City schools plot moves to erase budget shortfall Plans set for layoffs, seeking $10 million cut in EAI contract

November 05, 1995|By Jean Thompson | Jean Thompson,SUN STAFF

The financially troubled Baltimore school system will start the week by taking steps on two fronts to resolve its multimillion dollar budget shortfall.

School and city officials will prepare to lay off 100 administrative employees in January to help reduce anticipated expenses for the school year by an estimated $32 million to the approved budget level of $647 million.

They also will continue talks that began late Friday with Education Alternatives Inc. with the goal of cutting by $10 million the private, for-profit company's $44 million contract for managing nine city public schools.

The EAI negotiations, which are to resume Tuesday, have produced an "agreement in principle" for the Minneapolis company to continue managing the schools through June.

Neither Mayor Kurt L. Schmoke nor EAI chairman and founder John T. Golle wants to disrupt programs affecting students at midyear, said participants in Friday's negotiations. After two grueling hours, contract talks led by Mr. Schmoke adjourned about 10 p.m. with no agreement on the revised contract price.

"It was not a confrontation. I want to say it wasn't adversarial, but we came in with different points of view, so it was -- but the atmosphere was not hostile," a weary Mr. Schmoke said afterward.

He has called for a reduction in the contract's cost since early summer, and described EAI as entering the talks saying, " 'We know we have to contribute our fair share, but let's define it.' " EAI agreed to the mayor's request to open the contract because the company had changes of its own to propose.

Mr. Schmoke also said last week that EAI would have to take the $10 million reduction or end its contract with the city.

A final decision must be made by Friday, he said. That date is city officials' target for resolving a budget crisis that Mr. Schmoke once termed "routine" during the mayoral primary campaign. It's a shortfall that now is expected to force school management to streamline operations, school and city officials said.

"The longer we wait, the deeper the cuts we'll have to make," Mr. Schmoke said.

School Superintendent Walter G. Amprey, who announced last week that layoffs would be avoided at least through the holiday season, confirmed after the EAI meeting that about 100 central office and nonteaching jobs will be cut in January. Some administrative offices may be abolished.

By then, he said yesterday, school officials plan to have whittled an estimated $23 million from the shortfall. Already announced are $18 million in spending cuts affecting administrative operations, supplies, materials and equipment.

"I'm trying to hang on to all professional development" and other programs intended to institute long-term improvements in the school system, Dr. Amprey said. Cutting a swath through the administrative middle ranks will mean putting "the schools in greater positions of autonomy and responsibility, and that's the direction the state wants us to go and the direction that we've been moving in."

For weeks, city officials also have counted as potential savings their proposed $10 million reduction of EAI's contract to manage nine public schools.

But as the talks continue, the price appears to be under negotiation. Neither side would reveal specifics, but both left the impression that cost has become the pivotal issue in this fourth year of the five-year school privatization experiment.

EAI officials have added a wrinkle to the discussion by proposing measures they say would save money throughout the school system, not just in the nine schools they manage or the three schools in which they consult.

"We presented to the city new options tonight for systemwide savings based on our work in Baltimore. They have agreed to consider all of these options," Mr. Golle said, reading Friday night from a typed statement that bore the scratch marks of heavy editing.

School finance officers immediately began evaluating the proposals, which include long-term budgeting suggestions, Dr. Amprey said. It is too soon to tell whether the list adds to or duplicates ideas submitted by unions and department managers since June, he said.

Irene B. Dandridge, co-president of the Baltimore Teachers Union, praised the mayor's proposed $10 million change in EAI's contract but predicted that it would "eat up their profit" and imperil the company's future.

"I think [Mr. Schmoke] is trying to make EAI survive the same way the rest of the school system has to survive -- on what they have," she said, predicting that a compromise would be found to allow the experiment to continue through the school year.

Given the number of jobs affected by the budget crunch, she warned, the mayor must hold firm to his plan to cut EAI's contract or "it would mean he would be seen as a complete sellout."

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