PROVIDENCE, R.I. (WPRI) – It was billed as the “first labor-management educational management organization in the nation,” winning praise from U.S. Education Secretary Arne Duncan.

But three years later, United Providence (UP!) is on the chopping block.

Outgoing school Superintendent Dr. Susan Lusi said Tuesday federal budget cuts have forced the district to eliminate the taxpayer-supported nonprofit that was created to oversee Carl G. Lauro Elementary School, Gilbert Stuart Middle School and Dr. Jorge Alvarez High School, three of the city’s lowest-performing schools.

“Three years ago I did not have a crystal ball and I did not foresee the full financial picture that we now live in,” Lusi said.

The decision to slash UP! is the latest blow to a district that has already had to put off technology upgrades in schools across the city as well as a promise to provide more bus passes to high school students in the face of Mayor Jorge Elorza’s decision to level fund the city’s appropriation – $124.9 million – to the school department for a sixth consecutive year. The overall projected school budget for the fiscal year that begins July 1 is $353.5 million.

Providence’s schools have seen a steady stream of increased state aid since the 2010 passage of the state education funding formula – including another $7 million for the upcoming fiscal year – but Lusi and several school board members have said those dollars aren’t keeping pace with the department’s rising annual fixed costs. The decision to do away with UP! was directly related to a projected $9.1 million in cuts in federal aid, Lusi said.

Lusi said the district also plans to allow a separate contract with Cambium/NAEP to expire. The city is also reducing the number of days reading and math coaches can work by 10, but it is not planning to eliminate any coaches. She said the district and the Providence Teachers Union are also exploring ways to generate cost savings in professional development.

The loss of UP! will likely come as a surprise to education stakeholders.

A 501(c)3 nonprofit education-management organization housed in the same building as the Providence Teachers Union, UP! was created in 2012 in response to an Obama administration policy requiring each state to put together a specific strategy for turning around its lowest-performing schools.

Federal officials gave districts four options for tackling the problem schools: turnaround, which meant replacing at least half of the staff; transformation, which included replacing the principal and extending the school day; school closure; and restart, which forced a school to reopen under a new operation – most commonly as a charter school.

The option chosen for three Providence schools – Lauro, Stuart and Alvarez – was a restart. But instead of bringing in an outside charter organization, the city established United Providence as a way of meeting federal standards without alienating the teachers’ union.

The initiative was praised by Duncan as well as Gov. Lincoln Chafee and former Mayor Angel Taveras, who hailed UP! as a national model for labor and management to work together to improve failing schools. The organization was funded with a $100,000 startup grant in early 2012 from the Rhode Island Foundation and received a three-year, $2.6 million contract from the city on the promise that it would improve school climate and implement rigorous reforms to turn around the low-performing schools. It also received a $100,000 legislative grant from the General Assembly.

“The unique, child-centered, approach United Providence is taking to maximize student achievement is particularly exciting because it can be proven successful then replicated throughout the city, the state, and elsewhere,” Senate President M. Teresa Paiva Weed said in 2012.

The plan to abandon UP! comes just as the organization was viewed to be hitting its stride following initial growing pains that included staff turnover and resistance from teachers in all of its schools.

The organization took steps to right the ship last year when it hired Denise Jenkins as its managing director. Jenkins, who came to the district after overseeing education grants at the Rhode Island Foundation, is credited with using her wealth of experience as a former school administrator and case worker to provide stable leadership of the nonprofit.

At an UP! board meeting on April 27, Jenkins and other officials from the organization said the suspension rate at Alvarez High School had plummeted to 3%, down from 21% at the same time in the 2013-14 school year. The group said suspensions were down and school culture was improving at Stuart Middle School. Chronic absenteeism was down significantly at Lauro Elementary School. Last week, Lauro first-grade teacher Diane Ciccarone was named Providence’s teacher of the year.

But while Lusi and union president Mariebth Reynolds-Calabro agreed that there have been significant “culture and climate changes” in each of the UP! schools, Lusi acknowledged the schools have been a “mixed picture academically.”

“We have not found the secret sauce to really see a steep improvement in student achievement,” Lusi said.

Lusi said she believes UP! was a success because it gave the school department an initial glimpse of what school autonomy can mean across the city. She said the district will continue to give more control to principals at individual schools in the coming years.

Reynolds-Calabro said she was disappointed with the decision to cut UP!, but indicated she believes teachers in the three schools will remain committed to improving student outcomes.

“Providence teachers are used to bumps in the road and this is another bump in the road,” she said.

Continue the discussion on FacebookDan McGowan ( ) covers politics, education and the city of Providence for Follow him on Facebook and Twitter: @danmcgowan