Officials plan to eliminate the long-ailing Philadelphia School District and restart from the ground up.

“What we do know through lots of history and evidence and practice is that the current structure doesn’t work,” explained School Reform Commission Chairman Pedro Ramos. “It’s not fiscally sustainable, and it doesn’t produce high-quality schools for all kids.”

Insolvency, poor academic achievement, and parents’ concerns over safety are primary reasons for the overhaul.

“If we don’t close these schools, and we just keep them up—and a lot of them have very low utilization—we’re blowing about $33 million,” explained the SRC’s Chief Recovery Officer Thomas Knudsen. “We can’t afford that.”

The current 2013 district budget shortfall is $218 million, which left unchecked is projected to grow to $1.1 billion by 2017.

Knudsen released the reorganization plan at an April 24 press conference. It would close 64 poorly performing schools over five years, starting with 40 schools next year, move thousands of students to charter schools, and replace the central district office with “achievement networks” that would compete to run schools and sign performance contracts.

Decentralized achievement networks would compete to manage groups of 25 schools according to performance contracts and would replace the central district office, which now runs 249 schools.

District staff would be reduced to 200 employees, down from 1,000 a few years ago, who would manage compliance, finance, accountability, strategic planning, and government relations.

Effective principals, district staff, charter organizations, universities, or some combination would apply to run achievement networks. Pilot networks will begin this fall, with a formal rollout in 2014.

This “breaking-apart of the district,” according to Knudsen, would give schools more autonomy, which “creates an entrepreneurial approach, a flexibility, a nimbleness, [and] a willingness to experiment.”

Charter-school expansion will be crucial to building up the achievement networks. Currently, about 25 percent of Philadelphia’s 200,000 students are enrolled in charters. Charter enrollment is expected to reach 40 percent by 2017.

Philadelphia Mayor Michael A. Nutter praised the plan in a separate news conference. “If we don’t take significant action, the system will collapse,” he said. “If you care about kids and if you care about education, if you care about the future of this city, that’s what we need to all grow up and deal with.”

The prospect of closing up to one quarter of the district’s schools angered Philadelphia Federation of Teachers president Jerry Jordan, who blasted the reorganization as a “cynical, right-wing, market-driven” scheme.

Helen Cunningham, who serves on the board of directors for the Philadelphia School Partnership, disagreed, hailing the SRC’s decision to close schools as “a new era for the nearly 200,000 students who attend Philadelphia’s public schools.” By directing resources to performing schools and closing the rest, “the SRC demonstrated its focus on the most important factor for children and families: school quality,” Cunningham said.

The PSP, a nonprofit that supports expanding capacity in high-performing schools, districts, charter, and private, has started raising funds in anticipation of the school closures. PSP executive director Mark Gleason praised the reorganization as “a very bold attempt to…start allocating resources in a way that puts student interests first.”

Absent approval of Mayor Nutter’s budget and union concessions, “we have enormous, enormous problems,” said Knudsen.

Schools would get an additional $90 million under the mayor’s budget. Savings from school closures would narrow the districts’ budget gap another $33 million. Additional savings would have to come from wage and benefits concessions from local unions, including the PFT.

But officials agree that the status quo is not an option.

The School District has reached a point where it will either achieve fiscal sustainability and succeed at providing safe, high-quality schools or it will become a mere social program,” Ramos said.

Other experts are cautiously optimistic. “This sounds pretty good on paper,” particularly the achievement networks, said Dr. Jake Haulk, president of the Allegheny Institute for Public Policy. “The devil will be in the implementation details,” including the role of unions and handling negotiations with them. “[The reorganization] will be tough to put into place,” according to Dr. Haulk. “But I say to the Reform Commission and the Mayor, ‘Go for it.’”