School Choice & Charters

Pa. District Could Become State’s First All-Charter School System

By Denisa R. Superville — December 12, 2014 6 min read
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Cross-posted from the District Dossier blog.

The financially-strapped York City school system in the south central region of Pennsylvania could become the state’s first district where all schools are run by a private, for-profit charter organization.

It’s an option being pushed by York City’s emergency manager and one that has been slowly gaining some national currency as a strategy for fixing underperforming and financially struggling traditional school districts. A leading candidate for the takeover of the nearly 5,000-student York City district is Charter Schools USA.

But before proponents could push York City to make that change—a move staunchly opposed by some parents and district employees—a local judge will have to decide whether to grant Pennsylvania Acting Education Secretary Carolyn Dumaresq’s request to appoint a receiver to take control over the school district. On Thursday, Common Pleas Judge Stephen Linebaugh denied a request by the school district to temporarily halt the case.

Anticipating a ruling, four sets of parents, school employees, the Pennsylvania School Boards Association and the National Association for the Advancement of Colored People petitioned the judge this week to be added to the proceedings unfolding in court. Linebaugh allowed the teachers’ union petition to stand after hearings on Thursday, but said the interests of the other groups can be represented by the school district.

District employees fear that they will lose their jobs if a receiver is appointed and the district becomes an all-charter system. Their attorneys have also argued that receivership will not improve the district’s financial situation.

Observers are watching closely what happens in York City.

“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 advisor at 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.”

Exploring Other Options

Faced with pressure on all sides to radically improve academic performance in struggling schools, some states and districts across the country have adopted full-charter or partial-charter models.

The most radical conversion of a former traditional school district to an all-charter system is the almost decade-old Recovery School District in New Orleans, which in the spring of this year, turned over the last of its traditional 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 continues to run half a dozen traditional public schools, though, overall, the vast majority of the children in the city attend charter schools.

A public school district comprised entirely of charters—in the sense that the schools have full autonomy—is still rare. What’s more common is a portfolio model approach, with traditional district schools and a marketplace of charter operators that offer alternatives to parents. School models in Tennessee and Indiana—where the states have taken control of a percentage of its worst-performing schools and turn over the management and operations to private companies—are also alternatives.

The cases most comparable to what’s likely to play out in York City are two Michigan districts: Muskegon Heights and Highland Park. Facing deep financial deficits in 2012, state-appointed emergency managers opted to turn over school operations to for-profit charter operators in those districts.

In Highland Park’s case, the district’s schools are run by The Leona Group; in Muskegon Heights the schools were run for a time by Mosaica Education Inc.

But the transition to all-charter districts was not without pitfalls. Last April, Mosaica, which has offices in New York and Atlanta, shortened its five-year contract with Muskegon Heights to two years. The company was losing money in the deal because of higher than expected special education costs and lower than projected enrollment, according to the local press. Earlier this year, the local NPR station chronicled some of the challenges Muskegon Heights faced as the district transitioned from a traditional district to an all-charter system. In June, Muskegon Heights and Mosaica mutually parted ways, paving the way for the district to become independent but not in the way it was before the agreement with Mosaica. It hired a superintendent, but it has contracted with a nearby school district to manage its finances and another firm to deal with staffing.

The Leona Group continues to manage Highland Park public schools, but even there the model is not without some degree of growing pains.

Challenges of Full-scale Conversions

Smith said full scale conversions have been considered by a few districts over the years, but for a multitude of reasons, they decided against it. Part of the reason is the inherent difficulty in upending an established structure, he said.

“I would say that its 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,” he 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.”

Then there are the politics.

“Let’s be honest, the politics are really tough,” he said. “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.”

In those situations, everyone should be very clear from the outset about what the expectations are, he said. Transparency about spending is also likely to be a point of contention if guidelines are also not spelled out in the contract.

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,” Nelson said.

York City’s Situation

In Pennsylvania, Commissioner Dumaresq filed the petition on Dec. 1, asking that David Meckley, who has been serving as the York’s appointed chief recovery officer since December 2012 when the district was declared to be “a moderate financial recovery district”, be named as its receiver.

In June 2013, Meckley, the local school board and the unions agreed to a recovery plan, but the state now accuses the district on reneging on its implementation.

Citing the financial situation, the absence of an agreement with the teachers’ union and the lack of academic progress, Meckley proposed conversion to charter schools by outside operators. Over the summer, seven different groups, including Mosaica and Charter Schools USA, submitted proposals to run the district’s schools. The school board was set to vote on the contract with Charter Schools USA on Nov.19—10 days after receiving it—but the board decided to table the vote, saying that they needed more time to read the plan. (At that same meeting, the board approved a contract with the teachers’ union, with a 5 percent reduction in pay and concessions in health benefits.)

Twelve days later the state filed its action to put the district in receivership.

“It is now necessary for the district to be placed into receivership so the recovery plan can to be fully executed for the benefit of the students and to return the district to financial solvency,” Dumaresq said in a press release announcing the petition for receivership.

If Meckley is appointed receiver, he will be able to make nearly all district decisions, including those related to hiring, firing and spending. He will not be able to set the property tax rate to fund the schools.

Related: Pa. Auditor General Pushes for Tougher Charter School Oversight

Related: Delaware Charter Schools Are Segregated, Says ACLU

A version of this news article first appeared in the Charters & Choice blog.