Baltimore Vote Ends City's Contract With EAI

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Brushing aside a last-ditch plea by the chief executive of Education Alternatives Inc., the Baltimore school board voted unanimously late last week to cancel its ground-breaking experiment with private management of education.

Company officials had lobbied to preserve the contract after board members and Mayor Kurt L. Schmoke made it clear just before Thanksgiving that they intended to scrap the arrangement. (See Education Week, Nov. 29, 1995.)

City and school district officials had sought for months to reduce the $44 million the Minneapolis-based company was scheduled to receive this year for providing management or consulting services at 12 schools here.

Educators and residents here reflected last week on the implications of ending the nationally watched experiment a year and a half before the five-year contract was to expire.

"We have terminated the contracts, but we have not terminated the programs" instituted by EAI, Dr. Philip H. Farfel, the school board president, said after the vote. "We are committed to having schools choose the programs they want to continue."

Both Dr. Farfel and Superintendent Walter G. Amprey rejected the idea that the experience with EAI was an educational failure.

"This looks like a failure only because of the way we are severing the contract," Mr. Amprey said. "But at some point we would have severed it anyway."

Financial Considerations

The superintendent, who has been criticized for his enthusiastic support of EAI, has acknowledged that he would have preferred to continue the venture.

But Mayor Schmoke, who wields substantial power over the school district's finances, sought to save some $7 million on EAI's contract this year. The mayor said the cuts were necessary to shore up a projected $32 million shortfall in the district's $647 million budget.

Henry Raymond, the district's chief financial officer, said the city simply could not resolve disagreements it had with EAI on many issues discussed during negotiations to reduce the contract.

"The Baltimore school system cannot afford the present agreement the way it is structured," he told board members. Canceling the contract could save as much as $2.8 million this year and as much as $9.5 million in fiscal 1997, he said.

Before its final vote, the school board gave John T. Golle, the chairman and chief executive officer of EAI, a final opportunity to make the case for continuing the contract.

Mr. Golle told the board that rather than saving money, the early cancellation would make things worse. "A conservative estimate is that a cancellation will cost a minimum of $4 million to $6 million," he said.

For example, the district will have to take over the leasing costs of EAI computers and other equipment, "unless you want us to back up the truck" and haul it away, Mr. Golle said.

EAI was willing to give up $7 million out of its contract if it could be assured of a way to recoup the cut over time, he added.

"We believe we have made good-faith offers continuously since July," he said. "We stand proud on our record. We have committed to improve results, and we have done that."

But board members had virtually no questions or comments for Mr. Golle, and they quickly voted to end the district's contract with the company in 90 days.

After the vote, Mr. Golle said he was not bitter.

"I am proud of what we have done," he said. "We are walking out of this place with our heads high. We have provided hope to 7,000 children."

Angry Parents

Dozens of EAI supporters--mainly parents from the schools the company runs--began shouting at board members in disgust after the vote.

Sandra Nalls, a mother of three students at Graceland Park-O'Donnell Heights Elementary School, said her children have become much more enthusiastic about school since EAI took over three years ago.

"Now, the kids are going to go downhill," she said.

The company's opponents, led by the Baltimore Teachers Union and its parent, the American Federation of Teachers, have long doubted the educational merits of the company's methods.

"These guys were peddling all sorts of cures, but there was nothing imaginative in their program," Albert Shanker, the president of the aft, said after the vote. He summed up the lesson for other cities from the Baltimore experiment as, "Don't be a sucker. Don't write a blank check."

Test scores from the EAI-run schools have generated bitter disagreement. The company hurt its image after the contract's first year by claiming improvement when closer scrutiny showeddeclines.

However, test scores at the company-run schools have been rising, and word has trickled out here that results of state achievement tests due to be released on Dec. 12 will show further gains.

Last summer, researchers at the University of Maryland-Baltimore County released the first independent evaluation of the company's performance in Baltimore. The complex report was, on balance, favorable.

But there was plenty of fodder for critics, notably data showing that although students in EAI schools posted modest gains, the company spent about 11 percent more per student than the rest of the city's public schools.

Lois Williams, the project director of the evaluation and the associate director of the university's center for educational research, said EAI was hurt by its own hype.

"EAI suffers from overselling in the first place," she said. "They fudged on the idea of providing a superior education for the same cost. But per-pupil funding is not the same as at comparable schools."

Mr. Amprey said the district has just begun to assess the lessons its has learned from its experience with EAI. More planning before the contract was signed would have helped, he said, and the contract should have been structured differently.

But he said he remained bullish on private management of public education. "I think more and more people are being convinced this whole idea has merit."

Vol. 15, Issue 14

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