Edison Renews Four Contracts, Cuts Ties Elsewhere

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Edison Schools Inc. has renewed contracts to manage public schools in four cities, but it is ending its relationship with a Texas district for financial reasons.

In the first round of contract renewals in Edison's history, the school management firm is being retained by three of its four inaugural clients, while the Duluth, Minn., district has renewed its contract with the firm.

In Sherman, Texas—one of Edison's first clients, beginning in the 1995-96 school year—the company informed district officials this month that it would not seek to renew its contract.

"It has been a difficult situation for us, particularly on the financial front, in Sherman over the last five years," Christopher Whittle, Edison's president and chief executive officer, said last week. "In the first year, we had a situation in which we knew we were going to lose money. But we made a decision to see it through for the five years of the contract."

The nation's largest for-profit manager of public schools, New York City-based Edison is running 79 traditional public schools and independent charter schools this year, serving some 38,000 pupils. It has never been fired.

But in the 6,000-student Sherman district, the contract for Edison to manage the 450-student Washington Elementary School was under criticism from some district officials. They have said that the contract ended up costing the district as much as $4 million more than expected.

"This was costing both of us," said Tom Hudspeth, the interim superintendent. "We're a small school district, and it was more difficult for Edison to be able to make a profit."

'A Lot of Good Things'

Despite the financial issues, district officials had planned to hold community hearings and provide information to the school board so it could decide whether to renew the contract, Mr. Hudspeth said. "There were a lot of good things about the program, and there is a lot of parent satisfaction."

In Wichita, the school board has signed a new five-year contract under which Edison will continue to manage four schools. In Mount Clemens, where the company runs three schools, the school board voted last month to renew its contract for three years instead of five.

The board overseeing the Boston Renaissance Charter School, one of the nation's largest charter schools, has renewed its contract for another five years. And in Duluth, the board of Independent School District No. 709 has given a three-year renewal for Edison to keep running a 770-student charter school.

Vol. 19, Issue 20, Page 3

Published in Print: January 26, 2000, as Edison Renews Four Contracts, Cuts Ties Elsewhere
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