GARY | Officials at Charter School of the Dunes had no guarantee its charter would be renewed this year when it began construction of a new $13 million school building last summer.
And officials at Ball State University's Office of Charter Schools said they did not know the school was building a new facility, particularly a year before its charter was up for renewal, since that would have required an amendment to the original charter agreement.
Joan Todd, Ball State University spokeswoman, said the charter school needed written authorization to construct a new building.
Charter School of the Dunes is among seven in the state that received notice their charters would not be renewed through Ball State's Office of Charter Schools. Charter School of the Dunes and LEAD College Prep in Gary were among the seven that did not pass an extensive review of academic, financial and organizational performance and compliance. They appealed the decision and are awaiting a hearing.
"With anything like that, a new building or changing a facility, it's an amendment process. That was not done," said Bob Marra, executive director of Ball State's Office of Charter School.
Danielle Sleight, Charter School of the Dunes board president, said all amendments were filed and are up to date.
"We feel very comfortable that we have done what Ball State required and what we needed to do," she said.
According to its renewal application for Charter School of the Dunes, school officials knew the city of Gary wanted to develop the property it now occupies at 860 North Lake St., and the school would have to move.
"The board needed to make a decision to either build on the land purchased nine years ago while working on our charter renewal, or wait for the decision of our charter renewal and risk being without a building for our students," the application said.
"With this quandary in front of them, the board decided to build, with the understanding that if our charter were not renewed, the board would sell the new facility."
"We did not see nonrenewal as a realistic possibility," Sleight said.
Sleight said the banks that funded the loans through state and federal dollars are discussing the ramifications if the charter school doesn't win its appeal or find a new authorizer.
While the school appeals the nonrenewal notice, Sleight said, board members are still looking at options, and have sent proposals to other potential authorizers, including the Gary Community School Corp. and the Indiana State Charter School Board.
She said they are gathering information and continue construction.
"We are not at the point where we would say the building is not going to be finished," Sleight said. "If we don't have an authorizer, there is no school. We won't have any choice; the banks will sell the building. We wouldn't get any financing and we wouldn't be able to pay for it."
Who pays for the building if the school closes?
If the school closes, Sleight said, its cash balance would be used to pay off the bills. Any extra would revert back to the state, but Sleight said she would need to discuss the situation with the school board attorney.
In addition to its construction loans, Charter School of the Dunes has two outstanding loans totaling about $1.9 million, Indiana Department of Education spokesman David Galvin said Friday.
"If the school ceases operations, statute requires we use any tuition support funds for the school to cover repayment of the loans," Galvin said.
"If the repayment amount is larger than the funds available, the statute reads that we use state tuition support funds to ensure the loans are fully paid. The loans are not forgiven."
Galvin has said the state revoked approval of a $241,884 loan the school sought last year.
"Should the school continue operations, the department can re-evaluate its decision on the loan in the future," Galvin said.
Marra said the Ball State office communicated with Charter School of the Dunes officials throughout the renewal process. He said his office began using a more rigorous accountability framework.
"None of the schools should be surprised (about nonrenewal)," Marra said.
Terry Spradlin, associate director for the Center for Evaluation & Education Policy at Indiana University at Bloomington, said it appears there was a "monumental" failure to communicate between the Office of Charter Schools and Charter School of the Dunes officials.
"Clearly, there is an established process to review the charter contract," Spradlin said. "Were there red flags? Did the charter know of the likelihood of not being renewed, and should they have restructured with a new model? There seems to be a failure to communicate, with all parties at fault."
Spradlin asked if the charter school chooses to continue with the current model, why would a new sponsor approve a school that is not making sufficient progress.
"It's an unfortunate situation," he said. "The paramount issue is how to improve educational outcomes and how to redesign and restructure the educational program for success."