Alvarez & Marsal Completes St. Louis Public Schools Turnaround Effort; Yearlong Process Yields Financial, Operational and Academic Improvements.

NEW YORK -- Alvarez & Marsal, a global professional services firm, has completed an unprecedented turnaround effort on behalf of the St. Louis Public Schools, having brought change and improvement to a district that was in a state of operational and financial turmoil and in dire need of a major overhaul.

William V. Roberti, a managing director at A&M and head of the firm's public sector practice, led the turnaround initiative as acting superintendent, working closely with consulting firm McConnell, Jones, Lanier & Murphy LLP. Over the course of the engagement, the St. Louis Public Schools experienced dramatic financial, operational and organizational reforms. The district's $75 million year-end 2002-03 deficit was sharply reduced and a near-term $99 million cash shortfall was eliminated entirely.

"A year ago, the St. Louis Public Schools were on the brink of bankruptcy," Roberti said. "Operational, financial and organizational dysfunction created roadblocks to education that were detrimental to the children. Today, rampant waste, inefficiency and mismanagement have been replaced with strong financial controls, cash management and meaningful accountability. Overhead costs have been lowered significantly. Resources are now being concentrated in the classroom where they matter most."

While A&M's mandate was limited to operational and financial reforms, the firm placed significant emphasis on developing a productive environment in which students could learn and creating a foundation for the district to shed its reputation for poor student performance. During the past year, the district moved nine points closer to full state accreditation - something it has lacked for years - and experienced improvements in student achievement.

Noting the progress of the school district in the past year, St. Louis Mayor Francis Slay said: "No one has ever accomplished as much as Bill Roberti has - in as little time - in helping the St. Louis Public Schools become good choices again. For the first time in five years, most people can see progress. For the first time in a long time, employers see enough in the public schools to want to help."

Board of Education President Darnetta Clinkscale added: "When the Board of Education voted last year to begin this reform process, the district was in turmoil. With the help of A&M, we have achieved a level of reform that at one time seemed almost impossible."

In 2003, St. Louis voters overwhelmingly elected four new reform-minded members to the seven-member St. Louis Public School Board. One of the new majority's first official acts was to vote to address the district's crisis using restructuring techniques that have helped to turn around scores of troubled businesses. With the backing of the city's Mayor, the Board conducted a national search that included traditional educational consultants and top corporate crisis management and restructuring specialists. A&M was selected from a group of ten other firms to implement a plan for reform. In addition to McConnell, Jones, Lanier & Murphy LLP, A&M also sought the input of Dr. Rudy Crew during the engagement.

A&M's final report of the turnaround effort can be accessed at www.alvarezandmarsal.com/june_2004_turnaround_initiatives_update_FINAL .pdf (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field. You may also need to remove an extra space in the URL if one exists.)

Founded in 1983, Alvarez & Marsal is a global professional services firm that helps businesses organizations in the corporate and public sectors navigate complex business and operational challenges. With professionals based in locations across the US, Europe, Asia, and Latin America, Alvarez & Marsal delivers a proven blend of leadership, problem solving and value creation. Drawing on its strong operational heritage and hands-on approach, Alvarez & Marsal works closely with organizations and their stakeholders to help navigate complex business issues implement change and favorably influence outcomes. For more information please visit www.alvarezandmarsal.com or contact Rebecca Baker at [e-mail]