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D.C. Contract Hits Financial Speed Bump

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The proposed new contract for District of Columbia teachers is on hold unless the city finds a way to prove it can pay for the massive salary increases embedded in it.

Private foundations have offered nearly $65 million to help foot the bill, but the city's CFO says the strings attached—specific test score improvements and no "material change in DCPS' leadership" aka Michelle A. Rhee remaining chancellor—make the funding anything but a firm guarantee.

About $21 million of the private funding is earmarked for salaries.

D.C. Chief Financial Officer Natwar M. Gandhi told the city council this morning that he could not certify the contract as fiscally sound because city officials haven't been able to prove they have enough funding to pay for it, according to The Washington Post. The city has to find $135.6 million to pay for it through 2013.

And the foundation money, with its conditions, is not a viable option as far as Gandhi is concerned, as I told you about earlier this week.

"At this time, we cannot certify the use of private foundation funds to support salary and benefits under the tentative agreement," Gandhi said in his prepared testimony.

Gandhi has to certify the contract as fiscally viable before the council can vote on it. And members of the Washington Teachers' Union still have to vote on the contract as well.

Mayor Adrian M. Fenty, who is in charge of the schools, is planning a news conference this afternoon to talk about the teacher contract and funding situation, so there may be more to come on this. Keep your eyes peeled.


UPDATE (5/1): A reader asked a great question: Why should the CFO care if the foundations place conditions, such as maintaining stable leadership, in their agreements with the city? Check out the comments section for my explanation, which delves into the worlds of accounting and municipal finance law.

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