Riding the ‘turnaround’ merry-go-round in the continuing assault on Philadelphia public schools ­– Part V

by Ken Derstine

June 2, 2016

After Crossing the Rubicon

 Having crossed the Rubicon in its turnover of Wister public school to a charter company despite its not being,by its own criteria, a “failing school”, the Philadelphia School Reform Commission (SRC) is embarked on an agenda to greatly expand the privatization of Philadelphia public schools.

At its May 26th Action Meeting, the SRC formally turned over Wister to Mastery Charters concluding the process begun at its January 21, 2016 Action Meeting when Wister was returned to turnaround status despite evidence it was not “a failing school”. At the same time, at the May 19th and May 26th Action Meetings, the SRC sought ways to get around the recommendations of its Charter Office that two ASPIRA and two Universal charters not be renewed despite consistent violations of their charter agreements and low academic performance at the schools.

The ASPIRA and Universal Nonrenewal Recommendation

For over a year, the Charter Office had been telling ASPIRA it was in violation of its charter. In a January 22, 2015 letter to ASPIRA, the Charter Office listed 17 conditions that ASPIRA, Inc. must meet for charterrenewal, including overhaul of its board of trustees, its business practices and its oversight of its Stetson charter school. On August 23, 2013 reporter Daniel Denvir had reported ASPIRA owed millions to its four charters, but no one was checking its books. As previously, in December, 2014, ASPIRA rebuffed the attempt by the Charter Office to oversee its operations.

The vote for non-renewal of the two ASPIRA and two Universal charters was finally scheduled for the April 28,2016. Shortly before, the head of the Charter Office expressed confidence that the vote on the non-renewals was proof that oversight of Renaissance charters was working.

However, at the April 28th meeting, the SRC voted to table the non-renewals for the four charters. The reason given by Commissioner Bill Green was that the SRC had to wait for a report of the City Controller's office that was investigating the charters.

In his scathing 23-page report issued May 18, 2016, the Philadelphia Inquirer reported City Controller Alan Butkovitz stating,

Among other things, the report found questionable financial transactions among related entities, including loan guarantees; school-lease arrangements with parent organizations; and charter board members serving on boards with ties to the schools….

The charter management organizations, the report said, are running the schools, which "have no authority to make independent financial decisions or other significant operational decisions, and appear to be shell corporations of the parent education service provider."

Butkovitz said the Charter Office should be expanded since it only had nine employees to oversee 83 charters with 63,000 students. For comparison, Butkovitz said the Washington charter office has 39 employees who oversee 114 schools for 39,000 students. He added that the issues at ASPIRA and Universal are more evidence that an overhaul of the 1997 state charter law is needed.

At the May 19th SRC Action meeting held a day after the report was issued, the City Controller’s report was not mentioned. Instead the meeting began with a discussion with a lawyer that ASPIRA had hired. The lawyer, Ken Trujillo, was from a top Philadelphia law firm Schnader Harrison Segal & Lewis.

For thirty minutes the members of the SRC engaged in a collegial discussion about what Trujillo would do in the next week before the May 26th SRC meeting to fix ASPIRA’s managerial problems. The Commissioners, led by Commissioner Green, then engaged in discussions over the differences between “recusing” and “abstaining” on a vote. Using this parliamentary method, the non-renewal of ASPIRA’s two charters were once again tabled until the May 26th meeting.

After the vote, Commissioner Feather Houston expressed concerns (at 22:00 in the previous link) that ASPIRAis refinancing bonds to “fuel considerable expansion” and concerns about what this would mean given its managerial problems. At the April 28th SRC meeting (starting at 25:10), after the vote to table the non-renewal of the two ASPIRA charters, she had said she would be voting no on the ASPIRA non-renewals until she there was “absolute guarantee of curative action on the governance and financial matters.” She concluded, “…I don’t think the School District can tolerate that level of refusal to play by the rules.”

At its May 26, 2016 Action Meeting, though he was there, Trujillio did not speak or turn in a report. Instead the SRC tabled two resolutions (pages 2 - 14) that went into even more detail about why the Charter Office was recommending nonrenewal of two ASPIRA charters.  Resolution SRC-5 listed twenty-five reasons, most of them academic, in addition to its previously reported managerial and financial problems, why ASPIRA’s Stetson Charter should not be renewed. Similarly, Resolution SRC-6 listed thirty reasons why ASPIRA’s Olney Charter High School should not be renewed. It concluded:

Resolved, that there are substantial grounds for nonrenewal of the (SRC-5) Stetson Charter and (SRC-6) Olney charter, and be it 

Further Resolved, that the SRC will conduct a public hearing on nonrenewal of the Charter School’s Charter commencing on or about ____, subject to rescheduling, at which hearing theSchool District will present evidence in support of the grounds for nonrenewal of the Charter School’s Charter, and the Charter School will be given the reasonable opportunity to offer testimony and exhibits in support of why the Charter School’s Charter should be renewed; and be it …

So once again for a third time the resolutions are tabled for more meetings on the non-renewals. This is despite the dozens of speakers that have spoken at the April 28th, May 19th, and May 26th SRC Action Meetings both for and against the renewal of the charters. Based on past practice, the meetings will be a platform for ASPIRA’s new “oversight counsel” to present the spin of the facts presented by the Charter Office in order for the charters to be renewed.

The non-renewals for two Universal Charters, which was tabled at the April 28th SRC meeting, were not mentioned at the May 21st and May 26th SRC meetings. The City Controller’s report went into great detail about why Universal’s Charter should not be renewed, but this has not been mentioned by the SRC.

The Turnaround Merry-Go-Round Keeps Turning Around

At the April 28th meeting, the SRC voted to turn Jay Cooke in Logan to the Great Oaks Foundation, John Wister in Germantown to Mastery, and Samuel Huey in West Philadelphia to Global Leadership Academy. However, at the beginning of the May 19th meeting, it was announced that Great Oaks had withdrawn as manager of Cooke Elementary. Cooke Elementary will now have an internal school district turnaround. This means, while the school will remain in the District, the entire faculty must reapply for their positions and and no more than 50% can be rehired.

It was later learned that the reason for the withdrawal was that the Philadelphia School Partnership (PSP), the private organization set up to funnel corporate, hedge fund, and philanthropic donations to charters in Philadelphia, had withdrawn its $1 million grant to Great Oaks. Whether this was because of problems that had been brought to light about the Great Oaks Foundation, or because of another setback for PSP which a week earlier had  Young Scholars announcing it was closing its charter school at Kenderton Elementary in June, was not disclosed. Young Scholars had received $1.8 million from PSP when it took over Kenderton in 2013. A year after it opened Kenderton was touted as a model for privatization.

Future grants from Philadelphia School Partnership should be monitored to see if this is a change in policy to focus its funding on large charter chains such as Mastery, ASPIRA, KIPP, and Universal to make them “too big to fail” rather then independent or small network charters of which there are many in Philadelphia’s 83 charters. This certainly seems to be the trend with the SRC. At its April 28th meeting the SRC voted not to renew the charter for World Communications Charter School. Why were they voted for non-renewal and ASPIRA and Universal Charters have been given additional hearings? Even after a charter is closed they can appeal to the Pennsylvania Charter office. This may take up to two years and the schools remain in operation during that time. Public schools slated for closing have no right of appeal after the SRC votes on their closure.

The Fiscal 2016-2017 Philadelphia School Budget

Also at its May 26th Action Meeting the SRC adopted a $2.8 million budget for the 2016-17 academic year. The funding is based on $1.5 billion from the state, $1.275 billion from the city, and $12 million from the federal government. The budget includes $121 million more for charters than last year. Charter related expenditures have increased from 18% of the budget in 2011 to 31% in the new budget. In his presentation at the May 26th SRC meeting, Financial Officer Uri Monson said charter schools are “far and away” the leading contributor to the rising costs for the district which are projected to grow 8.4% (Page 18) in the next five years. He projects the budget gap for the District will balloon to $600 million by fiscal year 2021 without a change in incoming revenue.

The District is ending the 2015-2016 school year with a small surplus of $100 million (two-weeks of operating revenues). This surplus and lack of debt is due to understaffing with teacher vacancies ranging from 135 to 160 the entire school year, one nurse and counselor shared between several schools, except high schools that have over 1000 students, and almost no librarians. Superintendent Hite has claimed the District will be hiring 800 new teachers in June for the fall and will restore one nurse and one counselor to each school. The District has also contracted with Kelly Services in its continuing effort to privatize substitute teachers. The District only spent $17 million of the projected $45 million for Source4Teachers due to its lack of substitute applicants. This left teachers to give up preparation time and administrators students that did not have a substitute to various classes.

In the new budget, the School District debt service is $267,102,000 (Page 17), roughly 10% of the school district budget. In a May 5, 2013 City Paper article, Daniel Denver said that debt service had risen more than 32% in the five years before 2013 and more than half of the debt load of $157.9 million went to interest. He found, “According to 2011 Census data, districts nationwide paid an average of $155 per non-charter pupil on debt service. Philly spends $1,684 per non-charter student.” 

At its April 28th meeting the SRC adopted a series of three General Obligation Refunding Bonds. The aggregate cost for the three series of the refunding bonds is $349,960,00. The cost of Series C, for example, is $150, 720,000 (See Page 2). Beginning in 2017, the annual debt service for Series C will be roughly $18 million per year, in 2025 this goes up to $35 million, and decreases slightly from that peak until 2031. (See Page 25 for the full chart.) This is roughly $352,000,000 for a bond refunding of a $150,720,000 bond over fifteen years. Series A and B have similar exorbitant rates. Will the Philadelphia School District someday soon be at the mercy of financial institutions that will demand staffing, wage, benefit and pension cuts, and resource cuts to pay off this debt the way Puerto Rico and Greece are being attacked today? Or, has that happened already?

1000 Days Without a Contract

Friday, May 27th marked 1000 days since the Philadelphia Federation of Teachers has been without a contract. This means wages have been frozen since August of 2013. There have also been no step increases, meaning new teachers do not get step raises in the first eleven years of teaching which have been traditionally part of teachers salary, no raises for advanced degrees teacher traditionally received as compensation for paying for their courses out of pocket. Instead negotiations are at a stalemate since the SRC continues to demand teachers must pay a percentage of their health insurance.

Currently in negotiations the District is making the following demands:

1. No step increases that have been lost over the past 1000 days. This amounts to thousands of dollars for new teachers.

2. No degree/lane increases that have been lost over the past 1000 days.

3. The District continues to demand 5% health insurance contribution if you earn below $45,000 and 8% if you earn above that. This would amount to a 7% pay cut for District employees.

At the SRC’s May 26th Action Meeting two teachers and a parent described what the lack of a PFT contract has meant for teachers and students. They described overcrowded classes and overworked and underpaid teachers who must pay out of pocket for the resources their classrooms lack.

At the meeting, George Jackson, speaking for PFT President Jerry Jordan, as reported by the Notebook, said,

The educators that are still here are showing amazing dedication to Philly’s children, but they are nearing a breaking point,” said Jackson. Jordan's statement pointed to the district’s budget surplus as evidence of its “unwillingness to properly compensate educators.

Responding to the teachers, the parent, and the union representative, Commissioner Green once again showed his anti-public school teacher, anti-union bias. (This clip is audio only because Green was participating in the SRC meeting by a phone hookup.) 

When agreement couldn’t be reached on these and other contractual issues in August 2013, the SRC attempted to unilaterally impose a contract on its own terms. Commonwealth Court ruled in favor of the PFT in October, 2014. The SRC appealed to the state Supreme Court and a settlement remains at an impasse.

The corporate/business model of trade unionism has been disastrous for the labor movement as a whole. Green’s arrogance is the product of no serious resistance being put up to the privatization of Philadelphia public schools. The PFT leadership rarely shows up at SRC meetings, confining itself to newspaper Op-Eds and testifying occasionally before City Council. Teachers are increasingly vulnerable to capricious principals.  

Nor does the PFT leadership put up any resistance to the expansion of charters in the Philadelphia School District. In this policy, it is following the lead of the leadership of the American Federation of Teachers that sees charters as another source of dues paying members. The unionization of charter teachers is slow because charter companies put up stiff resistance to their employees having any control of their jobs or workplace. The very essence of charters is that they are the chief method used by corporate reformers of undermining the wages and working conditions of teachers in public schools. Why should charter school employees join a union when it does nothing to defend teachers working conditions and job security?

In January and May, public school teachers in Detroit staged sickouts to protest attacks on their wages and working conditions. For both sickouts, Randi Weingarten, President of the AFT, flew to Detroit to supposedly lend them moral support, but she did nothing to rally the national AFT to support the Detroit teachers’ sickouts. Instead both times the AFT organized “walk-ins” across the country in support of public education to put on a show of militancy that went no further then a rally of a few hours, instead of spreading the Detroit teacher sickouts nationally which would have truly challenged the corporate education reform attack on public education.

Also see:

School administrators delay voting on labor pact
June 2, 2016 - Philadelphia Inquirer

Kenderton parents push for Mastery to take over; decision rests with Philly SRC
June 2, 2016
Read the comments. 

Wolf and Kenney to chart future of SRC
Notebook - June 2, 2016

Chester Upland: Exhibit A for broken charter law
Philadelphia School Notebook - June 3, 2016

APPS Calls on Mayor, Governor to Investigate SRC Actions on Renaissance Renewals
Alliance for Philadelphia Public Schools - June 10, 2016 

One down, one looming, one to go: The state of Philly schools' labor negotiatins
Newsworks - June 13, 2016

PA: More Charter Christmas
Curmudgucation - July 4, 2016
PA ALEC legislators finally reveal their end game. 

St. Malachy to receive $1 million grant to grow after move
Philadelphia Inquirer - July 16, 2016
More grants for non-public schools from Philadelphia School Partnership. 

Also see:

Riding the ‘turnaround’ merry-go-round in the continuing assault on Philadelphia public schools ­– Part I 
March 27, 2016
The 
Battle for Wister; The SRC’s Projected Five-year Plan

 Riding the ‘turnaround’ merry-go-round in the continuing assault on Philadelphia public schools ­– Part II 
April 5, 2016
Mastery Charter Schools; The Unequal Funding of Public vs. Charter Schools

Riding the ‘turnaround’ merry-go-round in the continuing assault on Philadelphia public schools ­– Part III
April 13, 2016
The No Excuses Education Philosophy; 
’No Excuses’ in Philadelphia Charters; Origins of the No Excuses Schooling Philosophy

Riding the ‘turnaround’ merry-go-round in the continuing assault on Philadelphia public schools ­– Part IV
May 8, 2016
Crossing the Rubicon; The Latest Spin of the Turnaround Merry-Go-Round in Philadelphia Schoolsl; SRC Commissioner Green Makes His Move; The Broad Foundation and Boston Consulting Group's Privatization Plan is on Schedule; The Privatization Rollout in the Last Two Years