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City, nonprofits at odds over legal liability at 14 restart schools

A dispute over who would take the fall if something goes wrong inside struggling schools is delaying a federally funded turnaround effort that had already gotten off to a slow start.

As part of its application to secure school improvement grants, the city agreed to hand over operations to independent education organizations at 14 of its lowest-performing schools through a process called “restart.” The Department of Education selected six nonprofits to take over the reins at those schools, awarding them more than $17 million altogether.

But four months after the groups started working in the schools, the money remains in the city coffers.

The sticking point is that city lawyers want the groups, known as educational partnership organizations, to cover their own legal costs for any litigation brought by teachers, principals, staff or students in the schools they’re working in.

The proposition is controversial because the groups are replacing an authority figure — the superintendent — who does not actually carry any of the liability costs. The DOE is effectively an insurance carrier for superintendents, so when a lawsuit challenges, for example, a teacher rating that the superintendent signed off on, the DOE bears the legal costs.

The EPOs said they assumed they would have the same protection against legal liability, known as indemnification, because the state’s regulations mandate that they adopt all of the roles and responsibilities of each school’s superintendent. But according to several EPO directors, the city’s initial contract language treats them like vendors providing services to the schools, not managing everything from hiring to budgeting to discipline.

“It’s been several months of frustration over what we see as a fairly straightforward issue,” said a program director from one of the EPOs. “We feel we should be covered to the same extent that a superintendent would be covered in the case of a lawsuit.”

“You’re asking us to be superintendents in these schools and that’s a very complicated role to play,” added the director, who wanted to remain anonymous because he wasn’t authorized to speak about the negotiations.

Doug Elmer, director of Diplomas Now, which is working at Sheepshead Bay High School and Newtown High School, said the absence of signed contracts wouldn’t inhibit work being done in the schools. Diplomas Now has managed to stay afloat financially with money from the Investing in Inovation fund, Elmer said. At both Sheepshead Bay and Newtown, they’ve added 9th grade academies, hired more than a dozen consultants and extended day schedules.

But Elmer acknowledged that the lack of a contract could soon have an effect. Sheepshead Bay principal Reesa Levy has announced she is retiring at the end of the month and, as a restart school, the new EPO should have the authority to replace her. Without the contract in place, Elmer said, that role is still reserved for the current superintendent. Elmer said Diplomas Now is working closely with the current superintendent, Aimee Horowitz, to evaluate candidates, but would prefer not to hire a new principal until the contract is in writing.

“We’d feel a little more comfortable if there’s a contract signed,” said Elmer.

Of the four federally mandated improvement strategies, the city saw the restart model as a relatively safe political bet earlier this year because it did not require immediate staff firings and therefore could be used without sign-off from the teachers union.

DOE officials declined to comment about difficulties in implementing restart, but the rollout has drawn fire since it was first announced in August.

Ernest Logan, president of the Council of School Supervisors and Administrators, which represents principals, immediately expressed doubt about the plans, saying that the city was distancing itself from struggling schools at a time when it should be dedicating more energy to them. Logan reiterated that sentiment earlier this month in response to the city’s decision to close more than two dozen struggling schools:

The Bloomberg administration needs to take more responsibility, not less, for schools that are not doing well, rather than turning them over to private entities like EPOs or closing them and washing their hands of a deep-rooted problem that it has been unsuccessful in remedying.

The bumpy transition in the restart schools comes even as the DOE is supposed to submit plans to overhaul another 10 struggling schools to the state by the end of the month. Those plans will have to be approved by the state education department before they can be implemented.

Last month, New York State Board of Regents Chancellor Merryl Tisch indicated that she’s not happy with the city’s turnaround plan in at least one restart school. After visiting Automotive High School, a restart school that she referred to as a ‘warehouse’ for needy students, Tisch said she had observed little evidence of improvement.

“These contracts haven’t been signed yet and the people aren’t in place,” Tisch told GothamSchools last month. “I find it to be very troubling.”

“It was an obligation to get this money and I will not be happy to spend good money after bad,” Tisch said.

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