Philadelphia launches a grand experiment.

As the school year draws to a close, Philadelphia is in the midst of planning for one of the largest privatization efforts the nation has seen. The city will be placing 42 of its most troubled schools under private management next fall. Though a lot of the media attention has focused on Edison

The Philadelphia story began late last year when Gov. Mark Schweiker announced a plan to reform the troubled Philadelphia school system. Like many urban systems, Philadelphia has struggled over the years. The district was facing a $216 million budget deficit and more than half of its 205,000 students score in the bottom quarter on state reading and math tests. Schweiker proposed turning the operation of the district over to a private company reporting to a five-member commission that would replace the district's school board. Sixty of the worst performing schools would be run independently by a mixture of universities, community groups and private companies. Cost was estimated at $150 million a year, half of which would come from the state.

The city and state began a drawn out negotiation, marked by the themes of state versus local authority, funding equity, and conflict of interest. In the end, the operation of the district was turned over to the School Reform Commission (SRC), a five-member panel appointed by Gov. Schweiker and Philadelphia Mayor John Street.

Consulting Services

In late March the School Reform Commission selected 12 companies to act as its advisors on a variety of management issues. The contracts are being negotiated now and it is not clear how much will be spent on these contracts. Edison Schools was appointed the lead District Advisor, responsible for examining the central office and identifying best practices from other large urban districts, improving classroom management and school climate throughout the district, assessing the effectiveness of the district's professional development programs, improving teacher and principal recruitment and retention, and developing an 18-month action plan for the district's incoming ceo.

Other consultants selected to provide services included Research for Action to consult regarding staff development; Deloitte and Touche/School Net Inc. to consult regarding curriculum review; Victory Consulting to consult regarding high school renewal; KPMG Consulting/Kroll Inc./Jerry Lee Center of Criminology-University of Pennsylvania/Foundations Inc. and the City of Philadelphia to consult regarding school safety; KPMG Consulting to consult regarding procurement; PriceWaterhouseCoopers to consult regarding information technology; and KPMG Consulting/Sodexho to consult regarding food services.

School Management

In mid-April, the SRC took the next step, assigning 42 schools to outside managers, including nonprofit groups, universities and three for-profit companies. In addition, the Commission announced plans for more modest intervention at 28 other schools: 9 will become independent or charter schools run by community organizations and the remaining 19 will be "reconstituted" but will most likely stay within control of the district.

Edison Schools was assigned 20 schools to manage. Chancellor Beacon Academies Inc., a for-profit company based in Florida that operates public and private schools was assigned five schools; Foundations Inc., a nonprofit organization in Philadelphia that offers after-school programs was assigned four schools; Victory Schools Inc., a New York-based company that opened the state's first charter school won three schools; and Universal Companies, a new venture begun by Philadelphia record producer Kenny Gamble gained two schools. In addition, Temple University was assigned five schools and the University of Pennsylvania received three schools.

Though individual contracts will be negotiated with each of the management entities, the SRC has indicated that all outside providers must raise state test scores in their schools within three years or risk being fired. They must keep test scores at least at current levels. The providers must have a plan to show how they will put qualified teachers in every classroom, and classes must be kept small. There will be monitoring of the student transfer history in all schools, as well as monitoring of the number of expulsions and involuntary transfers. Providers will also be required to meet parents and other interested parties to answer questions and address concerns.

Contact: Mr. Frank Siefert, School Reform Commission, 215-299-7000