A ROADMAP TO SUSTAINABLE LOCAL CONTROL February 15, 2008

1. A ROADMAP TO SUSTAINABLELOCAL CONTROLFebruary 15, 2008 Team #1 Paul Blanchfield Andrew Davis Jimmy Henderson Ash Solar

2. Agenda Executive Summary Key Findings Action Plan

3. Executive Summary (I)Current Context For Education There are many positive forces working in New Orleans today, and many reasons for hope… • Student achievement is improving across the city • RSD students @ gr. level 2007: +5% ELA, +15% Math vs. 2006 (LEAP) • OPSB gains even larger, though for a smaller set of schools • Infrastructure and affordable family housing development pace quickening • LRA approved $500MM repair grant; 4 libraries recently reopened • Local business community beginning to invest in school transformation (School Facilities Master Plan) • Unemployment rate at lowest level since Katrina (3.4%), and job creation continues on a positive trajectory …but much work remains to be done, and some stumbling blocks have slowed the pace of reform • School facilities and operations still in disrepair • 57 sites remained vacant in Jan. ’08; 80% of open sites require renovation • Problems with transportation, food service, textbooks, etc. persist • Re-population of city slowing in many places, uneven across wards • History of corruption and apparent lack of cohesion keeping national donors from funding significant reform projects • Aversion to change among Parish residents is a speed bump to rapid progress (e.g., response to millage rates) Next 12-18 months a critical time for education in the city. Imperative to invest strategically for transformation to succeed.

4. Executive Summary (II)Strategic Objectives Sustainability: RSD must reform while anticipating the welcome transition to OPSB control Student Achievement: The heart of every successful school district…NOLA is no different Transparency: Critical to enable change and restore credibility

5. Executive Summary (III)Key Levers and Proposed Actions Governance & Organization Facilities • Adopt metrics-based criteria for return to OPSB control • Align district according to shared services organization model • Embrace collaboration with OPSB; approach as a strategic partner • Aggressively prioritize renovation efforts based on demand and cost, weighted by community considerations • Re-purpose low demand sites for community use • In partnership with experienced non-profits Sustain- ability Student Achievement Trans- par- ency Financial Management Talent Pipeline • Call/Reissue $250 MM of outstanding bonds - Feb/Mar 08 • Implement School-Based Budgeting (SBB) • Merge and renegotiate joint services (transportation, food services, etc) • Localize new recruiting efforts; lean on national partnerships to supplement • Enable informed HR decisions with performance tracking • Invest heavily in retention to keep top talent, reduce churn costs

6. Agenda Executive Summary Key Findings Action Plan

7. Governance & Organization Research Favors A Shared Services ModelIncrease Support, Collaboration and School-Level Autonomy Four Key Governance Principles Organizational Model: Shared Services Two Sources of Research • Support and services • Infrastructure • Scale cost reductions • School-site field support • Quality Management • Measurable compliance • School site, educator licensing & certification • Curriculum & PD supplier level control • Innovation • Propagate local success throughout network • New curriculum/ed. materials tested and distributed • Site level able to meet unique student needs 1 • Support and technical assistance rather than control • Collaboration and resource clearing house • Transparent, data-driven quality assessments • Increased school level autonomy: focus on teaching and learning District best practices • Compton Unified: metrics driven return criteria • Hartford, CT: senior staff accountability • Logan County, WV: strong relationship with local board 2 Scholarly research • Specialized talent filling key roles (Wong & Shen) • Collaboration with business, non-profits & community (Inst. of Ed. Law & Policy) • Provide educational services and develop local capacity (Education Leadership) 3 Source: ERIC lit review

8. Governance & Organization Shared Services in Action: Focus on Special EducationFranchises Serve as Powerful Analogs in the Business World Shared Services Component Deep Dive: How It Would Work In Special Education Franchise Analogs Support & Services • Electronic records management allows faster, accurate needs assessment and services at start of year. • Project started by Public Consulting Group. 1 • Centralized bookkeeping • Merchandising assistance • Optional payroll services Quality Management • Compliance metrics including: • percentage of students with needs served • test scores • special needs mix 2 • Unambiguous, measurable compliance standards • Enforcement plans Innovation 3 • Innovative strategies for reaching special needs students spread throughout district • Allows Professional Development to spread best ideas • Product innovations developed in corporate-owned stores and pushed to franchisees • Local best practices shared within Yum network Source: web research

9. Facilities Schools in use Vacant schools Almost Half of Facilities Still Vacant Across the City~67% of All Sites Need At Least Major Renovations Preliminary Building Assessment, Jan. ‘08 Area Map of New Orleans Public Schools, Jan. ‘08 Sites (#) Renovation Source: RSD/OPSB Facilities Master Plan website, Google Earth

10. Facilities Prioritize Renovation Efforts Using Re-Population TrendsPotential Opportunity To Re-Purpose Low Demand Facilities Re-population: School Vacancies by Zip, Jan. ‘08 One Possibility: KaBOOM Community Center Partnership = 1 vacant school Focus renovation efforts 3 month repopulation CAGR 8/07-11/07 (%) • KaBOOM is national non-profit organization that develops community recreation and play areas • Work in conjunction with local business and national funding partners • More than 600 play spaces built since 2002 • KaBOOM partnership can create a rallying point for the community and build goodwill Selectively invest Explore re-purposing sites Wait and re-evaluate 11/07 population as percent of pre-Katrina population (%) Divestiture could could yield ~$5MM; Opportunity to invest in community, build goodwill likely more valuable Source: RSD/OPSB Facilities Master Plan, Greater New Orleans Community Data Center, Zillow.com

11. Facilities Schools in use currently Potential re-purpose sites Area Map of Potential Sites to Re-Purpose Source: RSD/OPSB Facilities Master Plan, Greater New Orleans Community Data Center, Zillow.com

12. Talent Pipeline Recruitment & Retention: Keys to a Good Teacherin Every Classroom Recruiting Human Capital Management Systems Retention Thesis Localize and Partner Thesis Enable Informed HR Decisions Thesis Invest Heavily • Develop sustainable local talent pipelines • Partnerships with local universities • MS/HS recruiting programs with incentives • Leverage partnerships to sustain national talent pipelines • TFA alumni from other regions, unaccepted applicants for NO • Maintain current financial incentives • Implement high-quality performance tracking immediately • High-performers for retention, low-performers for removal • Incentives for school leaders around human capital • Develop district human capital market • Provide schools with ample info about all teachers, and vice versa • Leverage tracking systems to identify high-quality teachers early • Incorporate the employee value proposition into the on-boarding and evaluation process • Personalize retention discussions to the specific needs of each high-quality employee

13. Talent Pipeline Work Environment Personal Growth Financial Incentives Career Ladder Recognition Retention is Top Priority in New Talent Pipeline StrategyFive Step Approach to Strengthening Local Talent Pool • Graduate school partnerships, i.e. Rice Business School Education Entrepreneurs • Summer personal/professional development • Mentors • Professional Learning Community • Relationship with school leader • Relationships with co-workers • Targeted salary increases, i.e. 3rd year • Home ownership incentives • Tax credits • Front-loaded benefits i.e. portable 401-K • Multiple tracks based on skill set and interest • As a teacher, school leader, district employee • Early ID and clear communication • Community mentors • High Performance Appreciation Events • Invitation to Community Events Source: Corporate Executive Board

14. Financial Management Financial Responsibility Enables Student Achievement Simple Steps to Financial Accountability • Ensures equity across schools and wards • Alignment with school-based service model • Permits schools to reward top-performers • Successful implementation in Oakland, Houston & SF • Less successful in Seattle, SD, Hawaii School Based Budgeting • Finalize 2007-08 detailed budget • Decentralize financial decisions • Push service decisions to schools Manageable Debt Obligations • “Debt service > educational services” is unsustainable • Enables RSD/OPSB to focus on achievement • Restructuring can create big near-term savings • Call/Reissue $250 MM in outstanding bonds • Saves $60 MM over next 5 years – tax neutral • Instruction should be #1 expense • Delay obligations until tax base improves • Remove appearance of impropriety and corruption • Prepare for return to OPSB control • OPSB procure and manage joint services • 10% discount on transportation through joint negotiation ~ $2 MM savings per year Collective & Competitive Bidding • Ensure open bidding process • OPSB/RSD partnerships

15. Financial Management Current schedule Proposed schedule Call & Reissue Outstanding Bonds ~ $60 M SavingsReduces Near-Term Debt Burden; Enables Focus on Student Achievement “Debt Obligations of OPSB Must be Addressed” Bond Re-issuance Scenario Comparison $ 250 MM Outstanding Bonds 65 MM Notes Payable 10 MM Lease Obligations 200 MM Other LT debt $ 525 MM Total Obligations $MM Restructuring Rationale • Tax Neutral over life of the bonds • Total interest/premium is unchanged • Reissue at lower rate and longer maturity • Bonds are callable in Feb/Mar 2008 • Take advantage of lower rates and AA rating • Delay large payments until tax base improves • Continued repopulation throughout the city • Property assessments are at historical low Annual Chg. ($MM) 6 8 11 16 21 29 40 (81) (51) Source: Bloomberg Financial

16. Agenda Executive Summary Key Findings Action Plan

17. √ √ √ √ √ Community Relations • Metrics derived from CA’s FCMAT • Agreed to by RSD & OPSB • 2008: Initial assessment • 2009: External audit • 2010: Report to legislature • Beyond: continued internal and external audits until criteria met 1 Personnel Management 2 Timeline Student Achievement 3 Financial Management 4 Facilities Management 5 Metrics-Driven Plan to Transition District Control200+ Measures in Five Key Categories • E.g., all relevant media sources made aware of press conferences • E.g., selection procedures are uniformly applied • E.g., PD provides knowledge and skills to improve instruction • E.g., budget development process includes input from all constituents • E.g., bus loading and unloading areas are monitored on a regular basis Source: California Fiscal Crisis and Management Assistance Team

18. Student Achievement Transparency Student Achievement Sustainability Action PlansGovernance & Organization and Facilities Timelines Governance & Organization Facilities • 0 – 6 months • Implement organization redesign • Establish provider relationships • Develop list of needed services with CMOs & principles • 6 – 12 months • SBB—service and provider fees • Finalize metrics for OPSB transition • Town Hall Meetings • 12 – 18 months • Recruit partners, refine services • Identify OPSB service crossovers • Friction Points • RSD central office: Disruption of organization structure • Community: Potential misunderstandings • Nonprofits: Perceived loss of autonomy • 0 – 6 months • Track repopulation and refine model • Continue renovations • Finalize investment targets • 6 – 12 months • Town Halls specific to neighborhood schools • Identify partnerships for alternative sites • 12 – 18 months • Reassess school placement model • Actively transition alternative sites • Friction Points • Residents: Neighborhood school sites • Legal: Facility “Ownership” • Nonprofits: Partnership

19. Student Achievement Transparency Student Achievement Sustainability Action PlansTalent Pipeline and Financial Management Timelines Talent Pipeline Financial Management • 0 – 6 months • Identify key performance metrics • Town Hall meetings with teachers • Estimate costs & secure funding for initiatives • 6 – 12 months • Jointly develop process with educators • Establish partnerships • 12 – 18 months • Implement recruitment/retention plan • Establish internal marketplace • Friction Points • Union: Performance & tenure concerns • High Performing Schools: Loss of good teachers • Principals & CMOs: Competition for talent • 0 – 6 months • Finalize detailed 07-08 budget • Call/reissue $250 MM of outstanding bonds • Develop School Based Budgeting (SBB) structure • 6 – 12 months • Identify potential OPSB/RSD shared services • Procure/negotiate shared services • 12 – 18 months • Implement SBB structure • Friction Points • Taxpayers: Tax neutrality of reissue • OPSB & Charters: SBB and shared services • Legal Constraints: Reissue, joint-negotiation

20. The Roadmap to Sustainable Local Control Sustainability: RSD must reform while anticipating the welcome transition to OPSB control Student Achievement: The heart of every successful school district…NOLA is no different Transparency: Critical to enable change and restore credibility