Taming the ‘Wild, Wild West’ of Ohio Charter Schools?

CSR Academy principal Kieli Ferguson stands in the front hall of the school's K-4 building where she would greet arriving students each morning. The charter school will not reopen in the fall.

By Mike Brown, mbrown.c4ad@gmail.com

About 270 children in grades K-8, nearly all African-American children from disadvantaged backgrounds, will need to find another school next year. Their charter school, CSR Academy, closed to students on May 27 after 11 years of operation near Findlay Market in Over-the-Rhine.

“A sad day,” said the principal, Kieli Ferguson, who would greet each arriving student by name and sent them home at the end of the day with a thumbs up.

“Our families would say their children receive love here,” said Ferguson. “That’s the culture we wanted to foster.”

A loving environment or not, CSR Academy may be the type of low-performing school that state legislators envisioned closing when they passed major charter school reform legislation in 2015, known as House Bill 2.

The bill passed “with the strong support of both parties and from charter school backers and opponents alike,” reported the Cleveland Plain Dealer.

“In House Bill 2, there is a strong emphasis on trimming the weeds out of the low performing part of the (charter school) sector,” said Aaron Churchill, Ohio Research Director at the Thomas B. Fordham Institute, a center-right organization providing educational research and an advocate for charter schools and charter school accountability in Ohio.

After nearly 20 years of charter schooling in Ohio, will House Bill 2 finally serve to hold the program to account and overcome the state’s reputation as the ‘Wild, Wild West’ of charter schools? And, in the future, can the General Assembly resist pressures to dilute the new standards?

In the 2014-15 school year alone, taxpayers contributed more than $1 billion to the charter school program: $939 million from state foundation funding based on student enrollment and $116 million in federal funds.

Opening an educational frontier

Following Minnesota’s lead in 1991, Ohio passed charter school legislation in 1997 to improve student achievement, broaden school choice options, and help promote educational reform in challenged urban school districts.

The state’s first charter schools, known as community schools by law, began operation in the 1998-99 school year when 15 charter schools enrolled 2,200 students. By 2014-15, 381 charter schools enrolled more than 120,000 students, the Ohio Department of Education reported in its annual report on charter schools.

“Once the charter fuse was lit in Dayton and Ohio’s other major cities, these schools exploded, much as has happened in other states that allowed relatively unfettered charter programs,”  the Fordham Institute reported in a 2010 book, “Ohio’s Education Reform Challenges: Lessons from the Frontlines,” by Fordham Institute employees at the time, Chester Finn, Terry Ryan, and Michael Lafferty.

Charter schools in Ohio are nonsectarian, public schools that receive state and federal funding like traditional public schools but, unlike traditional public schools, are not permitted to raise local funds through property or income taxes.

They operate independently of traditional public school districts and are exempt from many of the regulations governing traditional public schools. Admission is open, and enrollment is tuition-free.

A charter school is a nonprofit entity by law, but most school boards contract with for-profit or nonprofit charter school operators to manage daily operations. Operators, also known as operating or management companies, may operate networks of charter schools in multiple states.

Charter schools in Ohio have proportionately more students from poor families (74 percent) than traditional public schools (45 percent), according to a 2014 report  on Ohio charter schools by the Center for Research on Education Outcomes at Stanford University.

They enroll the same proportion of students with special needs (15 percent) and of English language learners (2 percent) as traditional public schools.

Most charter schools in Ohio (94 percent) are brick-and-mortar operations with an average enrollment of 330 students. The state’s 24 online schools, known as eSchools, enrolled 39,000 students in 2014-15.

Two eSchools–Educational Classroom of Tomorrow (ECOT) with 15,000 students and Ohio Virtual Academy with 11,000 students–are the largest charter schools in the state.

Charter schools have become part of the educational landscape. They account for about 7 percent of all public school students in the state and about 5 percent in the U.S., reported the National Center for Education Statistics. Nationally, they enjoy bipartisan support. President Obama, like President Clinton before him, champions charters.

Charter schooling in the Wild West

Ohio charter schools were beset by problems from the beginning, according to the Fordham Institute book, “Ohio’s Education Reform Challenges: Lessons from the Frontlines.”

Academic results were poor. Oversight and accountability were weak. Finances were mismanaged. Conflicts of interest were exploited for financial gain. Some schools wanted to avoid accountability. Others emphasized parental approval over academic performance. Some were overly dependent on the vision and leadership of a single dynamic individual. And there were instances of financially-motivated student expulsions, fraud, and personal enrichment.

Others alleged instances of wage theft, selective admissions practices, and lack of transparency around for-profit charter school operators.

“The charter movement has in many ways been the best argument against itself,” said state Sen. Jeff Jacobson, a Republican then representing the 6th District, in a 2008 interview for the Fordham Institute book.

Ohio auditor, Jim Petro, in a 2002 operational review of the state’s charter program, urged that charter schools be held accountable to students, parents, taxpayers, and the General Assembly. The review contained 109 recommendations.

“Although community school proponents advocate market forces through parent choice as the best method to measure accountability,” Petro’s review said, “market forces alone cannot provide Ohio taxpayers with assurance of the viability of their investments in community schools nor do market forces demonstrate community schools’ ability to meet the goals of their individual charters.”

Despite regular legislative changes to the charter school program during each session of the Ohio General Assembly since 1997, the legal framework to insure accountability was regarded as inadequate as recently as 2014, according to a spokesman for the National Association of Charter School Authorizers, which evaluates state laws governing the quality and oversight of charter schools, reported the Plain Dealer.

A sheriff for the frontier

Who should police charter schools? Trim low-performing weeds in the sector?

School boards ultimately have responsibility for the academic, financial, and operational performance of their charter schools. And the operating companies they often hire also have a substantial influence on school performance.

Even so, it is generally agreed that charter school sponsors, known as authorizers in other states, are the key party to enforce accountability.

A sponsor–typically a school district, a county educational service center, or a qualified nonprofit approved by the Ohio Department of Education–has the power to authorize the legal existence of a charter school by entering into a sponsorship contract with the school board. Without a sponsorship contract, a school cannot legally operate.

A sponsorship contract sets out the agreed-upon performance standards. The school’s performance against these standards bear on the sponsor’s decisions about whether to place a school on probation, suspend its operation, or terminate the contract. And at the end of the contract term, whether to renew the contract.

Sponsorship costs money to satisfy the sponsor’s contractual duties as well as the legal responsibilities to provide technical assistance, oversight, and monitoring, including taking steps to intervene in a school’s operations to ensure compliance with all legal mandates.

So a sponsorship contract also provides for a sponsorship fee to be paid by the school board to the sponsor. By law, the fee cannot exceed 3 percent of the state foundation payment to the school.

While sponsorship contracts are good in themselves, sponsors rarely closed schools that needed to be closed and often approved new schools that should never have started.

“The charter movement has in many ways been the best argument against itself.”

Former Republican State Sen. Jeff Jacobson of Dayton (2008)

Additionally, anyone that wanted to start a new charter school or any school board that wanted to avoid closure could go sponsor shopping, known as “sponsor hopping,” until they found a sponsor willing to back them.

And any nonprofit that wanted to become a sponsor could because ODE was required by law to approve each sponsor application that contained all necessary information, provided the sponsor met the basic statutory requirements.

House Bill 2 attempts to address these and related issues by creating incentives–both rewards and penalties–for sponsors to do the right thing, according to Churchill.

For starters, House Bill 2 repealed the virtually automatic approval of sponsor applications, and now permits ODE to approve or deny sponsor applications at its discretion.

Beginning with the 2015-2016 school year, ODE will evaluate sponsors annually based on academic performance, adherence to quality practices, and compliance with law.  “One third of a sponsor’s evaluation is based on the academic performance of sponsored schools in its portfolio,” according to Churchill.

The sponsorship authority of low-rated sponsors can be limited or even revoked, while ODE can grant highly-rated sponsors broader sponsorship authority.

Sponsors are increasingly conscientious of the academic performance of schools in their portfolio because it matters when it comes to state ratings, Churchill said.

Also, the legislation “puts guardrails around sponsor-hopping,” said Churchill.

The reforms are exemplary in the NASCA’s view. In the association’s most recent evaluation of state laws governing charter schools, Ohio ranked third best among 43 states.

CSR Academy and the sheriff

CSR Academy’s sponsor is Richland Academy based in Mansfield, Ohio.

Richland sponsors 10 charter schools enrolling more than 1,800 students in the state. All 10 sponsorship agreements are scheduled to expire June 30.

In January, Richland notified the governing boards of six schools, including the board of CSR Academy and two other local charter schools–Accelerated Achievement Academy of Cincinnati on West Court and Impact Academy Cincinnati on Melrose–that it would not renew the sponsorship agreements due to academic deficiencies through the 2013-14 school year.

Richland’s notice to CSR Academy cited the school’s poor academic performance when compared to similarly situated schools and its failure, despite ample time, to show significant progress warranting renewal.  

“We have been with the (CSR Academy as the sponsor) since 2010, and there has been a decline in academic performance since 2012. And it wasn’t improving,” said Marianne Cooper, Richland’s executive director and a 10-year veteran of the charter sector.

Book bags of K-4 students hang at CSR Academy during the last weeks of school.
Book bags of K-4 students hang at CSR Academy during the last weeks of school.

Richland’s decision “was a complete surprise,” said Dale Elifrits, a founding board member and current chairman of the CRS Academy school board. “Our reaction was disbelief.”

“It was no surprise,” said Cooper. “The board chose not to listen to us. Instead, they were listening to the management company.” The management company is Mangen & Associates, a for-profit charter school operator based in Dayton, which has managed CSR Academy’s day-to-day operations since it opened in 2005-2006. Mangen is also the school’s fiscal officer.

“We’ve been very comfortable (with Mangen),” said Elifrits.

The school board appealed to Richland, as permitted by law, but the sponsor rejected the appeal. Elifrits was disappointed the law does not allow an independent third-party to arbitrate the appeal.

“Our schools are not social service agencies,” said Cooper. “That’s wonderful if they can add that to the academic package. But the academic standings have to be first.”

After informal discussions with other potential sponsors, the board submitted an application to the Ohio Department of Education to serve as sponsor.

In the meantime, ODE published the school’s 2014-15 report card, which presents grades on a traditional A-F scale, where ‘A’ is excellent and ‘F’ is failing. (CSR Academy is formally known to ODE as Cincinnati Speech and Reading Intervention Center.)

CSR Academy’s performance index grade–which measures how well students did on state tests, rewarding schools that improved the performance of their highest- and lowest-rated students–dropped to an ‘F’ from a ‘D’ in the 2013-14 school year.

The school’s value-add grade–which measures whether students make more or less than a year of academic progress over a school year–improved to a ‘C’ (one year of growth in one year) from an ‘F.’

Its K-3 Literacy grade–which measures how well the school helped K-3 students whose reading scores were not-on-track to reach on-track status–was an ‘F.’  The statewide average of students moving from not-on-track to on-track represents the bottom of the ‘C’ range. Schools were not graded on K-3 Literacy in 2013-14.

Richland and the school board both believed ODE would sponsor the school. But in April the department rejected the application.

ODE’s response removed any doubt that CSR Academy would be able to contract with a new sponsor for the next school year, thus insuring the school would close on June 30.

“What more battles can we fight? We’ve lost the war basically,” said Elifrits.

A eulogy for what might have been

A few years ago, CSR Academy might have gotten another year to prove itself, said Cooper. “But those times are over,” she said. “The landscape has changed. It’s not the same world out there.”

Vernida Britton, a member of the CSR Academy board, seemed to capture the sentiment of fellow board members and staff when she said, “If we had a little more opportunity and time, no telling what we might have achieved.”

Ferguson, a school board employee, and her supervisor, Genesis Henderson, a Mangen employee, agree. Both came to the school at the start of the 2014-15 school year.

Henderson said she was hired “to fix what was broken.” Henderson, as “superintendent,” leads a team of six other Mangen employees. They manage four other charter schools operated by Mangen: two in Cincinnati–Madisonville SMART Elementary and Impact Academy Cincinnati, which will close June 30–one in Dayton and one in Toledo.

The biggest problem at CSR Academy in 2014-15 was the board’s teaching staff, according to Henderson. “They were not what we call highly qualified teachers.”

The other big problem was “monetary restraints” imposed by the operator that limited teacher salaries, according to Henderson. “It’s the principle of, ‘you get what you pay for.’”

Henderson and Ferguson believe they had turned the corner on problems at the school. Staff quality, staff turnover, and student performance had improved. They were confident that future report cards would show performance worthy of continued taxpayer funding.

However, in April, after receiving the non-renewal notice from ODE, the superintendent and the principal turned their attention from planning for the next academic year to notifying staff and parents that CSR Academy would close.

“The parents were upset and disappointed,” says Henderson. “They have seen the changes that Kieli (Ferguson) and the team have made over the last two years. It’s a family for them. They trust the school.”

CSR Academy conducted classes for grades K-4 at this facility on Central Parkway.
CSR Academy conducted classes for grades K-4 at this facility on Central Parkway.

Academic struggles of charter schools are often related to financial struggles, according to Churchill, but that does not seem to be the case for CSR Academy. As of June 30, 2014, the net assets were $455,000, driven largely by the net investment of $965,000 in its two school buildings, according to the school’s 2013-14 audit. In early May, Mangen’s projected results through June 30, 2016 indicated a cash balance of $174,000.

CSR Academy conducted classes for grades 5-8 in this building on Elm Street.
CSR Academy conducted classes for grades 5-8 in this building on Elm Street.

After June 30, CSR Academy will be closed following state procedures that require assurances from the sponsor about notifications, school records, disposition of assets, and payment of creditors.

Competition for the students from CSR Academy

“If these children are not being served,” said Cooper, “they should go back to a traditional public school or another school that will serve them.”

Cincinnati Public Schools and other charter schools have a lot of interest in serving these students.

CSR Academy received $1.96 million in state funding in the 2014-15 fiscal year, and Mangen forecast the school would receive more than $2 million in 2015-16. These state dollars and about $500,000 in federal grants will follow the students to the Ohio schools they attend in the fall.

CSR Academy provided two charter schools–Madisonville SMART Elementary (MSE) and Cincinnati College Preparatory Academy–an opportunity to market directly to parents at a recent awards event.  And MSE hosted the academy’s kindergarten graduation ceremony in May.

This social media post promotes the "private school setting" of Madisonville SMART Elementary, a public charter school.
This social media post promotes the “private school setting” of Madisonville SMART Elementary, a public charter school.

Ferguson estimated about 30 percent of the academy’s students will enroll at MSE, which she called a “sister school” in the SMART family of schools operated by Mangen. “Our families trust our judgment,” she said. ”And they know we work with the staff and the leadership team there (at MSE).”

“We are very grateful to Madisonville SMART Elementary School that we will be able to keep some of our families and students together,” said Ferguson, who said she might have an opportunity to join MSE staff next fall. “We are supporting and assisting parents in making the application to MSE.”

CPS is required by state law to bus students to charter schools located within the district, such as MSE. There is no charge to the charter schools or to the parents of charter school children for this service.

Ferguson and Henderson also met with parents on two separate occasions to inform them of their options including two neighborhood CPS schools in OTR: Hays-Porter Elementary and Rothenberg Preparatory Academy.  

According to a CPS analysis, these two CPS schools are the neighborhood schools for 28 percent of CSR Academy students.

[Click this link for a table comparing CSR Academy, Madisonville SMART Elementary, Cincinnati Colllege Preparatory Academy, Hays-Porter Elementary, and Rothenberg Preparatory Academy on various indicators published by ODE including enrollment, teacher salaries and experience, state report card grades, and per equivalent pupil expenditures for classroom instruction.]

CPS, which currently sponsors two charters schools, is preparing a postcard campaign encouraging parents of CSR Academy students to choose a CPS school, according to CPS director of public affairs Janet Walsh.

“I think we are obligated to try to get these kids back in CPS where they are going to receive a higher quality instruction and all the other services that we can render,” said Eve Bolton, a member of the CPS board, speaking at a board retreat on April 30.

CPS also has a clear financial motivation to recruit these students, according to Jennifer Wagner, the CPS treasurer/chief financial officer.

As Wagner explained, state funding for charter school students flows through the CPS budget. CPS receives state funding of nearly $4,000 for each student residing in the district, whether the student attends a CPS school or a charter school. However, charter school payments deducted from CPS amount to $7,100 per student, which results in a shortfall to CPS of $3,100 for each charter student. This equates to about $24 million per year in local dollars to support charter schools.

The shortfall arises because charter schools are entitled to 100 percent of the state’s per student allocation, while CPS is not. The CPS allocation is reduced by a local wealth equalization factor to reflect the district’s greater wealth relative to other districts in the state. Greater wealth indicates a greater capacity for local funding through taxes.

The annual shortfall is eliminated if a student leaves a charter school in the district to go to a CPS school at the start of a new school year. 

“Traditionally, when a charter school closes, we get about 50 percent of the kids back. The other 50 percent go to charters or other schools,” according to Wagner.

A new chapter?

If the new accountability standards hold, it is expected that more charter schools and some sponsors will be closed. But there is already an initiative afoot to dilute the standards.

Kathryn Mullen Upton, Fordham Institute’s VP for Sponsorship and Dayton Initiatives, anticipates more school closures in the future. Upton, who oversees the institute’s sponsorship portfolio of 11 Ohio charter schools, predicts more sponsors will refuse to renew contracts with low-performing schools because of the sponsor evaluation system in House Bill 2. With more non-renewals will come more school closures.

ODE is expected to close sponsors with low ratings, however, the first sponsor ratings under House Bill 2 will not be released until this fall.

Meanwhile, there is a legislative initiative for ODE to use a new measure of academic performance on state report cards and in sponsor evaluations.

Known as the “similar students measure,” it adjusts for student demographic factors like family income, parent education, ethnicity, English proficiency, and transiency and would be used in place of the value-added measure of academic progress.

The Plain Dealer reported that the “similar students measure” would make many charter schools and urban school districts look stronger than they do on state report cards, even to the point of lifting them over suburban districts that don’t face the same challenges.

ODE is studying the issue and is required to issue a report by December 1.

Next fall, the students of CSR Academy will find themselves in a different school building with new teachers, new routines, and new classmates. “Mrs. Ferguson,” as they called their school principal this year, will no longer greet them by name at the door or send them home at the end of the day with a thumbs up. For them, it will be a new chapter.