Edison Schools submits pay schedule to district

Monday, Aug. 12, 2002 | 10:55 a.m.

Edison Schools Inc., which owes the Clark County School District $7.7 in philanthropic funds for the seven campuses it manages, has submitted a payment schedule to the district for approval, officials said this morning.

The proposed schedule of payments calls for Edison to deliver funds on a quarterly basis, beginning next month, district officials said.

Gloria Sizemore, director of the district's budget department, said this morning she was "optimistic" that the payments would be delivered as scheduled. The private school management company still has one payment left to make for the 2001-02 school year, which ended in June. That check is expected within weeks, Sizemore said.

"I'm not sure what's going on with Edison, and I don't know how serious their problems are," Sizemore said. "My job is the business of the Clark County School District, and frankly, that's the only business I'm concerned about."

Edison officials, who were not immediately available for comment this morning, have said the company will make good on its pledge to the school district.

The deal awaits approval from Walt Rulffes, deputy superintendent of operations for the district, and the Clark County School Board.

When Edison signed its contract with the district last year to run seven at-risk campuses, the New York-based company promised to raise $10.5 million in philanthropic funds for the schools over five years. When the 2001-02 school year ended in June, Edison had yet to make the scheduled payment of $2.2 million.

A $1 million check from a nonprofit foundation, on behalf of Edison, was delivered at the end of June. School district officials agreed to deduct the remaining $1 million from the payments Edison receives for managing the schools.

Rulffes expressed frustration with the language of the original Edison contract, which did not detail how -- or when -- the philanthropic payments would be made. The promise of the $10.5 million is what swayed school district officials to support the hiring of the private management company, Rulffes said.

Edison manages about 133 schools nationwide, and will begin operating 20 more in Philadelphia this fall. Each school follows a preset curriculum, which includes intensive reading programs and a longer class day.

Edison has been in a fiscal tailspin for several months, with its stock plunging 98 percent to a share price this morning of 43 cents. Edison was rebuked by the Securities and Exchange Commission for its accounting practices.

The company counted $40 million in expected profits from the Clark County School District,even through Edison was only handling $10 million of the funds. The remaining $30 million was paid out directly by the school district in maintenance, transportation and salaries.