Thursday, July 21, 2011

City, MCS Appear to Reach Tentative Agreement, Allowing Schools to Open Normally

Posted By on Thu, Jul 21, 2011 at 11:00 PM

MCS Board member Tomeka Hart and Council member Shea Flinn exchange views.
  • JB
  • MCS Board member Tomeka Hart and Council member Shea Flinn exchange views.
So it looks like we’ve got a deal to avert any hitch in beginning the 2011-12 school year — a tentative one, mind you, inasmuch as it still has to be formally approved by the full City Council, sitting as such, and the Memphis City Schools board.

But the ingredients of the deal, however masked in obfuscatory language, are clear enough: The city school board, which had threatened to cancel out the coming academic year if the City didn’t pony up in full on its court-ordered debt to MCS, has basically agreed to shave the debt down if the City agrees to pay up right away.

There were several phases to the Thursday afternoon showdown meeting that yielded this result.

Phase One was a presentation of the schools’ case, introduced by MCS board chairman Martavius Jones, in the presence of a majority of his Board members. Dr. Alfred Hall, MCS Chief of Staff, repeated the substance of the Board’s shocking Tuesday night resolution, asking the Council for immediate “full funding” of the $78.5 million which the courts have affirmed as the City’s maintenance-of-effort obligation to the city schools. The resolution had insisted on immediate payment of a $55 million installment.

Then MCS administrator Pam Anstey presented a detailed prospectus outlining the school system’s obligations, as well as its layoffs and other retrenchments, and the apparent fact of a remaining $160 million “budget gap” which — given what Jones contends is the depletion of the MCS reserve fund — had made it impossible to begin regular school operations this fall. Hence, the resolution passed 8-1 Tuesday night demanding an immediate $55 million payment from the city to avert a shutdown.

(And Jones, who had been the sole holdout on that night’s vote, said Thursday he would vote with the majority on the basis of what he has since learned.)

Phase Two, after a solicitation of audience input from Council education committee chair Wanda Halbert, who presided over the meeting, consisted of several orations on behalf of the schools.

The first of these, from Memphis Education Association Keith Williams, was a paean to the plight of teachers and students cruelly kept from their annual back-to-school rites by a heedless city government. Expressed in high-decibel rhetoric, it might as well have been, and maybe was, designed for CNN, one of the several news organizations, national and even international, which had delved into the Memphis situation once the prospect of canceling out a school year became public on Tuesday.

The final audience speech, though equally impassioned and a good deal more open-ended, came from one Chris Lareau of Stand for Children, and it concluded with Lareau’s plea that Jones and Council chairman Myron Lowery carve out a compromise and shake hands on it that very night. The progression from Williams’ seeming intractability through an intervening parent’s plea for reasonableness to Lareau’s call for a handshake deal was striking, and it suggested that an agreement might indeed be in the works.

But first the two sides staked out their opposing positions, including the MCS board’s fear, articulated by board attorney Dorsey Hopson, that the City was waiting out a ruling by federal judge Hardy Mays on city/county school-merger litigation that might result in the immediate liquidation of MCS as a governing unit and, with it, the erasure of the Board as a formal creditor.

That was balanced by Council attorney Allan Wade’s concern that, if Mays should so rule, any commitment in the meantime by the City to continued maintenance-of-effort payments now could be legally insisted on in the future by Shelby County Schools as a successor organization.

Then came a period when Council members extracted admissions from the MCS contingent that city school enrollment had fallen off, potentially justifying a reduction in the amount of the Council’s annual M.O.E. payments.

After several back-room conferences involving Jones, Hopson, Memphis Mayor A C Wharton, Councilman Shea Flinn, city finance director Roland McElrath, and others, the slipping enrollment became the basis for a formal resolution, introduced by Flinn and unanimously approved, that in determining the amount it owed MCS the City should resort to a “Test Two” formula, taking into account changing school-enrollment figures.

Further questioning by Council members established the likelihood that such a gauge might shave as much as $10 million off the current flat sum of $78.5 paid annually to MCS. A precise sum of $68,407,336 finally emerged somehow.

For purposes of comparison, the total proposed MCS budget for 2011-12, drawing on state and federal monies, and a variety of other sources, is $884,738,673 — a disproportion that had caused some to question the claim of the MCS board that it could not open the schools without full payment now from the City.

In the end, Wharton came to the well of the Council to announce a commitment by the City to pay $15 million by August 15, and further sums in installments through the autumn months according to the average rate of City payments to MCS from 2000 through 2011. Since the two sides had already stipulated that, on average, some 82 percent of the M.O.E. total usually got paid through October, that commitment became one of the legs of an apparent deal.

The other leg, provided that the MCS board confirms the arrangement at a special meeting on Friday evening, is based on the Council’s “Test Two” resolution, giving the Council the “option” of paying a sum based on reduced enrollment rather than on a full flat $78.5 million annual sum. The proposition is a little like one man’s owing another $25 but having the option, with the creditor’s consent, of repaying only $20.

To put the proposed deal in simplest terms, the City has to pay up $15 million by August 15th instead of $55 million as the School Board had wanted, and it can, with MCS acquiescence, knock a little off the top of the final sum.

If the Board says yes on Friday night and the Council okays the full MCS annual budget at its forthcoming August 2 meeting, the schools will open as usual. Keep in mind that this newly bartered agreement governs only the maintenance-of-effort sums called for in the 2011-12 school year.

Precise arrangements have not yet been made for repayment to MCS of the $58 million still owed by the City from the year of 2008-9 when the Council withheld that much from its M.O.E obligation, gambling that the courts would designate Shelby County government as the sole local funding source for all public schools.

That state of affairs, coupled with court orders, is what has endowed MCS spokespersons with debt-collector rhetoric, able to treat the City, in the words of Hopson Thursday night, as an entity always "in arrears."

UPDATE: Early Friday afternoon, Memphis City Schools superintendent Kriner Cash notified Memphis City Council chairman Myron Lowery and others of the cancellation of Friday evening’s scheduled meeting of the MCS board, called to ratify the tentative serttlement reached Thursday night with the Council.

Here is Cash’s explanation of the cancellation:

Dear Memphis City Schools Family,

On the advice of legal counsel, the Memphis City Schools Board of Commissioners have postponed their Special Called Board Meeting that was scheduled to take place this evening, (Friday, July 22, 2011) at 6:45 p.m.

Attorneys for Memphis City Schools and the Memphis City Council are in the process of working out the details of a potential agreement in order for us to open school on time. Once all of the details have been worked out and mutually agreed upon, a legally binding contract will be presented to both legislative bodies for their respective consideration.

The MCS Board of Commissioners will meet to discuss and possibly take action on said legally binding contract at the appropriate time. It must be emphasized that there is no binding agreement until both governing bodies have taken public action, approved the agreement, and officially signed off on same. Parents, students, employees, and the general public will be properly notified once a meeting has been scheduled. It remains this Board's and Administration's expectation that school will begin on its originally scheduled date of August 8, 2011. All preparation and planning work to accomplish this will continue as scheduled.

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