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Published in Print: April 11, 2001, as New York City Votes Are a Blow to Edison

New York City Votes Are a Blow to Edison

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The overwhelming failure of a plan to turn five New York City public schools over to private management has left Edison Schools Inc. licking its wounds and city officials bickering over tactics.

For opponents, the defeat of the plan late last month was a major victory against the privatization movement in public education and an opportunity to offer alternative strategies for improving the five schools, which have chronically low achievement.

Fewer than half the eligible parent voters at the five schools—three in Brooklyn and one each in Manhattan and the Bronx—took part in the balloting on the Edison proposal during a two-week election period in late March. Among the votes cast, four out of five were against the privatization plan.

Under New York state's charter school law, more than 50 percent of all eligible votes had to be cast in favor of the plan at each school for that school to be converted to charter status.

"It was a tough process," said R. Gaynor McCown, a vice president for corporate strategies at New York City-based Edison. "In the end, it might have been almost impossible for us to get 50 percent of the votes."

Mayor Rudolph W. Giuliani of New York, who has been an outspoken supporter of privatization, suggested after the parental vote that the board of education could and should turn over management of 20 of the city's worst-performing schools directly to Edison.

But Schools Chancellor Harold O. Levy and his staff have disputed the mayor's view, saying there is no legal way to turn over schools to private management other than by going through the parental vote spelled out in the state's charter school law.

Meanwhile, the mayor's influence over the school system got a boost last week with the election of a longtime ally of his as the president of the citywide board of education. Ninfa Segarra, a board member and former deputy mayor who favors the abolition of the governing body, became its president on April 4.

Conference Call

New York City school board politics is not for the faint of heart, and Edison's failure came after weeks of intense local media coverage about the parent elections at the five schools. The setback for the for-profit company also came about a week after the San Francisco board of education took a formal step toward removing the company as the manager of a charter school there. ("San Francisco Moves To Revoke Edison's Contract," April 4, 2001.)

Edison insisted that the recent defeats were not major disruptions to its national business plans. The company manages 113 schools, both traditional and charter public schools, serving 57,000 students.

"This was disappointing, but anyone who knows the financials of our company knows that New York was not make- or-break for us," Ms. McCown said.

Still, the New York City vote didn't go over well with investors. Edison's stock, which had already been declining in the past two months, slid below $20 a share after the voting, closing at $19.75 on April 5. Its 52-week high, reached in January, was $38.75. The company scheduled a conference call with analysts and investors for late last week to try to stem the decline.

Some Wall Street analysts remained upbeat. Merrill Lynch Inc. put out a research note stating that the San Francisco and New York City setbacks "do not change Edison's long-term outlook or strong current pipeline of potential contracts."

The opposition to Edison's New York City plan was led by the local chapter of the Association of Community Organizations for Reform Now, or ACORN. The grassroots activist group skirmished with the board of education over the parameters of the election, believing opponents were at a disadvantage because the school system was providing Edison with ready access to parents' names and contact information.

Edison's efforts were led by the Rev. Floyd Flake, a former Democratic U.S. representative from New York who is now a senior executive with the school-management company. But Edison failed in its efforts to win the support of such community leaders as the Rev. Al Sharpton and former Mayor David N. Dinkins.

Meanwhile, the powerful United Federation of Teachers, the local affiliate of the American Federation of Teachers, reportedly joined the opposition once the voting began, distributing anti-Edison leaflets. Union officials didn't return calls seeking comment.

Supporters of the privatization plan faced another foe: apathy, or apparent apathy, among parents at the five schools. Because a nonvote was the same as a no vote, it would be hard to determine whether some parents opposed to the plan believed it was enough to simply refrain from voting.

Regardless, Edison did not even come close to winning a majority of votes in any of the schools. In only one school did more than half of parents vote. And in that school, Community School 66 in the Bronx, 77 percent voted against the plan.

"They didn't engage folks," said Bertha Lewis, the executive director of the New York City ACORN chapter. "The parents felt they had to overcome an attitude that they were supposed to take this and swallow it. The lesson is don't make a top-down decision and put the parents last."

Seymour Fliegel, a longtime education activist in New York City, said the vote makes it unlikely that any public schools in the 1.1 million-student system will be turned over to private managers in the near future.

"Privatization is in trouble in New York City," said Mr. Fliegel, the president of the Center for Educational Innovation-Public Education Association, an independent group that studies and supports the city's public schools. "Everyone looks to Edison as the major player. A much smaller company is going to be reluctant to take a shot at it."

Changes on Board

He said school district leaders erred by choosing Edison as the lone possible company to manage the five troubled schools. Fourteen organizations had presented proposals to the school system to manage schools, and the school board had selected four finalists.

At least three should have been given the chance to persuade parents in the five schools to select them, Mr. Fliegel argued. Then the dynamic of competition that is supposed to be central to the privatization strategy would have had a chance to work.

"The whole process was handled poorly," he said.

But it didn't take long in New York for a new political drama involving schools to push the previous one offstage.

The election last week of Ms. Segarra as the president of the school board came as a surprise because the deciding vote in her favor was cast by a board member, Irving S. Hamer Jr., who is a longtime foe of Mayor Giuliani's. There were four votes in her favor and three abstentions.

Ms. Segarra, a lawyer and vice president at the City University of New York, joined the board in 1990.

The vote raised questions about the stability of Mr. Levy's job. Ms. Segarra opposed the selection of Mr. Levy as chancellor last year, as did the mayor.

Vol. 20, Issue 30, Page 5

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