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| photography by Dan Sellers |
Television news cameras flanked the ballroom at the downtown Sheraton. For its late September luncheon, the Dallas Regional Chamber got lucky. Months earlier, the chamber had booked as its keynote speaker Dr. Michael Hinojosa, superintendent of the Dallas Independent School District, to give the annual state of the district briefing to about 300 business leaders. And he actually had good news to share. The district had been logging steady gains in Texas Assessment of Knowledge and Skills (TAKS) test scores. Dallas had leapt to second among the state’s five largest school districts in the number of “recognized” and “exemplary” schools ranked by the state’s accountability system. But two weeks before the luncheon, the district had dropped a bombshell, so the TV news crews had turned out in force.
The bad news: the district had discovered a $64 million deficit in its $1.2 billion budget. Then it grew to $84 million [read how this happened in sidebar on page 42]. Eric Anderson, Hinojosa’s chief operations officer, the man tapped to overhaul the district’s business systems, had immediately been sacked. So, too, budget services director John McGee. Hinojosa and the board were bracing for the inevitable: euphemistically, a “reduction in force.”
As the cameras rolled, Hinojosa took the podium and apologized for the problem. “This is a very humbling situation for all of us,” he said. “We do accept responsibility for what occurred.”
He went on to outline roughly how he planned to pull the district out of its hole. He showed PowerPoint slides of charts tracking the recent academic successes of the district. And then he closed with an inspirational video.
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| Dalton Sherman electrified a crowd of 17,000 DISD employees. photography by Melanie Burford/DMN |
A month earlier, 10-year-old Dalton Sherman had delivered a back-to-school pep talk to 17,000 DISD employees at the American Airlines Center. The speech had been crafted by DISD officials, but young Sherman rehearsed it for months, learning to twine his oratory with cunning gestural cues and weighty pauses. It was so good that when the speech was posted on YouTube, it got hundreds of thousands of views and prompted Ellen DeGeneres to invite Sherman to appear on her show.
In the video, Sherman repeatedly shouts: “I believe in me! Do you believe in me?” The crowd in the AAC cheers.
That day at the Sheraton, as Sherman’s performance played on the big screen at the luncheon, Hinojosa sat cross-legged onstage in a chair next to School Board President Jack Lowe, one open palm clasping his knee, the other gripping his propped ankle. It wasn’t hard to transpose Hinojosa’s crisp-suited visage over Sherman’s, beseeching the businesspeople in the room with the boy’s refrain: “I believe in me. Do you believe in me?”
Three days after the luncheon, the Dallas chapter of the NAACP was calling for the superintendent’s head. But John Brooks, a lecturer at the University of North Texas College of Education, has kept tabs on Hinojosa since he took over the district. He says if Hinojosa were to step down, that would be a grave mistake. “You aren’t going anywhere in Dallas if you change your supes every three years. You just won’t,” he says. “If you don’t take care of your kids, you’ll lose your city.”
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| School Board trustee Ron Price has so far defended Hinojosa. photography by G.J. McCarthy/DMN |
JUST HOURS BEFORE the district acknowledged its financial blunder, Hinojosa was preparing for his established Wednesday morning routine. Earlier in the week he met with his driver, DISD Police Officer Freddie Jackson, to plan their slate of surprise school visits. The goal of their planning is to minimize “windshield time.” Once in the passenger seat of the black Lincoln Navigator, Hinojosa shuffles through a stack of “dashboard” printouts striped with bands of saturated color. The printouts track each school’s performance targets on student achievement and the school’s organizational health index, a gauge of campus cleanliness, student engagement, and staff harmony.
Hinojosa always begins his unannounced visits by having his driver circle the campus. At James S. Hogg Elementary in Oak Cliff, he points to the playground where he and his friends used to play ball. But the school grounds are not up to snuff. They’re overgrown with weeds, and though there is new fencing in front of the school, the chain-link fence around the back sags badly and is riddled with holes and tears. “Some of these parents aren’t engaged,” Hinojosa says. “We couldn’t get away with this in the Lakewood area.”
Once he’s through the front doors, Hinojosa zeroes in on the front office, seeking out the principal. “Walk with me,” he says. “I want to walk and talk. I don’t want to sit down. I’m listening, even though my eyes are shifting.”
He peeks into classrooms. Are the students engaged? He scans the walls. Is schoolwork posted? He inspects the stairwells. Are the corners clean?
At N.W. Harllee Elementary, a campus next to the Oak Cliff Cemetery and just down the block from the Classic Motel, a reputed outpost for drug deals and prostitution, Hinojosa jokes that he can fix his hair in the gloss of its freshly painted walls. He seeks out the custodial and cafeteria staffs, joking with them in Spanish. “You can just sense it by walking through the halls when things are not happening,” he says. “It’s amazing how the intuitive nature of it matches with the data.”
Spreadsheets are Hinojosa’s Bible. He rises at 4 a.m. to peer at eight of them, an array of both personnel and district data. The school sheets are graphed with color-coded bars: green for a school hitting its performance targets, yellow for near misses, and red for efforts that fall short. Since April 2005, when Hinojosa was named superintendent, he has visited each of the district’s 230 schools at least once. He is in the initial stages of his second pass. “This is my style,” he says. “I did this when I had a district of six campuses and 6,000 students.”
After emigrating from Mexico, Hinojosa grew up in Oak Cliff, graduating from Sunset High School, where he was a guard on the basketball team. He says his career in education just “sort of happened” when a teacher convinced him he would make a great educator and he applied for and won a $500 scholarship from the Future Teachers of America. He went on to earn his doctorate at University of Texas at Austin. His 29-year tenure in public education includes teaching posts at L.V. Stockard Middle School and W.H. Adamson High School; administrative positions in the Grand Prairie Independent School District; and roles as superintendent in Fabens (outside of El Paso), Spring (near Houston), and Hays (south of Austin).
“I stumbled into it,” he says. “I always wanted to be a teacher and a coach for the rest of my life. But other people kept pushing me into administration.”
THAT PUSH HAS landed Hinojosa in the thick of what some insist is an impossible job. Big cities chew up their superintendents. The typical urban school superintendent has an average tenure of two years, eight months. Dallas has had seven in the last 10 years.
“This is not a venture for weak souls,” says former Philadelphia School Superintendent David Hornbeck in the PBS documentary Toughest Job in America. In 1994, Hornbeck led a charge to improve student achievement in a school system bedeviled by entrenched bureaucracy, harsh media glare, a reactionary union, antagonistic politicians, budget deficits, and an intractable belief among many that Philadelphia’s poor and minority children were incapable of achieving academic proficiency. Hornbeck beat the odds, generating incremental academic gains in six years before a dispute over state funding did him in.
But most often a superintendent’s term is a briefer episode. In 2003, nationally recognized reformer Joseph Olchefske stepped down after four years as superintendent of Seattle public schools. The former investment banker and school district CFO was toppled by a $23 million deficit that was set to collect another $12 million in red ink for the next school year.
That same year, Dennis Chaconas was ousted after just three years as superintendent of the Oakland Unified School District. His district had installed new software to get a better handle on its finances, and it exhumed a $40 million deficit from the previous year. The deficit for the next school year was expected to be just as large. So the state took over the district, and Chaconas was out.
To anyone following Dallas’ financial woes, such crises will sound similar. When trouble struck in these districts, they were on track to generate significant academic achievement gains. According to Jon Fullerton, executive director of the Project for Policy Innovation in Education at Harvard’s Graduate School of Education and author of the article “Mounting Debt” (Education Next, Winter 2004), serious district financial crises can blindside even an experienced finance professional such as Seattle’s Olchefske. Districts often fail to handle such crises effectively because they treat them as straightforward management problems instead of digging deeper to understand the underlying organizational dysfunctions that prevent districts from managing their finances properly.
The typical district budgeting process, says Fullerton, drives districts to live on the financial edge, with revenues just matching expenditures, thwarting any attempt to align costs with strategy. The reasons for this are manifold. School districts face enormous pressure to spend every dime generated in a given year to avoid surpluses—juicy targets for outside interests such as politicians and labor organizations. Plus, unlike in business, money is not fungible in a school district. Financial flexibility is limited by a complex lattice of revenue streams that often come with tight restrictions, making it difficult for a district to redirect funds to adjust to shifting circumstances. Federal Title I funds, for example, must be spent only on low-performing students.
Couple this inflexibility with the lack of financial, accounting, and business management experience in district staffs (talented finance professionals earn far more in the private sector), and you have an environment ripe for budget overruns and worse. DISD is still untangling its own mess, so it’s impossible to say with certainty how it dug itself an $84 million hole, but it’s fairly common practice in school districts to view finance in isolation from academics, with superintendents prioritizing the latter as a matter of philosophy while the former is relegated to staff. In Dallas, as Jack Lowe has suggested, the staff was “lacking in the necessary levels of competence.”
For example, Deloitte & Touche was hired to audit DISD’s 2006-2007 school year operations. Just providing the accounting firm with the records it needed to execute the audit proved almost impossible. The audit dragged on six months longer than planned, and its price tag climbed from $1 million to $2 million, but it eventually unveiled a morass of lax record keeping, loose spending controls, and poorly implemented computer systems.
“I expected a challenge. It surpassed what I expected,” says Steve Korby, who joined the district earlier in the year as a consultant and then assumed the role of chief financial officer in August. “Every time we turned something over, it was far worse than we thought it would be.”
That would be a fair description of nearly every aspect of the district’s operations, which has forced Hinojosa to spend much of his tenure thus far dealing with the next emergency. As a result, Dallas School Board Trustee Ron Price says he finds it difficult to gauge Hinojosa’s leadership capacity. “He’s had to put out a lot of grass fires,” Price says. “He’s been a firefighter more than anything else.”
First there was the credit card scandal entailing some $6 million in misspent district funds. Then the federal audit that unearthed $5.3 million in misspent district grant funds. Then the $50 million budget gap last April, created by a district-wide teacher salary miscalculation. And then a new lenient grading policy announced just before the start of the 2008 school year that earned national play on CNN.
Still, as of this writing, Price is not ready to pull the plug on Hinojosa. “Who are you going to get to come in here with a $64 million deficit?” he asks. And, of course, that deficit has only grown.
One of the most consistent complaints leveled at Hinojosa is that he’s forever impatient. “He wants everything done yesterday,” says Aimee Bolender, president of the American Federation of Teachers union. “There is such a headlong rush to achieve a goal that he is leaving relationships and communications in disarray.”
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| sculpture (c) Tom Otterness, 2002 |
That goal is winning the Broad Prize [see Broad sidebar]. Yet Broad Foundation founder Eli Broad says impatience is a key to transforming public education. And Hinojosa’s impatience has undeniably led to significant gains. Reading, writing, and social studies scores are rising; progress has been made in math and science, though the gains have been marginal. The district jumped in state school rankings, going from 47 recognized and exemplary schools to 103 last year—an all-time high.
How has Hinojosa generated these gains? His shrewdest maneuver was dismantling a politicized, fractured district structure, one that nurtured eight “area superintendents,” each with its own fiefdom aligned with one of the board trustees. Essentially DISD had become eight separate school districts. Each was an autonomous entity with its own curriculum, and principals were routinely shuffled between schools to cure any number of ills. Hinojosa overhauled these fiefdoms into seven learning communities, each with a consistent, streamlined curriculum and a protocol for hiring and transferring principals.
“Not only was there a leadership churn at my level, there was a leadership churn at every campus,” Hinojosa says. “Very few of the principals that I had talked to had been in place very long.”
While circling James Bowie Elementary in South Dallas, Hinojosa makes note of the new playground equipment. He flips through his printouts, streaked with green. “They’re getting after it,” he says. “There’s no doubt about it.”
While strolling through the halls, he asks Bowie Principal Abril Rivera how she was able to get new playground equipment. The parents raised the money, $15,000, she says. This in a neighborhood where day laborers crowd the street corners not far away.
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| In October, to rectify the budget overrun, the School Board voted to lay off 1,100 employees, including about 550 teachers. photography by Tim Gruber/DMN |
Bowie was a basket case, a struggling school, Hinojosa says. But Rivera escaped the incessant principal shuffling and was able to forge ties with parents. “If you can get a great principal and get a great plan, you can have a great school no matter what community you’re in,” he says. “Every new CEO has their plan, their people, their stuff, and everybody starts all over. People then say, ‘Look, this, too, shall pass, and I’ll hunker down, and then I can do what I want to do.’ ”
He calls it the “managed destruction program.” Hinojosa is determined not to repeat it.
AS THIS STORY was going to press in October, the school board approved a budget-reduction plan that called for laying off more than 1,000 DISD employees, including about 375 teachers—hundreds in “core” courses (math, science, social studies, and English or language arts). Still, Hinojosa promised that students’ education would not suffer. The measure was expected to save approximately $30 million, with nonpersonnel cuts adding an additional $38 million in savings, reducing the total shortfall to about $15 million. The district was still working to trim that number, and the TEA was still watching the district’s efforts closely.
After announcing the layoffs, a handful of area corporate executives were tapped to be part of Hinojosa’s “kitchen cabinet” to help dig up the roots of the financial crisis and suggest short- and long-term solutions for the district. The cabinet includes, among others, Texas Instruments executive Phil Ritter [see page 54], former Dallas City Manager John Ware, Woodbine Development Company executive John Scovell, automobile executive Carl Sewell, former DISD Superintendent Linus Wright, and Trammell Crow Company Chief Executive Robert Sulentic.
TEST PATTERN
How TAKS scores have improved.
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Click here to enlarge chart.
SCORE BOARD
TEA accountability ratings through the years.
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Click here to enlarge chart.
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| Eli Broad. photography courtesy of The Broad Foundations |
THE BROAD PRIZE
Hinojosa has set a goal of winning it by 2010.
IT’S AMBITIOUS. Maybe even a stretch. Some even laughed at the idea. But a key driver behind Superintendent Michael Hinojosa’s transformation strategy is capturing the Broad Prize in 2010—“Road to the Broad” in district parlance, pronounced “brode.” The Broad Prize is $2 million in awards dispensed annually by the Los Angeles-based Broad Foundation. Winners are sifted from the 100 largest urban districts in the United States, with the top prize awarded to the district generating the highest gains in overall academic achievement and the most shrinkage in the achievement gaps that exist between categories of students.
Many of Hinojosa’s staunchest critics say that the Road to Broad is a pipe dream. He begs to differ. “You shoot for the stars, and if you miss you land on the moon,” he says. “You’re still in a lot better place than you were. So I’d rather have a high, high bar and shoot for it. Because it’s going to move you. It’s going to move the system.”
Established in 1999 by billionaire businessman Eli Broad, the Broad Foundation and its collection of prizes and grants were designed to dislodge the moribund thinking and low expectations that often plague urban school districts. Competition for the prize is stiff. Last year’s winner was New York City, a district with 1.1 million students and a $17 billion budget, while Houston was awarded the first Broad Prize in 2002. Houston continues to be the top-performing district in Texas. The Texas cities of Brownsville and Aldine are among the five finalists for the 2008 prize.
The prize money is distributed to the winning district’s entire pool of graduating seniors as scholarships, which are granted based on demonstrated academic performance gains and economic need. Currently, the top prize-winning district receives $1 million in scholarship funds, while each of the four runner-up districts receives $250,000.
The Broad Foundation encourages districts to search for talent from a wide spectrum of disciplines, including the military. “Military leaders are trained in moving legions of people forward,” says Broad spokeswoman Erica Lepping. “There are roles for military leaders in administration because they can inspire and move a group from A to B.” Through the Broad Center for Superintendents, an intensive 10-month training program, the foundation aims to build an executive “leadership corps” to fill future ranks of urban district CEOs.
“Most educators don’t understand leadership because that’s really not what is practiced,” says former Air Force Colonel Kim Olson, DISD’s chief human development officer and a graduate of the Broad superintendent program. “Just because you’ve been the head of a classroom or a school doesn’t mean you have leadership.”
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| Leigh Ann Ellis. photography by John Zak/DMN |
ANATOMY OF A CRISIS
How DISD came up $84 million short.
DISD BOARD Trustee Leigh Ann Ellis puts it this way: “It hit us like a bag of nickels.” She’s talking about the news, learned in September, that the district had come up $64 million short in its budget—a figure that quickly grew to $84 million. When School Board President Jack Lowe got the news, he seriously considered resigning but realized that would do more harm than good. “I don’t think you’re going to get somebody to take my place that can serve the district better than I can,” he said.
So how did it happen? Steve Korby can probably offer the best perspective. He initially came to the district as a consultant working for Tatum, sometimes described as a rent-a-CFO firm. When the shortfall was discovered, Korby accepted a full-time position as CFO of the district (and took a pay cut). Korby says the district lacked adequate financial checks and balances, and budgeting systems were never reconciled on a regular basis. Paper invoices floated around the district for an average of 20 days before being recorded, making it difficult to determine the district’s financial obligations at any given time. In fact, the district didn’t really know what it had spent until it received a canceled check.
But the most significant problem plaguing the district’s financial health is its expensive and poorly implemented computer systems. According to Korby, the district for years ran its operations with clunky software installed in 1999 to handle the apocalypse everyone saw as Y2K. It didn’t take the district long to realize that the software didn’t do the job, so in 2002 it installed a monster Oracle Enterprise Resource Planning System—but the district all but nullified its robust financial, human resource, and payroll applications by customizing the Oracle system to emulate the antiquated Y2K systems. Think of it as buying a new laptop and then installing Windows 98 on it.
All this happened before Hinojosa was hired in April 2005. When these decisions were being made, the district’s chief technology officer was a man named Ruben Bohuchot, who was convicted in federal court this past July for his role in a bribery and money-laundering scheme involving $120 million in DISD technology contracts.
So when principals across the district asked the budget office if they could hire more teachers to reduce class size, it’s no wonder the system failed to produce the right answer. According to Korby, DISD budgeting systems were handled with Borland Paradox software, a mid-’90s database that wasn’t even integrated into the Oracle system.
To rehabilitate this information technology train wreck, Korby says the entire system may have to be stripped from the district’s computers and reinstalled, an expensive process that could take up to three years to complete. “Things had just gotten to the point where people weren’t using common sense,” he says.
Korby says Hinojosa’s strategic vision, with its addition of some 750 teachers to reduce class size, exerted enormous stresses on the district’s ramshackle financial processes. It exposed faults that could have remained hidden for years.
“A nuclear device like this had to have gone off in the middle of our budget world in order to get the fundamental changes that needed to occur,” says Kim Olson, the district’s chief human development officer and a former Air Force colonel and KC-135 refueling tanker pilot. “Before, we were just tinkering along the edge of financial transformation.”
Now everything has changed.
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