COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COUNCIL COMMITTEE ON EDUCATION - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, 11/21/01 2:30 p.m. - - - RESOLUTION 101642 - Joint hearings of City Council and Board of Education of School District of Philadelphia to examine findings and recommendations set fort in report of Edison Schools, Inc. concerning the future of the Philadelphia School District. CITY COUNCIL MEMBERS PRESENT: Donna Reed Miller, Chair Jeannie Blackwell, Vice Chair Blondell Reynolds Brown Michael A. Nutter SCHOOL BOARD MEMBERS PRESENT: Pedro Ramos, President Sondra Dungee Glenn Michael Masch LEGISLATIVE BLACK CAUCUS MEMBERS PRESENT: Representative Michael Horsey Representative Leanna Washington Representative Rosita Youngblood - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 11/20/01 EDUCATION COMM. - CONT'D EDISON HEARING INDEX WITNESSES: Edison Schools, Inc. Eugene Wade, Executive Vice President .......... Dr. Thomas Stewart, Senior Vice President ...... 26 for Development Tung Le, Vice President, Education Assessment 53 Daniel Pianco, Director of Finance - - - Tom Doyle, President, Local 1201 ............... 89 3 11/21/01 EDUCATION COMMITTEE - RES. 010642
The hearing is getting ready to start. We're getting ready to start. Good afternoon. This is the continued hearing on Resolution No. 010642. In attendance today -- this is a joint hearing of Council, the School District, and the Pennsylvania the Legislative Black Caucus. Councilmembers in attendance are: myself, Donna Reed Miller, Chair, Committee on Education; Councilwoman Blondell Reynolds Brown; Councilwoman Jannie Blackwell; State Representative Leanna Washington; School Board President Pedro Ramos; and we do expect other representatives. We have Representative Rosita Youngblood and Councilman Michael Nutter. And at the moment, that is it. We want to begin our hearings. State Representative Michael Horsey has also joined us, and we want to bring our hearings and call Edison Schools, Inc. to the witness table. (Witnesses come forward.)
Mr. Wade, would you please identify yourself for the record and the members representing Edison Inc. 4 11/21/01 EDUCATION COMMITTEE - RES. 010642
Good afternoon. I'm Eugene Wade, and I'm executive vice president for Edison Schools. To my right is Daniel Pianko; Dan is one of our directors of finance. To my left, my direct left, is Tung Le, who is a vice president of education assessment. And to his left is Dr. Tom Stewart, who is a vice president for development.
As stated previously, this is a continued hearing on City Council Resolution No. 010642. We'll just go on and begin. There are no opening statements; it's simply a continuation. And I don't have the computer here for Councilmembers that are in their seats, but I'll try and monitor who wants to ask a question. And at this time, I'd like to recognize Councilman Michael Nutter.
Thank you, Madam Chair. You're very kind. Good afternoon. PANEL MEMBERS: Good afternoon.
(Addressing panel 5 11/21/01 EDUCATION COMMITTEE - RES. 010642 member whose computer monitor is obscuring the Councilman's view of panelists.) Are you trying to monitor something on your laptop there? For the moment, can you put your screen down? I can't see Mr. Wade, and I like to have visual contact of people when I'm asking questions.
Excuse me, Councilman Nutter. I would like to make one statement before starting.
The transcripts from our hearing on November 8th are not ready, and I do know that some Councilmembers asked Edison to bring back information. And what we're going to do today is combine those requests with any requests that come today out of the hearing, put it in writing, and send them an official letter so that we can get the responses that we need. Thank you.
In that regard, I did 6 11/21/01 EDUCATION COMMITTEE - RES. 010642 make at least one information request at the last hearing. And, Mr. Wade, I did want to follow up with you. That request had to do with providing a budget for the report that you provided to, I think, as has been indicated, your client, the Commonwealth of Pennsylvania, the $2.7 million. At the last hearing, one of my questions was, could you provide a detailed budget for the expenditure of those dollars? It was agreed that you would do that and so today I'm asking, do you have that information available?
Could you tell us what they are? (No immediate response.)
Okay. Does that mean that -- 7 11/21/01 EDUCATION COMMITTEE - RES. 010642
It's a backup P&L, a profit-and-loss statement to the financials that are in the report.
Oh, I'm sorry. You wanted the budget for the $2.7 million; is that correct?
Okay, I apologize. I don't have that with me today, and we were -- we were actually collecting up -- we had coordinated with the Chairwoman to collect up all of the requests because in the course of the hearing last week, I wasn't taking notes, that we would get the transcript and comply with all of the requests. We haven't gotten the transcript so I actually did not remember to do that. The idea was for us to get that transcript and literally comply with all of the requests at one time. So I apologize for that.
That's when I made reference to, Councilman Nutter, the lack of the transcript from our last hearing.
I understand that, and 8 11/21/01 EDUCATION COMMITTEE - RES. 010642 I appreciate, Madam Chair, the way you're trying to handle this. I guess until your statement -- I mean, there were, at least by my count, there were people here 6
Okay, maybe I lost 9 track of a couple of 'em, but I mean, between the 10 number of people who were here and, quite frankly, 11 the straightforwardness of the request, I am slightly perplexed at the inability to produce the information, but if we're going to wait until the full transcript is reviewed and every question analyzed, is there a way to put an end-date on when we might get answers to these questions? I mean, I didn't -- I mean, do you have to do a lot of work to figure out how the $2.7 million was spent?
No, we don't. It's a process issue. We had coordinated with the Chair, just thinking it appropriate that we get -- we were told that there were a lot of questions. We were getting questions informally on the way out the door. So what we said is, you know, if it made sense, that we would actually get a transcript, we 9 11/21/01 EDUCATION COMMITTEE - RES. 010642 would get all the questions from City Council, and we would respond to those questions appropriately so we didn't miss any person. And we were just trying to be thorough. We'll certainly get those to you forthwith and apologize for any inconvenience that we may have caused.
Okay. Given the events of the past hours, why don't you explain 10 to us from your perspective the difference between 11 the structure and the engagement you anticipated 12 prior to yesterday and as detailed, I assume, in 13 the report either that you sent to the Governor or 14 the Governor has presented as his plan versus any 15 of our best understanding of what changes took 16 place last night. 17 And so what is your present role, or your 18 proposed role, as compared to your previously 19 anticipated role as it relates to your relationship 20 with the School District? 21
Okay. I think prior to this, 22 it was a pretty clear role, which was that Edison 23 would potentially employ 55 of the top District 24 administrators and be responsible for the overall administration of the District. 10 11/21/01 EDUCATION COMMITTEE - RES. 010642 What's being proposed now -- it was agreed upon yesterday between the Governor and the Mayor was a -- Edison, as a -- I call it a consultant, advisor, and systems support provider for the District. Think about it this way: The District has to go through a turnaround on a number of different front, one academic and the second, operational. And given the current turnover in the leadership, you've got to do a few things with essentially new people coming in. Our job is going to be to help that team: The CEO, the administrators that are there, the school reform commission that might be in place, implement that plan. And it involves a couple things. One is, it involves Edison making available its intellectual property, management practices, any systems that we might have. For example, one of the proposals was that all of the teachers go through intensive training over the summer. Well, you can spend six months just building the training tools. We have a pretty comprehensive, well tied together, aligned training system that is tied to the curriculum. That could 11 11/21/01 EDUCATION COMMITTEE - RES. 010642 be modified by District administrators, and Edison would help them deploy it. That's one area, for example. So in each of the functional areas, as the team comes into place, Edison is prepared to make available its people, its resources. And then in addition to that, a team of dedicated executives that would help the new team achieve its goals, whatever those goals might be once they're negotiated by the Governor and the Mayor.
Who are these -- I mean, we've heard -- this number seems to be a significant number. Who are these top 55 people? What do they do, where do they work? And your testimony leaves me with the impression that out of that universe, there's going to be some significant amount of turnover. Did I understand you to say that?
Well, I think right now, our understanding is you've got an interim CEO and at least an interim chief financial officer that's turning over. You've got interim chief technology officers. So some of those 55 are included there. So what I was saying is a lot of the District 12 11/21/01 EDUCATION COMMITTEE - RES. 010642 leadership that might craft a plan have to implement it on a short time frame would be in those 55. But the 55 number was derived by taking a look at proposing an operational structure for the District. If you look in the report, we said, Here's a couple of different ways you could organize the District leadership. And then the 55 is literally count down the two layers on the org. chart and you get the 55 people. So it's every functional area in the District. Now, I don't think the plan is for the SRC to come in and fire 55 people. I think the plan is for the SRC and the Mayor -- the Governor and the Mayor to agree on what the objectives are going to be and then to begin to evaluate the current players in the system against the objectives. So for example, if you're going to move a particular area like a particular area from a paper-based system to a technology-based system as a part of the plan, you've got to evaluate whether you have the skill set, people with the skills set to do that.
Who's going to do 13 11/21/01 EDUCATION COMMITTEE - RES. 010642 that?
I think we could help in that and I think the SRC would have to, you know, have its own CEO and leadership team in place to really take the lead on that, but Edison's willing to help in that effort.
These 55 people, do they work at 21st and the Parkway or do they work at the schools?
The 55, I think, is the senior leadership, so 21st and the Parkway or wherever the headquarters might be.
And for whatever the turnover is, you're going to help either recruit or train or work with those people?
That was -- some of the substance of the discussion was what kind of roles would Edison be willing to play, and we told the Governor that we'd be willing to play, you know, any role in terms of consulting, supporting, helping to recruit and build plans for the new 14 11/21/01 EDUCATION COMMITTEE - RES. 010642 players that would come in, and leverage our own intellectual property. So yeah, the answer is yes.
I don't have an answer for that 'cause we haven't negotiated that. I think it will be something that we'll be negotiating with the School Reform Commission. We've invested $500 million into Edison over the seven years in building out systems to manage a school system across the country, but what that's going to cost Philadelphia will be determined in the negotiations (inaudible), so it's probably not appropriate for me to give you that answer.
Okay. Well, from your perspective, it may not be appropriate. I take a different position The SRC, to the best of my knowledge, won't have any of its own money; is that correct?
It will be -- it will have whatever resources the District has. Assuming that Act 46 is the vehicle that's used for a partnership 15 11/21/01 EDUCATION COMMITTEE - RES. 010642 or that a distress is declared, the School Reform Commission would take the place of the School Board, so to speak. So whatever resources are available to the School Board would be available to the School Reform Commission.
The School Board does not have its own independent resources; the School District is funded by the City of Philadelphia, the Commonwealth of Pennsylvania, and the federal government of the United States of America.
So you're saying that you're going to negotiate a price for your intellectual property with the School Reform Commission that has no independent dollars of its own. So I'm trying to get a sense of or even a range within which we may be operating --
-- so that the citizens and taxpayers of Philadelphia know what it is that they're paying for.
You can't answer it 16 11/21/01 EDUCATION COMMITTEE - RES. 010642 because you don't know the answer, or is it that you can't answer it because you refuse to answer it or because you don't want to answer?
Because we haven't even begun to get into the proposal phase. I mean, the reason we're negotiating with the School Reform Committee is because they have the legal right to contract with us. So they're going to come to us and say, Here's what we need you to do, Edison, and here's what we're proposing as a price. And then we'll enter into some negotiation around that. It could be the case that they say, you know, we don't want you to do these things. So it's not -- so what the answer is is going to be determined in part by the negotiations that have to happen. And it's inappropriate for me certainly at this level to get -- at this juncture to get into that discussion right now.
Okay. Who's going to implement the elements of your intellectual property product?
At the end of the day, the implementation of anything in the District will reside with the CEO and the School Reform 17 11/21/01 EDUCATION COMMITTEE - RES. 010642 Commission. And so it's theirs to implement or not implement and it's ours to support them on if they decide to use it.
-- to the SRC. The SRC is going to be responsible for CEO and the much-heralded 55 people, and that group is going to be in charge of all of the schools, 264 schools. Is that the way it works?
Okay. And what are the funding streams that out of this arrangement come to Edison? 'cause I'm left with the impression that there's going to be a price for the intellectual property product, then you have potentially implementation and training and all of that.
There's other consulting services, you may help with the hiring of administrators. What would you anticipate the total price or the cost to the School District or 18 11/21/01 EDUCATION COMMITTEE - RES. 010642 to the SRC for Edison services?
I think it will be less than the $40 million that I think -- there's a number that's floated out there of that $40 or thereabouts is what the budget says. I would imagine it's less than that because that number was considering us running the District, and we're not going do run the District. So that's kind of -- if you want to think about it and get a range, that's the ceiling. It's certainly going to be something less that, and I think what it ends up being will be driven by what we're asked to do. And at that point -- we just haven't gotten to that level of detail yet. So I don't have an answer, a direct answer for you on that.
But another question -- I think you said, what revenue streams will come to Edison?
You know, the other piece of business that we're going to -- and role that we love to play is that we would love to be a part of the partnership schools. So that's another area 19 11/21/01 EDUCATION COMMITTEE - RES. 010642 where we would love to participate in the transformation of the District.
That's a different stream and a different -- that's much more similar to our current model, and I can certainly talk to you about that.
Okay, I'll get to that in a second. The proposed relationship as you've laid out, a consultant to the SRC, helping with the CEO, possibly the search, the administrators; now, have you performed this role --
We have in other districts, we're brought in to run schools. We have in our own company all across the United States. We haven't done this and we haven't consulted. In other words, no District has said to us -- Well that's not true. Some districts have asked us, Can we take components of your intellectual property and your design and implement it? And we actually have a business that we're starting to do that called "Affiliates." But this is slightly 20 11/21/01 EDUCATION COMMITTEE - RES. 010642 different than that. We haven't done large-scale consulting in this way as a business. We are prepared, though, to make available what we have developed to the District to the extent that the District is interested in implementing any of it.
Last question for the moment. With regard to the partnership schools, whether as you propose them here or in other places, tell me what happens with the role and involvement of parents at the individual schools and what is their say as it relates to whether their school for their children becomes a partnership school, a taken-over school, a privatized school. Whatever the language is going to be, tell me what is in place, either today or what you anticipate going forward, that engages parents in that process.
There is -- right now, honestly there is no formal -- the way the Governor has proposed it, there isn't a formal role for parents in the process of determining whether or not a school becomes a partnership school. The driving consideration -- 21 11/21/01 EDUCATION COMMITTEE - RES. 010642
I didn't make the decision, so I -- I mean, I don't want to comment on that.
Oh, I think there ought to be a role for parents in this process for sure. And I think there will be. At this point --
Parents should be involved in organizing their schools, they should be involved in the wraparound services. Parents can be involved in the decision. I think the driver, though -- to be honest, I think what the driving consideration ought to be is the performance of the children in the schools and whether or not the District has the capacity to serve those children right now. And in some of the communities that we're going into, you 22 11/21/01 EDUCATION COMMITTEE - RES. 010642 know, parents are saying that we've reached out to -- we'd like to see something different happen in our schools.
Okay. And what happens in those schools where the parents say, We like the way things are and we don't necessarily want to have the benefit of your services; what do you do there?
In the schools where parents are saying that things are doing well, those are the schools that tend to perform well. So we -- under the plan, the schools are divided into three groups: The schools that are performing well and the schools that are doing okay, and some schools that are seriously failing children. And those schools, the SRC will have to make a decision about whether or not it wants -- how its plan to deliver the services that it's responsible for the children.
Who determines what category -- is this the -- I think there are 60, 174 and 30?
I think the SRC would make that determination. We've made a proposal and we said, 23 11/21/01 EDUCATION COMMITTEE - RES. 010642 Here's our view to the Governor. I think the SRC has to take this and work with it and decide what it wants to do.
I understand that. When you made the decision to create the three categories, what was the basis of which schools will be in what category?
It was the overall performance of clusters, so we looked at performance primarily. We looked at how these schools -- where these schools were on State rankings and how these clusters had performed historically. And we didn't just look at individual schools. So if you notice from the report, it's not take the 60 worst schools, you know, 264 down to 204; it's take the underperforming clusters because from a practical management standpoint, you want to keep feeder patterns consistent, and neighborhoods tend to be underserved, not just schools. And so that's --
I don't know. I don't have the list in front of me. 24 11/21/01 EDUCATION COMMITTEE - RES. 010642
There isn't a list right now. It's a proposal that it be done. There isn't actually 60 schools that have been picked out anywhere. I think the SRC, we've given them some ways to think about the process. They'll have to make that decision.
Okay. Madam Chairwoman, my last question is, in the report, or by way of your practice, tell me what in the larger scale, after you get beyond whether the parents are involved or not involved and whether their school is going to be privatized or not, based on your system, what is the role of parents, and what either responsibility or level of accountability do you place on parents for the future performance of their children?
I would imagine in the schools that we would be involved in, if any, that parents would have a role in governance, which is something I'm not sure they have now. There would be a -- I would imagine that there would be parents who would actually be involved in both the formation and the governance of those schools, parents whose kids are 25 11/21/01 EDUCATION COMMITTEE - RES. 010642 in those schools. I would imagine that parents would be involved in the wraparound services. I would imagine that some parents might work at the schools in providing support. One of the things that we do at Edison, for example, to involve parents in our schools is a tremendous amount of outreach and to get the parents directly involved in the instruction of their children. We have, you know, the (unintelligible) division, we have book 12 campaigns. Parents are involved in organizing 13 that, parents are involved in overseeing that. We 14 also have outreach programs. 15 Every kid in an Edison school 3rd grade up 16 gets a home computer, every family has a home 17 computer available to them. The parents come in 18 and get six hours of training just to be able to 19 pick the computer up. And that's a way for us to 20 have a direct link into the home. So we would have serious mechanisms built in for parent involvement from governance right on down to the day-to-day operations at school. But that's Edison's model; that's not necessarily, you know, what's going to be mandated. 11/21/01 EDUCATION COMMITTEE - RES. 010642 That's how we do business. And Tom wants to add one other part to the answer.
Thomas Stewart, Senior Vice President for Development. My role in the organization is essentially to do what you just described. When we identify communities across the country that we want to work in, it often begins with parents. There are two sets of schools that Edison managers. One is charter schools, the others are contract schools. The schools that we're discussing in Philadelphia would be contract schools in which we'd be working directly with whatever the ultimate authority is in this district, whether it's the SRC, the Board of Ed or the superintendent. In charter schools, charters, as you all know, in Philadelphia are often designed and founded by parents and educators and others at the grassroots level, so they play a direct role in 27 11/21/01 EDUCATION COMMITTEE - RES. 010642 governance. The same would be true probably to a limited extent, but that would determined by the SRC. Gene mentioned that it's important to us to not only improve achievement but to bridge the digital divide, so Edison makes a commitment to giving every family with a child in the 3rd grade and above computers. In addition to that, parents have to receive six hours of training. Every classroom in an Edison school has a telephone, which we found is critically important in terms of keeping the teachers and the parents linked. The last thing I would say is, at the end of every year, Edison conducts a parent survey that's done by Harris. Eight to roughly eight and a half out percent -- excuse me. Eight to roughly eight and a half out of every ten parents in an Edison school said that they would recommend an Edison school to a family member or a friend. But it's not so much the outcome of the survey, but surveys and other ways of gleaning information from parents is critical to how we stay abreast of their experience in our schools.
What happens if the parent doesn't come in for computer training; what happens to the computers?
We would do outreach. There are times when parents come. We look for a parent or a surrogate or a guardian. Most parents actually do because the computer training is designed for folks who, you know, from literally, Here's how you turn it on to get it started. So most folks are interested. We've had some neighborhoods in some communities -- and I really mean a small number. Our experience has been that most people, the vast majority, come in for training. And, you know, I think we've heard a lot about, Well, do the computers disappear or don't they work? Our replacement rate is no greater than in any corporation. So in other words, our kids are taking and our families are taking care of the equipment and the investment. They're viewing it as their part of the investment and so they're 29 11/21/01 EDUCATION COMMITTEE - RES. 010642 serious about it. And our experience has been that most parents come in. And if there isn't a parent, there's someone in that family that we can bring in for the training and that is there to take responsibility for the child.
Can I add one thing to Gene's comments? There are in the minority, I think, two categories of parents. There are some parents, though we have done a very sensitive outreach in an attempt to bring them into the schools, particularly to do the training, they still don't come in, and we've worked really hard to try to improve the approaches that we use to get the parents to come in for the training, because the training for the computer is much bigger than training for the computer; it's a way to get parents into the fold of public education. And we're talking about 70 percent of the children in Edison schools. Out of 75,000 students in Edison schools, 70 percent of them receive free or reduced lunch. So we're working with under-resourced parents and under-resourced communities. 30 11/21/01 EDUCATION COMMITTEE - RES. 010642 The second category in the minority -- I mean, you know, it's a phenomenon that to some extent I guess we're happy about, but in about the last two years, we've noticed that parents are coming in less for the computers because they already have computers at home. So the digital divide that existed four or five years ago to some extent is being resolved by low-income families; and, therefore, they are not interested in free Edison computers.
Isn't that one of the issues that Wayne County in Goldsboro, North Carolina had with Edison, that there were boxes of computers just sitting around because parents would not come in and receive training?
Yeah. I mean, there are two ways you can look at that. I mean, one criticism that could possibly be made is that Edison promised computers and they never delivered. The fact that in Goldsboro, the computers were there. We've satisfied one half of our commitment. The other half, particularly in Goldsboro, the challenge was in fact getting parents in to receive the training and, therefore, take the computers home. 31 11/21/01 EDUCATION COMMITTEE - RES. 010642 We do stipulate under every condition that they have to complete the training, and if they don't, we think it's a futile effort to send computers home and which parents don't understand them and, therefore, can't appreciate them. In Goldsboro, the school in question was one of the lowest-performing schools in the district, and that was a contractual arrangement we entered into with that particular school district. So it shouldn't surprise anyone that that school came with some challenges, and getting computers into the home was just one of several.
Representative Washington. I do have some follow-ups to that issue. REPRESENTATIVE WASHINGTON: I'd like to know where Mr. Whittle is today. I was told he was going to be here.
No, he was -- I think I made clear, or at least we tried to with the Chair, to say that Mr. Whittle wouldn't be here. We were advised that the questions today were going to be about the substance of the report primarily and that we would spend a lot of time on that. So I 32 11/21/01 EDUCATION COMMITTEE - RES. 010642 brought folks who know a lot about the report and about Edison's record as it relates to, you know, its academic program, which is another line of questions we thought were here. Mr. Whittle was here, I think, at the last hearing, and we were here, you know, for a fair bit of time, and we thought we would be more specific in relating primarily to the -- and addressing primarily the issues related to the report. REPRESENTATIVE WASHINGTON: Well, I just want you to -- you could let Mr. Whittle know that we expected him to be here since he is the person that inadvertently is Edison, who is the -- is he not the president of the organization?
Sure. I -- my job has been to oversee this effort in Philadelphia. REPRESENTATIVE WASHINGTON: No, I'm talking about Mr. Whittle; I think he should have been here. You know, I heard you talk about family involvement, and I know that the 60 schools that are picked are the lowest score schools, and most of those schools are in areas of North Philadelphia and Logan and areas like that where there's a lot 33 11/21/01 EDUCATION COMMITTEE - RES. 010642 of dysfunctional activity and family environment. What are you going to do about that, how are you going to deal with those kids?
The report recommends that the District consider, whether it's the SRC or whatever the ultimate authority is, that they consider an approach to addressing that issue. REPRESENTATIVE WASHINGTON: What is their approach?
That seeks the support of organizations that have ties to those communities to work very closely with whatever service-providers that are coming in. The report recommends that multiple service-providers be pre-screened and pre-qualified to -- REPRESENTATIVE WASHINGTON: Is that what you call wraparound services?
No, that's not. I'm referring now to management companies, of which Edison's one of. Those management companies would work with organizations that are based in those communities and collaborate to provide comprehensive services that extend not only into the school but into after-school and weekend 34 11/21/01 EDUCATION COMMITTEE - RES. 010642 programs and tutoring and mentoring programs. REPRESENTATIVE WASHINGTON: Mm-hmm.
The goal is to bring a more thorough and comprehensive approach to education in those communities.
And if I might just add on that. I think that -- the theory here is that there are a lot of providers who are doing wraparound services, what we're calling wraparound, which are some of the social support services that kids and families need. Those tend to be groups that, when we do our research and are talking to those groups, they tend to be groups that have had not a very close tie to the current school district, so they tend to operate on the margins. And what this is designed to -- the partnership theory at least is designed to bring them into the mainstream governance of schools, and really, it's a strategic alliance mechanism. It's a way to take serious community organizations that have been doing wraparound services and embed them into the schools so you've got a continuum of services that are being provided to kids. That's one big part of the strategy. 35 11/21/01 EDUCATION COMMITTEE - RES. 010642 REPRESENTATIVE WASHINGTON: Well, I think it takes a little bit more than that. Do you live in Philadelphia?
Excuse me? REPRESENTATIVE WASHINGTON: Do you live in Philadelphia?
No, I don't REPRESENTATIVE WASHINGTON: You need to have some -- I mean, what happens in Philadelphia is a lot different from where you guys come from. When you talk about the families that have needs, I have not heard you yet address any of the needs that those kids really have or those families really have. And when I heard you talk about giving them a half -- a discount lunch, I didn't hear you talk about giving kids breakfast. You said that -- didn't you say you provide them --
No, I didn't say anything about food, ma'am. I just said that 70 percent of our students receive free and reduced lunches, which is one indication of poverty. REPRESENTATIVE WASHINGTON: But one of the things that you need to look at when you talk about 36 11/21/01 EDUCATION COMMITTEE - RES. 010642 the schools, these 60 schools that you're talking about, these kids need breakfast, lunch, and dinner. I mean, that's how a kid learns, with a full stomach, and I guarantee you, if you give them three meals a day, they'll come back the next day for three more meals.
That's right. And you know what, right now the way the school system is set up, most of our kids will get the two meals paid for, and then what happens is, if we're doing after-school programs with our providers in their extended-day programs, there's your third meal, if that's a part of the plan. So the whole idea is to be able to do that kind of outreach. REPRESENTATIVE WASHINGTON: In the other cities that you were in, did you union-bust there; did you come in and just let the unions go through their latest contract, and then after that, you dismissed them and just brought people in at a lower pay scale to do the same jobs that union people did?
We have 45 contract -- well, let's talk about what you mean by "union-bust." What we -- 37 11/21/01 EDUCATION COMMITTEE - RES. 010642 REPRESENTATIVE WASHINGTON: If you break those contracts that the union company have, once those contracts are due to be renewed or to be voted on again, if you don't bring those same people back and let those people that live in Philadelphia have those jobs that sustain their families, that's what I'm talking about.
No, we haven't -- REPRESENTATIVE WASHINGTON: I understand that you agreed to let the PFT keep their contract until it's finished. And then what happens after that?
Well, let me actually -- 'cause I think we're -- I want to actually frame this and at least answer the question by first stating something first about how we think about unions. This is an important question that you're getting -- you're getting at the heart of one of the really important issues on the tables here, which was, what was our recommendations about how you treat unions in this process generally speaking. And a couple of the fundamental decisions were made by the administration and certainly in the way in our report that we proposed to the 38 11/21/01 EDUCATION COMMITTEE - RES. 010642 Governor, one is that, you know, there not be layoffs of people, other than in senior-management roles where you might not have a position for somebody 'cause they don't have the skill set. You really do need talented people at the top, that's really an exception. And even there, the goal is, a lot of folks who work at the top, you know, and I think you saw the administration do that this year rather than lay off people. They took teachers who were in administrative posts where they may or may not have been qualified or may or not have been needed and moved them back to the classroom. So that's one group folks. Let's talk about teachers. Any -- the sort of main theory with respect to teachers, the idea here is that to get the instructional personnel into instructional roles, not administrative roles, not outside-of-the-classroom roles, but to get teachers into the classroom and support them. And so what that means is that a lot of the jobs that are -- when we talk about teachers and the teacher size -- the ratios, a lot of that is instructional jobs that are not instructional in 39 11/21/01 EDUCATION COMMITTEE - RES. 010642 their day-to-day activity. And the goal here is to get those jobs and those folks back and then to reduce the non-instructional folks; in other words, the administrative instructional. Then let me -- so we're not saying go in and bust unions and undo contracts. Now, having said that, the State -- that's teachers. And under Act 46, you wouldn't be able to touch the teachers' contract anyway. REPRESENTATIVE WASHINGTON: But what about the bus drivers and the custodians and those people?
Yeah, I'm going to get there. Under those jobs as well, what we've said is, let's streamline and make more efficient the operations of those areas. Those tend to be some of the jobs where you have the highest levels of turnover, meaning that people -- percent of the -- in many 20 of those functions, 20 percent of the folks in those jobs leave every year. So you've got hundreds of people -- REPRESENTATIVE WASHINGTON: And where did you get those numbers from?
The District. Those are 40 11/21/01 EDUCATION COMMITTEE - RES. 010642 numbers that we know. By the way, there's something I would like to say. A lot of the numbers that we cited that people say, Where did you get those numbers from? We got them from the District, a fair number of the numbers. The thing is, when you look in the report and you talk about the turnover rates, we didn't make those up. We don't have the data; we got that data from the District. So if it's wrong, we should go back and talk to them, but we didn't make up the data.
Mr. Wade, could I just ask you to clarify. Specifically, when the report discusses the student-teacher ratio before pre-right-sizing, as in the original proposal, did you count in that ratio teachers in preschool programs?
It isn't. Let me explain. I need to explain and answer at the same time. The answer is yes, we probably did do that 41 11/21/01 EDUCATION COMMITTEE - RES. 010642
Because what we did was, we took instructional jobs. It was instructional -- (Unintelligible; parties talking over each other.)
So a ratio is, you know, a numerator over a denominator. The numerator is the number of teachers and the denominator is the number of students. You said the numerator is teachers, including preschool teachers. Does the denominator include or exclude preschool students?
Would you agree that a fair ratio would -- that if it's going to include preschool teachers in the numerator that it would include preschool children in the denominator; wouldn't that be fair ration?
And I would also agree that the number that you're talking about probably would have less than a 2 percent impact on our number. 42 11/21/01 EDUCATION COMMITTEE - RES. 010642 So you're talking about a minor discrepancy.
But I'd like to talk about fair representation, and I'd like, you know, to --
Sir, I don't know that that's the case. I'm going to have one of the guys who put this together look in the report, and we can talk to it together. I'm not sure if that's the case.
I think the report makes reference to a -- a ratio of 1 teacher per 13 16 children, and we just need a better breakout. 14 You know, I have -- many of us have children in 15 public schools. When you read that figure, you 16 think it's 16 children in the classroom.
I know, I know what you said, and that's why we need a clarified answer to that question.
It's misleading when you -- (Unintelligible; parties 43 11/21/01 EDUCATION COMMITTEE - RES. 010642 talking over each other.)
What I'm going to do is -- we took District data, ma'am, and our classroom -- your advertised classroom-to-student ratio, the classroom teacher to students is 28.6 right? But that's not counting all of your teachers. Our point here is that a lot of your teachers -- this is the point, this is actually the point. Your teachers -- some of the people classified as instructional are not in the classroom. That's the point. They're being called instructional. But they're not doing instructional jobs. So the idea here behind this report and what we're trying to get at is, let's take instructional jobs and move them into instructional roles. Let's not have a 28.6 class size but have a whole lot of people classified as instructors who aren't doing instruction. And I'm not saying that that's the case, but the idea was what to move the teachers to I call personally to the point of production. The real action in learning is in the classroom. Let's get the resources to the classroom. 44 11/21/01 EDUCATION COMMITTEE - RES. 010642 So that explains a lot of discrepancy.
You know, I don't know whether substantively it was a part of the Edison report but it certainly got a lot of sizzle, which was the 16-1 ratio. So are you ready to answer the -- I saw you just got a note. Are you prepared to answer whether the denominator includes or excludes preschool students? I mean, I'd like to ask a couple --
If we could come back to that because I don't know the answer to that directly. REPRESENTATIVE WASHINGTON: My next question is, what -- there were several cities where Edison failed. Could you tell me why.
There were two cities -- well, We can talk about this. There were 3 cities out of the 65 contracts that we have, and I think we did go over this last time and I'll go over it again. There were 65 contracts that we have, 3 of them that we lost. REPRESENTATIVE WASHINGTON: Why, why did you lose them?
They were not renewed. And one of them, we didn't renew the contract. 45 11/21/01 EDUCATION COMMITTEE - RES. 010642 REPRESENTATIVE WASHINGTON: But --
Let me -- let me -- I'm going to answer. One of them we didn't renew the contract. (Addressing colleague.) In which city was that in? Was that in Sherman, Texas? In Sherman, Texas, Edison decided not to renew the contract. It was one of our first contracts. And the other two -- Lancing, Michigan, we didn't do -- they didn't renew our contract, they terminated us. And like I said before, you know, 3 out of 65. REPRESENTATIVE WASHINGTON: But you say 3 out of 65, but there were also cities where your test were scores low, I mean, where there was no 19 improvement in your test scores. So what happened there?
In 15 out of 16, 15 percent of our schools out of the 100 percent of the 136 schools that we operate -- and I think said this the last time and we'll say it again. Fifteen of our schools, 15 percent of our schools, our test 46 11/21/01 EDUCATION COMMITTEE - RES. 010642 scores are either flat or down. In 85 percent, they're up. We're not making those tests up; those are state tests, they're not our tests. Tung can actually answer this a lot better. You may want to --
Could I ask a follow-up question to a point that you raised. That was one of the questions that I raised at the previous hearing. There were a list of school districts that I had been reading about and I went through them name by name and that was some information that was requested to -- that said would be delivered to me after that hearing. There were a number of others in addition to those three where you had formally lost the contracts. There were a number of other school districts that at least on the public record and in articles it said that you had troubled relationships, and that was kind of how they were termed, and I listed some of them. They included Pontiac, Michigan; they included Dallas, Texas; San Antonio, Texas; of course, San Francisco; Wichita, Kansas; York, Pennsylvania. Those are the ones that I remember. 47 11/21/01 EDUCATION COMMITTEE - RES. 010642 And we asked if you could clarify what your relationship was. Was the school district considering terminating their relationship with Edison? was there a process that was under review? I was told that you would clarify your relationship in those additional school districts, and I think that may begin to get some of what the chairperson may be asking, that in addition to those three districts that were formally terminated, there were a number of other districts. Whereas we understood it, there was that consideration was on the table and the districts were less than satisfied with Edison's performance.
I may have a simpler way of stating the question. I mean, maybe if you just worked from backwards from the number, maybe you could just tell us how many schools you were in last year and how many of those schools you're schools you're certain to be in next year of the original. If we can have those numbers, I think we can move a little further rather than trying to remember school districts.
And the measurable performance results. 48 11/21/01 EDUCATION COMMITTEE - RES. 010642
The reason I ask that is because I want to make sure that we're working with the right number. And if you can tell us where you were last year and were you expect to be, then you can explain, you know, to the extent that the second number's lower than the first, explain what the difference is and why.
We have two sets of responses, and Tung Le is going to address, I think, the more intimate details of your response. But there's two things we need to say for the record. First of all, if you go onto the Internet and if you rely on newspaper articles to track the performance of Edison, it's not a good source of data. Just here in Philadelphia, Philadelphia, regardless of what position you take on school reform, a lot of facts have been fabricated for or against, and I think the same is true in other cities. First thing we'll say The second thing that's important to know is that we have never been terminated from any of our relationships. In several situations, we've come up for renewal. And as Gene mentioned, in 3 cases out of 65 relationships over 7 years, we did 49 11/21/01 EDUCATION COMMITTEE - RES. 010642 not have those contracts renewed.
The third thing Mr. Whittle said last time, on November 8th, was that you deserve to be thrown out of Lancing when he was giving the example of the three places in which you didn't do the job there and -- (Unintelligible; parties talking over each other.)
We have not been terminated. There's a difference between not having a contract renewed. In most cities that we go into, every roughly fourth or fifth year, we meet before the authority that owns the charter or the contract. Whether it be a charter school board or a superintendent or a board of education, we sit down and see whether Edison has met the stipulations or the outcomes that were a part of the contract. And in three cases, those contracts weren't renewed for the reasons Gene alluded to. Before I turn it over to Tung Le, there's just one other thing I want to say.
Three cases, yes. 50 11/21/01 EDUCATION COMMITTEE - RES. 010642
Yes. And Gene just mentioned all three. We are very open and honest about -- and our copy of our Fourth Annual Report is on the Internet. We can make it available to anyone who wants a copy. We openly say that percent of our 9 36 schools are not performing at a level that we're 10 comfortable with. 11 And to the extent that some of the reports 12 that you're reading about touch on that, we think 13 that's accurate and we think that's honest, and we 14 believe that that's the way education should work. 15 And if we're not doing a good job in those cases, then there should be some discussion about our contract being renewed or in fact us being terminated. But we want to be clear that --
Okay. I'm looking at your 10K, which is an SEC filing, and I'm reading under the section and this is (indiscernible) so 51 11/21/01 EDUCATION COMMITTEE - RES. 010642 you might as well hear it here and then you can respond to it because this is going around. Under the section that says five years, at least on this printout, it's on , your 10K filed with the Securities and Exchange Commission says, "A management agreement covering two schools and due to expire at the end of the 2004-2005 school year was terminated early, at the end of the 2001 -- 2000-2001 school year. That's a statement from the 10K.
Yeah. I guess we -- we're mistaken, then. We apologize, but that's, you know, we're also human. Sometimes, we, you know...
But there's -- I mean, we're just trying to get a lot of what may separate, you know, some of the facts from some of the, you know, the other stuff.
Right. But we have lost three contracts (indiscernible). It's not renewed and it sounds like we have one that's terminated, but I may not be familiar with it. But that's -- one of those -- it must be one of the three that got terminated early is what it sounds like. But three of them were not renewed or we 52 11/21/01 EDUCATION COMMITTEE - RES. 010642 were -- or they were no longer in existence.
And we expect to be in -- the schools that we're in now, we expect to be in them a year from now, I guess, is the other statement.
With all due respect, I was asking a slightly different question because I know that there may be very big differences in type of contracts you may have district to district and what abilities districts may have to change or terminate or end their relationship with you at various times. I was asking a very specific question on a list of districts that went beyond the three you had named about a less-than-satisfactory, I guess, relationship with the Edison Company, and I was being very specific for a reason, and I was hoping for a specific answer. Again, if you can't give that answer here today because it's just too much detail, I would like to have that answer provided soon because I assume that you -- you know, you talk about your system as a -- your schools as a system, so I assume you're pretty clear about your 53 11/21/01 EDUCATION COMMITTEE - RES. 010642 relationships in the various states where you do have schools under contract.
Yeah, I think you're right. I think that's fair and we can, at a later date, get into everyone of the contracts -- of the districts that were mentioned to talk about our relationship with those --
Tong Le, I'm the head of the Assessment Department for Edison schools. I think I want to make just two points. One is that, you know, your questions are talking about total relationships based on less-than- stellar performance -- I believe that's what you had quoted. And I think we should separate operational issues that we might -- you know, problems that a district might have with us against the academic performance as well. For instance, one of the contracts that Gene mentioned that we lost in Wayne County, that was a contract that was ended by the district, but you'll note that in two of three years, including this most recent year, that we operated at that 54 11/21/01 EDUCATION COMMITTEE - RES. 010642 school, that school was on the exemplary list of schools based on student performance. And then secondly, on that list of things you were mentioning, you know, you were mentioning San Antonio, and Minneapolis, I believe, is on that list. Those are -- I would also again separate that from performance, especially student performance, considering that our performance in both of those districts are actually, you know, beyond doubt. Three of our schools in San Antonio, for instance, all three of there were performing at over 85 percent on the state-mandated test and are either recognized or exemplary, so --
Out of respect to the representative, I think we're all supposed to be asking follow-up questions to the representative's questions, so I want to -- the Chair also feels that we should, you know, try to stay focused on that. So to the extent that answers are available, I mean, I think what we're trying to get to here is clarifying -- you know, the issue was clarifying what the track record is. And I thought that by just giving two hard number-type questions such as 55 11/21/01 EDUCATION COMMITTEE - RES. 010642 how many last year, how many do you know you're going to be in next year that you can work. You know, rather than just being all over the place, we could work from hard numbers.
I can answer the first part of the question, which is the performance. You had, I think, a hard number.
How many schools are you going to be in? How many schools were you in last year? which is a one-word answer, it's a number. And how many schools do you know you're going to be in next year already? and that's also a number. (Panelists confer amongst themselves off the record.)
We understand it's approximately 113 schools that we were in last year, if that's what you're trying to get at. And we're in approximately 136 this year.
My question was -- sorry for that, Gene. My question was: Of the 113 that you were in last year, how many of those 113 will you be in next year? 56 11/21/01 EDUCATION COMMITTEE - RES. 010642
And my answer is, right now, to the best of our knowledge right now, given where we are, that we're going to be in all of the schools that we're in today in September.
In other words of the 113 you were in last year, you'll be in all of those next year?
I believe one or two of the schools that we didn't renew, I believe it happened last year. So maybe there are two of them. And I'm doing this from --
I mean I think what we're trying to do is get the right answers on the record, if any of them are available. We'd rather have that than --
One of the things -- I do have a copy of the Fourth Annual Report that I'd like to present to the Council. In it, we openly talk about three categories of schools out of our roughly -- based on academic performance, whether the schools are doing positively, whether the schools are doing negatively, or whether the data is incomplete right now because they're first-year schools. 57 11/21/01 EDUCATION COMMITTEE - RES. 010642
It would also indicates which schools we have and which years. But I think, according to our records, that we were -- of the 113 from last year, 2 of them we're not in now. So if you think about it that way, we were down to 111, so we went up to 136; that means we picked up -- call it schools this year. 9
When we send you our 10 requests or the questions and answers, could you 11 note why those two are not going to be with you? 12 Is it performance, is it cost? Can you break down 13 the reasons why they're no longer -- 14
Right, okay. 15 The other thing that might be helpful -- 16 and this is a suggestion -- is, you know, we said 17 there are 15 schools that are flat or down, and 18 there's a bunch that are up. I mean, what may be 19 helpful is saying, What are the patterns we see? 20 You know, for example, what we do find is 21 that for two years in some of our schools, it takes 22 three years before you actually see gains. So 23 where are those schools in the process? Are these 24 first-year or second-year schools or are they in 25 their third year? And we can talk to you about 58 11/21/01 EDUCATION COMMITTEE - RES. 010642 where those schools are in the life cycle. Some of those schools are, you know, second-year that we've had to manage those schools, and it takes three before you really say any significant gains.
Right. Well, I had a question that I was going to ask regarding the issue that you just spoke of. I'm going to call on Councilwoman Blondell Reynolds Brown.
Thank you, Madam Chair. Gentlemen, good afternoon. You indicated in the answers to Councilman Nutter's questions that you will at some juncture proceed into negotiations with the leadership in our city. What do you consider your strengths to be as a for-profit educational organization? I mean, is it in curriculum design? is it in teacher training? is it in wraparound services? is it teacher practices services for the special ed? What are your strengths that we should be excited about?
Yeah, I think the main strengths for us are in our management expertise 59 11/21/01 EDUCATION COMMITTEE - RES. 010642 around education, so there's something that doesn't really show up in any box: It's actually how you manage a system of schools that are spread out and growing, and those are a set of practices. So I call that one area. Second is our school design. And closely related to that is our training and professional development for teachers. We do have some of what we consider to be and what a lot of folks consider to be some really good training for teachers. So how do you take training, professional development and tie it to a curriculum so that teachers walk in the door with a set of practices and tactics around classroom management, around getting kids levels of achievement. A third big area that I think this district could really -- where we might be able to help is around our infrastructure to support that, the technology that supports that. Our benchmark assessment system is unique. We can look of -- we have a running record of all of our kids on line, and know what they're learning and what they're not learning, and that data really does inform instruction. It's something that we -- and we 60 11/21/01 EDUCATION COMMITTEE - RES. 010642 talked about this at meetings that we would make available and customize for Philly but it's -- it gives the district a view into the school. So for example, if you're looking at a type of math question, and all the kids on the math question in this particular class or building get it wrong. Well, maybe it's not the kids; maybe it's how it's being taught, and we need to address that in our instruction. And it gives our management, our vice presidents, our instructional managers the tools to actually know what's happening. Those systems are things that we've invested in and that are big strengths here. So a lot of what happens in education is we're changing over the last 10 or 15 years to the way we run schools in this country, but -- and the systems that support those are the things that -- you know and we've -- we have our designs. The systems to support those are something that we've invested in.
What is your response, then, to those who believe that real school reforms come with smaller classrooms and certified teachers teaching in their subject area? 61 11/21/01 EDUCATION COMMITTEE - RES. 010642 I hear no mention of those tangible things that speak to real school reform. So for me, there's a disconnect.
We believe in those things, but in the absence of the tools that support teachers -- in other words, smaller class sizes but no training, where you drop new teachers into a classroom and it's small with no support and training, with little support and training, you're not going to get the same -- you know, the smallness of the class itself isn't going to help people learn how to implement, you know, success for all, for example. There's got to be an ongoing professional and development and training and support regiment. Part of a district's job is to provide support for its teachers and its students and the professionals that work with children. It's to build the system so that people can, in a small class size setting, really get improvement gains. One of the things that -- so you're not looking at just a collection of schools; it's the system.
Let's speak to the support services that you provide for 62 11/21/01 EDUCATION COMMITTEE - RES. 010642 children. Who pays for them in your scenario? Who pays for the wraparound services and related support services that are needed for students with special needs and students who come with an array of unfortunate circumstances?
Well, let's take the special-needs one first. Those dollars, you know, would come to the District. In other words, the District would have the same responsibility to --
The same thing. We would be subject to the same laws and regulations. So if we have children with special needs, you know, as a contractor for the District, we'd have to take the federal and state dollars and apply them towards those students and service them.
So you're going to expect the City of Philadelphia to enter into the arrangement with you where you provide the services and we provide the dollars to ensure that those services are implemented; is that what I'm hearing?
No. What you'd find is, you 63 11/21/01 EDUCATION COMMITTEE - RES. 010642 know, under the arrangement, we would be the manager of the school. Children have entitlement dollars, so I'm not exactly sure -- and the entitlement dollars, the dollars follow the kid. We can't take or give away those dollars; it's a federal entitlement.
What credence do you put into independent studies, independent research?
Okay. I mean, it's clear that there's a lot of skepticism about Edison, given your very scattered -- personal opinion -- scattered track record of success, be it teacher turnover, be it cost overruns. And you say, in response to a number of questions, that we should disregard what we see on the Internet and we should disregard what other newspapers across the country have had to say about it in cities where you are currently located. Is that an inaccurate statement? 64 11/21/01 EDUCATION COMMITTEE - RES. 010642
And I would add to that -- let me finish. I would add to that that what you should do as well is talk to some of the people, you know, the schools, the districts, our clients.
And here's the response. In schools in Macon, Georgia, Wichita, Kansas, San Francisco, California, school boards are trying to end Edison's contract because of poor student performance and rising costs. Even many of the schools Edison claims are successes, like those in Miami, Florida and some in Illinois, have failed to show improvements and are at the bottom of the states' assessment tests. Should we not rely on that kind of independent assessment when school boards like the City of Philadelphia are having to make a judgment on whether or not we should embrace you?
I think we've got to get down on the level of the detail. If I could just take 65 11/21/01 EDUCATION COMMITTEE - RES. 010642 your statement again, 'cause it's a general statement. Well, let's talk about, for example, we've been cited in Illinois for teacher turnover in Chicago. I've heard people say, Well, you've all these teachers turn over in Chicago. Let me give you some background on Chicago. We were brought in to Chicago to take over a school that wasn't an Edison school. It was actually being run by another management company, Sabus (ph.) and they were actually fired after the first year. We were brought in. And many of the teachers that were working in that school didn't want to work in the Edison system. They signed up for Sabus system, so there should have been turnover. In other words, some of the folks who work in that school shouldn't have been in an Edison school 'cause that's not what they signed up for. That helps to explain some of that. In Macon, Georgia --
In Macon, Georgia, we classified in our Fourth Annual Report we're unsatisfied with their performance, and they are two of the -- 66 11/21/01 EDUCATION COMMITTEE - RES. 010642
In Macon, Georgia, that's a school where we just didn't perform. If you take percent and multiply -- there's about of our 7 schools that aren't doing well. I mean, we can go 8 blow by blow there. We've said that these schools 9 are either flat or non-performing. 10 The two schools in Macon, Georgia, fall 11 into that category. We got to get our act together 12 on those two schools. It's important -- and it's 13 outlined in the report. It's not like we hid it. 14 In the report that we just gave you, we say, These 15 schools are flat and we didn't do a good job. I 16 mean -- 17
In your 18 report, what do you say about York County? which 19 is, for us, close to home. 20
The data wasn't available for York at the time of the report. And that's a first-year school, so we would consider the first-year scores for the PSSA baseline. That's listed as incomplete.
And in San Francisco, if you 67 11/21/01 EDUCATION COMMITTEE - RES. 010642 don't mind --
And in York, just to finish there, that's a school that we've had nine months of operations in, and so we'd like to at least get another year under our belt before we're judged on how fast. Now, the point about some of our schools being at the bottom, that's why we were asked to come in. They were at the bottom when we walked in the door. So if you're moving a school system -- I'm using a hypothetical here -- from a 21st percentile to a 30 percentile, you still may be at the bottom.
Well, let's, move in the continuum. Cite two or three examples where you came in and there's a remarkable increase from where the school was at the point that you came in.
I can gave you three. There's a school in Baltimore, Montebello Academy. We've been cited for our record in Baltimore. Two out of the three schools in Baltimore that we took over. In one school, there were marginal gains, you know, five (indiscernible) and serious significant gains. 68 11/21/01 EDUCATION COMMITTEE - RES. 010642 If you can do that every year, over five years, you turn the school around. This is first year now. These schools are in their second year. In one school, we took the school from being one of the worst-performing elementary schools to being the top performing elementary school in a year. Now, what I want to say to you is, doing that in a year is not something we do all the time. For some schools, it takes one, two, three years to really see that school turn around. Dallas -- there's a school in Dallas, Medrano, that we took, you know, in a year. And let's talk about the population in Baltimore. Very similar to the population of students in terms of demographics here in Philly -- primarily African-American. In Dallas, primarily Latino population, school near the bottom of the performance curve, and you might want to --
In Medrano, it was this year, I believe the highest gaining elementary in Dallas ISD.
Are you currently working with any high schools?
We currently work in seven high 69 11/21/01 EDUCATION COMMITTEE - RES. 010642 schools.
That's new information. Okay, let me close with -- I do have an independent study, an evaluation of student achievement in Edison schools that was performed by Western Michigan University, and I need you to respond to this, recognizing that your response to the question was, it depends upon who does the independent study. And I quote: "Our findings suggest that Edison students do not perform as well as Edison claims in its annual reports on student performance." The next table -- and it cites several indices here. "Of our numerical ratings for the ten cases and the ratings Edison gave to these cases in its third annual report were" -- scratch the last sentence. Let me repeat the one that matters to me. "Our findings suggest that Edison students do not perform as well as Edison claims in its annual reports on student performance." 70 11/21/01 EDUCATION COMMITTEE - RES. 010642 So given that and given your belief that we should not pay attention to quotes given by school boards across the country, then what should we rely on in terms of the accuracy of what you're reporting?
I'd like to address three points on that. One, just to clarify, I don't believe Tom meant to say that you should disregard any type of report. I believe that Tom wanted to say that you should be -- consider the source of the report just basically to clarify --
Secondly, West Michigan, we believe, is a -- it was a study funded by basically somebody who opposes us. But the substance of the point is -- the largest part is if you look at the methodology, the way they consider whether or not a school is successful is by looking at absolute measures of gains -- or absolute levels of achievement versus gains. We focus on gains. In all of the reports that we do when we discuss our schools, we talk about how much they have gained. If you give us a 71 11/21/01 EDUCATION COMMITTEE - RES. 010642 school that is performing at the percentile and we take it to the 20th percentile, so they've gained 10 percent, when you compare that to a school that is at the 60th percentile and goes from 60 to 62, well, clearly that school at 62, in one sense, did better than the school at 20, but it certainly didn't outgain us.
Finally, 10 should we as a body look to that you respect whom you believe best represents the track record of Edison? Whom should we look to since all of those cited do not matter?
No, ma'am, we're not saying that the Western Michigan report --
I think you should look at Western Michigan, but I think we've got to get into the details. If you ask a question about methodology and you say -- they said they disagreed, we're talking about apples, they're talking about oranges. If we're talking about gain raits and they're talking about achievement, then we've got to have a fair discussion about. Let's 72 11/21/01 EDUCATION COMMITTEE - RES. 010642 compare apples to apples and really talk about what we've done. And on that, we're willing to stand. We're not saying that we disagree with, you know, everything that's written about us, but we're saying that if you're telling me that a school that started off, you know, times better 8 than our school and is doing better than us a year 9 later, you're probably right, to use a 10 hypothetical. You know, we should talk about these cases of Edison not performing and look at how, you know, how this -- what folks are saying and look through to the details.
Mr. Wade, citing two pretty good sources -- if I could ask a follow-up on that by citing two pretty good sources: One being Mr. Whittle, the other being the Philadelphia Inquirer. On November 9, the Philadelphia Inquirer, a story written by Sue Snyder and Dale Mezzacappa said, and I quote: "Whittle, joined by 10 members of his team, including the teacher and principal, said 84 percent of the company's 136 schools nationwide were showing significant gains." Let me repeat that, 'cause I want to give you a chance to say whether that's accurate. 73 11/21/01 EDUCATION COMMITTEE - RES. 010642 Again, Mr. Whittle's quoted as telling the Inquirer that 84 percent of the company's 136 schools nationwide were showing significant gains. Was that -- if you know -- I don't know if it would be fair unless you were standing there to say whether that was accurately reported or not, but if --
That 84 percent of our schools are up significantly? Yeah, in terms of how we define schools, yeah, I think that's --
The quote was that 84 percent of the company's 136 schools nationwide were showing significant gains. Would that be accurate?
Yeah. And significant is 5 percentage points or more on a national norm and 6 percent on a criterion reference, if I'm not mistaken. That's on average across our system.
How many of your -- of the 100 -- how many of the schools are counted in that Fourth Annual Report? 74 11/21/01 EDUCATION COMMITTEE - RES. 010642
That's a good question. Here's the point of confusion. When we talk about a site -- what we've detailed here are the sites. Sometimes you have schools -- when we count a school -- and we can talk about the situation. I think it's K through 4.
We just need to clarify between 136 and 80. For instance, a K-12 school would be considered, in our system, three schools -- elementary, middle school and a junior. I believe the Fourth Annual Report looks at schools as one case. So a K-12 school in the report counts as one.
It would actually be something like 86 of sites. Again, we're talking misdefinitions here. What we do is we report it by site because that's how the states would look at it and report the scores out. When we talk about a school, if we've got a K-12 charter, that's one school, but you'd have middle, elementary, and high, which is why we have fewer sites listed there than the schools that we talk about. That's the 75 11/21/01 EDUCATION COMMITTEE - RES. 010642 difference. we haven't excluded any of our sites. We've captured all of our children that we were managing at that time. We didn't exclude anything. What we do do, though, is our definition of schools. And if you look -- in our 10K, we kind of talk about that. Our definition of school and site that's being used. Part of the problem is we're operating in different states so -- 11
According to your 12 report, how many schools do you have enough data on 13 to report on whether they've made progress? 14
Is it a hundred percent 16 of all your schools or all of your sites that -- 17
We reported on a hundred percent 18 of the sites that we had data available. 19
How many schools did you 20 have data for at the time of the report?
So it sounds like it was less than all of it 'cause when the reports went out, the data wasn't there. Maybe the state authority 76 11/21/01 EDUCATION COMMITTEE - RES. 010642 had to issue the report. So we took -- Our annual report is set up to go out at a certain time, so if the data's not available, we don't report on it. It's not that we're hiding it; it's that it's not available. And if it's not available there, you can certainly probably get it from a state Website. These are state schools, these are public schools.
Right. I'm trying to just trying to understand the statement made in the report because, at least from my understanding -- and I may be wrong work and maybe you can work backwards from this and explain it -- is that, in fact, the Fourth Annual Report refers to 113 schools, not 136, and that according to your criteria, you've seen positive gains in 62 schools that you operate. So if you could --
No, there would be 62 sites. That's where the difference is. So 62 sites could have been -- you know, call it 70-some-odd, 80-some-odd schools. That's where the -- that's probably where the difference would have been accounted for. These are methodological issues, and I 77 11/21/01 EDUCATION COMMITTEE - RES. 010642 think if have a chance to actually -- I mean, this is good because we can sort of -- (Addressing colleague at table) Okay, but he's counting up the, quote/unquote, schools.
In your annual report, are the schools categorized by the length of time you've had them? Is there something that indicates how long Edison has had a contract with that particular school or site?
We have a copy but we haven't certainly had a chance to read it. Okay, Representative Horsey. REPRESENTATIVE HORSEY: I just have one generic question and it's a part of Mr. Ramos' question. Is this assessment done by your organization to an objective or are these test scores on a state level?
All of the test scores reported in the Fourth Annual Report were the primary means of accountability. 78 11/21/01 EDUCATION COMMITTEE - RES. 010642
It's state data reported by us. REPRESENTATIVE HORSEY: It's a state data report from all of the different states on Edison schools?
That's correct. REPRESENTATIVE HORSEY: Okay, that's all. Thank you.
Sir, in response to your question, I believe we reported on 74 schools in the Fourth Annual Report.
I'm just looking at something that -- Exhibit 5. (Unintelligible; parties talking over each other.)
That's 62 schools on the positive list and 4 schools in the no-gain list.
That's 62 out of how 79 11/21/01 EDUCATION COMMITTEE - RES. 010642 many?
Out of 74. You'll -- 62 schools are reported in the positive side and there's 4 schools that are in the no gain-side, and there are schools reported in the negative-performance 7 side. 8
And that's what 84 is based on? (Unintelligible; parties talking over each other.)
I didn't make up the wording; I'm just quoting Mr. Whittle.
And what I think he may have been doing Pedro -- Mr. Ramos, I'm sorry. But, you know, what we were doing here was, some of the data that was in the report wasn't available, so we've gotten updated stuff on our schools as states release the results. So I think what he referred to was right. It would include this information here, plus anything that would have been available -- that's 80 11/21/01 EDUCATION COMMITTEE - RES. 010642 been available. And a lot of reports have come out since we -- we go to press with this or we compile the data over the summer, right?
This report was released, I believe, the first week of October, and we looked at all schools that were -- all schools that were available as September 1st.
So the bottom line is that, you know, if you were to take his statement literally, his statement was inaccurate?
Yeah. And 136 schools is how many schools we're running this year. The report only focuses on the schools that we had last year. So that would be incorrect.
Can you read back the statement? Was it that we have 136 schools? I mean, I think the point that he was making was two points here. One is, we run 136 schools, and some of them are first-year schools so we don't have data, right? And some of them are second-year schools and we only have a benchmark. But of the schools that we have had where we have the data, it's an 84 percent record, and that's what's outlined, and, you know, on average, 81 11/21/01 EDUCATION COMMITTEE - RES. 010642 it's about 84 percent. That's what's outlined in our report.
I'm still a little confused. Is the report based on -- as of last year, you had been saying that you had 113 schools, schools that you were operating. And that report, then -- I'm assuming the Fourth Annual Report would be based on those 113 schools.
No, it is not based on 113 schools; it is based on 74 schools.
Sites. It's 74 schools or sites. We're using "school" two different ways. Okay, it's 74 schools that we had data available for.
A distinction is not made in the report between schools and sites. So either you are missing data for some number of your schools or --
Okay, okay, I got it. Here's the -- the new schools aren't there. Anything that's new, would have been new last year, wouldn't be there. So there are a bunch of the 113 that were first-year schools, so those schools wouldn't 82 11/21/01 EDUCATION COMMITTEE - RES. 010642 be in because that's a baseline year. Then there are some schools of 113 where the data wasn't available because the state hadn't released it. So everything that we had data for we released in our report.
That we had data on, plus anything we've gotten since that time.
So, again, the assertion that there's been -- that 84 percent of your schools have shown significant gains is really based on then 74 of the then 113 schools. And it's not 136 schools. I'm trying to understand what this claim is based on if it's only based on 74 of 113. Is that correct? (Unintelligible; parties talking over each other.
Okay, 113 schools is how we count schools. We count a K-12 school 3 times. What the report -- what the report is -- what the Fourth Annual Report is based on is if you just look at sites and not schools, there were 90 sites last year, which was the same as 113 schools. Out of those 90 sites, the report focused on 74 83 11/21/01 EDUCATION COMMITTEE - RES. 010642 sites that we had available. So there are sites that we didn't have the data available for at the time of the report and those are footnoted in footnotes 2 and 3. I think that answers the question.
That the claim of the 11 84 percent improvement is based on. 12
Okay. And I think 14 that's important distinction because the impression 15 is when you're speaking of these 136 that you 16 operate.
Right. We get confused when we talk about sites and schools too. REPRESENTATIVE HORSEY: Madam Chairperson, one more time for clarity sake, the same question. These are schools that have taken their local state test?
That's correct. These are not Edison tests; these are state tests. So it's the 84 11/21/01 EDUCATION COMMITTEE - RES. 010642 (indiscernible) in Texas, it's the MCATs in Massachusetts, it's the MEEP in Michigan. It's different every place that we're in.
But I assume that when Mr. Whittle speaks, he doesn't speak to the state departments of education when he makes statements like 84 percent of 136 schools.
Yeah, he was just wrong. I mean, I think he was just inaccurate, it was a misstatement. But the point was 136 schools and we have 84 percent -- of the data that we have available, our schools are showing 84 percent significantly positive. And we've got -- like Mr. Le said, of the 74 -- of the 90 sites that we have, we included 74 of them in the report because that's the data that was available at the time.
Thank you, Madam Chair. I will say that we find it very disappointing that there is a plan to educate children and we're having a problem communicating 85 11/21/01 EDUCATION COMMITTEE - RES. 010642 here. It's very disappointing when we can't talk about figures or when there's a dispute over the validity of data we received and that's available on the Internet. It's very, very disappointing. We fought long and hard in this Council for the right to debate the School District, the superintendent, and others about education. For a long, long time, we were told that all we could do was vote for money and we had no say. And technically from the charter, that's true, but we fought to change that. And the gains that we have we certainly are not prepared to lose. We want an open dialogue and discussion. But where we are now is one where we don't trust the information we receive. I want to feel comfortable that if these are the ground rules, this is the measuring stick, this is the information we get. It's very disappointing when we don't feel that way. I don't like to feel that for some reason it's not an open discussion and that the information we get is somehow skewed in one way or another. Very, very disappointing. In fact, I talked to the union who said that if 20 percent of their -- they're just behind 86 11/21/01 EDUCATION COMMITTEE - RES. 010642 you. If 20 percent of their workforce, as you mentioned, turned over, that would be 800 people. And that's absolutely impossible. They couldn't function with those kind of numbers. How can you say --
I'm not sure what you're talking about. Who couldn't function, us or the District?
Well, this is information, ma'am, that we didn't make this up. This is what the District told us. They told us that these -- in certain areas, they gave us the turnover rates for different classifications of employees, and we reported it. We didn't make it up. We didn't go and count people and look at personnel files. They --
The School District is here. I doubt -- we haven't seen those kinds of figures. I doubt they said that they got 800 people turning over.
Councilwoman, it's funny because every time somebody -- every time somebody 87 11/21/01 EDUCATION COMMITTEE - RES. 010642 asks a question about analysis, the answer is that the data comes from the School District, but it's not addressing the analysis. The question that she just asked, I heard, was about how feasible is making percent cuts? And that's an 7 analytical -- 8 (Unintelligible; parties 9 talking over each other.) 10
He said 20 12 percent of the labor force turned over, 20 percent. That means 800 employees, and they couldn't survive at those kinds of figures.
Let's start with your teachers. My understanding is you turn over about 1300 teachers a year. REPRESENTATIVE WASHINGTON: Well, we weren't talking about teachers. That was a question I asked you about the union workers.
Right. REPRESENTATIVE WASHINGTON: The PFT, the bus drivers, the maintenance, those kind of people, custodians.
And their 88 11/21/01 EDUCATION COMMITTEE - RES. 010642 president is right behind you. We could bring him up and have this discussion openly if you would like to do that, but he just told me percent 5 would be 800 people. You said 20 percent; we 6 didn't make up that figure. 7
We were advised that in your 8 custodial services, we were advised by the District 9 that there's a turnover rate of about 20 percent 10 among your custodial staff. 11
Madam President, 12 could we ask Mr. Doyle to come up and verify or 13 reject that figure? That's only one thing -- 14
That's a District figure, 15 ma'am, that's a District figure. You have the 16 board president here; he should be able to verify 17 what the turnover rate is for their employees. 18
Mr. Ramos just 19 said that the Board is continually referenced in 20 this way. We have Mr. Doyle here who knows --
We have not had a chance to get underneath the hood of Edison's numbers because despite the commitment to the Mayor that that analytical information would be available to him, not until last night after the agreement 89 11/21/01 EDUCATION COMMITTEE - RES. 010642 between the Mayor and the Governor was it said again that that that information would be provided, so we have yet to compare notes to figure out the basis of their numbers or even to correct any significant problems, because despite the commitment by Mr. Whittle to Mayor Street, that information has not been forthcoming during the last few weeks.
Thank you. Mr. Doyle, maybe you can shed some light on this issue, the issue that percent -- there's 13 a turnover of 20 percent of your members. Would 14 you also say who you represent for the record, 15 which workers and identify yourself for the record. 16
My name is Tom Doyle, and I'm 17 president of Local 1201. We represent all the bus 18 drivers, maintenance, mechanics, engineers, 19 cleaning personnel, warehouse personnel, print shop 20 personnel, all of the blue-collar workers in the School District of Philadelphia. The figure of 20 percent turnover in our bargaining unit per year is absolutely impossible. That would be 800 people per year. The District couldn't function with our bargaining unit down 800 90 11/21/01 EDUCATION COMMITTEE - RES. 010642 people with the cuts that we already are under right now because of no hiring in the District. It would be impossible, it just can't happen. I personally receive a report from Human Resources once a month. They send over a list of all terminations, retirees, deaths, alien takeovers, whatever it maybe. I get a report once a month of every person in the School District that leaves the system. And I check off my people and then I send it out to the girl so they can delete it from the computers. I personally highlight the names and Social Security numbers, then put my stamp on it and put it in the file. There's no way we could lose 800 people a year.
What might it be, what would be more realistic, Mr. Doyle?
More along the lines of 5 percent. In negotiations last year, in '99, we came up with the figures between 5 and 8 percent a year, and the 8 percent is really pushing the envelope, 5 percent is a little conservative. So it's probably about 6 percent a year
How large is your 91 11/21/01 EDUCATION COMMITTEE - RES. 010642 membership?
Ma'am, can I clarify something? I didn't say percent of his members, that's not 6 what I said. I said we were advised that 20 7 percent of certain areas, and I specifically talked 8 about custodial workers, which don't make up all of 9 his members. So we're not talking about 800 10 people. I mean, I was very specific in the data. 11 I said that we were advised that 20 percent of the 12 custodial staff. So maybe that's wrong, but that's 13 what we -- is that true or is that wrong? 14
No, 20 percent of the 15 custodial staff does not turn over a year. 16
Okay? No segment of my 18 bargaining unit, whatever department it may be -- 19 engineering, maintenance, cleaning, transportation 20 warehouse or print shop turns over at a rate of 20 percent a year, it just didn't happen.
And 6 percent is a big difference from 20 percent, a big difference. this is what I'm saying about this hearing. I've been to so many Edison hearings, I'm 92 11/21/01 EDUCATION COMMITTEE - RES. 010642 "Edisoned out." And, you know, it's important and I'm so tired of the conflicting information. I'm tired of hearing about the record is bad or about hearing -- you said today you're in four schools and we want to ask what that is because we were told that you have no experience in any high school. But after this round, Madam Chair, if it's okay, Rosita Youngblood, Representative Youngblood wanted to follow up on this question, then I want to complete my questioning. But certainly, you know, I wanted to get to the bottom of this. But 6 percent and 20 percent, we're in two different universes.
Our problem is, Edison sits here and asks us to believe the numbers that they're putting out that they're basing their analysis on, and then when someone questions that analysis, it's the School District's fault, Oh, we got those numbers from the School District. But they're basing their analysis on the number that they got from the School District. You can't have 93 11/21/01 EDUCATION COMMITTEE - RES. 010642 it both ways, you can't have it both ways
That's how we had to do it. We couldn't go through and count (indiscernible), so I'm sorry. We had 60 days, 60 days to do our analysis, and we're supposed to have a collaborative analysis and get the District -- AUDIENCE MEMBER: (Inaudible.)
Well, maybe you should have asked for 120 days instead of 60. (Unintelligible, parties talking over each other.)
For that price tag, give me 2.7 mill and I'll give you an analysis, forget 60 days. (Applause.)
But I think the real question is, why don't know that and why are we told something different? From my standpoint, it's actually frustrating for me to sit here and have folks saying, Well, you guys are basing -- we have -- we still don't know -- can you guys tell us what the turnover rate is of your custodians? That 94 11/21/01 EDUCATION COMMITTEE - RES. 010642 would be wonderful, because I thought we had that already. REPRESENTATIVE WASHINGTON: Okay, we're asking the questions, not you guys.
And I still have questions but I wanted to yield on this union matter to Representative Youngblood, if that is okay, Madam President. REPRESENTATIVE YOUNGBLOOD: One of the concerns that I have is that most of the schools in Philadelphia were built probably in the 1920s, '30s, '50s, and '60s. And I have found that in entering schools that if we don't have the proper custodial force as far as maintenance -- any day in the winter in a Philadelphia school, and I've witnessed this, the children are sitting in schools where the furnace doesn't work, there might be something wrong with the electrical fixtures. And we're saying that we're going to limit what we consider our maintenance force. And if we do that, then what is going to happen to the upkeep of an already-crumbling infrastructure? I mean, those are some of the questions that I'm concerned about. I don't know if you got 95 11/21/01 EDUCATION COMMITTEE - RES. 010642 answers from the District on how we're going to continue to maintain and who are going to be the people that are going to support this?
We would assume that it would be the same people that are here now. REPRESENTATIVE YOUNGBLOOD: But if we're losing some of the workforce and we don't have enough people at it is to maintain, as far as I'm concerned, our school district adequately as far as maintaining the heating systems -- we even need new furnaces, the electrical part as far as -- a lot of these schools need to be totally rewired.
We would agree, we would absolutely agree. REPRESENTATIVE YOUNGBLOOD: And that's what I'm basically asking. Have you put this in your analysis on how -- or did the School District give you information on how this was going to be done?
Well, we didn't get into capital budgeting here, so if you look at the report, we don't get into the capital budgeting part of it. We understand there's a lot of work and what we said is we relied on stuff that was 96 11/21/01 EDUCATION COMMITTEE - RES. 010642 done particularly around some of the support areas. What we focussed on was how people are being managed and how the work is getting done. So we didn't just go in and say -- I mean, for example, you know, we may have five people on a job that you need three people to do. I mean I've heard anecdotally that, you know, and directly from senior members of the union even that, you know, in places -- and sometimes we go into a neighborhood and we do bring people in to do a job and we keep one guy outside to watch the car. Well, I mean, you know, is that appropriate? Should you get a security person to watch the car and maybe have the workers in the union actually in the building? I mean, that's the kind of stuff that we were focusing on and trying to get resources to the service point, not just doing away with people. And, you know, we didn't advise that the District reduce its -- REPRESENTATIVE YOUNGBLOOD: Well --
I'm sorry, go ahead REPRESENTATIVE YOUNGBLOOD: No, I know what you're saying as far as the capital project. I also look at that as an operational entity 97 11/21/01 EDUCATION COMMITTEE - RES. 010642 because without having the proper support personnel, you cannot operate a school, period. And that's why I'm asking these questions. Will we have in the operational end -- I know about the capital and operational budgets, but this to me is just in the operational end so you can operate the schools so that the children can attend the school.
Our view is that the quality of the services that the schools and children get, both instructional services and support services, can be improved significantly, that you can't have schools -- I walked into a school where, you know, it had 500 kids and 2 janitors and the principal is using her extra money to get another custodian. That's a problem. I mean, that is a problem. That's not a problem of not having enough custodians, by the way; it's a management and organizational problem. I think you said "operational issue." Now, I'm not trying to -- I don't want to beat up on any class of employees. I think everybody here in the system cares about kids and wants to do it right. Most people want to do a great job. What 98 11/21/01 EDUCATION COMMITTEE - RES. 010642 we have said is that there are some management techniques and some practices some and ways of organizing the work that would increase the service level so that we get what -- so that the taxpayers are getting what they're paying for in those areas.
But the issue is the bottom line is, you can't lay off a workforce and think these old schools can run, it's impossible. And that is what we're saying. We are saying that we want a legitimate response to legitimate questions. That's not a legitimate response. Let me move on. Seven schools, these high schools that you said you operate in, where are they? Can you name them?
We have a high school in Flint. Northwestern is a high school in Flint, Michigan. We have a high school in Chicago, a K-12 school, so it's part of that. We have a high school in Mt. Clemens, Michigan, Mt. Clemens Secondary and Junior Academy. We have a high school in Trenton, New Jersey, Grandville Charter High School. We have a high school in Washington, DC, Edison Friendship Charter School, Woodson Campus. We have a high 99 11/21/01 EDUCATION COMMITTEE - RES. 010642 school in Kansas City, Missouri, Westport Senior High School. And then the last high school is Chester.
What is your record there? We have heard you have no experience in any high schools, which is one of the reasons that we -- I guess citywide everybody rejected your application. We have 264 schools, and without showing us that you have the experience in making schools improve, we're afraid to entrust all of these schools and these kids to you. We don't have any -- we don't see anything that says you have a good high school record. And another thing Representative Youngblood was asking as well is, what academic program will you be using? We've had the City criticized, and most of us agree that we can't have so many programs. We understand that we have to have a few -- maybe two maybe three maximum of reading and math programs. What is your program of choice?
Give us all three 100 11/21/01 EDUCATION COMMITTEE - RES. 010642 levels. REPRESENTATIVE HORSEY: Excuse me, Madam Chairperson, may I ask a question before they answer? And that is, what is their professional expertise in the area of education? Are any of them educators?
I have a Ph.D. in government. Upon completing my Ph.D. at Harvard University, I have spent two years -- (Unintelligible; parties talking over each other.)
I helped found a school in Washington, DC that is a middle high school, college preparatory school, which I was the head of for three years. REPRESENTATIVE HORSEY: Excuse me, that's not my question.
Okay. REPRESENTATIVE HORSEY: My question is, does any of these four gentlemen have an education degree? Not educational experience, 'cause your agency does have education experience. Do any of you have education degrees?
No. 101 11/21/01 EDUCATION COMMITTEE - RES. 010642 REPRESENTATIVE HORSEY: Who is Piaget? Who is Montessori? Now, you've got the Ph.D. Who is Piaget and who is Montessori? (No immediate response.) REPRESENTATIVE HORSEY: They're the foundation of American education. Okay, excuse me. You can go ahead and.
We understood the question, but this is the -- REPRESENTATIVE HORSEY: Piaget is the founder of developmental education. The whole grade structure of 1st to 12th is based on Piaget's, a Frenchman's theory on developmental psychology. It's the foundation of American education. Okay, excuse me, go ahead.
But these are the reasons why we have so many problems with hearings. Frankly, I was not looking forward to a hearing -- 102 11/21/01 EDUCATION COMMITTEE - RES. 010642 and I've been very quiet about and I've hosted many Edison meetings in my district as well. But we have to have reasonable, legitimate responses to questions so that we can have faith in some role that the Mayor and the Governor seem to indicate you might perform, but you don't give us anything to hang our hats on. We have people who put us here, who vote for us, who expect us to come to them with some responses. You don't give us any responses. We feel that we're getting a double talk on your record 'cause I've seen, if I'm not mistaken, where approximately 50 percent or more of your schools do not improve or are not performing well.
But you say not to believe the information we get.
But yet you sit here and you say -- they mentioned three schools and you said the record wasn't clear. Then you say you made a mistake. Come on, please, please don't insult our intelligence up here. All of us work too hard. I'm a former educator, I worked hard. I 103 11/21/01 EDUCATION COMMITTEE - RES. 010642 was Chair of the Education Committee until I assumed Finance Chair and Vice Chair of the Education Committee for City Council. I worked hard to read the Governor's report, hard to go through your stuff, work with my charter schools, published the first charter school newsletter, and on and on and on. Many people back here have done many things in this field. We care, we're committed people. But you have to treat us legitimately. Don't insult our intelligence with ridiculous answers or duck it. I would prefer that you say you didn't know. I would prefer that you say the Governor and the Mayor you're not sure what the ramifications are or the implications are for your organization, but don't give us foolish answers. Everybody's too busy. (Applause.) REPRESENTATIVE HORSEY: Madam Chairperson, may I -- REPRESENTATIVE WASHINGTON: Okay, the next person for questions is Sondra Dungee-Glenn.
Thank you, Madam Chairperson. 104 11/21/01 EDUCATION COMMITTEE - RES. 010642 I wanted to start by trying to get clarification on some statements that were made earlier. We were spending a lot of time talking about Edison's performance with some of the school districts that you had previously been in, and we were cautioned because you had only been in some of these schools a short period of time, one or two years. But just in terms of clarification on a couple of districts that had been brought out by name, one in Sherman, Texas, where we were talking about the termination -- or, excuse me, the non-renewal of your contract. This was not a short-term relationship, as I understand it, in Sherman, Texas. You had been in that school -- in that school district a number of years, I believe, at least five years. Is that correct?
And so, therefore, the lack of performance was not based on one or two 105 11/21/01 EDUCATION COMMITTEE - RES. 010642 years of Edison's experience there but it really had been over five years.
Also, the issue of San Francisco, again, as I understand it, it is a state chartered school now maybe for one year or less, but that you had previously operated in the San Francisco School District, and that relationship had ended and it had been given a state charter, but it was the same school continuing to operate, and that those test scores had also not shown any improvement. Is that correct?
No, it's not correct. I'll explain the situation in San Francisco. San Francisco is a city, like several cities in the United States, that was not very open to charter schools. Edison was invited by a local group to come in and consider developing a charter school, which it did. It was a very controversial matter, because in San Francisco, in order to receive a charter, the local group has to submit its application to the board of education. At the time, it was as a nine-member board. Five members 106 11/21/01 EDUCATION COMMITTEE - RES. 010642 favored, four members did not. Edison received a charter with its local partner. A year later, there was an election. The balance of power shifted from 5 to 4 to those who oppose charter schools. That particular board called Edison in with this local partner and basically challenged Edison's performance in the first year. If you read the record in San Francisco closely, parents supported keeping Edison there. The state stepped in because it appeared the board of ed and the parents in particular reached an impasse about whether Edison should stay or not. The board stepped in and concluded that, in fact, the student performance was improving and that the board of ed did not make a valid argument for terminating the relationship. The board also discovered that the school also had some other needs in which it made -- excuse me, the state made an investment particularly in the area of facilities. The state decided to take the charter from the city in order to avoid the controversy and make it a state charter, but it was the parents that fought to keep Edison there based on the performance that they had 107 11/21/01 EDUCATION COMMITTEE - RES. 010642 witnessed in their children's development.
They had, no matter how you looked at it, before or after the state charter?
That's correct. Those test scores are available on California's Department of Education Website, and if you compare Edison's scores to the District of San Francisco from Spring of '98 to the year before we took over, if you follow those 2nd graders to the 5th grade where they are this year, you'll found that we've outgained the district.
In that school. So if the district criticizes us, it's a criticism on themselves.
Okay. Let me ask you, the final case was in York County where, as I 108 11/21/01 EDUCATION COMMITTEE - RES. 010642 understand it, the PSSA test scores for this year were lower than they were prior to Edison's -- excuse me, they were higher prior to Edison's coming in and taking over that school than they had been in the first year that Edison operated the school. In other words, the test scores went down once the school was turned into an Edison school. Does that follow with your --
Okay, all right. I just wanted to get that clarification because there's a lot of information here
And, excuse me, those test scores aren't reflected. My colleague has corrected me, that they are not reflected in the annual report because it's a first-year school.
It's a first-year school, it's not in your annual report.
All right, now I just 109 11/21/01 EDUCATION COMMITTEE - RES. 010642 two other areas of questioning. Councilman Nutter was questioning you about what potentially may be your consulting relationships with our school district if things go forward. Now, apart from the $2.7 million consulting contract you've had with the Commonwealth of Pennsylvania, can you identify and describe for us what consulting services Edison provides to school districts currently?
Okay, so currently, you don't provide any consulting services --
Okay. This will be a new type of relationship the, a new business for you.
Other than in a district where we are going to do, I think, Affiliates, our Affiliates Division. Similarly, we take our intellectual property and we go in and they will 110 11/21/01 EDUCATION COMMITTEE - RES. 010642 install our systems in their schools, small school district. We typically -- you can call that consulting but it's not the same kind of thing we'll be doing here. So we don't have anything like Philadelphia anyplace in the country
Are there any other school districts that have purchased your "intellectual property" from Edison?
We just started that business unit and we're now capitalizing it. We have a first customer that has signed up. We have not actually -- we're just in the early stages. By next fall, it will have been installed, but we just got that business started in the last six months. Our first customer's not on line now.
Georgia. They're using one of our pieces of intellectual property, they're testing out our Edison benchmark assessment system currently.
And are there any other 111 11/21/01 EDUCATION COMMITTEE - RES. 010642 of your competitors that offer similar intellectual property?
There are some companies that are solely in that business. We're in the business of providing whole school models, and so in our typical relationships, that's what we offer. We're hired to provide a comprehensive educational instructional program with management systems.
No. I'm saying in that business, we don't know. The answer is, I don't know of other people who are doing this. To my knowledge, there isn't a company in the country that would have done a project like this. To our knowledge, I don't know that there's a relationship like this anywhere, like the one being proposed.
Okay, thank you. This will be something new. We're going into unchartered territory here. (No response.)
Now, let me ask you, going into your report that you submitted to us, I 112 11/21/01 EDUCATION COMMITTEE - RES. 010642 want to hit on some issues and I'd like to hear your response in terms of the fairness of that report, and it's looking at the comparison that you made between the Philadelphia School District and what you have phrased as comparable districts around the country. And most specifically, when you selected these school districts, did you make your best efforts in looking at districts that you would consider fair comparisons to the Philadelphia School District?
You know, I think what we did is, we made a tradeoff. And not to make it seem one way or the other. We had to look at districts that had -- were using SAT9. So in the universe of districts that use the SAT9, the two that were closest in size and complexity were Philly. Now, having said that, they're not the same in terms of poverty. I think we went over that last time. So Philly does have higher needs than those districts in terms of the number of students who, you know, use free and reduced, but we didn't have a -- you know, we couldn't -- you know, we didn't want to compare Philly on one test to Detroit on other tests to New York. Actually, 113 11/21/01 EDUCATION COMMITTEE - RES. 010642 to be honest, $2.7 million wouldn't pay for that analysis; you'd have to hire a bunch of sort of economists and stuff to go out and run those numbers, and we just couldn't do that in this exercise.
Mr. Wade, my read of the report says that you used the SAT, not the SAT9 to compare these districts.
Would it surprise you, Mr. Wade, if I said that the average poverty rate -- the average weighted poverty rate for all of those district, I believe, was around 35 percent; whereas, the School District's poverty rate is more than double that?
No, it wouldn't. We heard that last time we were here. It definitely wouldn't surprise me.
Did you have a chance to look at cost-of-living indices and make --
We heard about that last time we were here as well, so I know -- we're aware of that as well. 114 11/21/01 EDUCATION COMMITTEE - RES. 010642
Again, just for clarification, you do refer to it in your report as the SAT, which is a college entrance exam. Did you mean the SAT9?
, educational program, at the bottom of the page, using SAT scores as a measure of students achievement and so on and so forth.
Yeah, I believe that's correct. Stanford Achievement Test is what we were referring to, not the Scholastic Aptitude Test. REPRESENTATIVE WASHINGTON: So you're saying that in all the reports you have that down, it's an error so everybody has the same error in their reports that you've given out?
And if I may, Mr. Wade, I've been given further clarification -- 115 11/21/01 EDUCATION COMMITTEE - RES. 010642
Well, but they mean different things. REPRESENTATIVE HORSEY: 'Cause it skews the data.
No, we didn't skew the data, sir. REPRESENTATIVE HORSEY: No, that mistake skews the data.
But it isn't a mistake. Now, if we look through the report -- I'm going to do this right now. I'm going to look through the report and find where we define that term, 'cause I'm sure my team defined the term somewhere in the report. So we'll look through the report and find where it's defined, and then we can go back and use that definition. All the acronyms that we used were defined in this report. In fact, in the back of the report in the appendices, we talk about the fact that we ran SAT9 data. There's quite a bit of data that we don't do throughout the appendices, and it's lear that it's clear that it's SAT9 scores. 116 11/21/01 EDUCATION COMMITTEE - RES. 010642
Mr. Wade, according to your footnote, number 11, , that the source for this is the National Center for Educational Statistics, and I'm being told that that site does not contain SAT9 scores, it does contain SAT scores. So it does bring me back to my question.
Footnote applies to spending 11 less money, not to the acronym SAT.
Well, wait a minute, what about 12? Footnote 12 says "SAT." If the Chair will allow, I mean, it is, I think, generally accepted out in the public that the SAT means one thing and the SAT9 means something else. It's been reported in every Philadelphia newspaper that it was SAT. Everybody knows what SAT is.
And the point, Mr. Wade, is to get to the issue of fairness of the comparisons that you're making between the Philadelphia School District and the three school districts you claim are comparable -- Houston 117 11/21/01 EDUCATION COMMITTEE - RES. 010642 Broward County, and Clark County. And we've already established that they have very different poverty rates. And even in your reports, you recognize that there is a correlation between academic achievement and rates of poverty within a child's home and the impact that it may have on their achievement.
And if we are comparing school districts that have at best a little better than half the poverty rate of the Philadelphia School District, do you consider that a fair comparison?
The answer is yes because that was the only -- as opposed to comparing it to somebody who took a different test -- and by the way, if look in our appendices, we're talking about SAT9 data. We're looking for the definition. In terms of the comparison, I think that versus trying to compare Philly to a district that uses a different test, that was the most fair thing that we could find given the -- unless we were just going to do it based on the population of kids and have small school districts and compare those to 118 11/21/01 EDUCATION COMMITTEE - RES. 010642 Philadelphia. I mean, so we chose similarly-sized districts who took the SAT9.
It seems that it would be at least fair that in your report you do indicate, though, that the district you're comparing differed from Philadelphia in some very significant ways, which is not brought out in your report. It was only brought out through questioning here, and I think it was information that had to be presented from this side of the table as opposed to something that was forthcoming from your company. And, again, the impression and the perception that it leaves, which I think is very unfair to our students, is that they are, for some reason, not measuring up, when you're really not comparing really comparable student populations. And, again, I think that's just an example of what we're saying, that something very unfair has been brought forth in the report that's been presented to us.
Just two things. One is that, you know, it's clearly our report and we're 119 11/21/01 EDUCATION COMMITTEE - RES. 010642 responsible for it and we stand behind it, but these are not numbers that Edison created. These are numbers that we hired out for. Alan Krueger, who is one of the country's most well known economists and academic economists -- and actually, in all of Alan Krueger's prior writings on the relationship between money and performance, he's very clearly pro-money in (indiscernible). So these are his findings; these are not Edison's (inaudible). And these secondly, Metametrics, the other company that handled --
If I might, I think your point, I think it's a very fair point. I think you've made a very fair point that in the comparison -- the comparison may have been unfair. In the actual data runs that we did on the SAT9 data, those we think we stand by. We were trying to compare that to something and we compared it to other districts who took the SAT9 who had a similar size. And that is essentially the methodology.
But still, they have very different student populations.
I would agree with you. 120 11/21/01 EDUCATION COMMITTEE - RES. 010642
So now that we've laid all of that out, are you prepared to say that this may have been an inappropriate or unhelpful comparison? particularly because it follows immediately after the following sentences: "It is well established that children living in poverty are at a much greater risk for learning and behavioral problems, health problems, abuse, and neglect. In addition, living in poverty increases the chance that a child will experience difficulty in school." And then you say, "However, it is important to note that other urban school districts of similar size have historically outperformed the school district academically."
So everything there is true, but the "however" seems to suggest that notwithstanding the fact that poverty is a differential, look at these school districts, they are doing better. Do you regret having written it in this way now?
No. The only thing I regret is that we didn't footnote it. 121 11/21/01 EDUCATION COMMITTEE - RES. 010642
Do you think it's possible that people may have understood you to be saying that with comparable problems in terms of poverty and other challenges to learning, these school districts are doing better because of the immediate juxtaposition with the connection of the "however"?
I certainly would have understood them, Mr. Masch, to be saying I -- I wouldn't have perceived people to understand all of that. I guess the point is --
So why did you say "however? However, notwithstanding that all of this is true, look at these districts, they do better. Why is the "however" in there? Isn't it supposed to connect one paragraph to the other?
No, I think I addressed it earlier. I think we -- I'm telling you how we got there, I'm going to be very clear about it, 'cause I don't want to give answers and have you guys say, Well, you're just making up stuff. So --
Is it a useful comparison? 122 11/21/01 EDUCATION COMMITTEE - RES. 010642
So poverty does not matter, it should not be taken into consideration.
You say that, and then you say, "However, note that these school districts do better," as if, even when you have problems in poverty, you can do better than we do.
No, Mr. Masch. Either we're acknowledging the poverty as a factor or we're not. We acknowledge --
No, I think you can acknowledge it and say that notwithstanding that problem, you can do better, and the proof is that these school districts --
Well, part of where that may be coming from is notwithstanding our population of students is what it is -- just the 64, let's not talk about the 136, so we're clear. The 74 in the report is a similar demographic base. You can do better. So that is -- so I would disagree. I 123 11/21/01 EDUCATION COMMITTEE - RES. 010642 would say to you that notwithstanding -- are you saying that notwithstanding the fact that these kids are where they are, they can't do better?
Yes, I'm saying that they can do better, but I'm also saying that I think that we need to make investments in order for them to do better, given how much of the resources of this school district are already claimed by other uses, and most of that by judicial order, by mandate, by contract, by law, which takes away a great deal of discretion. So if we want to address core education, the statement here that we can do much better and we don't need to spend more money, I do question that.
Well, we didn't say that. We actually asked the State and Commonwealth for $150 million. So we didn't say don't put any more money in --
Right and then -- (Unintelligible; parties talking over each other.)
And then you propose reductions in spending of 225. I think 225 minus 124 11/21/01 EDUCATION COMMITTEE - RES. 010642 50 gets you 175 in net cuts. Isn't that true? Some reprogramming and the rest is an absolute reduction in spending, and I think we -- we still don't know how you could do that without harming education, and we're looking forward to getting the itemization on that.
Oh, I'm looking forward to getting into that conversation as well, sir.
Mr. Wade, I just want to conclude on this point by saying that I do believe it was an unfair comparison because the assertion that you made is as if the a school district with similar rates of poverty can do much better than we have. And what you have shown is that you have not compared us to the school districts with similar poverty and, therefore, your conclusion is faulty and leaves a false perception. And I think that's very unfair and it's presented and attempted to be presented in an objective and fair way.
It certainly wasn't an attempt on our part to obfuscate, and I can understand how you would take away that. I mean, all I have to say is that we made 125 11/21/01 EDUCATION COMMITTEE - RES. 010642 a decision to compare you to people who were taking the same test rather than comparing you to folks who weren't. And that's the result of it. So we, you know -- I'm sorry, go ahead.
Thank you. Just to finish that thought out, then have you made a comparison between not only similarly-sized districts but districts that have similar poverty rates and done that comparison?
You compared Philadelphia to similarly-sized districts, but Philadelphia had a significantly different poverty rate as compared to the other three districts. What I asked you was, did you compare Philadelphia to similarly-sized districts with similar poverty rates? That was the question.
They don't take the same tests so there's no way to compare it necessarily. In other words, if you --
So there are no other systems that are of comparable size to Philadelphia, that also have comparable poverty rates anywhere in the United States of America that take the same test? Are you talking about the SAT9?
No, but in terms of how it's used here versus how it's used in other places, you've got to have a similar student grade level, you've got to be taking the test at the same grade level, and it's got to be used in the same way.
And the data that's reported in those states -- for example, Texas (inaudible).
Let's go back to 127 11/21/01 EDUCATION COMMITTEE - RES. 010642 Mr. Masch's question, then. What is the valuable of comparing Philadelphia to a similarly-sized district that happens to take the same test but has glaringly wide variance in poverty rate? What is it then that you're comparing?
But what's the validity of the comparison if, as you point out -- in your report, you say that poverty is a criteria to be calculated in any equation that talks about educational output. You acknowledged the fact and then took it out of the equation.
But if you're going to do a fair comparison -- (Indiscernible; parties talking over each other.)
We're not the one that, you know, as if we didn't include that, then it's invalid. You're saying -- 128 11/21/01 EDUCATION COMMITTEE - RES. 010642
No, you acknowledged it; you just compared two different entities based on that issue.
Based on their size, their actual size of being urban districts who take the SAT9 and use them the same way. We took the --
Okay, thank you. Let me go on to my questions. In the course of your work either for the Commonwealth or for the contract you have or any other work that you've done, have you looked at any other school districts in Pennsylvania and their performance?
We've looked at the data on the District Web site, we looked at the PSSA exams. I mean, we had the ranking of Philly as one of the (indiscernible) districts. So in that regard, we did -- we didn't examine other districts other than Chester, where we actually manage schools. 129 11/21/01 EDUCATION COMMITTEE - RES. 010642
So, for instance, you don't necessarily know what's going on in the Lower Merion School District or Gladwyne School District or the Colonial School District or Wissahickon or Radnor, any of those places?
Okay. Do you have any sense of why those districts are such high-performing districts in Pennsylvania as compared to Philadelphia?
Okay, let me ask you a couple of financial questions. What's the price of the stock today?
Okay. What happens if you have a contract with the SRC and as things kind of go up and down and you experience significant problems on the NASDAQ, what happens in terms of your relationship with either the School District, the City, or the SRC?
That's a good question, 130 11/21/01 EDUCATION COMMITTEE - RES. 010642 actually. We lost half of our market cap a year ago, when the market went down. That's a really good point. We've been through a situation where we lost half of the value of the shareholders in the company, and nothing happened. Not a thing happened to our schools, we didn't pull back services or anything. We just had our stock price go down. So, I mean, at least to say that if what happened earlier this year was any experience, a lot of companies around the country lost a whole lot of value, including us, like something on the order of a billion dollars of the of the market cap, and nothing changed in our schools.
Okay. And what, if any, impact would be on the company if, for instance, Mr. Whittle, who, at least according to the most recent schedule 14A, has a fairly significant bonus opportunity as well as a variety of stock-option possibilities, depending on the price of stock? What happens to the company if Mr. Whittle decides to cash out and do something else?
We've brought a group of 11 131 11/21/01 EDUCATION COMMITTEE - RES. 010642 people in here. I mean, Mr. Whittle, like me, is involved in new-school development. The operations of the schools are Mr. Cerf, are other players in our school. We're a very, you know, a pretty large --
Not necessarily. Mr. Whittle was one of the original investors and owns a lot because he built the company and started it.
So we wouldn't all have the same. You know, having said that, I don't think he's anywhere near a controlling shareholder. I don't think control would change hands in the company. You know, he owns a significant stake.
Right, I understand. Suppose it did, what would happen?
If he left? Well, I imagine we'd promote somebody else to CEO and keep moving. I imagine we would do like a lot of other companies do. What happened here -- same thing happened here. When your CEO of the School District leaves, 132 11/21/01 EDUCATION COMMITTEE - RES. 010642 you get a new one. I mean, that's something that organizations do.
The School District's not traded on the NASDAQ; it's a public entity. What's the impact of your contract here in Philadelphia on the finances of the company?
We don't have a contract and we're not exactly sure what any contract's going to look like right now, so we don't know. I can't answer that.
What educational outcomes are you prepared to commit to for your work here in Philadelphia over the term of your contract? What can we expect over the school year -- I guess that will be school year 2002-03 up through school year 09 and 10, I guess.
If you will look on the report, we lay out what we think are academic performance gains, and we separate them out by type of school for certain school categories. And these are based on, you know, performance and achievement gains that we typically sign up for around the country. For your lowest performing schools, we're -- meaning fewer than 75 percent of the 133 11/21/01 EDUCATION COMMITTEE - RES. 010642 students performing in the -- 75 percent of the students in the below-basic categories. So in other words, 50 percent or fewer of the students will be scoring in the below-basic category, right? The goal is to move those kids percentage 7 points; meaning over the course of five to seven 8 years, you move those kids, you double the rate of 9 achievement. 10 That's pretty significant. I mean, as a 11 school system, there's not a district -- I can tell 12 you this: There's not a district in the country 13 that's done that. 14
With every respect, I 18 mean, you guys are smarter than every administrator 19 of every school district in the United States of 20 America? 21
I didn't say you said 24 that; I'm asking you the question. You said that 25 no one else has been able to do it, and I'm asking 134 11/21/01 EDUCATION COMMITTEE - RES. 010642 you how will you do it?
Because of our own experience -- to be clear, the schools that we let out in the report that gave to you, which is the 74 schools, we see these types of achievement gains. So we feel comfortable signing up for them in the schools that we manage because that's what we do. And that's what we expect. And our internal goals for our company are actually higher, that's what we expect in our schools.
I think at that point, there are going to be, you know, repercussions for the company?
A good example is what happened in Lancing, Michigan. You know, people may say, You guys didn't perform for a long enough period of time, so we don't want you here. That's -- but, you know, we'd say, Give us a chance to show you what we can do and, you know, give us a couple, 135 11/21/01 EDUCATION COMMITTEE - RES. 010642 three years to show you. Let's be clear. We're not saying, Give us seven years and then the schools that move zero and then on the second year, they're ging to move to the percentile. I think there's floors, so 7 every year, you ought to see a couple pf percentage 8 gains in the PSSA. I think right now in Philly, 9 it's 0.2 is the gain rate. And we're talking about 10 5 percent. 11
All right. Do you 12 have either performance incentives or what some 13 might refer to as clawback provisions in your 14 contracts for non-performance? 15
No. We have renewal and 16 termination. I don't think we've done any -- in 17 other words, if we don't perform, the schools don't 18 take money away from the schools. What they say 19 is, if you don't perform under the contract and we 20 see adequate improvement, we will then terminate 21 your contract. 22
'Cause the net effect of that 24 would be really just to take money out of the 25 classroom. 136 11/21/01 EDUCATION COMMITTEE - RES. 010642
No, I actually wasn't talking about taking money out of the classrooms; I was talking about taking money back from you
Yeah. We haven't done that, we haven't had those deals. We do have deals that say if we don't perform, then after two years, not waiting till the end, even mid-course, our contracts are -- you know, we can be terminated for the lack of progress. That's how we deal with it.
But, I mean, you got the money, you've moved on, you've got other irons in the fire and, I mean, you just kind of keep moving, right?
But that's not a good business model for us. It's much more costly for us to get a customer and get the school off the ground --
If you don't perform during the course of your contract before two years, is payment based on performance?
No, not -- it's negotiated. So what we say is, we are paid and we agree to produce 137 11/21/01 EDUCATION COMMITTEE - RES. 010642 these results. So is payment year to year, you know, kid to kid, based on performance? No. It's not realistic. What we do is, we say, you know, Here's the aggregate achievement gains that we're going do sign up for, and then there are check points in the contract where the provider is -- in charter schools, it's easy because they bring in third parties, they have charter school boards and they assess your performance. And our contract schools are a similar type of mechanism.
Okay. It's been reported in the press that -- and I think this was a statement by Mr. Whittle -- that if you didn't get the central office or central management or, 0I guess, direct control or the 55 people, we can go back to that example, but the Whole central office management -- I think Mr. Whittle was quoted as saying if you didn't get the central office management as a part of your engagement here in Philadelphia, there was a question, it seemed to be a serious question, as to whether or not you would want to do any business here in Philadelphia.
Given the events of 138 11/21/01 EDUCATION COMMITTEE - RES. 010642 the last hours, how do you respond to that and why are you still engaged?
I think what Mr. Whittle was 5 conveying is the sense that, you know, if we're 6 going to be making a serious investment in 7 (inaudible) some of the worst-performing schools, 8 the District -- it's a lot easier to do that if the 9 District is on a similar tract, meaning the 10 District is improving its operational performance, 11 it's actually delivering the services at the right 12 cost, it's right-sizing itself. And we thought 13 that we could be helpful in that. 14 We would be concerned about coming into a 15 district that said a totally different agenda and 16 we were basically running 60 schools. You create a 17 situation where we might not be able to get our 18 jobs done. 19
We might not be able to deliver 21 on the 60 schools in that kind of a situation. 22
In that context, it 23 was also reported, I believe, in the press that as 24 a part of your relationship here, there was an anticipation that you were going to be investing 139 11/21/01 EDUCATION COMMITTEE - RES. 010642 upwards of $100 million --
-- in the Philadelphia school system. Where does that commitment stand based on the events of the last hours? 7
That commitment still stands. 8 We would invest that money into the 60 schools, and 9 we -- 75 -- we anticipate about 75 million of it 10 going into, you know, the -- if we're the led -- 11 let's assume we're the lead provider here. We 12 would -- the lead provider would put up 75 million 13 lead provider schools and make available 25 million 14 to other groups, community groups and companies 15 that we're going to start other schools as part of 16 that arrangement. 17 In other words, you know, it's like -- 18 right now, it's like starting up charter schools. 19 People wouldn't have to cap them to get them off 20 the ground. It's our commitment -- if we were the 21 lead provider, we would provide that 100 million. 22
Okay. Last question. 23 Who are some of the local people that you 24 contracted with for your work here in Philadelphia?
Universal Companies was a 140 11/21/01 EDUCATION COMMITTEE - RES. 010642 contractor of ours. Some of those groups had other contractors that we worked with, but Universal was one of our local partners that did some work for us early. PFM, Public Financial Management, was another company that's local that we hired to do a lot of the financial analysis. I believe there was a real estate group that we also brought in locally to help us with some of the analysis for the operations, real estate operational issues.
These other people that you mentioned, you kind of give the indication that you didn't contract with them directly?
How would anyone get any part of a contract if they didn't have a contract with you directly?
We've asked people to, you know, do assignments and they have their own vendors that they partner arrangements, I mean, just like we do. If we're asked to do work, we've got, you know, partners all over the place that we bring in. 141 11/21/01 EDUCATION COMMITTEE - RES. 010642
IBM, for example, would be an example for us. We do business with them all over the country. They'd come in on this and work with us and just provide people and resources.
So excluding the outside contractors, what was the actual dollar amount paid to Edison for its work?
I don't know where we are today. I don't know how much has been paid out.
We've got $2.7 million, you hired a bunch of contractors, the balance actually goes to you.
I would imagine less than a million dollars of the $2.7 million went to Edison. In other words, most of that is the full-time people that we brought to bear on this. We had about 30-some-odd people in different capacities working on this. And I would say -- 142 11/21/01 EDUCATION COMMITTEE - RES. 010642
Yeah, that were on our payroll that we pulled away from other assignments around the country and put them in here for different periods of the project. And I would bet -- and, again, the caveat is I haven't seen the final bill, so I don't know, but I know, for example -- I can add up from just having looked at our most recent bills. Of the million and a half dollars that I can stand by that's already gone out the door to other vendors in connection with this. So I'm assuming that when the final bill comes, it will probably be less than a million. And the way Edison handled this is, we brought the resources to the table. We paid our own people, and it looks like the project actually ran over, and we will just have to eat that. In other words, we may end up spending more than a million dollars on the Edison people, but we're not 143 11/21/01 EDUCATION COMMITTEE - RES. 010642 going to get any more money for that. And part of the reason why is we extend this thing out another 30 days, and they didn't increase -- you know, they didn't say, okay, Edison, we're going to, you know --
We extended the -- our work -- a lot of our work on this was extended out more time, so we had more time in the project and we didn't get extra for it. So we incurred additional costs that never got picked up by the State for the project. A lot of our vendors bill based on their time. So --
I understand. Now, when did you say you were going to have that detailed budget analysis?
I will call the State and have them deliver you a bill early next week, and whatever we deliver, you know, you'll get a copy of that.
Thank you. 144 11/21/01 EDUCATION COMMITTEE - RES. 010642 Thank you, Madam Chair.
Thank you. One last question from Representative Horsey. REPRESENTATIVE HORSEY: I'll keep it short. I remember years ago sitting there was Dr. Connie Clayton and she made presentations to City Council and she'd have five or six people with her. And just for the record, Connie Clayton, Dr. Connie Clayton, who used to be in charge of the school system, has a chair at Penn in the Department of Education named after her. And then we got Mr. Hornbeck and he'd sit there. And the difference between Mr. Hornbeck and Connie Clayton is, when Connie Clayton sat there and made the presentation to City Council, she had Ph.D.s in education. When Mr. Hornbeck sat there, he had eight or nine lawyers. So my question to you is exactly -- maybe you'll get it. My question to you is, I see you gentlemen there, I've asked the question earlier, and I got on you about it. You are after a management consulting contract; is that correct? 145 11/21/01 EDUCATION COMMITTEE - RES. 010642
That's one part of what we would do here, that's one piece of it. One piece of it is we'd have a -- I'm sorry, we'd have a consulting -- a management consulting contract at the District. And then if, you know, if we're chosen as lead provider, we'd have a management contract for schools. REPRESENTATIVE HORSEY: So you'll actually be responsible for teachers in the classroom as well as principals and schools?
Managing those schools, that is correct. And not the people at this table, but the dozens of superintendents and former public school educators that work in our school system, the Edison Schools Network. REPRESENTATIVE HORSEY: So you do have Ph.D.s who specialize in education with Edison?
We have former 20 superintendents that are associated and work for Edison, including -- REPRESENTATIVE HORSEY: That's not a fair question [sic].
I'm not sure what your -- REPRESENTATIVE HORSEY: Mr. Hornbeck was a 146 11/21/01 EDUCATION COMMITTEE - RES. 010642 school superintendent; that doesn't go to the heart of his expertise to me in education. I'm talking in terms of education degrees.
I guess I'm not trying to be flip; I just don't know what you're getting at. REPRESENTATIVE HORSEY: Well, the point being that I believe education has been highjacked away from the professionals who are teachers vis-a-vis principals, people who have gone to school, studied the art of teaching children, and have made it their life. The argument for me right now, and the reason why we're at this table, is the argument between administrators who are bureaucrats over who's going to be in charge of those professional people down here. That's the -- the comparison of Connie Clayton to Mr. Hornbeck is that Connie Clayton had Ph.D.s in education and was an expert in the area of education. David Hornbeck had lawyers with him, and they were always talking about areas of education. They were not experts.
Mm-hmm. REPRESENTATIVE HORSEY: So that the struggle that's going on now in Philadelphia is 147 11/21/01 EDUCATION COMMITTEE - RES. 010642 between the bureaucrats and which ones are going to be in charge of the experts. So my question to you again is, you guys are experts; do you have people with education degrees with Edison?
Thank you Representative Horsey. We want to wrap this hearing up. And is there anything that Edison would like to say in wrapping this up?
I have a couple questions that we'd like you to -- we're going to recess this hearing, I'm not going to adjourn it -- and ha-ha.
If I may respond, what I'd like to do is, for example, the exchange -- I just want to be candid, right, I just want to be real candid. I do want to give you straight answers, but the forum -- I mean, we're willing to -- the folks here or anybody we need to bring, let's create a forum where we can sit down and talk about this, 'cause I 148 11/21/01 EDUCATION COMMITTEE - RES. 010642 think people are making good point. We're not out to, like, misrepresent anything or we're not trying to not answer you, but this whole -- we spent 5 minutes on how many schools do we have. I mean, 6 it's, like, we can do that at this setting or we 7 can actually sit and -- I understand from the 8 School Board's standpoint, you've saying you 9 haven't had a chance to engage us on this, and some 10 of the process has broken down. 11 The process is now back on track, the 12 Mayor and Governor are working. Documents are 13 being sent over, and we are prepared to make 14 ourselves available to people to answer questions 15 that folks have. I mean, it wasn't like we're 16 saying Edison doesn't want to or not want to give 17 you the information that the folks that you 18 represent deserve. 19 I mean, I think what we should do is spend 20 some detailed time with board members individually, as a group, City Councilmembers individually, site visits, come into our corporate office, kick the tires. When we talk about a site versus a school, let us explain to you what we mean before -- you know, we're in a situation folks are firing at us, 149 11/21/01 EDUCATION COMMITTEE - RES. 010642 saying, We don't understand what you mean so we're going to assume that you meant it this way. We want to have a chance to explain, particularly to you folks, what is we do and how we do it. And we're not sitting here because we're ashamed of what we do; we feel good about it. We actually are doing some good things, and we'd like to be able to say, Here's what we've done well, here's where we've actually had some challenges. We're not perfect, and some of the things that we've done poorly we've learned from. But we do relish the opportunity to sit in small groups and in big groups and really dig into the meat of what we're talking about with respect to proposals, with respect to our assumptions, with respect to, you know, what we propose for the District. Now, having said all of that, at the end of the day, We're not going to be the decision-makers here, but we did provide at least a platform that people can disagree or agree about this, but at some point, we're going to get beyond this, and it's going to be about -- we're going to all figure out what we're talking about at the 150 11/21/01 EDUCATION COMMITTEE - RES. 010642 District and then we're going to drill into what do we do to improve the school system. And, you know, we're willing to make ourselves available for you guys to answer questions in any way, shape, or form, you know, as this process unfolds. And I expect over the next days, we're 8 going to be pretty heavily engaged with just one of 9 the groups up here, which is the Mayor and some 10 representatives of the School Board. There's going to be intense engagement around that. And so what I would say to you is that over the next 10 days or so, at least some of the folks here and many of our senior people will be in a room with District employees and we won't be able to be here, you know, for long sessions.
We're very happy to hear that over the next 10 days, there will be some really intensive meetings with our school board and --
Right. That will be fine. One of the things that I want to do is 151 11/21/01 EDUCATION COMMITTEE - RES. 010642 wrap this up, and we are looking forward to individual meetings or other types of forums, but in the meantime, until those things are set up, until things are much more clear from our perspective of what role you're going to play here in Philadelphia, I want to recess this hearing to somewhere around December 14th at the call of the Chair. If we don't need to do it then, then we will not. But in the meantime, we need to end this with some structure with a date in mind because there are a couple --
Could I just add one thing. I do understand that our staff at the School District and other representatives of the Mayor's Office are going to be meeting with the Edison staff. And one of the things that we're looking forward to is, you know, getting their -- getting that interaction going and the assessments of some of the analysis and really report back from our own staff, which we will then share not only with the Mayor's Office but with other elected officials and which we will share with Edison. I want to say on the record that we will share whatever analysis we get from our staff with 152 11/21/01 EDUCATION COMMITTEE - RES. 010642 Edison. We want everything to be open. We want you to see that analysis before we give it to elected officials so that we really can have a dialogue. I wish that is the way that things would have proceeded in the past. The only part of the process we can control is our side so we will make that commitment.
So we want to recess this, and what I'll do -- we did have someone here writing down questions. We do have a document that someone recorded questions from the November 8th hearing. And we also have our court stenographer, so once we get all of this together, who should I send it to?
To Tom, okay. I will send it to Dr. Stewart. And we are going to recess to the call of the Chair -- well, the date actually is December 14th at p.m. Thank you for coming. And I thank everyone else, too. 153 11/21/01 EDUCATION COMMITTEE - RES. 010642 (Proceedings end at 4:12 p.m.) - - - 154 CERTIFICATE I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia's meeting of the Council Committee Comm. of Wednesday, November 21, 2001, are contained fully and accurately in the stenographic notes taken by me upon, and that this is a true and correct transcript of same. RE: Resolution No.010642 _______________________________, Josephine Cardillo Registered Professional Reporter and Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)