An established Indianapolis charter school network is looking for a better deal.
Christel House schools are applying for new charters — even though its current charters are not expiring, nor are its schools in bad standing academically or financially.
Instead, the schools’ leader says the network wants to save money by switching oversight agencies, estimating it could cut administrative fees by about $63,000.
“Loosely, we’re estimating the savings to be worth about the cost of a teacher within our network,” Christel House Head of Schools Carey Dahncke told Chalkbeat. “It’s going to allow us to hire one additional teacher without having to generate any additional revenue.”
To realize those savings, Christel House Academy South, Christel House Academy West, and the Christel House DORS (which stands for “Drop-Out Recovery School”) campuses would be removing themselves from the purview of the mayor’s office — widely recognized nationally and locally as a high-quality authorizer — to the less-experienced state charter school board.
It’s an unusual type of authorizer shopping, but the National Association of Charter School Authorizers says avoiding “excessive” fees is considered nationally to be a good reason to look elsewhere. Usually, authorizer shopping is seen as skirting accountability when new or failing schools seek authorizers with lower standards.
So far, Christel House appears to be the only charter school network to switch to the state agency solely based on its lower fee. Schools choose their authorizers based on a number of factors besides fees, including the oversight agency’s requirements and standards, mission, or proximity. Asking for new charters puts Christel House in the months-long process of compiling detailed applications and going through hearings before finding out whether their new charters will be granted.
But in some ways, the network’s move could signal a bigger shift in Indiana’s charter landscape, highlighting the growth of the state’s charter school board and a significant change in the way the mayor sponsors charter schools. And it could set off more critical look at how authorizers are funded.
For years, the mayor’s office did not charge an authorizing fee to charter schools, absorbing the cost of overseeing them through the city budget.
But in 2016, the mayor’s Office of Education Innovation began charging a fee to its charter schools, in part to be able to manage its growing portfolio of schools. It takes 1 percent of each school’s per-pupil state funding, and it waives the fee for schools in their first three years of operations.
“This was intended to allow the Office of Education Innovation to become a self-funding entity and provide more flexibility and autonomy around resource allocation,” Brian Dickey, the mayor’s interim charter schools director, wrote in an email. He added that he has not heard from other charter schools that the fee is overly burdensome.
According to its 2016-17 annual report, the mayor’s charter office collected about $860,000 in authorizing fees from its schools. The fee more than covers the salaries of its seven employees, so the city no longer has to budget additional dollars to oversee charter schools.
In Indiana, authorizers can charge a fee of up to 3 percent of state funding. The authorizing fee can only go toward fulfilling authorizing obligations. Oversight agencies are responsible for vetting charter school applications, holding schools accountable for their performance, and monitoring their finances.
But Dahncke raised concerns about an authorizer depending on schools’ fees as its only source of funding.
“If you’ve got an entity that is supposed to be holding schools accountable, and they’re in the position where they’re not renewing a school, it cuts their budget,” Dahncke said, “which is the only source of income. It just doesn’t seem like the right kind of policy.”
In addition to the authorizing fee, Dahncke said the mayor’s office also requires each of Christel House’s schools to pay about $9,000 for site visits. That brings Christel House’s annual administrative fees associated with the office’s oversight to about $108,000, he said.
Across its campuses, Christel House serves more than 1,500 students, targeting students from low-income families in underserved areas and adults who dropped out of high school. It launched its first school in 2002, the inaugural year of charter schools in Indiana, and its charter applications show the network operates with an annual budget of about $17 million.
Christel House’s relationship with the mayor’s office helped the network find a location for its west side campus, which opened in 2014, Dahncke said. It will be a transition to form a new relationship with the state charter school board, but he said he doesn’t expect that to cause a “monumental shift” in the schools.
With a move to the Indiana Charter School Board, Dahncke estimates Christel House can reduce authorizing fees to about $45,000. The state agency uses its own in-house team for site visits, eliminating that cost.
In addition, the state charter school board charges a lower authorizing fee — 0.5 percent for the upcoming school year. The board has cut the fee down three times since 2012, when it was assessing a 2.5 percent fee, said executive director James Betley.
That’s because the agency receives an annual allocation in the state budget, he said, which amounted this year to $750,000.
Betley said he hasn’t heard from other charter schools interested in coming to the authorizer solely because of the fee, like Christel House did. And he cautioned that the fee could change in years to come.
In that case, Christel House would continue to seek the lowest-cost options, even if it meant switching authorizers again, Dahncke said.
“Nobody learns to read or do math as a result of paying that fee directly,” he said. “We’re a little bit indifferent to the ‘who’ authorizes us as long as we have a positive relationship and feel we’ll be judged in a meaningful way.”