Schools as a business

Another excellent article from Denis Smith.  He hits the inherent conflict of interest between operating a business and doing what is right for the students.


http://www.plunderbund.com/2015/10/27/are-public-charter-schools-also-considered-businesses-mind-the-quotation-marks/


These charter schools are operated as personal fiefdoms.  This is another great example


"If people consider a school to be a business enterprise, inevitably the profit motive gets confused with the educational mission, which is what schools are supposed to be all about. The proliferation of for-profit national charter school chains has been a chief contributor toward the blurring of pedagogy and profit. And entities like Imagine and K12, a publicly traded company that is a big player in the virtual school field, only add to the growing perception that charter schools are first and foremost businesses and thus are all about money and privatization."


"Likewise, the nation is indebted to the Washington Supreme Court for its ability to teach us a civics lesson and, in the process, highlight a problem of democracy. When a board that is hand-picked by a private corporation and spends public funds to run what is called a “public” charter school that is a problem of democracy due to the absence of voter input – a violation of the democratic process.
We also should extend our thanks to the League of Women Voters for helping the Washington Supreme Court to understand that a school is not a business, but it nevertheless must be our business to ensure that schools are learning communities, not profit-centered enterprises, governed by citizens chosen in elections by qualified voters, not by corporations."

The wild west produces a judgment

Solution:  Eliminate the middle man.  Keep all of the rent!  Open a virtual school.  (It works, see K-12, Ohio Connections or ECOT)

Columbus Dispatch is getting on board.

 

$1 million judgment against charter school operator

By: Catherine Candisky

The Columbus Dispatch - January 21, 2015 01:00 PM

A federal judge in Missouri ordered Imagine Schools, one of the nation’s largest charter-school operators, to pay nearly $1 million for forcing a lucrative lease agreement on a school it operated.
Under the complex deal, Imagine Schools negotiated the pricey lease with SchoolHouse Finance and presented it to the school board of the Renaissance Academy for Math and Science for approval. Imagine Schools owns SchoolHouse Finance and directly benefited by the agreement.
“This clearly constituted self-dealing,” U.S. District Judge Judge Nanette K. Laughrey wrote in a blistering 29-page ruling.

Sound familiar? The Dispatch in October reported about a North Side charter school spending more than half of the tax dollars it receives on rent in a very similar lease deal with Imagine Schools and SchoolHouse Finance. The board of the Imagine Columbus Primary Academy asked Imagine to renegotiate the lease but that has not happened.

Other Ohio charter-school operators use similar lease deals, and while apparently legal, supporters and opponents complained that they wasted tax dollars and lawmakers pledged to take a look.
"Legislators who are working on charter school reforms should make prevention of these types of abuses a top priority," said ProgressOhio Executive Director Sandy Theis.

Charter schools are privately operated with public tax dollars and many contract with management companies to handle day-to-day operations.

ProgressOhio recommended placing a cap on state money used for rent, requiring the Ohio Board of Education to sign-off on leases, requring charter-school boards to have independent attorneys and financial officers and other changes.

In the Missouri case, the school board of the now-closed Kansas City school sued its former management company, claiming it had manipulated the board and failed to act in the school’s best interest. “While the Renaissance Board theoretically had authority to act independently on some limited issues, it was in fact a captive of Imagine Schools by both design and by operation,” Laughrey wrote. “While this changed over time with the assistance of the sponsor, the University of Missouri, intervention came too late to save the school, which operated consistently with too few expenditures for instruction and low student performance.”

Laughrey found no evidence that Imagine Schools discussed the market rate for similar leases with the Renaissance board or informed members that SchoolHouse calculated the rental rate based on a 12 percent return on investment regardless of the market rate. They also neglected to mention that the higher-than average rent would result in lower-than average expenditures on books, supplies and teacher salaries.

“For example, in 2007-2008, Renaissance spent 27.9 percent of its funds on instructional costs while the national average was 65.8 percent and Missouri was 64.6 percent,” the judge noted.
Laughrey also had some interesting findings about how Imagine gets board members to go along with these not-so-sweet deals. Imagine recruited inexperienced school board members and one who had received political contributions from the companies and had family members working there.

Another example of profits over students, what a profitable scam

Note the incestuous management team.  My prediction, another failed school but profits for the Charter company.  Not if, but when the failure will occur.  Do they really expect more students based on their track record?  Do they care? Self preservation is a powerful motivator.

 

New school board seeking lower lease payments, more money for kids

COLUMBUS — A scrappy new school board overseeing the Imagine Columbus Primary Academy wants to re-negotiate the school’s lease.
And what a lease it is: The Imagine academy pays an Imagine subsidiary $700,000 per year to rent a school with just 155 students. The rent consumes more than half of the struggling school’s annual budget, leaving little for classroom instruction.
And when a plumbing problem sent sewage flowing though classrooms on the first day of school, the tenant—not the landlord—was responsible for the repair.
Board Chair Melonia Bennett said she knows the five-year lease is valid. “But I’m kind of hoping that if we point out some of the issues – like the school might not be viable in five years because of how high our costs are – that at least the parties would be willing to discuss the issue.’’
Bennett made her comments at last week’s school board meeting where she convinced her fellow board members to form a subcommittee charged with trying to lower the rental payments and free up more money for teachers and kids.

• Hidden Video Available Online Here
• Copy of the Imagination Budget Online Here

As expected, Imagine representatives who attended the meeting appeared hostile to the idea, repeatedly advising the school to bring in more money by enrolling more students.
ProgressOhio Executive Director Brian Rothenberg, whose organization secretly videotaped the meeting, showed part of the tape at a Columbus news conference Tuesday and said he hopes it inspires other charter school boards to fight back, too.
“It’s clear that Gov. Kasich and the lawmakers won’t fix the system so I am calling on charter school board members to fight from within,” he said. “Shine a spot light on these abusive financial arrangements. Work to get money in the classrooms where it matters the most.”
Board members made the same point, arguing that the school’s low test scores could be raised with more interventions and more experienced teachers but low salaries lead to high teacher turnover. The school received an F on the latest state report card.
The Imagine academy is a charter school paid for with public money and operated by Imagine Schools Inc., a Virginia-based company.
In a 2010 report on Imagine Schools, the think tank, Policy Matters Ohio, found it has a poor record of performance in Ohio and a business model that includes elaborate real estate transactions, high management fees, overlapping business relationships, low spending on classroom instruction, and tight control of school finances and board relationships.
Four years later, the same troubling pattern is evident at the Columbus academy, Rothenberg said.
Until last year, the school’s building off of Morse Road housed another Imagine school but it was forced to close after a nine-year run of poor academic results. So Imagine opened a new elementary school with a new principal in the same building under a new name.
The school can hold 500 students but competition from other schools and low test scores has today’s enrollment about 155.
In addition to paying $700,000 to lease the building, the school pays Imagine about $10,000 per month in “indirect costs” it pays to Imagine for sponsor services, according to its balance statement. The money is to pay for lawyers and salaries for corporate and regional staff such as Jennifer Keller, director of Imagine’s Ohio regional team.
Keller is the sister of Amy Butte, Imagine Executive Vice President for Ohio and Indiana. Amy’s husband, Chris, is business manager of the Ohio Regional Team.
Keller attended the board meeting and defended the $700,000 per year lease.
“Until we start to get our enrollment up the lease is going to be a substantial cost. So we have to figure out, 1: How do we increase enrollment.” The more students the school has the more state money it collects – and the more it must pay in those “indirect’’ fees to Imagine.
Despite high turnover from teachers and staff and a principal who joined the school last February, there has been some consistency: Keller and Amy Butte served as the regional leaders for several leaders, including years when Imagine operated the school that eventually was forced to close.
Also attending the board meeting, and defending the lease, was Imagine attorney Amy Borman.