York City schools: End of state oversight near?

The Department of Education deemed York City and Harrisburg in need of moderate recovery and assigned them financial recovery officers. The other two were rated severely distressed, and the department assigned receivers that could make all decisions short of setting tax rates.

The recovery officers were to work with the York and Harrisburg boards to craft financial recovery plans, which the boards were bound by law to follow once approved.

If the locally elected directors balked at a plan or failed to follow it, the state could petition the court for receivership and cut the school boards out altogether.

And in fact, the state did just that under York City’s first recovery officer, David Meckley, in 2014 — and won.

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Gov. Tom Wolf’s election and a new recovery officer appointed by Wolf’s education secretary ended the case before a court could rule on the district’s appeal.

Now, three years into a four-year plan under Saylor, the York City School District is reportedly on track to meet all of its benchmarks, according to Saylor and a recent report from a nonprofit education firm monitoring its progress.

More: ‘Substantial progress’ in York City schools, education firm says

However, while the 2012 law clearly spells out what can land a district in financial recovery, “there isn’t anything specific that says how (districts) get out,” Saylor said.

What does it mean to recover? The recovery officer is supposed to submit monthly reports to the Education Department tracking the district’s progress, but there are no goals set each month other than the district meeting its budget, she said.

Still, Saylor said, her monthly reports would factor into the department’s decision to remove the district from financial recovery, as will a report from the nonprofit consultant, Mass Insight Education.

However, since none of the four districts with recovery plans have gone on to the next step, she said she doesn’t know what that process will look like.

The first, in June, will be Harrisburg, which has reported to the education secretary and is awaiting news of whether it will be removed from recovery status, and York City will finish its plan in June 2019, according to Saylor.

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The Education Department’s communications director wrote in an email to The York Dispatch Wednesday, May 30, that getting out of a recovery was a matter of meeting exit criteria specified in each district’s recovery plan.

By law, each plan’s criteria had to include such things as a district not requesting an advance on its basic education subsidy, teacher and employee salaries being paid on time and no defaults on bonds, notes or lease rentals.

Additionally, Saylor required the York City School District to have three successive years of a positive fund balance of at least 5 percent of annual revenues and two successive years of positive annual financial results.

So far, York City has met all of these requirements, she said.

The criteria that is more subjective and open to interpretation, she explained, is the implementation of educational reforms denoted in the plan, as well as evidence of at least “significant progress” towards the plan’s academic goals in each school building.

“That is entirely up to the secretary,” she said.

But the strategies are a guideline to inform the recommendation, Saylor said, adding that some are not meant to be completed — they are ongoing.

If a declaration, at Saylor’s recommendation, terminating recovery status is not made, the school district can petition the state to have its status removed.

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Or if the district does not meet exit criteria by the plan’s expiration date, she can request time to create a revised plan — which she agreed she would want to do.

Saylor said she expects the secretary would accept her recommendation.

“I would certainly hope that we’d have had a conversation first,” she said of the secretary, so there would be no surprises.

Post-recovery: Following removal, the York City school board would essentially be on probation for five years.

The board would have full control over district management but would be monitored to ensure it meets its obligations in the recovery plan and sustains financial stability.

If the district fails to keep obligations in the plan, the secretary still has the option to petition the court for a receiver.

The York Dispatch reached out to Superintendent Eric Holmes and school board members Wednesday, June 6, for their thoughts on nearing the end of recovery.

Board member James Sawor said he’s “optimistically cautious,” adding that he still has concerns over state funding and whether the resources will be sustainable.

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Though the proposed 2018-19 budget is balanced, the district has to borrow about $2.3 million from its unreserved fund balance to cover expenditures — which Sawor says it cannot continue to do — as well as cut a $1.3 million after-school program.

“We don’t want the state to say, ‘They’re fine,'” because the district got out of financial recovery, he said, emphasizing schools still need the money due to them from the funding formula, given continuing challenges such as acute poverty.

“I believe that we’ve been doing our part, and it’s time for the state to step up and do its part,” he said.

Holmes agreed, saying in an emailed statement that with the highest percentage of acute poverty in the state, York City should be receiving an additional $51.7 million, but the funding formula only applies to new money.

More: Coalition: York City district is Pa.’s most underfunded per student

Still, he is encouraged by York City’s progress.

“The original financial recovery plan predicted that by 2018, without significant reforms, the district would have a $17 million operating deficit and a $55.7 million fund balance deficit,” he stated.

The district now has a positive fund balance, and for the sixth year in a row, a proposed balanced budget that does not increase the property-tax rate, he continued.

“We do a whole lot with a little,” school board President Margie Orr said, noting York City is “very frugal with our spending.”

Sawor praised the Wolf administration and Saylor for the success, saying the new recovery plan did not have the business focus favored by the previous state-appointed recovery officer.

“We all believed we could make it, we just needed the time and resources to do it,” he said.

But Sawor admitted that if the state did not think the district was ready, he would support staying on a recovery plan, as long as there was no additional cost to the district.