All The Trimmings

[June 10th, 2009]

When the decline in state funding for K-12 education forced Portland Public Schools to cut $32 million from its 2009-2010 budget this week, the School Board looked first at the biggest expenses—salaries for teachers, administrators and other staff.

Rarely, if ever, do the seven members of the School Board look critically at the district’s smaller expenses—such as its numerous contracts with outside consultants, which are typically rubber-stamped by the board with unanimous yes votes when it approves its consent agenda.

A 2005 report from Multnomah County’s auditors is the most recent comprehensive review of the district’s practice of outsourcing some of its administrative tasks. The report revealed PPS had 562 “personal service” contracts totaling $35.5 million in 2005—or about one out of every $11 in the general fund budget, the same pot of money that pays for teachers and programs.

In light of the board’s scant oversight of its personal service contracts, WW examined dozens of those contracts from the 2008-2009 school year.

In every case except one, the contracts were covered by the district’s general fund, which shrinks to $407 million in the upcoming budget. Many were classified as “direct negotiation,” which means they were awarded with no competitive bidding.

“It’s a little bit here and a little bit there, but it does add up,” says Ann Nice, president of the Portland Association of Teachers union from 2002 to 2006.

The Gravy Trainers
Several retired administrators continue to work under contracts that replicate jobs already being done by PPS’s central administration.

Peter Hamilton, who retired as Lincoln High’s principal in 2006, cost the district 57,200 in grant money for a half-time “project manager” position in 2008-2009.

Jean Fischer retired in 2006 as an area director supervising principals. But she returned as an independent contractor during the 2007-2008 school year to be a high-level substitute and adviser in the district’s central office. That work continued in the 2008-2009 school year, when Fischer earned $75 a hour under a contract worth 100,000, before she became a half-time staffer.

Then there are several ex-school officials who make far smaller amounts performing more limited tasks. For example, Carol Turner, former Mayor Vera Katz’s education advocate and a School Board member in the mid-1990s, had a contract for 5,531.25 for “professional advising” and “facilitation services.”

Outcome: Superintendent Carole Smith’s 2009-2010 budget eliminates 22 central office jobs, which may ultimately increase the district’s reliance on these limited-term contractors.

Cost: More than $62,000.

The Sweet Talkers
PPS has entered into four contracts with communications guru Gwenn Baldwin since 2005 for a total not to exceed $50,000. In 2008-2009 alone, she earned $80 an hour “to identify the primary communication themes to serve as the foundation of an effective communication strategy in support of a successful contract negotiation with the Portland Association of Teachers.”

Since the beginning of the current fiscal year, she has billed the district $5,446 for help with contract negotiations that are handled by several board members, a full staff of communications experts and an attorney from the law firm Barran Liebman, LLC.

Outcome: The teachers union has been without a contract since the end of the 2007-2008 school year.

Cost: $5,446

The Real Estate Moguls
Abe Farkas, the Portland Development Commission’s former development director, has been working with PPS since 2006 to sell the long-vacant Washington-Monroe High School in the Buckman neighborhood. Despite his high-level contacts, Farkas could not help the district dodge the real-estate collapse, even for $200 an hour. Last year, a deal with Beam Development to convert the closed school into condominiums and retail stores fell through. The initial 2006 contract with Farkas was not to exceed $50,000. In 2008, the contract was extended and increased to $80,000. In 2009, it was extended a second time so that Farkas could continue to bill $200 an hour.

PPS considered no other consultant for the job. “Use of this contractor will expedite the process due to his knowledge of the community,” the original 2006 contract states.

Outcome: The two parcels the district hopes to unload between Southeast Stark and Morrison streets and 12th and 14th avenues remain undeveloped. And the real market value of the land has plummeted from a high of $4.6 million.

Cost: So far, $11,221.53 for the 2008-2009 school year.

The Recruiters
After recruiters identified Leon Dudley as a possible candidate for principal of Jefferson High School in 2006, he proved such a disaster on the job that PPS had to spend $12,000 to coach him. Yet he still lasted less than a year.

It would seem the district might reconsider its use of recruiters. But this year, PPS paid a different recruiter, Cascade Consulting Group, at least 8,649.89 to recruit a “chief academic officer,” a new high-level administrator under Superintendent Carole Smith. Smith interviewed several candidates but didn’t hire anybody.

Outcome: The position remains empty.

Cost: At least $8,649.89

The Hoteliers
Although the district has plenty of vacant buildings as well as auditoriums and gyms in schools across the district, PPS held monthly meetings for principals at local hotels throughout 2008-2009 instead.

A detailed accounting of the general fund spending reveals the district spent $36,535 at the Doubletree Hotel at Lloyd Center, $23,908.05 at Embassy Suites at the airport, and $18,804.13 at the Portland Airport Holiday Inn.

Outcome: The meetings, part of the Portland Leadership Academy designed to help principals develop professionally, will hold its next meeting on June 18 at the Sheraton Portland Airport Hotel.

Cost: Including meals and other incidentals, at least $79, 247.26.