Edison Schools, Inc. may be already failing, although their most difficult test -- the fall 2002 opening of the 20 Philadelphia schools that they are taking over -- is rapidly approaching.
The corporation's stock reached its lowest value ever yesterday when it fell to one point. While the stock managed to close at 1.24, confidence in Edison's ability to initiate the largest program of its kind here in Philadelphia is being seriously questioned.
In April, Philadelphia's School Reform Commission decided to privatize 42 of the 264 city schools, granting 20 of those schools to Edison's for-profit education management.
Philadelphia Mayor John Street has repeatedly expressed his concern over the SRC's decision, but is particularly anxious now, according to spokesman Frank Keel.
"We have been concerned from the get-go -- it's too many schools too fast," Keel said. "This is compounded by Edison's dire financial straits at the moment."
And while Keel noted how Street recognized the need for school sytem improvements, he said that "reform for reform's sake, as [the SRC's plan] is now, is not the answer."
The state of Pennsylvania, under Governor Mark Schweiker, has already allotted $75 million for the city's school reformations. The city will soon announce an additional contribution of $45 million to the cause -- 42 privatizations, and 28 seriously reformed or chartered schools.
The 20 Philadelphia schools would be Edison's most ambitious project since the company's beginning in 1995.
Edison's Vice President of Communications Adam Tucker said that their finances budgeted for the 2002-2003 school year would be from $30 to $50 million -- an amount he believes Edison can uphold, regardless of their plummeting stock values.
"We're disappointed in the performance of our stock, but it's just one indicator of the company's viability," Tucker said.
In its first quarterly report of 2002, Edison reported that it had $45 million in its bank accounts and $15 million in credit.
"Every year we've raised the amount [required of us], and we're absolutely confident that we will be able to do it again this year," Tucker added.
Yesterday, the corporation presented bids to the SRC requesting to partner with six Philadelphia community groups to run another nine schools -- four chartered and five independent -- in the district.
Ironically, Edison's proposals were made on the very day its stock plummeted to its all time low.
Edison Schools is currently the largest for-profit school privatization company in the nation, operating 136 schools in 20 states and educating 75,000 students nationwide.
However, even in those somewhat stabilized schools, problems have arisen.
For example, the school district of Inkster, Mich. -- a Detroit suburb -- faced a state takeover three years ago. The district turned its approximately 3,500 students over to Edison's control.
T.J. Bucholz, spokesman for Michigan's Department of Education, describes the relationship between the town and company as "tenuous at best."
"Edison has failed to do a number of things it said it would do, such as grant timely financial reports to the Inkster board," Bucholz said.
Tucker, does not see the situation in Inkster as one that would be replicated here in Philadelphia.
"Part of what's happening in Inkster are problems with the board and management contracts," Tucker said. "We wouldn't anticipate something like that in the Philadelphia schools."
Bucholz agrees that there have been problems on both sides of the Inkster dilemma; regardless, the state is leaning toward reclaiming jurisdiction over the Inkster schools and breaking up the reform committee.
"We believe that the children of Inkster aren't receiving the high grade of education they deserve," Bucholz said.
According to Tucker, though, complaints in Inkster have not been overwhelming, and he considers them to be part of the trial period during the first few years.
In addition to its work in Inkster, Edison has worked with other charter schools, including Boston Renaissance Charter School. Recently, however, it was announced that this school would end its contract with Edison.
Despite its many problems, Edison remains positive that they will be able to meet the challenge of the Philadelphia schools.
However, Street will be meeting with Schweiker on Friday to express his concerns and ensure that the Philadelphia schools will open as scheduled this fall.
