Erie School District asks for court-appointed overseer to help dissolve charter school
The Erie School District is seeking more court intervention as it tries to speed up the dissolution of the Erie Rise Leadership Academy Charter School and preserve whatever assets the publicly funded school has left.
Saying it has been unable to get financial information from Erie Rise, and growing more concerned about the shuttered charter school's fiscal management, the district is asking an Erie County judge to appoint a receiver to monitor the school's assets and wind up its financial affairs.
The Erie School Board rescinded Erie Rise's charter a year ago, citing chronic poor academic performance, and the school stopped operating at the end of June in a leased building at West 10th and Cascade streets.
But Erie Rise has not fully dissolved its finances and administrative functions, to the frustration of its chartering entity — the Erie School District.
"It does not appear that anyone is overseeing Erie Rise's actions to ensure it is satisfying generally accepted standards of fiscal management, as required under Pennsylvania law," a district lawyer said in a motion for an appointment of a receiver, filed Jan. 26.
Erie County Judge Marshall Piccinini has scheduled a case-management conference on the Erie Rise case for Friday. The motion for a receiver is expected to come up at that hearing.
School district first sued for Erie Rise's records
The school district's request for a receiver follows an earlier request — that a judge order Erie Rise to provide the district financial records and other information during the dissolution process.
The district said it needs the records to identify Erie Rise's remaining public funds and other assets, most of which are to revert to the district.
Taxpayers funded Erie Rise. The school opened in 2011 and offered gender-specific, extended-day classrooms to students living in poverty.
The Erie School District paid about $3.4 million a year to cover Erie Rise students' tuition in 2023.
Erie Rise had about 300 students in kindergarten through eighth grade in January 2023 and 213 when the school closed in June 2023.
On Dec. 9, the Erie School District filed its request that the judge order the disclosure of the Erie Rise records — a request known as a complaint in mandamus. A number of developments have occurred since then.
On Jan. 8, according to email correspondence attached to the district's motion for a receiver, the state Department of Education told the Erie School District that Erie Rise had not submitted its 2023 reports to the department, as required.
On Jan. 9, Erie Rise opposed the district's mandamus complaint in a response filed in court. Erie Rise argued that state law sets no firm timeline for its dissolution and said its financial audit will be done this spring.
On Jan. 17, Erie Rise's former landlord, the Greater Erie Community Action Committee, initiated legal action to sue Erie Rise for breach of contract, seeking $315,000 in past due and remaining rent.
District wants former state appointee named receiver
The Erie School District does not agree with GECAC's claim, according to the district's motion for a receiver. But the district said the reasons that warrant the appointment of a receiver include the $315,000 claim, Erie Rise's failure to provide financial records to the district and the school's failure to provide the reports to the Department of Education.
"To date, Erie Rise is severely deficient in numerous aspects of its legally mandated reporting and does not appear to be undertaking those steps necessary to complete its dissolution," the district's lawyer on the case, Michael Musone, said in the motion for a receiver.
"Additionally, Erie Rise has refused to provide the District with requested information, which the District is legally permitted — and in fact obligated — to receive and review."
The motion states that "a receiver would ensure that Erie Rise's affairs are wound up in a timely manner — including ensuring that GECAC's claims are addressed."
The Erie School District wants Judge Piccinini to appoint a familiar person as a receiver. The district is proposing Jim Ohrn, the former vice president and CFO of Custom Engineering in Erie.
Ohrn has extensive knowledge of public school finance in Pennsylvania. Then Gov. Tom Wolf appointed him to serve as the Erie School District's financial administrator in the final stage of the district's financial recovery. Ohrn's post ended when the state removed the district from financial watch in 2022.
U.S. Department of Education probe remains in background
However long Erie Rise takes to dissolve, another potential legal problem is looming.
On June 7, 23 days before it closed on June 30, agents with the investigative arm of the U.S. Department of Education searched the offices of Erie Rise and the Booker T. Washington Center, at East 18th and Holland streets in Erie.
Erie Rise had partnered with the Booker T. Washington Center as part of a federal grant program designed to provide additional services to students, particularly those who attend high-poverty and low-performing schools.
The U.S. Department of Education confirmed the searches when they occurred but has released no further information on them.
Contact Ed Palattella at epalattella@timesnews.com. Follow him on X @ETNpalattella.
This article originally appeared on Erie Times-News: Erie School District wants receivership for ex-Erie Rise charter school
