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Update: Iowa School Budget Review Committee forgives $9 million of Davenport Schools' deficit
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Update: Iowa School Budget Review Committee forgives $9 million of Davenport Schools' deficit

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The Iowa Board of Education has repeatedly said Davenport Community School District wasn’t “too big to fail.” On Tuesday, the School Budget Review Committee might have proved that wrong.

The SBRC, which is separate from the Board, voted 3-2 to forgive more than $9 million of the district’s debt, which was incurred after intentional overspending and failing to meet corrective action plans in subsequent years.

“The school district cannot fail. It can, but it shouldn’t,” said Dave Roederer, director of the department of management and secretary of the SBRC.

After the vote, Davenport School Board President Bruce Potts said it was “the best outcome I could have hoped for.”

“This is a tremendous relief,” he said. “It has become so much more doable, though still painful.”

How did we get here?

At the Committee’s December meeting, Davenport requested more than $13 million in the form of a modified supplemental amount, which grants the district spending authority for its own cash reserves but doesn’t provide revenue. That decision was tabled until Tuesday’s special hearing, and Davenport changed their ask to $9,275,489 — everything except for the initial $2,769,693 the district intentionally overspent in fiscal year 2016, in a bid to make up for per-pupil funding the district said they were missing out on due to Iowa’s funding formula.

Superintendent Robert Kobylski took over the top position in the district this year, and he told the Committee that the 14,000 students in his district shouldn’t suffer the consequences of such drastic financial cuts because of the decisions of “adults who are not in the room today,” referring to former Superintendent Art Tate and the previous school board. Davenport first overspent in the 2016 fiscal year, and the 2019 fiscal year was the fourth consecutive the district had a negative unspent balance.

Director Linda Hayes is the only school board member left from the board seated during the March 2015 meeting where Tate said he cared “more about our students and their needs than I do about the state law in this case.” She was sworn in mere weeks before Tate’s remarks.

Keith England, one of the SBRC members who voted against the plan said all districts — big, small, urban, rural — have difficult decisions to make.

“All but one played by the so-called rules,” he said after the meeting adjourned.

Gretchen Tegeler also voted against the plan. Leland Tack, Martha Bruckner and Roederer voted for it.

Where are we going?

Without the relief provided by the Committee, the district reportedly would have had to lay off 100 teachers, assuming 50 left through retirement and natural attrition. Another 52 staff members — 13 each of administrators, clerical staff, operations staff and other professionals — would have been cut as well. Kobylski said cuts of this magnitude would turn the district’s buildings into “shells of a school.”

Instead, with the relief, 25 teachers will be cut, as well as 24 administrators, clerical staff, operations staff and other professionals.

John Kealey, president of the Davenport Education Association commended Kobylski, the board and the SBRC for the break. He also reiterated how many of the people who contributed to the overspending were gone, and that the students were owed a proper education.

“There are still a lot of questions, but the future looks brighter,” Kealey said.

Davenport will report back to the SBRC at the Committee's next meeting, March 10. Over the next two to three weeks, the district will be working with the school board to make decisions about programming and facilities to present in a plan. 

Setting a new precedent

Before the vote, some Committee members questioned what sort of precedent forgiveness would set for other districts. Last week, the Iowa Board of Education questioned the same thing.

“Davenport is in an unprecedented situation, and we’re asking for your help to move forward,” Kobylski said Tuesday. “We will obviously honor whatever decision you make here today. But we do need to know the decision today (to proceed).”

At a press conference on Wednesday, Kobylski said the district knew they were making a "very bold request," and understood that the decision would carry "great magnitude across the state." He also said the district would not squander the opportunity the vote granted them.

In May, Iowa Board of Education Vice President Mike Bearden told Davenport that no district was “too big to fail.” After the vote Tuesday, he said he stood by that comment.

“There is not a district that is too big to fail,” he said. “(Davenport) had some issues, and we’ve been jointly working with them to help them correct.

“This news will make it easier for them to provide quality staff and the resources they need.”

Joshua Byrnes, a member of the Iowa Board of Education, said he was surprised by the vote and concerned about the ramifications.

“This isn’t so much about Davenport, so much as it is the precedence just set today,” he said.

Tom Lane, a mentor appointed to Davenport by the state, emphasized many of the same points he made to the Board of Education days earlier: A district as big as Davenport is “a whole different animal” that will require years to make the systemic changes necessary. Still, he said he was pleased with the changes made by Kobylski and the new board.

“This is a board that is taking this very, very seriously and wants to do the right thing,” he said. “They don’t want to relive the past, but they want to serve their community and their kids.”

One parent requested time Tuesday for public comment: Gina Hale, who asked the SBRC not to grant Davenport the aid and to seriously consider reorganizing the district.

“It is not fair that they’re threatening to fire 100 teachers and are holding our students hostage for what is an ongoing demand to forgive the illegal activities of the district,” she said. “SBRC has a duty and a responsibility … to hold districts to legal spending.”

The SBRC, Roerder said, was founded to address the unique situations that arise in different districts that could not all be addressed in Iowa Code. Still, Davenport had been reporting to the SBRC for years and were told they were digging a hole they wouldn’t be able to climb out of by themselves.

If a similar overspending issue arises in another district, Roerder said the Committee will put a stop to it before the debt becomes as large as Davenport's. “We’re going to stop it pretty doggone quick, and if we end up in court, we end up in court.”

The SBRC gave Davenport a second chance, but it made clear the district still has improvements to make. 

“You’ve got to win,” Roerder said, looking at Kobylski and the Davenport school board. “You’ve got to get it done, or you’re going to severely damage your community.”

After the meeting adjourned, Kobylski went to each committee member and told them the district would get the job done, he said Wednesday. 

"We're going to do this well, and we're going to do this right," he said. 

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