Food, custodial staff positions eliminated at Isaac Elementary

• The Isaac Elementary School District in Phoenix eliminated 85 positions to address a financial crisis.
• The district outsourced its food, custodial, and grounds services. Many terminated workers were offered positions with the new vendors.
• The district also discontinued its before- and after-school program, working with families to find alternatives.

The Isaac Elementary School District in Phoenix has eliminated dozens of positions as it continues to navigate the fallout of a financial crisis that led to its takeover by the state.

On March 6, the district’s Governing Board approved a reduction in force of 85 positions, primarily in food, custodial and grounds services, along with some administrative positions.

Interim Superintendent Lily Mesa-Lema described it as a “difficult but necessary” step to ensure financial stability. The cuts were expected to save about $1.45 million for the rest of this fiscal year and $3.35 million next fiscal year, she said.

The reduction in force, which was approved with a 4-1 vote, eliminated those positions from the district. But staff members had already been affected because the district began outsourcing its food, custodial and grounds services on March 1.

According to Mesa-Lema, 66 staff members affected by the reduction in force were invited to apply for positions with the new contracted vendors. Ten staff members have since been hired by ABM, which the district contracted for custodial services, and 38 have been hired by Chartwells, which the district contracted for food services, Mesa-Lema said.

The district also stopped offering its before- and after-school programming, called the Isaac Learning Club, which had operated before school starting at 6 a.m. and after school until 6 p.m. Mesa-Lema said that 132 students were “impacted by the time adjustments,” and the district worked with families to enroll eligible students in the district’s grant-funded 21st Century Community Learning Centers for after-school programming and partnered with the Boys and Girls Club to provide families with childcare until 7 p.m.

“I want to acknowledge that these changes have been challenging for everyone,” Mesa-Lema said. “However, they were necessary steps to keep the district operating through the remainder of the year.” She said the district “must maintain a positive cash flow to cover payroll and essential expenses while making significant reductions in expenditures.”

The district was placed under receivership by the State Board of Education in January after overspending its budget by millions. J.S. Held, a consulting firm, was chosen to take over the district and resolve its financial crisis.

Employees went several days without pay in February after the Maricopa County Treasurer’s Office said it would stop honoring Isaac Elementary’s expenses until the district could pay its debt, which amounted to about $28.5 million.

Then, Isaac Elementary approved a deal with the neighboring Tolleson Union High School District, which agreed to essentially loan Isaac Elementary $25 million to keep its doors open. At the time, Keith Kenny, a director at J.S. Held, said the agreement resolved the district’s emergency funding issue and would allow him to focus on “much needed cost cutting measures” and liquidating assets.

J.S. Held has until May to produce a report for the State Board of Education, which will include an investigation into how the financial crisis occurred and a long-term financial improvement plan. The Arizona attorney general also said she would investigate Isaac Elementary’s financial mismanagement.

On Thursday, Mesa-Lema said that $20 million of the $25 million the district received from Tolleson Union was used to cover capital overexpenditures.

“While the remaining $5 million provided temporary cash flow, given these constraints, financial adjustments were urgently required to ensure the district can maintain operations while minimizing overexpenditures that will carry into next fiscal year,” she said.

The district has also received about $6 million in federal pandemic relief funding that it had previously forfeited, and it’s anticipating about $2 million in proceeds from selling land to Phoenix for affordable housing.

Reach the reporter at mparrish@arizonarepublic.com.