A case study was done of the Boston University management and operation of the Chelsea (Massachusetts) school system including perceptions of key participants and outcomes of the first year of the partnership. Despite unanticipated levels of hostility between various groups and slow funding, which slowed some first year objectives, the project made progress in the following areas in the first year: (1) strengthening the administrative and physical capacity; (2) improving the academic climate; (3) implementing early childhood education programs; (4) establishment of a health care center; and (5) development of curriculum objectives. Problems encountered in the first year were either financial or involved problems of rapport between groups. Fund-raising got off to a slow start but ultimately fell only 27 percent below projections. Conflicts among groups initially centered around fears that the public's business would not be conducted in public or subject to the safeguards normally imposed on government bodies. Although that issue was resolved in large part, there continues to persist the problem of defining processes and relationships among the various interested parties. Included are nine exhibits and six appendices containing a list of persons interviewed for the report; thoughts on the project implementation; a tables of contents for "A Model for Excellence in Urban Education"; an action plan; and lists of cash gifts, pledges, and grants. (JB)