The Project School

Bank foreclosing on former charter school property.” Indianapolis Business Journal (IN), 2/25/2013

Old National Bank is suing the operator of a charter school that closed last summer in Indianapolis, claiming it failed to pay off the $1.8 million balance on its mortgage.

The Project School in August lost a court battleto stay open after Mayor Greg Ballard revoked the school’s charter due to poor test scores and financial issues...

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“Ballard moves to shut down The Project School.” Indianapolis Business Journal (IN), 7/17/2012

It looks like there will be no back to school at The Project School, a charter school just northeast of downtown.

Indianapolis Mayor Greg Ballard announced Tuesday evening that he intends to revoke the charter that gives The Project School the authority to operate. Ballard cited poor test scores and “recently discovered financial problems.”

The four-year-old school, which is publicly funded, has never seen more than 30 percent of its students pass both the math and reading portions of the state standardized ISTEP test...

A notice of revocation sent to The Project School paints an ugly picture of the school's finances. It claims the school has run a deficit in each of the last three years and now has nearly $5.3 million in debt. The notice also states that The Project School delayed paying its staff this month by one week because it had so little cash on hand.

The notice of revocation also cited a report by the Indiana State Board of Accounts, which found that The Project School had improperly used more than $63,500 in federal facilities and planning grant money to pay salaries and operational expenses...

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Indianapolis charter schools (student dumping)

“IPS superintendent calls for state investigation into charter schools.” FOX59 (IN), 10/24/2011

Indianapolis Public Schools Superintendent Eugene G. White called for a state investigation Monday.  White called for the state to investigate what he calls an illegal charter schools practice that will cost his district $500,000 in state aid this year.

In a letter to State Superintendent of Public Instruction Dr. Tony Bennett, White claims that charter schools are intentionally waiting until after the states average daily membership date to release special needs, homeless and other difficult to place students back to IPS, thereby keeping state aid for the students, while shouldering IPS with the responsibility to educate them...

White said 72 children have come back to IPS because they were homeless and could not be transported to charter schools or the charter school was unequipped to handle their special disabilities or they faced disciplinary expulsion...

White said IPS staff videotaped interviews with returning students and parents about their decisions to leave charter schools and those tapes will be made available to state officials and Mayor Greg Ballard, who sponsors the schools, and Ball State University, which oversees the system.

White said the practice violates state and federal laws and is asking for investigations of 10 charter schools in particular...

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Indiana charter schools (low teacher salaries)

CHARTER SCHOOL SALARIES LOWER / For some, appeal of mission compensates for discrepancy; April 24, 2011; Journal Gazette (Ft. Wayne, IN) 

Allen County charter school teachers made $21,000 less on average than their regular public school counterparts in 2010, according to a Journal Gazette analysis.

The average public school teacher salary in Northwest Allen County Schools, Southwest Allen County Schools and Fort Wayne Community Schools was $49,987, while the average teacher salary in Fort Wayne’s three charter schools was $28,584…

According to a 2010 study by Vanderbilt University, charter schools tend to have higher teacher turnover rates than traditional schools. They also tend to have less-experienced, and therefore lower-paid, teachers.

Locally, teachers at FWCS had 14 years of experience on average, compared to five years or less at the city’s charter schools. Those numbers are from the 2008-09 school year, the latest available on the Indiana Department of Education’s website…

The Vanderbilt study, which used data from the National Center for Education Statistics 2003-04 Schools and Staffing Survey, found that 47 percent of charter teachers who left their schools on their own accord did so because they were frustrated by their working conditions.

Western Michigan University professor Gary Miron, who evaluated charter school pay scales and attrition rates in six states, said it’s possible charter school teachers use their charter school experience as a steppingstone to move to public school districts where they earn higher salaries and benefits.

Simnick and other charter school advocates, however, argue that relatively high turnover rates might reflect the fact that charter school leaders are empowered to dismiss poor teachers…

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Indiana charter schools (real estate profiteering concerns)

CHARTER SCHOOLS AND VULTURES; April 18, 2011; The Journal Gazette 

When the Texas Board of Education reviewed the application for a charter school to be operated by Imagine Schools Inc., board member David Bradley had a question for company CFO Barry Sharp.

"So are you in the real estate business or the charter (school) business?" Bradley asked.

A great question. It's one the Allen County Property Tax Assessment Board of Appeals is asking, as well. Based on an Indiana Supreme Court decision from December, the board is reviewing the property tax exemption for the Imagine MASTer Academy in Fort Wayne.

In a review of the school's complex real estate arrangements, I came across a fascinating observation by Brent Van Alfen, who has advised charter schools on financing. He warns of the relationship between education management organizations like Imagine Schools Inc. and real estate investment trusts:

"There are many of these REIT/(education management organization) partnerships that remind me of a couple of vultures feeding off of an emaciated carcass."

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A TAXING TALE / COUNTY SCRUTINIZES CHARTER SCHOOL PROPERTY TAXEXEMPTION; April 17, 2011; Fort Wayne Journal Gazette (IN) 

The news about charter schools, their owners, and the money they make goes back to December to the state Supreme Court. In reversing a decision by the Indiana Tax Court, the justices ruled that a property owner doesn’t automatically qualify for a tax exemption even if property is used for a charitable or exempt purpose.

From that one decision, some charter school books are being opened in Fort Wayne. Taxpayers can learn where some of their tax dollars are going, and a lot of them leave the state and end up at a company boasting of attractive profits from a “reliable cash flow.”

A company is summoned. Based on that Supreme Court decision and a January memorandum from the Indiana Department of Local Government Finance, Allen County officials summoned JERIT CS Fund LLC, the real estate investment trust listed as owner of the Wells Street campus of the Imagine schools, to defend its property tax exemption…

The tangle of leases and subleases, for-profit management organizations, charter school boards and real estate investors involved in some of the state’s existing charter schools begs for transparency before more tax dollars start flowing out of state.

Statewide, a lot of money is spent. Taxpayers will spend more than $3.2 million in rent this year on just four Indiana charter schools. Most of the dollars are flowing to a Kansas City, Mo., real estate company that earned $84.7 million in profits last year. And while the Allen County board is scrutinizing the property tax exemption sought for the company’s property on North Wells Street, Entertainment Properties Trust can’t lose: Its triple net lease agreement makes the tenant – Indiana taxpayers – responsible for maintenance costs, utilities, insurance and taxes…

JERIT (see box on cover) bought the Wells Street campus from Schoolhouse Finance for $5.5 million – $2.6 million more than North Wells Schoolhouse paid the YWCA for the property just two years earlier and about $1 million more than its assessed valuation…

Steve Zacher, president of The Zacher Company, a Fort Wayne commercial real estate company, said in an interview that there was no market explanation for the rent increases.

“It seems like someone is making a killing,” he said. “People can get a fair return on their investment, but somebody is getting a way-above-normal return.”

Bryant appeared at the PTABOA hearing alongside Fink. He characterized the complex real estate deals as a means of leveraging investments to acquire more charter school facilities…

Why the court ruling matters. The Indiana Supreme Court decision that prompted the review might well result in the exemption’s being denied. A denial would set up the first test of the ruling. It holds that a property owner – not just the tenant – must demonstrate the property is owned for a tax-exempt purpose.

That could be a tough case for Entertainment Properties Trust (see box on cover) to make. In a video annual report posted on its website, the publicly traded company boasts returns to shareholders of almost 40 percent, citing public charter schools as a promising sector in a portfolio of specialty real estate that also includes megaplex theaters, water parks, ski resorts and vineyards…

Ohio is a laboratory for Imagine Schools Inc. Imagine Schools Inc. has become the largest charter school operator in the nation, with 73 schools. Policy Matters Ohio, a nonpartisan think tank, examined Imagine Schools’ model in a comprehensive report released last May.

“Schoolhouse Finance spent a combined total of $6 million to buy five Ohio properties that now house four Imagine schools,” according to Piet van Lier, the author of the report.

“Within 22 months of the purchase date for each property, Schoolhouse Finance has sold all five properties to one of three REITs for a combined total of more than $26 million. According to state audits and lease documents obtained through public records requests, the non-profit charter schools run by Imagine continue to operate under long-term leases with Schoolhouse Finance, paying hundreds of thousands of dollars in rent each year to the Imagine subsidiary.”…

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Paramount School of Excellence

CHARTER SCHOOL CO-FOUNDER FACES NEW ALLEGATIONS - LAWSUIT ACCUSES DIMITRI SNOWDEN OF $45K IN FRAUD; March 17, 2011; WRTV Indianapolis 

INDIANAPOLIS -- The co-founder of an Indianapolis charter school is facing new allegations he defrauded schools and small business owners out of thousands of dollars. 6News' Kara Kenney reported Monday that Dimitri Snowden, the co-founder of the Indianapolis-based Paramount School of Excellence, was named in a lawsuit brought by the KIPP Academy, another Indianapolis charter school, which is sponsored by Mayor Greg Ballard and funded by public tax dollars. [More about KIPP Indianapolis HERE]

The school accuses Snowden and his information technology company, Ion360, of breach of contract, fraud and deception totaling $45,796 in damages.

The Paramount School of Excellence also contracted with Snowden's company, but fired him and is now seeking legal action…

Tom Wagenhauser with Indy IT Professionals said small-business owners should always ask for references, certifications and accreditations before doing business with a Web company…

Ion360 is listed as a member of the Indianapolis Chamber of Commerce. The chamber refused to comment on Snowden's membership due to the ongoing lawsuit.

According to the lawsuit brought by KIPP, Ion360 pressured the school to purchase products and services it did not need and could not afford and failed to provide the promised "responsive service and rapid resolution" to technology issues and problems.

It's unclear whether KIPP Charter Academy investigated Snowden prior to hiring him…

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Flanner House Higher Learning Center

CHARTER SCHOOLS BOARD VOTES TO REVOKE FLANNER HOUSE HIGHER LEARNING CENTER'S CHARTER; October 21, 2005; Indianapolis Mayor’s Office press release (IN)

INDIANAPOLIS - The Indianapolis Charter Schools Board today voted to revoke the Flanner House Higher Learning Center's charter due to numerous problems the school has experienced over the past two years.

The Charter Schools Office first flagged these problems during the 2003-04 school year, and detailed them in the 2004 Charter School Accountability Report of Mayor-Sponsored Charter Schools. Problems also were cited in a recent audit by the Indiana State Board of Accounts.

The revocation was issued today and will become effective as soon as all students transition out of the school, but no later than December 23, 2005. Reasons for the revocation were detailed in a notice sent to the school on September 27. They include:

· Failure to report enrollment. The school failed to accurately report average daily membership for the 2003-04 and 2004-05 school years in accordance with state law.

· Failure to report student attendance records. The school routinely failed to maintain and report accurate attendance records, in accordance with state law.

· Graduating students who haven't met requirements. Student transcripts show that many students who received diplomas in the last two years did not meet the graduation requirements set out in the school's charter or Indiana law, typically because they either did not have enough credits or had not passed the appropriate courses.

· Poor test scores. In both years of operation, most students failed to successfully complete the required standardized test (Northwest Evaluation Association Measures of Academic Progress) in the fall and spring. Some of those who successfully completed the test actually did worse on the spring test than they did on the fall test and lost ground against both state and national norms in grades and subjects tested in both the 2003-04 and 2004-05 school years.

· Lack of certified teachers. In the 2004-05 school year, the school employed only four licensed teachers at the school, which is less than the number of teachers the school's charter requires and less than necessary to adequately staff the school.

· Failure to test students. The school failed to administer the ninth grade Indiana Statewide Testing for Educational Progress Plus ("ISTEP+") examination to any students enrolled in the ninth grade in 2004-05, as required by state law.

· Debt. The school has a debt of $142,076.44 and must forgo more than $600,000 in state money because the school could not account for the students listed in the 2003-04 and 2004-05 enrollment reports…

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Fountain Square Academy

CITY TO CLOSE FOUNTAIN SQUARE CHARTER SCHOOL; March 18, 2011; Indianapolis Business Journal (IN) 

Indianapolis Mayor Greg Ballard will force the Fountain Square Academy, a charter middle and high school, to close at the end of the next school year, but plans to work with the school’s board of directors to launch a new school in the same neighborhood.

The decision, announced Friday morning at a press conference, marks the first time Ballard has chosen to shut down a charter school. It is also the first time a charter school in Indiana will be shut down primarily for academic reasons.

Ballard also gave a shorter-than-normal renewal to one other school, KIPP Indianapolis, 1740 E. 30th St., which in recent years also has had poor academic performance… [More about KIPP Indianapolis College Preparatory HERE] 

Ballard also suspended a decision on one other school, Fall Creek Academy, to allow city officials to review student scores from the state-standardized ISTEP test taken earlier this month. If those scores continue a recent growth trend, Ballard said he would “be happy” to renew the school’s charter…

It’s been five years since a mayor-sponsored charter school has been forced to shut down. In 2005, Mayor Bart Peterson decided to close Flanner House Higher Learning Center, citing poor academic performance, too few teachers, inflated enrollment figures and generally poor management.

Fall Creek Academy and Fountain Square Academy are both managed by Indianapolis-based GEO Foundation…

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Indiana charter school cluster (three schools)

LOCAL CHARTER SCHOOLS CITED BY INDIANA STATE BOARD OF ACCOUNTS; March 31, 2011; The Times of Northwest Indiana (Munster, IN)

The Indiana State Board of Accounts has released reports on three local charter schools, citing examples of poor record-keeping and money management.

Reports were released in mid-March on the 21st Century Charter School of Gary, Charter School of the Dunes in Gary and the East Chicago Urban Enterprise Academy. All three reports covered the period of July 1, 2008, to June 30, 2010.

The educational management company for Charter School of the Dunes and the East Chicago Urban Enterprise Academy is Chicago-based American Quality Schools. The management company for 21st Century Charter is Indianapolis-based GEO Foundations.

Paul Joyce, deputy state examiner, characterized the problems in all three reports as an overall lack of internal control procedures established by the charter school boards and the management company for the schools. He said they are either not following the controls in place or don't have controls to follow…

With the expansion of charter schools across the state, Joyce said the Indiana State Board of Accounts workload has increased dramatically. He said if the Indiana Legislature approves the current language for charter schools, board of accounts officials hope to get the authority to establish internal control policies and procedures for charter schools to meet minimum standards…

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Indiana charter schools (poor performance)

ISTEP RESULTS: CHARTER SCHOOLS FAILING TO MEASURE UP? February 14, 2011; Chesterton Tribune (Northwest Indiana) 

As Indiana forges ahead with a plan that could make it the most charter school friendly state in the country, some school officials are pointing to testing results that they say show that charter schools don’t always make the grade.

Duneland Superintendent Dirk Baer cited a statewide ranking of ISTEP scores that found that some of the lowest results among third graders statewide were from charter schools.

“What are we really accomplishing by siphoning off the funding for public schools if that’s their performance level?” Baer said. “To me it makes no logic.”

Indiana State Teachers Association President Nate Schnellenberger offered different statistics: Of the top 100 performing schools on ISTEP in all grade levels, only one was a charter school. And of the 50 worst ISTEP scores, 31 came from charter schools.

“The idea that charter schools are some panacea ... simply is not true,” he said.

Independently, the Chesterton Tribune reviewed charter school ISTEP scores from the latest round of testing last spring. Among the various grade levels, 60 to 75 percent of charter schools’ results were below state average in both the English/language arts and math portions of ISTEP test…

A proposal moving forward in the Indiana Legislature would set the stage for an “unfettered expansion” of charter schools in Indiana, Schnellenberger said. The bill, HB 1002, would allow more sponsors of charter schools, including mayors of second class cities and certain private colleges and universities…

Schnellenberger said ISTA’s position is that at a time when funding for existing public schools is diminishing, focusing on charter schools is the wrong way to go.

“To me, it’s more about privatizing public education than anything else,” he said.

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