Charters to cost School District $25 million more than anticipated

The Philadelphia School District has seen its charter school costs soar at the same time it is grappling with a deep financial crisis.

Officials this week said the district may spend nearly $700 million on charter payments by the end of the school year - $25 million more than budgeted.

One of the main reasons is that charters have enrolled 1,600 more students than permitted in their agreements.

A total of 67,315 students were enrolled in January in the 86 charters in the city and a handful of cyber and suburban schools.

The charters collect money to educate these students even though their enrollments are higher than agreed to. Other charters have refused to sign agreements that would limit enrollment.

The district pays the charters $8,596 per student, $22,242 for those who receive special-education services.

The Walter D. Palmer Leadership Learning Charter School is authorized to enroll 675 students at its two campuses in North and Northeast Philadelphia, the district says. It has 1,302. Palmer has maintained it is entitled to enroll the students under state law.

The district has tried to crack down on schools that have exceeded enrollment maximums, and that have refused to limit enrollment.

In October, the district warned it could begin charter-revocation proceedings against 29 schools unless they signed agreements by Dec. 15.

Paul Kihn, deputy superintendent, said in an interview that 10 of the schools had signed enrollment agreements, eight were expected to sign soon, and five were awaiting approval by their boards. Little or no progress has been made at the other six schools, Kihn said.

"We continue to hold out hope that as additional pressure is applied," the schools will sign, Kihn said.

Discovery Charter School in West Philadelphia has not signed. The district contends Discovery should have no more than 620 students; district records show 735.

"We have not been able to reach an agreement," Sean P. Stevens, chairman of Discovery's board, said Thursday.

In January, Kihn sent a follow-up letter to the schools saying the district would continue to examine its legal options, including revoking charters if the schools do not agree to enrollment limits.

Kihn's latest letter did not set a deadline, but he said the district and the School Reform Commission "feel an urgency to get this matter resolved."

He added: "The longer you wait, the more you have to worry about inaction sending the wrong message publicly and legally."

In August, the SRC voted to suspend part of the state School Code, including the provision that bars districts from capping charter enrollment. It also waived a section that allows charters to bill the state Department of Education when a district refuses to pay for students.

Kihn's letters urged schools with unsigned charters not to bill the state for extra students.

Kihn said the district's lawyers, citing the SRC's suspension of the School Code, are trying to persuade the state Department of Education to stop paying the charters for the extra students they enroll.

Education Department spokesman Tim Eller said Thursday that state charter law "requires the department to withhold funds if a school district does not pay a charter school."

Kihn's correspondence with charter leaders is the latest development in the district's long-running battle to manage charter costs. The saga includes several court cases.

In the spring of 2012, Commonwealth Court ruled that the district violated a 2008 law when it limited enrollment at two charters and refused to pay for additional students. The court said that under state law, enrollment could not be limited - unless the school had agreed to a cap in its signed charter.

Palmer Leadership is one of the schools in the suit. The state Supreme Court has agreed to review a narrow portion of the Palmer ruling.