A Preliminary Report on the School District of Philadelphia’s School Closure Plan

Audit Date: February 12, 2013
Audit Categories
  • Other
Controller: Alan Butkovitz
Audit Tags
  • Children and Families,
  • Education,
  • School District

Executive Summary

For Immediate Release:
February 12, 2013

Contact: Harvey Rice

Controller Butkovitz Says School District’s Closure Plan Overstates Revenues
City Controller issues report on School District’s plan to close almost 40 schools

Report on the School District of Philadelphia’s School Closure Plan

PHILADELPHIA – City Controller Alan Butkovitz today released a report on the School District of Philadelphia’s school closure plan that indicates the District’s projected revenues and savings are overstated by millions of dollars.

The Controller’s report reviewed the School District’s plan to close almost 40 schools, which would generate $28 million from the sale of property over five years, as well as the additional annual savings of $28 million from the closure of the schools.

“The School District’s revenues and savings projections of these closed schools is somewhat misleading and based on a few tenuous assumptions,” said Butkovitz, at today’s City Council Committee on Education.

“It is unlikely that even under the best of conditions in the real estate market the District will sell 36 additional properties,” said Butkovitz. “It is unwise to count on a short-term cash infusion on either the revenue or the expenditure side.”

According to Butkovitz, the real estate market surrounding these schools suggests that many of these properties will remain vacant for years to come.

“Many of the decommissioned properties will remain vacant for at least five years,” said Butkovitz. “They will not generate revenue but rather they will accrue significant carrying costs.”

For most of the buildings on the School District’s proposed closure list, utilities costs represent between 20 and 50 percent of facilities expenses. This could cost the District about $5 million in the first two years after the closures, $3.5 million over the subsequent three years, and an additional $1.5 million annually for five years thereafter.

In addition to reviewing the costs projected by the School District, the Controller analyzed the impact of blight from the shuttered schools and found the total “Neighborhood Blight Effect” could be as much as $86 million. It is estimated that blight could decrease the average property value by almost $2,000.

“In communities still suffering major equity losses due to the global financial crisis and the long-term general disinvestment in many Philadelphia neighborhoods, this additional equity loss could prove devastating,” said Butkovitz.

As the Controller found in his 2011 Review of Vacant School Buildings, school buildings that remain vacant for long periods of time become magnets for drugs, crime, and neighborhood-endangering fires.

The Controller’s report on the School District’s closure plan also found that in one-third of the cases, students will be transferring from a school with a higher School Performance Index (SPI) to a school with a lower SPI. Students at Roosevelt, Carroll, Shaw and Pepper will be transferring to lower-performing schools at considerable distance from their homes.

“It’s questionable whether the School District’s closure plan is adequately linked to the District’s stated commitment to improving academic outcomes,” said Butkovitz. “Thousands of families may face significant obstacles created by the school transfers, some of which will mean that students will be forced to travel into unfamiliar neighborhoods to attend new schools.”