Private Firm Gives St. Louis a Shock to the School System

The school district was broke -- and failing. Half of all high school freshmen quit before graduation. Fewer than 7% of juniors scored “proficient” on a state reading and writing test.

In desperation, the school board took a radical route: They handed control of public education here to a corporate turnaround firm from New York.

Alvarez & Marsal has a 20-year track record of restructuring companies in crisis, from clothing manufacturer London Fog to the Trump Casinos, from Liquor Barn retail stores to Arthur Andersen accounting. But its experts had never applied their business models to public education. The school board here gave them a $4.8-million contract to try.

No other urban school district has ever offered itself up for such an overhaul.

The result has been dramatic change and fierce public anger.

Since taking over the district in June, the management consultants have closed 16 schools, laid off at least 2,000 employees, rearranged bus routes and privatized services such as food preparation and textbook distribution.

In the process, they’ve infuriated so many parents in the largely black community that several civic leaders are calling on families to boycott the first day of school on Monday.

“My wish is that no one would show up to school on day one,” said Bill Haas, one of two school board members who opposed hiring the turnaround team.

One radio talk show host declared that it would be “child abuse” for parents to send their kids to school. Even the head of the teachers union, though urging children to come to school, said she thought the quality of education “is going to be suspect this year” because the new administration had poisoned the atmosphere.

Decimated by years of white flight to the suburbs, the St. Louis School District serves an overwhelmingly poor student population that is 81% black. About 41,000 children are enrolled -- less than half the student body in the 1960s, though it’s still the largest district in Missouri.

The management consultants put William V. Roberti, a former Brooks Brothers chief executive, in charge of the district, with the title of acting superintendent. He can’t fathom why his reforms have provoked such rage.

Districts across the nation have let teachers go and class sizes swell, but here, Roberti has cut $60 million from the budget without laying off a single classroom teacher. He has made sure that kindergarten, first- and second-grade teachers have no more than 23 students -- down from 25 last year. He’s also hired 94 “literacy coaches” to work full time on reading.

In short, he’s doing just what he did in the private sector: helping his client focus on what counts. For Brooks Brothers, that was selling suits. For the St. Louis Public Schools, it’s educating kids. Anything not directly related to that mission goes.

Before Roberti took over, the district ran a warehouse to distribute books, a property management division to tend to 40 unused buildings, even a greenhouse to grow plants for classrooms. He swiftly dismantled those operations.

“Why not outsource that to others who do it as their primary business?” Roberti said. “It applies in the private sector and it applies in education: You have to focus on your core competence.”

But many in St. Louis have made it clear they don’t want their schools run like a corporation. They want their schools to be community anchors.

“If there is such a budget crisis in this district, why are they spending all this money for an outside firm to come in and bulldoze our community?” asked the Rev. Timothy Tyler, who decided to send his daughter to a suburban district this year rather than face the turmoil here.

It might make business sense to shut down 16 schools with declining enrollment. To parents, though, those schools were often the only safe, stable haven in their neighborhoods.

It might make business sense to privatize food service and custodial work. But to parents, that means hundreds of neighbors will lose jobs with benefits. It means that lunch ladies and janitors who had worked in the same school for decades will be replaced by a rotating cast of minimum-wage contract workers.

Even changing the bus routes has been contentious. Roberti is proud to have computerized the system. The transportation director no longer has to hunch over a map with string and thumbtack, planning routes. But parents complain that bus stops have been moved arbitrarily, forcing their kids to walk across highways or wait outside crack houses.

In making so many changes so quickly, with minimal public input, the turnaround specialists “have assaulted the community,” said Alderwoman Irene Smith, who has urged parents to keep their kids out of school Monday. She and other protesters complain that the New Yorkers -- led by Roberti, who is white -- have “disrespected” the African American community by ripping apart a district run for years by black educators.

“It’s no good for kids and it’s not fair to taxpayers,” said Eric Thomas, 41, a machine operator. He will keep his son, Shawn, home in protest on Monday -- and if need be, for weeks to come, until the district is in new hands. “As long as it takes,” he said.

Roberti finds such criticism exasperating. When he took over, the school district had a $90-million deficit out of a $450-million budget. Substitutes were running hundreds of classrooms due to a shortage of credentialed teachers. Test scores were so bad that the district has only provisional state accreditation.

Financial oversight in recent years has been so lax that the district was spending $50,000 a year insuring vehicles it no longer owned. Last year, the district spent nearly $450,000, the equivalent of a dozen teacher salaries, to cater banquets for meetings often attended by just a handful of staff. “The facts are, this place was a mess,” Roberti said. “People in St. Louis have to decide: Do we want to have a great system to educate our kids, or do we want a bloated system that gives a lot of people jobs?”

That stark either-or strikes some education experts as naive.

“The thing about public education is, it’s public. And when you cut your moorings to the community so dramatically, you end up with a real sense of backlash,” said Paul Houston, executive director of the American Assn. of School Administrators.

The backlash has been especially furious here because the new managers seem so distant -- and so single-mindedly focused on saving money.

It’s become trendy in the past decade for urban districts to bring in non-educators as superintendents, tapping politicians, CEOs, prosecutors, even Army generals to lead reforms. But when they’re hired, the new leaders move to the community. The consultants running St. Louis schools fly home on weekends and expect to be gone for good in nine months.

Other districts, most famously Philadelphia’s, have hired private, for-profit firms such as Edison to run troubled schools. But those efforts are aimed at improving student performance; the firms train teachers and provide a fresh curriculum.

In contrast, the Alvarez & Marsal team arrived here thinking they “wouldn’t touch the education piece at all, but would just work on back-end issues,” said Sajan George, who now handles the district’s finances. The team later hired Rudy Crew, a former chancellor of New York City schools, as an educational consultant working 15 to 20 hours a month.

Still, for the next year, the focus will be on the district’s fiscal condition, not its academic crisis.

“I don’t know if it will work or not. I do know that the status quo wasn’t working,” said Lana Stein, a political science professor at the University of Missouri here.

The biggest test of the new approach will come Monday.

St. Louis schools traditionally have had trouble getting more than 75% of students to show up on opening day, despite giving away door prizes such as big-screen TVs. The consultants are striving to raise attendance this year, running television and radio ads.

But boycott proponents have been telling parents that it’s not safe to send kids to class Monday, given the changes in bus routes, custodial service and school assignments. Pastors across the city will hold youth activities in their churches as an alternative to school.

No one is willing to predict how much support the boycott may have. Anger at the district runs deep. But in the end, many parents may agree with Carla Burton, a mother of four who sympathizes with the protesters but feels even more strongly that her children ought to be learning from day one.

“I’m not happy,” Burton said. “But I feel they should be going to school.”