August 20, 2020

Gary Schools' Private Manager Gets New $7.4M Two-Year Contract

A sign for the Gary Community School Corporation in 2017. - Eric Weddle/WFYI News

A sign for the Gary Community School Corporation in 2017.

Eric Weddle/WFYI News

The private manager of Gary Community Schools received initial approval Thursday for a new two-year contract, worth potentially $7.4 million in state funds, to continue turnaround efforts in the cash-strapped, academically struggling district.

Members of the state Distressed Unit Appeal Board unanimously approved the contract extension for Florida-based MGT Consulting, the company hired by the state three years ago to oversee the district.

DUAB chairman Justin McAdam said the contract does not increase the pay to MGT, from the last year of its initial contract.

“The terms of the contract are largely similar to the terms of the three years prior, though we have made substantial modifications from the performance benchmarks, based on our understanding, and the circumstances on the ground have changed,” he said.

DOCUMENT DUAB and Gary Schools Recovery Contract

The contract’s total base compensation is $5.5 million plus an additional $1.9 million, if the manager can achieve each of the more than 40 benchmarks in the areas of academics, fiscal, operations and engagement.

The 50-page contract includes specific expectations for the manager, tied to the bonus funds, such as:

  • Increasing the number of enrolled students by 5 percent for each of the next two school years
  • Improving pass rates on math and English portions of the state I-Learn exam for all students by 10 percent of each of the next two school years
  • Providing more transparency to staff, families and the public on changes within the district.

The contract also takes into consideration some metrics that may need to be revisited if impacted by future policy changes at the federal, state or local level, due to the coronavirus pandemic, such as state testing requirements and attendance.

The contract also drops the term “emergency” from describing MGT’s role as a manager.

“That moniker of emergency manager really brings a connotation to the project that perhaps does not reflect where we are today and does not reflect the progress made over the past three years of stabilizing the future of Gary Community Schools,” McAdam said.

In 2017 legislation took power away from the elected Gary school board and gave it to an emergency manager overseen by DUAB. At the time, the district had fallen into more than $100 million in debt.

In that time, the district’s annual deficit has been cut from $22 million to around $6 million. It also received approval to postpone some loan repayments and redirect around $25 million to demolish vacant school buildings and repair some school buildings.

But troubling trends in academics have raised concern from community members, parents and lawmakers. The graduation rate dropped from 82.5 percent in 2018 to just under 58 percent last year.

There's also been outcry about the condition of some school buildings, including leaks and heat problems.

During the virtual meeting, multiple Gary residents raised concerns about device connectivity and parents’ ability to help their children navigate the remote learning curriculum, in place for Gary Schools students since e-learning began Aug 12.

“There are many parents who are engaged, but there are a lot of issues with the technology,” said parent Tracy Coleman. “That’s where I am asking DUAB for an independent investigation.”

Paige McNulty, the district’s third emergency manager, said help sessions for parents are planned.

Earlier this summer Tracy Brown, a DUAB member who represents the Department of Education, voted against preparing a two-year contract for MGT due to lack of student academic improvement. She had sought a one-year deal.

Brown, on Thursday, joined the other four members to approve the new contract.

Before the contract between DUAB and MGT is finalized, it must pass a standard review process from various state agencies, including the office of Attorney General Curtis Hill.

MGT’s contract is paid by general state funds, not funds allocated to Gary Community Schools for tuition support or property taxes, McAdam said.

The school district is seeking an eight-year $48 million operating referendum on the Nov. 3 ballot.

Contact WFYI education reporter Eric Weddle at or call (317) 614-0470. Follow on Twitter: @ericweddle.


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