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Published in Print: June 23, 2004, as St. Louis School District Gets Its House in Order

St. Louis School District Gets Its House in Order

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A year after the St. Louis school board brought in a private management firm to run the city’s troubled schools, the district’s business practices are much improved, but significant academic challenges remain.

The $4.5 million contract with the New York City-based Alvarez & Marsal expires at the end of July. At that time, Deputy Superintendent Floyd Crues will take over as interim superintendent while the school board searches for a permanent schools chief. Mr. Crues, who began teaching in St. Louis in 1978, was appointed on June 8 to a one-year contract.

Settling for an interim superintendent was a disappointment for district leaders, who said last fall that they wanted the management firm to clean house so that St. Louis could attract a top-quality candidate. ("Private Managers Stir Up St. Louis Schools," Sept. 3, 2003.)

The board aggressively courted former New York City Schools Chancellor Rudolph F. Crew for the job. But Mr. Crew, who served as an adviser to the district under Alvarez & Marsal, turned down the post to run Florida’s Miami-Dade County district.

Robbyn Wahby, an education aide to Mayor Francis G. Slay of St. Louis, said the district is steadily moving in the right direction, and she credited the management firm with laying a strong foundation to build on.

"They have done a lot of the heavy lifting that needed to be done," Ms. Wahby said last week. "New dollars are now going into the classroom, instead of into an ineffective and inefficient bureaucracy."

Cleanup Job

When the seven-member school board hired Alvarez & Marsal to run the 40,000-student system last June, it was a controversial move.

The goal was to clean up a district that had so much trouble handling basic operations that $5 million worth of textbooks sat unopened in a warehouse, accurate financial projections were hard to come by, and the district was inching toward insolvency. William V. Roberti of Alvarez & Marsal, a former chief executive officer of the Brooks Brothers clothing retailer, was hired as the district’s acting superintendent. To the praise of some and the dismay of others, he quickly closed 16 schools, cut $60 million in expenses by outsourcing services, and fired some 1,400 employees.

These days, school board members receive monthly updates on the district’s finances, accounting practices have been standardized, and the transportation service has been streamlined.

"Financially, the system was flying blind," said Vincent C. Schoemehl, a school board member and a former mayor of St. Louis. "The transparency is infinitely improved. We know to the nickel where we are. We’ve demonstrated that there is a way to connect the cultures of the private sector with the culture of urban education. I would recommend the model to any public entity that needs to refresh itself."

Despite the improvements made to the business and financial practices, a June 14 report from the Missouri state auditor projected a $38 million deficit in the district’s $450 million budget for this fiscal year. If additional cuts are not made, the audit warned, that could grow to a $54 million deficit for fiscal 2005.

Among other steps, the audit called for the district to do even more to evaluate the efficiency of its school buildings, many of which are under capacity because of declining enrollment.

The district requested the audit and acknowledges that financial challenges remain as a result of past mismanagement. But school board members said that considerable progress has been made and that business practices are improving every day.

Public Skeptical

William Tate, the chairman of the department of education at Washington University in St. Louis, said the management team failed, however, in a crucial task: persuading the public that the changes it made were necessary.

"They didn’t do a good job marketing or communicating," said Mr. Tate, who believes parents and community members never had the chance to buy into the plans of the turnaround firm. "It was done so naively."

Alvarez & Marsal, he added, has been narrowly focused on improving business operations while giving short shrift to improving academics.

"If you’re running a restaurant, you need to have your accounting in order, but you don’t stop serving food," Mr. Tate said. "It’s important to have your financial place in order, but it’s mandatory, when as an organization your mission is teaching and learning, to pay attention to education. They don’t talk about academics."

Mr. Roberti asked the Council of the Great City Schools, a Washington-based organization that advocates for urban schools, to evaluate the district’s efforts to improve academic performance.

A team of leaders from urban districts that have improved achievement visited St. Louis in January and issued a report blunt in its criticism. The 130-page document praised the district for hiring literacy coaches in all schools, creating interim assessments, and channeling cost savings into the classroom. But it found the overall picture dim.

"The school district has no instructional focus; it lacks a plan for raising student achievement; its instructional staff is poorly organized; and its sense of direction has splintered," the evaluation found. "The district is also marked by little sense of urgency for improving achievement, no accountability for results, and very low expectations for children.

"To make matters worse," it said, "the district has piled one program on top of another for so many years that one cannot tell what the system is tying to do academically and why."

Mary Armstrong, the president of the St. Louis Teachers and School Related Personnel Union, called the report "right on target."

For years, she said, the union has been saying some of the same things. But Ms. Armstrong worries that changing the culture in St. Louis’ schools could be an uphill fight.

"I have never seen the morale as low as it is right now," Ms. Armstrong said.

Vol. 23, Issue 41, Pages 6-7

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