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Duluth Board Ends Ties With For-Profit Management Firm

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The Duluth, Minn., school system has ended its business relationship with a for-profit school-management firm that sought to take over permanent management of the district.

The city's school board declined to renew its four-month, $40,000 contract with Education Alternatives Inc., which provided the district with an interim superintendent during a time of transition.

"As far as I was concerned, they were hired to do a job, they came in, and they did it,'' said Michael P. Maxim, the board's president.

"It is tough, in four months, to turn things around,'' he continued. "I don't think we ever got to see, nor was there any way to analyze, the ideas that E.A.I. espouses.''

Other board members said that apart from fulfilling its contractual obligation, the company accomplished little else that impressed them.

George M. Balach, a board member who had opposed the contract, said that "as far as the day-to-day operations of the district went, they were no better or worse than our own person would have been.''

Another board member, Mickey Ferguson, said that while she had no regrets about the short-term relationship, "I don't know of one of our nine board members who would have voted to continue our relationship with E.A.I.''

Long-Term Management

The Duluth board's contract with the Minneapolis-based firm was viewed as the first that contemplated long-term private management of a public school system.

Under the pact, E.A.I. agreed to provide the district with an interim superintendent while assisting in the search for a permanent replacement.

The firm also conducted a management-efficiency study and said it would explore the possibility of operating the district full time.

Soon after taking the helm, however, E.A.I. was asked to resolve a long-running debate over school construction in the district. Meanwhile, it angered secretaries and custodians by proposing budget reforms that the employees feared would lead to layoffs.

The firm also was criticized by a local newspaper for allegedly circumventing the spirit, if not the letter, of the state's open-meeting laws by meeting informally with board members or by asking them to privately commit to various proposals in writing before they were brought up for a vote.

Allegations Denied

David A. Bennett, the president of E.A.I. and a former superintendent of the St. Paul schools, called the newspaper's allegations "ridiculous.'' He said the two interim superintendents provided by his firm acted no differently than other superintendents in the state, who he said send confidential memos to board members on an almost daily basis.

Ms. Ferguson, however, said "several board members, myself included, became uncomfortable'' with what they perceived as secretiveness on the part of E.A.I.

"If these were the tactics that were going to be employed by E.A.I. on a long-term basis, I personally would not be interested in pursuing a long-term relationship with that company,'' Ms. Ferguson said.

Although the firm won praise from some board members for its cost-cutting proposals, its chances of winning a long-term contract grew even longer when the board's choice for superintendent, Reginald S. Nolin, expressed concerns about sharing power with the company.

Mr. Bennett said that while his business benefited from the four-month experiment, it is unlikely to repeat it elsewhere.

"Our business is not in becoming interim superintendents,'' he said.

Last month, the Baltimore school board approved a contract with E.A.I. to manage eight city elementary schools and one middle school beginning in September.

As of March, the firm was operating one public school in Florida and two private elementary schools in Minnesota and Arizona, and had entered into a partnership with Florida state officials who were trying to identify three school districts that would agree to be managed privately.

The company also sought a contract with the Green Brook, N.J., public schools, but voters there defeated school-board members who backed the move.

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