Charter school families find they have little say over company

By Emily Richmond

Friday, April 2, 2010 | 2:01 a.m.

On paper, charter schools are supposed to give parents more of a voice in their children’s education.

But families at Imagine in the Valle, one of two Clark County campuses operated by a private Virginia company, say they are finding it difficult to make themselves heard.

What makes charter schools attractive to some parents is that although they are funded by the state and get the same per-pupil funding as traditional public campuses, they enjoy greater leeway in areas such as instructional methods and staffing.

And supposedly, key decisions are made by school supporters — including parents and teachers — who sit on the school’s governing board.

Like most states, Nevada allows charter school organizers to hire for-profit management companies to help with day-to-day operations, provided the governing board remains in control.

But in the case of one company — Imagine Schools Inc. — parents say the expectation of local control is not being met.

Imagine runs two Clark County campuses — Imagine in the Valle in Durango Hills and Imagine 100 Academy of Excellence in North Las Vegas. And Valle’s parents are discovering just how much authority they’ve ceded to the company, and how little say they have over their school’s path.

One parent complains: “They have the power, they hold the strings.”

Nevada education officials have expressed reservations about the business model of Imagine Schools, which operates 71 campuses in 11 states and the District of Columbia.

The way Imagine got its foot in the door in Nevada is different from how charter schools normally are organized. Typically, a grass-roots committee of residents starts a charter school and manages it within the confines of the state-funded budget.

In the case of Imagine, the company typically recruits people to serve on its organizing committees. Then its executives handle the application, including hiring staff and securing facilities, with little input from the local governing board. Subsequently, day-to-day operations, including managing how the state funding is spent, rest almost entirely in the company’s hands.

For fiscal year 2009, the most recent year for which data are available, the Valle campus received $1.3 million in state funding. Of that, $706,000 — just over 54 percent — went to salary and benefits. Another $170,583 was paid to Imagine for its management services and $214,000 went to the company’s real estate affiliate for rent.

When the state announced it was cutting public education funding by 6.9 percent to help close a massive budget gap, parents at the Valle campus thought it would be a good time to review their pricey contract with Imagine, which is up for renewal.

But the company shows no intention of offering to shave costs. In fact, Imagine intends to move the 300-student Imagine School in the Valle from a YMCA building, where its lease has run out, to a more expensive stand-alone facility.

And if that weren’t enough, the increased rent will go directly into the pocket of the real estate arm of Imagine’s corporate parent.

“Academically, our kids are thriving, but we worry we’re not going to have a school if these shenanigans keep up,” said Lynette Cherry, whose triplets are second-graders.

The cautionary tale: Once the parents adopted Imagine’s proposal to form a charter school that it would operate, they have found themselves mostly helpless in controlling costs.

Nevada’s charter schools, like all other publicly funded campuses, face 6.9 percent reductions in state support. Valle and 100 Academy are locked into operating agreements with Imagine that guarantee the company 12 percent of all revenue, on top of the rent that must be paid to Schoolhouse LLC that handles Imagine’s real estate holdings.

The company also owns all of the school’s instructional supplies and materials, and it’s Imagine’s name on the property lease.

Nancy Hall, regional vice president of Imagine Schools, declined to comment about negotiations with the Valle board or the company’s contract.

Imagine has plans for two additional charter schools in Clark County, including one that could open in September if various state requirements are met.

The concerns of the Valle community are familiar refrains involving Imagine Schools. Similar complaints about exorbitant fees for management services, high rent and lack of local control by the governing board have surfaced at Imagine 100 Academy, as well as campuses in other states. Several governing boards have opted to break ties with the company.

The Valle campus, which opened in 2008, and its principal, Connie Jordan, have won high praise from parents who are pleased with the academic program. Marc Abelman, parent of two Valle students and a member of the governing board, said the school provides “a unique learning environment where the teachers really care.”

It’s the business side of the school that concerns parents, including the need to rent a facility after plans by Imagine to build a school stalled because of the recession.

The priority for the parents is making sure the school has a home in August, Abelman said.

Imagine, through its real estate affiliate, plans to lease Centennial Academy, a private school in northwest Las Vegas, for $35,000 a month.

Yet, Imagine is demanding $42,000 monthly from the shrinking budget to pay the rent. The $7,000 difference has yet to be explained, Abelman said.

It would be easier to walk away from what appears to be a less than ideal business deal if he didn’t believe the school was worth fighting for, Abelman said.

So this is the difficulty facing the governing board of the K-6 Valle school: Its management contract with Imagine leaves leasing arrangements up to the company. Balking at the lease puts the contract at risk and, without Imagine, it would be difficult for the board to find a replacement location or the requisite management services in time for the 2010-11 academic year.

State officials say such a management agreement that includes power over leases is intolerable because it gives the outside company too much control over the school’s fate. There’s nothing in state statute preventing such an agreement, which is hampering the state’s efforts to persuade Imagine management to bend.

As for the state’s cuts in public education, Abelman said the governing board will meet this month to discuss the potential effect on the Valle campus. So far, few details have been shared, and with Imagine controlling the bulk of the operating budget, the board is waiting for the company to take the lead.

Imagine Schools founder and President Dennis Bakke has long championed the philosophy that private industry has a role in public education. The company’s financial investment in its local programs, particularly 100 Academy, has been significant. A local spokesman said Imagine has forgiven about $1 million in debt (in administrative fees and rent) owed by the governing board to the company as part of its management fee, after the school’s revenue couldn’t meet costs.

But Bakke has also made clear that he considers the schools “belong” to Imagine, rather than the local governing board. In a 2008 interview with the Sun, he compared his company’s contract to a marriage, and said it is intentionally designed to make divorce difficult.

For now, the Valle board hasn’t broached the possibility of breaking up with Imagine because the priority has been securing a new facility, Abelman said.

“We are moving forward with Imagine because we don’t see any other option at this point if we want to keep our school,” Abelman said. “And we are determined to have a wonderful school next year.”