by Benjamin Herold
for the Notebook and WHYY/NewsWorks
Tom Knudsen is going to be asked to do a lot in the next six months.
During a dramatic meeting Thursday night, Philadelphia’s School Reform Commission told a stunned audience that the District is on the brink of financial disaster, then announced a leadership shakeup that resulted in Knudsen being appointed the School District’s new “Chief Recovery Officer.”
The former head of Philadelphia Gas Works will have all the powers of both the superintendent and the chief financial officer. His charge is twofold: implement $61 million in budget cuts over the next six months, and reorganize the District to address its long-term “structural imbalance” between revenues and expenses.
For his efforts, Knudsen will make $25,000 a month through June of this year.
After the announcement, Knudsen and SRC Chairman Pedro Ramos participated in a session with reporters. Below is an edited transcript with some of their comments:
Knudsen on why he accepted the position:
There is nothing more important to Philadelphia than the school system. I know the city well. I know the government personalities, both here and in Harrisburg. I think I can make a contribution, and that’s why I accepted the request to serve again.
Ramos on why Knudsen is a good fit for the District, given its current predicament:
Mr. Knudsen’s experience at PGW is very comparable. Those of us who have been around and in the city know the even more dire circumstances in which PGW found itself. People know not just what he accomplished, but the manner in which he accomplished it, which is very business-like, always preferring partnership to confrontation, but also applying his experience and skills as a seasoned executive in turnaround situations to the benefit of complex governmental organization with labor being one of those difficult situations that has to be part of a solution.
Knudsen on the District’s financial situation:
I’ve had an opportunity to work with the SRC for the last few days, and I share the sense of urgency and alarm that Commissioner [Feather] Houstoun expressed tonight. This is a severe circumstance, to say the least.
Knudsen on the request for qualifications that the District is issuing for consultants to help with the "recovery" effort:
You hire consultants for a variety of reasons. One of the most important ones is they have a working knowledge of best practices in the industry right now. The other reason one looks at these groups is that their experience with implementation…When you are looking at the basic restructuring of a company, or in this case an educational system, you need other hands to guide the process….You want to have that additional expertise in play as you are guiding what will ultimately amount to a transformation.
We have identified 2 or 3 major areas that we think it would be good to hear from the industry as to what further assistance they could provide….
The first is we have a whole series of immediate cuts, or adjustments more accurately, to make. It would be helpful to have very quick analyses of what those would mean to the organizations, the complications that flow from them, and so forth. So you want to have someone look at them very quickly.
The second is the whole transformation issue. I’m only signed up for about six months now. But it is my intention, and I’ve talked with the board about this, we only have about 17 to 19 months to reform the efforts here so that we have a structural realignment between revenues and expenses. We don’t want to waste this next six of seven months. The second portion of the RFP then addresses helping me, the commissioners, and the department staff to get a very quick handle on a future direction, what that will mean to us in the short, intermediate, and longer term. It is my intention that I will try to take advantage of my background and try to put a foundation under which the company, the district, is going. The SRC already has a number of thoughts about future objectives, mission, direction.
The third portion of the RFP is a little different. That is talking about the monetization of assets. We have any number of buildings, we have other assets, that represent value that is sitting out in the community. Empty buildings, partially used buildings, a whole study of the deployment of those assets. So its those three things that we want to get on the ground real quickly with to see if we can make judgments about the future of the District.
Chairman Ramos on why the SRC chose to create an expensive new position and look for outside consultants even as it puts on the table the possibility of eliminating programs like arts, music, and gifted altogether and getting rid of every school police officer in the city:
We can’t afford to continue on the trajectory that we’re on. People who work in June may not be paid in July. We’d love to have more time to analyze this, to act. We don’t….The circumstances in which the District finds itself are unprecedented in my adult life. So we’re doing all we can, understanding that the decision is difficult, subject to scrutiny, could be second guessed. It’s the best call we could make given the time that we have.
Chairman Ramos on whether former Acting Superintendent Leroy Nunery and former Chief Financial Officer Michael Masch, both of whom were reassigned Thursday, are to blame for the District’s budget failures:
[Nunery and Masch] have gotten us a long way. They’ve brought us pretty far downfield. The clock is running out, so we’re bringing in a specialist to help us get through this period.
I don’t think that you can place blame in one single person. I don’t think it's fair to, and I don’t think you can accurately do it. At the end of the day, the buck stops with the School Reform Commission.