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Hartford Hires E.A.I. To Run Entire District

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The Hartford, Conn., school system has turned itself over to a private company.

Under a contract approved by the school board last week, Education Alternatives Inc. will manage every facet of the district's schools. The unprecedented contract entrusts the for-profit, Minneapolis-based company with managing the district's 32 schools and its annual budget of some $200 million.

"We are absolutely convinced that the current way of operating our schools does not work and cannot work," said Edward J. Carroll, a member of the Hartford board who voted with the 6-to-3 majority favoring the agreement.

Mr. Carroll welcomed the agreement as bringing the district "some additional talent and resources and skills." And he predicted that Hartford's alliance with E.A.I. "will be a model for the rest of the country."

However, the legality of the contract remained in question last week. The city attorney, Pedro E. Segarra, has refused to add his signature, which he said was legally required. Mr. Segarra said the contract violates the city charter in several areas in which it gives the company financial powers that belong to city officials.

Members of the city council who have opposed the contract threatened last week to withhold the funds the district needs to pay the company.

School board members argued that the city attorney's signature was not needed and that the city was obligated to provide the payments under state law.

Mayor Michael P. Peters sought to broker an agreement between the city council and the school board. Although no such reconciliation had been reached late last week, both sides said they were optimistic--largely because the alternative likely would be a long and expensive battle in the state courts.

John T. Golle, the chief executive officer of E.A.I., said in an interview last week that he considered the contract "signed, sealed, and delivered" and had started moving employees and equipment into the 25,000-student district.

Experiment and Enterprise

The Hartford contract, which had been tentatively approved in August, calls for E.A.I. to make substantial investments in the school system, especially in the area of technology. The company is to be paid installments from the regular district budget at the end of each month and will try to recoup its investments and clear a profit from making the schools operate more efficiently. (See Education Week, Aug. 3, 1994.)

The contract is the first in the nation entrusting all aspects of a school system's operations, including its budget, to a private firm.

The Minneapolis school board last year granted a less extensive contract to Public Strategies Group Inc., a private consulting firm in St. Paul. Under that agreement, the company's president, Peter Hutchinson, serves as the superintendent but does not control the district budget and leaves most educational tasks to school officials.

Public Strategies stands to gain $470,000 under its performance-based contract being renegotiated with the Minneapolis board. The board was deadlocked last week over the question of how much money the firm should receive for achieving each of the renewed contract's eight new goals.

Denis P. Doyle, a senior fellow at the Hudson Institute, an Indianapolis-based think tank, said the medium size and diverse demographics of Hartford--a city of about 140,000 with large poor and minority populations--make it a near-perfect setting for the experiment in private management.

"If you were a researcher and you wanted to pick a city to try it in, you would be hard-pressed to do better than Hartford," Mr. Doyle said.

Other observers saw opportunity for E.A.I. in the fact that Hartford spends more than $8,500 per student but has achievement scores ranking among the state's lowest.

Ted Kolderie, a senior associate at the Center for Policy Studies in Minneapolis, said he viewed the arrangement as "perfectly reasonable" given the failure of more than a decade of education reform.

"Those of us who are involved in public education need to accelerate the process of school reform if we are going to keep public education in the public domain," added S. Paul Reville, a member of the state school board in Massachusetts, where the private Edison Project is a partner in three charter schools.

Stephen C. Tracy, the senior vice president for public school partnerships at the Edison Project, which is seeking to manage individual schools for profit, said the Hartford contract "bodes well for our prospects."

District of Columbia school officials, who last year tabled a proposal to entrust some schools to E.A.I., will be watching what happens in Hartford, said Beverly P. Lofton, a spokeswoman for the schools.

'Scandal in the Making'

The agreement provoked sharp criticism, meanwhile, from the nation's two major teachers' unions, both of which have fought to keep E.A.I. from gaining contracts.

Keith Geiger, the president of the National Education Association, said the company has done nothing in Baltimore, where it has managed nine schools since 1992, or Dade County, Fla., where it provides instructional services at one school, to merit running an entire district. School boards and superintendents elsewhere have been able to address their problems "without lining the pockets of shareholders," he said.

Albert Shanker, the president of the American Federation of Teachers, issued a statement calling the contract "a scandal in the making."

"Although the superintendent supposedly has oversight of this multimillion-dollar contract, the key employees running the show, especially the business manager, are E.A.I. employees or chosen with E.A.I. approval," Mr. Shanker said.

Mr. Golle said the agreement with the Hartford board calls for him to honor all existing union contracts but allows him to try to renegotiate the labor agreements when they come up for renewal. He said he has no plans to significantly cut back on the district workforce.

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