Ethics questions at two Charlotte-area sites highlight charter school tensions

This week two separate efforts to save struggling Mecklenburg County charter schools ran into ethical questions about the management companies trying to fix their problems.

On one level it’s an odd coincidence. Thunderbird Prep in Cornelius has turned to a consultant whose history in South Carolina sparked an ethics commission investigation there. Aristotle Prep in Charlotte has mustered a group of heavy-hitters in North Carolina’s school choice scene whose connections are so entwined that the state has sought advice from its own ethics panel.

Both schools are part of the boom-and-bust charter school scene playing out in North Carolina – most intensely in the Charlotte region. They raise questions about how the state can best encourage choice and competition while protecting students and taxpayers.

For that reason, the dramas playing out at the two schools matter to citizens across the state.

“It’s one thing to talk about more options, but we have to make sure these options are quality,” said Darrell Allison, who heads North Carolina’s main school choice advocacy group and is a founder of the new charter management company that hopes to take charge at Aristotle.

The Charlotte region has been at the epicenter of North Carolina’s charter school boom, with more new launches and forced closings than any other part of the state. Even the two small schools in question, with fewer than 200 students each, are linked to a network of national and even global organizations that invest in or do business with publicly funded charter schools.

The struggles of Aristotle and Thunderbird highlight some of the core tensions in the school choice movement.

1. Market competition cuts two ways.

Charter proponents say letting families vote with their feet encourages innovation and improves all public education, as school districts are forced to improve or lose students. That has played out locally, as Charlotte-Mecklenburg Schools expands academic options to compete.

Strong demand for established charter schools in and around Charlotte has encouraged would-be operators and state officials to target the region for new schools. But the increasing competition has made life tough for several start-ups, which must compete not only for students but for faculty and school leaders.

Thunderbird, which opened in 2014 and had only 160 students last school year, is a stone’s throw from Lake Norman Charter School, which has been around for almost 20 years and has 1,600 students and a long waiting list. Because public money for charter schools is tied to enrollment, a slump can start a downward spiral as the school struggles to cover its costs. And when a charter school closes the public impact is bigger than when a mom-and-pop business fails.

2. Bureaucracy has an upside.

Critics hammer CMS for employing thousands of non-classroom employees, from academic support staff to large departments that handle payroll, purchasing, computers, human resources, transportation and other non-educational duties. But if a new magnet school opens with low enrollment or the district hires a weak principal, there’s plenty of support to get the school stabilized.

On the other hand, each independent board that oversees a charter school has to find school leaders who can wear all those hats. Some schools address that by opening as part of a charter chain that provides management and academic support, such as the for-profit Charter Schools USA or National Heritage Academies.

Others go in search of outside assistance after they get into academic and/or financial trouble. Aristotle is asking for a change in its charter that would allow a newly created management company to take over operations.

Veritas Charter School Service, whose CEO is under investigation by the South Carolina Ethics Commission for her operation of a Spartanburg charter school, is only the latest in a string of vendors Thunderbird’s leaders have paid to help run the school.

Like a traditional education bureaucracy, a charter management company or consultant takes a slice of the public money that might otherwise go to classrooms.

3. Public money comes with strings.

Charter schools are often billed as offering freedom from the rules that can hamstring traditional schools. While North Carolina’s charter schools do have greater flexibility on such issues as hiring, firing and setting school calendars, the reality is they must follow most of the same regulations as any other school getting state and federal money.

For instance, charter schools must administer state exams and get state letter grades. For a school that caters to at-risk students and/or locates in an impoverished area, that can mean a D or F that impedes marketing – and ultimately can lead to forced closure. Persistently low test scores are part of the problem at Aristotle, which opened in 2013.

Charter schools are also subject to North Carolina’s open meeting and public records laws. That means problems that might be overlooked or resolved quietly at private schools get a public airing – appropriate since they’re spending public money, but challenging when families spooked by those reports can look elsewhere.

4. Regulators and operators can be awfully cozy.

Charter-friendly lawmakers want to make sure the people who authorize and oversee those schools are supportive and knowledgeable. That translates to a lot of connections and overlap between the folks who scrutinize and those being scrutinized.

North Carolina’s last charter school director left to work for a virtual charter school in the state. He was replaced last summer by Dave Machado, who was hired from Lincoln Charter School. The Charter School Advisory Board, which does most of the deep-dive work before making recommendations to the state Board of Education, is made up mostly of current and former charter school leaders.

Even within that group, there’s tension over how high the bar for charter approval should be set and when the state should pull the plug on existing schools. Acting on recommendations from the staff and advisory board, the state has forced three longstanding Charlotte charter schools to close in the last two years.

Both Thunderbird and Aristotle are under extra state scrutiny because of their problems. Despite that, Machado said he was unaware of the South Carolina complaints against the latest Thunderbird consultant until he received repeated emails from the public and queries from the Observer.

The proposal to save Aristotle that came before the Board of Education this week was so tangled that the board delayed voting until it can get an opinion from North Carolina’s Ethics Commission. It centers around Tony Helton, who is a Charter School Advisory Board member and CEO of Team CFA, a foundation that has provided advice and financial support to Aristotle from the beginning.

He’s also CEO of the newly formed Achievement for All Children, which is seeking a contract to run Aristotle in exchange for 5 percent to 10 percent of its revenue. That group has no track record to examine, nor was any other company invited to bid for the job.

“I’m uncomfortable from a business perspective. I’m uncomfortable from an ethical perspective,” said Gregory Alcorn, the state Board of Education member who represents the Charlotte region.

5. Buildings remain a hurdle.

Counties pay for the buildings that house district schools. Charter schools must pay for theirs out of operating money and/or outside funding.

When all goes well, that means children get a public education at less cost to county taxpayers. But the reality of finding a suitable building, especially in Mecklenburg’s costly real estate market, means many new charter schools open in temporary facilities and struggle to land a permanent home.

Aristotle, which spent its first four years renting classrooms in an uptown Charlotte church, is moving into the building that used to house Mountain Island Day School. Students will be picked up and dropped off at the old site and ride a bus nine miles to the new one.

Thunderbird bought a former Montessori building that floods when heavy rain falls, leading to parent complaints about mold and rodent infestation. The building has been sold twice, with the charter school making lease payments, while the drainage problems remain despite costly repairs.

Ann Doss Helms: 704-358-5033, @anndosshelms