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The city wants to turn around 11 failing schools, and there's $66 million in federal money available to do it. But there's a hitch. The Obama administration wants most of the principals removed first -- a stipulation some local leaders aren't happy about.

"It's pretty ridiculous to institute a nationwide, one-size-fits-all education policy. So those bureaucrats in Washington have really forced the city's hand. So the only way the city can get these funds, $2 million a year for several years, is to replace the principal," said City Councilman David Greenfield.

Out of the 11 schools, the city is only removing one principal -- Carlston Gray from William E. Grady Technical High School in Brooklyn. Three others were exempt from the rule, since they've been on the job less than three years.

Since two of the 11 principals quit, that leaves five who the DOE says are all good leaders. The Obama administration rejected requests to let them stay on the job, so the city is getting around the rule by giving four of them promotions. As a result, they'll get a brand new title of "Mentor Principal" and work with a second principal, who is being hired to make it appear that there has been a leadership change.

The final principal is simply being moved, from one of the failing schools to another.

Schools Chancellor Joel Klein on Thursday told NY1 he thought the federal rule was too restrictive, so he figured a way around them.

"I think that solves the problem of one, making sure we are in compliance with federal law but at the same time, making sure that we have good people in the building," Klein said.

Geraldine Maione, principal of Franklin Roosevelt High School, was one of the leaders who officials say was doing a good job.

"The DOE agreed that this was an outstanding principal -- her reviews were great. The school was on an upswing. The idea we are going to remove an outstanding principal at a school that needs help is absurd," Greenfield said.

In order for Maione's school to get $6 million, she had to go. Luckily, she isn't going very far -- just over to Grady Tech, one of the other schools on the list.

The U.S. Department of Education would not comment on the city's plans to get around their rules. The funds have already been given to the state to dole out, so it's ultimately up to officials in Albany to approve the plan.

State officials tell NY1 they are working with the city.