PHILADELPHIA – If ever there was a school district with huge financial problems, it’s Philadelphia’s.

spending report graphic nbThe alarming media headlines have told the story for the past few years:

From January, 2012: “Philly schools send layoff notices to 1,400.”

From June 2013: “3,783 being laid off by Philadelphia school district.”

From August 2013: “Philadelphia borrows so its schools open on time.”

Sounds like a desperate situation, doesn’t it?

But maybe the school district’s financial problems do not have to be as grave as they are. Perhaps this district is a lot like an alcoholic who complains about being broke and homeless, yet spends all of his money on booze.

How else can a district with a $300 million deficit explain having 395 employees making more than $100,000 per year in straight salary, totaling more than $50 million per year?

How else can this district spend more than $132 million per year for health insurance for teachers union members alone, while the teachers contribute a measly $288,000?

How else can the district pay $5.2 million per year toward a “wage continuation plan” for sick or injured employees, or $36 million in severance pay for those leaving the district?

EAGnews came across these disturbing figures – and many more – as part of our continuing “Where Your School Dollars Go” series. We inspected checking records and filed freedom of information requests in an effort to track as much district spending as possible in the 2011-12 and 2012-13 fiscal years.

There’s absolutely no reason for this type of spending when district leaders are begging state and national officials for operational funds to keep their doors open.

Some say the Philadelphia school district is broke? We say district and union officials have nobody to blame but themselves.

Big salaries and benefits

Even if the Philly school district didn’t have big money problems, the huge salaries it pays hundreds of employees could hardly be justified.

Its four-year graduation rate in 2012-13 was 64 percent, nearly 20 percentage points behind the state average. Only 38 percent of 11th graders scored at or above proficiency in math on 2012 state tests, compared to 60 percent statewide. The students turned in the same type of results in reading and science.

Big dollars for staff should equal impressive results in the classroom. We fail to see how district residents would tolerate anything less.

Yet the 20 highest paid employees – all administrators, starting with Superintendent William Hite ($270,000 per year) make a combined $3.3 million in straight salary. And as mentioned above, 395 employees are currently making at least $100,000 per year, with their combined salaries totaling $51.7 million.

The budget cutting should begin with those salaries.

Union labor costs are also a huge problem for the district, mostly due to costly provisions in the Philadelphia Federation of Teachers’ recently expired collective bargaining agreement. That’s why, when school officials recently asked the state for $40 million, Gov. Tom Corbett demanded that union labor costs be addressed first. He knew there was no point in chasing good money after bad.

The most recent labor costs we were able to track came from fiscal 2011-12, and they’re enough to turn a taxpayer’s stomach.

Of course, the teachers all got their automatic, annual “step” raises, regardless of their classroom performance or the district’s financial condition. That cost the district a cool $16.8 million. They also received a three percent general raise, costing the district $14.4 million, according to documents obtained from the district.

The district also paid teachers an accumulated $1.4 million for “lost preparation time.” It paid $5.2 million toward a “wage continuation plan” for disabled employees who have exhausted their sick leave. It paid an extra $519,168 to teachers who attained Level 1 or 2 teaching certification. It paid $36.2 million in severance pay to employees leaving the district due to resignation, retirement or termination.

It even paid $2.3 million to a fund that helps pay union members’ personal legal costs!

And what about health insurance for members of the teachers union?

“…For the fiscal year ending June 30, 2012, the school district’s Benefits Office reports that health insurance claims and associated administrative, wellness and disease management costs and fees for employees represented by the Philadelphia Federation of Teachers was $133,061,332, of which $132,773,073 was paid by the agency (district) while $288,259 represent employee contributions … ,” according to the district.

Talk about a gravy train for teachers. Most school districts around the nation require employees to pay at least 10 to 15 percent of their health insurance costs. In the private sector the norm is closer to 30 percent. Philadelphia teachers paid less than one percent.

And they wonder why this school district is broke.

The union labor costs listed above add up to more than $208 million, and there are a lot more labor costs that we didn’t collect. If the district did nothing else but cancel or trim all of the union perks, that $300 million deficit could be gone overnight.

Travel and food

The Philly district’s wasteful ways don’t end with labor costs.

Most large metropolitan districts spent a great deal of money on travel, including ritzy hotels across the nation. On the surface the Philadelphia district seems relatively innocent, with a combined hotel tab of $121,249. And most of that expense was for student trips.

But as it turns out, we weren’t able to view the expense for staff trips. That’s because employees fill out travel request forms in the buildings where they work, and those forms are not forwarded to any central office. The employees also receive advances for most travel costs, so the money is recorded as part of payroll and not segregated into travel costs.

In short, we were not able to track the amount that school employees spent at hotels, but based on the tabs rang up in other large urban districts, the total is probably six or seven figures per year.

But we can report that the district spent $238,666 on restaurants and catering in 2012-13.

The $201,609 catering total included $72,822 at Frank’s Catering, $48,144 at Al’s Corner and $39,750 at Diantonio’s Catering.

Most of the catering costs covered meals for student activities, open houses, parent meetings, workshops and professional development sessions for teachers, according to the district. Do all of those types of affairs have to be catered?

The $37,056 restaurant tab included $7,957 at City View Pizza, $7,426 at Nick’s II Pizza, $4,375 under a separate line item for City View Pizza, $4,232 at Ba Le Bakery, and five more businesses where more than $1,000 spent.

The district “invested” a great deal of money in various ethnic organizations, including African American groups ($552,631), Latino organizations ($3.8 million), Jewish organizations ($170,830) and Korean/Vietnamese organizations ($261,306).

One of those organizations, the Coalition of Schools Educating Boys of Color ($478,751), provided “in-classroom mentors, professional development and conference opportunities,” according to the district. The service must have been pretty awesome to command that type of fee.

Ashleigh Costello contributed to this report

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