Behind the Headlines — February 26, 2016

Behind the Headlines — February 26, 2016


(female announcer)
Production funding for
Behind the Headlines is made possible in part by.. (male announcer)
The Bartlett Area Chamber
of Commerce and its member company, Ewing
Kessler incorporated providing mechanical and building control
solutions for sustainable energy efficient building performance. This privately owned
regional company is committed to relationships in service
responsive to clients’ needs. Learn more at ewingkessler.com
and ekautomation.com – Superintendent Dorsey Hopson
tonight on Behind the Headlines. [theme music] I’m Eric Barnes, publisher of
the Memphis Daily News. Thanks for joining us. I am joined tonight
by Dorsey Hopson, superintendent, Shelby
County Schools system. – How are ya? (Eric)
I’m good. Thanks for being back. – My pleasure. (Eric)
Along with Bill Dries,
senior reporter with the Memphis
Daily News. So, the Shelby County
Schools are in their third year. We were just talking about that. This is your third year as
superintendent and interim with Memphis City
Schools before that. So, three or four years. Your biggest hurdle every day
to get done what you want to get done for the school system? – Um, you know, we
always have, um, significant
budgetary challenges. It’s like every year. And if I could, you know,
put some context to it, we’ve cut about $200 million
over the last four years. You know, we have reduced
our central office staff. We’ve closed 17 schools. And despite all
those tough decisions, we’ve shown positive academic
growth and our test scores have continued to improve. But we’re at a point
now where, you know, as we go through this, this will
be our fourth budgetary cycle with a significant budget gap. There’s really nowhere else to
cut other than the classrooms. So, you know, as you continue to
try to juggle the cuts that need to be made versus the support
we want to have for some very fragile kids, it’s just tough. But at the end of the day,
I’m just so proud of our school leaders and teachers because
despite some extraordinary challenges, they continue to
show positive achievement. I’m very proud of our
school leaders and teachers. – Let’s break down
those numbers a little bit. Two-hundred
million dollars in cuts. How many student.. How many fewer students are
there over that same period of time, give or take? Right? Because there’s
so much shifting. So, just trying to
get my base line. – So, I think you have to
throw out the merged year. Because obviously we’re
about 145,000 students then. We’re at now in terms
of traditional schools, about 94,000 students. When you go back to the
Legacy Memphis City Schools, they I think were right
about 101,000 schools. But then you have to also
consider the fact that the Legacy — Shelby County Schools
now in addition to the old Memphis City Schools, there
are 18 schools that were in unincorporated
parts of Shelby County. So, you know, certainly
student enrollment declines are always a challenge. – When you talk
about the budget number, where do.. All that budget is
separate from the ASD, which we’ll talk
about a little bit. Is it separate from many charter
schools or does that number include the charter schools
under your umbrella even if they’re independent or
Shelby County Schools. – It does but all
we really do, Eric, we do just straight pass through
of the charter school money. And I think just
for context again, this year we’re losing about.. Or next year we’re losing
about $50 million in revenue. So, we made about $50,000 —
$50 million worth of cuts. But the issue becomes we have
about $26 million worth of new charter schools coming on line. So, we pass that money through. So, you have to cut, you know,
what you decline in revenues. But the you also have to
make provisions to cut for new charter school growth. – How many charter
schools separate from the ASD? How many charter
schools are there? – We’ll have 50 next year. We’ll have our budget will be
around $897 million next year. About $115 million are straight
pass through to charter schools. – We’ll get Bill
here in a second. Just a couple more details here. The budget gap for
this upcoming year, what is the number? – The number is 72 million
is what we started with. But then again, you have
to put that $26 million. You have to account for that
for the new charter schools. So, you probably have to cut
somewhere around 100 million if you’re going to cut. But the hope is that the
community and the county commission will see that
we’re being as efficient as we possibly can. And we’re getting
positive results. You know, I’m sure
we’ll talk about it. Our iZone is one of the most
successful turnaround models in in the country. So, hopefully that people will
realize that we’re being good stewards and doing a good job. And maybe we can start to get
a little financial support. – Bill? – So, as you start to talk to
the Shelby County Commission about that, what do you think
the barometer is for them after several years of
cutting your funding? Do you think that
they’re in a mood to say, okay, we’ve got it
about as far as it can go. Now let’s look at
what we can add to this. Especially since they’ve got
about $500 million in a surplus. – So, I think that the overall
tenure of the Shelby County Commission is that they’ve been
very supportive of the work that we’ve been doing. You know, they have an
obligation to be fiscally conservative and we
appreciate and respect that. And they ask some
very good questions. You know, I think
that overwhelmingly, they want to make sure
we’re being efficient. But I think we’ve shown
that we have been efficient. And, you know, the comments and
conversations that I’ve had with different county commissioners
suggest to me that if we can make a strong and
documented case based on data, there may be
some willingness to support
the school district further. – Since you were last on, we’ve
had Tennessee Attorney General’s opinion on OPEB, other
post-employment benefits. And the opinion dealt
specifically with the OPEB obligation or liability
from Memphis City Schools. Is your… Are your dollar figures
going into this new fiscal year? Does that include
the OPEB liability? – Yeah, you know, at
the end of the day, you know, we have to make sure
we take care of our retirees. I want to applaud
Terry Roland, you know, for showing some leadership
around this issue and appointing and ad hoc committee. Mayor Roland —
I mean, I’m sorry. Mayor Luttrell. [laughter] Mayor Luttrell, he has shown
a lot of leadership, too. We’ve had a lot of
meetings with him. David Reaves, we had a
lot of meetings with him. So, we’re all working
behind the scenes to figure out, you know, what the
right approach is given the Attorney General’s opinion. Notwithstanding that though. You know, we budgeted about
$32 million every year to quote unquote pay as you go to address
our employee healthcare and OPEB liability. But the reality is I think
you hit the nail on the head. In addition to having a
budgetary shortfall every year because we have a
structural deficit, you know, we have a $1.5 billion
debt that we have to figure out, you know, how
we’re going to fund. We’re trying to be as
aggressive as possible. Ideally we’d be
putting aside, you know, 25 or 30 million dollars extra
a year to make sure we fund the ARC, which is the annual
required contribution. But when you’re, you
know, struggling to just, you know, balance your budget,
we don’t have the luxury of putting money aside
to address the OPEB. – The $1.5 billion,
just so people are clear, that is the OPEB. That is the healthcare benefits. The retirement
system is in good shape? – That’s through the state. – So, that has always been. There’s not a ticking time bomb
there from your point of view. OPEB for Shelby County Schools.. I think we talked about
this last time you were on. And some people know this,
some people probably don’t. That includes retired
teachers from Germantown, from the old Shelby County
School system and Memphis. So, although the school systems
split and they are the suburban schools, you all have the
responsibility for that whole Legacy retirement system. – That’s correct. I think at the
time of the merger, the Legacy Shelby School
systems had about $400 million in OPEB liability. The Legacy Memphis City
Schools had about 1.1 billion. – So, will you.. You have talked with the school
board before about possibly changing the benefits. Will there be a proposal that
you’ll have coming up on that? – Yeah. I mean, you know, we made some
very aggressive recommendations to deal with a very
aggressive problem. I think our school
board, you know, very smartly asked us to,
um, slow it down a little bit. And we brought in some
consultants from Detroit who actually helped Detroit, who
obviously were in much worse situation than the
Shelby County Schools, get their OPEB
liability under control. So, we’re actually working
with those consultants now. We’ll be rolling out and sharing
some recommendations in the upcoming weeks. And I think the
board just wanted, A, to make sure we double check
and triple check the numbers and double check and triple
check the recommendations. But then, wanted to make sure
we had some assistance as we implement what
will be very difficult or challenging changes. – Changes are cuts
in benefits, right? I mean, lots of companies,
lots of organizations are going through this because the cost of
healthcare is getting so high. But really, it’s probably
things like higher co-pays, higher deductibles, those sorts. I know you’re not
getting in the details of it but those kinds of changes. – I mean, just for
example, um, you know, if you work for
the school system, you started working
when you were 25. You worked 30 years. You retire at 55. You get, you know, full
healthcare and the payments, you know, are, you know,
not as high as they’ve been in other places. So, one of the recommendations
that we made was to not offer employee health
insurance to pre 65 retirees. Just things like that. I mean, you know,
the reality is that, you know, with the Affordable
Healthcare Act and other different kinds of options
that exist now that may not have existed ten or
fifteen years ago, um, there’s much more
flexibility and much more opportunity to be efficient. Having said that, you know, when
people work for you for years with the promise, they expect
that promise to be fulfilled. So, I think the board is just
doing the delicate balancing act to make sure, A, that the
cuts that are right cuts. But then also that when we
make the changes in cuts that retirees are supported and
moving to a different system. – Talked about efficiency. You’ve talked about the
cuts to the administration and school closings. That was one of the
constant criticisms, I think, of the old Memphis City
Schools was that there were half filled schools just because of
population changes within the city that schools that
needed to be closed. And there’s always the
administration is bloated. You got, you know, 100
people with six figure salaries. I mean, there’s always these
kind of stories and rumor. And talk more about schools. We’ll start with
school closings. You’ve closed 17. Will more be closed? – Yes. Can I do the opposite thing? I think at the end
of the day, you know, our central office makes
up two percent of our entire budget now. It’s probably around 4.2 or
4.3 to Memphis City Schools. And so, just for context, we
have a $72 million budget gap. If you eliminated all the
employees at the central office, it’d be $18 million. So, I think that we worked
incredibly hard to streamline our central office, I
mean, almost to a fault. I mean, I think that
there are some things that I wish we had back. I think when you don’t
have critical people, it affects our ability to
have better customer service and things of that nature. But we’re working through it. – How many people in the
administrative office, the administration? – I think the total central
office is somewhere around 700 I believe. You know, but that
includes, you know, all non-school based personnel. I mean, think about it. We have a, you
know, nutrition center. We feed 1,000 or serve
100,000 meals every day. We have a $20 million
transportation contract. We have an athletic department. So, it’s a lot. But I think that we have
demonstrated and partly through the good work of
the TPC years ago. We made some very aggressive
recommendations that we follow. So, I think that we
are certainly efficient in our central office. With regard to school closures,
we’re going to have to make some more tough decisions. I say that because, you know,
we’re doing an analysis now. We’re having an
outside group, you know, paid for through the Gates
Foundation to come in and just test, you know, our footprint. And the reality is we have about
27,000 more seats than students. And when you have the
structural deficit, when you’re constantly
looking to your fund balance, we’re going to have to make
some dramatic changes to our footprint really for
our long term health. And obviously as
your footprint shrinks, you can change some
of the structures of your central office, too. So, those are things
that are gonna happen. We expect that probably
somewhere around the fall we’ll be ruling out a very,
very comprehensive footprint analysis. We’ll be getting
feedback from the community. But the reality
is that, you know, we cannot continue to
operate poor performing, under enrolled schools. – In which, it inevitably will.. People will say, that’s
great but not my kids’ school. You just get into those
incredibly difficult decisions. I mean, but you’re saying that’s
just going to have to happen. (Dorsey)
Yeah, I think it’s just really
incumbent upon me to, in a very transparent
way in different venues, you know, share the data and
then share the vision for how things can make better. Because what happens is if you
think back to a couple of years ago, we closed a couple
of schools in Whitehaven, Westhaven. And, you know, so, people
were up in arms about it. But we came up with a
solution that really, um, people were,
uh, excited about. So, we closed three schools
but built one new school. So, I think you just have to
have solutions like that where people don’t feel
like, you know, I’m getting the shaft. And I think also
included in that is, you know, when you
combine schools, we have to have a very,
very aggressive strategy for improving the
academic achievement. Because to me, this is about,
like, the dollars. What we found is you don’t
really save that much money closing schools. But what you do is you get a
larger concentration of students in a school. And you can invest
resources in that school. You know, a big problem we have
and we talk about the iZone is that, you know, we
still have, you know, a big teacher shortage. You know, we have a lot of
principals that are brand new. So, when you
consolidate then, you know, you can get, you know, your best
teachers and your best school leaders in front
of the most kids. – Let’s talk about the
competition for the teachers in particular because
we hear a lot about, oh, you’re competing with the
ASD and with charter schools and with private schools. What do you tell
teachers who teach in the Innovation Zone schools? Because I would imagine that
those other players have to compete against you when it
comes to attracting teachers because of the work
that the iZone schools have been able to do. – Yeah, I think that what I’ve
found is that the teachers who teach in the iZone
don’t do it for the money. It’s really more of
a calling, you know, as it were. I mean, you know, we
look at the iZone like, you know, the trauma center. You know, everybody, every
doctor is not going to work in the ER. You know, because you have
kids who are so far behind, they need intense treatment. You see things every day
that you shouldn’t see. And, you know, while there is
some financial incentive to be in the iZone in the form of
signing bonuses and retention bonuses, you know, teachers
tell me without exception, we don’t do it
because of the money. We do it because we
have a passion for it. But I do think that because of
the national recognition that iZone has received, we’ve
had people from D.C. here. I think people from Indianapolis
are coming next week. Nashville’s coming. Knoxville’s coming to see
the good work that’s going on. I think that that is — does
create a lure for people who are interested in turn around work
and may be interested in moving beyond the classroom
in turn around work. – So, are your
teachers there new teachers, or are they veteran teachers,
or are they Teach for America? What’s the mix? – We have a good combination
of all those teachers. I think that we looked at
some data the other day. We had a TFA contract
for our school board. We probably have 47 TFA
teachers in our iZone. But I think that more than half
are veteran teachers who have a lot of experience in turn around
schools or priority schools. – A couple just basics on iZone. Innovation Zone Schools was
started the first year that Shelby County Schools.. I mean, it’s been
around three years? – The year before. Yeah, yeah. – How many schools are there? – We have 21
schools in the iZone. I think we’re bringing
on three more next year. – And someone out
there listening is saying, that’s fantastic. How come all the
schools aren’t iZone schools? – Well, I mean, the reality
is there is a cost to it. The school day is longer so
teachers make more money. We do signing and
retention bonuses. And then we spent a lot of money
on targeting specific support around reading and around math. You know, quite frankly I wish
that every priority school we had or every bottom ten percent
school we had could be an iZone. But you have a cost,
which goes back to, you know, if you can consolidate
some schools and then invest those iZone
resources in schools, you can begin to
touch more kids. – An iZone schools,
the costs are ten percent more than a peer school, 20? – It’s about $600,000 more
because of the longer school day, because of the
intervention and support, and because of the bonuses. – You said you’d love for
all the priority schools to be iZone schools. What about the ones
that are ASD schools? I mean, where are you? There’s some political debate. There are
families, there are kids, you know, parents and so on
who aren’t happy with the ASD, which is the state run
effort on priority schools. We had Malika Anderson
on a couple of weeks ago. We’ve had you on
with Chris Barbic, a former head of the ASD
at least once or twice. Do you see that.. You know, the Vanderbilt study
came out that people can look up that pointed to
better performance in the iZone versus ASD. Is it time for all these ASD
schools to become iZone schools and the ASD to go away? – Well, I think,
again, it’s a matter of, you know, resources. You know, obviously as Chris
and I used to say all the time, we had a healthy coopertition. And the reality is
is that, you know, we have so many schools that
need additional support that the Shelby County Schools
just quite frankly, the way things are constructed,
doesn’t have the resources to address all of our
priority schools. You know, in
theory, um, you know, the ASD would
be a great partner because they bring
additional resources. Not just money resources but
also human capital resources. I think that we’d
all agree that, you know, we’d like to have
better results from the ASD and some of the charter operators. And it’s not just the
district and the ASD as a whole. There are some of the operators
and some of their direct run schools that are getting
great results for kids. So, I think that the main
challenge that the ASD is having in addition to the results
has been the perceived lack of engagement with communities. So, you know, people can’t
feel in this work you’re doing something to them, particularly
when your heart is coming from a place where you’re trying
to do something for to help. So, there’s
an article or study that came out recently, too. Just talked about the issues or
the challenges that they’ve had with engaging communities. So, you know, I want the ASD to
do well because they’re doing well, then that means kids in
Shelby County are doing well. – So, what are your thoughts
on the legislation that’s in Nashville right now that would
say either freeze the ASD where it is or abolish it out? I think both versions
are circulating out there. – I mean, I think that, um.. I think that we don’t have a
lot of time to worry about that. I mean, I think that
we’re focusing on, you know, the work
that’s going on in the iZone. I get the point. I think that, you
know, that, um, to the extent they have schools
that are doing well and they have some good practices,
there’s nothing wrong with saying let’s
figure out, you know, how to make the ASD better. But I guess, you know, if given
all the politics around all that, I mean, I
don’t really have, you know, a position
on the legislation. – Taking a look at
another kind of school, you’ve been authorized by the
school board to look at the formation of a
Crosstown High School. And those are discussions with
Christian Brothers University, with the
developers of the project. How’s that going? – It’s going well. That’s something I’m
very excited about. You know, we spend so much time
talking about priority schools and bottom five and
bottom ten percent schools. I don’t want people to forget we
have some very high performing schools in the
Shelby County Schools, too. I mean, White Station
obviously comes to mind. Whitehaven, Central,
Maxine Smith, Germantown. The list goes on,
and on, and on. So, you know, part of our
strategic plan and one of our priorities is to increase
high quality school options. So, I think Crosstown gives us
an opportunity to do just that. The vision is for a 500 student
high school right there in the Crosstown, serving Midtown
families and families throughout the county. I know that they want to be very
aggressive about bringing some private school families
back to the school system. So, um, you know, we hope to
have some proposal for the board to consider, um, hopefully
at our March board meeting. Just I think that there’s a.. You know, obviously the
board is cautious in that, you know, it doesn’t want to
have a bad financial deal. It also wants to
make sure that it, um, tends to the needs or
concerns from schools like Central who are
worried about losing kids. But I think that we can come up
with something that will be a win-win for everybody,
particularly for kids. – And the school board members
that you heard from also were particularly concerned about the
impact on the other schools as well. Does this drain
from those schools? Or is this a net
gain in students? – From my position,
I think it should be a net gain. I mean, I think that if you
create high quality schools and attract people who wouldn’t
normally be in your schools, that’s a win-win. You know, we talked about
restarting and doing something special with East High School. I still want to do that. I think the more.. The better schools we
can create or the more, uh, high, um, performing
schools we can create, I think it’s better
for the district. I think it’s better for the
community and for families. – Just a couple minutes left. About two minutes left here. The BEP lawsuit. You all are suing the state
over the funding formula, basic education programming. What’s the status
on the lawsuit? – So, the court actually
just, I think about a week ago. Everything was on hold
because there was a.. The court was considering,
uh, whether the Hamilton County lawsuit could
proceed as a class action, I believe. So, they actually just
made a ruling on that. So, I suspect that
it’ll pick up pretty soon. But even having,
you know, said that, you know, we’re
very appreciative of, you know, the Governor’s
commitment to education. He had a big inclusion in
terms of additional dollars in his budget. So, that’s certainly a
step in the right direction. – And there’s a voucher
bill up in Nashville. What is your take on vouchers? – Well, I think that, you
know, at the end of the day, um, you know, again,
you can’t control what the legislature does. You know, I think if we continue
to make better schools and have schools that are doing so well
that people don’t want to go to, you know, private schools, then
that’s a challenge for us that we need to rise to a level. – Shifting gears a little bit. A lot of discussion and we’re
doing a show on it next week and it’s just in the papers
about minority and women owned businesses and contracting. The study came out
that the county budget, it’s under one percent or
two percent or something. The city is only at 12%. That in a majority
African-American city. Do you track that? The contracting that the
Shelby County Schools does. And are you happy with your
performance in terms of minority and women owned business? – No, I think that
our numbers are, you know, very low as well. And I applaud our board
for being very aggressive. I mean, I think that we probably
will be discussing a disparity study probably at our
March board meeting. But I think at
the end of the day, what I like to see,
Eric, is that if, you know, general contractors in
this county and city know that this is important to all
governmental entities, they’re in the best
position to fix this. I mean, they go out and recruit
partners who can do the work and form partnerships. Then, you know, we might be able
to do this without all these kinds of studies. But certainly we’ve got a
big room for improvement. – Alright. Thank you for being here. Bill, thank you. Thank you for joining us. Join us again next week. [theme music] (male announcer)
Support for Behind the Headlines
is provided in part by.. The Bartlett Area Chamber
of Commerce and its member company, Ewing
Kessler incorporated providing mechanical and building control
solutions for sustainable energy efficient building performance. This privately owned
regional company is committed to relationships in service
responsive to clients’ needs. Learn more at ewingkessler.com
and ekautomation.com

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