In Pa., a District's Distress Drives Shift to Charter Operator
The financially strapped and academically challenged York city school system in Pennsylvania could become the state's first where all schools are run by a charter organization, after a county judge approved a state request to appoint a receiver to take charge of the nearly 7,500-student district.
The receiver, David G. Meckley, who has been serving as the district's chief recovery officer since 2012, says he wants to transfer the management of the schools to an outside agency because the local school board has not been following a recovery plan it approved in 2013.
Observers are watching closely what happens in York, a city of some 44,000 people located about 100 miles west of Philadelphia.
"This is very much an exceptional case as you look around the country, but I would add a big asterisk to that," said Nelson Smith, a senior adviser for the National Association of Charter School Authorizers. "When you think about the number of districts that are both in financial distress and also have persistently low achievement in at least some of their schools, you might see states taking [these] actions more frequently."
The Dec. 26 order by President Judge Stephen P. Linebaugh of the York County Court of Common Pleas drew an immediate appeal by the school district and pledges from the local teachers' union to do the same. Mr. Meckley, meanwhile, has begun a three-year term as receiver, though authority to levy and increase taxes will remain with the elected school board, according to the order.
If management of all of the York city district's schools is transferred to an outside entity, the leading contender for that role is the Florida-based Charter Schools USA, a for-profit network of 70 schools, which Mr. Meckley has proposed to take over the schools.
Exploring Other Options
Under pressure to overhaul academic performance in struggling schools, some states and districts have adopted full-charter or partial-charter models.
The most radical conversion is the almost decade-old Recovery School District in New Orleans, which last year turned over the last of its regular public schools to charter operators. The Orleans Parish school board, which was stripped of control over most of the city's schools in the wake of Hurricane Katrina, still runs half a dozen regular public schools, though, overall, the vast majority of children in the city attend charters, which are independently run schools.
A district made up entirely of charters—in the sense that the schools have full autonomy—is still rare. More common is a "portfolio" approach, with regular district schools and a marketplace of charter operators that offer alternatives to parents. Models used in Indiana and Tennessee—where the states have taken control of some of their worst-performing schools and have transferred their management to private companies—are also alternatives.
The cases that are most similar to what's likely to play out in York, Pa., are in Michigan: Muskegon Heights and Highland Park. In the face of financial deficits in 2012, state-appointed emergency managers in those districts turned over operations to for-profit charter operators.
In Highland Park, the schools are run by the Leona Group; in Muskegon Heights, the schools were run for a time by Mosaica Education Inc.
But transitions have been rocky. Mosaica, which has offices in New York City and Atlanta, shortened its five-year contract with Muskegon Heights to two years last April. The company was losing money because of higher-than-expected special education costs and lower-than-projected enrollment, according to local media accounts.
In June, Muskegon Heights and Mosaica mutually parted ways. The district hired a superintendent, but contracted with a nearby district to manage its finances and with another firm to handle staffing. The Leona Group still manages Highland Park's schools, but has not avoided growing pains.
Mr. Smith of the charter school authorizers' association, based in Chicago, said a few districts have considered full-scale conversion to a charter model but have decided against it, for many reasons. One is the difficulty in upending an established structure, he said.
"I would say that it's very, very difficult to do this through a standard elected school board that would voluntarily agree to cede its power over the schools to a third party," Mr. Smith said. "That requires a bit of a leap. It's probably easier to get this sort of arrangement of simply chartering out the schools when you have a receiver or emergency manager."
Rocky Recovery in York
Then there are the politics.
"It's not an easy thing to do from a political standpoint, and it's not an easy thing to do well if you think about what it means for changing the whole notion of who is responsible for what," Mr. Smith said.
In those situations, he said, the contract needs to delineate responsibilities and expectations "really clearly so that everybody is on the same page in terms of what kind of achievement is expected, over what period of time, and that there is a good deal of transparency about expenditures and about how decisions will be arrived at, and what kind of access the public will have to that information."
In ruling for the state's request for receivership in the York city district, Judge Linebaugh said the concern before the court was not whether the plan Mr. Meckley would put in place was "the best plan or even a good plan for the district" or the citizens of York County. The issue, according to the judge, was whether acting state Secretary of Education Carolyn Dumaresq's request to appoint Mr. Meckley as the receiver was "arbitrary, capricious, and wholly irrelevant" to restoring the district to financial stability.
The judge concluded that the request was not, and that Mr. Meckley had made significant attempts to put into place the recovery program that the school board had approved.
As part of the recovery strategy, all of the district's eight schools were required to submit and implement improvement plans. But by November 2013, no school had done so.
The recovery plan also called for salary and benefits concessions from the York City Education Association, an affiliate of the National Education Association, but attempts to reach an agreement that met requirements of the recovery plan had failed, according to the judge.
Mr. Meckley also amended the charter plan at the school board's request. Under the alternative proposal, the board would have continued to oversee five buildings for four years, while an outside operator ran the remaining three. In the fifth year, the results would have been compared, with one model then being adopted for all schools.
That, too, was rejected by the board, according to the judge's opinion.
The last straw for state officials came in November, when the board tabled an agreement between the district and a charter operator and—apparently without Mr. Meckley's prior knowledge—approved a contract with the teachers' union that included an across-the-board 5 percent reduction in pay beginning Jan. 1 and concessions in health benefits, but didn't cut as much as recommended in the recovery plan, according to the York Dispatch. (The school board later rescinded the contract with the union and sought new negotiations after the state filed the petition for receivership.)
In court, the school board and the union disputed the financial picture that Mr. Meckley and Richard Snodgrass, the district's business manager, presented and contended that the school district would end the 2015 fiscal year with a surplus.
Ms. Dumaresq, the acting education secretary, said that with the judge's decision, Mr. Meckley can now begin to implement measures that will restore financial and academic stability to the district.
But it is unclear how legal appeals and opposition from incoming Gov. Tom Wolf, a Democrat, will affect the conversion plans.
The Education Law Center and the Public Interest Law Center of Philadelphia filed friend-of-the-court briefs arguing that the constitutional rights of special education students would be violated under the plan to hand over operations to Charter Schools USA.
Mr. Meckley agreed in court that some changes to the plan were necessary based on concerns raised by the school board.
Vol. 34, Issue 15, Page 1Published in Print: January 7, 2015, as District's Distress Prompts All-Charter Plan