City residents will have two opportunities in the next few days to hear from Rochester City School District Superintendent Terry Dade about the district’s $30 million shortfall for 2018-2019.
Dade is scheduled to address the district’s audit committee at 5:30 p.m. Oct. 8 in conference room 3A at the central office, 131 W. Broad St.
Dade and members of the finance committee are scheduled to answer questions from City Council beginning at 5:30 p.m. Oct. 10 at in council chambers at City Hall.
The shortfall, revealed in late September, is the latest flashpoint between the city and the district. In early September, the city lost an appeal to have a referendum about the school board placed on the November ballot.
City Council on Sept. 30 passed a resolution requesting the state to “institute immediate structured and monitored financial constraints” on the district. The resolution does not say what those constraints should be.
“Now it’s up to the state to make a decision,” school board president Van White said.
White said that the board has been transparent about the shortfall and that he and Dade have met with state education officials.
White said the $30 million deficit – due in part to overruns in health care benefits and tuition for students attending charter schools – is 3 percent of the district’s nearly billion-dollar budget. White said he did not want to minimize the amount.
“It’s significant,” he said. “Any amount that is not accounted for and not reconciled with existing resources which the board approved, that’s serious.”
White said the board welcomes the upcoming audit from the state comptroller’s office.
The Children’s Agenda, which advocates for the health, education and welfare of children, is dissecting the district’s budget situation. Go to thechildrensagenda.org and click on blog posts.
In passing the resolution, council said it was worried that the district’s money problems could haunt the city’s financial reputation. The resolution declared that the district’s financial crisis cannot be resolved without help from the state. It also said the district showed “chronic mismanagement and habitual excessive spending” and possibly withheld information to national debt rating agencies. The resolution also cited recent court decisions that “have made it clear that the State controls all matters related to education,” a reference to the court decision barring the referendum about the short-term fate of the school board.
This latest crisis involving the school district came to light when in September when White said the district went public with the results of an incomplete external audit. White said that auditor notified the district’s auditor. White said the district overspent by $22 million, and had needed to replenish $8 million in reserves.
A letter to City Council from Mayor Lovely Warren and Council president Loretta Scott requesting the resolution for the state to intercede stated that the city is concerned that the 2019-2020 budget also may be overspent, “compounding this problem for the children and families of the School District as well as the City’s taxpayers.”
During the Sept. 30 meeting, several council members expressed concern that the district’s fiscal situation would hurt the city’s standing and called for the need for financial stability in the district. Some council members also said there was a crisis of confidence among city residents with the district.
Several days before council met, the bond rating firm Moody’s notified the city that its Aa3 debt rating was under review because of recent reports of the district’s shortfall. Changes in debt ratings can affect a municipality’s ability to borrow money or what it pays in interest.
On Sept. 23, Warren wrote to Gov. Andrew Cuomo about the district’s shortfall, which she said came through news reports. She asked that the governor “work with your partners in government to completely sever the connection between the City and the School District, and empower it as a distinct entity consistent with how the vast majority of the State’s 400-plus school districts operate.”
In that letter, she also asked for the state to investigate the District’s finances “for the sake of our children and their families.”