By MATTHEW HAAG / The Dallas Morning News
The Texas Education Agency last week approved the opening of a McKinney charter school run by a company that other states rejected over concern about its tax status.
The Texas board of education allowed the for-profit Imagine International Academy of North Texas to run the school even though state law allows only nonprofit organizations to open state-funded charter schools.
Imagine argued that it would use the nonprofit status of an affiliate charter school in Indiana.
State officials said the Texas attorney general reviewed the arrangement and determined that it was allowable before the school was approved.
But school officials in Florida and Nevada have raised questions about other Imagine schools, saying they have not proved they are nonprofit and that public money should not flow into for-profit hands. The company has opened dozens of schools in 13 states.
Multiple calls to the Imagine Schools Inc. headquarters in Arlington, Va., for comment were not returned.
In Florida, Imagine intended to open 15 schools.
But the company met heavy resistance from local and state education officials, and withdrew its applications. Florida education leaders questioned whether Imagine was a certified nonprofit or a business attempting to profit from public education money.
"They cannot prove to us that they are a nonprofit. They do not have a 501c3," said Tina Pinkoson, chairwoman of Florida's Alachua County Public Schools, where Imagine applied to open a charter school this year. "They say they can prove it, but we won't believe it until they show us."
The school district's attorney, Tom Wittmer, voiced similar reservations to the school board.
The structure of the school in McKinney, and another campus approved last week in Georgetown, is similar to that of the proposed schools in Florida. According to paperwork submitted to TEA, the charters will use Imagine Schools Inc. for "the opening and ongoing operation of the Academy."
That means Imagine Schools Inc. would receive 12.5 percent of the per-pupil state funding, which is about $750,000 from each of its Texas schools, according to the TEA.
The charters would also pay Imagine Schools Inc. monthly allowances, Julia Brady said. Ms. Brady was a founding parent of the McKinney campus and was later hired as school development director of Imagine International Academy of North Texas.
The amount of the monthly allowances has not been set in Texas, but in Alachua, Fla., Imagine Schools Inc. proposed receiving $3,000 a month for 20 years, plus 1 percent to 3 percent of the charter's revenue for up to 20 years.
In return, Imagine Schools Inc. would provide the two Texas charters everything from teachers to budgeting to human resources, the charter applications state.
Both the Texas charters will lease school space from Schoolhouse, a subsidiary of Imagine Schools Inc., Ms. Brady said.
She said the Imagine charter schools are paying for services they need.
"It's hard to find a vendor to lease something or provide loans to a new charter school," Ms. Brady said. "It's essentially a way for schools to tap into an existing company with a strong credit background."
Ms. Brady said the company is not unjustly siphoning public funds.
"I don't see it that way," she said. "Essentially, the local board has contracted with Imagine Schools to set up and start up the charter, paying them for services rendered."
Ken Berger, CEO of Charity Navigator, a nonprofit watchdog group, said the setup skirts the rules.
"The charter seems like a shell corporation created for the for-profit corporation," he said. "It looks like they found a way around regulations."
According to the Internal Revenue Service, Imagine Schools Inc. is not a certified nonprofit – or 501c3. Ms. Brady said the company is expecting to receive the status soon. The company applied for it in November 2005.
Mr. Berger said the process should take months, not years.
Mr. Berger said it's fine for nonprofits to contract with for-profit corporations. But when most of the contract appears to be made with the same company, the relationship becomes "questionable," he said.
"It seems like they are giving oversight duty to Imagine," he said. "It seems like the tables have turned and Imagine Schools are managing them. But it certainly sounds like a questionable arrangement."
Monday, July 06, 2009
Imagine, Inc. Charter Schools and Real Estate
The inherent fetidness of the charter school model is without parallel in the history of American schooling. As the economy continues to sink as a result of capitalist greed, our "leaders" continue to foist on the American people a scheme that epitomizes the corruption and reckless disregard that brought us the current Depression.