After year of education funding fixes, Chester Upland still running in the red

Prepping seniors to walk the stage for the 2016 Chester Upland School District High School graduation ceremony, social science teacher Sherman Lineberry was all business.

“You really have nothing to do but pay attention,” he said into public-address system. “No phones, no earphones, no texting.”

On a steamy June morning, more than 200 students in matching black T-shirts practiced proceeding on and off Chester Upland’s football field.

Listening to the familiar strains of “Pomp and Circumstance,” it was easy to forget Chester’s schools almost didn’t open this year.

This year, battles in court and in Harrisburg sought to restore the Delaware County district from the clutches of skyrocketing debt. These efforts helped the district squeak by for one more year — but are not enough to put it in the black.

Off to a rocky start

Michele Paulick, who grew up in Chester, is now a public school teacher and union representative. A couple of weeks before classes were set to start, administrators handed down some bad news.

“The district coming to us and saying, ‘We may not be able to pay you,'” said Paulick.

Parents flooded a public meeting, demanding answers. Some even vowed to take their kids out of the midsized school district, 10 minutes southwest of Philadelphia.

The tumult died down after the state provided an emergency infusion of cash, paying about $5,731,000 toward the district’s debt and freeing up money for the fall’s first paychecks. But that doesn’t mean it was smooth sailing, said Paulick.

“[The administration] came to us again in December, saying, ‘We may not be able to pay you.’ They came to us again for the summer pay, saying, ‘We may not be able to pay you,'” said Paulick.

‘It’s broken for Chester Upland’

Chester Upland School District has consistently been one of, if not the most, financially distressed school system in Pennsylvania for more than a decade.

“It just doesn’t work,” said Delaware County Court of Common Pleas Judge Chad Kenney at a 2015 hearing on the school district’s finances. “It’s broken for Chester Upland.”

Local property taxes can’t support operating costs, so Chester Upland is funded primarily by the state. And the 10-month budget stalemate in Harrisburg this past year effectively poured kerosene on the district’s smoldering pile of debt.

Pennsylvania officials declared Chester Upland a “financially distressed” district more than two decades ago, due to its inability to locally fund its costs.

High poverty and a large charter sector create an environment where public schools and public charters must compete for resources — as well as students. Abetted by years of mismanagement, the result is cyclical budget deficits, cuts to programing, stagnating wages and subpar academic performance. 

Karen DeShullo, Chester Upland’s chief business administrator, said last summer the district predicted Chester Upland’s debt would multiply by a factor of six in two years.

“At that point in time, we were projecting for the end of 2017 to have a deficit fund balance of $50.2 million,” she said. A 2015 independent forensic audit showed the district has made strides to eliminate redundancies and bookkeeping irregularities

School officials blamed part of Chester Upland’s continually skyrocketing debt on charter schools, which enroll about half of the students in the district.

In 2015, Chester Upland official and state officials sued area charter schools, in an extreme example of a common gripe — that the state’s charter law is stacked against school districts.

The district argued that the boatload of money it was sending to charters for special-education students — $40,000 per student — wasn’t actually being spent on those students.

Last fall, the two sides settled and signed a new agreement, instituting a lower rate — $27,029 for special-education students — and slightly raising regular student tuition to $10,683. While that contract and fluctuating enrollment ended up costing Chester Upland more in the regular tuition column, the change to special education spending stabilized charter costs and saved the district about $9.5 million in 2015-2016.

Another win? The state passed a law that changes how it distributes its education funding — including a special $12 million annual supplement just for Chester Upland.

Those two moves helped the district avoid a debt-death spiral this year, reducing the anticipated deficit by tens of millions of dollars. The projected deficit for 2015-2016 is $8.8 million, about a third of what was anticipated at the beginning of the school year. 

As long as lump-sum disbursements don’t eliminate the gap between operating costs and revenues, debts will continue to mount. The projected deficit for 2016-2017 is $17.4 million.

Assuming pension and charter costs remain steady, the annual structural deficit is between $8 million and $9 million, according to DeShullo.

That means school administrators are on the lookout for novel ways to cover basic costs.

“One of the things we’re looking to do in the next coming year and going forward is to really seek more revenues from private donors … fundraising for operations for the district,” said DeShullo.

Teachers gonna teach

When district officials said they couldn’t pay teachers in the fall, instructional and support staff voted to work anyway.

“These temporary fixes are just to keep egg off the faces of those who are giving us little drips and drops, to keeping it from looking like they’re totally derelict in their duty,” said Pete Cosfol, biology teacher at Chester Upland’s STEM Academy at Showalter, the district’s merit-admission middle and high school.

Cosfol has taught in Chester Upland for 23 years, nearly the same amount of time the state has had oversight in the district. In spite of this year’s financial difficulties, he said, his classroom didn’t suffer.

“I can well separate the two because the school has never run better, I don’t think,” he said, attributing much of that success to Showalter’s new principal, Jonas Crenshaw.

Richard Paquette, a social science teacher in the same school, agreed on the positive academic trajectory.

As the father of young children himself, he said the prospect of not getting paid at the beginning of the school year was “a nightmare.”

“Not knowing if I was going to be able to pay my mortgage, if I was going to have to borrow money from my parents to feed my children, if I was not going to be able to come to work because I couldn’t afford child care,” he said.

Chester Upland officials will present the district’s 2016-2017 budget — and its projected $17.4 million deficit — in a public meeting on June 30.