SalemNews.com, Salem, MA

SALEM - The House and the Senate passed a bill yesterday afternoon allowing the city to either borrow money or spend in deficit to get through this year's fiscal crisis with fewer job cuts.

Nearly 30 teachers and dozens of aides, custodians and secretaries were set to lose their jobs before Gov. Deval Patrick filed legislation Monday to help the city deal with a $4.7 million school deficit. How much money will be spent - and how many jobs will be saved - is still being worked out.

"We are definitely not anticipating needing more than $500,000 to bring back all of the teachers," Mayor Kim Driscoll said yesterday, "and that will also enable us to bring back a small number of paraprofessionals - approximately 10."

Many laid-off school employees said goodbye to their colleagues on Friday, only to learn later that day that the state was stepping in with this legislation that could spare jobs. Since then, employees have been waiting anxiously. Now, Driscoll said, "We want to be able to retain people by Friday."

"We need to get this resolved," Superintendent William Cameron Jr. said yesterday. "The thought of having this prolonged another week is daunting to me."

The Salem Education Fund has amassed $330,000 so far that will help restore roughly 15 classroom teaching positions. With roughly $500,000 in additional spending, Cameron said he hopes to restore all teaching jobs.

"We still have a number of teaching positions that have not been restored," Cameron said. "What we plan to do, if the money being discussed through this state intervention becomes available, is reinstate all teaching positions, full-time or part-time, that we would be losing."

Nonclassroom teaching positions include music, gym and art teachers, as well as technology integration specialists.

"We're under very tight time constraints," Cameron said.

Rather than borrowing money, Driscoll said the city will likely opt to carry the deficit, under review of the Department of Revenue, which would require the city to shrink the deficit each year until it's gone - in a maximum of seven years.

"We hope we'll be able to do it sooner than seven years," Driscoll said.

The mayor said carrying the deficit is probably a cheaper option than borrowing money, which would involve interest payments and a cost of issuance fee.

"Nothing is finalized," Driscoll said. "We're having those discussions."

The new legislation may require an emergency meeting of the City Council and School Committee this week so that both bodies can vote on the legislation's conditions: that the city and schools consolidate administrative functions through adoption of a state law - a proposal Driscoll brought before members in December.

The state law outlines administrative functions as "including but not limited to financial, personnel and maintenance."

Driscoll and former City Council President Matt Veno said in December that the school budget crisis highlights a lack of oversight in current financial practices. City officials have blamed the deficit on mismanagement by former School Business Manager Bruce Guy. Salem police are investigating the deficit.

Of the $4.7 million deficit, $1.8 million is because of fiscal year 2007 payments that were deferred and paid out of fiscal year 2008 money - leaving the schools without enough money to pay this year's bills. In addition, this year's spending plan was underbudgeted by millions of dollars, particularly in special education.

The City Council absorbed the $1.8 million portion of the deficit, and the schools cut millions of dollars through nonpersonnel reductions and contract renegotiations. A remaining $1.2 million was set to be eliminated through layoffs.

It appears that may be reduced - through the Salem Education Fund and the $500,000 in deficit spending - to roughly $370,000, which still might be eliminated through layoffs, depending on factors such as any additional funding that comes in.

It's unclear which aides or other school employees will be spared with the new funding. As far as positions other than teachers, Cameron said "however much we can afford to do...in bringing back staff with that money, we'll do it."

The Salem Education Fund is expected to continue collecting money through private donations and fundraisers. Among the donations, the Board of Library Trustees donated $5,000 specifically for the restoration of a school librarian.

Already restored positions include three out of four sixth-grade teachers in the Union Wharf at Collins Middle School, which means the team of students and teachers will remain largely intact. It had been slated for elimination, which would have dispersed the students into other classrooms.

"(It's) good because it will keep those kids together," Collins Principal Mary Manning said. "The schedule's a little difficult (going from four to three teachers), but it will work and we'll do it for the rest of the year."

Jobs saved

Positions restored through the Salem Education Fund so far:

* 8 elementary teachers, including 3 at Bates, 2 at Bentley, 1 at Horace Mann

* 1 English teacher at Bowditch

* 3 grade six teachers at Collins Middle School

* 3 high school teachers - 1 vocational education, 1 math, 1 English

Total: 15