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Recovery officer works to restore confidence in Harrisburg School District

Gene Veno discusses financial mismanagement, plan modifications

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Gene Veno is chief recovery officer for Harrisburg School District.
Gene Veno is chief recovery officer for Harrisburg School District. - (Photo / File photo)

With or without a recalibrated recovery plan, Gene Veno is confident the Harrisburg School District will be out of debt and on its way to full fiscal health by 2018.

But in light of last fall's discovery that the district finished 2012-13 with an operating surplus of more than $11 million, rather than a $4.5 million deficit, the chief recovery officer has developed a new baseline forecast and presented recommendations to the school board to amend the plan it approved in May.

The revisions to the plan, which is intended to end years of financial mismanagement, include flat property taxes through the 2017-18 school year.

At least that is the goal, said Veno, who has a contingency in his proposal to increase taxes to the Act 1 index limit in 2016-17 and 2017-18. If the index is lower than his estimates of 3.5 percent and 3.75 percent, the district would apply for exceptions, he said.

"That is correct, but my intent is to do better," he said.

The 2017-18 school year is a long way off, Veno said. As revenue improves, district budgets should look better.

He has several initiatives in his plan to grow revenue and reduce expenses, including increased collection of delinquent real estate, earned income and occupation taxes.

Veno also wants to restore full-day kindergarten and limit charter school growth. The latter has been pegged at 13.7 percent annual enrollment growth.

One of the district's goals is to expand its cyber school program for K-12, instead of just for high school.

The amended plan, which should be taken up by the board in February, calls for restoring half of the 5 percent salary reduction that district staff incurred at the beginning of 2012-13. Veno has proposed freezing salaries thereafter and capping district health insurance cost increases at 5 percent.

Additionally, he said the district should not need a $6.4 million supplemental loan from the state.

Last week, Veno discussed the changes in the financial circumstances facing the district and the message he is trying to convey to stakeholders in Harrisburg.

Q: How surprised were you when it was discovered again that the district had a substantial operating surplus and not a deficit as originally thought?

A: Was I surprised? I was more exasperated than surprised in October, when this came about. I was disappointed. I was really saddened. I truly believed the numbers that we were given were in the best interest of the district.

But I immediately went back to the unions and to the public and said, "Here is what I know, here is what the board knows. We're a team, we're working together to rectify this." And we are. That's what the recalibrated plan is.

What message do you hope this revised recovery plan sends to the shareholders in this city?

When Gov. Corbett signed into law Act 141, he did so with the intent of rescuing school districts that were in financial distress. I want the community to know that the board and superintendent and the (chief recovery officer) advisory team are all working together to improve the mindset in the community.

I am confident that what we all have been able to accomplish the last seven months since the plan was approved that the citizens, both corporate and homeowners, see the positive changes that are taking place on every level in the district. The district has a chief financial officer, (and) the independent auditing firm of Stambaugh Ness reported that the district does have the additional $11.4 million that we reported on Oct. 14, 2013.

More importantly, the level of transparency that we demonstrated should be embraced as a breath of fresh air now knowing that the district is beginning to make a sound turnaround with the financial issues that have plagued this district for many years.

Out of all the changes in this plan compared to what was approved in May, what should be the two biggest takeaways for the casual observer or outsider that may be looking at Harrisburg for a possible move?

One takeaway is that the district has a five-year plan of action, both academically and financially. The second takeaway is that the plan, when fully implemented, will save the Harrisburg School District and all of its rich history and memories of the many students who attended the elementary and senior-high classes.

This plan needs to be implemented so that our city has a quality educational system that will work hand in hand with the Strong Plan and mayor of Harrisburg to promote the city to businesses that both the city and the city school district are making great strides together, which is unprecedented during these very difficult economic times.

Yes, we have a plan and so does the city, which not only the casual observer will see and believe but future businesses and relocating families will want to hear.

How will we look back on this effort in 2018, if the forecast pans out?

Proudly, knowing that many people were responsible for making this recovery plan a major accomplishment for the students in the district and those yet to become students in the district.

How do you ensure measures taken during this recovery period will continue beyond the scope of the work?

The district, like no other district that I know of in the Commonwealth of Pennsylvania, now has projected and established five years of sound budgets. There are financial controls and policies in place to ensure we are achieving the multitude of the many initiatives in the CRO recovery plan.

Now that the CRO plan is in place, our role is to make sure all aspects of the plan are implemented in accordance with both the academic and financial goals and objectives. I am encouraged by all I am seeing just occurring in the past seven months. There is much more to do, but we are making great strides each and every day.

Veno's role

On Dec. 12, 2012, Gene Veno was appointed by then-state Education Secretary Ron Tomalis as the chief recovery officer for the Harrisburg School District, which is in moderate financial recovery status.

Harrisburg is one of four financially distressed school districts with state-appointed recovery officers under Act 141.

Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at jasons@cpbj.com. Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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