Feature                                                      Pages 28-31


The Complicated Layers of

Competing Interests 

In addressing Erie, Pa.’s, dire fiscal state, a superintendent discovers what it takes to find common ground and mutually agreeable solutions.


Anyone who has served in the role of superintendent, no matter the size of the district, has had those moments at day’s end when rather than reflecting, you simply shake your head and try to recall everything that happened since you walked into your office that morning.

While thinking about the complexity of district leadership, a number of metaphors come to mind, but no matter how skilled I think I am at organizational leadership, there are days when I am simply the shiny steel ball in the pinball machine. Other days, I am the chef at a busy restaurant, the referee at a particularly contentious and combative ice hockey game, a firefighter, police officer, judge, sales representative, diplomat and even a teacher. In some districts, we assume the title of CEO, just like leaders in the corporate world.

Jay Badams
Jay Badams, superintendent in Erie, Pa., pushed for complete transparency while addressing the school system's financial woes. 

In many ways, school superintendents do serve as CEOs of their organizations. Like corporate chiefs, we serve at the pleasure of a board of directors and lead all functions of the organization. In the private sector, making money is the mission of the corporation, and the primary responsibility of the CEO is to maximize profits.

Customer Identification
For school chiefs, the mission is much more complex. Our boards meet at least monthly to approve every expenditure and personnel action. Another major distinction is evident when you consider the primary “customers” of the corporation and the school system. From a business perspective, the customer is the individual or organization that buys the product or service, but in our schools and districts, the customer is the student. Or is it the parent? Or the business community? Or the taxpayer? Or the teaching staff? Or is it society at large?

In the business of education, the answer to each of these questions is “yes.”

Unlike a traditional business whose product or service is targeted to a specific consumer, school systems serve everyone. For students and parents, our product is an education. For employers, our product is a skilled and knowledgeable worker. For the taxpayer, our product is frugal stewardship of public money. For society, it’s an informed and responsible citizen. For our employees, the product is a satisfying career with opportunities for growth and a reliable income.

Each of these customer groups also has varying and often competing interests and priorities. Parents often demand smaller class sizes, enhanced transportation, more arts and extracurricular opportunities, one-on-one tutoring, competitive sports and state-of-the-art technology — all while nonparent taxpayers complain they have no children in school yet must fund the continually increasing costs to educate their neighbors’ kids.

Some of these groups even have conflicting needs regarding the school district. A local business leader may decry the unmet need for more technical instruction for students while simultaneously rejecting the notion of a tax increase to fund it. Teachers may want annual salary increases but also reduced class sizes. Many in the community hold a positive view of the teacher in the classroom, the Friday night football game and the graduation celebration yet loathe the taxing body that makes it all happen.

Fiscal Woes
This swirling mixture of competing needs and priorities is most obvious in the context of the annual school budgeting process in which the board of education and district administration must decide what will or will not be funded in the coming year. In Erie, our relatively poor, urban district has faced crushing shortfalls for three consecutive years.

I became superintendent of the Erie Public Schools in June 2010, just as the combined effects of many years of unabated spending, five years of no tax increases and the end of federal stimulus funding left our district with a $16 million cumulative cash-flow deficit and a $26 million shortfall in a $147 million budget. Our district was on the verge of requiring state intervention.

For us, there was no easy solution. We had no choice but to raise revenue and drastically reduce expenses. Further, we would need several years to work our way out of our predicament, so we were asking all of our stakeholders to make a series of sacrifices over multiple budgets. In the first year, our solution combined a tax increase, a massive staff reduction and a bond refinancing. Last year, our approach to the budget spared taxpayers and staffing but necessitated the closure of three schools. And for 2013-14, our board and administration proposed another tax increase and further administrative and noninstructional staff reductions.

In the 2011-12 budget, the public was outraged at the prospect of increased taxation, and many questioned both the competence of district leadership and the integrity of the elected board. Early on, rumors germinated and grew about what programs would be cut, which schools would be closed and who would be furloughed.

I believed the only way I could successfully lead our school district through this crisis was by using education, transparency and dialogue to engage the entire community in the solution of this problem. So our leadership team began to inform the public about the looming crisis as early as July 2010, one month after I assumed the superintendency. I met with the Erie Times-News editorial board, appeared on morning AM radio talk/call-in shows and sat for an extended interview on public radio. We produced a website with a public survey about budget priorities and announced a series of interactive public meetings. During the crisis, I also was in the middle of the University of Pennsylvania’s Mid-Career Doctoral Program, which added another layer of complexity, but this also provided additional resources and expert counsel.

We would need everyone with a stake in this problem involved in its solution, so I established three advisory groups — a business advisory group consisting of CFOs and CEOs from local businesses; an academic advisory group of higher education leaders from several area universities; and a community advisory group with a broad membership of parents, nonprofit leaders, clergy and taxpayer advocates. These groups not only provided useful advice, but because we shared all of our audit reports, financial statements, and budget documents with them, we began to regain their trust. In turn, they repeatedly validated the actions of our board and administration and became key communicators and brand ambassadors.

Community Outreach
Ultimately, the single largest component of our budget solution was the reduction of more than 300 positions from a staff of about 1,500. Teaching positions made up the bulk of the cuts, but we eliminated a greater percentage of administrative jobs. We also gained support for a nominal tax increase and refinanced a $6 million bond payment.

As soon as we understood the magnitude of the necessary retrenchment, we brought in support from the state Department of Labor to meet with affected employees. We communicated so often and so thoroughly about the district’s financial situation that, by the end of June, when the board passed the final budget, few people even attended the meeting.

While we were able to avoid the trauma of school closings in the 2011-12 budget, we faced a $13 million deficit in the subsequent spending plan. The 2012-13 budget reflected significant reductions in state funding as the state capitol responded to its own budget woes. Since we were in the middle of a comprehensive facilities plan, we already had identified more than 7,000 empty seats in our 21 schools that serve about 12,000 students. Using a variety of enrollment projections and dozens of GIS maps, we identified three elementary schools that could be closed. Further disrupting our district, three additional schools would need to be reconfigured to accommodate this consolidation.

Again, we held numerous public meetings, met with the daily newspaper’s editorial board, built an online transparency portal with all information, carefully informed our families and staff and held facilitated meetings at every school that would be affected. Widely publicized data and frequent and open communication led to public meetings at each school that started out tense and emotional, but ended with applause. Our leadership team and board were surprised that the significant restructuring went so smoothly and that our families and staff adjusted so quickly.

In this budget year, we are dealing with a $9 million shortfall. Closing a gap of this maginitude in some ways poses a more daunting challenge than the $26 million crisis that marked the beginning of my tenure as Erie’s superintendent. We have already cut staff, closed schools, and refinanced our debt. We have pared spending so much that little remains to cut.

At this point though, our whole community understands the significant financial challenges facing our school system and has been largely supportive. Further, because we have opened our decision-making process to unprecedented public involvement and scrutiny, we have earned the trust of these diverse stakeholder groups, even though their interests and priorities may still be at odds.

We have provided constantly updated budget information on our website (www.eriesd.org/budget), which helped us earn top recognition for transparency from the nonprofit Sunshine Review. In this year’s budget, we have appealed to taxpayers for a tax hike but have matched the new revenue with equal spending cuts. We also developed a nonprofit foundation to enable the investment of our philanthropic community.

Common Ground
The solutions to each of our past three budget challenges were wrapped in complicated layers of conflict among groups with competing interests, between well-established organizational practices and the demands of the new fiscal reality, and between the needs of the organization and the needs of the external community.

In fact, even among various segments of the external community, the district’s financial crisis posed different potential costs, and thus created conflicts among them. So we sought common ground — we secured agreement from our staff, business leaders, nonparent taxpayers and the local news media that our schools’ and students’ success are vital for the health of our society and our economy.

In our case, the work was not only an attempt to balance a difficult budget but also a strenuous effort to change the values, attitudes and behavior that had brought us to such a perilous position.

Jay Badams is superintendent of the Erie School District in Erie, Pa. E-mail: jbadams@eriesd.org

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