Charter Schools To Get City of Wilmington Bond Funding?

Filed in Delaware by on December 11, 2013

This is the proposal that is on the agenda for tomorrow’s City Council meeting — an authorization for the City to help with the financing of the MBNA buildings that are supposed to be converted to Charter Schools:

An Ordinance to Approve and Authorize the Financing of a Project for the Community Education Building Corp.; Making Certain Findings with Respect Thereto; Authorizing the Issuance of City of Wilmington Revenue Bonds and Authorizing Other Necessary Action. (1st & 2nd Reading)

Synopsis: This Ordinance is being presented by the Administration for Council’s review and approval. If approved, Council would be authorizing the City to assist the Community Education Building Corporation (CEBC) in converting the former MBNA Bracebridge IV Building into a facility to allow for the operation of up to four charter schools. Specifically, the Council would be authorizing the City to assist with financing through the City’s Revenue Bonds Series 2014 in an aggregate principal amount not to exceed $35 million. If approved, the City would assist the CEBC in refinancing an interim loan, financing a portion of renovations, funding a debt service reserve fund and paying costs associated with issuing the Bonds.

This is the First and Second Reading of this ordinance, which means it ought to go to a committee meeting for hearings. It means that there will be plenty of time for all parties to weigh in and talk to Councilmembers. But take a good look at this — Charter Schools that the City will have no control of and can’t ask for any accountability from are looking for financial help from the City. Even though City residents certainly are paying school taxes already and provide additional funding via the income taxes we pay to the state. Besides, I thought that these schools are meant to operate more cheaply that public schools — which apparently won’t be asked for here, since they are asking for Bond funds from the City to get started.

I absolutely oppose this. Absolutely. Unless someone can explain to me why this set of charters can’t get started with the usual funding mechanisms. And I want to know why funding schools we have no control over is more important than buckling down and doing the work to stabilize what we *do* control.

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  1. Kilroy's delaware | December 12, 2013
  1. pandora says:

    Rumor is… it was this mega charter that pushed for HB-165 (the new charter law!). Remember, that law now allows for minor capital funding. Ugh. Also remember, that if these charters receiving this taxpayer money go under the tax payer will lose their investment.

    And if the city of Wilmington has extra funds, may I suggest spending it on our crime problem. Priorities, people! And a mega charter school that isn’t answerable to the public – while using public money – isn’t a priority.

  2. cassandra_m says:

    What counts as “minor” funding, do you know?

  3. liberalgeek says:

    So the charter law allows for state funding? Is this in addition to the state funding?

    Which other private enterprises and non-profits are eligible for the city bond funding?

  4. pandora says:

    HB-165 was always and only about the money. Kavips pulled out the money quotes in June:

    (II) Minor capital improvements shall be funded in the same manner as the Vocational Technical School Districts.

    (l) Charter schools shall have the same access to conduit bond financing as any other non-profit organization, and no State or local government unit may impose any condition or restriction on a charter school’s approval solely because the applicant is a public charter school. It is the further intent that a charter school shall apply for conduit funding to issuers within the State of Delaware unless more favorable terms may be found elsewhere.

    (m) The Department of Education shall administer a performance fund for charter schools, to be known as the “Charter School Performance Fund”. The Department of Education shall establish threshold eligibility requirements for applicants desiring to apply for funding, which shall include but not be limited to a proven track record of success, as measured by a Performance Framework established by the charter school’s authorizer or comparable measures as defined by the Department. The Department of Education shall also establish criteria to evaluate applications for funding, which shall include but not be limited to the availability of supplemental funding from non-State sources at a ratio to be determined by the Department. The Department of Education shall prioritize those applications from applicants that have (a) developed high-quality plans for start-up or expansion or (b) serve high-need students, as defined by the Department. The fund shall be subject to appropriation and shall not exceed $5 million annually.

  5. pandora says:

    Operating expenses always followed the child from school to school, but capital financing did not. Now the law allows for charters to receive minor cap. This was HB-165′s goal all along.

    Also keep in mind that charters receive transportation funds (and they got to keep the surplus, while public schools had to return any unused funds. Is this still the case?). Charter students are all choice students and are the only choice students in the state to receive transportation.

  6. Mike O. says:

    Good catch, Cassandra.

    Remember Longwood Foundation owns the property, The deal always played up the idea of donating the building to “the schools” or to “the people of Wilmington” but it is in fact a gift to a private foundation. The charters are tenants, and Longwood retains significant control over the direction of the charters. The schools are in fact chartered to the State BOE. The city would be foolish to sign onto this. Remember the ceremony with the big red ribbon around the building? There was no talk of this bond issue then.

    Charters have access to state conduit financing, but Longwood does not. I’d like to hear the story of how wealthy Longwood came to the city’s door looking for a helping hand.

  7. cassandra_m says:

    That’s great context, Mike O, thank you!

    Usually, ordinances are posted to the City website as a pdf. This one seems to be missing. I sent an email asking if they’ll be posting that. Will provide a link to it as soon as it is up.

  8. John Kowalko says:

    Also keep in mind that charters receive transportation funds (and they got to keep the surplus, while public schools had to return any unused funds. Is this still the case?). Charter students are all choice students and are the only choice students in the state to receive transportation.

    “Still the case” as epilogue language is manipulated/presented each year to contravene existing code, that demands specific accounting of transportation funding (for all schools) and a return of all funds not used for transportation by all schools and charter schools. I have opposed this reinvention of existing code that has taken place for the last five years and will be offering legislation that disallows superseding existing code more than two years in a row (with epilogue language included in the budget bill). If the code needs to be changed than it should be repealed by law, not by exemptions slipped into the “Budget Bill”. Many of my colleagues promised that they would support this type of legislation if I did not attempt to amend the budget from the floor and I accepted their word as a reasonable compromise last June 30th. Now it is time to put up.
    John Kowalko

  9. Dana says:

    When I lived in New Castle County, the place was overflowing with private and parochial schools, and, even with as many as were there, many of them still had waiting lists. (My daughters went to Corpus Christi, which had a waiting list, and if we had stayed, my older daughter would have started at Padua, which also had a waiting list.) It seemed as though everyone who could possibly afford a private school sent their kids to private schools.

    And yet, with something like a third of the potential students removed from the county and state having to pay for their education, even though their parents were still being taxed for it, there’s apparently enough demand for the sort of “public-private” school that a charter academy is that someone seriously believes could draw enough students to make it worthwhile to open? What the heck is going on with your public schools?

  10. Steve Newton says:

    The other way to look at this comes from some additional rumors I picked up about two weeks ago. It seems that some among the elite supporting this mega-charter have started to get cold feet about the dead-certainty of their success. What happens to their credibility if one of the charters in the building turns out to be Pencader or Reach or Moyer all over again?

    So there are mumblings that some people are starting to make demands in order to create an atmosphere in which they could cite the failure of the community or the government to support them, and then walk away, saying (essentially): “See what a good deal you missed out on.”

    I think there is some recognition in the charter school movement that with the passage of HB 165 their influence has peaked. It is still huge, and it is still relevant, and they will still score victories in the years to come, but they no longer have quite the blank check they used to enjoy.

  11. Mike O. says:

    Dana, many of the parochial and other private schools now have declining enrollments, corresponding in part to the declining fortunes of the middle class,and the self-inflicted wounds of the Church. As a result there is new demand for publicly funded private schools (which is what charters are).

  12. big says:

    “And if the city of Wilmington has extra funds, may I suggest spending it on our crime problem”
    Wouldnt a school where the children have a better opportunity to learn and move forward in their education help stop the wave of crime in the city?

  13. liberalgeek says:

    Big – there is no evidence that that is what charter schools do.

    Plus, unlike lots of cities, Wilmington does not have a school district, so there is no public school budget in the city.

  14. Dana says:

    Mr O wrote:

    Dana, many of the parochial and other private schools now have declining enrollments

    We moved away in 2002, so my knowledge dates from then. At the time, there were waiting lists, but I guess that things have changed.

  15. Dana says:

    Mr Big wrote:

    Wouldnt a school where the children have a better opportunity to learn and move forward in their education help stop the wave of crime in the city?

    OK, conceding Mr Geek’s subsequent comment, what problems exist in the NCC schools that say that students don’t have a decent opportunity to learn and move forward?

  16. Mike O. says:

    “what problems exist in the NCC schools that say that students don’t have a decent opportunity to learn and move forward?”

    Poverty. Poverty and segregation.

  17. Mike Matthews says:

    Oh my. Oh my my my.

    Went to a County Council meeting last month. Looks like I may need to go to City Council tomorrow.

    This is very, very troubling.

  18. kavips says:

    Particularly when REACH is in the news today, as an example of what happens when no government entity is given the responsibility of watching over Charter Schools… Who today, can say the new Rodney Square school won’t screw up the heads of all its students… when all they have to do, is stroll down to the the Sheraton tonight where the parents of REACH are meeting, and see the damage done.

    REACH was started with good intentions too….

  19. Norinda says:

    Cost-Benefit and Economic Impact of a Mega City Charter School. What about a City Public School System? Would this Decline the Tax Base for the City as another ‘Non-Profit’ organization. Who are these Investors & Stakeholders?

  20. mediawatch says:

    I have it on good authority that at least two other new charters are signing (or have signed) leases on other buildings in downtown Wilmington. Neither site was previously used as a school, so both will likely need renovations prior to opening next fall. How will the city justify putting itself on the hook for up to $35 million to help renovate a building controlled indirectly by the heirs of the legendary Pierre S. du Pont and then turn a blind eye to operators of other charters who were not fortunate enough to know the secret handshake used by the directors of the Longwood Foundation?

  21. cassandra_m says:

    Wow. It *is* $35 million.

    WHEREAS, the Community Education Building Corp. (the “Borrower”), a
    qualified organization pursuant to Section 501(c)(3) of the Internal Revenue Code of 1986 and a Delaware non-stock corporation, has applied to the City for assistance in financing a project and related expenses (the “Project”) consisting of the: (a) refinancing of an interim loan from Capital One Bank, proceeds of which were used to renovate, equip, modernize and convert the Bracebridge IV building located at 1200 N. French Street in Wilmington, Delaware (the “Facility”) into (i) a facility to house and operate up to four charter schools dedicated to educational activities and (ii) parking spaces for building tenants and visitors; (b) financing a portion of the renovations of and improvements to the Facility; (c) funding a debt service reserve fund; and (d) paying the costs associated with issuing the Bonds (as defined herein);

  22. Dana says:

    Mr O wrote:

    “what problems exist in the NCC schools that say that students don’t have a decent opportunity to learn and move forward?”

    Poverty. Poverty and segregation.

    Thing is, those aren’t problems within the schools; those are problems from outside the schools.

  23. KilroysDelaware says:

    Are we talking a conduit or the City of Wilmington actually bearing the cost? I don’t know where the tax status of this building is! Longwood owns it an is leasing space to charters! That shouldn’t make it school tax exempt. Though not the topic here but surely there should be a concern if this building goes exempt on school taxes which will take money from school district building is located in.

    Isn’t one of Longwood’s board member a owner of a charter schools ;) . Isn’t one of the board members a son of a former governor who helps fund CSI ;) . Isn’t there a predominate local lawyer tied to the charter school movement capitalizing on charter schools ;) . Folks it is a no win! When the D’s and R’s that own Delaware are in bed with each other re: charter schools nothing can stop them and the further erosion of the foundation of traditional public schools.

    Where in the hell is Jea Street? This mega charter school is and downtown tomb the keep minorities locked up in a commercial building with no athletic fields and no outdoor playground. 5 charter schools in one building downtown!!!!!! How many school buses will choke traffic during rush hour! What about those children required to walk to school? Will their be crossing guards! What about the so-called de facto segregation? GET THIS ! where is the city money for preferential choice busing for city kids who don’t have soccer moms that can drive them to the school of their choice! What good is school choice or city kids to attend suburban schools of their choice if their parents don’t have reliable transportation?

    One thing for sure, which this city action we need the righteous civil rights leaders within to shut up about re-segregation! Why not fund a traditional high school in Wilmington? Bottom line is , someone is cashing in!

  24. Dana says:

    Mr O said that the problems with the NCC schools are poverty and segregation. Those are, of course, problems which are not under the schools’ control, but the conditions under which the students live outside of the schools.

    That said, aren’t the schools already places in which poverty isn’t such a problem? The schools all provide reduced price or free lunches for students from poor homes, and don’t most of them have a hot breakfast program as well? The schools have custodial staff to provide reasonably clean buildings, and the schools are all heated in the winter; they really ought to be better places to be than the homes of students living in poverty.

  25. Eve Buckley says:

    Yesterday Kilroy posted a helpful study of DE’s current charter landscape, drafted as a law schl course paper by Jn Kowlko III. That’s worth rdng at this juncture. Can the existing city public schls produce an impact statement for council suggesting how the mega-charter will affect the students they teach? Based on DE’s experience so far, there are two likely outcomes:

    1. Mega-charter will enroll current city public schl kids in well-marketed schls of inferior quality to the existing public schls (with less well remunerated, less experienced teachers). Students in the charter(s) will have reduced educational opportunity, and meanwhile existing schls will suffer revenue loss & decline as well. Charter investors may benefit. Not a worthwhile public investment.

    2. Mega-charter will enroll some current private schl students along with city public schl students who are highest-achieving and have strongest family support–a variety of mechanisms exist in DE to foster this. City schls will serve increasing concentrations of most-challenged students, becoming more troubled than they are now. Look for greater violence by the disenfranchised. Not a worthwhile public investment.

    Dana, in DE (remarkably!) charter schls CHOOSE whether or not to provide the meals that you refer to. This is supposed to change starting next fall–but many of the highly regarded charters have neglected to feed low-income kids thus far. So those children don’t enroll (of course)–and under-informed Delawareans marvel at the schls’ academic and disciplinary successes. The demographic discrepancies been our top charters and the district schls around them are stunning, and cry out for legal scrutiny. The non-discriminatory charters achieve ed. outcomes comparable to or worse than those at demographically similar public schls. But funding them is redundant, and many of the districts’ operational costs remain the same even as students trickle to the publicly funded alternatives. So the cost of this dual system is born in the district schl classrooms, and in support services & enrichment for their students (disproportionately poor and minority). Not a route to systemic public ed. improvement–yet very popular with an influential minority of beneficiaries (investors, some charter parents, and the politicians who cater to them).

  26. Eve Buckley says:

    Also note that there’s a useful cache of documents analyzing the short-sightedness of Newark Charter school’s expansion last year, available here:

    The demographic study in particular, at that home page, suggests important avenues for research into the likely impact of the proposed Wilm. buidling charters on public education in the city. City residents and their council reps. should have a clear sense of that before deciding whether to provide the requested public funds.

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