Should schools be operated like public utilities, which are overseen by public boards but managed by private, for-profit firms?
The idea of private firms' managing public schools is appealing to some, appalling to others—but with the advent of a company that offers this service, the idea has already become a reality. Education Alternatives, Inc. (EAI), a Minneapolis-based, for-profit company, has managed a public elementary school in Miami Beach since 1991; but its largest site is Baltimore, where the company began last year to manage 9 schools (now increased to 12). EAI is also negotiating with a dozen other school districts that are potential clients.
At present, EAI is the only company of its type operating in the United States. However, Chris Whittle's Edison Project, which originally planned to create a nationwide system of private schools, now intends to focus on managing public schools, beginning in 1995. These developments disturb critics of privatization, who believe schooling is a public responsibility that should not be surrendered to companies guided by the profit motive.
EAI's relationship to the schools it manages should be seen as "a public-private partnership"—not as privatization, says David Bennett, EAI's president. EAI keeps the school district's personnel and must answer to the school board, he points out.
According to Bennett, EAI offers several advantages to its clients. "The big advantage is accountability, because we sign a performance contract with the school district," he says. If the school board is dissatisfied with the company's performance, it can terminate the contract at any time. "We live or die by our ability to perform."
Another benefit is the up-front capital EAI brings, explains John Golle, the company's chairman and CEO. This money—$750,000 to $1 million per school—is used to repair school buildings, introduce technology, and beef up security. The costs are amortized over the length of the contract. "Schools can't encumber themselves like this without a referendum," he notes.
In addition, EAI's subcontractors, KPMG Peat Marwick, an accounting firm, and Johnsons Control World Services, an operations and maintenance firm, provide "a lot of specialized talent" that a district couldn't possibly procure on its own, Bennett says. And EAI is free to concentrate on improving instruction, without having to deal with the political issues that absorb much of the central administration's time.
EAI manages both instruction and operations at all but two of its Baltimore schools. The company's instructional program, known as "Tesseract," is a compilation of best practices, Bennett says. Tesseract takes a "constructivist approach," putting emphasis on active learning and small-group work. Whole language, whole math, and attention to learning styles are also aspects of the program. Other major elements include a teacher's aide in every classroom, extensive use of computers, and a Personal Education Plan (PEP) for each student. EAI provides lots of staff development training to enable teachers to use the program effectively. "Our company is populated with trainers," Bennett says.
The Same Money?
One of EAI's main goals is to reduce spending in the noninstructional sphere—in areas such as custodial and clerical services—by introducing greater efficiency and accountability. These savings enable the company not only to turn a profit for its stockholders, but also to channel more funds into the classroom—an extra $600 to $1,000 per child each year, Golle estimates.
Typically, in urban schools, only about 50 cents of every dollar is spent in the classroom, Golle says. No service industry in the world spends only half its outlay to render the service and the other half to run the business, he says. As the sole exception, public education is "way out of whack."
EAI claims it can do a better job educating children for the same money as the district spends. However, whether EAI schools receive the "same" money in Baltimore has become a disputed question, leading to a lawsuit filed by the Baltimore Teachers Union.
The EAI schools in Baltimore receive the district's average per-pupil allocation and pay a certain percentage back to the district for overhead. EAI therefore asserts that its schools are not given a financial edge. In fact, Golle argues that EAI should be paid more than the average per-pupil allocation, because the EAI schools have a disproportionately high number of Chapter 1 and special education students.
The school district's costs, however, are higher under the contract with EAI. In the first year of the contract, the district paid EAI $23.3 million (after deducting overhead costs), yet it would have cost the district only $20.6 million to run the nine EAI schools itself, says Judson Porter, director of finance and procurement for the Baltimore Public Schools.
Mary Pat Clarke, president of the Baltimore City Council, objects to the financial advantage she believes the EAI schools enjoy. The extra expenditure "was presented to us as an effort to see if outside management could improve the school environment and academic achievement of the children," Clarke says. But the extra funding must be provided to all students, she insists. "Every child deserves an equal opportunity."
The Baltimore Teachers Union is upset about funding and other issues. The fact that EAI is a for-profit firm whose first responsibility is to its stockholders, not the citizens of Baltimore, is troubling, says Linda Prudente, a spokesperson for the union. Moreover, the company's need to make a profit means less money is actually being spent on students. "That profit is coming at the expense of the children of Baltimore," she says. The union is also concerned that "no oversight committee or watchdog" is monitoring how EAI is spending public funds.
The high level of interest in EAI is a reflection of the widespread yet simplistic belief that the private sector is superior to the public sector, says Michael Apple of the University of Wisconsin-Madison. Although he concedes that inner-city schools are "horribly overbureaucratized" and failing many students, Apple does not think the best alternative is privatization. He emphasizes that some urban public schools—such as Fratney Street in Milwaukee, Rindge School in Cambridge, Mass., and Central Park East in New York City—achieve impressive results despite adverse conditions. Collaborations among parents, teachers, and community activists can solve problems from the bottom up, he believes. "Before we sing the praises of what EAI is doing in Baltimore," he says, "we must ask what [the district] has really gained—besides clean schools, some computers, and media hype?"
Whether EAI has raised student achievement in its Baltimore schools since the fall of 1992 is an open question. According to Bennett, students progressed almost nine months (on average) in reading and math skills during the last three months of last year, as measured by their instructional computer program.
Anne Roberts, principal of Monroe Elementary School, one of EAI's Baltimore schools, says it's too early to tell whether student achievement is up. She notes that CTBS scores "plummeted" last year, leading the school to modify the Tesseract program by putting more emphasis on basic skills.
Ruby Grogan, a 1st grade teacher at Monroe, believes Tesseract does help children, but says it may take several years before test scores reflect the benefits. Her students have higher self-esteem and enjoy coming to school, she reports. "I see growth that you can't document on a piece of paper."
Golle cites another sign of success: Attendance at Harlem Park Middle School, another of EAI's Baltimore schools, has risen from 70 to 88 percent over the last year and a half. He believes more students are showing up because instruction has improved. "You can't fool inner-city kids into coming to school," he says.
Golle emphasizes that EAI has no guarantee of making a profit. Those who run the company are willing to risk their money and reputations to help public schools, he says, because they care about children. "If people like us are not allowed to improve public education, who will?" he wonders.
Teaching in a Tesseract School
Teaching in a Tesseract School
What is it like to teach in a school managed by Education Alternatives, Inc.?
The inservice training, teachers' aides, and use of technology are three “very, very big boons,” says Linda Lentin, a lead teacher at South Pointe Elementary School in Miami Beach, which EAI has managed since 1991.
Inservice topics for teachers at South Pointe have included learning styles, team building, conferencing with parents, whole language, and teaching math with manipulatives. Although she's a 35-year veteran, Lentin says EAI has taught her how to empower students, so she can be the mentor and facilitator she's always wanted to be.
Teachers in Baltimore give EAI mixed reviews. The company has reduced red tape, enabling teachers to get materials more quickly, says Ruby Grogan, a teacher at Monroe Elementary School. Other pluses include the technology, training, and individualized instruction. However, the Tesseract program requires teachers to do a “massive” amount of recordkeeping, she says, in documenting whether children are meeting goals. “That part I don't care for—one person [being] taxed with that,” she says. Grogan also regrets that teachers are assigned a new intern every year. In the past, teachers may have worked with a certain paraprofessional for 8 or 9 years, she says. “You had a working team going there.”
Nevertheless, Grogan says she enjoyed the first year under EAI's management. “It was an eye-opener for me to see what children can do” if they are allowed to take more responsibility for their learning, she says.
