Subject: Kasich must crack down on outrageous charter school leases
From: Brian Rothenberg <[email-masked]>
To: john podesta <[email-masked]>
Date: Mon, 13 Oct 2014 17:44:28 +0000

[1]ProgressOhio

--------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE
                                        Contact: Brian Rothenberg, ProgressOhio
Phone: [2]614.207.3237
           Kasich must crack down on outrageous charter school leases

   Oct. 13, 2014

   COLUMBUS -- After taking millions in campaign contributions from charter
   schools and their allies, Gov. John Kasich's administration failed to
   crack down on exorbitant lease arrangements that Imagine-operated charters
   have with a subsidiary. This failure to act has allowed a system that
   siphons money from classrooms to an out-of-state charter operator with a
   shameful academic record, said ProgressOhio Executive Director Brian
   Rothenberg.

   "The person in Ohio best positioned to know about these leases and act to
   stop them is David Hansen, the man Gov. Kasich appointed to head our
   charter accountability agency,'' Rothenberg said. He noted that Hansen
   used to sit on the board of an Imagine school in Columbus and even
   supported its closure two years ago because of its consistently poor
   academic record.

   Since then, a new Imagine school has opened in the same building with a
   similar lease, and Kasich has tapped Hansen to lead Ohio's new Office of
   Quality School Choice and Funding. In his new role, paid with tax dollars,
   Hansen has said virtually nothing about Imagine.

   "Why won't Hansen and the governor even comment on this," Rothenberg
   asked. "Our `fiscally conservative' governor needs to explain why he's
   allowed all this money to be wasted and all these kids to be hurt. And his
   charter school watchdog needs to go.''

   Nearly all Imagine schools in Ohio fail in their basic mission to educate
   kids, Rothenberg said. All but one received a D or F on the Performance
   Index of the recent state report card. The lone C went to the Imagine
   Groveport Community School.

   Despite Imagine's poor performance, Imagine and a subsidiary, SchoolHouse
   Finance, collected at least $14.4 million in public money last year for
   their 17 Ohio schools, according to [1]records from the schools and state
   auditor. More than half -- $8.9 million - covered rent for long-term
   leases to SchoolHouse Finance. The $5.5 million balance went to pay
   "indirect costs'' to Imagine to provide certain management services.

   The arrangements leave little money for classroom instruction. School
   officials commonly complain that low teacher salaries cause the kind of
   rapid turnover that undermines continuity and student achievement.

   Last month, Imagine officials asked Ohio schools for statistics on teacher
   turnover. The response from Harrisburg Pike in Columbus: "17 out of 24
   left for public school jobs with an average pay raise of $12,000. Left for
   money only.'' The Woodbury Academy in Dayton lost 6 of its 12 teachers,
   while the Klepinger Road school in Dayton lost 6 of 34.

   According to a Sunday report in the Columbus Dispatch, five Imagine
   schools in Franklin County received a combined $20.2 million in the
   2012-13 school year. A quarter of that money -- more than $5.1 million --
   was spent on rent, all under long-term leases with SchoolHouse Finance. A
   sixth school, Imagine Integrity Academy, spent an astounding 81 percent of
   its $440,009 in state aid on rent.

   A feisty school board serving the Imagine Columbus Primary Academy (ICPA)
   is trying to convince Imagine to re-negotiate its $700,000 annual lease
   and said in a [2]memo that it "believes that this payment is too high to
   sustain an academically successful school.''

   A subcommittee formed to tackle the lease holds its first meeting at 6 pm
   Wednesday at the school, 4656 Heaton Road. The recommended national
   benchmark for rent payments is 15 percent of the annual budget, not the 38
   percent projected for the current school year. "Based on the 2014-15
   projections, this would amount to: $188,620.50,'' a move that would, slice
   the rent by about $511,380. "This is a realistic projection of what ICPA
   can afford to pay in rent per year,'' according to the memo.

   As the schools' operator, Imagine receives hefty fees to provide things
   such as human resources administration, purchasing, marketing and audit
   preparation, according to state audits.

   Although marketing clearly falls under the duties of Imagine, individual
   schools are reporting marketing expenses for July and August this year,
   the most current available. They include: Klepinger Road in Dayton
   ($76,369); Great Western in Columbus ($68,568); Groveport Community School
   in central Ohio ($17,343); Clay Avenue elementary and middle schools in
   Toledo ($16,409); and Woodbury Academy in Dayton ($15,486).

   State audits offer no explanation for the expenses.

   Rothenberg praised Yost for auditing the schools on time but questioned
   why he has not questioned the leases.

   "Everything you need to know about why these schools fail can be found in
   the audits,'' Rothenberg said. "The silence needs to stop.''

                                      -30-

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