May 26, 2022

Indiana extends contract with Gary schools manager

The financial outlook for Gary's schools has improved. But lawmakers have yet to agree on a plan for ending the takeover. - Dylan Peers McCoy/WFYI

The financial outlook for Gary's schools has improved. But lawmakers have yet to agree on a plan for ending the takeover.

Dylan Peers McCoy/WFYI

The state board charged with overseeing the Gary school district voted Thursday to extend its management contract with MGT Consulting Group while committing to focus on improving academics. 

The Indiana legislature seized control of the Gary Community Schools district five years ago in response to dire financial problems. Under state oversight, the financial picture has improved. But lawmakers have yet to agree on a plan for ending the takeover. 

Without a clear vision for how the takeover will end, the Distressed Unit Appeal Board voted unanimously to negotiate up to a two-year contract with Florida-based MGT, which has run the school system since 2017

"We see this as the beginning of the end,” said board chair Justin McAdam. “We believe that as a board that we are in a position where this engagement — at least in its current form — can be concluded in two years. However, that does require legislative intervention.”

The legislature is not set to reconvene until 2023. 

Ahead of the contract vote, the board held a meeting in Gary where MGT made a presentation to residents and heard public comment. More than a dozen Gary residents came to Indianapolis earlier this week to urge lawmakers to return the schools to local control.

DUAB has become something akin to a school board for the Gary district. But instead of locally elected board members, it is made up of state officials and non-voting lawmakers. Its meetings often focus on the financial condition of the school system. 

Over the next two years, the board expects to prioritize academic improvements, McAdam said. 

"We are fortunate to be in a position where now the resources of the district can be primarily focused on academics,” he said. “That's as it should be. That's how most school corporations get to act. And it's where we want the school corporation to be focusing its effort now and in the future." 

Eric Parish, MGT executive vice president, outlined some of the strategies the group plans to improve academic performance in Gary. It will rely on two additional team members, Transformation Director Andre Wright and Project Director Rajeev Bajaj. Paige McNulty will continue as district manager. 

At the meeting. Rep. Vernon Smith (D-Gary) was aggressively critical of MGT’s approach to engagement with the Gary community and families. 

"People aren’t … gonna always remember what you do. They're not gonna always remember what you say. But they do remember how you make them feel,” said Smith, a non-voting member of the board. “And I'm saying, MGT makes people feel inferior." 

But after MGT presented its academic plans for the school system, Smith said he was “encouraged” by the data-driven approach. 

Rep. Liz Brown (R-Fort Wayne) urged the board not to lose sight of how severe the problems in Gary were before the takeover. The year the state intervened, the district had accumulated more than $100 million in long-term debt. At the time, teachers lacked textbooks and curriculum guides, and some buildings were unsecured. 

"We need to remember, though, there is no rainy day fund now. There are no cash reserves. We finally got to a point — under the amazing management of MGT — where they are not spending more money than they are taking in,” Brown said. “But we had a long way to go, financially."

Since MGT took over management, the district has made budget cuts to reduce the annual deficit and has benefitted from a massive influx of local, state and federal money. That included a crucial increase in local property taxes, which voters approved in 2020.

Contact WFYI education reporter Dylan Peers McCoy at dmccoy@wfyi.org. Follow on Twitter: @dylanpmccoy.

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