By Michael Meenan

Every year, city students receive report cards on their school performances. Since last year, city schools were graded as well. But at a public forum on the Upper East Side Wednesday, community members questioned the policy’s effectiveness.

Last fall, about two-thirds of city schools brought home “As” and “Bs,” but 16 schools that received “Ds” and “Fs” were ordered shut down and restructured. Meanwhile, principals at “A” schools stood to get bonuses.

Schools Chancellor Joel Klein and his supporters said the system gives schools accountability.

"We think it's an important part of a moral commitment to hold everybody responsible for student learning," said Deputy Chancellor Chris Cerf.

Most of the forum’s speakers, however, were against the school-grading system.

"If the majority of black and Latino students aren't learning, the system isn't working. And we cannot blame poverty," said Esmeralda Simmons of Medgar Evers College.

Critics said schools need to be graded on more than annual standardized math and reading tests.

"Lots of subjects not tested are going to be neglected because teachers are going to get bonuses, principals are going to get bonuses based only on reading and math scores," said Diane Ravitch of NYU’s Steinhardt School of Education.

The teachers’ union wants each school to receive four overall grades, including one for safety.

One state lawmaker said schools need to be evaluated but Mayor Michael Bloomberg should not be the only one coming up with the criteria.

"When the legislation comes up for reauthorization for mayoral control in 2009, you're going to see a lot of State Assembly members and State Senators from New York City saying we didn't get it right the first time," said Manhattan Democratic Senator Liz Krueger.

School officials said they are listening to the input about how to improve the school report card system, but that schools are still going to get one letter grade – “A” to “F” - to measure their performance.