chambers to capacity and filling the streets outside Broadway.

Twenty people delivered testimony to the City Council on Monday, all in support of the teachers. Below are some of their remarks.

A $5 million transfer from the city’s savings will prevent 110 layoffs at the School Department, for now.

After almost four hours of debate and moving testimony from students, teachers and their parents urging the city to fully fund the schools to prevent layoffs, the City Council voted unanimously Monday night to approve the $5 million transfer out of the city’s stabilization fund, meeting a portion of the school’s $8.3 million budget shortfall. Also, the city has given the schools the go-ahead to transfer $1.3 million from revolving funds towards their operations.

The vote was a relief to hundreds of protestors, both inside the City Council Chambers and on Broadway outside City Hall; however, unless another $2 million is uncovered in the coming weeks, at least some of those employees may find their jobs threatened once again.

“We weren’t begging for something we wanted; we were demanding something we were owed.” – Superintendent Fred Foresteire

“This will delay the situation,” said Superintendent of Schools Fred Foresteire. “We’re not doing anything this Friday. We’re appreciative of what we’ve got, and we’re going to see where this takes us. We may be in this position two months from now.”

Where that remaining $2 million will come from is a question without easy answers. “It depends on a lot of things,” said Foresteire. “If it doesn’t snow for instance, we’ll save some money. You can’t take money out of your snow budget until winter is over, obviously.”

One suggestion was the possibility of seeking a home rule petition through the legislature allowing the city to take out a loan. According to State Senator Sal DiDomenico; however, the chances of such a petition passing quickly enough are not great. “I can tell you, without guarantee but with a good certainty, that in this current climate, to get a home rule petition through the state legislature for a loan to a one-point community in the Commonwealth out of 351 is not a good bet,” said DiDomenico. “Nothing is off the table, but the prospects of passing it in the short-term future are very slim.”

The School Department originally requested $7 million from the city, but according to Mayor Carlo DeMaria, $5 million was all the city was able to give out of its stabilization fund. According to the mayor, any more could dip the city’s savings to a level that could jeopardize Everett’s bond rating, something that could cost the city millions over many years as the interest rates on its loans increase. “That’s why it’s $5 million,” said DeMaria. “We can’t go beyond that. We can’t afford to.”

According to the city’s CFO, Eric Demas, even this transfer could impact the city’s financial ratings. “It is still possible that the rating agencies are going to have a concern that we used existing reserves to fund operational needs,” said Demas. “Certainly that’s not something that any of the rating agencies would ever be interested to see any of their communities do.”

But the School Department believes that the $5 million transfer was simply a portion of the $6 million that is owed to it by the city, including $2.5 million in Medicaid reimbursement money generated by the schools, as well as $1 million DiDomenico was able to procure for the schools at the State House.

According to Foresteire, properly understood, the schools aren’t in deficit, but rather dealing with the consequences of unexpected expenses and missing anticipated funds. “The unexpected costs, plus the anticipated revenue that we didn’t receive, is why we had to appear before the City Council Monday night,” said Foresteire. “We weren’t begging for something we wanted; we were demanding something we were owed. Residents need to understand that.”

“The school budget is not in deficit,” said Foresteire in the midst of the debate on the $5 million transfer. “The school budget right now has $35,763,000 in it, available to it. The only question being asked here tonight: Are we going to continue to provide services to our young people at the rate that we are? And if you say no, we’ll go back and take whatever actions necessary. The school budget isn’t over budget, isn’t going to go over budget. The only thing we’re asking for is what we’re rightly entitled to, and if you don’t want to give it us, then we’ll take the actions necessary.”

But according to the city, when Chapter 70 and Medicaid reimbursement monies are delivered to the city, under state law they have to be entered into the city’s general fund. In other words, according to the mayor’s office, all of those funds are included in the $5 million, and even taking that into account, $5 million remains what the city maintains it can afford to spend.

DeMaria has suggested that a misunderstanding occurred when the city provided $2 million over net spending for the schools during last year’s budget process, and that what the city understood as a contribution to the district’s needs in total, the schools understood as an additional contribution on top of what it felt was owed to it. “We gave the school $2 million above net spending because we were told it was enough to get them through the fiscal year,” said DeMaria. “If you had come to us during the budget season and showed us that you needed additional resources or funds – the only thing that Mr. [Assistant Superintendent Charles] Obremski said was that you needed $2 million above and beyond net school spending.”

Foresteire has countered that after chargebacks from the city, the schools only saw $1 million of that contribution, and that fundamentally much of the money in question was simply what the School Department was entitled to. “This School Department – I’ve been up here every time for 52 years – we’ve never been funded at the levels we should be. This is what we have to address as a community,” said Foresteire. “If we got what was owed to us, we wouldn’t be here right now.”


Unexpected expenses

A major cause for the schools’ shortfall is continuing struggle with changes made to how the state calculates how much aid it gives to the district for needy students. The state provides aid to the schools to feed every student studying in the district considered economically disadvantaged. Formerly, those students were counted by the School Department, but three years ago that responsibility was moved to the state. Under the change, to qualify as “economically disadvantaged” under state guidelines, the students and their families must have been enrolled in a state or federal poverty program, such as food stamps, for a certain number of years.

The problem for diverse urban communities like Everett is that many of its low-income students are immigrants whose families either do not qualify for those services or haven’t been on them for very long, and thus are not counted as “disadvantaged” by the state – while still requiring assistance. In all, the situation has cost the district between $6 million and $8 million this year.

The schools have also dealt with a number of unexpected expenses, totaling $3,480,000. Among those expenses are the following:

  • The capital conversion of Webster Extension – $991,000
  • The renovation of Keverian School yard – $324,000
  • A legal settlement from the prior year regarding an employment issue – $223,000
  • The arrival of 25 out-of-district Special Education students – $1,585,000
  • FY18 education grant reductions, ironically cut because the district’s high-performance led the state to decide the district didn’t need the money – $357,000


Next steps

The mayor announced that the city would be taking several steps “to ensure we do not find ourselves here again.” Among those steps are the creation of a Task Force on School Finance, the hiring of an outside firm to conduct an operational audit on both the schools and city finances, and the creation of an internal School Finance Review Commission.

The Task Force on School Finance, a panel of “outside experts,” will “develop recommendations for savings and efficiencies within the school department,” according to the mayor’s office. It will be staffed by Co-CEO of Century Bank Barry Sloane, President of the Boston Municipal Research Bureau Samuel R. Tyler, Professor at Lasell College and Chief Learning Officer and Chief Strategist at Thomas Leadership Solutions Dr. Dwayne Thomas, and Executive Director of the Center for Education Policy Research at Harvard University Dr. Jon Fullerton. The City’s Director of Organizational Assessment, Dr. Omar Easy, will be the task force’s staff director

The operational audit will look into how the shortfall occurred and “identify any funding options or operational efficiencies that may conserve funding for subsequent years.” Until the results of the audit have been produced, the mayor has called for a freeze on “any further encumbrances, discretionary spending, hiring, and out-of-state travel.”

According to CFO Demas, no forensic audit is necessary in this case. “Let me tell you, in my position as a forensic auditor, no forensic audit is needed,” said Demas. “There is no missing money, and all of the school’s funds and spending are accounted for.”

According the mayor’s office, the School Finance Review Commission is designed to “formalize the close working relationship of the city, school department, city council, and school committee and to advance accountability.” The committee, which will meet every month, will be composed of the mayor (or the mayor’s designee), city auditor, school superintendent, school business agent, city solicitor, chief procurement officer, four members of the City Council and three members of the School Committee.

“I think what I’ve proposed tonight will show us that we need more funding for our schools, and we need some help from the governor and our state legislature,” said Mayor DeMaria. “I feel that we won’t be here again, that once this is completed you’ll see during the budget process we’ll have enough funding to make sure that teachers will never have to worry about this again – or custodians, or whoever is on the layoff list, will not have to worry that when they’re offered a position, the funding is there to secure them throughout the year.”

To address the issue with state funding, the City Council has called for the creation of a delegation of members of the mayor’s office, the School Committee, and the City Council to have a dialogue with Governor Charlie Baker. “The only way we’re going to make any progress is to work in conjunction with the administration, Senator DiDomenico and Representative McGonagle,” said City Council President Peter Napolitano. “I know they’re working hard at it, but we need to get back out there and tell our story. Pretty much all of us are products of the Everett Public School system. Our kids are the biggest investment we can make in our future – cities like Everett, Revere, Chelsea, gateway communities – our kids are among the most likely to fall through the cracks, and we need to get the state to look at this a little different. We can’t be evaluated in the same way as a community like Wellesley. Our spending is different, our needs are different, and our demands on our youth are different.”

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