Budget & Finance

Vallas Backs Off Plan To Cut School Managers’ Fees

By Catherine Gewertz — June 11, 2003 2 min read
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Schools chief Paul G. Vallas has backed off his plan to reduce the fees paid to six outside groups that manage some of the lowest-performing schools in Philadelphia.

Mr. Vallas, who became the chief executive officer of the city’s public schools in July 2002, wanted to cut by nearly half the fees paid to the groups for managing 40 schools. He intended to use the money to improve high schools. (“Vallas Calls for Cuts to Private Companies,” April 2, 2003.)

But after meetings with two state legislators, Mr. Vallas agreed to keep the groups’ per-pupil fees for the 2003- 04 school year about the same as this year’s, said district spokeswoman Amy R. Guerin. The education management organizations, or EMOs, are paid from $450 to $881 per pupil above standard funding.

The district has “an agreement in principle” with the two universities, two nonprofit groups, and two for-profit companies to hold their per-pupil funding steady, but not all contracts have been signed, Ms. Guerin said. The signing deadline is June 30.

The contract with Chancellor Beacon Academies, a company that operated five schools in the 193,000-student district this school year, has been terminated, effective later this month. (“Phila. Board Ends Contract With Chancellor Beacon,” News in Brief, April 23, 2003.)

Vickie Frazier- Williams, a Chancellor Beacon spokeswoman, said last week that the Coconut Grove, Fla.-based company is considering litigation, among several options, in response to the termination.

A ‘Negotiation’

Mr. Vallas gave up on his proposed cutbacks after talks with Republican Rep. John M. Perzel, the speaker of the House of Representatives, and Rep. Dwight Evans, the highest- ranking Democrat on the House appropriations committee.

Steve Miskin, Mr. Perzel’s press secretary, said the three men had struck no “deal per se,” characterizing their discussions instead as a “negotiation.” He said the two lawmakers believe the EMOs are promising and should be “given a chance to succeed or fail on their own.”

The schools chief agreed to flat-line the companies’ per-pupil fees, and the legislative leaders said they would support him in his high school reform program and help enlist support for state legislation necessary to allow the district to restructure its existing debt, Mr. Miskin said.

Mr. Vallas said that although he had hoped to put all of the EMOs on a “level playing field” by restricting each to about $450 per pupil, he still retains the power to end their contracts for convenience.

And while he can no longer shift $10 million in money for the companies to high school improvement, he expects to realize at least $50 million in savings from debt restructuring over five years that can be applied to high schools as well as to other district improvements.

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