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$139 million: Cost of charter expansion so far




by Benjamin Herold for the Notebook and WHYY/NewsWorks

Charter school expansions approved by the School Reform Commission this spring are projected to cost the cash-strapped School District $139 million over the next five years – $100 million more than District officials had previously stated.

A District spokesperson released the revised figure hours after School Reform Commissioner Joseph Dworetzky directly challenged District staff’s previous public estimate -- $38 million over five years – during the SRC's open session Friday morning,

The dramatically lower cost estimate “was an error,” Thomas Darden, the District’s deputy for strategic initiatives, later acknowledged.

Darden gave the $38 million figure publicly during Friday’s meeting and in response to a request from the Notebook/NewsWorks earlier this week.

During the extended charter renewal and modification process this spring, the SRC has approved a total of 5,416 new seats across 14 charters, including 317 new seats approved Friday morning. 

In the coming school year, those seats will cost $13 million, a steep price tag for a District still facing a 2013 budget shortfall of as much as $282 million, much of which will have to be borrowed.

Officials said the $139 million in projected expenses over the next five years could be offset by roughly $20 million in savings because Mastery Charter Schools agreed last year to relinquish 600 approved but unused seats for its Lenfest campus.

The costs of the new charter seats have been factored into the District’s projected shortfalls both for next year and over a five-year period, a District spokeswoman said Friday.

The SRC has yet to hold meetings for seven charters still up for renewal or modification this year.

For weeks, Commissioner Dworetzky has been contending that the District and SRC must meet their central goal of expanding the number of “high-performing seats” in city schools through a more cost-effective approach than expanding existing charters.

“I think the cost of these seats is really, really high,” Dworetzky said. 

“These are … in my view, not well-justified expenditures.”

Friday morning, Dworetzky questioned Darden on the cumulative costs of the charter seats added to date.

After Darden responded with the $38 million figure, Dworetzky jumped in.

“The number I have is substantially greater,” he said.  

Officials estimate that each new charter seat comes at a net cost of $7,000 per year to the District. 

That figure represents the difference between the amount of the per-pupil charter payment the District must pass on to the charter and the amount of savings the District is able to realize by taking that seat off its books.

The $7,000 per seat, per year figure does not account for the so-called “stranded costs” that the District incurs as a result of the empty seats and underutilized buildings that the District must maintain even after losing students to charters.

The $7,000 per seat, per year figure also does not account for potential savings to the District from creating new charter seats. For example, the SRC has been negotiating with some charters to prioritize taking students from overcrowded District schools with the intent of limiting the District’s need to construct new facilities.

Here are the details on the additional seats over the next five years that the SRC has approved so far this spring:

  • Philadelphia Performing Arts          1,400 seats
  • First Philadelphia                          1,150
  • Nueva Esperanza                            710
  • Wissahickon                                   536
  • Boys' Latin                                      320
  • West Oak Lane                               296
  • Franklin Towne High                         250
  • New Foundations                             211
  • Mastery Pickett                               136
  • Franklin Towne Elementary               130
  • KIPP Philadelphia                            106
  • Alliance for Progress                        100
  • Southwest Leadership                        56
  • KIPP West Philadelphia                     15

Dworetzky has maintained that growing the District’s Renaissance Schools initiative, which includes both wholesale charter conversions and District-managed turnarounds, is a preferable strategy.

Officials estimate that creating a seat in a Renaissance charter costs the District $800-$1,000 per year.

On Friday, after the Notebook/Newsworks pressed for clarity on the cost, District officials released a spreadsheet detailing the year-by-year expansion plans and revealing the higher projected cost.

Despite the erroneous $38 million figure given publicly on Friday, the District’s Darden stressed that the SRC has been working from correct estimates of the financial impact of charter expansions throughout this year’s renewal and modification process.  

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