Edison Overstates Philadelphia School Savings From Outsourcing Maintenance and Operations Work, Keystone Research Center Finds

Harrisburg, March 19 -- A report by Edison Schools Inc. claiming that maintenance and operations costs in the Philadelphia School District are "exceptionally high" is based on a misleading comparison with a sample of much smaller school districts, according to a Keystone Research Center review.

In an October 2001 report Edison suggested that there is a "significant savings opportunity" to be realized by outsourcing various services now performed by Philadelphia School District employees.

"The problem with Edison's report," explains Dr. David Bradley, KRC policy analyst, "is that it compares the Philadelphia Schools' maintenance and operations costs with costs of much smaller, mostly rural school districts."

"When the costs of the Philadelphia School District are compared with other urban school districts of similar size," says Bradley, " they are in the middle of the pack or lower."

According to Bradley, Edison relied on data from American School and University Magazine's (www.asumag.com) annual Maintenance and Operations Costs survey. Twelve of 23 respondents to that survey in the mid-east region that includes Philadelphia were rural. "The largest school district in the survey had only 76,436 students," Bradley notes.

In the 2000-2001 school year, the Philadelphia schools had 210,428 students.

The KRC reports 1998 data from the Council of Great City Schools that show the Philadelphia School District maintenance and operations costs averaged $471.59 per student, compared with a national urban average of $516.42. The Philadelphia Schools' transportation costs per pupil, $151.50, were also lower compared with the national urban average of $261.29.

Philadelphia's expenditures on operations as a percent of total expenditures, 10.7 percent, is also unremarkable when compared to other larger urban schools systems according to the KRC. New York spent 8 percent, Dallas, 11.9 percent, Houston, 11.4 percent, Chicago 8.6 percent, Miami-Dade 13.4 percent.

Wages for building engineers and cleaners in the Philadelphia School District (who account for 73 percent of non-transportation maintenance and operations personnel) are also in line with Philadelphia-area averages, leaving limited room to lower wages through outsourcing. In the Philadelphia District, building engineers earned $17.19 per hour compared with the Philadelphia metropolitan area average wage of $19.52 per hour. Cleaners in the Philadelphia schools earned an average hourly wage of $11.03, just $1,14 more that the metropolitan average of $9.89.

"Edison has claimed that it could save a lot of money by cutting 'excessive' operations and maintenance costs," Bradley says. "A closer look suggests this claim merits further scrutiny."

"Since concentrated poverty is one of the basic challenges faced by the Philadelphia School District," added Bradley, "creating more poverty-wage city jobs – a likely result of outsourcing – seems a misguided approach."

Edison Schools Inc. is the largest for-profit school-management company in the United States and has actively pursued contracts for running the Philadelphia School District. The district was seized by the state last year in hopes of correcting perennial financial problems in the system.

The Keystone report, titled "Fuzzy Math in Philadelphia: Edison Overstates Savings Possible on School District Maintenance and Operations Work", is available from the KRC Web site at www.keystoneresearch.org.

The Keystone report was released in the Pennsylvania Capitol media room at a press conference that included comments by Pennsylvania Senator Shirley Kitchen (D-Philadelphia). The report will be presented to the Philadelphia City Council at City Hall budget hearings tomorrow at 4:30 p.m.

The Keystone Research Center is a Harrisburg-based non-partisan think tank, and a leading source of analysis of Pennsylvanian's economy and public policy.

Contact
David Bradley 717-255-7158
dbradley@keystoneresearch.org

Peter Wiley
570-522-0738
press@keystoneresearch.org