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Ex-Richmond Chief Has Left Long Trail Of Fiscal Questions

By Peter Schmidt & Ann Bradley — May 22, 1991 11 min read

Walter L. Marks arrived in Kansas City, Mo., to take the job as superintendent of public schools with a resume that contained both educational high marks and fiscal question marks.

While his innovative magnet-schools program in Richmond, Calif., has won him praise from many, Mr. Marks’s financial management of the district, which he ran until last December, has also been called into question.

Mr. Marks’s career, particularly his experience in Richmond, illustrates the difficulty school boards have in overseeing the administration of ambitious educational reforms.

The Richmond magnet-schools program was “all just based on hope,” said Thomas A. Shannon, executive director of the National School Boards Association. “School-board members were desirous of improving the instructional program, and here was a school administrator who could show them how to do it.”

“It was a wonderful program,” he added, “but the problem was they couldn’t afford it.”

The Richmond Unified School District recently made history when it required a $19-million state bailout after running up a projected $23.5-million budget deficit. (See Education Week, May 8, 1991.)

Responding to the Richmond bankruptcy, a California grand jury and state auditors are investigating, and state legislators and education officials last week called for a law that would give state officials the authority to seize control of district finances from school boards that overspend.

As it turns out, however, the Richmond incident, although by far the most serious, is not the first time that Mr. Marks has been criticized for budget mismanagement.

Mr. Marks also encountered questions about his fiscal-management abilities during his tenure as superintendent in Montclair, N.J., and Wake County, N.C.

But the past troubles did not stand in his way when he became a candidate for the job in Kansas City, where the school district is implementing the nation’s most expensive and far-reaching desegregation order.

Mr. Marks’s past success with magnet schools impressed the Kansas City school board, which hired him in February after conducting what board members acknowledged last week were cursory checks into his tenure in Richmond.

In an interview last week, Mr. Marks maintained that state officials bear much of the responsibility for the Richmond collapse, and he asserted that he has the financial and managerial skills to lead the 35,000-student Missouri school district.

“I have been a superintendent for 17 years,” Mr. Marks said. “I have balanced every budget for every district I have been in, except that last one in Richmond. I would think that 16 or 17 years of balanced budgets shows that I can fiscally manage.”

Several school-board members who have worked with Mr. Marks in the past said in interviews last week that they were surprised by Mr. Marks’s success in landing the high-profile Kansas City job.

In retrospect, some said that they wished they had kept a more careful watch over Mr. Marks’s budgets and that they had spent more time probing his record.

They described Mr. Marks as charismatic, brimming with enthusiasm, and a good salesman for his ideas.

But Mr. Shannon of the nsba said boards should not be swayed by forceful administrators. Board members should always demand to know the short- and long-term costs of every budget proposal, he said.

“The ultimate power in dealing with these things is through what I call ‘the power of the question,”’ Mr. Shannon said. “School boards should demand an answer. One of their functions is being the gatekeepers of reality.”

The Kansas City school board’sdecision to hire Mr. Marks provoked protests from the state of Missouri, which, as a defendant in the desegregation case, pays the lion’s share of the remedy’s costs.

State Protests Hiring

In February, the state asked the federal judge overseeing the case to put the district in receivership, charging that it had demonstrated repeated poor management by overspending its budget and driving up the state’s costs.

Michael Fields, an assistant attorney general, said the state regards the board’s decision to hire Mr. Marks as “another argument for putting the district in receivership.”

“The board did absolutely no background check in respect to Richmond,” Mr. Fields said. “Basically, they asked the fox how the henhouse looked, and when the fox said, ‘fine,’ they said, ‘O.K.”’

Mr. Fields asked the Desegregation Monitoring Committee, which oversees the case, to “take exception” to both the manner in which Mr. Marks was hired and the fact that he was hired at all.

The committee protested the board’s search process but did not take exception to his hiring, Mr. Fields said.

Alexander P. Ellison, a board member who served on the search committee, said he cast the lone vote against Mr. Marks because he felt that the board “acted somewhat hastily” in selecting him.

Mr. Marks was not one of the original finalists, Mr. Ellison noted, although he was interviewed early in the search.

Kansas City board members did not visit Richmond to interview officials there. Instead, they telephoned “a couple of board members” and other officials, Mr. Ellison said.

“The board was convinced that a lot of this was unjust and more or less just allegations--that Marks was being used as a political football,” Mr. Ellison said.

Support for Marks

Mr. Ellison and other board members said they strongly support their new superintendent.

“I think it’s fair to say we probably could have done a lot more homework,” William DeFoor Jr., another board member, said. “But probably we would have come up with the same conclusion. He’s probably the most innovative visionary I’ve ever met in education.”

Mr. DeFoor and Arthur A. Benson 2nd, who represents the plaintiffs in the desegregation case, stressed that they believe Mr. Marks has the leadership skills to motivate the district to take advantage of the resources provided as a result of the remedy ordered in the case, which Mr. Benson estimated has cost $600 million over the past six years.

“We badly need his strengths, which include enthusiasm for racial integration, his experience with and knowledge of magnet schools, his relationships with teachers and parents, and his belief that urban children can learn as well as any other children,” Mr. Benson said.

Kansas City officials also point out that the court scrutiny of the district will provide an extra layer of oversight of Mr. Marks.

In addition, they note, the district has hired a retired head of a local corporation to consult with the superintendent for six months as he reorganizes the central administration.

Although it is facing a $6-million budget deficit, Mr. Marks said the district’s main challenge lies in building magnet schools, attracting students, and improving test scores.

“What is not working in Kansas City has little to do with my having a strong financial background,” he said.

Magnets Draw Attention

The 53-year-old Mr. Marks began his administrative career as an assistant principal in Beechwood, Ohio. From there, he moved to Montclair, N.J., where he worked as curriculum director and superintendent and developed a magnet-schools program to desegregate the schools without mandatory busing.

While the program drew national attention, several current and former district officials said the plan also made Mr. Marks some enemies.

In 1978, members of the local League of Women Voters publicly complained that the program was causing the district to overspend its budget and that the district was inappropriately carrying debts over from the last month of one year to the next fiscal year.

The school board called in state auditors, who uncovered some accounting lapses but did not find any misappropriation or misrepresentation of funds.

In 1981, Mr. Marks was recruited by the 64,000-student Wake County, N.C., school district, which was eager to put a magnet system in place to help integrate the newly merged city-county system that includes Raleigh.

Charlotte M. Martin, a board member when Mr. Marks was hired, said board members visited Montclair and were “captivated by what we saw.”

“The itty-bitties were speaking foreign languages, playing instruments; the schools were racially balanced” she added. “It was just what you would want to see.”

Ms. Martin said she and her fellow board members did not independently interview people in Montclair.

“We weren’t interested in fi4nances,” she said. “We were interested in programs and desegregation and making it work and how it could be successful.”

Eventually, however, Ms. Martin and other board members became concerned about how the magnet programs Mr. Marks set up in Wake County were being funded.

Ann Koonce, a board member, said she had always doubted that it was possible to do the things Mr. Marks talked about within the district’s budget.

“He didn’t ask for any additional anything,” Ms. Koonce said. “He said, ‘trust me.”’

In 1984, after an audit requested by the school board, the state education department ordered the district to repay $489,000 in Chapter 1 money that had been used in a mathematics program that served children who were ineligible for the federal remedial aid.

Leaves Wake County

Mr. Marks said that he himself requested the state audit and that the money was promptly repaid. The amount, which was spent over two years, came out of an annual budget of more than $100 million, he noted.

Central-office administrators failed to tell principals that only eligible students could participate in the math program, Mr. Marks said, noting that audits of federal programs are common.

“I submit to you that I have never been in a district that did not have audit exceptions to [Chapter 1] almost every year,” he added.

Mr. Marks and the school board agreed that he should leave Wake County.

In 1985, he became superintendent of the 1,800-student Lake Travis Independent School District outside of Austin. Mr. Marks said board members hired him to drum up community support for a $19-million bond issue to build facilities.

The bond issue passed. But taxpayers in the retirement community complain today that the buildings are too lavish, said Bonnie Siddons, a school-board member, who said she faults Mr. Marks for “the way the money was spent.”

Mr. Marks said that the decision to build “beautiful structures” was also made by board members, and that the projects stayed within the approved limits.

On to Richmond

The Richmond board voted unanimously to hire Mr. Marks after ael10lhead-hunter checked his background.

“He had a reputation as an agent for change and innovation, and the Band-Aid solutions we had used in our district had not worked,” said Frank R. Calton, a nine-year member of the Richmond school board.

The district was aware of the controversy over Mr. Marks’s use of federal funds in Wake County, but “we were told it was a matter of judgment as to whether these funds were appropriately used,” Mr. Calton said.

In hindsight, he said he sees no reason why the district should not have hired Mr. Marks, although he noted that he became the lone member of the board to question the superintendent on budget issues.

Mr. Marks’s attitude, Mr. Calton said, was: “He was the ceo, and we either liked the way the ceo operated or we didn’t. If we didn’t, we should get rid of him, but it was not the board’s business to get into areas of finance.”

Whenever an examination of the district’s budget showed a deficit, Mr. Calton alleged, “the superintendent would come up with a revenue-enhancement program that, in my mind, was even more soft money.”

Mr. Calton noted that Mr. Marks made excellent strides in attacking the district’s dropout rate and starting magnet programs.

Meanwhile, “He spent them into oblivion,” said William L. Rukeyser, a spokesman for the state education department, who asserted that the explanation for the district’s financial woes “can be boiled down to two words: Walter Marks.”

Legislature Responds

Mr. Marks argued last week that the Richmond district was saddled with a budget deficit when he arrived. He asserted that state officials share the blame for failing to provide the district with adequate funding and for freezing state money on which the district depended.

Noting that the district had counted on lottery revenues and cost-of-living adjustments that never came through, Mr. Marks said, “If I did one thing that I should not have done, I looked at best-case scenarios in financing rather than worst-case scenarios.”

As a result, Mr. Marks acknowledged, he gave district teachers larger salary increases than the budget could bear.

After the extent of the district’s financial problems became apparent late last year, the Richmond board bought out Mr. Marks’s contract for $92,000--about half its value--and dismissed him.

A Contra Costa County grand jury empowered both to act as a public watchdog and to issue criminal indictments is investigating the district, Jim Sepulveda, deputy district attorney for the county, said.

“They are not investigating any named individual,” he said. “They are investigating the whole scenerio.”

Mr. Sepulveda said the panel expects its investigation, which began last fall, to be completed this month.

Meanwhile, the office of State Controller Gray Davis is conducting an audit of the district, which it expects to complete in November. (See related story, page 12.)

State legislators and education department officials last week were also taking steps to protect themselves against being ordered to bail out other insolvent school districts.

A bill in the legislature would require districts to examine their budgets more frequently. The measure also would grant county offices of education the authority to step in when a district appears unlikely to pay its bills and to appoint a county superintendent as financial trustee with the power to override board actions.

A version of this article appeared in the May 22, 1991 edition of Education Week as Ex-Richmond Chief Has Left Long Trail Of Fiscal Questions