Funding reaches schools account

City system plans layoffs to help repay its loans, `break even,' officials say

March 24, 2004|By Liz Bowie | Liz Bowie,SUN STAFF

After months of political debate, threats and promises, Baltimore's public schools finally got the money.

The $43 million promised to the school system arrived in its checking account Monday afternoon. But its chief financial officer, Rose Piedmont, reminded the public at last night's school board meeting that it is only made up of loans, and the largest portion - $34 million - must be paid back by August.

The money borrowed from the city and the Abell Foundation allows the system, which was on the brink of insolvency, to keep paying its employees.

But minutes after announcing that the money had arrived as promised, Piedmont said that the system is coming up with a plan to lay off another 50 temporary employees by April 5.

This school year, the system has laid off more than 800 employees.

With attrition, Piedmont said, the system has 911 fewer employees.

And she cautioned the school board and the public: "We will have cash-flow problems in late 2004 and early 2005."

What that is likely to mean is the system will have to go back to Mayor Martin O'Malley by the end of the year to request another loan to get it through a cash-flow crunch.

Piedmont said she expects the system to "break even" by the end of this school year - in effect, spending will have kept to within revenues for the first time in three years.

This year's layoffs will have helped reduce expenses enough so that the system should be able to significantly reduce a $58 million accumulated deficit next year, Piedmont said. The system believes it can cut the deficit by 60 percent then, she added.

What is still unclear, said Chief Executive Officer Bonnie S. Copeland, is whether the system will have to lay off more employees over the summer, in particular teachers. She said that while officials can't make promises, the school system has sent letters to the newest teachers, giving them some statistics that would seem to indicate they are not likely to be laid off.

Copeland said the system has 885 teachers with 30 years of service or more who could retire and 900 teachers who are not fully certified. If layoffs are necessary, the system would start by dropping the uncertified teachers.

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