After a contentious hearing, a judge ruled Thursday that Joe Watkins could remain the state-appointed receiver of the troubled Chester Upland School District, turning down state officials' surprise request to oust him.

The state Education Department had cited Watkins' alleged failure to improve the finances and student performance in the poverty-stricken system, but Delaware County Court President Judge Chad F. Kenney said he did not see a reason to "break up the team" when the district was showing some progress, two years after Watkins was appointed to his $144,000-a-year post.

The hearing at the Media courthouse was convened in response to the state's request to remove Watkins and replace him with Francis V. Barnes, a former state secretary of education.

Kenney ordered both sides back into court Jan. 8 for a progress report on the district's plan to bring more students back to traditional schools from charters, a centerpiece of its recovery efforts. He said he wants district and education officials, including acting Secretary Carolyn Dumaresq, to go over all aspects of the plan together "to see if this is real."

Watkins, 61, a longtime player in GOP politics and frequent cable TV pundit, said after the sometimes-chaotic eight-hour hearing that he was "very, very grateful." He said he planned to work closely with Dumaresq.

In her petition to remove Watkins, Dumaresq chided the receiver as not providing timely updates on his recovery plan and amendments to it. During the hearing, she said he provided "concepts" for how he was going to save the district but not concrete budget information and data.

Watkins said he provided as much information as he had about his plan to partner with charter schools to eliminate a $20 million structural deficit. Under that plan, he would have all 3,500 or so charter students classified as Chester Upland students so that the district did not have to pay nearly $60 million - almost half of its budget - in fees to the schools.

The district would then pay the charters a reduced fee for shared services.

If Chester Upland recaptured every charter student, CFO George Crawford testified, the district would break even.

But Dean Kaplan of PFM, a financial firm that the state uses to help distressed communities and schools, said: "It would be highly unlikely that all those things would happen."

Superintendent Gregory Shannon also testified that the schools were making academic progress, particularly in elementary reading gains, even though the annual state School Performance Profiles that measure student achievement were below what is considered adequate.

Throughout the hearing, Kenney slammed state officials as not helping the schools and chastised them for blaming Watkins for all the ills.

"Are we really getting serious about schools in Chester? . . . Or are we just discussing a change to look like we're doing something?" Kenney asked Dumaresq.

Kenney used the hearing to voice broader concerns about the district. "I'm not removing Mr. Watkins only to have Dr. Barnes come up here and just give me just more platitudes," the judge said.

Watkins took the witness stand to defend his performance, insisting that he was in constant contact with Dumaresq.

But the jurist also had criticism for Watkins for not providing more details of his charter plans, and a recently announced proposal involving a Chinese educator and businessman to build new schools in Chester and funnel up to $1 billion into the district and community.

The judge upbraided Watkins for not informing state officials about a planned trip to China.

"If you're going to Hong Kong, it's best to call the boss and say, 'Are you going with me?' and she's smart enough to say, 'We're not going to Hong Kong - make them come out over here.' "

Dumaresq said she didn't see the ruling as a loss for the department.

"I came down today to try to get the court's attention and the receiver's attention, and I think I accomplished that," she said.