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In the early days of the COVID-19 pandemic, the Cleveland school district was staring down a potential financial catastrophe. The national economy was tanking, COVID chaos was mounting in schools, and the district鈥檚 10-year funding levy was headed for a risky public vote.

Failure to renew and increase the levy, worth roughly $65 million, would mean closing or consolidating 25 schools, slashing funding for sports and extracurriculars, and eliminating some academic support programs for struggling students.

Derek Richey, the chief financial officer, gritted his teeth and got to work, creating a doomsday plan to cut nearly 12 percent of the district鈥檚 $1.5 billion budget and lay off 675 employees, if the levy failed.

But as it turns out, Richey didn鈥檛 need to use his worst-case scenario. Thanks in part to his efforts, the levy passed, and the direst predictions about the economy and a corresponding fiscal crisis for districts didn鈥檛 materialize. His meticulous planning and leadership, however, helped ensure that Cleveland is on sound fiscal footing to weather any future financial storm.

Richey, 42, is a rare breed of school district CFO, one who has expanded the role beyond the quotidian duties of the typical school business official to ensure that principals, teachers, students, and academic and nonacademic programs are central to the district鈥檚 financial calculus. He doesn鈥檛 simply ensure that there are line-item allocations for programs; Richey collaborates with building-level educators and department heads about what best fits their needs.

That collaborative approach, along with moving beyond the traditional number crunching, has earned Richey both local and national praise.

鈥淥ur prior CFOs, they were all good bookkeepers, but they didn鈥檛 contribute to, 鈥楬ow is spending this money changing achievement, meeting a strategy?鈥� They left that to the academic people,鈥� said Eric Gordon, Cleveland鈥檚 superintendent.

Hoa Truong, a consultant who has known Richey professionally since they crossed paths in 2013 at a Broad Center fellowship program for budding school leaders, agreed.

鈥淗e鈥檚 always focused on how do they think strategically about the dollars that they manage within Cleveland, how do they best support the things that need the most support,鈥� Truong said. 鈥淚t seems like kind of a basic thing, but I would not say that鈥檚 the norm.鈥�

Helping the district find its footing

Cleveland has been near the brink before. At the start of the 2010s, only 30 percent of the district鈥檚 44,000 students were proficient in math, the majority of its traditional public and charter schools were among the lowest-performing in Ohio, and just about half of high schoolers were graduating in four years.

The city鈥檚 broader economic fortunes were also on shaky ground, as the ongoing exodus of manufacturing jobs from the city was compounded by a sharp rise in foreclosures and economic hardship following the Great Recession. In 2014, 58 percent of the city鈥檚 children were living in poverty.

The school district is now nearly a decade into the Cleveland Plan, a package of reforms implemented in 2012, in part to prevent a state takeover. Under the plan, the district committed to expanding high-performing schools, closing failing schools, shifting budget and governance decisionmaking from the district to principals, and carefully tracking progress on graduation rates and other key academic metrics.

The plan, coupled with sturdy leadership from top administrators, has put Cleveland鈥檚 schools on a notable upswing.

The district鈥檚 finances have improved as well. Even as state aid tied to declining enrollment continues to be an issue, the levy reflects the public鈥檚 renewed confidence in the system鈥檚 ability to spend resources wisely.

Richey, who had been a key part of that turnaround, is quick to share credit with his colleagues for the improvements and points to the groundwork laid before he arrived in 2015. After four years in the CFO role and seven overall with the district, he is intensely invested in improving students鈥� experiences and seeing initiatives through.

That was the case last year when the district had to purchase technology in line with a new strategy to enhance student engagement. The district鈥檚 IT team chose Clevertouch, an interactive display that would hang on the wall of each classroom and enable educators and students to write and draw digitally for the whole class to see. Each device costs $2,500, with the total topping $10 million, including installation鈥斺�渢oo much money to spend without a plan,鈥� Richey said.

Instead of buying the displays and sending them to classrooms, where some would likely sit untouched, he recommended that the IT team identify a handful of teachers who were already using them and asked them to choose colleagues who would serve as good test subjects.

鈥淭his would also allow us to work out any kinks with early adopters,鈥� Richey said.

His closest collaborators say this kind of calm, proactive research is one of his core strengths.

鈥淗e approaches things with a curiosity that I think is really healthy,鈥� Gordon said.

Implementing new programs to enrich students鈥� lives

Richey spots opportunity in crises.

Eight months into the pandemic, he and colleagues rallied the city鈥檚 voters to renew the tax levy, even as the economic turmoil of the pandemic鈥檚 prevaccine era was exacerbating poverty in the area, according to a 2020 report from the Ohio Association of Community Action Agencies.

Under Richey鈥檚 watch, the district is using the levy, as well as the three rounds of federal COVID-19 aid, to implement initiatives Cleveland had been sitting on for years.

鈥淲hat our kids were getting before is just not good enough,鈥� he said. 鈥淲e鈥檙e going to take the opportunity to place the bet and say, 鈥業f we can provide a better experience, we think we will be able to attract and retain more students,鈥� and the community will see the value and support it with their tax dollars.鈥�

Richey鈥檚 team has hit the ground running on everything from an updated pay scale for athletic department employees to a new budget-visualization approach that ensures schools can see all the financial resources available to them at any given time.

In recent months, he helped spearhead an effort to change bell schedules and transportation plans for elementary and middle schools. The goal was to go from an eight-period day to a 10-period day, with all teachers at work for nine consecutive periods. The first and last periods offer enrichment for students who want to pick up an additional course in physical education, arts, or music.

The plan offering more enriching programs for students emerged from contract negotiations with the teachers鈥� union in March last year.

But when it was time to put it into action months later, no one in district leadership seemed available to take it on鈥攅xcept Richey.

鈥淚 was passionate about it so that鈥檚 helped,鈥� he said.

He met with fellow district leaders, the arts director, the transportation team, and principals to discuss how the transformation would work. The collaboration benefited immensely from the strong relationships Richey had cultivated during his tenure.

Richey and the district鈥檚 transportation director, Eric Taylor, had contemplated changing the bus schedules years ago so that more buses would be able to drop off students at three schools during a single bus run. At the time, only 15 percent of the buses hit the mark. Now, with the changes Richey and Taylor spearheaded, 85 percent of buses hit three schools in one run.

鈥淗e understood that the way this was going to work was if school folks, curriculum folks, the content folks centrally, transportation鈥攊f they all collaborated and worked together, they could figure out a set of things that school principals would want to do that actually were good and grounded in good content and that were cost-effective,鈥� said Jonathan Travers, a partner at the Massachusetts-based school finance consulting firm Education Resource Strategies, which works with districts including Cleveland on equitable-spending approaches.

鈥淗e is really a bridge-builder, which is often a unique quality in finance.鈥�

Cleveland schools are now offering enrichment courses in more than 70 topics, as wide ranging as African drumming and extreme fitness to jewelry making and musical theater.

Roughly 3,000 students, or 13 percent of the district鈥檚 K-8 enrollment, are already participating in those programs. Travers marvels at the district鈥檚 success pulling off a new program while trying to keep daily operations afloat as in-person school returned this fall.

鈥淭he path of least resistance when you鈥檙e already managing a crisis is to not have to change,鈥� Travers said. 鈥淚t鈥檚 pretty amazing that they have largely pulled this off at scale.鈥�

A push for reform sparks a passion for education

Richey鈥檚 K-12 career began in 2008, while he was working at a health care IT company and living in Kansas City, Mo.

After the birth of his son, many friends and acquaintances assumed he鈥檇 be crossing state lines to Kansas City, Kan., where the schools have a better reputation than their counterparts in Missouri.

He found that perception frustrating. After stumbling upon an ad soliciting candidates for two school board vacancies on the Missouri side, he applied with the hope of improving the reputation of the city鈥檚 schools. He was selected to fill one of the seats and successfully won reelection two years later.

鈥淨uite fortuitous that free, promotional newspaper showed up on that day,鈥� said Richey, who served on the board from 2008 to 2012.

He quickly embraced the challenge of making substantial changes from within the system and eventually realized he wanted his night job to become his day job.

鈥淲hen I joined the board, we had like 1,000 board policies, down to minutiae levels of determining what the superintendent and his team should do,鈥� Richey said. 鈥淲hen I left, we had a completely revised set of policies that were focused on the expectations of what we wanted the district to achieve for kids.鈥�

In 2012, he moved to the Metro Nashville Public 69传媒 in Tennessee, where, as the district鈥檚 director of innovation, he helped steer more resources into the hands of principals.

That work drew the attention of Gordon, who recruited Richey in 2015 as executive director of budgets and grants. When the district鈥檚 chief financial officer retired in 2017, Richey stepped up.

Cleveland was only a few years removed from the city government鈥檚 formation of the Cleveland Plan, enrollment was dropping, and student poverty was endemic. But Richey saw the glass as half full: a more cooperative board than he鈥檇 previously encountered and some strong positive momentum on graduation rates and equitable spending among schools.

Now, two years into a public-health crisis that keeps throwing new curveballs at school districts, Richey finds himself in the unlikely position of telling his colleagues to worry less about money than they typically do, as long as they鈥檙e confident their investments will pay off for students.

鈥淵ou鈥檝e got to shake them loose a little bit,鈥� he said. 鈥淗aving the CFO say, 鈥楽eriously, spend the money, dream big, don鈥檛 worry about the cost鈥欌�攖hat鈥檚 a really liberating thing.鈥�