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East St. Louis District Gets Year Off to Rocky Start

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Almost a year after the Illinois school board appointed a special panel to oversee the finances of the East St. Louis schools, the district remains hampered by labor unrest, management difficulties, and a lack of cash.

District officials had hoped to start the school year on a positive note, but the threat of a teachers' strike and a series of legal skirmishes suggest that District 189's troubles are far from over.

Negotiations between the district's school board and the East St. Louis Federation of Teachers broke down last month after union leaders rejected a contract offer that did not include raises for teachers this year. The union has accused the district of unfair labor practices by putting in place parts of its offer without the union's approval.

Coy Nunn, a union vice president, said last week that the district's actions may force a strike.

On another front, the school board has challenged in court the state panel's appointment of an accounting firm to handle the district's finances, said Gary Ey, the state's associate superintendent for fiscal and shared services. The board wants a judge to clarify how much control the special panel has over the district's books.

"The problem is we never really SAT down and talked things over about our roles," Martha Young, an East St. Louis board member, said of the panel.

The state named the three-member panel last year to oversee the district after years of reports of fiscal mismanagement and failing schools. (See Education Week, Feb. 15, 1995.)

Panel members complain that they are not receiving the cooperation they expected from the district's leaders, several of whom swept into office earlier last year promising reform.

Case Dismissed

The news for district leaders, however, hasn't all been bad.

Earlier this month, a circuit court judge dismissed a class action filed by the Illinois chapter of the American Civil Liberties Union in April. The lawsuit claimed the district has failed to provide safe and adequate schools for its 15,000 students.

The ACLU plans to appeal, said Valerie Phillips, a spokeswoman. The group is seeking a court order that would force the district to improve conditions for its students--or be dismantled, she said.

Despite that victory, the district is still grappling with how to balance its books. In a preliminary audit of last year's expenses, the oversight panel found about $10 million in accounting errors, said Richard J. Mark, the panel's chairman, who is the chief executive officer of a local hospital.

This summer, the panel became frustrated with the pace of change and persuaded the school board to hire an accounting firm to handle payroll, accounting, and other financial operations, replacing about 25 workers, Mr. Ey said.

The district's court challenge to that move has aggravated tensions between the panel and the school board.

"We were hoping with the new administration and superintendent that things would be easier," Mr. Mark said. "This showed it won't be."

Playing Catch-Up

The oversight panel said in its annual report that the state may have to resort to more drastic steps--such as dissolution or reorganization of the district.

Recently, panel members discovered that the misuse of funds may be more widespread than they had believed. They have begun investigating allegations that school officials may have misspent athletic-department funds. Two popular high school coaches have resigned over the issue, saying they were frustrated by the way the schools managed that money.

But Ms. Young said the school board can only move so fast to make the changes the state wants. "This present board is trying to correct a lot of wrongs that happened years ago," she said.

Meanwhile, almost $1.5 million in the district's proposed budget hangs on the negotiations between the teachers' union and the school board, Mr. Mark said. The oversight panel must sign off on the final budget, which is expected to be about $75 million.

Teachers are unhappy with the district's efforts to freeze their pay this year and to end its longstanding practice of paying for health care for dependents.

But Ms. Young said the district stood firm on its proposal, and the two sides remained far apart last week.

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