IT'S NO secret that the School District of Philadelphia is facing its own fiscal cliff.
The district asked its blue-collar union to forgo wage increases and give back money to the district last summer as school closures loomed. Just two weeks ago, district officials were forced to borrow another $300 million from Wall Street to pay its bills.
So, why is the district giving out pay raises to certain groups?
The grumblings among district workers began to rise this month when word leaked that 25 nonunion employees had received salary increases since the summer.
"The environment is so negative right now. They might be sitting next to someone who got a raise," said one employee who works at district headquarters, speaking on condition of anonymity. "It doesn't do well for morale right now."
The beneficiaries of the $311,351 in increases, which average $12,454 per year, work primarily in information technology, human resources, finance and grants, and compliance.
Coincidentally, these same four areas are noted in the Boston Consulting Group report released over the summer that pushed for a "lean" central staff to manage the district and its future.
The BCG report - a lightning-rod document because it was privately funded and calls for a scaled-back central office and a number of school closings - will be the subject of a City Council Education Committee hearing Monday to hear testimony from district, union and other representatives.
District officials referred to the increased salaries as "adjustments" that had been compressed over the years compared to union wages. They said that the hikes were needed to retain those eligible for retirement and other qualified personnel.
And, in some cases, "we're trying to communicate a certain prominence about a certain position and the importance of that," said Superintendent William R. Hite Jr.
Hite signed off on the adjustments recommended by chief recovery officer Thomas Knudsen, they said in separate interviews with the Daily News. Hite said that two promotions, Christina Ward and Joseph D'Alessandro, "were completely my responsibility," while the others were under Knudsen's control.
Ward, a 31-year district employee working in the office of special finance, was promoted to deputy chief financial officer. She'll earn $138,420, a 17-percent raise. Her pension will increase approximately $15,750 per year because of the promotion.
Former deputy budget director D'Alessandro is now the chief of grants development and compliance. His pay rose 16 percent to $130,270, a $18,000 hike.
"Those were roles that were reconstructed in order to do work that is critically important for this organization moving forward," Hite said. D'Alessandro will be in charge of $500 million in federal grants.
"I think reasonable people understand that you have to have qualified people to run an activity of this size; qualified people are not readily available in the market place for many of these activities," Knudsen said.
"I'm less concerned about the optics as people might easily consider this. I am interested in this place continuing to function well."
But the district should be concerned with how the raises look from the outside, according to one former school official.
"If you're going to ask the public to get behind these major reforms, get behind closing the schools, changing the dynamics of dealing with the unions, then you have to be working in the most credible and transparent way," said Phil Goldsmith, who served as interim schools chief executive officer in the early 2000s.
Goldsmith said he understands the need for raises, although it's never a good time to implement them.
The district should ask "is this the time to do it?" he said. "They just floated a bond, there's a lot of work ahead. . . . Now you're worrying about compensating salaries? You have other things to worry about."
Hite also added Evelyn Sample-Oates, former deputy chief of communications, to a newly formed cabinet-level position. Hite named her chief of family and community engagement. He said he created the department because he noticed "we were not hearing parents," when he interviewed for his job last summer.
Sample-Oates now earns $129,162, a 49 percent jump from her previous salary.
"Seems to me it's business as usual," Goldsmith said. "It's not like it's a long-tenured employee. If it's such an important position, why are you giving it to someone who's been demoted?" (Sample-Oates once headed the communications department.)
Hite has also authorized two out-of-town hires: deputy superintendent Paul Kihn, earning $210,000 and Karyn Lynch, head of the newly created student support services, who will earn $168,000.
Union leaders were surprised by the news.
"It seems immoral to me," said George Ricchezza, 1201 District Leader for 32BJ SEIU. The union agreed this summer to forgo raises for four years and contribute $100 million back to the district.
"If I would have known prior [about the raises], I would have had a more intense conversation about it so I could absorb the thinking of the district," Ricchezza said of a meeting he had with Hite last week. "It's going to be difficult for our members to understand this."
"We constantly hear about the school district's fiscal woes and the need for everyone to make sacrifices," said Jerry Jordan, president of the Philadelphia Federation of Teachers. "Obviously there's ample money to spend in some areas, while our schools are forced to do without the basics needed to educate our students."