A hole of $33 million in the district's budget was revealed Oct. 4. Two weeks ago, during a meeting with community newspaper editors and reporters at district headquarters, Olchefske said the gap is the result of "really bad budgeting and really bad information."
Olchefske is also adamant that he won't step down, despite a demand for his resignation by the Seattle Education Association (the teachers union) and no-confidence votes by teachers in some district schools.
"I'm angry about this," he said. "I'm shocked that it occurred, and I'm committed to making sure it never happens again."
The School Board members are continuing to support Olchefske. Although he won't be getting a pay raise this year, the Seattle School Board agreed in a vote at their Nov. 20 meeting that Olchefske's performance was "very good." Mary Bass was the sole dissenting vote.
Olchefske's leadership has drawn supporters since he stepped into the superintendent's role in the early '90s. Test scores continue to rise at many district schools, and he has a history of replacing ineffective principals with strong performers. The school board's review also noted that parent involvement, safety and security and academic performance have generally improved during Olchefske's watch.
The budget deficit has two elements. In the 2001-02 school year, there was a shortfall of $21 million. This year, the hole is approximately $12 million.
When Olchefske first realized there was a problem in August, he worked with a team of district employees for 30 days to try to determine the cause of the budget imbalance. The predicament emerged while the district was preparing for its annual audit.
Olchefske said it turns out that some revenues were counted twice, and some expenses that should have been charged to the 2001-02 school year were allocated to the 2002-03 budget.
To cover last year's loss, the district will pull money out of its reserve fund and sell off some of its surplus property, according to Olchefske. Olchefske noted that the potential hit list includes Briarcliff Elementary School and Queen Anne High School, which could be sold together with the leases for the apartments that now occupy the building.
The district's building next to Costco has already been sold for $12 million.
The plan to handle this year's estimated deficit and be in the black by the end of this school year is to reduce central administration and central services to schools. Among the services that will take a hit is the number of English as Second Language and Special Education teachers and assistants the central office normally sends to the schools.
Approximately 150 central office positions will be eliminated and the equivalent of 31 full-time teachers with the central office will be laid off. Federal and state funding allowed the district to reduce the layoffs from 37 to 31. It was the planned cuts in the special education and bilingual positions that sparked the Seattle Education Association to ask for Olchefske's resignation.
"We're a people-intensive business, and so reducing costs of the magnitude that we're talking about ultimately does mean eliminating positions," Olchefske said.
Olchefske said that one way the cuts will be minimized is by moving employees to vacant positions in the district.
The superintendent cautioned that cuts already made at the schools themselves are the result of under-enrollment. Each school is allocated money based on a projection of expected enrollment. If the enrollment doesn't meet the projection, the school has to return the funding above the actual enrollment to the district, according to Olchefske.
To avoid a similar deficit in the future, the school board will choose a committee, which, in turn, will decide on an independent auditor to review the district's budgeting and reporting systems.
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