School District questions pro-charter group's math

The Philadelphia School District says it would cost as much as $500 million to enroll 15,000 more students in new charter schools - about 20 times more than the amount offered by a private group.

The Philadelphia School Partnership this week announced a gift of $25 million to the beleaguered school system to "take the cost issue off the table" and encourage the district to consider 39 charter applications on their merits alone.

But were the SRC to add those charter seats, the price over six years would be much higher - if a fixed cost claimed by the district but disputed by PSP is used to do the math.

"A quick review shows that half a billion dollars is not off the mark," said spokesman Fernando Gallard.

The district has not disclosed whether it will approve any new charters or accept the unprecedented offer, seen by some traditional public-school advocates as an private group's overstepping its bounds.

Mark Gleason, PSP's executive director, said Thursday that the group's offer was not meant to pick up the entire tab for charter school expansion, but to start a conversation about how the group can get more students into good schools.

The $25 million figure "might not be the precisely accurate number, but what we want to do is work together to find out what the real number is," Gleason said. "We're game to offset as much of that as possible. Can we offset all of the costs? No, but we can do our best."

Gleason said that he was open to going back to donors, whom he declined to name, to see if they might pledge more money to cover the costs of new charter schools.

What is clear, though, is a wide gulf between the district's math and PSP's.

Gleason said PSP arrived at its $25 million offer by calculating what it thought was would be the district's outlay for three years of so-called stranded costs - the amount the school system must pay when students leave district schools for charters.

But PSP proposed support for the new charter school students in the first year only - and those new students represent a continuing cost to the district.

Also, PSP's stranded-cost figure was about $2,000 per student annually, and the district uses $7,000. The Boston Consulting Group, a national firm brought in by district leadership to scrutinize the schools' finances and operations in 2012, arrived at the $7,000 figure, which figured that about one-third of the students who enroll in charter schools come from private and parochial schools.

Gleason said PSP had "never understood that number" and would like an explanation of it. He said it was a "flawed premise" that a third of all new charter students come from private and Catholic schools.

Gleason acknowledged that the district bears cumulative costs for new charter seats, not just start-up costs, and said that the PSP offer would pay only for three years of start-up costs.

By year three, Gleason said, the state will likely have adopted a fair-funding formula now in the planning stages by legislators with bipartisan support.

Gleason said that if the district received a grant, he would explore whether the anonymous donors were willing to be named.

The pressure on the SRC is enormous. No new charter schools have been approved for seven years, and House Speaker Mike Turzai (R., Allegheny) has made it clear that he expects the SRC to add between 16 and 27 new charter schools.

Sources have said Gov. Wolf told the SRC that he expects no new charters to be approved, because of financial considerations. Both sides have threatened the SRC's existence if things do not go their way.

And now, if the SRC turns down PSP's offer, it would likely anger politicians who will be crucial to passing a new state budget. The district is asking for $200 million in new money this year from Harrisburg.

Locally, there is significant wariness of PSP, seen by some as a threat to traditional public schools.

"It would be a terrible mistake to take the money," said Susan Gobreski, executive director of the Education Voters Institute in Pennsylvania, a nonpartisan organization that advocates for public education. "We cannot let benefactors make decisions like that. I'm very concerned about how much pressure is being put on the district to make decisions that are not in the best interest of the district or most of the kids in Philadelphia, and certainly not in the interest of Philadelphia as a community. This is ideology gone wild."

Gobreski said she does not oppose charter schools. Her children attended Independence Charter School in Center City.

"There is a full-scale effort to take control away from the district and give it to vendors," Gobreski said. "People need to be really wary."

Founded in 2010, PSP set a goal of raising $100 million to ensure more city students have access to high-quality schools.

Its funding comes from a variety of sources, including the Bill and Melinda Gates Foundation, the Walton Family Foundation, and the William Penn Foundation.

Money also comes from securities trader Jeffrey Yass, a founder of the Susquehanna International Group, who was a key backer of State Sen. Anthony H. Williams (D., Pa.) in the Democratic gubernatorial primary. Janine Yass, a supporter of school choice and Jeffrey Yass' wife, is a member of the partnership board.

Michael G. O'Neill, founder and chief executive of Preferred Unlimited Inc., a Conshohocken firm involved in sand mining for the oil and gas industry, is the board's chair.

Other board members include Evie McNiff, president of the Children's Scholarship Fund Philadelphia, which provides financial support for families of low-income students to attend nonpublic schools; Chris Bravacos, president and chief executive of the Bravo Group, a Harrisburg lobbying and public relations firm; and representatives from the philanthropic, business, and education communities.

The partnership says it has distributed more than $35 million since 2011 to give 15,370 students access to spots in high-performing schools.

In addition to the $25 million for new charter school seats, PSP has also offered $10 million for district-run turnarounds, schools that would overhaul their own programs.

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