Management group seeks $420,000 more from St. Louis

ST. LOUIS -- A consultants group hired to help run St. Louis Public Schools is seeking $420,000 more than it initially told the school board it would need, citing a workload larger than it expected.

McConnell, Jones, Lanier & Murphy, based in Houston, told the St. Louis School Board in June it would charge the district $500,000. Now, the company is seeking $920,000 for six months of work, plus $138,000 in expenses, which were not capped in the contract.

"None of us expected the project to turn out to be what it was -- that is really the only explanation I can give," firm partner Sharon Murphy said. "The project is a whole lot wider in scope than we thought."

The group had expected to leave before the first day of school Sept. 8, but instead will be in St. Louis through next month, Murphy said. The partnership specializes in school logistics and accounting. It was hired as a subcontractor to Alvarez & Marsal, the New York-based turnaround firm leading the overhaul of the state's largest school district, which has included closing 16 schools and cutting more than 1,400 jobs.

Privatizing

Members of the firm -- which had up to eight consultants in St. Louis charging $50 to $200 an hour -- helped turn the district's warehouse and payroll over to a private company and reorganize the transportation system with computer software.

The fee increase is on the agenda for discussion at Tuesday's school board meeting.

Under the company's contract, interim superintendent William V. Roberti, a managing partner with Alvarez & Marsal, decides whether to pay the extra charges. Roberti said he had approved the request and would present the changes to the school board "in the interest of full disclosure."

Murphy provided a statement to Roberti with the additional fees and reasons for them, as required by the contract. Because of "the severe financial crisis facing SLPS, significantly more implementation assistance was needed," the statement said.

Saving money

Roberti said he was saving the district money by using Murphy's consultants, instead of members of his own firm, who charge more.

The payment to Roberti's firm is set for $4.5 million, although the contract also allows that figure to change. Roberti said he still expected the project to come in under $5 million.

Roberti's firm, which could be in St. Louis for up to a year, has billed $1.5 million for the first three months. The board also has given a third firm, specializing in human resources, two contracts worth a total of $475,000.

At the request of Gov. Bob Holden and concerned citizens in St. Louis, state Auditor Claire McCaskill agreed last month to audit the school district, which Roberti's firm says has a $90 million budget shortfall.