Shelby County Schools welcomes timely settlement money

Shelby County Schools is poised to receive a much-needed infusion of cash next week as part of a recently approved settlement with the city of Memphis in a longstanding dispute over school funding.

The district is to receive its first payment of $8 million by Feb. 15 as part of a $41 million settlement approved last month by both the Memphis City Council and Shelby County School Board. The agreement was reached just weeks before the district is expected to cut millions of dollars from its budget to counter a loss in students and tax revenue.

The money couldn’t come at a better time for the state’s largest public school district, which was created in 2013 in a historic merger of the city and county school systems. The combined district has struggled financially because of decreasing property tax revenue and the loss of thousands of students to new charter schools and six new municipal school districts – all while working to turn around dozens of academically underperforming schools.

The settlement stemmed from ongoing litigation and negotiations following the City Council’s 2008 decision to withhold $57 million from then-Memphis City Schools. At the time, the council said it was not legally obligated to pay the district and that the school system owed the city for prior debts.

Under the agreement reached in January, the city will provide payments or services to Shelby County Schools totaling almost $42 million over the next 15 years. Following the $8 million initial payment, the city will make annual payments of $1.3 million through 2030. In addition, the district will be forgiven for an $8 million bond debt from 1998, and the city will provide police officers at schools through June 30, 2016, valued at about $2 million.

“When you do mediation, when both sides are walking away a little upset, it’s a good deal,” Superintendent Dorsey Hopson said on Jan. 27 before the board voted to seal the deal. “To put this behind us, it’s best for the community and it’s what’s best for the district.”

District administrators haven’t decided specifically how to divide up the settlement money, and discussions are under way on how the district will receive the first payment, spokesman Christian Ross said Wednesday. However, Hopson previously has said much of the initial money likely will help bolster the district’s Innovation Zone, also known as the iZone, in an effort to improve test scores in the district’s lowest-performing schools.

In all, the district has 69 schools that are considered priority schools – defined as schools that fall in the bottom 5 percent of schools in the state. Seventeen of those are within the district’s iZone, a program created by the state in 2012 to fund turnaround efforts at schools that need it the most. The efforts – which include teacher signing bonuses, professional development and altered curriculum – are largely funded by federal School Improvement Grant money that soon will be depleted.

The district’s iZone has become a source of encouragement for the beleaguered school system, showing strong academic improvements in math and English scores at several of the schools. District administrators have proposed expanding its iZone in the fall.

“Our iZone schools are highly regarded as models for student achievement and school turnaround efforts both in the state of Tennessee and nationally,” Ross said.

Contact Daarel Burnette II at or 901-260-3705.

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