One of the few remaining Edison charter schools went broke, leaving teachers without a pay check. No one knows if the teachers will ever be paid. Most of Edison’s business now is online, not direct management of schools.
Derrick Thomas Academy charter school in Kansas City, which opened in 2002 with great promise, lost its charter and left behind a massive financial mess, with Edison demanding payment by the state, and financial backers crying about their losses.
According to the local story:
“The money that might have covered teacher salaries is tied up in court over a dispute among the school, the company contracted to manage it and the company that issued bonds for the school’s launch.
“The University of Missouri-Kansas City, which had sponsored the charter school at 201 E. Armour Blvd. since it opened in 2001, has no financial responsibility for the school or its debt. The academy announced last fall it would close after UMKC refused to renew its charter, citing poor management and low test scores. The school has since been overseen by an interim board.
“The Missouri Department of Elementary and Secondary Education (DESE) has been named in legal action to garnish more than $2.2 million that the management company, EdisonLearning Inc., says it is owed.
“Derrick Thomas Academy, now locked up behind a heavy black gate, also owes a substantial amount of money to the bondholder for the school, Lord Abbett.
“Jim Sansevero, spokesman for Lord Abbett, said the school has defaulted on bond payments and “$10 million is at risk.” The school used its building to secure the bonds.”
Is this disaster likely to dim the enthusiasm of charter advocates? Will they say that 11years was not a fair trial? What do you think?
Diane Ravitch's blog 
That’s okay. It’s “for the kids.” The teachers won’t mind not being paid.
Do I smell New Market Tax Credit Investors…Again! PHEW! http://www.nyfera.org/wp-content/uploads/2009/11/CharterSchoolBondMarket.pdf
Considering the entities involved, all of the proponents of charters and privatization will act as though nothing happened and continue with the puffery about how wonderful their product is. In the true American business tradition, the least able to afford the expense, students, their families, and teachers, will bear the costs of these failures.
States need to require charter schools to put their teachers salary & retirement in “trust” so this doesn’t happen again. I wonder how teachers retirement fund was sent up. Was the charter school allowed to “borrow” from it at any point? Bad enough charters pay teachers below the going rate, but then to run off with what teachers have earned should be a jail offense! Martha was sent upstate for lying and these administrators are just going to walk away? I wonder if these Derrick Thomas Academy administrators walked off with their last check?
States might want to do that for there public school employees as well. California, for example, will have to add an additional 4.5 billion a year for the next 30 years in order to pay teachers the pensions that were promised.
Puke!
Jeb Bush used the Florida teacher pension money to bail out Edison in 2011:
http://www.huffingtonpost.com/leonie-haimson/chris-cerf-there-you-go-a_b_835180.html
A similar situation happened in Palm Bay, Fl. with a Palm Bay charter. The city promoted the school with much fanfare. A couple of years later, the finances were a mess and bonds were issued. Now that school is about to default. The last thing the city I live in needs to do is to get into the education business.
Charter schools reneging on their duty to pay for services rendered, and now a district reneging on their duty to pay for insurance premiums they owed. Does anyone fear a pattern may be developing? It’s okay now just to renege on promises if those to whom the promises were made are teachers? Who’s next? Will we really see the culmination of the dismantling of the American public school system?
It reminds me of a bad post-apocalyptic sci-fi movie. It’s time for the next film in the sequence, but I fear that those in power may be able to foresee and prevent any meaningful resistance. Free speech means little if your opponent controls the media.
And meanwhile, what of the students? At least the families had advance notice and plenty of time to plan for this, but we are still talking about a group of kids who’ve formed bonds with peers and adults, which will now be disrupted.
Teachingeconomist those teachers in California paid for those pensions. This is a part of the untaxable income is your benefits. It is their obligation to cover those costs in real time. That is the deal. If you did a deal with someone and they broke it what would you do? When they take away your earned income they have robbed you. That is the law. Why should they ever be in a position to legally do this? They should not is the answer. It is total corruption not unions and teachers who do this as it is on their end. My money is mine and not yours is what it is and should be.
This is why they are a serious game. Tom Van Der Ark who used to run the education division of the Gates Foundation before Deasy went to N.Y. and wasted $1.5 million of the taxpayers money to not start 3 charter schools. Why was this allowed? Why are there about 280 charter schools at LAUSD. In 2010 it was 240 according to the L.A. County Office of Ed. handbook. This is huge money for certain sectors. And why not the public will pick up the tab for my profit. Great profit center.
Unfortunately they did not cover those costs in real time.
This, I think, is an advantage of the defined contribution plan. It forces the government (or the private firm, for that matter) to pay the cost in real time.
It will be interesting to see what state and local governments do. Public employee pension funds seem to be underfunded by by about four trillion dollars.
That poor district has tried everything.
It does not look promising for KCMO because Sly himself says he wants the schools there to be “Meccas of technology and entrepreneurialism”
Bad buzz words.
Why do communities think that it’s ok to stiff teachers? They are on the front lines of education (doing the actual work), are lower paid than administrators and consultants, and when there is financial dispute, they don’t get paid. And then we wonder why we can’t keep really good teachers… This seems to be the modus operendi for a lot of places.