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Board asked Russo to leave

Baltimore CEO got critical review last year; Panel 'alarmed' over some issues; Schools chief accused of not watching budget

Sun Staff

March 5, 2004

A year ago, Baltimore's school board had become so unhappy with Carmen V. Russo's leadership - particularly her inability to monitor what would become a financial catastrophe - that it wrote a critical review of the chief executive officer's job performance and asked her to leave, according to documents and sources.

Several weeks after the performance review was written, Russo resigned, saying that she would leave June 30, 2003, a year before her four-year contract expired.

In the February 2003 job evaluation obtained by The Sun, the school board says "that the CEO was not monitoring, directing or correcting the [Baltimore City public school] budget problem until it became a system-wide crisis."

The document not only reveals that the board was closely monitoring the budget but also that it had lost faith in Russo to solve the system's problems by this time last year. While it maintained a united front of support for the former CEO in public, in private the board was writing that it was "alarmed" over a number of issues.

A full year before the system's finances became the subject of heated public debate between Gov. Robert L. Ehrlich Jr. and Mayor Martin O'Malley, the school board was about to take one of the strongest actions it could - replace the system's leader.

Russo, who now lives in Boca Raton, Fla., declined to comment and referred questions to Stuart H. Grozbean, an attorney with the Belli, Weil and Grozbean law firm in Rockville.

"It is Ms. Russo's position that release of her evaluation is a personnel matter, and therefore, strictly confidential," Grozbean said. "The release of her interim report is grossly inappropriate."

School board members would not comment on the job evaluation, but several sources close to the school board said Russo was asked to leave after she received it. School board President Patricia Welch would say only, "It was agreed that Carmen would not spend the last year of her contract in Baltimore."

The evaluation lists 28 incidents that the board considered examples of Russo's shortcomings, including failures to resolve disputes over special education, communicate with the board on budget matters, and fill key management positions.

The document indicates that as early as December 2002, the school system administration apparently did not have a handle on the extent of the deficit. As an example, the report said that the board was told at a working session the night before a school board meeting that the deficit was $21 million. But the next day, the board was "blindsided" when the administration said during the public meeting that the deficit was $31 million.

In another instance, the board said it was surprised to learn that the school system would end the 2001-2002 school year with a deficit after Russo's staff had projected a surplus a few months earlier. The report indicates that $20 million in annual expenses had apparently been omitted from the budget.

Sudden changes in budget forecasts noted in the review proved to be chronic. In the months after the board wrote the job review, the projected deficit continued to rise on Russo's watch. After she left, an audit of the system's finances this fall showed the cumulative deficit stood at $58 million. The system's total budget for the year was about $900 million.

It wasn't just Russo's handling of finances that concerned the board. It also said there were three key management positions that had been left vacant: the chief financial officer, facilities director and purchasing director.

And the board criticized the CEO for strained relationships with O'Malley and U.S. District Judge Marvin J. Garbis, who oversees special education in the system, as well as internal relations among the professional staff.

The poor relationship between the CEO and O'Malley, the board wrote, "has put the school system in a very tenuous position with city government."

Hired in 2000 to lead the 103,000 student school system, Russo was charged with turning around the city's troubled high schools. She came to the system from the Broward County, Fla., school system, and the board was apparently satisfied with her performance in the first two years of the contract. In the first year she received a $15,000 bonus on top of her $192,000 salary, and in the second, she got a $20,000 bonus.

When asked about Russo's job performance, her attorney, Grozbean, said he would not release other job reviews and added, "One should look with jaundiced eyes on any source releasing only partial information and who has elected to withhold other information that would cast Ms. Russo in a more positive light."

When she arrived, Russo inherited a $19 million budget deficit, which she reduced in the first year. But in the next two years, the deficits rose.

By fall 2002, Russo had begun to look for jobs, and on Sept. 20, her candidacy as a finalist for a high-level state education position in Florida was disclosed. The uncertainty of her status continued until the end of November, when Russo pulled out of the running.

While board members said they were relieved she was staying, the public began to question her commitment to Baltimore. In July, Russo moved back to Boca Raton, where she had maintained a residence and works as a consultant.

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