Knudsen's in charge: SRC shakes up administration

Posted: January 20, 2012

THE SCHOOL Reform Commission last night emphasized the Reform in its name, hiring a "chief recovery officer" to lead Philly's school district out of a financial abyss for the next six months and demoting two top-ranking officials.

Former PGW head Thomas Knudsen was named to the new post. He will have the authority of the superintendent and the chief financial officer, SRC Chairman Pedro Ramos said. Knudsen has agreed to a half-year, $150,000 contract that will not pay him benefits, Ramos added.

In addition to the temporary hire, Penny Nixon was promoted to chief academic officer and will answer to the SRC, Ramos said. She had been associate superintendent of schools.

Demoted are Leroy D. Nunery II, the acting supertintendent, and Michael Masch, the chief financial officer. Both still have jobs with the district, but with pay cuts.

Nunery, who worked under controversial former Superintendent Arlene Ackerman, becomes special adviser to the SRC. His main project will be to develop a model to decentralize district headquarters, giving more autonomy to school principals.

Masch, chief financial officer since July 2008, becomes special adviser to Knudsen.

The shake-up comes as the district faces a $61 million budget gap which, if not covered by June, threatens the district's payroll and its ability to access credit in fiscal year 2013 on July 1, SRC Commissioner Feather Houstoun said.

"Tom will have the superintendent/CRO portfolio to manage down this gap, bring his executive skills and experience under these circumstances to bear to produce a plan that will be implemented and implementable . . . to avoid the July scenario," Ramos said. Ramos set the clock last night at 163 days and counting to close that gap.

If it's not closed, Houstoun said, "we're really going to limp, limp through this fiscal year. We're going to be able to pay our debt service . . . Our vendors will see a significant slowdown."

And, she said, "we will not be able to make payroll" beginning July 1.

The SRC's actions drew swift criticism from many, including the hundreds of employees who packed the contentious meeting. Many were members of Local 32BJ, District 1201, the union representing 2,700 bus aides, cleaners, building engineers, and mechanics. All have been sent layoff notices. "What I see here is a dismantling of the public-school system," said George Ricchezza, 1201 president.

"The district finds itself in a stunning set of circumstances in which we all will be asking more of everybody," Ramos said, calling the budget situation "urgent."

He announced pay cuts and furloughs for nonrepresented employees. He also announced:

* A 3 percent raise set for nonrepresented employees would not be given.

* All nonrepresented employees making more than $50,000 must take three unpaid holidays before June, and they must now begin to pay a portion of their health-care premium costs.

* Across-the-board pay cuts ranging from 8 percent for those making $180,000 and above, to 3.75 percent for those at $75,000 and $99,999. Nunery's pay will be cut from $230,000 to $210,000 and Masch's from $196,000 to $180,000.

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