School Finance

State Board approves $1M shift of low-income funding to Dougco

In an attempt to better match federal funds with the students the money is supposed to help, the state is piloting a program that will re-direct more than half a million dollars to the relatively wealthy Douglas County Schools.

The State Board of Education this week voted 6-1 to approve a pilot program under which the suburban school district will receive an additional $547,072 in federal Title I money next year to provide services for poor students.

The two-year pilot is intended to account for students who attend the HOPE Online Learning Academy – Elementary but who live in other districts that now receive the Title I funding for those children. The $547,072 is the estimated shift of funds in 2014-15. A similar amount likely would be allocated in 2015-16.

The plan drew vocal opposition from board member Elaine Gantz Berman at Wednesday’s meeting, and district leaders who stand to lose money aren’t happy either.

“We’re robbing Peter to pay Paul,” Berman said. Dougco “is the ninth wealthiest county in the United States. … I can’t in good conscience vote for this. I can’t take money away from Greeley and Aurora and DPS.”

Charlotte Ciancio, superintendent of the Mapleton Public Schools, told Chalkbeat Colorado that what CDE is doing “is absolutely the right conversation and absolutely the wrong solution.” Mapleton would lose $5,188 from its estimated $1.2 million Title I allocation.

“Five thousand dollars in a district our size is significant,” Ciancio said.

The four districts taking the biggest hits are Denver ($169,733), Aurora ($143,970), Adams 12-Five Star ($45,868) and Westminster ($45,905). See the list of districts that will lose money and the amounts here.

Summing up the dilemma, state school finance director Leanne Emm told the board, “It’s a zero sum game.”

The problem

The problem CDE is trying to address was created because Title I funding allocations are based on geography – primarily poverty rates within U.S. Census tracts and welfare caseloads. But students enrolled in online schools like HOPE live in many different districts, 21 districts in HOPE’s case.

In the bureaucratic words of a document presented to the board Wednesday, “Current methods for allocating Title I, Part A funds do not always accurately reflect where students are receiving services. Given the changing landscape of educational opportunities for students, studying the impacts of revising allocation methods will provide information necessary to make informed decisions moving forward.” (See the full presentation here.)

Although HOPE Online is authorized by the Dougco district, “very few of those kids live in Douglas County,” Keith Owen, deputy commissioner of education, told Chalkbeat Colorado in an interview. About 1,000 HOPE elementary students live outside the district.

“HOPE and Douglas County have been asking the department” for action on the issue for a number of years, Owen said, but no solution seemed workable until the idea for the pilot program came up. Senior Assistant Attorney General Tony Dyl indicated to the board he believes the program meets federal requirements.

The additional funds won’t necessarily go to HOPE but rather will allow Dougco to provide Title I funding for resident students in its own schools.

Owen told the board that Dougco’s current $1.2 million Title I allocation goes to HOPE and to certain set-asides like funding for homeless students. “They [the district] don’t serve other schools currently,” he said.

The bureaucratic backstory

Title I is massively complicated, and a major issue is that while overall district funding is determined by census-determined poverty rates, money is distributed to schools based on different criteria, usually the number of students eligible for free lunch or for both free and reduced-price lunch.

Ciancio, in a letter to the board urging rejection of the pilot project, noted that census-based poverty calculations indicate 1,486 Mapleton children are in poverty, but it has 4,287 free-lunch students. (Read the letter here.)

“We contend that the [Small Area Income and Poverty Estimates are] seriously underestimating the true impact of children in poverty in some districts,” she wrote. (SAIPE is the federal acronym for the census poverty calculation.)

On top of that, Title I funds come in four subcategories, for which districts have different levels of eligibility.

And, beyond a requirement that schools with 75 percent or more at-risk students get Title I funding, districts have latitude in how they spend the money. Some give it just to elementary schools, for instance.

“There’s never enough money to serve every student,” Owen said.

The complexity and the flexibility lead to varying amounts of Title I funding among districts. Owen said Dougco is spending $758 per eligible HOPE student. Berman said the DPS per-student amount is $438. Within a district, some schools may receive no Title I money, even if they serve some poor students.

See the list of all Colorado schools with their 2012-13 Title I status here (link downloads PDF).

The proposed solution

CDE developed criteria for online schools that could be eligible for the pilot, including minimum numbers of students eligible for free and reduced-price lunch, having a significantly higher percentage of such students than the authorizing district and participation in the federal school meal program. Of all the programs considered, only HOPE met all the criteria. It’s the only such school to participate in the meal program at its learning centers.

Owen said CDE will monitor use of the funds, including the strategies implemented for poor students, the impact on districts that lost funding and how to effectively use Title I funds in a multi-district online school. “A pilot gives us the opportunity to look at the impact,” he said.

Commissioner Robert Hammond told the board, “Ultimately the lessons learned could lead to statewide changes.”

In her letter, Ciancio wrote, “In our assessment, taking resources from one severely underfunded, highly impacted school district to support another underfunded school district feels inappropriate and unjust.”

She continued, “We ask you to charge the Colorado Department of Education to go back to the drawing board to find a solution that equitably funds districts and considers each child.”

She suggested that a more uniform way to allocate per-student funding could be developed by the state.

Owen told the board that such a statewide change might be possible but “is a massive undertaking” that CDE doesn’t have the capacity to handle now.

Shifting of Title I funds away from districts isn’t unprecedented. The state-run Colorado School for the Deaf and Blind in Colorado Springs and schools supervised by the Charter School Institute receive Title I funds based on their students’ districts of residence.

HOPE’s elementary program enrolls about 1,750 students, more than 60 percent eligible for free lunch. The school is in its fourth year at the priority improvement rating, Owen said. That’s the second lowest level in the state accountability system, and schools remaining at the level for five years are subject to state interventions including closure. (See the accountability report on all three HOPE schools here).

money matters

Why Gov. Hickenlooper wants to give some Colorado charter schools $5.5 million

Students at The New America School in Thornton during an English class. (Photo by Nic Garcia)

If Mike Epke, principal of the New America School in Thornton, had a larger budget, he would like to spend it on technical training and intervention programs for his students.

He would buy more grade-level and age appropriate books for the empty shelves in his school’s library, and provide his teachers with a modest raise. If he could really make the dollars stretch, he’d hire additional teacher aides to help students learning with disabilities.

“These are students who have not had all the opportunities other students have had,” the charter school principal said, describing his 400 high school students who are mostly Hispanic and come from low-income homes.

A $5.5 million budget request from Gov. John Hickenlooper, a Democrat, could help Epke make some of those dreams a reality.

The seven-figure ask is part of Hickenlooper’s proposed budget that he sent to lawmakers earlier this month. The money would go to state-approved charter schools in an effort to close a funding gap lawmakers tried to eliminate in a landmark funding bill passed in the waning days of the 2017 state legislative session.

Funding charter schools, which receive tax dollars but operate independently of the traditional school district system, is a contentious issue in many states. Charter schools in Colorado have enjoyed bipartisan support, but the 2017 debate over how to fund them hit on thorny issues, especially the state’s constitutional guarantee of local control of schools.

The legislation that ultimately passed, which had broad bipartisan support but faced fierce opposition from some Democrats, requires school districts by 2020 to equitably share voter-approved local tax increases — known as mill levy overrides — with the charter schools they approved.

The bill also created a system for lawmakers to send more money to charter schools, like New America in Thornton, that are governed by the state, rather than a local school district.

Unlike district-approved charter schools, which were always eligible to receive a portion of local tax increases, state-approved charter schools haven’t had access to that revenue.

Terry Croy Lewis, executive director of the Charter School Institute, or CSI, the state organization that approves charter schools, said it is critical lawmakers complete the work they started in 2017 by boosting funding to her schools.

“It’s a significant amount of money,” she said. “To not have that equity for our schools, it’s extremely concerning.”

CSI authorizes 41 different charters schools that enrolled nearly 17,000 students last school year. That’s comparable to both the Brighton and Thompson school districts, according to state data.

Hickenlooper’s request would be a small step toward closing the $18 million gap between state-approved charter schools and what district-run charter schools are projected to receive starting in 2020, CSI officials said.

“Gov. Hickenlooper believes that working to make school funding as fair as possible is important,” Jacque Montgomery, Hickenlooper’s spokeswoman, said in a statement. “This is the next step in making sure that is true for more children.”

If lawmakers approve Hickenlooper’s request, the New Legacy charter school in Aurora would receive about $580 more per student in the 2018-19 school year.

Jennifer Douglas, the school’s principal, said she would put that money toward teacher salaries and training — especially in the school’s early education center.

“As a small school, serving students with complex needs, it is challenging and we need to tap into every dollar we can,” she said.

The three-year old school in Aurora serves both teen mothers and their toddlers. Before the school opened, Douglas sent in her charter application to both the Aurora school board and CSI. Both approved her charter application, but because at the time her school would receive greater access to federal dollars through CSI, Douglas asked to be governed by the state.

Douglas said that her preferred solution to close the funding gap would be to see local tax increases follow students, regardless of school type or governance model. Until that day, she said, lawmakers must “ensure that schools have the resources they need to take care of the students in our state and give them the education they deserve.”

For Hickenlooper’s request to become a reality, it must first be approved by the legislature’s budget committee and then by both chambers. In a hyper-partisan election year, nothing is a guarantee, but it appears Hickenlooper’s proposal won’t face the same fight that the 2017 charter school funding bill encountered.

State Rep. Jovan Melton, an Aurora Democrat who helped lead the charge against the charter school funding bill, said he was likely going to support Hickenlooper’s proposal.

“You almost have to do it to be in alignment with the law,” Melton said. “I don’t think with a good conscience I could vote against it. I’m probably going to hold my nose and vote yes.”

Payment dispute

Fired testing company seeks $25.3 million for work on TNReady’s bumpy rollout

PHOTO: TN.gov

Tennessee officials won’t talk about the state’s ongoing dispute with the testing company it fired last year, but the company’s president is.

Henry Scherich

Henry Scherich says Tennessee owes Measurement Inc. $25.3 million for services associated with TNReady, the state’s new standardized test for its public schools. That’s nearly a quarter of the company’s five-year, $108 million contract with the state, which Tennessee officials canceled after technical problems roiled the test’s 2016 rollout.

So far, the state has paid the Durham, North Carolina-based company about $545,000 for its services, representing about 2 percent of the total bill, according to a claim recently obtained by Chalkbeat.

Measurement Inc. filed the claim with the state in February in an effort to get the rest of the money that it says it’s owed. Since then, lawyers for both sides have been in discussions, and the company filed a lawsuit in June with the Tennessee Claims Commission. The commission has directed the State Department of Education to respond to the complaint by Nov. 30.

“We’re moving forward,” Scherich told Chalkbeat when asked about the status of the talks. “… We’re simply asking to be paid for the services we provided.”

Education Commissioner Candice McQueen declined last week to discuss the dispute, which she called “an ongoing pending lawsuit.” A spokesman for the attorney general’s office also declined to comment on Monday.

Scherich said he and other company officials have not been called to Nashville for hearings or depositions.

“Our lawyers and the state’s lawyers are still skirmishing each other,” he said. “…They argue about lots of things. It’s kind of like we’re establishing the ground rules for how this process is going to proceed.”

PHOTO: Grace Tatter
Education Commissioner Candice McQueen announced the firing of Measurement Inc. and the suspensions of most testing in April 2016.

Tennessee’s dramatic testing failure started on Feb. 8, 2016, when students logged on during the first morning of testing and were unable to load TNReady off the new online platform developed by Measurement Inc. The fallout culminated several months later when McQueen fired the company and canceled testing altogether for grades 3-8. In between were months of delays after McQueen instructed districts to revert to paper-and-pencil materials that would be provided by Measurement Inc. under the terms of their contract. Many of those materials never arrived.

The company’s claim suggests that the state was hasty in its decision to cancel online testing and therefore shares blame for a year of incomplete testing.

The Tennessee Department of Education “unilaterally and unjustifiably ordered the cancellation of all statewide electronic testing that occurred on February 8, 2016, following a transitory slowdown of network services that morning,” the claim says.

(In an exclusive interview with Chalkbeat the day before his company was fired, Scherich said Measurement Inc.’s online platform did not have enough servers for the 48,000 students who logged on that first day — a problem that he said could have been fixed eventually.)

The claim also charges that McQueen’s subsequent order to substitute paper test materials was “unnecessary and irresponsible” and impossible to meet because of the logistical challenge of printing and distributing them statewide in a matter of weeks.

In her letter terminating the state’s contracts with Measurement Inc., McQueen describes daily problems with the company’s online platform in the months leading up to the botched launch. “This was not just a testing day hiccup; the online platform failed to function on day one of testing,” she wrote.

McQueen said those experiences contributed to her department’s conclusion that Measurement Inc. was unable to provide a reliable, consistent online platform and left her with no option but to order paper and pencil tests. She also cited the company’s failure to meet its own paper test delivery deadlines for her ultimate decision to terminate the contracts and suspend testing.

The last sentence of the four-page termination letter says the state would “work with (Measurement Inc.) to determine reconciliation for appropriate compensation due, if any, for services and deliverables that have been completed as of the termination date after liquidated damages have been assessed.”

In addition to its invoices for work under the contract, Scherich said his company is owed another $400,000 for delivering test-related materials to the state after its contract was ended.

“We didn’t want to be a company that stood in the way of the programs of the state of Tennessee, so we provided all the information they requested,” Scherich said. “We were told we would be paid, we provided the information, and then we’ve not been paid.”

Founded in 1980, Measurement Inc. had been doing testing-related work for Tennessee for more than a decade before being awarded the 2014 TNReady contract, its biggest job ever. The company had a fast deadline — only a year — to create the state’s test for grades 3-11 math and English language arts after a vote months earlier by the legislature prompted Tennessee to pull out of PARCC, a consortium of other states with a shared Common Core-aligned assessment.

Scherich said the loss of the TNReady contract was “a major hit” for his company, but that Measurement Inc. has paid every employee and subcontractor who worked on the project. “We have had to go into debt to keep ourselves viable while we wait for this situation with Tennessee to be resolved,” he said, adding that the company continues to do work in about 20 other states.

To pursue its claim, Measurement Inc. has hired the Tennessee law firm of Lewis, Thomason, King, Krieg & Waldrop, which has offices in Nashville and Knoxville.

“I’m sure we’ll work out something amicable with the state over time,” he said. “I’m an optimistic person. But I think our lawyers and their lawyers will have to have a lot of negotiations.”

Below are Measurement Inc.’s claim against the state, and the state’s letter terminating its contracts with the company.

Editor’s note: This story has been updated with details about the claim’s status.