St. Louis Roiled by School Turnaround Gambit

ST. LOUIS —  Nine months ago, the school board hired a corporate turnaround firm to run the troubled public education system here.

The consultants will return to New York in June, their $4.7-million contract up.

They will leave behind a school district in chaos -- and a city enraged.

Applying business models developed to save casinos and clothing chains from bankruptcy, the outsiders slashed the district’s expenses by 15%. They shut 16 schools, laid off more than 1,100 employees and hired private companies to handle food service, building maintenance and payroll accounting.

They made the moves quickly, with minimal public input. Many parents felt betrayed. Accusations of racism filled the air as some activists protested that the cuts fell most heavily on African American neighborhoods.

And the uproar is getting louder.

The restructuring experts, from the firm of Alvarez & Marsal, announced this month that their budget cuts had not been deep enough. To close a $23-million gap projected for the 2004-2005 school year, they have proposed shutting more schools, boosting class sizes or eliminating field trips, library book purchases and enrichment programs for gifted students.

Now the teachers union is threatening to strike. Hundreds of parents and school employees have turned recent public meetings into near-riots, with hissing and shouts of “Liar! Liar!” being hurled at school board members. Civic leaders who support the turnaround firm have been proclaimed “traitors to the African American community,” their photos plastered on derogatory posters.

Adding to the chaos, some school board members have vented their frustration with sandbox antics.

One recently dumped a pitcher of ice water on a school district administrator. Another sent out a mass e-mail so full of expletives and sexual innuendo that the acting superintendent has sued him for defamation. A third compared protesting parents to Nazis, saying they were “plain un-American” for disrupting meetings with their complaints.

Amid the tumult, parents wonder who’s paying attention to the district’s nearly 40,000 students -- many of them poor, black and failing miserably on standardized tests. Parents complain that some schools lack supplies as basic as copier paper and that others don’t seem to have the budget to fix broken classroom computers.

“The consultants are stuffing money into their pockets and heading to the door saying: ‘I really tried, but I don’t know what ... to do with the schools.’ That’s what we’re left with. It’s a crime,” said George Cotton Sr., whose two children attend city high schools.

Even those who credit the consultants with getting the district’s finances in order acknowledge that the whole process has left a deep wound.

“Let’s just put it this way: They’re going to be gone soon. Maybe the wrath they’ve created will go with them,” school board member Amy Hilgemann said.

The head of the turnaround team, former Brooks Bros. executive William Roberti, makes no apologies.

When he took over, he said, the district’s books were in shambles. The previous administration spent nearly $410 million in 2002-2003, blowing through a $39-million surplus of cash reserves and ending up in the red.

And children were clearly not learning. On state tests last year, barely 5% of the city’s high school students were deemed proficient in reading and writing; fewer than 3% were competent in math and science.

Critics “can mistrust us, distrust us, whatever they want, but the reality of life is ... what they had here before didn’t work,” Roberti said. “We did what had to be done.”

Some of the firm’s critics grudgingly admit that no insider would have been able to cut through the bloated bureaucracy of the St. Louis School District as effectively. Previous superintendents could not muster the political will to sell long-vacant properties, much less to dismantle unneeded operations like the greenhouse that grew plants for city schools.

Education experts point out that St. Louis is not alone in making drastic cuts; urban districts from New York City to Portland, Ore., face agonizing choices, and several have had to lay off teachers. The Los Angeles Unified School District must cut close to $500 million, or nearly 10%, out of its operating budget to balance next year’s books. “It’s been an awful year,” said Michael Casserly, executive director of the Council of Great City Schools.

Given that climate, “the team is probably worth every dollar we’re overpaying them,” school board member Bill Haas said.

Roberti asserts that his clear-eyed approach to the budget has attracted a new breed of administrators, who will continue to run a tight ship after the consulting firm leaves. A shoe manufacturing executive has come out of retirement to serve as the district’s chief financial officer. The new chief operating officer spent 15 years running pharmaceutical factories.

“This is all about bringing in competency,” Roberti said.

But many parents say that the corporate mind-set -- however competent -- is not appropriate for public education.

Outsourcing cafeteria work might make sense on paper. But it left hundreds of residents, many of them parents of city students, out of work and without health insurance. Shutting a school with dwindling enrollment might pencil out. But it left vacant, boarded-up husks in neighborhoods struggling with too many crack houses.

Kathy Styer said she had always been delighted with the education her daughters received in programs for the gifted. This year, however, she said her kids have been buffeted by perpetual upheaval, their teachers demoralized and the future of the gifted programs left uncertain.

Like many parents, Styer said she could not understand why the school board had to pay out-of-town consultants millions to tell the board the district was broke. “I pay taxes here, and I really feel they’re wasting our money,” she said.

“Everything this company has done since they got here has been secret, behind closed doors. They have totally disrespected the parents,” said Dorris Walker-McGahee, who has a daughter and three grandchildren in city schools.

The next big test for the district will come in April, when the board hires a new superintendent to take over from the departing consultants. The city has received 11 applications; board members expect to begin interviewing three finalists soon.

The leading name bandied about so far has been Rudy Crew, former head of New York City’s schools.

Some in the community say they’d love a superintendent with Crew’s energy and experience. Others vow to put their kids in private schools if Crew takes the job; they don’t trust him because he’s been advising the turnaround firm on literacy programs for the last year.

Both sides agree on just one point: Whoever takes the top job has quite a task ahead.

“Rebuilding trust is going to be really hard,” said Lana Stein, a political science professor at the University of Missouri.

Alvarez & Marsal, meanwhile, has been approached by other urban school districts about taking on similar jobs. Despite the uproar in St. Louis, the firm’s executives are convinced that the corporate model can rescue public education.

“It’s been a gut-wrenching year,” Roberti said. “But I’m proud of what we’ve done.”