IPS Ends Deal With Charter Schools USA, Creating Uncertainty For Takeover Schools

This story was updated Thursday, Nov. 21, 2019 at 10:20 p.m.

Indianapolis Public Schools Board voted unanimously Thursday to not renew a contract with the for-profit operator of one of its first innovation partnerships.

Emma Donna Elementary School was opened by the Florida-based Charter Schools USA in 2015 in partnership with IPS. The company also operates Emma Donnan Middle School as part of a state-mandated takeover. The two schools created a K-to-8 southside campus where students were taught by the private company’s teachers.

When the partnership was approved, it signaled a drastic change in the relationship between the two organizations. In 2011, the State Board of Education took control of Emma Donnan Middle School and three other IPS high schools due to chronic academic failure. Charter Schools USA was hired to turn around the middle school and Thomas Carr Howe and Emmerich Manual high schools.

The state’s decision set off bitter fighting at the time, pitting IPS against CSUSA and state education leaders.

IPS Board Commissioner Diane Arnold was on the board when the takeovers occurred. Then in 2015, Arnold voted to approve the innovation partnership with CSUSA. She said it seemed reasonable, given CSUSA was in control of the middle school. The company hoped it could improve academic achievement by creating a K-8 school that students could potentially attend up until high school.

But Thursday, Arnold said time had run out. The five-year innovation agreement between IPS and CSUSA was up for renewal. The school’s academic achievements weren’t enough to keep working with the company, she said.

“I think it was the other issues that came up. The leadership. The drastic teacher turnover rates and some of the other issues, like not getting information from them,” Arnold said. “I don’t think it was a mistake (to approve in 2015). We gave it a chance.”

No one from Charter Schools USA or its partners attended the board meeting. IPS plans to keep the school open. The district will explain the next steps for Emma Donnan families at community meetings in December.

IPS set up a website with information about Emma Donnan: www.myips.org/about-us/emma-donnan-process-update/

Next month, IPS plans to formally ask the State Board of Education to return Emma Donnan Middle School to the district in June 2020 when the state takeover expires.

The below story was published Tuesday, Nov. 19, 2019:

IPS Wants Ties Cut With Emma Donnan Operator -- Future Of Howe, Manual High Schools More Uncertain

Indianapolis Public Schools leaders do not want district commissioners to renew its management contract with the for-profit company running Emma Donnan Elementary School. They also want to request the state return Emma Donnan Middle School back to the district after its state-sanctioned takeover ends next year.

Tuesday IPS Superintendent Aleesia Johnson cited academic and financial concerns among reasons she wants to cut ties with the private company and says she wants to find a locally-based operator to run the K-6 and 7-8 schools as innovation schools. 

The private company is Florida-based Charter Schools USA, or CSUSA, and it also runs former IPS high schools Thomas Carr Howe and Emmerich Manual under a state takeover contract. If the IPS Board approves the request not to continue innovation network status of Emma Donnan Elementary School with CSUSA, that could impact the future stability of Howe and Manual as well.

Charters for those schools sought by a CSUSA partner have not yet been approved, and it’s not yet known who will run them or if they will remain open when state intervention ends after the 2019-20 academic year.

The IPS Board will vote on Johnson's plan to not renew the contract Thursday. A nonrenewal notice to CSUSA is already written. 

All of this comes just days before a public hearing Monday on proposed charter school applications for Donnan, Howe and Manual. The hearing is 5:30 p.m. at Manual. The State Charter School Board is set to consider granting charters to a partner of CSUSA next month.

The three schools were taken over by the state in 2012 for chronic academic failure as part of a larger, state-wide intervention overseen by the State Board of Education. The state hired CSUSA to turnaround Donnan, Howe and Manual and manage each through June 2020.

Two years ago Noble Education Initiative was contracted by CSUSA to manage the schools. Noble Education Initiative, or NEI, is a Florida-based nonprofit started by Sherry Hage, the former chief academic officer of CSUSA and wife of CSUSA CEO John Hage. Other NEI employees also formerly worked for CSUSA.

Earlier this year, the state board approved a panel recommendation for CSUSA to seek charters for each of the schools to operate them free of state intervention after the takeover contracts end. A nonprofit organizer and NEI applied for the charters. 

But if the IPS Board does not renew the Emma Donnan Elementary School innovation partnership, and the State Board of Education agrees to return Emma Donnan Middle School to the district, it could jeopardize NEI’s proposal for Howe and Manual high schools to become public charter schools.

IPS leaders have remained tight-lipped on whether they believe NEI can legally operate charter schools in the Howe and Manual buildings. State law allows the buildings, following the end of state intervention, to be turned over to a charter organizer in a sale for $1. In the past, Johnson said outstanding bonds on the buildings and related IRS regulations could prevent this from happening. 

The charter applications for the two high schools reference the issue and the possibility IPS could partner with the nonprofit organization.

On Tuesday Johnson said the district may comment on the issue next week, pending the IPS Board decision Thursday.

“Us making this recommendation (about Donnan) certainly kind of indirectly or demonstrates that partnership is not likely,” Johnson said about Howe and Manual.

IPS set up a website with information about the recommendation: www.myips.org/about-us/emma-donnan-process-update/

Colleen Reynolds, a CSUSA spokeswoman, described the company as “shocked and dismayed by the disingenuous actions taken today by IPS to attempt to hurt the students and staff at Emma Donnan.”

Reynolds, in an email, said IPS has a political motive not to renew the contract. The alleged motive was not described in the statement.

“While we have been working hard to bring Emma Donnan students to a place where they can be successful, it appears that IPS has been planning to disrupt this success all along,” Reynolds wrote. “IPS clearly has decided that parents do not deserve high-quality educational options while their own schools are in decline. It’s no wonder they want to bring back high performing students and they are willing to disrupt students’ and teachers’ lives for political gain.”

Document: Read CSUSA's full statement

Reynolds says CSUSA is confident the State Board of Education will not return the middle school to IPS based on the academic improvements during the takeover. Last year the school earned a C rating on the state’s A-F scale for the first time in nearly a dozen years of F grades..

Yet a review of the school by IPS points to data that Johnson says, shows the partnership is not working out in the best interest of students. 

That includes, a decline in enrollment, from 631 students in 2016-17 to around 435 students this year. A decline in enrollment is a cause for financial instability, according to a report presented to the IPS school board. Schools are funded based on the number of students enrolled. 

Teacher retention at Donnan is also flaged. According to IPS, there is a 10 percent retention rate among teachers for the past three years. 

It remains to be seen who the State Board of Education will side with IPS or Charter Schools USA. A majority of a seven-member taskforce recommended the schools remain with NEI and the state board agreed. The state board’s recommendation for CSUSA to seek a charter for Emma Donnan was conditional on the renewal of the IPS innovation agreement.

“When the State Board of Education transitioned Emma Donnan Middle School out of intervention status, the Board prioritized local autonomy and deferred to the existing agreement between Indianapolis Public Schools and Charter Schools USA,” Molly Craft, State Board spokesperson, said. “Following IPS’s announcement to non-renew the innovation agreement, the board will now revisit the evidence and data gathered throughout the comprehensive community engagement process so Board members may weigh options.”

The state board is expected to take up the issue at its December 4 meeting. Board member Byron Ernest, a former Manual High School principal, works for Noble Education Initiative. 

The Past And Future

In 2015 Jon Hage, the CSUSA CEO, and former IPS Superintendent Lewis Ferebee used a new law to open the K-6 Emma Donnan Elementary School in the Emma Donnan Middle School building to create a campus for students in kindergarten to 8th grade. The contract for the school was for five years and ended in June 2020. 

This was also the start of what is known as IPS innovation schools -- a school fully managed by an independent organization yet ultimate oversight is with the district board.

The Emma Donnan K-8 campus was part of Hage’s long-held plan to create a feeding system for students to be instructed under the company’s curriculum from kindergarten through high school graduation. Under this plan, students would matriculate from Donnan after 8th grade and then enroll at the nearby Manual High School, then also run by CSUSA.

At the time, the agreement between the company and the district drew strong support from the State Board of Education. Only one IPS Board member, former commissioner Gayle Cosby, voted against the plan. 

Then a year later, more board members questioned the progress at Emma Donnan. 

In 2018, IPS released a high school reconfiguration plan that resulted in the closure of three high shcools. The report also suggested closing Howe and Manual high schools if the state returned the schools to the district.

Superintendent Johnson, who was not the district leader when the plan was made, said the district wants to reconsider that stance and have a broad community discussion.

In March, the State Board of Education directed CSUSA to seek charters to independently run the schools when state takeover status ends in mid-2020. Instead, a new nonprofit organization called ReThink Forward Indiana are seeking charters for each school. If the charters are granted, Noble Education Initiative will operate the schools for ReThink Forward.

The applications filed with the Indiana Charter School Board propose dramatic enrollment growth at the schools in the next five years or less.

• Donnan would more than double its current enrollment of around 300 students to 657 by 2022-23.
• The eastside Howe would expand to a K-12 school and more than double enrollment to 970 students by 2021-2022 (currently, the school is grades 7-12 with around 600 students).
• Manual would remain a 9-12 school, according to the application, but increase enrollment by about 200 students to 812 students.

The Indiana Charter School Board is scheduled to vote on the charter applications Dec. 13.

Correction: The article misstated the business relationship between Charter Schools USA and Noble Education Initiative. Noble Education Initiative is a nonprofit corporation and is not owned by Charter Schools USA.

Contact WFYI education reporter Eric Weddle at eweddle@wfyi.org or call (317) 614-0470. Follow on Twitter: @ericweddle.