Phila. School District plan includes restructuring and school closings

The Philadelphia School District will massively restructure itself in the coming months, fundamentally altering the way it is organized and run - and possibly closing 40 low-performing, underused schools next year and shifting many more students to charters.

The district faces a $218 million shortfall for the coming school year, more than previously stated and subject to rise if Mayor Nutter's proposed city tax plan does not materialize or if a recent charter school ruling is not altered.

Pressing academic and safety problems "and the fact that, financially, we cannot continue in the present form of organization and operations that we have right now" require the district to change its basic structure, Chief Recovery Officer Thomas Knudsen said Monday night.

Knudsen and Chief Academic Officer Penny Nixon will publicly present budget details, a five-year plan, and their blueprint for decentralizing and restructuring at a news conference Tuesday. They declined to release or confirm any details in advance, but several sources with firsthand knowledge of the plan provided information to The Inquirer.

Finances are one main driver. The district has long spent beyond its means, current leaders say, but the time of reckoning has arrived.

Officials are planning to save $156 million over five years from personnel costs by restructuring benefits and wages. In that period, they are also planning on $149 million in savings from charter schools, namely through a per-pupil payment cut of 7 percent in 2013 followed by a three-year freeze at that level.

But they are also figuring on saving $122 million in operations by closing about 40 underutilized and underperforming schools in September 2013, then six more schools every year through 2017.

The 40 school closings would save about $33 million, officials have said.

The SRC recently voted to close eight schools, but at the time it acknowledged it would have to close many more in the future. With more than 50,000 students shifting from district schools to charter schools in the last decade, district classrooms now have tens of thousands of extra seats.

Knudsen's and Nixon's plan is a proposal that still requires approval by the School Reform Commission, but the leadership team has been working closely with the SRC and it is unlikely their recommendations would be rejected.

Officials have also briefed City Council and staff members on their plan to "modernize" custodial services, maintenance, and transportation. The district has already issued layoff notices to the members of Local 32BJ, District 1201 - bus aides, cleaners, maintenance workers, building engineers, and others.

The district has solicited bids for outsourcing those services, and Knudsen said it would keep the current employees only if they work for the lower prices quoted by outside bidders, according to those briefed Monday by Knudsen.

Another key facet of the plan is getting students out of failing schools and moving them into what the district is calling "high-performing seats," regardless of whether those seats are in district or charter schools.

"I think we have to proceed down a path of basic reforming of the School District and moving into the whole idea of treating all schools as public schools as a first step," Knudsen said.

District, city, charter, and, most recently, Archdiocese of Philadelphia officials have signed on to the Great Schools Compact, a document whose main goal is closing underperforming schools and expanding strong ones. The aim is to shed 50,000 low-performing seats in five years.

Officials are predicting that in that time, 40 percent of all city students - there are roughly 200,000 now in district and charter schools - will attend charter schools. It's about 25 percent now.

The district's central office, already about half the size it was last year, will further shrink, with few functions left for it to manage.

Most school-related services are expected to leave central office control and go to so-called "achievement networks," which would be groups of 25 or so schools run by either district staff; an external organization like a charter management group, university, or education management organization; or a combination of district insiders and others.

Organizations and individuals will bid on the right to run achievement networks, which could include only district schools or district schools and charters. They could be grouped by geography or by other factors.

The achievement networks would have goals for each individual school and would be subject to being tossed out by the district if they fail to meet performance goals. Principals and teachers would remain district employees, but principals would be rated by their achievement networks.

A separate reorganization plan drafted by Nixon calls for the elimination of the current academic division structure with assistant superintendents responsible for large groups of schools. "Principal learning teams" - separate from the achievement networks - will serve as professional networks.

The central office, under Nixon's plan, would give schools a "menu of supports and services" that they could use in such areas as school climate and safety, curriculum, instruction and assessment, leadership and talent development, and parent and family services.

But principals would be able to choose their own curricula and schools could decide on their own teaching styles.

It appears the current "empowerment" and "vanguard" designations to mark struggling and succeeding schools will go away.

Schools, under the new plan, will fall into one of three categories.

Those that consistently meet state and district standards or have shown sustained improvement would be granted full autonomy over curriculum, safety strategies, budget, and scheduling.

Schools in the next tier would have autonomy but get more scrutiny and support from the central office, as required by the No Child Left Behind law.

The lowest-performing schools would get more scrutiny and support and, barring immediate improvement, would be closed or radically restructured.

The plan incorporates much of the work of the Boston Consulting Group, turnaround specialists hired by the district two months ago to help restructure operations.

Knudsen, who was appointed to the temporary chief recovery officer position in January, said the plan he would present Tuesday incorporated much of the consultants' ideas.

"We worked very intimately, hand-in-glove, with them," Knudsen said. "It was a very collaborative process."

Beyond the $218 million shortfall for fiscal 2013, uncertainties remain. The district is banking on $94 million from the mayor's Actual Value Initiative, which would reassess city properties to create more tax revenue, but that measure has not yet garnered the City Council support it needs to pass.

And the district's projections do not take into account a recent court ruling that found the district illegally capped enrollment at the Walter D. Palmer Leadership Learning Partners Charter School. If that ruling stands, it could have wide implications on charter school expansion, which the district has tightly controlled until now. Unplanned expansion would cost the district millions it does not have.