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State Seeks To Put Kansas City Schools Under Receivership

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The State of Missouri has asked the federal judge overseeing the Kansas City school-desegregation case to appoint a receiver to run the entire school district, charging that the school board and administration are incapable of operating the systemefficiently.

Under the state's plan, the school board and superintendent would be stripped of their authority while the receiver restructures the district. In addition to examining the district's organization and finances, the state envisions the receiver presiding over a "downsizing" of the desegregation plan--one of the most ambitious and expensive in the nation.

The state's Feb. 14 request came in response to a motion filed by the district in January seeking permission to change its budgeting procedures to avert an anticipated deficit of $9.2 million next year.

The district argues that without the change it will be forced to lay off 190 employees by April 15 and to eliminate vital programs.

Rather than make such cuts, the district asked U.S. District Judge Russell G. Clark to allow it to combine its regular operating budget with its desegregation budget. The state bears much of the district's desegregation costs.

Michael J. Fields, an assistant state attorney general, said last week that the state regards the district's request as "the ultimate bailout."

"Their solution is simply work some accounting sleight of hand," Mr. Fields said, "thus availing themselves of the state treasury for any deficits they might have."

But Allen R. Snyder, a lawyer for the district, said the idea of appointing a receiver was an "illogical response" to the district's fiscal crisis because it has admitted its problems and has proposed several ways of solving them.

"That shows we're being responsible and laying out the situation and options," Mr. Snyder said. "There is no basis in our view [for the idea that] elected officials should be displaced by the court."

Escalating Costs

The district attributes its budget woes to the fact that its operating budget has remained stable over the years as the cost of administering the sweeping desegregation plan has increased. Among other things, the plan calls for renovating all existing schools, erecting dozens of new buildings, and establishing magnet programs in most schools. (See Education Week, Dec. 13,
989.)

Mr. Fields said the district's motion "claims that they've been given so much money through desegregation that they're going broke trying to spend it."

But Mr. Snyder pointed out that the district originally had asked for more resources to administer the desegregation plan and was turned down by the court. At the same time, he noted, the court warned the district not to reduce its regular education programs.

Missouri, which is also a defendant in the case, must pay half of the cost of the capital-improvement program and 75 percent of the cost of other desegregation expenses.

In past years, the state has assumed up to 90 percent of the cost of the desegregation effort because the district has been unable to pay its share, Mr. Fields said. The district now owes the state $85.5 million.

The district's motion argues that more than half of its operating budget cannot be cut without violating the court's orders in the case. Because the orders specify class-size ratios that must be maintained, for example, no teachers can be laid off without affecting the desegregation plan.

Money raised from past tax increases ordered by Judge Clark have gone into the desegregation budget, Mr. Snyder noted, not the operating budget.

This year, the district has a $7.4-million budget shortfall that it plans to close by instituting a hiring freeze, making cuts, and tapping reserve funds.

Under the proposed "single budget" approach, the district would present the judge and the court-ordered desegregation-monitoring committee with a proposed budget for their review each year.

Expenditures that are deemed necessary would be paid for by the district and by the state, providing for a system of "review and accountability," the district's motion states.

But the state argues that the district itself designed the costly remedies that have caused its deficits.

Combining the two budgets, the state's motion says, would be "totally unprecedented" and would amount to "shifting the burden of its lack of leadership and poor management to the taxpayers in the rest of the state."

Arthur A. Benson 2nd, the lawyer for the black plaintiffs in the case, called the state's motion "95 percent bluster."

Other observers said they were not surprised at the state's action, noting that its discontent with the cost and scope of the desegregation case has long been known.

Mr. Fields called the result of the desegregation efforts, which depend heavily on attracting white suburban students to city schools, "a joke." There are currently 752 nonminority students enrolled in the 5,000-student district, a spokesman said.

Rather than asking for a receiver to scale back the desegregation plan approved by the court, Mr. Snyder said, the state should ask the court to change its orders.

Both Mr. Benson, who said he favors the idea of combining the budgets, and Mr. Snyder said they also did not believe the state had presented sufficient legal evidence for its assertions about the district's incompetent management.

"None of us have been terribly pleased with the management of the district relative to the efficient and effective expenditure of resources," said Eugene E. Eubanks, chairman of the desegregation-monitoring committee. "At same time, we recognize that there are many complex activities takingplace in the district."

Julia Hill, president of the Kansas City school board, said the board's decision last week to hire Walter L. Marks, the former superintendent of the Richmond, Calif., schools, demonstrates that it is managing its affairs properly.

Mr. Marks, whose contract was bought out by the California district last December, will be paid $140,000 annually for a 8-month contract.

Ms. Hill said the fact that the Richmond district is now bankrupt and is negotiating for a state bailout did not change her high opinion of Mr. Marks. (See Education Week, Feb. 20. 1991.)

She added that the board plans to ask a local corporation to loan it an executive to run the district's business affairs, although no candidates have been identified for that post.

The California superintendent's background in establishing magnet schools made him a particularly attractive candidate for Kansas City, Ms. Hill said.

"He said Kansas City interested him because we have desegregation money," she
said, "and most cities don't have that."

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