As the Scranton School District’s deficit continues to grow, the Pennsylvania Department of Education placed the district in financial recovery status today.
The step, which includes having a chief recovery officer work full-time onsite, was one that district officials hoped to avoid. Financial recovery is one step before receivership, which would include the state taking control of operations. Under financial recovery, the school board still has power to govern and make final decisions.
The school district received notice about 4:30 this afternoon.
“At this time, I have no comment,” Superintendent Alexis Kirijan, Ed.D., said. “I have sent the information to the board. I plan on discussing everything with the board.”
Rosemary Boland, president of the Scranton Federation of Teachers, said she received a call from Gov. Tom Wolf this afternoon.
“We take this seriously, of course,” said Boland, whose members have worked under an expired contract since 2017. “I told him I appreciate the fact that he’s thinking about us.”
Scranton, which last year had the largest accumulated deficit in the state, joins Harrisburg, York City, Duquesne City, Chester Upland and Penn Hills in recovery.
The chief recovery officer, to be named by the state, will work with school officials to implement a financial plan to lead the district into solvency and position it for academic success. Chief recovery officers have backgrounds in school leadership and business management and have direct access to PDE experts.
In addition, a special advisory committee established by the school board will work with the recovery officer to provide recommendations and feedback on the financial recovery plan. The committee will meet with the recovery officer on a monthly basis.
Scranton has been designated as a financial watch district since June 2017, receiving technical assistance from PDE on financial and budgetary issues. It also received $2 million in additional state revenue during the 2017-18 school year and $6 million during the 2018-19 school year.
Despite these efforts, the district continues to experience ongoing and significant financial difficulties and now meets relevant criteria to be placed in recovery status, including:
n The district’s unreserved fund balance has declined for three consecutive years and is less than five percent of the school district’s annual expenditures.
n The district’s total outstanding debt is greater than the school district’s total annual expenditures.
n The district experiences a delinquent tax rate of more than 10 percent.
n The assessed valuation of taxable real estate in the district, as certified by the State Tax Equalization Board, has not increased over the previous five years.
n The district experienced a deficit of three percent or more for three consecutive school years, resulting in a reduction of unassigned fund balance each year.
The district has until Jan. 30 to appeal this designation to Secretary of Education Pedro A. Rivera. If an appeal is not filed by then, PDE will appoint a chief recovery officer within five days.
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Contact the writer: shofius@timesshamrock.com; 570-348-9133; @hofiushallTT on Twitter