D.C. lacks funding for teachers raises, CFO tells council

D.C. Chief Financial Officer Natwar M. Gandhi.
D.C. Chief Financial Officer Natwar M. Gandhi. (Marvin Joseph -- The Washington Post)
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By Bill Turque
Washington Post Staff Writer
Saturday, May 1, 2010

The District's chief financial officer told the D.C. Council on Friday that the city remains short of the money needed to pay for raises in a proposed new teachers' contract and that he is not ready to declare the deal fiscally sound.

Natwar M. Gandhi's assessment means that uncertainty about the pact, hailed nationally as a groundbreaking plan that rewards teachers for performance rather than seniority, will continue at least for the near future.

The contract, which promises educators a five-year, 20 percent package of pay increases, cannot be presented to the Washington Teachers' Union or the council for approval until it receives Gandhi's blessing.

The analysis began a day of testimony from Gandhi and Schools Chancellor Michelle A. Rhee that highlighted the fiscal confusion surrounding the contract and the continuing tensions between their agencies. The Gandhi deputy assigned to Rhee's office, George Dines, said he was excluded from the chancellor's senior staff meetings because he was a temporary appointee. Under subsequent questioning, Dines also acknowledged that he had been unable to deliver timely financial reports to Rhee.

Gandhi told the council that although progress has been made in closing a $33 million funding gap, problems remain on two fronts. The city is still $10.7 million short of fully funding the pact, which will cost $135.6 million over the next four years. He reiterated that the District cannot use $21 million available from four private foundations to pay teacher salaries because the money comes with unacceptable conditions, including the group's right to withdraw it if the school system's leadership changes.

"At this time, we cannot certify the use of private foundation funds to support salary and benefits under the tentative agreement," he said.

Rhee, who followed Gandhi to the witness table, said the District is attempting to persuade the private funders -- the Broad, Arnold, Walton and Robertson foundations -- to modify their requirements. The hope is to allow the city to receive about $16.6 million in donations immediately after fiscal certification, union ratification and council approval of the contract.

The other issue is a projected $22 million in overspending in the school system's current budget. Gandhi disclosed the problem last month after Rhee announced that she intended to pay for part of the contract with a $34 million surplus. Gandhi said most of the surplus was offset by overspending on overtime, special education and central office operations.

The school system "continues to face remaining spending pressures of $22.8 million," Gandhi said. "We cannot ignore these pressures as we work to close the FY 2010 fiscal gap in the tentative agreement."

Rhee said her staff was working on a package of reductions that would fill the gaps in the contract and the current budget but did not offer much detail.

"I'm perplexed why we don't have a better handle on these numbers," council member David A. Catania (I-At Large) said.

Rhee acknowledged it would have been better to seek fiscal certification before announcing the deal. She said she and union leaders were concerned about details being leaked to the media while the contract was pending in Gandhi's office.

"We regret the recent confusion around the fiscal viability of the contract," she said.

A new potential point of conflict surfaced Friday: pressure from public charter school officials to address what they say are inequities posed by the raises promised to D.C. teachers. Public and public charter schools receive the same funding per student, but charter advocates have long complained that public schools benefit from other money outside the per-student formula. The new salary structure would place charter schools at a competitive disadvantage in hiring good teachers, charter advocates say.

Barnaby Towns, spokesman for Friends of Choice in Urban Schools, said some schools are considering legal action against the District if it does not agree to change the student funding formula to account for the pay increases.

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