Sticker shock: How Hillsborough County's Gates grant became a budget buster

TAMPA — The iconic photograph from 2009 shows Hillsborough County School Board members in happier times, holding hands with superintendent MaryEllen Elia to celebrate a $100 million gift from the Bill & Melinda Gates Foundation.

The partnership would reform the way teachers were evaluated and paid. Its goal would be to make school better for children — especially poor and minority children. The Gates name would put Hillsborough on the map, and make its superintendent an education superstar.

Six years later, Elia is gone and there is more hand-wringing than hand-holding as the nation's eighth-largest district comes to grips with an experiment that left it in financial disarray.

A review by the Tampa Bay Times has found that:

• The Gates-funded program — which required Hillsborough to raise its own $100 million — ballooned beyond the district's ability to afford it, creating a new bureaucracy of mentors and "peer evaluators" who don't work with students.

• Nearly 3,000 employees got one-year raises of more than $8,000. Some were as high as $15,000, or 25 percent.

• Raises went to a wider group than envisioned, including close to 500 people who don't work in the classroom full time, if at all.

• The greatest share of large raises went to veteran teachers in stable suburban schools, despite the program's stated goal of channeling better and better-paid teachers into high-needs schools.

• More than $23 million of the Gates money went to consultants.

• The program's total cost has risen from $202 million to $271 million when related projects are factored in, with some of the money coming from private foundations in addition to Gates. The district's share now comes to $124 million.

• Millions of dollars were pledged to parts of the program that educators now doubt. After investing in an elaborate system of peer evaluations to improve teaching, district leaders are considering a retreat from that model. And Gates is withholding $20 million after deciding it does not, after all, favor the idea of teacher performance bonuses — a major change in philosophy.

• The end product — results in the classroom — is a mixed bag.

Hillsborough's graduation rate still lags behind other large school districts. Racial and economic achievement gaps remain pronounced, especially in middle school.

And poor schools still wind up with the newest, greenest teachers.

• • •

Since news broke that the foundation is holding back the last $20 million, critics of the reform movement have been chortling.

They're lumping it in with corporate-led school turnaround efforts in other cities where businesses got rich while children continued to struggle. They're comparing it with a widely publicized experiment in Newark, N.J., where Facebook founder Mark Zuckerberg's $100 million "challenge grant" to public schools resulted in layoffs and school closings as millions went to consultants and richer teacher contracts.

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Closer to home, Hillborough's new superintendent, Jeff Eakins, is trying to figure out how much of the costly system to continue.

"You learn from it," Eakins said last week. "That's where I'm really at with reviewing the entire implementation."

Eakins learned after taking over for Elia that the district's reserve fund was evaporating at a speed that alarmed bond rating firms, which affects the district's ability to borrow. He also learned a big part of the problem: Raises negotiated as the Gates system went into effect added $65 million a year to district expenses. And that does not include performance bonuses, which last year cost an estimated $12.7 million more.

Cutting back is not an easy decision. State law now ties teachers' pay to their performance and their students' test scores — two factors at the core of the Gates system, known as Empowering Effective Teachers or EET.

The system works like this: Peer evaluators observe teachers using a rubric based on the work of education author Charlotte Danielson. They score teachers on everything from subject knowledge to how well they get their students to behave.

Their findings, after multiple visits, are combined with results of principals' evaluations. A third component, based on student data, is dependent on state test results and comes later in the year. The total scores now factor into teacher pay.

Mentors offer practical advice to new teachers and, upon request, those who are struggling.

At last count evaluators and mentors numbered 265 — a staff that did not exist before 2010.

"The peer group is a faculty. We're the largest faculty, I think, in the district," said Christie Gold, a former English teacher and one-time teacher of the year. Now in her sixth year as an evaluator, she earns a base salary of $66,000.

"I happened to be in that group that made the biggest leap, but now I'm at the top pay tier," she said, recalling that she used to take on jobs such as department head and newspaper adviser to keep up financially. "I was always chasing after more money just so I could make what a college-educated, experienced professional should make."

That was the thinking too of union executive director Stephanie Baxter-Jenkins, who bargained to bring seasoned teachers closer to the level of their counterparts around the nation.

But no one, it appears, calculated the long-term cost of both the infrastructure Gold finds so beneficial and the salaries Baxter-Jenkins considers so richly deserved.

With $200 million in private and public money to play with, it was as if the district dined out nightly, ordered lobster and never kept track of the mounting tab.

• • •

The thinking behind the effort can be seen in statements by Bill and Melinda Gates nearly a decade ago.

"Melinda and I believe that providing every child with a good education is the only path to equality in America," the richest man in the United States told an education forum in 2008.

He was appalled that so few high school graduates were ready for college. He was amazed that while Amazon.com knew every customer's reading habits, teachers did not have data they could use to help students.

He could not comprehend why teachers were not rewarded for exceptional results. And as for those whose students continually fell behind, he said, "they're in the wrong line of work, and they need to find another job."

More recently, Gates mused that it's almost easier to cure malaria than to fix America's schools.

When he offered to spend $500 million on a teaching reform experiment in cities around the nation, Hillsborough leaders jumped at the challenge.

They said they were well-positioned because the teachers union worked well with the administration under Elia, who was entering her fifth year as superintendent. There was low turnover on the School Board. Performance bonuses had been part of the district's culture for years.

District and union leaders were ecstatic when word came in late 2009 that they had been chosen. Already there were rumblings of state education reform, and Hillsborough would get to chart its own course.

U.S. Secretary of Education Arne Duncan visited Hillsborough, declaring it a national model.

Union president Jean Clements had her picture in Newsweek.

The plan was to develop a sophisticated instrument that would sort teachers into a hierarchy and pay them accordingly. "Young, exceptional teachers will be able to earn as much as a 20-year teacher currently earns," the proposal said.

Through a variety of recruitment programs and incentives, top teachers would be placed in schools that needed them most.

By far the most controversial goal was this one: "At least 5 percent of tenured teachers dismissed for under-performance annually." Today, district and union leaders insist no one ever intended for that to happen. "I don't care what it says on a piece of paper," Clements said.

As it turned out, teachers left at twice that rate. By 2015, non-retirement departures had nearly tripled to 1,503, the vast majority of them resignations.

District leaders see that as a sign the process works: Principals can pinpoint early on when a teacher is not cut out for the job and counsel that person out of the system. New teachers who stay improve far more quickly because of the new supports.

• • •

In its twice-yearly reports to the Gates Foundation, district leaders celebrated their progress. The union ratified a contract in 2010 — including the reforms — by 96 percent.

It didn't take long for costs to climb. But the mood remained jubilant, and the public relations firm Hill and Knowlton — which was paid more than $700,000 — kept good news flowing.

Work started with 77 peer evaluators. Over time that number nearly doubled.

"The original grant application under-projected the number of peer evaluators that would be needed, and it also over-projected the case load that a peer could manage," said Anna Brown, who became project manager in 2013. "That definitely escalated some costs."

Some of the upgrades were planned from the start. Others resulted from state law, or just the district's need to adjust.

The district raised evaluators' pay to get a better applicant pool.

It expanded the program to include psychologists, counselors and social workers, media specialists and preschool teachers, members of the same union who arguably could not be left out.

The peer evaluators got pay supplements, which human resources chief Stephanie Woodford defended at a recent School Board workshop. These were high-performing teachers who had given up chances to make more money through performance pay and promotions, she said. "Many of the peers and mentors take a cut in pay to take these positions."

A mentor program for first-year teachers was expanded to include second-year teachers.

The district hired "teacher leaders" through the federal Teacher Incentive Fund to spend part of their day teaching and the other part helping their co-workers improve. It put "human resource partners" in the personnel office to work on making sure each school had an effective staff.

"Peer connectors," were enlisted in 2012-13 because teachers did not trust their evaluators, and needed someone at their schools to help them navigate the system. While not adding to the head count, they did add to the work load.

The district also strayed from the notion of paying for performance instead of seniority. In what would create perhaps the biggest sticker shock, it paid for both.

The union negotiated a pay plan for the 2013-14 school year that gave teachers a $4,000 raise after every three years of service. That came on top of bonuses they could earn if they scored highly on their evaluations.

Baxter-Jenkins, the union executive director, said she wanted to do right by long-time teachers who had been underpaid through prior pay schedules.

"You cannot leave out the people who gave their life here and stuck to this district through thick and thin," she said.

Regardless of what reformers might say, Baxter-Jenkins said it's not reasonable to expect a teacher to commit to a job that offers no expectation of increased earnings.

"While I think performance pay is fine," she said during a recent bargaining session, "having good base salaries is a much better draw for people to become teachers and stay teachers."

Brown and her predecessor, David Steele, point out that the pay plan was not technically a part of the Gates program.

But it was negotiated at a time when the district was touting its collaborative relationship with the union, which in turn had to reassure its members. Clements is not insulted when the plan is described as generous, and considers it a testament to the district's unusually close relationship with the union.

"I believed then that it was affordable and I believe now that it is affordable," she said.

The district went from having the 19th largest average teacher salary in Florida to the eighth-largest. It increased 9.7 percent since 2010 — double the rise in average salary statewide.

But Hillsborough schools did not share equally in the largesse.

According to a Times analysis, 56 percent of the raises over $8,000 went to teachers at schools that do not receive federal antipoverty aid — a group that employs about 46 percent of the district's teachers.

District leaders say that's because the plan benefited long-time teachers, who by nature gravitate toward the suburbs.

But the differences were, in some cases, dramatic.

At Bevis Elementary in affluent FishHawk Ranch, 23 teachers got raises of $8,000 or more.

At Clair Mel Elementary, in a blue-collar area just east of Tampa, there were two. And one of those was a peer evaluator.

• • •

The district's most recent report to the Gates group showed the total cost of the program had grown from $202 million to $271 million. Brown said that figure includes other initiatives, including a principal recruitment and training program. Of the $271 million, nearly $50 million went to consultants. More than $23 million of that came from the Gates money and the rest from other non-Gates sources.

The University of Wisconsin got $3.4 million for a complex system to tabulate the student data part of teacher scores.

Education Analytics of Madison, Wis., was hired to answer academic questions such as: "How does the stability of written evaluations compare to the stability of value-added over time?"

The district paid Cambridge Education $3.2 million to train the peer evaluators, plus about $500,000 each year after that to "calibrate" their findings.

But those contracts represent short-term commitments.

Over time, Hillsborough also spent tens of millions for peer evaluators, mentors and bonuses, an expense that would remain long after the Gates relationship ended.

Estimates of those ongoing costs swelled from $32 million to $52 million a year.

In promising they could sustain the effort, officials touted the district's reputation for good fiscal management.

"Our organization has a strong system established to execute our budget-making process," they wrote in a 2014 progress report.

District leaders assured Gates that, with an operating budget of well over $1 billion, it would not be hard to find the funds.

They never specified what they would cut. But events in recent years offer some clues.

The district stopped buying school buses, which resulted in Hillsborough having one of the oldest fleets in the state. And after the deaths of two disabled children in 2012, the Times reported that Hillsborough paid some of the lowest wages in Florida for exceptional student education aides.

Critics warned that the Gates program would run out of money or bankrupt the district. But School Board members voted to add components to the plan, often without discussion.

They said they were unaware of the looming financial crisis until June, when Eakins needed $68.5 million from district reserves to meet payroll.

• • •

Did the Hillsborough County school system get its money's worth?

With rapid-fire changes in state education policy and testing systems, there are few simple answers.

It is difficult, for example, to compare 2010 graduation rates with today's because the state changed the formula. But, measured against the state's 12 largest school districts, Hillsborough's rank has fallen from eighth to 10th.

In its proposal to Gates, the district aimed to address the achievement gap affecting poor and black students, and to have 90 percent of its third-grade and eighth-grade students testing on grade level in reading and math. However, proficiency rates were between 53 and 59 percent on the 2014 Florida Comprehensive Assessment Test, and as low as 33 percent for black students.

Still, the district listed pages of positive results in its reports to the Gates Foundation.

FCAT scores, overall, were on the rise. More students, and more minority students, were taking Advanced Placement classes. Hillsborough students got top scores on Trial Urban District Assessment, a national measure.

But despite the intent to spread top teachers around, payroll data show a child in one of Hillsborough's high-poverty schools is more than twice as likely as his suburban counterpart to get a teacher who is under 25 — or new to the district.

"No one has really found the secret for how you attract your best teachers to teach your neediest students," Steele said. Now retired and working as a consultant, he said that disparity exists everywhere.

The Gates Foundation has not ruled out the possibility that it will contribute more money before the grant expires in 2016, and has pointed out several times that it committed to paying "up to" $100 million, not necessarily the full amount.

Contacted by the Tampa Bay Times for this article, the foundation issued a brief statement saying it will likely bring in consultants — including American Institutes for Research, which designed the Florida Standards exams — to evaluate the entire effort in 2017.

• • •

As Eakins and his leadership team ponder what to keep and what to discontinue, they face tough choices.

Advocates of the peer observation system, such as Gold, insist teachers crave feedback — that they learn from it and children learn more as a result.

But Brown and Eakins are discussing a gentler "non-evaluative" form of feedback in which high-performing teachers help their co-workers without marking them down. The peer evaluator system that took years to build could be cut back dramatically.

"Relationships are key in teachers growing professionally," Eakins said. He believes such relationships should exist largely within the school walls, and that collaboration will also cut down on the turnover that often plagues the poorest schools.

Eakins, Brown and Steele agree that a key benefit from the Gates program was the evaluation rubric, which allows for better conversations about teaching.

"We've also learned how to … differentiate between teachers who need more professional support and those who we may be able to tap to provide some of that support," Eakins said.

The big missing piece: kids.

Moving forward, Eakins said, "we have to learn how to translate this into student achievement."

With the budget a pressing issue, the district might cut back or dramatically change the observation practice. Gold fears if that happens, teachers will miss out on valuable feedback that ultimately helped children.

"I go into classes and typically some things are really great and some things are not so great," she said.

"And almost always I think, there could be more rigor. That's what students say they want and that's where teachers struggle the most."

Contact Marlene Sokol at (813) 226-3356 or msokol@tampabay.com.