School Committee calls for state investigation into financial pact between OSV entities, proposed city charter school

WORCESTER — With a single item on the agenda, Worcester Public Schools leaders gathered on the fourth floor of the Durkin Administration Building to call for an investigation into the financial arrangement between Old Sturbridge Village, Old Sturbridge Academy, and the proposed Worcester Cultural Academy.

The School Committee voted unanimously at Monday afternoon’s special meeting to call upon the State Auditor, Office of the Inspector General, as well as the State Ethics Commission to look into the matter.

“As public officials, it’s our responsibility to advocate on behalf of our scholars,” said Superintendent Rachel H. Monárrez, who previously came out against the approval of the proposed charter school. “And that’s what we’re doing here.”

The special meeting was called not long after state Department of Elementary and Secondary Education (DESE) Commissioner Jeff C. Riley announced Friday he was going to recommend the state Board of Elementary and Secondary Education (BESE) vote in favor of awarding a charter to the Worcester Cultural Academy at its next meeting.

That just what the BESE did Tuesday morning, voting 7-4 in favor of the charter.

More:Mass. Board of Elementary and Secondary Education OKs Worcester charter school

Both Worcester School Committee member Tracy O’Connell Novick and Deputy Superintendent Brian Allen raised concerns over a section from the Old Sturbridge Village annual report, in which CEO Jim Donahue wrote that both the proposed school and Old Sturbridge Academy “are the key to the future of the Village.

“The academies will provide reliable, contractual revenue to the museum, safeguarding us against fluctuations in uncontrollable factors that impact admission, such as weather and public health,” the report said.

Donahue could not be reached for comment.

Allen pointed to several other concerns, management fee, selection of the Educational Management Organization, or EMO, and composition of the board of trustees.

The proposed school, he said, will pay Old Sturbridge Village a service fee equal to 7% of all per pupil tuition payments the school receives during the period of this agreement.

Financial concerns

By its fifth year, Allen said, roughly $470,000 will be paid annually to the group on a no-bid contract for services such as human resources, accounting, and marketing, and $1.7 million will be paid to Old Sturbridge Village for the management fee.

The school would also not be in compliance with the state Department of Revenue Municipal Finance Bureau’s Public Purpose Limitation, which outlines how public funds can be used for public goods and services in Massachusetts, he said.

While public funds are not supposed to be used for private purposes under the law, there is guidance for ventures that “advances both public and private interests.”

If the “dominant motive” is public expenditure over a private one, then it will not be invalidated, whereas if the dominant motive is reversed, it will be considered invalid.

Due to the contractual revenue Old Sturbridge Village would receive from Worcester Cultural Academy, it would be considered a dominant private purpose, Allen said.

He also said that the school’s proposed board members would also violate the state’s conflict of interest law, which is meant to “ensure that public officials’ financial interests and personal relationships do not conflict with their public obligations,” and of which charter schools are legally subjected to as well.

“Of the 17 listed founding members, 12 have direct ties to Old Sturbridge Village, Old Sturbridge Academy, or EL Education,” Allen said.

Six of the founding members, he said, work for the EMO, two of the proposed board members serve on the Board of Overseers for Old Sturbridge Village, and three currently work for Old Sturbridge Academy.

The one proposed member who works at EL Education will, “undoubtedly receive hundreds of thousands of dollars if the charter school is approved.”

This does not adhere with the DESE’s governance guidance on choosing an educational management organization that provides administrative or educational services to schools.

“Boards should follow their normal procurement procedures, use sound business practices, and ‘shop around’ to maximize competition when choosing an EMO,” the governing guidance said. “After a Board has chosen an EMO, it must continue to maintain its independence from the company.”

There is no independence from the company or members of the board, Allen said, and they have an “apparent conflict between the financial health of Old Sturbridge Village and the appropriate management fee charged to Worcester Cultural Academy.”

Unions call for museum boycott

Following the end of the meeting, the Massachusetts Teachers Association and the Educational Association of Worcester — the state and local educators unions — put out a joint statement to call on Old Sturbridge Village to withdraw its application to open the proposed school until the investigation is completed.

“This charter proposal offers nothing new to our students and will only hurt our schools by taking away resources,” EAW President Melissa Verdier said. “Stand with Worcester students, educators, and the community — tell OSV you will not visit or contribute to their exploitative financial model of profiting off Worcester students.”

The unions also called for a boycott of the museum.

Citizens for Public Schools, a nonprofit based in Boston, also called on the board to reject the proposed charter school on Monday.

The DESE board also met for a special meeting Monday evening to discuss Riley’s recommendation.

“This is the first new charter school proposal to make it through DESE’s vetting process and come up with a vote in my five-year tenure,” Riley said. “Simply put: this charter school has met the criteria of state law and our board’s regulations, and as such, I am recommending it to you for your deliberation and vote.”

The commissioner, and members from the Office of Charter Schools and School Redesign, gave a presentation on the charter authorizing process, as well as their review and vetting process of the proposed charter school’s application.

Comments followed by decision

Board members who hosted a public hearing on the Worcester Cultural Academy in December at Quinsigamond Community College also spoke about the things they heard and saw from public speakers.

Following the presentation, board members were given the opportunity to ask Riley’s team questions about the proposed school and its application, including how they concluded it was in compliance with state laws.

“No application is ever perfect,” said Cliff Chuang, a member of Riley’s team. He said that the team would not have recommended approving the charter if it had not met the proper criteria.

Chuang and other members of Riley’s team took turns walking the members through their decision-making process, as well as addressing some of the concerns raised about the school in the past by Worcester school and city leaders, as well as community members.

But the board’s special meeting was meant to provide a forum for the members to get the info they needed before their regular meeting Tuesday, during which they will discuss the matter further and allow public commentary before voting on whether or not to award the proposed school its charter.

This article originally appeared on Telegram & Gazette: School Committee calls for state investigation into financial arrangements of city charter school