State threatens ‘emergency action’ on Hillsborough school finances

TAMPA — Weeks after the Hillsborough County School District cut more than 1,000 jobs from its workforce, the Florida Department of Education is warning it might place the system in financial receivership.

Under that scenario the state would assume control of finances in the nation’s seventh-largest school district. The highly unusual step would include a forensic audit of all accounts and records and appointment of a financial emergency board.

“Make no mistake about it,” Commissioner of Education Richard Corcoran wrote in a letter Thursday to the School Board and superintendent Addison Davis. “If your board neither possesses the will nor the ability to develop an appropriate plan that will improve your fund balance to meet requirements outlined in statute, I will be forced to utilize the totality of the powers delegated to me by the Legislature and State Constitution to take emergency action.”

Corcoran requested a detailed financial recovery plan within 20 days.

State law requires districts to maintain a reserve that is equivalent to 2 percent of anticipated revenues. District leaders have warned for months that, absent deep cuts in spending or a new source of revenue, they would run out of money in June.

Hundreds of millions of dollars are anticipated under the federal government’s COVID-19 relief plan. But that money flows through the state. According to Corcoran’s letter, the Legislature will not make the federal money available until the 2021-22 fiscal year, “which could be too late to prevent the immediate risks you are facing.”

What’s more, Corcoran wrote, “I strongly encourage you to remember that fixing a long-term problem by using a short-term resolution will not get the district on solid ground.”

The slow release of federal funds has been a source of frustration for school district officials and Democratic leaders alike. On Twitter, U.S. Rep. Kathy Castor offered this response to Corcoran’s letter: “Actually State of Florida should stop slow-walking emergency aid intended for local schools and students ... and fund public education, not leave us in the basement!”

Corcoran, in his letter, recounted the recent history of the district’s finances, including the discovery in 2015 that it lost $200 million after it shifted to a new teacher payment plan.

By the district’s own admission, he wrote, a leading driver of its operational deficit was “longstanding overstaffing by a few thousand employees.” More recently, he wrote, the finance staff alerted his agency that Hillsborough anticipated a negative balance of $107 million as of June 30.

Financial receivership is not the same as a complete state takeover. Instead, the state assumes control of the district’s finances until the emergency passes. This has happened twice before in Jefferson County, a small rural district where a charter operator was installed to run all of the schools.

Manatee County’s district came close to an emergency status, but worked with the state to avoid official action. No one has suggested a charter operator in Hillsborough.

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Corcoran wrote that he has “grave concerns regarding sometimes chaotic local discussions and actions” in Hillsborough. He did not elaborate, leaving it unclear if he was referring to public discussions about Davis’ future.

Complaints about Davis and the team he recruited from his last post in Clay County have reached a fever pitch ever since more than 1,000 positions were cut districtwide. Parents and teachers inundated School Board members with calls and emails. Social media sites have cropped up along with an online petition demanding Davis’ resignation.

More recently, in what Davis acknowledged as a breakdown in process, close to 100 teachers learned of their dismissal in a batch email on a Friday afternoon.

Davis and his team have maintained all along that they inherited Hillsborough’s financial mess when they arrived in early 2020. The letter from Corcoran, potentially, supports that position.

Department of Education spokeswoman Taryn Fenske said the state has been working with the district for months on ways to improve its financial picture, and the activities of the past few days made it more clear that state action might be needed.

“It seems like the focus isn’t on getting things in order. It’s about pushing blame, when this has been a problem even before Addison Davis came along,” Fenske said. “The fact is, they have a financial issue. Get it fixed.”

In a written statement, Davis said: “For the last nine months, I have shared publicly the critical state of the financial picture for HCPS. My leadership team has identified and implemented strategies that have helped to mitigate this crisis through staffing allocation cuts and other measures. These decisions have not been easy and I understand the community’s frustration and angst.”

The statement continued: “We have done everything to minimize the impact on individuals, but I know that they have affected our teachers, students, families, and school-based administrators. All of this has been necessary to avoid a state takeover, and I look forward to working with the Board in the weeks and months ahead as we continue to improve and work in the best interest of our primary stakeholders — the students.”

At a retreat earlier this week, School Board members decided to draft a professional development plan to address areas where they want Davis to improve. They agreed to meet next on Tuesday to do this work.

Then, in a twist, Chairwoman Lynn Gray scheduled an emergency board meeting for 10:30 a.m. Friday to share information with board members that pertains to Davis’ leadership.

She did not specify what that information is. But some in the community are anticipating results from a survey of school leaders by their membership organization, the Hillsborough Association of School Administrators. The survey asks 20 questions that speak largely to Davis’ management style.

At the Monday retreat, several School Board members said they are hearing principals feel overwhelmed and disenfranchised. Board member Melissa Snively, who defended Davis vigorously, said she has told him many times that “it is very critical that he creates and cultivates a relationship with leaders of the school. I think everybody is important. Principals, it’s critical.”

The administrators’ association planned to close out the anonymous, online survey Thursday evening. Executive director Ray Bonti said he hopes to meet with Davis to discuss the results before sharing them with the board and public.