Russo says she had layoffs prepared

City's ex-schools chief denies blame for finances

November 21, 2003|By Liz Bowie | Liz Bowie,SUN STAFF

Former Baltimore schools chief Carmen V. Russo defended her administration yesterday by saying that she had left a list of 400 to 500 people to be laid off and discussed the issue with incoming chief Bonnie S. Copeland before her departure, a claim that immediately drew criticism from Copeland and board members.

Those school system workers weren't laid off and the failure to do so has become one of the key points in assigning blame for a financial crisis that is forcing the layoffs of up to twice that number of school system employees by January.

"When I left I had some pink slips in place. I discussed it at length with Dr. Copeland," Russo said in an interview from her home in Boca Raton, Fla. Copeland took over as chief executive officer July 1.

Copeland responded: "I never saw a list of four to five hundred. ... I can never recall a conversation about laying off people immediately."

Two board members said administrators developed a list earlier this year, six months before Copeland became CEO. They said they believed that the staff reductions had been made - as the board had directed - before Copeland arrived.

"We had senior executives promise us they were going to make these cuts. They promised us over and over they would make them in the summer, when the cuts would require fewer layoffs," said Sam Stringfield, vice president of the board.

Another board member, Kenneth A. Jones, also reacted to Russo's claim. "That statement says to me that Carmen Russo is willing to say anything necessary to prove that she did a good job with her fiscal management in Baltimore. She did not," he said.

If 500 employees had been laid off earlier, the overspending would not have continued through this month and the system would have been in far better financial shape today.

Russo has taken much of the implied blame in the past few weeks for overspending that created a $52 million cumulative deficit by the time she left. But she said others share responsibility, although she won't name anyone.

"If we are talking about blame, blame has to be shared. No one was as aggressive as they should have been 18 months ago," Russo said.

When it became clear that the school system had a growing deficit a year ago, Russo laid off hundreds of temporary employees and proposed several steps that could be taken to avert a larger deficit, including furloughs, further layoffs and cuts in spending at the school level.

But most of those actions were delayed or never approved by the board.

In May, when she and former Chief Financial Officer Mark Smolarz proposed a budget for the fiscal year beginning July 1, they said the budget could be balanced only by cutting 600 positions, most of which they hoped to accomplish through retirements and attrition rather than layoffs.

Russo said she prepared with her staff a much larger list of names of people to be laid off and that it was "90 percent" ready. She said she did lay off 75 people, but didn't initiate the much larger reduction because it took a long time to develop the list and she ran out of time.

Brian Morris, who became a board member in July, disputed her account.

"I think there was direction from the board early this year to do [the layoffs] and plenty of time for [Russo] to do that. Why they were sitting on her desk is a mystery to me," said Morris.

Russo said eliminating the temporary employees shortly before Christmas had been so unpopular that it became difficult to continue with more layoffs. But she said the system's administration should have been reduced as the enrollment declined over the past decades.

"The history of the school system is an inflated payroll," Russo said.

Smolarz said that the layoff decision was put off to the end of July when employees have to declare whether they are retiring or leaving. In some years, he said, as many as 1,000 people have quit or retired, which would have eliminated much of the need for layoffs.

But this year only about 250 people decided to leave. In addition, he said, the system hired too many teachers.

The seeds of the fiscal crisis were sown long before this past summer, however. Russo and others say officials may have underestimated the difficulty in creating an independent school system from what had been a department of city government before 1997.

"I am not into finger pointing and blame here," Russo said. "People didn't realize there was no financial infrastructure. This is something that has haunted the system as it became independent."

Without a good system of financial accounting, it was difficult to give the school board reliable information about the system's finances, payroll or even the number of employees, a number of officials have said.

Russo said if she has any regrets it is that she didn't stand up and discuss that issue more. "I think what I could have done is maybe been more aggressive in talking about the lack of infrastructure and trying to seek out more help," she said.

Russo has been commended for the system's academic progress during her tenure. Test scores rose and she started several small, new high schools.

She said she has become an educational consultant advising schools on high school reform and creating small schools.

She lives in Boca Raton, but she said she spends a lot of time in New York with clients.

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