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Major effort to privatize schools collapses

For-profit Edison pulls out of Pa. city

CHESTER, Pa. -- Pennsylvania's first major experiment in school privatization is coming to an ugly end in this poverty-stricken city of abandoned buildings, vacant lots, and closed shipyards on the outskirts of Philadelphia.

Edison Schools, a for-profit company hired four years ago to run eight of the city's nine schools, is pulling out in June, partly because it has not gotten paid about $4 million in fees.

The decision followed a tumultuous year that began with book and teacher shortages and a riot at the high school that led to 28 arrests. Conditions worsened, with Edison at the mercy of local officials when it came to control over the district's finances and getting the information it needed to do its job.

Among other things, it turned out that the district's poor accounting concealed a $35 million budget deficit. District officials said recently that without an immediate loan to pay teachers, the system would have just $9 left in the bank.

''We have not been able to work well together," Edison spokesman Adam Tucker said. ''We knew that we were no longer going to be enough of an active agent for positive change."

Michael F. X. Gillin, chairman of the state-appointed board that brought Edison in, said the tempest has left him dispirited. Next year, he said, the district will reopen without private companies.

''At this point, that is probably the best thing that could happen," Gillin said. ''There are a lot of social problems down there. You can't just blame the administration or Edison for the kids' low test scores."

Edison, founded in 1992, is the nation's biggest private operator of public schools. It runs about 157 public schools across the country and has had mixed success.

Edison stayed a short time in Dallas and Minneapolis, where officials concluded it had not improved things enough to justify its fees. In Baltimore and Philadelphia, Edison has taken over hard-luck schools, produced improvements in student performance, and won acceptance.

In 2001, a board installed by the state to oversee the woeful 6,000-student Chester-Upland district brought in Edison. The past year was especially turbulent.

In March, an elementary school that was infested with rats and contaminated with asbestos shut its doors after it was declared unfit for students. Hundreds of youngsters finished the year at another school.

Edison also found itself in a perpetual three-way power struggle with the board and the central administration. The contract did not allow Edison to hire or fire teachers. The company also did not control the district's finances and had limited ability to shift resources to places that needed them.

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